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

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Speaker 2: This is the Blueberg Day Bakut podcast. Good morning, It's Tuesday,

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Speaker 2: the twenty sixth of August. I'm Caroline Hepkeat in London and.

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Speaker 3: I'm Stephen Carroll. Coming up today.

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Speaker 1: Donald Trump says he's firing Federal Reserve Governor Lisa Cook,

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Speaker 1: but she insists he has no power to do so

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Speaker 1: and refuses to quit.

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Speaker 2: French assets sell off as the country's prime minister calls

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Speaker 2: a confidence vote that may topple the government.

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Speaker 1: Plus the grass Isn't Always Greener? Why an artificial turf

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Speaker 1: producer encapsulates the US tariff pressures squeezing European firms.

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

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Speaker 1: US President Donald Trump says he's firing Federal Reserve Governor

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Speaker 1: Lisa Cook. In a letter posted on truth Social he

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Speaker 1: said he had sufficient cause to remove her, citing allegations

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Speaker 1: she made false statements on mortgage loans. Cook has pushed back,

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Speaker 1: saying Trump has no authority to fire her and that

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Speaker 1: she will not step down. Her lawyers say the president's

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Speaker 1: move is illegal and vowed to take whatever actions are

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Speaker 1: needed to prevent it. Danielle di Martino Booth is a

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Speaker 1: former advisors the Dallas Fed.

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Speaker 3: Twelve months ago.

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Speaker 4: I would have never thought that I would have seen

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Speaker 4: this happen, much less see the head of the Bureau

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Speaker 4: of Labor Statistics be called down from her post as well.

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Speaker 4: Everything right now makes us very nervous, including whether or

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Speaker 4: not there's a next person who mar or may not

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Speaker 4: be in the crosshairs.

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Speaker 1: Danielle de Bertino Booth there who's now CEO of QI Research.

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Speaker 1: If he were to succeed, the move could give Trump

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Speaker 1: a chance to name someone to the FED board and

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Speaker 1: secure a four person majority on the Fed's seven member

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Speaker 1: Board of Governors. While a president has never removed a

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Speaker 1: FED governor from office, one can do so for cause. However,

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Speaker 1: according to Bloomberg Intelligence, the mere allegations of fraud are

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Speaker 1: likely insufficient to meet the four cause removal standard.

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Speaker 2: US President Donald Trump has threatened substantial new tari and

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Speaker 2: export controls on countries that impose a digital services tax

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Speaker 2: on American tech companies. In a social media post, Trump

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Speaker 2: said that he would introduce export restrictions on highly protected

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Speaker 2: technology and chips unless the quote discriminatory measures are removed.

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Speaker 2: Polka Mishra, partner at Javelin Wealth Management, says the eventual

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Speaker 2: impact of the threat still isn't clear, so the thing.

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Speaker 5: It's still again about dealmaking. Canada did give in on

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Speaker 5: the digital tax, but Europe is holding firm. So we

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Speaker 5: feel that you can't make long term predictions based on

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Speaker 5: a terror being announced or threatened now and then being

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Speaker 5: taken off again or some deal being struck. So I

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Speaker 5: still think that it's probably going to be again a negotiation,

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Speaker 5: some deals.

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Speaker 3: Being struck, but it's not going to.

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Speaker 5: Impact the EI rally or the EI story significantly.

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Speaker 2: Commissioner partner a Javelin Wealth Management, speaking there, JOHMP has

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Speaker 2: long argued that digital services taxes discriminate against US tech

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Speaker 2: jants but to European countries including France, Italy and the

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Speaker 2: UK have maintained their levees as international talks over how

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Speaker 2: to more effectively tax multinational giants and a digital age continue.

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Speaker 1: French Prime Minister of France Barberoux has called a confidence

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Speaker 1: vote for the eighth of September that could topple the

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Speaker 1: country's government. The news prompted to sell off in French assets,

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Speaker 1: with stocks falling and bond deal's rising speaking to reporters

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Speaker 1: in Paris, Bayrou says the action was necessary.

