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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Good morning.

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Speaker 3: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 3: stories we're following today.

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Speaker 2: Karen, we begin with deadlock in DC. Congress has blown

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Speaker 2: past a midnight funding deadline to trigger the first government

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Speaker 2: shutdown in nearly seven years. Democrats and Republicans remain in

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Speaker 2: a spending standoff. The Democrats want to attach healthcare and

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Speaker 2: other policy changes to a stopgap spending bill. Senate Minority

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Speaker 2: Leader Chuck Schumer is blaming the majority party.

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Speaker 4: Republicans once again rejected democrats proposals to avoid a shutdown,

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Speaker 4: fixed healthcare premiums and spare Americans the calamity of skyrocketing

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Speaker 4: through the roof healthcare costs.

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Speaker 2: Senate Minority Leader Chuck Schumer says unless Congress act Obamacare,

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Speaker 2: tax credits will expire at the end of the year,

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Speaker 2: in premiums will spike. Majority Leader John Thune says Democrats

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Speaker 2: are to blame.

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Speaker 5: Democrats may have chosen to shut down the government tonight,

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Speaker 5: but we can reopen it tomorrow. All it takes is

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Speaker 5: a handful of Democrats to join Republicans to pass the clean,

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Speaker 5: non partisan funding bill that in front.

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Speaker 2: Of US Senate Majority Leader John Thune and his fellow

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Speaker 2: Republicans needed at least eight Democrats to support the funding bill.

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Speaker 2: Only three voted, with all but one Republican in favor

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Speaker 2: of it last night.

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Speaker 3: Nathan, the government shutdown means key services for Americans and

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Speaker 3: pay for federal workers are suspended. President Trump is tying

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Speaker 3: the healthcare funding stand off to immigration.

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Speaker 6: They wanted to be able to take care of people

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Speaker 6: that have come into our country illegally, and no system

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Speaker 6: can handle that. And so we're totally opposed on that.

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Speaker 6: But we can't take care.

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Speaker 7: We just can't do it.

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Speaker 6: I'd love to do everybody, I'd love to do.

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Speaker 8: The whole world, but.

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Speaker 6: Our country can't handle people that come into our country illegally.

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Speaker 3: President Trump spoke to reporters from the White House a lawn.

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Speaker 3: He's suggesting his administration will use this shutdown to conduct

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Speaker 3: mass lay offs of federal workers beyond temporary furloughs. The

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Speaker 3: Congressional Budget Office estimates about seven hundred and fifty thousand

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Speaker 3: federal employees will be sidelined each day the government is

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Speaker 3: shut down.

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Speaker 2: And Karen Bloomberg Economics estimates the shutdown could send the

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Speaker 2: unemployment rate from four point three to four point seven percent.

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Speaker 2: That's if it lasts for three weeks, and those furloughed

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Speaker 2: workers count as temporarily unemployed. Historically, much of the economic

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Speaker 2: impact from shutdowns has been recouped after it ends, but

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Speaker 2: during the last one, the Congressional Budget Office estimated the

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Speaker 2: US economy failed to recover three billion of the eleven

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Speaker 2: billion dollars at lost in overall output.

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Speaker 3: Well Nathan us Dock Index futures are slipping with the

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Speaker 3: start of the first government shutdown in nearly seven years.

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Speaker 3: We get more with Bloomberg's John Tucker John Good Morning, Hey.

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Speaker 9: Good morning, Karen.

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Speaker 10: Traders say if the shutdown stretches from days to weeks

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Speaker 10: and could intensify concern over an economic slowdown and drive

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Speaker 10: treasury yields and stocks lower. Well, the shutdown also means

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Speaker 10: that key economic reports they're on hold, that includes Friday's

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Speaker 10: critical jobs report, and traders fear that the loss of

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Speaker 10: visibilities is going to lead markets in the dark and

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Speaker 10: the outlook for monetary policy from the Fed. Daniel Polliot

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Speaker 10: oh Tree Capital Management sees it this way.

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Speaker 11: In the past, shutdowns have had a limited effect on

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Speaker 11: bonds and stocks, but with valuations so stretched in equities today,

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Speaker 11: this time potentially could be different.

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Speaker 10: Well, non essential fedal workers will be furlough. The Trump

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Speaker 10: administration has said they're looking to make some of those

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Speaker 10: cuts permanent, and that could create a shock, just as

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Speaker 10: FED policy makers are focusing on the labor market in

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Speaker 10: New York, John Tucker, Bloomberg.

