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

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Speaker 2: This is the Bloomberg Day Baker podcast. Good morning, It's Friday,

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Speaker 2: the thirtieth of January. I'm Caroline Hepkitt in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today, the White

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Speaker 3: House prepares for the US President to nominate Kevin Worsh

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Speaker 3: as the next chair of the Federal Reserve, as Trump

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Speaker 3: says he'll reveal his pick today.

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Speaker 2: The US considers a range of expanded options for striking Iran,

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Speaker 2: as the goal of any military action remains unclear.

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Speaker 3: Plus succession drama in real life, the forty billion dollar

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Speaker 3: Swedish family empire set for a handover of power.

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Speaker 2: Let's start with the roundup of our top stories.

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Speaker 3: Bloomberg understands that the Trump administration is preparing for the

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Speaker 3: President to nominate Kevin Worsh as the next chair of

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Speaker 3: the Federal Reserve. Donald Trump says he now plans to

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Speaker 3: announce his pick for FED chief later today. According to

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Speaker 3: one source, the former Fed governor visited the White House

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Speaker 3: yesterday day. Speaking last Night's President, Trump teased his impending

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Speaker 3: announcement without giving the name. Away Radio was saying tomorrow,

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Speaker 3: but just an outstanding person and a person that.

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Speaker 4: Can't be too surprising to people. A lot of people,

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Speaker 4: a lot of people think that this is somebody that

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Speaker 4: could have been there a few years ago.

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Speaker 1: It's going to be somebody that is very respected, somebody

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Speaker 1: that's known to everybody in the financial world.

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Speaker 4: And I think it's going to be a very good choice.

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Speaker 2: I hope so.

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Speaker 3: Donald Trump, speaking their sources, who spoke to Bloomberg on

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Speaker 3: the basis of anonymity, warns that the selection is not

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Speaker 3: final until the announcement is made.

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Speaker 2: Kevin Wolfsh served on the US Central Banks Board of

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Speaker 2: Governors from two thousand and six too and eleven and

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Speaker 2: has advised Persident Trump on economic policy. If nominated and confirmed,

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Speaker 2: he would succeed Jerome Powell, whose term ends in May.

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Speaker 2: Stocks fell and treasury yields pushed higher on bets that

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Speaker 2: Walsh will be come the next fedchair. Mike McKee is

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Speaker 2: Bloueberg's international economics and policy correspondent.

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Speaker 5: The thing about Walsh, and the reason you're seeing markets

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Speaker 5: react the way they do are at the moment, is

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Speaker 5: that he was very, very hawkish when he was on

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Speaker 5: the SEDE before, even when inflation was low he wasn't

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Speaker 5: ready to cut interest rates, and obviously that's completely contrary

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Speaker 5: to what President Trump wants. So how does he handle

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Speaker 5: that and how does he see the role of interest

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Speaker 5: rates in keeping the economy afloat and bringing inflation down?

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Speaker 2: Mike McKee speaking there as, Walsh has aligned himself with

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Speaker 2: the President. In recent months, He's notably been arguing publicly

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Speaker 2: for lower interest rates and going against his long standing

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Speaker 2: reputation as an inflation hawk.

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Speaker 3: The arrival of a US aircraft carrier strike group in

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Speaker 3: the Middle East means President Donald Trump has new options

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Speaker 3: to carry out his threats to attack Iran. The group

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Speaker 3: has about forty five aircraft, but President Trump's goals remain unclear,

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Speaker 3: with his message shifting from removing Iran's leaders, punishing the

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Speaker 3: regime for its deadly crackdown on protesters, or extracting a

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Speaker 3: new nuclear agreement.

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Speaker 4: The New York.

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Speaker 3: Times is reporting that the US president has been presented

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Speaker 3: with an expanded list of potential military options by the Pentagon.

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Speaker 3: According to the newspaper, the current set of options even

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Speaker 3: includes the potential for American forces to carry out raids

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Speaker 3: on sites inside Iran, and that officials say Trump is

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Speaker 3: taking a similar approach to Iran as he did to Venezuela.