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Speaker 6: This is why I asked the President to reconvene Parliament

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Speaker 6: in an extraordinary session on Monday, September eighth. I will

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Speaker 6: engage the government's responsibility on that day with the General

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Speaker 6: Policy Statement, in accordance with our constitution. This General Policy

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Speaker 6: Speech will pose the central question whether the danger to

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Speaker 6: the nation is serious, whether there is an emergent here not,

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Speaker 6: in order to choose a path to regain control of

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Speaker 6: our public finances.

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Speaker 1: Fantobarru they are speaking through a translator. France's far right

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Speaker 1: National Rally party, the leftist France Unbowed and the Greens

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Speaker 1: also they would vote against the motion, while the Socialists

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Speaker 1: said they.

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Speaker 3: Wouldn't back the government.

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Speaker 1: If a majority of lawmakers fail to support Bayeru, he'll

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Speaker 1: be forced to submit as government's resignation.

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Speaker 2: Here in the UK, grocery prices are accelerating as retailers

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Speaker 2: contend with poor harvests and higher operating costs. The rate

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Speaker 2: of food inflation hit four point two percent this month,

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Speaker 2: the highest level since February twenty twenty four, according to

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Speaker 2: the British Retail Consortium. Retailers have worn the price rises

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Speaker 2: could hit six percent by the end of the year

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Speaker 2: as they contend with increase paywell taxes and a higher

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Speaker 2: minimum wage. They are arguing and urging rather the government

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Speaker 2: not to raise taxes on retailers in the autumn budget.

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Speaker 1: Young people in the UK are facing the worst jobs

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Speaker 1: markets the pandemic. Youth unemployment reached fourteen point one percent

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Speaker 1: in the three months to June, a two point rise

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Speaker 1: from pre COVID levels. Bloombergs James Walcock has more.

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Speaker 7: First time job seekers are often the most vulnerable to

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Speaker 7: hiring freezes. After labour upped payroll taxes, employers are pausing

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Speaker 7: hiring to cope. That's according to job search website Adzuna,

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Speaker 7: who say entry level roles now account for just a

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Speaker 7: fifth of all vacancies. That's the lowest share since October

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Speaker 7: twenty twenty and well below the post COVID average of

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Speaker 7: twenty seven percent. The drop comes as experts say AI

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Speaker 7: is starting to distort the jobs market, with entry level

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Speaker 7: roles being less sought after.

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Speaker 3: In London. James Wilcock Bloomberg Radio.

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Speaker 2: Elon Musk is suing Apple and Open AI, arguing that

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Speaker 2: the companies are harming consumers. The billionaire founder says that

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Speaker 2: Apple's decision to integrate to open Ai across iPhones is

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Speaker 2: thwarting competition from others like Musks, X and XAI. Bloomberg's

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Speaker 2: Mark German says, the question is if Apple actually breached

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Speaker 2: antitrust rules.

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Speaker 8: Elon is right, they do give pretty hot promotion to

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Speaker 8: some of the other AI companies in the app store.

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Speaker 8: They haven't done a lot of that promotion for Grock,

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Speaker 8: and so maybe we'll see more of that from Apple.

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Speaker 8: But all in all, I find this lawsuit to be frivolous.

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Speaker 8: I don't personally consider it an anti trust situation, but

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Speaker 8: it's obviously not up to me to decide, and it

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Speaker 8: is a little surprising that Elon Musk actually went through

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Speaker 8: with this.

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Speaker 2: For Mark German, the case sets up a high stakes

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Speaker 2: legal battle between the richest person on the planet and

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Speaker 2: one of the world's most valuable companies. A spokesperson for

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Speaker 2: Open Ai told Bloomberg this latest filing is consistent with

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Speaker 2: mister Musk's ongoing pattern of harassment.

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Speaker 1: Those are your top stories on the markets. The Bloomberg

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Speaker 1: Dollar Spot Index a tenth of one percent weaker. The

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Speaker 1: tenure Treasury yield up three basis points in trading this morning.

