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

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Speaker 2: This is the Blooe Big Dabacate podcast. Good Morning is Wednesday,

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Speaker 2: the twenty seventh of August in London.

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Speaker 3: I'm Caroline Hepca and.

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Speaker 4: I'm Stephen Carroll. Coming up today, Donald Trump vows to

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Speaker 4: go to court to remove Federal Reserve Governor Lisa Cook

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Speaker 4: as the White House considers ways to extend its influence

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Speaker 4: across the Fed's regional banks.

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Speaker 2: As UK government boring costs come close to nineteen ninety

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Speaker 2: eight highs, we look at whether the data used to

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Speaker 2: measure the country's economy is up to the job.

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Speaker 4: Plus, we have lift off SpaceX successfully launches its starship

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Speaker 4: reusable rocket, surviving most of its journey back to Earth.

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Speaker 3: Let's start with a round up of our top stories.

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Speaker 4: The White House is exploring ways to exert more influence

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Speaker 4: over the fed's twelve regional banks, including how their presidents

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Speaker 4: are vetted and chosen. That's according to sources who've spoken

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Speaker 4: to Bloomberg. The reporting comes as Donald Trump says he's

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Speaker 4: ready for a legal fight with FED Governor Lisa Cook,

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Speaker 4: adding that he's already looking for her replacement.

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Speaker 5: Well, we have some very good people for that position,

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Speaker 5: and I think we have some very good people were

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Speaker 5: down to.

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Speaker 4: I mean, I think I maybe in my own mind

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Speaker 4: have somebody that I like.

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Speaker 3: But I deal with Scott.

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Speaker 4: And I deal with Howard, and we're dealing with.

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Speaker 1: A lot of people actually that are going to be

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Speaker 1: involved in that decision.

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Speaker 4: Ultimate it's a very important decision. Yes, President, they're referring

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Speaker 4: to the Treasury Secretary Scott Bassant on the Commerce Secretary

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Speaker 4: Howard Lutnik, who would both be expected to weigh in

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Speaker 4: on any possible successor. In a statement released on Tuesday,

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Speaker 4: the Federal Reserve said it will abide by any court

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Speaker 4: ruling regarding Cook. If Trump succeeds, he could secure a

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Speaker 4: dubbish majority on the FED Board as he pushes for

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Speaker 4: lower interest rates. We got reaction from former Fed Vice

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Speaker 4: Chair Lal Brainard.

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Speaker 6: Well, I think the Federal Reserve is an incredibly difficult

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Speaker 6: position here. But you have to remember this is not

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Speaker 6: about an individual governor. This is really an unprecedented attack

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Speaker 6: on the independence of the Federal Reserve as an institution.

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Speaker 4: Former Fair Advice Chair Lale Brainard speaking there as concerns

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Speaker 4: grow that President Trump's unprecedented and escalating attack on the

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Speaker 4: federal reserve runs the risk of driving long term borrowing

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Speaker 4: costs higher.

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Speaker 2: Now the United States has placed a fifty percent tariff

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Speaker 2: on some Indian goods, which came into effect only a

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Speaker 2: short time ago. The levee is doubled the existing rate

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Speaker 2: and threatens to damage the export competitiveness of the world's

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Speaker 2: fastest growing major economy. President Champ says that the charge

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Speaker 2: is punishment for India's ongoing purchases of Russian oil, which

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Speaker 2: he said is funding Putin's war in Ukraine. But despite

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Speaker 2: the move, India and Russia have pledged to increase their

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Speaker 2: annual trade over the next five years by fifty percent

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Speaker 2: to one hundred billion dollars. New Delhi has also called

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Speaker 2: the US actions against it unfair, unjustified, and unreasonable.

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Speaker 4: The asset manager Carmeniac is warning that French government borrowing

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Speaker 4: cost could spike to one hundred basis points over their

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Speaker 4: German peers if the government collapses in ten days time.