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Speaker 2: Apple has delivered record quarterly sales in a better than

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Speaker 2: anticipated forecast for the current period. Sales at the tech

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Speaker 2: giant Trounce Wall Street estimates jumping sixteen percent to one

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Speaker 2: hundred and forty three point eight billion dollars in the

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Speaker 2: final three months of twenty twenty five. Bluemake's chief correspondent

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Speaker 2: Mark German says it's hard to put into words just

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Speaker 2: how good the results are.

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Speaker 6: Massive, massive quarter. This is a home run. Their greatest

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Speaker 6: quarter ever by orders of magnitude. That's a gigantic bee

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Speaker 6: on overall revenue. China is back. You have a big

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Speaker 6: b on the iPhone in particular, eighty five billion dollar

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Speaker 6: quarter is just insane. The installed based two and a

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Speaker 6: half billion. The numbers are just beyond excellent.

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Speaker 2: Bloomberg's Mark German setting out the positive results they're driven

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Speaker 2: by the iPhone seventeen. But Apple has worn that rising

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Speaker 2: component costs are threatening to squeeze margin in news that

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Speaker 2: clouded the record quarter. According to CEO Tim Cook, the

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Speaker 2: company expects more of an impact to gross margins in

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Speaker 2: the current period.

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Speaker 3: A sizeable proportion of cars sold in Europe are now

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Speaker 3: made by Chinese brands. That's as demand grows for hybrid

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Speaker 3: and battery powered vehicles. Bloomberg's two aud of Bio has more.

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Speaker 7: Chinese auto makers were responsible for nearly one in ten

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Speaker 7: cars sold in Europe last month. It's a record share

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Speaker 7: that comes off the back of a bumper year led

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Speaker 7: by soaring sales of electrified vehicles. Manufacturers in China use

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Speaker 7: their competitive edge in battery technology to outplace rivals in Spain,

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Speaker 7: Italy and the UK, but the nation's growing foothold also

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Speaker 7: spotlights the immense strains facing Europe's car making sector, squeezed

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Speaker 7: by tariffs and evolving demand, and so far there's no

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Speaker 7: sign of any let up as Chinese names double down

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Speaker 7: on expansion efforts across the continent. In London, ta Adebayo Bloomberg.

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Speaker 2: Radio, President Trump and Senate Democrats have reached a tentative

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Speaker 2: deal to avert a disruptive US government shutdown. The deal

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Speaker 2: would fund the Homeland Security Department for two weeks to

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Speaker 2: allow more time for talks. Democrats are seeking requirements that

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Speaker 2: DHS agents use body cameras and obtain judicial warrants, but

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Speaker 2: lawmakers are almost certain to fail to enact the measure

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Speaker 2: before a Friday night deadline.

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Speaker 3: And Donald Trump has warned the UK and Canada against

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Speaker 3: striking fresh business with China. Speaking to reporters yesterday, the

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Speaker 3: President advised against attempts to forge closer relations with Beijing.

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Speaker 4: Well, it's very dangerous for them to do that, and

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Speaker 4: it's even.

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Speaker 1: More dangerous, I think, for Kennedy to get into business

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Speaker 1: with China.

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Speaker 4: Canada is not doing well. They're doing very poorly. And

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Speaker 4: then you can't look at China as.

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Speaker 3: The answer, President Donald Trump, speaking there hours after the

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Speaker 3: British Prime Minister Cair Starmer met China's shooting ping in Beijing.

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Speaker 3: The UK government announced yesterday that China will relax rules

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Speaker 3: for British tourists and business travelers, allowing them to enter

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Speaker 3: the country visa free for stays of less than thirty days.

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Speaker 3: Starmer's visit follows that of Canadian leader Mark Karney, who

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Speaker 3: rolled back tariffs on Chinese electric vehicles previously imposed to

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Speaker 3: match US levies.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: Now let's look at the markets over in Asia. Stocks

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Speaker 2: are dropping. The Old Country World Index is down a

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Speaker 2: tenth of one percent. Msciashed Pacific Index down seven tenths

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Speaker 2: of one percent. The dollar on the Blooeberg Dollar Spot

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Speaker 2: Index is stronger about a quarter of one percent. Treasury

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Speaker 2: yields are currently up about three and a half basis

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Speaker 2: points this morning. Historically hawkish Kevin Walsh being seen increasingly

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Speaker 2: by markets as President Trump's pick for fed chair gold

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Speaker 2: this morning is sliding down three and a half percent.