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Speaker 1: Looking at the European session, we're going to be watching

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Speaker 1: the euro currently a tenth of one percent stronger against

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Speaker 1: the dollar one sixteen thirty two, one sixteen thirty two.

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Speaker 3: This morning.

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Speaker 1: The catcrant in power has finished down one point six

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Speaker 1: percent yesterday, and European stock futures are pointing half a

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Speaker 1: percent lower for the Eurostox fifty today.

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Speaker 2: In a moment, we'll bring you details on President Trump's

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Speaker 2: escalating attack on the Federal Reserve and a special report

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Speaker 2: on the fallout of US tariffs on EU exporters. But

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Speaker 2: another story is caught my eye this morning. This is

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Speaker 2: the new craze, what it's been going on for a

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Speaker 2: few months, but it's really crazier than ever. This is

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Speaker 2: Le Boo Boo's pop marks, plush toys that are sold

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Speaker 2: in these mystery boxes. They're kind of blind boxes. They

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Speaker 2: are being bought, sold, resold for astronomic sums.

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Speaker 3: Yeah.

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Speaker 1: I mean, look, if you've managed to escape this trend

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Speaker 1: so far, I congratulate you for hiding on a corner

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Speaker 1: of the Internet that I certainly haven't found.

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Speaker 3: But look what I'm really interested.

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Speaker 1: In the piece of that our collegues are written about this

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Speaker 1: this morning is how it can pas too because there's

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Speaker 1: a lot of people join the comparison to beanie babies,

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Speaker 1: remember them?

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Speaker 3: Yes, is this the same as beanie babies?

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Speaker 1: Apparently a much faster and much more dramatic increases in

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Speaker 1: sales because that's the way the internet cycle works now.

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Speaker 1: But a lot of people who are buying and selling

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Speaker 1: them now. Because the story is a lot about the retail.

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Speaker 1: The resale is going on as well, and the secondary

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Speaker 1: market for lebubus. I don't think there's a ticker for

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Speaker 1: that yet, but we may have one a couple of weeks.

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Speaker 1: But the idea that people realize is something that's not

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Speaker 1: going to last. This is not the buy keep for

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Speaker 1: twenty years and then buy a house sort of fantasies

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Speaker 1: that people had about beanie babies.

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Speaker 3: No, but it's also.

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Speaker 2: About intellectual property, and it's interesting that this is a

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Speaker 2: Chinese cultural phenomenon that has actually broken through into Europe

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Speaker 2: and into the US. You know, is it a rival

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Speaker 2: to Disney. Look on the way back to London. I've

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Speaker 2: got on the plane with my kids and of course

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Speaker 2: the person in front of us in the queue had

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Speaker 2: a beautiful Louis Vuton bag with dangled Yeah.

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Speaker 1: Was it at a boobo or was it at aufu

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Speaker 1: which is a faker boo boo?

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Speaker 3: She even more of it anyway.

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Speaker 1: There's also some very interesting thoughts about how this isn't

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Speaker 1: necessarily a very deep trend. There isn't a huge market

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Speaker 1: behind it if you compar it to the likes of

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Speaker 1: Nintendo's Pokemon as well. So that's a whole other question

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Speaker 1: of kind of how you actually developed this into a market.

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Speaker 1: A great deep dive into the business behind pop Martin

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Speaker 1: the Boo Boos. You find it on Bloomberg dot com

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Speaker 1: and we'll put a link to the article in our

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Speaker 1: podcast show notes as well.

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Speaker 2: Now, President Trump says that he has sufficient cause to

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Speaker 2: fire Federal Reserve Governor Lisa Cook. In a statement, Cook

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Speaker 2: says Trump has no authority to do so and she

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Speaker 2: won't quit. Joining us now to discuss is Blomboogs Chief

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Speaker 2: Asia correspondent Roslyn matheson to talk about the story dominating

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Speaker 2: this morning. Ros I think we should start just by

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Speaker 2: talking a bit about who Lisa Cook is and what

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Speaker 2: President Trump's allegations against her are.

