WEBVTT - Trump Targets Powell, Traders Dump US Assets, $2 Trillion Tariff Hit

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>This is the Bloomberg Day baker At podcast, available every

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<v Speaker 2>morning on Apple, Spotify or whatever you listen. It's Tuesday,

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<v Speaker 2>the twenty second of April. Here in London. I'm Caroline

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<v Speaker 2>Hipkot and.

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<v Speaker 3>I'm Stephen Carroll.

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<v Speaker 4>Coming up today, Donald Trump demands an immediate rate cut

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<v Speaker 4>from Fed charge Jerome Powell as investors flee US docs,

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<v Speaker 4>bonds and the dollar amid growing Sell America momentum a.

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<v Speaker 2>Two trillion dollar tariff hit. Bloomberg crunches the numbers on

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<v Speaker 2>the cost of the US president's global.

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<v Speaker 3>Levies plus the art of the deal.

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<v Speaker 4>Rachel Reeves vows to put the UK front and center

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<v Speaker 4>as she prepares for face to face talks with her

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<v Speaker 4>US counterpart, Scott Bessant.

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<v Speaker 2>Let's start with the roundup of our top stories.

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<v Speaker 4>US markets have sold off amid renewed attacks from President

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<v Speaker 4>Trump on Federal Reserve charg Jerome Powell. In his latest

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<v Speaker 4>broadside against the central Bank, Chief Trump warned the economy

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<v Speaker 4>could slow unless quote mister too late, a major loser

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<v Speaker 4>lower's interest rates.

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<v Speaker 3>Now.

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<v Speaker 4>Bloomberg reports that Trump has privately questioned advisors about the

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<v Speaker 4>possibility of removing Powell, though some administration officials have cautioned

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<v Speaker 4>him against such a move. Economists widely expect Trump's tariffs

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<v Speaker 4>to boost inflation and slow growth, even if just temporarily.

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<v Speaker 4>Former Federal Reserve economists Claudia Sam says markets need to

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<v Speaker 4>be alive to the possibility of the White House trying

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<v Speaker 4>to remove Powell.

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<v Speaker 5>I take it very seriously, and I you know, this

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<v Speaker 5>administration has taken steps, whether it's with the tariffs or

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<v Speaker 5>with downsides in the government that really were, you know,

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<v Speaker 5>beyond expectations. So I you know, the unthinkable is thinkable

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<v Speaker 5>with this administration.

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<v Speaker 4>Thadia Sam, speaking there after Federal Reserve Charge your own.

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<v Speaker 4>Powell again stressed last week that the Center Bank must

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<v Speaker 4>ensure tariffs don't trigger a more persistent rise in inflation.

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<v Speaker 2>Trump's escalating frustration with the Fed chair has triggered a

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<v Speaker 2>broad fly from US stocks, bonds, and the dollar has

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<v Speaker 2>traders grow increasingly uneasy with the administration's policy approach. A

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<v Speaker 2>key gauge of the greenback is on track for a

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<v Speaker 2>fourth straight day of losses as sentiment on Wall Street

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<v Speaker 2>shifts from optimism to what some are calling a cell

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<v Speaker 2>America mood. Apollos Chief economist Torston Slock says the US

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<v Speaker 2>economy is facing an ever growing list of headwinds.

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<v Speaker 1>It's just not only terms and retaliation, which of course

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<v Speaker 1>are the most important ones. It's also corporate confidence is

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<v Speaker 1>very low. The Conference Board measures and also the CEO

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<v Speaker 1>index measure from various sources and CFO measures going lower.

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<v Speaker 3>KAPEX plans are also grinding lower.

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<v Speaker 5>Literally for the last two months, and because of course,

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<v Speaker 5>consumer confidence is also at the lowest level.

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<v Speaker 3>Literally in decades.

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<v Speaker 2>Apollos Chief economists Torston Slock speaking there as investors continue

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<v Speaker 2>to pile into gold amid increasing market uncertainty. The precious

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<v Speaker 2>metal has now hit yet another code, topping three four

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<v Speaker 2>hundred and forty four dollars an ounce following a two

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<v Speaker 2>point nine percent search on non day.

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<v Speaker 4>Donald Trump's trade tariffs and it's the beginning of April,

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<v Speaker 4>will shave about two trillion dollars off the global economy

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<v Speaker 4>by the end of twenty twenty seven, according to a

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<v Speaker 4>new estimate from Bloomberg Economics. The effects of the trade

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<v Speaker 4>war hanging over the world's economic leaders as they gather

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<v Speaker 4>of the IMF and World Bank Spring meetings in Washington,

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<v Speaker 4>Saxo Banks Chief Investments strass Charity Sanana says, the shape

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<v Speaker 4>of the shock is still unclear.