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Speaker 2: Remember the LME, the London Metals Exchange also suffered a

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Speaker 2: one day delay yesterday. Oil prices for Brent currently bank

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Speaker 2: crewed features are down one point three percent. Those are

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Speaker 2: the markets.

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Speaker 3: In a moment, we'll bring you more on President Trump's

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Speaker 3: preparing to announce his pictilly the Federal Reserve, plus inside

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Speaker 3: the succession drama at a forty billion dollar Swedish empire.

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Speaker 4: Put another story that we've been reading this morning.

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Speaker 3: If you could safely implant to chip in your brain

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Speaker 3: to enhance your intelligence, would you, Caroline.

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Speaker 2: Are you seriously asking me? Shudder? Absolutely shudder. I just

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Speaker 2: don't think I could do it, but I'm fascinated that

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Speaker 2: others might.

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Speaker 3: Bloombergminius Parmi Olson has been writing about this. We know

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Speaker 3: that Elon Musk is among those who has ambitions in

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Speaker 3: this area with Neuralink, others are researching it too now,

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Speaker 3: Parmi says there are parallels to other innovations. Take for example,

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Speaker 3: Silicon Valley investing trillions in building artificial intelligence artificial general intelligence,

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Speaker 3: despite no consenses on what AGI actually even means, and

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Speaker 3: companies aparently even backing away from that as well. So

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Speaker 3: plenty of enthusiasm for it. But even Neuralink's chief surgeon

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Speaker 3: has admitted that pharmacological agents like LSD are perhaps more

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Speaker 3: promising for brain plasticity research than electrode based chips. Now

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Speaker 3: there is progress being made in this area which can

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Speaker 3: help people who have disabilities or suffering from particular neurological diseases.

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Speaker 3: And Parme's argument really is that perhaps Musk and his

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Speaker 3: ILK should be better directing their research towards that end

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Speaker 3: rather than necessarily just trying to be the smartest person

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Speaker 3: in the room.

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Speaker 2: Yeah, and there have been amazing improvements, haven't there in

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Speaker 2: terms of the research that's being done to help people,

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Speaker 2: you know, who have mobility issues are very very severe

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Speaker 2: one sometimes you know, using engineering to try to help

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Speaker 2: people maybe who are paraplegic and quadriplegic. So that would

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Speaker 2: be wow, an amazing game changer, wouldn't it.

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Speaker 3: I also just find this idea of wanting to use

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Speaker 3: the technology to be the Marster person in the room.

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Speaker 3: I mean, AI would want to be a lot more

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Speaker 3: reliable before you plug it into your brain.

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Speaker 4: Could could you?

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Speaker 3: You know, imagine how insufferable literally everyone would be for people,

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Speaker 3: you know, confidently spouting opinions with very little relation to

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Speaker 3: what the actual evidence is based on it, just because

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Speaker 3: their chip implant has told them this is what they've

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Speaker 3: scraped off the internet as a as a piece of information.

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Speaker 2: Well, it would save me from the iPhone being you know,

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Speaker 2: flourished during the dinner party.

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Speaker 3: True, yes, there's much people have been much more. People

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Speaker 3: would be much more polite perhaps in that sense, but anyway,

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Speaker 3: a bit far away is what we've and from Paramee

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Speaker 3: Elson's piece, but you can read the full thing at

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Speaker 3: Bloomberg dot com for its slash opinion.

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Speaker 2: Okay, so let's think about what we're expecting today. President

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Speaker 2: Donald Trump says that he will announce who he has

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Speaker 2: picked to lead the Federal Reserve later. Bloomberg has learned

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Speaker 2: that the administration is preparing for the President to nominate

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Speaker 2: former FED Governor Kevin Walsh as the new chair to

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Speaker 2: replace your own power Bloomberg Opinion colonist Daniel Moss joins

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Speaker 2: us now for more. Kevin Walsh is one of the

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Speaker 2: names who's been circulated for this role for some months. Now,

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Speaker 2: why do you think that President Trump would have picked him?