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Speaker 9: As You're saying she serves on the seven member Board

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Speaker 9: of Governors, and they, alongside some of the Reserve Bank presidents,

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Speaker 9: make up the FOMC, which is the committee that sets

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Speaker 9: interest rates, and obviously interest rates are very much in

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Speaker 9: the crosshairs for the US administration led by Donald Trump.

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Speaker 9: She had a short term that ended in twenty twenty four,

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Speaker 9: and she's been nominated for a new term, which is

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Speaker 9: not due to expire until twenty thirty eight. She came

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Speaker 9: in at a time when rates we're being height We

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Speaker 9: know that she's held concerns around inflation, although we don't

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Speaker 9: know what her intentions might be for the next rate

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Speaker 9: setting meeting in September. But obviously she is someone who's

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Speaker 9: drawn Donald Trump's eire. I mean, she did serve on

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Speaker 9: Barack Obama, the former President's Council of Economic Advisors. She

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Speaker 9: has also worked at the Treasury Department, and she has

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Speaker 9: a doctorate degree in economics, so she does have the

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Speaker 9: credentials there obviously for her position. Donald Trump's accusation is

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Speaker 9: that she essentially took out mortgages on more than one

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Speaker 9: property at the same time, declaring those to be her

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Speaker 9: primary residents, so she had double mortgages on alleged primary residences,

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Speaker 9: and that's the accusation that is being leveled against her.

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Speaker 9: She obviously has denied that. She said she'll bring out

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Speaker 9: her evidence against her. She's obviously also refuting Donald Trump's

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Speaker 9: efforts to fire her.

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Speaker 1: In terms of the legal machinations here ras what exactly

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Speaker 1: can Lisa Cook do to protect her job or what

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Speaker 1: standard does Donald Trump have to prove to be able

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Speaker 1: to have the sufficient cause to fire Lisa Cook?

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Speaker 9: Well, right now there is the possible doj investigation against her,

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Speaker 9: but she's not been charged with anything. So what she

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Speaker 9: could do is immediately look for an injunction to reinstate

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Speaker 9: her while court action goes on, and court action could

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Speaker 9: take quite some time. As you said that, the question

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Speaker 9: is can Donald Trump fire her for cause? And there

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Speaker 9: are various things that make up that description for cause,

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Speaker 9: including inefficiency, neglect of duty, and wrongdoing in office. And

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Speaker 9: the question is in any of that you know, does

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Speaker 9: she meet does she meet the bar with these accusations.

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Speaker 9: But really what she can do is draw this out

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Speaker 9: quite extensively to a litigation and all the way up

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Speaker 9: to the Supreme Court. And the question is what does

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Speaker 9: the Supreme Court see as the issue of full cause.

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Speaker 9: So this could become a protracted legal issue either way.

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Speaker 9: And as I said, no charges have actually been laid

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Speaker 9: against her.

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Speaker 3: No, indeed.

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Speaker 2: But this is also a present Trump pursuing a goal

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Speaker 2: that we know he has in terms of wanting lower

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Speaker 2: interest rates. What does this mean for FED independence and

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Speaker 2: for the rate path?

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Speaker 9: Well, that's right, so obviously you know this is a

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Speaker 9: key part of Donald Trump's efforts to reshape the FED

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Speaker 9: and especially the Board of Governors and have a majority

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Speaker 9: of people on that board actually who share his points

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Speaker 9: of view about interest rates. I mean Aaron Klein who's

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Speaker 9: from the Brookings Institution describes this as a kill shot

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Speaker 9: quote at FED independence, and basically he's trying to reshape

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Speaker 9: the FED into his liking and the markets obviously do

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Speaker 9: not like that. You can see the reaction so far

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Speaker 9: in financial markets in the aftermath of Trump's announcement in

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Speaker 9: terms of the dollar and treasuries, and really this could

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Speaker 9: raise further fundamental questions about the independence of the FED.