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<v Speaker 6>Will it be a growth shock, will it be an

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<v Speaker 6>inflation shock? So some kind of an he went driven

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<v Speaker 6>you know issues maybe resulting in a kind of a

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<v Speaker 6>cyclical issue, some kind of a recession or a saculation, whatever.

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<v Speaker 3>It might be.

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<v Speaker 6>But now we're just mophing it into a structural one,

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<v Speaker 6>you know, with the kind of questions that it raises

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<v Speaker 6>on the credibility you know of the US and usc.

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<v Speaker 4>ASCID Saxo Banks Chief Investment Strategies Charity Sanana, there the

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<v Speaker 4>tariff moves that brought into question US economic answer, security leadership,

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<v Speaker 4>and the multilateral rules based system symbolized by institutions like

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<v Speaker 4>the International Monetary Fund.

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<v Speaker 2>Many leaders will be using the IMF gathering as an

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<v Speaker 2>opportunity for trade talks with the US government. UK Chancellor

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<v Speaker 2>Rachel Reeves is one of the finance ministers flying to

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<v Speaker 2>Washington to make the case for free trade. She's expected

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<v Speaker 2>to meet with US Treasury Secretary Scottan Bessen for the

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<v Speaker 2>first time there.

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<v Speaker 4>The United States has announced new tariffs on solar panel

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<v Speaker 4>imports from Cambodia, Vietnam, Malaysia and Thailand. The levies could

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<v Speaker 4>be more than three thousand, five hundred percent the culmination

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<v Speaker 4>of a trade probe started by former President Joe Biden.

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<v Speaker 4>Many Chinese manufacturers had set up operations in Southeast Asia

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<v Speaker 4>after they were hit by similar tariffs twelve years ago.

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<v Speaker 4>The tariffs are likely to boost US domestic manufacturing but

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<v Speaker 4>increase the cost of ramping up renewable energy production.

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<v Speaker 2>To other news, a paper conclave is now due to

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<v Speaker 2>decide on Pope France's successor after he passed away on

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<v Speaker 2>Eastern Monday. The College of Cardinals will meet in about

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<v Speaker 2>two weeks time, when around one hundred and thirty five

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<v Speaker 2>members will cast their vote. Amongst those traveling to Rome

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<v Speaker 2>for the proceedings will be the Archbishop of Westminster, Cardinal

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<v Speaker 2>Vincent Nichols, who says that Francis will be remembered fondly his.

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<v Speaker 7>Commitment to the individual and to the people on the

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<v Speaker 7>edges of society, who is unquestioned, but he also fashioned

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<v Speaker 7>that in a way directed to those who hold the

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<v Speaker 7>power and generate the world.

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<v Speaker 2>The Archbishop of Westminster, speaking there, the election could threaten

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<v Speaker 2>what Pope France's supporters see as his legacy as a

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<v Speaker 2>reforming pope if a more conservative candidate is chosen and

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<v Speaker 2>moves the Church away from his positions on issues such

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<v Speaker 2>as LGBTQ rights.

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<v Speaker 4>American, European and Ukrainian officials are due to hold talks

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<v Speaker 4>in London tomorrow as the White House pushes for a

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<v Speaker 4>deal to hold Russia's invasion, whom We're understands. The US

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<v Speaker 4>ecritaristic Marco Rubio and special envoys are expected to meet

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<v Speaker 4>foreign ministers and advisors from France, Germany, the UK and Ukraine.

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<v Speaker 4>The gathering is intended as a follow up to meetings

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<v Speaker 4>in Paris last week, where the US shared proposals to

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<v Speaker 4>enable a ceasefire and peace agreement between Russia and Ukraine.

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<v Speaker 2>Those are top stories for you this morning. Let's look

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<v Speaker 2>at the markets at the Bloomberg Dollar Spot index losing

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<v Speaker 2>ground again for a fourth day in a row. There

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<v Speaker 2>had been some early gains, but those seem to have evaporated.

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<v Speaker 2>The Bloomberg Dollar spot indexes currently down a tenth of

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<v Speaker 2>one percent, the yenner one hundred and forty handle, the

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<v Speaker 2>euro edging higher about a tenth almost two tenths of

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<v Speaker 2>one percent this morning US stock futures are actually in

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<v Speaker 2>the green after the plunge that we saw on Monday.