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Speaker 8: In the event thatsh does get the nod? You can

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Speaker 8: see a direct line from Walsher's earlier career till now.

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Speaker 8: He is a former FED insider, worked in the George W.

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Speaker 8: Bush White House, a former deal maker on Wall Street.

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Speaker 8: He was always going to be in consideration for a

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Speaker 8: top role in a Republican administration. Trump considered him in

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Speaker 8: twenty seventeen, but went for J. Powell instead. You know so,

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Speaker 8: despite Walsh's history as an insider as a FED governor

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Speaker 8: from two thousand and six to twenty eleven, he has

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Speaker 8: carved out a space for himself as a trenchant Fed critic,

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Speaker 8: and he's been nodding to all the things that Trump

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Speaker 8: likes to hear. He wrote an op ed in The

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Speaker 8: Wall Street Journal late last year which hit all those touchstones.

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Speaker 4: Was critical of J. Powell lash the Biden.

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Speaker 8: Administration's records said the President Trump had not been getting

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Speaker 8: the credit he deserves, so it's been a really expert refashioning.

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Speaker 3: So what his nomination, if confirmed, mean that we would

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Speaker 3: get a more a Dovish fad than given what we

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Speaker 3: been hearing from Caravin Wrreses in recent years.

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Speaker 4: I think that's really hard to gauge.

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Speaker 8: Trump has said he's looking for someone who'll cut interest rates.

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Speaker 8: The FED is inclined to ease a bit more this year,

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Speaker 8: so whoever is picked is sort of leaning against an

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Speaker 8: open door. But again, I want to go back to

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Speaker 8: Walsh's record as a FED governor. A lot of the

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Speaker 8: duvish positions that the FED took from two thousand and

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Speaker 8: seven to two thousand and nine, the financial crisis and

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Speaker 8: then in the aftermath. Guess how many times Kevin Walsh dissented.

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Speaker 8: It looks like a donut zero. So in recent speeches,

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Speaker 8: he's criticized the expansion of the balance sheet, he's criticized

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Speaker 8: FED activism. Granted there was a crisis from two thousand

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Speaker 8: and six, excuse me, two thousand and seven to two

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Speaker 8: thousand and nine.

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Speaker 4: He hung around the FED for a while afterwards.

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Speaker 8: You can see in some of the latter month discussions

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Speaker 8: of his tenure he was uneasy about ramping up the

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Speaker 8: balance sheet again in the end, not uneasy enough to.

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Speaker 2: Dissent, Yes, But maybe I suppose restoring ambiguity feels much

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Speaker 2: more familiar to markets than anything else. What do you

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Speaker 2: think it actually means if he is confirmed for the

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Speaker 2: issue around federal reserve independence.

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Speaker 8: It depends what you mean by that. So in his

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Speaker 8: press conference this week at the end of the FOMC meeting,

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Speaker 8: toward the end, j Powell was asked whether he had

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Speaker 8: any advice for his successor, whoever that person might be.

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Speaker 8: He emphasized a couple of things, among them that the

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Speaker 8: Fed's democratic accountability comes through Congress. You know, way back

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Speaker 8: when Ben Bnanki gave similar advice to the incoming Janet Yellen,

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Speaker 8: which is, remember, Congress is our boss. Now, Congress designed

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Speaker 8: the FED through a series of bills to have insulation

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Speaker 8: from the executive branch. Now, just how that works in practice,

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Speaker 8: given the president's you know, bombastic critiques of the FED,

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Speaker 8: just how it works under the next chair will be

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Speaker 8: something to watch.

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Speaker 4: My guess.

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Speaker 8: If that person is Kevin Walsh, You're going to see

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Speaker 8: pragmatism takeover before too long. It's hard to gauge, you know,

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Speaker 8: any sort of distinctive philosophy or ideology based.

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Speaker 4: On his record.

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Speaker 3: Okay, well, we all a waste that announcement with entrast

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Speaker 3: Bloomberg opinion columnist Daniel math thank you very much.

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Speaker 4: Stay with us.