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Speaker 4: That will be the widest yields spread since the height

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Speaker 4: of the Eurozone death crisis in twenty twelve. Ahead of

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Speaker 4: the confidence vote on the eighth of September, opposition to

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Speaker 4: French Prime Minister of France Barberou's government is growing. The

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Speaker 4: leader of the far right National Rally Party, Jordan Baldela,

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Speaker 4: told France's TF one television that he won't back the premiere.

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Speaker 7: We will obviously be voting against the government's confidence motion

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Speaker 7: and as seeking potentially a new government or new president

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Speaker 7: if this one has to choose constitutional tools to get

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Speaker 7: out of this crisis or hear what the majority of

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Speaker 7: the French people want today.

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Speaker 4: Jodan Baldella, speaking there through a translator during an interview

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Speaker 4: with the Francis Fan. Three of the major opposition groups

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Speaker 4: have now indicated they will vote against the com Fidan's

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Speaker 4: motion next month, increasing the likelihood of a resignation. Barroo

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Speaker 4: is calling the vote in an effort to consolidate support

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Speaker 4: in parliament for forty four billion euros worth of spending

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Speaker 4: cuts and tax increases that he considers vital to averse

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Speaker 4: disaster for the public finances.

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Speaker 5: Now.

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Speaker 2: The yield on UK thirty year bonds climbed close to

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Speaker 2: a twenty seven year high yesterday, piling pressure on Keir

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Speaker 2: Starmer's government to tighten its fiscal policy.

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Speaker 3: Bloomberg's un Parts reports long dated guilt yield surge.

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Speaker 5: Yesterday's market's caught up with Monday's moves In the US

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Speaker 5: after the bank call of the closure, thirty yields are

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Speaker 5: now just a whisker away from five point sixty six percent,

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Speaker 5: a level they last saw in nineteen ninety eight. The

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Speaker 5: high cost of borrowing as yet another headwind for the

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Speaker 5: Chancellor as she works out how to make the sums

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Speaker 5: add up ahead of her or some budget, and if

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Speaker 5: she was hoping for some relief on interest rates, Catherine Mann,

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Speaker 5: who sits on the Berwis rate setting Committee, says now

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Speaker 5: is not the time. She says policies not currently tighten

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Speaker 5: off and holding rates is the appropriate thing to do.

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Speaker 5: In London, i'm umpot Splinberg.

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Speaker 4: Radio Nigel for Hours, the leader of Britain's Reform UK party,

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Speaker 4: is vowed to expel tens of thousands of asylum seekers

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Speaker 4: if he wins the next general election, as part of

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Speaker 4: a program dubbed Operation Restoring Justice for ourset of reform

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Speaker 4: led government would remove Britain from the European Court of

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Speaker 4: Human Rights and carry out mass deportations.

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Speaker 8: The only way we will stop the votes is by

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Speaker 8: detaining and deporting absolutely anyone that comes via that route,

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Speaker 8: and if we do that, the boats will stop coming

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Speaker 8: within days.

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Speaker 4: The reform UK leader out of that he would scrap

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Speaker 4: the country's Human Rights Act to remove legal roots of

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Speaker 4: appeal and disipply the nineteen fifty one Refugee Convention for

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Speaker 4: five years. The CEO of the Refugee Council and ver

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Speaker 4: Solomon denounce the toxic narratives that dehumanize refugees and fuel

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Speaker 4: fear and division across the country.

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Speaker 2: Elon Musk's SpaceX has successfully launched a test flight of

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Speaker 2: its Starship rocket, achieving new technological milestones after a year

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Speaker 2: of far e setbacks. Build as the largest and most

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Speaker 2: powerful rocket ever built. It successfully deployed satellites for the

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Speaker 2: first time and survived most of its journey back down

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Speaker 2: to Earth. Let's have listened to the moment that it

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Speaker 2: launched from SpaceX's starbase in South Texas.