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<v Speaker 2>Asian equities and mixed Chinese tech shares drifting in Hong

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<v Speaker 2>Kong this as we see the Topics Index upper tenth

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<v Speaker 2>and the Nikky slightly lower this morning. As for oil prices,

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<v Speaker 2>WTI crud futures climbing one percent this on. In gold

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<v Speaker 2>up one point seven percent, so we're actually approaching the

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<v Speaker 2>thirty five hundred dollar mark four hundred and eighty two,

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<v Speaker 2>and looking at the bond market as tenny USC is

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<v Speaker 2>at four forty three, up by two basis points. Those

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<v Speaker 2>are the markets.

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<v Speaker 4>In a moment, we'll bring you more on the pressure

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<v Speaker 4>on Jerown Powell. Plus Rachel Reeves heads to Washington for

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<v Speaker 4>those IMF and World Bank meetings in the shadow of

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<v Speaker 4>Trump's tariffs.

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<v Speaker 3>But another story that we've caught our eye this morning.

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<v Speaker 4>The author Rachel Gisa has been writing for BusinessWeek about

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<v Speaker 4>a topic that she's written a book about as well.

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<v Speaker 3>But this is to do with the title is.

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<v Speaker 4>Building a Better Man of Sphere, but something that's being

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<v Speaker 4>reflected on as the particularly masculine approach to policy that's

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<v Speaker 4>been taken under the Trump administration.

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<v Speaker 2>Yeah, sort of hyper aggressive manhood, but not the sort

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<v Speaker 2>of masculine world let's say Ronald Reagan where it's kind

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<v Speaker 2>of tough sheriffs, that sort of part of Familia's type

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<v Speaker 2>of world that Rachel describes. In fact, she talks about

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<v Speaker 2>the men in the inner circle of Donald Trump, Elon

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<v Speaker 2>Musk and JD. Vance and Mark Rubio and Pete Hegser

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<v Speaker 2>than others not being actually in the kind of traditional

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<v Speaker 2>American archetypal sort of mode, but actually forming this kind

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<v Speaker 2>of insecure model of masculinity. She says that the manuscript

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<v Speaker 2>online doesn't have to be like that, that there could

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<v Speaker 2>be a kind of another another way, and she brings

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<v Speaker 2>out some really interesting statistics that for example, Goat, which

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<v Speaker 2>is a research firm, finds that young men in the

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<v Speaker 2>US a quarter of them follow fashion influencers, thirty percent

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<v Speaker 2>are into film and theater and acting. So that there

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<v Speaker 2>could be a kind of much broader Internet that you

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<v Speaker 2>could respond to young men's desires for that connection.

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<v Speaker 4>It's not that the Internet as bad, articles that there

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<v Speaker 4>are bad parts of the Internet, and perhaps what we

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<v Speaker 4>need to be able to do is support boys and

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<v Speaker 4>young men in I suppose finding the diversity that's out

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<v Speaker 4>there as well, rather than necessarily falling into.

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<v Speaker 3>Some of the murkier part of it. But it's a

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<v Speaker 3>really interesting reader.

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<v Speaker 4>You'll find it at Bloomberg dot com and on the terminal,

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<v Speaker 4>and if you're listening to the Bloomberg Daybreak You're a podcast,

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<v Speaker 4>you'll find a link to the article in our show notes.

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<v Speaker 2>Now to the markets we have seen world swings or

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<v Speaker 2>markets as traders face a new source of uncertainty? Will

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<v Speaker 2>Donald Trump tie to removed your own Powell as the

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<v Speaker 2>chair of the Federal Reserve?

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<v Speaker 3>Butlin a big opinion.

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<v Speaker 2>Columist Daniel mos Jones is now to discuss, Daniel, Good Morning,

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<v Speaker 2>how precarious do we think Powell's position is now?

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<v Speaker 8>I want to go back to a remark that Claudia

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<v Speaker 8>sam made on air just a few minutes ago. She says,

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<v Speaker 8>it's a very real possibility. I agree, it certainly is

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<v Speaker 8>a possibility. Now does that make it a probability? I

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<v Speaker 8>don't know. If you look at the way markets have

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<v Speaker 8>behaved since Thursday morning, US time, when Trump resumed his

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<v Speaker 8>threats to get rid of Powell, it's that there's been

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<v Speaker 8>in abeyance for a little while the reaction has been

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<v Speaker 8>a swift and punishing so as the folks at ISI

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<v Speaker 8>ever Core have asked, if you liked the market reaction

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<v Speaker 8>to the tariffs, get ready for something very special In

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<v Speaker 8>the event, Powell is dismissed.

