Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is the Bloomberg Day baker At podcast, available every
Speaker 2: morning on Apple, Spotify or whatever you listen. It's Tuesday,
Speaker 2: the twenty second of April. Here in London. I'm Caroline
Speaker 2: Hipkot and.
Speaker 3: I'm Stephen Carroll.
Speaker 4: Coming up today, Donald Trump demands an immediate rate cut
Speaker 4: from Fed charge Jerome Powell as investors flee US docs,
Speaker 4: bonds and the dollar amid growing Sell America momentum a.
Speaker 2: Two trillion dollar tariff hit. Bloomberg crunches the numbers on
Speaker 2: the cost of the US president's global.
Speaker 3: Levies plus the art of the deal.
Speaker 4: Rachel Reeves vows to put the UK front and center
Speaker 4: as she prepares for face to face talks with her
Speaker 4: US counterpart, Scott Bessant.
Speaker 2: Let's start with the roundup of our top stories.
Speaker 4: US markets have sold off amid renewed attacks from President
Speaker 4: Trump on Federal Reserve charg Jerome Powell. In his latest
Speaker 4: broadside against the central Bank, Chief Trump warned the economy
Speaker 4: could slow unless quote mister too late, a major loser
Speaker 4: lower's interest rates.
Speaker 3: Now.
Speaker 4: Bloomberg reports that Trump has privately questioned advisors about the
Speaker 4: possibility of removing Powell, though some administration officials have cautioned
Speaker 4: him against such a move. Economists widely expect Trump's tariffs
Speaker 4: to boost inflation and slow growth, even if just temporarily.
Speaker 4: Former Federal Reserve economists Claudia Sam says markets need to
Speaker 4: be alive to the possibility of the White House trying
Speaker 4: to remove Powell.
Speaker 5: I take it very seriously, and I you know, this
Speaker 5: administration has taken steps, whether it's with the tariffs or
Speaker 5: with downsides in the government that really were, you know,
Speaker 5: beyond expectations. So I you know, the unthinkable is thinkable
Speaker 5: with this administration.
Speaker 4: Thadia Sam, speaking there after Federal Reserve Charge your own.
Speaker 4: Powell again stressed last week that the Center Bank must
Speaker 4: ensure tariffs don't trigger a more persistent rise in inflation.
Speaker 2: Trump's escalating frustration with the Fed chair has triggered a
Speaker 2: broad fly from US stocks, bonds, and the dollar has
Speaker 2: traders grow increasingly uneasy with the administration's policy approach. A
Speaker 2: key gauge of the greenback is on track for a
Speaker 2: fourth straight day of losses as sentiment on Wall Street
Speaker 2: shifts from optimism to what some are calling a cell
Speaker 2: America mood. Apollos Chief economist Torston Slock says the US
Speaker 2: economy is facing an ever growing list of headwinds.
Speaker 1: It's just not only terms and retaliation, which of course
Speaker 1: are the most important ones. It's also corporate confidence is
Speaker 1: very low. The Conference Board measures and also the CEO
Speaker 1: index measure from various sources and CFO measures going lower.
Speaker 3: KAPEX plans are also grinding lower.
Speaker 5: Literally for the last two months, and because of course,
Speaker 5: consumer confidence is also at the lowest level.
Speaker 3: Literally in decades.
Speaker 2: Apollos Chief economists Torston Slock speaking there as investors continue
Speaker 2: to pile into gold amid increasing market uncertainty. The precious
Speaker 2: metal has now hit yet another code, topping three four
Speaker 2: hundred and forty four dollars an ounce following a two
Speaker 2: point nine percent search on non day.
Speaker 4: Donald Trump's trade tariffs and it's the beginning of April,
Speaker 4: will shave about two trillion dollars off the global economy
Speaker 4: by the end of twenty twenty seven, according to a
Speaker 4: new estimate from Bloomberg Economics. The effects of the trade
Speaker 4: war hanging over the world's economic leaders as they gather
Speaker 4: of the IMF and World Bank Spring meetings in Washington,
Speaker 4: Saxo Banks Chief Investments strass Charity Sanana says, the shape
Speaker 4: of the shock is still unclear.
Speaker 6: Will it be a growth shock, will it be an
Speaker 6: inflation shock? So some kind of an he went driven
Speaker 6: you know issues maybe resulting in a kind of a
Speaker 6: cyclical issue, some kind of a recession or a saculation, whatever.
Speaker 3: It might be.
Speaker 6: But now we're just mophing it into a structural one,
Speaker 6: you know, with the kind of questions that it raises
Speaker 6: on the credibility you know of the US and usc.
Speaker 4: ASCID Saxo Banks Chief Investment Strategies Charity Sanana, there the
Speaker 4: tariff moves that brought into question US economic answer, security leadership,
Speaker 4: and the multilateral rules based system symbolized by institutions like
Speaker 4: the International Monetary Fund.