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Speaker 3: More from Bloomberg Daybreak Europe. Coming up after this to

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Speaker 3: Sweden now, where the powerful Wallenberg family is said to

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Speaker 3: have sway over forty percent of the companies under local

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Speaker 3: stock exchange. As one janeral a Reacher's retirement age, they're

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Speaker 3: looking to achieve a smooth transition of power to a

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Speaker 3: new crop of faces. Our Sweden bureau chief Charles Daily

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Speaker 3: joins us now for more on this story. Charles Firstley

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Speaker 3: tell us about the Wallenbergs and the scale of their investments.

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Speaker 1: It's not an understatement to say that in Sweden this

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Speaker 1: family is really viewed as business royalty. For six generations,

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Speaker 1: they have played an oversized role in the corporate life

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Speaker 1: of the Nordic region's biggest economy, by first building what

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Speaker 1: is now the country's largest bank, SEB, to holding an

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Speaker 1: unparalleled range of industrial stakes across public and private markets,

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Speaker 1: and that all basically means a portfolio worth about three

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Speaker 1: hundred and fifty billion krona or almost forty billion dollars,

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Speaker 1: and it includes major stakes in companies such as Ericson,

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Speaker 1: EQT and AstraZeneca. The ownership is held by foundations, not

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Speaker 1: the family members, which is an important distinction. I think

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Speaker 1: an eighty percent of the dividends from that portfolio fund

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Speaker 1: research and education.

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Speaker 4: The rest can be reinvested.

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Speaker 1: And I also think it's worth mentioning that through a

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Speaker 1: system of dual class shows the family not only owns

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Speaker 1: stakes in these various companies, but can control the direction

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Speaker 1: of the businesses by having a relatively higher proportion of

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Speaker 1: voting rights in relation to the capital held. And this

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Speaker 1: uneven system of voting power has courted controversy in recent years,

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Speaker 1: but the family argue, as they indeed told us, that

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Speaker 1: it fosters responsible, long term ownership in good times and bad.

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Speaker 2: Your reporting is so interesting. Tell us about what this

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Speaker 2: transition is that is taking place right now and who

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Speaker 2: the new faces are who may take up key roles.

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Speaker 1: Absolutely, it's a really interesting time for the family. They

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Speaker 1: are currently led by three patriarchs from what is called

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Speaker 1: the fifth generation, one of which is a called Poker Wallenberg,

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Speaker 1: whom we spoke to at length for the purposes of

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Speaker 1: our story today. As these three are all nearing retirement age,

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Speaker 1: a process of appointing the next generation of family members

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Speaker 1: began formerly last year. This sixth generation, as they're called,

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Speaker 1: is a collective group of thirty individuals in their twenties

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Speaker 1: and thirties, and you know, they have varying interests and

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Speaker 1: experience across business, law, finance, and research. So far, there's

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Speaker 1: been bord appointments from the sixth generation at private equity

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Speaker 1: Giant EQT as well as the family's main holding company,

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Speaker 1: investor AB and just this week, in fact, there was

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Speaker 1: another announcement for lender SEB which said it was going

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Speaker 1: to nominate Martina Wallenberg to its board and she is

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Speaker 1: thirty six years old.

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Speaker 3: And of course the changing cast is also casting some

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Speaker 3: questions about the Wallenberg's influence as well. Can this new

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Speaker 3: generation maintain the family's position and sway, Yeah, it's a really.

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Speaker 1: Good and difficult question. The family will certainly hope so.

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Speaker 1: And under Poker Wallenberg's leadership, they have been planning for

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Speaker 1: an northerly handover, a path for at least the past

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Speaker 1: ten years. The new crop of Wallenberg's, though, will no

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Speaker 1: doubt have to deal with continue challenges to this dual

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Speaker 1: class share system, and I think that's especially true in

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Speaker 1: a world of increased scrutiny around governance. There's also a

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Speaker 1: rising billionaire class in Sweden, as tech entrepreneurs from the

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Speaker 1: likes of Spotify and Klana increasingly dominate the country's rich lists,

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Speaker 1: and only time will tell if these business owners will

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Speaker 1: emerge as challenges to the crown or if the new

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Speaker 1: generation of Wallenberg's can maintain their grip on power.

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