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Speaker 2: Radio, Okay, John, thank you, speaking of the labor market.

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Speaker 2: The White House has withdrawn the nomination of EJ. And

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Speaker 2: Tony to lead the Bureau of Labor Statistics. His nomination

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Speaker 2: was seen as an attempt by the President to gain

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Speaker 2: control over the agency responsible for that key economic data,

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Speaker 2: including the monthly jobs report and the Consumer Price indexis

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Speaker 2: is used to measure inflation. Bloomberg's Miles Miller has more

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Speaker 2: on the surprise reversal.

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Speaker 5: E j.

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Speaker 12: Antonio was just to partisan from the Heritage Foundation, which

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Speaker 12: has a lot of connections to the current Trump White House,

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Speaker 12: and surely that he was just to partisan, and in

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Speaker 12: addition to that that they did not feel he would

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Speaker 12: have a smooth sailing on Capitol Hill.

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Speaker 2: Bloomberg's Miles Miller ads the Senate had not yet set

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Speaker 2: a date for a confirmation hearing.

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Speaker 3: Nathan as traders remain in the dark with economic data.

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Speaker 3: Should the shut down carry on, they may rely more

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Speaker 3: heavily on fed's speak. And we heard from Chicago Fed

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Speaker 3: President Austin Goulsby yesterday discussing the impact of tariffs on

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Speaker 3: interest rates.

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Speaker 13: I thought rates are going to come down in that environment,

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Speaker 13: and I was saying I thought they had a fair

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Speaker 13: bit of ways to go when they announced the tariffs

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Speaker 13: at those kind of rates, especially in manufacturing, also in agriculture.

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Speaker 13: It was the hair on fire kind of moment where

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Speaker 13: a lot of folks in the in various manufacturing industries

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Speaker 13: were saying, we can't if these are the rates, we're

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Speaker 13: not going to survive. We're going to see a real

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Speaker 13: closing out.

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Speaker 3: Austin Golesby spoke at an agricultural conference hosted by the

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Speaker 3: Chicago Fed. He also expressed concern about some government official

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Speaker 3: supporting the idea of giving the Trump administration the power

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Speaker 3: to influence interest rates.

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Speaker 2: While the standoff continues on Capitol Hill, Karen, President Trump

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Speaker 2: says his administration is close to ending a standoff with

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Speaker 2: Harvard and finalizing a five hundred million dollar deal. Speaking

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Speaker 2: in the Oval Office, alongside Education Secretary Linda McMahon. The

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Speaker 2: President explained what Harvard plans to do once that agreement

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Speaker 2: is reached.

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Speaker 6: Well in the process of getting very close, and Linda's

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Speaker 6: finishing up the final details, and they'd be paying about

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Speaker 6: five hundred million dollars and they'll be operating trade schools.

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Speaker 6: They're going to be teaching people how to do AI

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Speaker 6: and lots of other things.

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Speaker 2: President Trump's deal with Harvard would end one of his

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Speaker 2: highest profile class with American universities. It's not clear if

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Speaker 2: the settlement would include an independent monitor at something Columbia

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Speaker 2: University accepted in its own agreement.

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Speaker 3: And finally, Nathan and Company news Pfizer has agreed to

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Speaker 3: cut some prices by up to eighty five percent and

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Speaker 3: sell directly to the public in the US. The move

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Speaker 3: allows Pfizer to avoid tariffs on the pharmaceutical industry for

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Speaker 3: three years and addresses President Trump's argument that Americans are

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Speaker 3: paying more for medicines and remarks heard here on Bloomberg.

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Speaker 3: Swiser CEO Albert Borla talked about the deal at the

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Speaker 3: White House.

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Speaker 14: For years, other rich nations refused to pay the first

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Speaker 14: serve for the medical innovation, and as a result, Americans

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Speaker 14: had to assume this proportional cost on their soldiers. This

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Speaker 14: situation we all knew is not sustainable.

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Speaker 3: Heiser CEO Albert Borlow is speaking alongside President Trump. Other

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Speaker 3: major drug makers are expected to follow the move. Time

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Speaker 3: now for look at some of the other stories making

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Speaker 3: news in New York and around the world, and for

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Speaker 3: that we're joined by Bloomberg's Modica Rigs Monica, Good morning, Hey.

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Speaker 9: Good morning, Karen.

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Speaker 15: A federal judge says the Trump administration unconstitutionally targeted non

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Speaker 15: citizens for deportation over pro Palestinian protests. Bloomberg's Amy Morris

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Speaker 15: has that story from Washington.