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Speaker 9: You even had SMP Global Ratings recently warning that you know,

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Speaker 9: this could be a factor for the US sovereign credit

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Speaker 9: rating if you have the idea of the perception of

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Speaker 9: the erosion of an independence of American institutions. The question

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Speaker 9: is would it have any impact on the next interest

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Speaker 9: rate decision? Unlikely, especially if she's still in place, And

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Speaker 9: as I said, we don't know how she intended to

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Speaker 9: vote or would intend to vote in that meeting, but

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Speaker 9: certainly in the longer term there are fresh questions about

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Speaker 9: the independence of the FED as a result.

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Speaker 1: Okay Rasler Maths and our chief Asia correspondent, thank you

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Speaker 1: very much.

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Speaker 3: Stay with us.

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Speaker 1: More from Bloomberg Daybreak Europe coming up after this now.

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Speaker 2: The European Union agreed a tariff deal with the US

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Speaker 2: in late July. It has meant some predictability for businesses,

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Speaker 2: but also hard choices and lingering doubts about whether the

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Speaker 2: US will stick to this tariff rate of fifteen percent.

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Speaker 2: Joining US now is Bloomberg's report in Amsterdam, Charlotte Hughes Morgan,

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Speaker 2: who's been doing some deep dive reporting on this. Charlotte,

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Speaker 2: welcome to the program again. What have businesses been telling

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Speaker 2: you about this fifteen percent tariff being imposed on most

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Speaker 2: European products?

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Speaker 10: Thank you for having me. Well, yes, I mean it's

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Speaker 10: safe to say that there is a lot of gloom

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Speaker 10: amongst European business leaders at the moment. There's this kind

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Speaker 10: of gloomy resignation and the sense of frustration that obviously,

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Speaker 10: you know, these trade tarift are outside of their control,

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Speaker 10: but they have a huge impact.

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Speaker 8: On their businesses.

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Speaker 10: I mean for a lot of these European companies. And

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Speaker 10: we talked to companies kind of outside of the major

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Speaker 10: sectors that you tend to think about when we read

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Speaker 10: about trade tariffs, you know, we tend to think about

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Speaker 10: s we conductor's farmer. We spoke to really wide range

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Speaker 10: of companies that are still really important for the European economy,

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Speaker 10: and so many of them have really complex supply chains

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Speaker 10: and the US is a really significant market for a

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Speaker 10: lot of them. So this is a real headache and

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Speaker 10: I think what we wanted to do with this reporting

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Speaker 10: is really dies a deep dive into the day to

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Speaker 10: day decisions that these business leaders are having to make,

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Speaker 10: and it's really tough. I mean, for some this is

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Speaker 10: kind of yet another headache after the supply chain disruptions

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Speaker 10: of the COVID years and then you had inflation, and

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Speaker 10: now these tariffs are kind of muddying the waters again.

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Speaker 10: And making it really hard to make those long term

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Speaker 10: decisions that are crucial for for kind of any well

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Speaker 10: run business. I think another thing to add is obvious

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Speaker 10: the macro uncertainty this kind of caught and that's crept

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Speaker 10: in to the market. I mean, some people we spoke

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Speaker 10: to said that's almost more painful than the tariff rate itself.

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Speaker 10: You know, so many customers are holding back on investment,

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Speaker 10: and that is really kind of having an impact on

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Speaker 10: these European companies.

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Speaker 1: Charlotts among the companies that you spoke to for this

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Speaker 1: story as well are makers of artificial turf underlay and

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Speaker 1: grass used in the United States and other places as well.

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Speaker 1: I mean, talk to us about how these businesses are

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Speaker 1: adapting to these changing tariff rules.

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Speaker 10: Yeah, I mean that was a really interesting business. Again,

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Speaker 10: as I said, not something that always springs to mind

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Speaker 10: immediately when you think about the tariff conversation. But yeah,

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Speaker 10: this turf business that manufactures your artificial turf the stadiums

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Speaker 10: around the world, but particularly in the US. Seventy five

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Speaker 10: percent of its revenues come out of the US, and

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Speaker 10: so they're having to do some really kind of hard thinking.