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Speaker 3: Bio three two one.

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Speaker 2: The rockets super heavy boosters separated as planned before splashing

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Speaker 2: down in the Gulf of Mexico. Starship is at the

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Speaker 2: heart of SpaceX's plans to put Starlink Internet satellites into

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Speaker 2: Earth's Orbid and to one day put humans on Mars.

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Speaker 3: Those are your top stories.

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Speaker 4: On the markets, the msciosh Pacific Index down by a

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Speaker 4: tenth of one percent. European stock features are pointing higher

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Speaker 4: after we saw another day of selloff yesterday, so Eurostock's

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Speaker 4: fifty futures are up by three tenths of one percent.

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Speaker 4: On currency markets, the Bloomberg Dollar Spot Index two tenths higher.

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Speaker 4: The euro is trading at one sixteen fourteen, the pound

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Speaker 4: at one thirty four forty seven, and the ten year

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Speaker 4: treasury yield is upper basis point at four point two

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Speaker 4: seven percent.

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Speaker 2: Now, in a moment, we'll bring you more on Donald Trumps,

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Speaker 2: pressure on the Fed, Lisa Cook, plus the latest in

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Speaker 2: the barrage of criticism over UK economic data. But there's

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Speaker 2: another story that's caught our eye. And of course, the

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Speaker 2: I peraps the entire internet.

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Speaker 4: Where were you, Caroline when you heard the news?

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Speaker 2: I shall not reveal, but I am totally fascinated by

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Speaker 2: Taylor Swift and yeah.

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Speaker 4: In Instagram posts that took the world. Yes, I think

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Speaker 4: Taylor Swift is engaged in Travis Kelsey in case you

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Speaker 4: hadn't heard, And the Internet is full of people reacting

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Speaker 4: to it, which I think is more interesting than the actual.

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Speaker 3: Point dress studying the flowers.

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Speaker 4: But look at us being bloomberg. We've also been looking

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Speaker 4: at how people have been spending their money around this

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Speaker 4: as well. So, for example, on betting website, gamblers are

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Speaker 4: making wages on when the wedding will take place. Apparently

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Speaker 4: eighty thousand dollars worth of bets were placed on one

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Speaker 4: website in the hours after the Instagram post announcing the engagement.

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Speaker 4: Apparently on polymarket, betters are going as far as to

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Speaker 4: gamble when the couple might have a baby. Others are

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Speaker 4: also convinced the singers now going to headline the twenty

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Speaker 4: twenty six Super Bowl halftime show. So there are business

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Speaker 4: opportunities everywhere you look in this one. It's actually a

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Speaker 4: very interesting reflection of the gambling frenzy that's been going

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Speaker 4: on in the US, Americans batting billions on sport but

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Speaker 4: also cultural events. In advance of this, around two hundred

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Speaker 4: and fifty thousand dollars changed hands on one website for

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Speaker 4: bets on whether Travis Kelsey and Taylor Swift would get

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Speaker 4: engaged this year. Odds were hovering in case you're wondering,

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Speaker 4: at about forty percent going into this week. Yeah, other effects.

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Speaker 4: We're seeing this already. The dress that Taylor Swift wore

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Speaker 4: in the engagement photos sold out apparently.

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Speaker 2: And of how much and what the design of the

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Speaker 2: ring was all about.

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Speaker 4: I mean, emergandising possibilities really are endless if you think

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Speaker 4: about it. Anyway, plenty more to read on this news.

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Speaker 4: Will put some of the links to our stories on

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Speaker 4: this on our podcast show Notes Now.

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Speaker 2: President Trump says that he is prepared for a legal

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Speaker 2: fight with Federal Reserve Governor Lisa Cook as he attempts

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Speaker 2: to gain more control over the US Central Bank. Joining

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Speaker 2: US Now to discuss his Bloomberg's Markets live strut is

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Speaker 2: Mary Nicola, Mary, Good Morning. President Trump said yesterday we'll

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Speaker 2: have a majority I fall out of the seven FED

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Speaker 2: board members as Trump appointees, and they then have influence

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Speaker 2: over regional FED governors. So I suppose the fundamental question

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Speaker 2: is how likely is that?