Speaker 2: Many leaders will be using the IMF gathering as an
Speaker 2: opportunity for trade talks with the US government. UK Chancellor
Speaker 2: Rachel Reeves is one of the finance ministers flying to
Speaker 2: Washington to make the case for free trade. She's expected
Speaker 2: to meet with US Treasury Secretary Scottan Bessen for the
Speaker 2: first time there.
Speaker 4: The United States has announced new tariffs on solar panel
Speaker 4: imports from Cambodia, Vietnam, Malaysia and Thailand. The levies could
Speaker 4: be more than three thousand, five hundred percent the culmination
Speaker 4: of a trade probe started by former President Joe Biden.
Speaker 4: Many Chinese manufacturers had set up operations in Southeast Asia
Speaker 4: after they were hit by similar tariffs twelve years ago.
Speaker 4: The tariffs are likely to boost US domestic manufacturing but
Speaker 4: increase the cost of ramping up renewable energy production.
Speaker 2: To other news, a paper conclave is now due to
Speaker 2: decide on Pope France's successor after he passed away on
Speaker 2: Eastern Monday. The College of Cardinals will meet in about
Speaker 2: two weeks time, when around one hundred and thirty five
Speaker 2: members will cast their vote. Amongst those traveling to Rome
Speaker 2: for the proceedings will be the Archbishop of Westminster, Cardinal
Speaker 2: Vincent Nichols, who says that Francis will be remembered fondly his.
Speaker 7: Commitment to the individual and to the people on the
Speaker 7: edges of society, who is unquestioned, but he also fashioned
Speaker 7: that in a way directed to those who hold the
Speaker 7: power and generate the world.
Speaker 2: The Archbishop of Westminster, speaking there, the election could threaten
Speaker 2: what Pope France's supporters see as his legacy as a
Speaker 2: reforming pope if a more conservative candidate is chosen and
Speaker 2: moves the Church away from his positions on issues such
Speaker 2: as LGBTQ rights.
Speaker 4: American, European and Ukrainian officials are due to hold talks
Speaker 4: in London tomorrow as the White House pushes for a
Speaker 4: deal to hold Russia's invasion, whom We're understands. The US
Speaker 4: ecritaristic Marco Rubio and special envoys are expected to meet
Speaker 4: foreign ministers and advisors from France, Germany, the UK and Ukraine.
Speaker 4: The gathering is intended as a follow up to meetings
Speaker 4: in Paris last week, where the US shared proposals to
Speaker 4: enable a ceasefire and peace agreement between Russia and Ukraine.
Speaker 2: Those are top stories for you this morning. Let's look
Speaker 2: at the markets at the Bloomberg Dollar Spot index losing
Speaker 2: ground again for a fourth day in a row. There
Speaker 2: had been some early gains, but those seem to have evaporated.
Speaker 2: The Bloomberg Dollar spot indexes currently down a tenth of
Speaker 2: one percent, the yenner one hundred and forty handle, the
Speaker 2: euro edging higher about a tenth almost two tenths of
Speaker 2: one percent this morning US stock futures are actually in
Speaker 2: the green after the plunge that we saw on Monday.
Speaker 2: Asian equities and mixed Chinese tech shares drifting in Hong
Speaker 2: Kong this as we see the Topics Index upper tenth
Speaker 2: and the Nikky slightly lower this morning. As for oil prices,
Speaker 2: WTI crud futures climbing one percent this on. In gold
Speaker 2: up one point seven percent, so we're actually approaching the
Speaker 2: thirty five hundred dollar mark four hundred and eighty two,
Speaker 2: and looking at the bond market as tenny USC is
Speaker 2: at four forty three, up by two basis points. Those
Speaker 2: are the markets.
Speaker 4: In a moment, we'll bring you more on the pressure
Speaker 4: on Jerown Powell. Plus Rachel Reeves heads to Washington for
Speaker 4: those IMF and World Bank meetings in the shadow of
Speaker 4: Trump's tariffs.
Speaker 3: But another story that we've caught our eye this morning.
Speaker 4: The author Rachel Gisa has been writing for BusinessWeek about
Speaker 4: a topic that she's written a book about as well.
Speaker 3: But this is to do with the title is.
Speaker 4: Building a Better Man of Sphere, but something that's being
Speaker 4: reflected on as the particularly masculine approach to policy that's
Speaker 4: been taken under the Trump administration.