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<v Speaker 4>In context of central bank independence, though, is there's a

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<v Speaker 4>bigger thrast than what we've seen before. It's not the

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<v Speaker 4>first time we've heard, but it's got crestsism of central bankers.

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<v Speaker 8>Trump has been the first president in some decades to

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<v Speaker 8>openly take on the FED. What we tend to forget

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<v Speaker 8>is prior to the Clinton administration this was very widespread.

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<v Speaker 8>One of the things that Bob Ruben imposed on the

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<v Speaker 8>Clinton white House was we don't criticize the FED the

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<v Speaker 8>otherwise we believe in a strong ballot or so much

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<v Speaker 8>for that one. You know, Look, central banking history is

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<v Speaker 8>full of anecdotes about pressure that people like Richard Nixon,

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<v Speaker 8>like Lyndon Johnson, like others brought to bear. There was

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<v Speaker 8>a wartime monetary policy that existed under FDR and Harry Truman.

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<v Speaker 8>In Asia, central bank independence is slightly less tootemic, but

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<v Speaker 8>it is questioned. Nonetheless, serious questions have arisen about independence

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<v Speaker 8>in Indonesia, in Thailand, and in New Zealand, which rolled

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<v Speaker 8>out the model of a modern central bank in nineteen ninety.

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<v Speaker 8>The government has really done some things to bring the

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<v Speaker 8>bank to heal. So look, this is not God given. Okay.

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<v Speaker 8>If you look at the US Constitution actually says nothing

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<v Speaker 8>about the Federal Reserve. Congress has delegated the power to

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<v Speaker 8>set monetary policy to the Federal Reserve. And I'll just

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<v Speaker 8>one other thing. I'm not defending Trump. Political pressure on

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<v Speaker 8>the FED has historically been misunderstood. Certainly the decade I

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<v Speaker 8>spint in Washington, the thing the FED worried about the

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<v Speaker 8>most was political approsure from the Congress and changes to

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<v Speaker 8>the Federal Reserve Act.

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<v Speaker 2>Okay, Daniel, thank you so much for being with us

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<v Speaker 2>this morning, Blueberg opinion columnist Daniel Moss. And yet, of

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<v Speaker 2>course the markets are concerned about this. A lot of

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<v Speaker 2>our opinion writers, including Daniel, have got pieces on the

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<v Speaker 2>Blueberg terminal for you, including John Authors about the worries

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<v Speaker 2>of what it would do immediately to markets werepal.

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<v Speaker 3>To be dismissed.

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<v Speaker 4>Well, the UK's chancer Rachel Reeves is in Washington this

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<v Speaker 4>week for the International Monetary Fund and World Bank Spring meetings.

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<v Speaker 4>She'll be meeting with the US Treasury secretaries, got best

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<v Speaker 4>and to push for a UK US trade deal. Our

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<v Speaker 4>UK correspondent Lizzie Burden is here with us to help

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<v Speaker 4>us look ahead to that. Lizzie, the world is staring

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<v Speaker 4>into a trade war, abyss. The IMF will release its

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<v Speaker 4>new economic forecasts today.

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<v Speaker 3>What should we.

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<v Speaker 1>Expect, Well, it's set to lower its outlook for growth today.

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<v Speaker 1>And remember but the IMF's projections actually later on tend

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<v Speaker 1>to have proved optimistic about crises when you look back.

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<v Speaker 1>So whatever they say today, the is going to be

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<v Speaker 1>the impact of tariffs. The reality is likely to be

0:13:12.000 --> 0:13:14.600
<v Speaker 1>a lot worse. But this, of course is going on

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<v Speaker 1>just a few blocks from the White House, and this

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<v Speaker 1>is the first gathering of all of these ministers in

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<v Speaker 1>the US capital since Donald Trump's inauguration as US President

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<v Speaker 1>in January, so that adds another edge to these discussions.

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<v Speaker 2>What's Reeve's hoping to get from the trip though, in particular,

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<v Speaker 2>there is also the trade deal and the UK's relationship

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<v Speaker 2>with China. Reeves was talking only a few days ago

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<v Speaker 2>about cutting ties with China would be foolish.