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Speaker 3: How quickly could it happen?

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Speaker 1: Well, we know, for one thing, what is going to

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Speaker 1: happen with Lisa Cook in terms of there's it's going

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Speaker 1: to the court, potentially going to the courts, and that

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Speaker 1: could mean a very long drawn out legal battle. So

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Speaker 1: it might not be that swift that we get a

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Speaker 1: resolution on what happens.

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Speaker 3: But even if not, the whole fact.

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Speaker 1: That we're going through this long legal battle, the fact

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Speaker 1: that President Trump is trying to influence the Central Bank

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Speaker 1: is quite nerve wrecking for markets, and it's going to

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Speaker 1: weigh on the dollar because at the end of the day,

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Speaker 1: you're undermining the credibility of the FED. You're infringing on

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Speaker 1: the independence of the FED, and that is essentially one

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Speaker 1: of the key cornerstones of policy in the US.

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Speaker 3: So a lot of it.

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Speaker 1: For now it seems like the reaction is a bit complacent,

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Speaker 1: but if he gets what he wants, it's actually quite

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Speaker 1: damaging for the dollar and US assets.

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Speaker 4: Well, I suppose let's talk about how this could play

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Speaker 4: down the line as well, because even a protracted legal

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Speaker 4: battle also casts a shadow over the FED. And of

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Speaker 4: course we're thinking about the decision over the FED chair

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Speaker 4: next year too. I mean, what is the outlook or

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Speaker 4: the market considerations about what the Federal Reserve could look

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Speaker 4: like in a couple of months time.

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Speaker 1: Yeah, if a lot of I mean, there's obviously we

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Speaker 1: know and it's been very clear that the administration wants

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Speaker 1: lower rates. So I think what you end up getting,

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Speaker 1: especially if there is a lot of influence from the

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Speaker 1: political side, is that you get shortened rates quite well anchored.

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Speaker 1: The problem really comes in in the back end, where

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Speaker 1: concerns about inflation expectations, especially if you have PCE coming through,

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Speaker 1: or if you have you know, the concerns about a

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Speaker 1: policy mistake, and of course just where the trajectory of

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Speaker 1: inflation could be potentially going with tariff's coming through. So

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Speaker 1: I think the end result is going to be a

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Speaker 1: lot of emphasis on the back end, or pressure on

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Speaker 1: the back end of the curve. But what you'll see

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Speaker 1: is more of a lock in on the front end

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Speaker 1: because you'll there will be heightened expectations of more aggressive

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Speaker 1: easing if the administration really gets what it wants.

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Speaker 2: So that's the sort of thinking around you know, an

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Speaker 2: independent federal reserve. Maybe that that looks a lessertain now

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Speaker 2: obviously that being you know, the bedrock of US and

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Speaker 2: global market is or was certainly a significant one. There

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Speaker 2: is also another political crisis though that we should be discussing,

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Speaker 2: and that's in France over the budget, which has seen

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Speaker 2: French boring cost surge and Comegnact warning that the yield

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Speaker 2: spread between French and German bonds could hit one hundred

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Speaker 2: basis points.

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Speaker 3: So why is that so important?

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Speaker 1: Yeah, I mean we're not it's nothing new that we're

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Speaker 1: getting some of these political rumblings from from France. And

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Speaker 1: we've seen it before in twenty twenty four when mccran

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Speaker 1: called a snap elections. We saw it again when the

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Speaker 1: prime minister was a government first collapsed, so there has

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Speaker 1: been a bit of a repeat. The problem is, and

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Speaker 1: we've seen it before, is the fact that there's a

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Speaker 1: greater scrutiny on debt sustainability, whether you have it from

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Speaker 1: the U or from France. The fact is government debts

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Speaker 1: are ballooning. We already see it in the borring costs

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Speaker 1: for guilt for example as well. So this just places

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Speaker 1: greater scrutiny under debt sustainability and it puts even more

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Speaker 1: pressure on the long end of the curve.