Speaker 2: Yeah, sort of hyper aggressive manhood, but not the sort
Speaker 2: of masculine world let's say Ronald Reagan where it's kind
Speaker 2: of tough sheriffs, that sort of part of Familia's type
Speaker 2: of world that Rachel describes. In fact, she talks about
Speaker 2: the men in the inner circle of Donald Trump, Elon
Speaker 2: Musk and JD. Vance and Mark Rubio and Pete Hegser
Speaker 2: than others not being actually in the kind of traditional
Speaker 2: American archetypal sort of mode, but actually forming this kind
Speaker 2: of insecure model of masculinity. She says that the manuscript
Speaker 2: online doesn't have to be like that, that there could
Speaker 2: be a kind of another another way, and she brings
Speaker 2: out some really interesting statistics that for example, Goat, which
Speaker 2: is a research firm, finds that young men in the
Speaker 2: US a quarter of them follow fashion influencers, thirty percent
Speaker 2: are into film and theater and acting. So that there
Speaker 2: could be a kind of much broader Internet that you
Speaker 2: could respond to young men's desires for that connection.
Speaker 4: It's not that the Internet as bad, articles that there
Speaker 4: are bad parts of the Internet, and perhaps what we
Speaker 4: need to be able to do is support boys and
Speaker 4: young men in I suppose finding the diversity that's out
Speaker 4: there as well, rather than necessarily falling into.
Speaker 3: Some of the murkier part of it. But it's a
Speaker 3: really interesting reader.
Speaker 4: You'll find it at Bloomberg dot com and on the terminal,
Speaker 4: and if you're listening to the Bloomberg Daybreak You're a podcast,
Speaker 4: you'll find a link to the article in our show notes.
Speaker 2: Now to the markets we have seen world swings or
Speaker 2: markets as traders face a new source of uncertainty? Will
Speaker 2: Donald Trump tie to removed your own Powell as the
Speaker 2: chair of the Federal Reserve?
Speaker 3: Butlin a big opinion.
Speaker 2: Columist Daniel mos Jones is now to discuss, Daniel, Good Morning,
Speaker 2: how precarious do we think Powell's position is now?
Speaker 8: I want to go back to a remark that Claudia
Speaker 8: sam made on air just a few minutes ago. She says,
Speaker 8: it's a very real possibility. I agree, it certainly is
Speaker 8: a possibility. Now does that make it a probability? I
Speaker 8: don't know. If you look at the way markets have
Speaker 8: behaved since Thursday morning, US time, when Trump resumed his
Speaker 8: threats to get rid of Powell, it's that there's been
Speaker 8: in abeyance for a little while the reaction has been
Speaker 8: a swift and punishing so as the folks at ISI
Speaker 8: ever Core have asked, if you liked the market reaction
Speaker 8: to the tariffs, get ready for something very special In
Speaker 8: the event, Powell is dismissed.
Speaker 4: In context of central bank independence, though, is there's a
Speaker 4: bigger thrast than what we've seen before. It's not the
Speaker 4: first time we've heard, but it's got crestsism of central bankers.
Speaker 8: Trump has been the first president in some decades to
Speaker 8: openly take on the FED. What we tend to forget
Speaker 8: is prior to the Clinton administration this was very widespread.
Speaker 8: One of the things that Bob Ruben imposed on the
Speaker 8: Clinton white House was we don't criticize the FED the
Speaker 8: otherwise we believe in a strong ballot or so much
Speaker 8: for that one. You know, Look, central banking history is
Speaker 8: full of anecdotes about pressure that people like Richard Nixon,
Speaker 8: like Lyndon Johnson, like others brought to bear. There was
Speaker 8: a wartime monetary policy that existed under FDR and Harry Truman.
Speaker 8: In Asia, central bank independence is slightly less tootemic, but
Speaker 8: it is questioned. Nonetheless, serious questions have arisen about independence
Speaker 8: in Indonesia, in Thailand, and in New Zealand, which rolled
Speaker 8: out the model of a modern central bank in nineteen ninety.
Speaker 8: The government has really done some things to bring the
Speaker 8: bank to heal. So look, this is not God given. Okay.
Speaker 8: If you look at the US Constitution actually says nothing
Speaker 8: about the Federal Reserve. Congress has delegated the power to
Speaker 8: set monetary policy to the Federal Reserve. And I'll just
Speaker 8: one other thing. I'm not defending Trump. Political pressure on
Speaker 8: the FED has historically been misunderstood. Certainly the decade I
Speaker 8: spint in Washington, the thing the FED worried about the
Speaker 8: most was political approsure from the Congress and changes to
Speaker 8: the Federal Reserve Act.
Speaker 2: Okay, Daniel, thank you so much for being with us
Speaker 2: this morning, Blueberg opinion columnist Daniel Moss. And yet, of
Speaker 2: course the markets are concerned about this. A lot of
Speaker 2: our opinion writers, including Daniel, have got pieces on the
Speaker 2: Blueberg terminal for you, including John Authors about the worries
Speaker 2: of what it would do immediately to markets werepal.