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<v Speaker 1>Yeah, if I can thread all those things together. So

0:13:43.400 --> 0:13:45.920
<v Speaker 1>she's going to be lobbying the US Trade Secretary, Treasury

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<v Speaker 1>Secretary Scott best Sent for a trade deal. You had

0:13:48.880 --> 0:13:53.000
<v Speaker 1>Donald Trump and Keir Starmer speaking on Friday. Officials though

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<v Speaker 1>trying to temper expectations about what Reeves can get out

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<v Speaker 1>of best Sent this week. It's really about improving the

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<v Speaker 1>mood music for now. But this is her first time

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<v Speaker 1>meeting him in person. Now he's seen here in London

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<v Speaker 1>as one of the less hard line voices in the

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<v Speaker 1>Trump administration and the focus of ministers and the UK

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<v Speaker 1>ambassador to Washington, Peter Mandelson, Lord Mandelson, is very much

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<v Speaker 1>to persuade Donald Trump to try and cut his twenty

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<v Speaker 1>five percent global tariff on car and steel imports, and

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<v Speaker 1>as you say, also to get a trade deal. Now,

0:14:25.800 --> 0:14:28.040
<v Speaker 1>Reeves's team of stress that the UK is not just

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<v Speaker 1>going to give away anything to get that trade deal

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<v Speaker 1>over the line. They might be prepared to cut the

0:14:31.880 --> 0:14:34.880
<v Speaker 1>Digital services tax, which of course hits US tech companies.

0:14:35.160 --> 0:14:39.120
<v Speaker 1>They may cut tariffs on some US meat and seafood exports,

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<v Speaker 1>but Kirstarmer, the Prime Minister, has ruled out relaxing food

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<v Speaker 1>safety standards because of course there are huge fears about

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<v Speaker 1>chlorinated chicken and hormone hormone fed beef here in the UK.

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<v Speaker 1>It would send the UK newspapers absolutely mad if those

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<v Speaker 1>things gone over the line, and it could jeopardize closer

0:14:57.120 --> 0:14:59.600
<v Speaker 1>ties with the EU. And remember Kirstarmer on May the

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<v Speaker 1>nineteen is hosting this UK EU summit to reset trade

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<v Speaker 1>and security ties post Brexit. Then there's the China element,

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<v Speaker 1>and as you say, Rachel Reeve's telling the Telegraph newspaper

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<v Speaker 1>over the weekend that it'd be foolish to buckle to

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<v Speaker 1>Donald Trump's pressure to limit the UK's dealings with China.

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<v Speaker 1>So a lot of plates to spin for the team

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<v Speaker 1>in Washington this week.

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<v Speaker 4>But perhaps also a chance for Rachel Reeves to get

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<v Speaker 4>away from some of the big fiscal questions that are

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<v Speaker 4>persisting at home. Already speculation over what she might do

0:15:28.360 --> 0:15:29.160
<v Speaker 4>in the next budget.

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<v Speaker 1>Yeah, it has been a theme for this labor government

0:15:31.240 --> 0:15:34.400
<v Speaker 1>to focus on the perhaps easier, could you believe it,

0:15:34.520 --> 0:15:36.920
<v Speaker 1>international picture than what's going on at home. We know

0:15:37.000 --> 0:15:41.120
<v Speaker 1>that she's so fiscally strained, but she has pledged that

0:15:41.160 --> 0:15:43.880
<v Speaker 1>she is not interested in a wealth tax at the

0:15:44.080 --> 0:15:48.160
<v Speaker 1>upcoming autumn budget. She says that the capital gains tax

0:15:48.240 --> 0:15:51.040
<v Speaker 1>changes that they made last autumn are pretty much where

0:15:51.080 --> 0:15:53.720
<v Speaker 1>they need to be. But of course we know that

0:15:53.760 --> 0:15:55.960
<v Speaker 1>she only left the same amount of headroom as she

0:15:56.000 --> 0:15:59.360
<v Speaker 1>did last autumn nine point nine billion pounds, so there's

0:15:59.480 --> 0:16:03.520
<v Speaker 1>lots of splation about tax rises and she's ruled out

0:16:03.640 --> 0:16:06.640
<v Speaker 1>breaking her fiscal rules, so it only leaves spending cuts

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<v Speaker 1>off that her cream vanishes again.

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<v Speaker 4>This is Bloomberg Daybreak Europe, your morning brief on the

0:16:11.920 --> 0:16:14.960
<v Speaker 4>stories making news from London to Wall Street and beyond.

0:16:15.240 --> 0:16:19.200
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0:16:24.360 --> 0:16:27.080
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0:16:27.120 --> 0:16:29.880
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0:16:36.960 --> 0:16:39.320
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0:16:39.400 --> 0:16:42.040
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0:16:42.080 --> 0:16:46.760
<v Speaker 4>Break Europe.