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Speaker 3: And that's unlikely to go away.

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Speaker 1: So we don't have the vote until September eighth, so

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Speaker 1: that's going to likely lead to a lot of investor

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Speaker 1: angst in the run up and there's going to be

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Speaker 1: a lot of pressure on French assets as a result.

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Speaker 4: Well, continue to monitor that as it develops. Mari Nicola

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Speaker 4: for Now our Market's life strategist. Thank you, stay with us.

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Speaker 4: More from Bloomberg Daybreak Europe coming up after this.

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Speaker 5: Now.

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Speaker 2: Britain's Royal Economic Society is the latest to wade into

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Speaker 2: the crisis around the UK's economic data. The Body for

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Speaker 2: British Economists is warning that experts can no longer properly

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Speaker 2: analyze the gender pay gap, as well as other wage

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Speaker 2: and inequality measures. What it's The latest blow is the government,

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Speaker 2: civil servants and bankers all vent their frustration at the

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Speaker 2: deterioration of the UK's official statistics At Bloomberg's James Walcock

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Speaker 2: joins us now for more on this. So just tell

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Speaker 2: us and explain a bit more about the state of

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Speaker 2: this problem with economic data.

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Speaker 9: I think, Karen, imagine an ideal economy and what you

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Speaker 9: would want to know about it. In an ideal world,

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Speaker 9: you'd love to know how much people are paid, how

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Speaker 9: much game people are in work, and maybe what's the

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Speaker 9: GDP actually Commy's worth. Now this sound is me getting

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Speaker 9: at my laundry list of all the statistics that have

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Speaker 9: been delayed or suspended or corrected in the past three

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Speaker 9: years by the Office of National statistics in the UK,

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Speaker 9: so labor force employments which has been suspended entirely until

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Speaker 9: twenty twenty seven, producer prices, trade data GDP, business surveys,

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Speaker 9: and retail sales.

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Speaker 3: So like you pick.

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Speaker 9: Your indicator of how the economy is going, the OS

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Speaker 9: has in some fashion had issues with that day to

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Speaker 9: the latest one being retail sales, which was just last week.

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Speaker 9: It has been delayed by two weeks where they do

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Speaker 9: quality assurance. Now we're now seeing the second order effects

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Speaker 9: from that. We've already heard from government ministers and politicians

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Speaker 9: and central bankers and financiers saying this is difficult, but

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Speaker 9: we're now say academics weighing and the Royal Economic Society

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Speaker 9: is one of the world's oldest and most prestidious can

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Speaker 9: make associations, and they're saying it's easier to study other

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Speaker 9: countries than the UK where they're based at this point

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Speaker 9: in terms of how to look after the labor market.

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Speaker 9: And then on top of that, a recent review by

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Speaker 9: the British journalm Industry Relations found the OS has underestimated

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Speaker 9: the gender pay gap for twenty years now by one percent.

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Speaker 9: They also say that they got the number of people

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Speaker 9: on the minimum wage wrong by twenty percent, and now

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Speaker 9: the Resolution Foundation have released a rival index looking at

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Speaker 9: unemployments which predicts will be at five percent by the

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Speaker 9: end of the year. The other thing, tanks are trying

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Speaker 9: to fill the gap where officialtistics used to be. It

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Speaker 9: all adds up to what is effectively this sort of

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Speaker 9: vacuum where UK for statistics used to be.

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Speaker 3: So what's being done to fix such chains?