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Speaker 10: When we spoke to them, I mean they said they

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Speaker 10: have a laser focus on pricing, constantly thinking about, you know,

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Speaker 10: how much of the of the kind of tariff cost

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Speaker 10: can they reasonably pass on to their customers in the US.

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Speaker 10: How much can they absorb you know, they have factories

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Speaker 10: in the US, or they're shielded from the kind of

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Speaker 10: tariff impact to some extent that they are a vital products.

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Speaker 10: I mean these are really complex, you know, complex products

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Speaker 10: to make, and some and some elements just can't be

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Speaker 10: made outside the US, So they're having to think about

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Speaker 10: how they kind of pass on those costs to customers.

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Speaker 10: They're also having to think about their investment decisions. You know,

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Speaker 10: where where are they going to invest? Are they going

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Speaker 10: to relocate some production to the US. I think that

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Speaker 10: company in particular said, you know, that's not feasible for

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Speaker 10: us in the cost of relocating our factories, the difficulty

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Speaker 10: finding the very specific expertise that we need to make

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Speaker 10: this complex product over in another country. I mean, so

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Speaker 10: they are kind of doubling down on their European operations.

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Speaker 10: But others we spoke to a German medical equipment maker,

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Speaker 10: for example, who are actually going to, you know, focus

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Speaker 10: on building up their US operations. But again that's a

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Speaker 10: really long term project. I mean, these businesses have really

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Speaker 10: long timelines, and the cost of doing so means that

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Speaker 10: they will have to divert some some money that would

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Speaker 10: have otherwise been spent on innovation and research. So that

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Speaker 10: is again another kind of knock on effect is that

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Speaker 10: that a lot of the time and the money that

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Speaker 10: could have been used for growth and for building up

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Speaker 10: these businesses is being spent trying to mitigate tariff impact

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Speaker 10: and trying to work out, you know, the logistics of

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Speaker 10: kind of still exporting to the US.

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Speaker 2: When you add all of this up, what are the

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Speaker 2: macro implications and the impact of.

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Speaker 10: This well, I mean, if you ask the European business

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Speaker 10: le's you know, it's negative. I mean, I think, as

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Speaker 10: I said, even just that point, you know, the money

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Speaker 10: that's going that's being spent on these tariff decisions, the

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Speaker 10: logistics and the time that if that is moving away

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Speaker 10: from from innovation and kind of dampening grace. If you think,

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Speaker 10: you know, say say lots of companies in Germany's industrial

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Speaker 10: heartland start doing the same thing to try and grapple

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Speaker 10: with the with the tariff impact that obviously would e

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Speaker 10: road Europe's you know, some of Europe's industrial centers. You've

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Speaker 10: also got the pricing conversation. You know, if you're having

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Speaker 10: to pass on some of this cost to US customers,

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Speaker 10: I mean that eventually passes on to the consumer. Do

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Speaker 10: you have that kind of uptick in prices for the

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Speaker 10: end consumer in the US, which obviously could have this

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Speaker 10: kind of knock on effect on inflation. So if you

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Speaker 10: look at the mood music overall, you know it is

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Speaker 10: negative and that broader caution. I mean even today we

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Speaker 10: saw Trump Trump saying he might impose, you know, impose

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Speaker 10: tariffs in retaliation for the digital services attacks. You know.

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Speaker 10: So you think you have this certainty with the deal

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Speaker 10: that was agreed in July fifteen percent paraphrate for Europe,

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Speaker 10: But I think there's still concern among European business leaders

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Speaker 10: that this might not be the end of it. And

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Speaker 10: actually that certainty, that long term visibility is really key

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Speaker 10: for their businesses. And if that, you know, starts coming

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Speaker 10: under threat at scale, well then that that could be

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Speaker 10: a huge problem for Europe.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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