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Speaker 16: A federal judge in Boston ruled a US policy that

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Speaker 16: targets international students for removal on idiological grounds is unconstitutional,

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Speaker 16: violating the First Amendment. The judge says the policy was

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Speaker 16: arbitrary and capricious, and accused Homeland Security Secretary Christy Nome

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Speaker 16: and Secretary of State Marco Rubio of misusing their powers.

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Speaker 16: US District Judge William Young also ruled the administration violated

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Speaker 16: the Administrative Procedure Act, so a hearing on that is

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Speaker 16: to be scheduled later in Washington. Amy Morris Bloomberg Radio.

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Speaker 15: President Trump says Hamas has a few days to accept

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Speaker 15: a peace proposal.

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Speaker 9: He says, Israel's already agreed to.

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Speaker 6: We're going to do about three or four days.

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Speaker 11: We'll see how it is.

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Speaker 6: All of the Arab country signed up, the Muslim country

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Speaker 6: is all signed up, zeels all signed up. We're just

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Speaker 6: waiting for Amas, and Amas is either going to be

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Speaker 6: doing it or not. And if it's not, it's going

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Speaker 6: to be a very set and.

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Speaker 15: He says the deal would include the release of Palestinian

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Speaker 15: prisoners in exchange for hostages. Rescuers are scrambling now to

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Speaker 15: find survivors after a powerful magnitude six point nine earthquake

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Speaker 15: at the Philippines last night.

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Speaker 9: At least sixty nine people have died.

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Speaker 15: Meantime, forecasters watching two big storms in the Atlantic. Here's

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Speaker 15: Bloomberg's meteorologist Craig Allen.

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Speaker 17: Hurricane Umberto is still in the Atlantic, a category one

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Speaker 17: with eighty mile per hour winds less than three hundred

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Speaker 17: miles away from Bermuda, but will ride up and over

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Speaker 17: Bermuda and stay away from the island except for the

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Speaker 17: rough surf and dangerous speech erosion and rip currents. Meanwhile,

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Speaker 17: Hurricane of Melda has become the more important storm with

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Speaker 17: eighty five mile per hour winds and is on a

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Speaker 17: track right now to directly hit the island of Bermuda

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Speaker 17: with winds that could exceed one hundred miles per hour.

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Speaker 17: May very well be a Category two.

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Speaker 15: Global news twenty four hours a day and whenever you

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Speaker 15: want it with Bloomberg News.

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Speaker 5: Now.

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Speaker 9: I'm Monica Rix, and this is Bloomberg Karen Nathan, Thanks Monica.

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Speaker 3: Time now for our Bloomberg Sports update, and for that

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Speaker 3: we bring in John stash Hour.

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Speaker 9: Thanks Karon.

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Speaker 8: The start of the baseball postseason three low scoring games,

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Speaker 8: and then the Dodgers beat the Reds ten to five

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Speaker 8: in LA. They hit five home runs, two by show

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Speaker 8: Heo Tony. The Red Sox beat the Yankees three to one.

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Speaker 8: Garrett Crochet at one point retired seventeen banners in a

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Speaker 8: row Detroit one two one in Cleveland, Derek scugelstruck at fourteen.

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Speaker 8: That comes with back to back home runs in the

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Speaker 8: fifth inning, beat San Diego three to one. The Angels,

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Speaker 8: another team that will need a new manager next season.

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Speaker 8: Ron Washington will not return. He didn't manage the second

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Speaker 8: half this past season after heart surgery. That's your Bloomberg

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Speaker 8: Sports update.

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Speaker 3: Stay with us more from Bloomberg day Break coming up

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Speaker 3: after this.

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Speaker 1: Coast to coast on Bloomberg Radio nationwide, on and around

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Speaker 1: the world on Bloomberg dot Com and the Bloomberg Business Appum.

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Speaker 9: This is Bloomberg Daybreak.

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Speaker 2: Good morning, I'm Nathan Hageren. For the first time in

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Speaker 2: nearly seven years, a government shutdown is underway in Washington.

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Speaker 2: But even before the funds lapsed just after midnight, the

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Speaker 2: finger pointing had been well underway in the Senate.

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Speaker 5: The Democrat caucus here in town in the Senate has

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Speaker 5: chosen to shut down the government over a clean, non

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Speaker 5: partisan funding bill.

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Speaker 4: Republicans are plunging America into a shutdown, rejecting by partisan talks,

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Speaker 4: pushing a partisan bill and risking America's healthcare.