Speaker 3: To be dismissed.
Speaker 4: Well, the UK's chancer Rachel Reeves is in Washington this
Speaker 4: week for the International Monetary Fund and World Bank Spring meetings.
Speaker 4: She'll be meeting with the US Treasury secretaries, got best
Speaker 4: and to push for a UK US trade deal. Our
Speaker 4: UK correspondent Lizzie Burden is here with us to help
Speaker 4: us look ahead to that. Lizzie, the world is staring
Speaker 4: into a trade war, abyss. The IMF will release its
Speaker 4: new economic forecasts today.
Speaker 3: What should we.
Speaker 1: Expect, Well, it's set to lower its outlook for growth today.
Speaker 1: And remember but the IMF's projections actually later on tend
Speaker 1: to have proved optimistic about crises when you look back.
Speaker 1: So whatever they say today, the is going to be
Speaker 1: the impact of tariffs. The reality is likely to be
Speaker 1: a lot worse. But this, of course is going on
Speaker 1: just a few blocks from the White House, and this
Speaker 1: is the first gathering of all of these ministers in
Speaker 1: the US capital since Donald Trump's inauguration as US President
Speaker 1: in January, so that adds another edge to these discussions.
Speaker 2: What's Reeve's hoping to get from the trip though, in particular,
Speaker 2: there is also the trade deal and the UK's relationship
Speaker 2: with China. Reeves was talking only a few days ago
Speaker 2: about cutting ties with China would be foolish.
Speaker 1: Yeah, if I can thread all those things together. So
Speaker 1: she's going to be lobbying the US Trade Secretary, Treasury
Speaker 1: Secretary Scott best Sent for a trade deal. You had
Speaker 1: Donald Trump and Keir Starmer speaking on Friday. Officials though
Speaker 1: trying to temper expectations about what Reeves can get out
Speaker 1: of best Sent this week. It's really about improving the
Speaker 1: mood music for now. But this is her first time
Speaker 1: meeting him in person. Now he's seen here in London
Speaker 1: as one of the less hard line voices in the
Speaker 1: Trump administration and the focus of ministers and the UK
Speaker 1: ambassador to Washington, Peter Mandelson, Lord Mandelson, is very much
Speaker 1: to persuade Donald Trump to try and cut his twenty
Speaker 1: five percent global tariff on car and steel imports, and
Speaker 1: as you say, also to get a trade deal. Now,
Speaker 1: Reeves's team of stress that the UK is not just
Speaker 1: going to give away anything to get that trade deal
Speaker 1: over the line. They might be prepared to cut the
Speaker 1: Digital services tax, which of course hits US tech companies.
Speaker 1: They may cut tariffs on some US meat and seafood exports,
Speaker 1: but Kirstarmer, the Prime Minister, has ruled out relaxing food
Speaker 1: safety standards because of course there are huge fears about
Speaker 1: chlorinated chicken and hormone hormone fed beef here in the UK.
Speaker 1: It would send the UK newspapers absolutely mad if those
Speaker 1: things gone over the line, and it could jeopardize closer
Speaker 1: ties with the EU. And remember Kirstarmer on May the
Speaker 1: nineteen is hosting this UK EU summit to reset trade
Speaker 1: and security ties post Brexit. Then there's the China element,
Speaker 1: and as you say, Rachel Reeve's telling the Telegraph newspaper
Speaker 1: over the weekend that it'd be foolish to buckle to
Speaker 1: Donald Trump's pressure to limit the UK's dealings with China.
Speaker 1: So a lot of plates to spin for the team
Speaker 1: in Washington this week.
Speaker 4: But perhaps also a chance for Rachel Reeves to get
Speaker 4: away from some of the big fiscal questions that are
Speaker 4: persisting at home. Already speculation over what she might do
Speaker 4: in the next budget.
Speaker 1: Yeah, it has been a theme for this labor government
Speaker 1: to focus on the perhaps easier, could you believe it,
Speaker 1: international picture than what's going on at home. We know
Speaker 1: that she's so fiscally strained, but she has pledged that
Speaker 1: she is not interested in a wealth tax at the
Speaker 1: upcoming autumn budget. She says that the capital gains tax
Speaker 1: changes that they made last autumn are pretty much where
Speaker 1: they need to be. But of course we know that
Speaker 1: she only left the same amount of headroom as she
Speaker 1: did last autumn nine point nine billion pounds, so there's
Speaker 1: lots of splation about tax rises and she's ruled out
Speaker 1: breaking her fiscal rules, so it only leaves spending cuts
Speaker 1: off that her cream vanishes again.
Speaker 4: This is Bloomberg Daybreak Europe, your morning brief on the
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Speaker 3: I'm Caroline Hepka and I'm Stephen Carroll.
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