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Speaker 9: It depends what you view as the problem, Stephen. In

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Speaker 9: many ways, the OS is a very good metaphor for

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Speaker 9: the UK. More broadly, you've got a changing society, you

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Speaker 9: have limited resources, you have a response to COVID, the pandemic,

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Speaker 9: and questions of a productivity. If you look at the surveys,

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Speaker 9: the onsay the surveys on labor being fixed. New leads

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Speaker 9: are in place and they say they are urgently refocusing

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Speaker 9: resources on their core economic outputs. And so if you

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Speaker 9: think the problems are survey based, they're hoping new techniques

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Speaker 9: will fix it. If you think this is an austerity problem,

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Speaker 9: ten million pounds is being cut from non urgent economic

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Speaker 9: data to go into sort of the essential areas. But

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Speaker 9: at Bloomberg Analysis says there is going to be a

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Speaker 9: six percent funding cut in real terms by twenty twenty nine.

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Speaker 9: If you think this is a problem of culture and productivity,

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Speaker 9: it's worth noting in two thousand and seven ninety percent

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Speaker 9: of the OS's London based staff quit than move to Newport,

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Speaker 9: so a leveling up sort of question. In twenty twenty,

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Speaker 9: over the pandemic, they all moved to homeworking and the

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Speaker 9: only's high people as far abroad as Northern Ireland, as

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Speaker 9: far as flung away from Newport. Then twenty twenty three,

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Speaker 9: when areas in the data started creeping in, they were

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Speaker 9: then told to move back to forty percent homeworking, which

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Speaker 9: means that the o ands are currently on strike where

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Speaker 9: they are doing a zero office attendance policy. All of this,

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Speaker 9: depending on how you want to look at it could

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Speaker 9: be sort of the problem or the range of problems.

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Speaker 9: It's not a short term thing that can be fixed

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Speaker 9: very easily.

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Speaker 2: Yeah, so it's funding its people, but maybe it's also

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Speaker 2: the fact that we're becoming such a digitized economy and

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Speaker 2: so the way that you collect statistics is really changing.

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Speaker 2: Lots and lots of issues then really to get to

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Speaker 2: grips with and it all comes out kind of quite

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Speaker 2: a difficult time also for the government, certainly when we're

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Speaker 2: thinking about the autumn budget and government finances, and an

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Speaker 2: interesting interview.

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Speaker 9: It quite I mean arguably, this could be one of

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Speaker 9: the worst possible moments to come. R high inflation, you

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Speaker 9: have a weakening jobs market. This is the moment that

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Speaker 9: central bankers sort of test their metal and earn their stripes.

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Speaker 9: And meanwhile interest rates being so high as putting pressure

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Speaker 9: on bond yields. They are now higher than the sudden

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Speaker 9: spike under the former Prime Minister of this trust who,

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Speaker 9: as you hinted, their Caline Bloomberg spoke to yesterday. Now

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Speaker 9: she thinks politicians here should be taking a leaf out

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Speaker 9: of President Trump's approach.

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Speaker 3: To the FED.

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Speaker 10: I think the Bank of England needs to be accountable

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Speaker 10: to politicians. I think the current system doesn't work. This

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Speaker 10: is why I'm very sympathetic to what Donald Trump is

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Speaker 10: saying about the FED. Monetary policy is incredibly important.

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Speaker 9: Now you can hear that full interview on the Odd

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Speaker 9: Lots podcast later this week. But with central bankers under scrutiny,

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Speaker 9: and as we head into like you say, car into

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Speaker 9: this difficult autumn where Chancellor Racheries will be feeling endless

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Speaker 9: questions about taxes. She'll be hoping for better economic data

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Speaker 9: to try and give her more fiscal space. But if

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Speaker 9: that data does come at this crucial moment, will we

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Speaker 9: trust it.

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Speaker 4: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 4: stories making news from London to Wall Street and beyond.

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Speaker 3: I'm Caroline Hepka and.

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Speaker 4: I'm Stephen Carroll. Join us again tomorrow morning for all

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Speaker 4: on Bloomberg day Break Europe