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Speaker 2: And that was Senate Majority Leader John Thune and Minority

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Speaker 2: Leader Chuck Schumer hours before this latest shutdown took effect.

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Speaker 2: Joining us this morning, Terry Haynes, the founder of Pangaea Policy. Terry,

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Speaker 2: good morning. This is the first shutdown in nearly seven years,

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Speaker 2: but certainly not the first government shutdown ever. Will this

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Speaker 2: one be any different.

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Speaker 7: Good morning, Hi, Good morning, Nathan. I think it will

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Speaker 7: not be a lot different in the sense that it

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Speaker 7: won't be very long, and in two weeks everybody will

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Speaker 7: have forgotten what the fight was about, and there was

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Speaker 7: very unlikely to be much economic impact. One major bank

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Speaker 7: came out with a very good study that showed that

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Speaker 7: of the fourteen shutdowns that happened since Reagan became president

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Speaker 7: so forty five years ago, in ten of them, the

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Speaker 7: S and P was up from the time that the

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Speaker 7: shutdowns started to the time it ended. So I think

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Speaker 7: it's unlikely to have any lasting economic impact or markets impact,

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Speaker 7: that's for sure.

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Speaker 2: Well, how do you see this playing out, because in

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Speaker 2: the moments leading up to this, both sides seemed pretty

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Speaker 2: dug in, particularly the Democrats when it comes to their

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Speaker 2: demands for healthcare spending in a stopgap.

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Speaker 7: I think a couple of things. I think that firstly,

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Speaker 7: you know I've said to you before. I think both

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Speaker 7: alreadys want to shut down for political reasons and for

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Speaker 7: different political reasons. Democrats need to show some fight and

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Speaker 7: some resistance to the bad Orange Man, so they're doing that.

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Speaker 7: I also think it's not going to be a long

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Speaker 7: one for a couple of reasons. One is that, uh,

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Speaker 7: you know, all all Democrats need. Democrats are the ones

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Speaker 7: doing the asking, so I'm not being partisan here. They

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Speaker 7: have the more complicated position. Republicans just want to keep

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Speaker 7: things open. Democrats want stuff. They say they want the

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Speaker 7: healthcare stuff. All they need to do is to declare

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Speaker 7: victory is get negotiations with the Republicans. Republicans have already

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Speaker 7: indicated they're interested in doing that, just not on this bill.

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Speaker 7: So that's a fairly easy win. Beyond that, you know,

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Speaker 7: you can already see the cracks in Schumer's side. You

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Speaker 7: had three defections yesterday Fetterman, Cortes, Mastow, and King, who's

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Speaker 7: independent but caucuses with Democrats. And the longer this goes on,

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Speaker 7: the more pressure there will be from public employee unions,

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Speaker 7: who are big supporters of Democrats to want to bring

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Speaker 7: those folks back. So there's going to be a lot

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Speaker 7: of pressure on the Maryland and Virginia senators who represent

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Speaker 7: hundreds of thousands of those folks, and they'll be pushing

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Speaker 7: for some sort of resolution. After that, you only need

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Speaker 7: one more vote in order to keep the government open.

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Speaker 7: So you know, I think the tide goes out pretty

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Speaker 7: quickly on Senator shum Or, unless unless he tries to

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Speaker 7: declare victory here.

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Speaker 2: You mentioned the Maryland and Republican senators obviously constituents of

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Speaker 2: a large number of federal employees there. Do you think

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Speaker 2: this indication from President Trump that he could use this

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Speaker 2: shutdown to enact mass federal layoffs could lead to some

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Speaker 2: cracks here? Is that what you're getting at?

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Speaker 3: Oh?

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Speaker 7: Oh, exactly? So, yes, I mean there is a threat

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Speaker 7: to government employees, you know, employment status that hasn't existed before.

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Speaker 7: So far, the administration has not kind of pulled the

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Speaker 7: ultimate trigger on this, instead talking about furloughing people instead

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Speaker 7: of riffing or you know, completely getting rid of positions.

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Speaker 7: But you know, that's a distinction without much difference to

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Speaker 7: people who are very concerned about their jobs. You know,

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Speaker 7: I don't anticipate that there's you're going to have a

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Speaker 7: situation where the four Democratic senators from those two states

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Speaker 7: are going to you know, publicly break with Schumer or

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Speaker 7: anything like that. But there's going to be an awful

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Speaker 7: lot of pressure brought to bear to try to figure

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Speaker 7: out something that helps and improves the status of those

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Speaker 7: those public workers.

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