Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is the Bloomberg DAYBAC podcast, available every morning on Apple,
Speaker 2: Spotify or wherever you listen. It's Tuesday, the twenty fifth
Speaker 2: of March in London. I'm Caroline Hepka.
Speaker 1: And I'm Stephen Carroll. Coming up today.
Speaker 3: Donald Trump's top team accidentally includes a journalist in their
Speaker 3: group chat discussing military strikes.
Speaker 2: The US President shows further confusion about his plans for
Speaker 2: sweeping levies as he talks of exemptions for some countries.
Speaker 3: Plus the Bank of England Andrew Bailey says Britain needs
Speaker 3: AI to boost its long term growth prospects.
Speaker 2: Let's start with a roundup of our top stories.
Speaker 3: The Trump administration is confronting a major security breach after
Speaker 3: a journalist was inadvertently added to a text group by
Speaker 3: US National Security Advisor Mike Waltz. The group chat on
Speaker 3: the Signal messaging app, was used to discuss detailed plans
Speaker 3: to bomb hoothy targets and Yemen, and it included the
Speaker 3: US Defense Secretary, vice President, Secretary of State, and Director
Speaker 3: of the CIA, along with other top officials. Speaking to
Speaker 3: ABC News, The Atlantics editor in chief Jeffrey Goldberg said
Speaker 3: at first he thought the group was a hoax.
Speaker 4: It seemed completely absurd to me that the national security
Speaker 4: leadership in the United States would be meeting on a
Speaker 4: messaging app to discuss forthcoming military action, and that they
Speaker 4: would also sort of invite the editor of The Atlantic magazine.
Speaker 3: Jeffrey Goldberg went on to say that at one point,
Speaker 3: Defense Secretary Pete Hegseth shared a post that included what
Speaker 3: he said were operational details of forthcoming strikes on Yemen,
Speaker 3: including information about targets, weapons the US would be deploying,
Speaker 3: and attack sequencing. Speaking after The Atlantic published its story,
Speaker 3: Hegseeth sought to dismiss the claims in this exchange with
Speaker 3: a reporter.
Speaker 5: How did you learn that a journalist was privy to
Speaker 5: the target, the types of weapons used, I've.
Speaker 1: Heard I was characterized.
Speaker 6: Nobody was texting war plans, and that's all I.
Speaker 1: Have to say about that.
Speaker 3: Hegsath's efforts to play down the league came as White
Speaker 3: House National Security spokesman Brian Hughes said the message thread
Speaker 3: appears to be authentic and that they were reviewing how
Speaker 3: an inadvertent number was added to the chain.
Speaker 2: The private texts among top US officials also revealed how
Speaker 2: some members of the Trump administration feel about their European allies.
Speaker 2: With more here is Bloomberg's James Wilcock.
Speaker 7: Back and forth between Vice President JD. Vance and the
Speaker 7: Defense Secrety Pete Hegseth will make for particularly troubling reading
Speaker 7: in many European capitals. A user identified Advance in the
Speaker 7: chat wrote, it plans to strike who the targets? Quote
Speaker 7: I just hate bailing Europe out again. Heg Seth reportedly
Speaker 7: responded three minutes later, quote VP, I fully share your
Speaker 7: loathing of European free loading. It's pathetic. White House National
Speaker 7: Curity Advisor Mike Waltz goes on to say that the
Speaker 7: US would taliate the cough associated with the strike on
Speaker 7: the Hoho thies and levy them on the Europeans at
Speaker 7: Donald Trump's request. The US president claimed to be unaware
Speaker 7: of the breach when asked about it an event later Monday.
Speaker 7: His spokeswoman, Caroline Levitt said in the statement he has
Speaker 7: the utmost confidence in his national security team, including Waltz.
Speaker 7: In London, James Wallcock Bloomberg Radio.
Speaker 3: Donald Trump says his TARAF rollout on the second of April,
Speaker 3: will feature rates on a country by country basis, corresponding
Speaker 3: to trade barriers on US products. Speaking to reporters, the
Speaker 3: president twice signals that trading partners may be given exemptions
Speaker 3: or reductions.
Speaker 5: We may take less than what they're charging because they've
Speaker 5: charged us so much.
Speaker 1: I don't think they could take it.
Speaker 5: In other words, they've charged us so much that I'm
Speaker 5: embarrassed to charge them what they've charged us. But it'll
Speaker 5: be substantial, and you'll be hearing about that on April second.
Speaker 3: Trump's comments so at further confusion about it is plans
Speaker 3: for a sweeping tariff announcements scheduled for next week, which
Speaker 3: he's dubbed Liberation Day. The President also said he planned
Speaker 3: to proceed with tariffs on auto imports over the next
Speaker 3: few days, as well as measures targeting lumber and semiconductors
Speaker 3: down the road.
Speaker 2: HSBC is considering outsourcing parts of its trading business to
Speaker 2: save on technology costs. Bloomback has learned that internal discussions
Speaker 2: have been held at the bank about sending some of
Speaker 2: its fixed income orders to an outside market maker like
Speaker 2: Jane Street or Citadel. In a separate exclusive interview with Bloomberg.
Speaker 2: HSBC CEO Georgel Hedri stress the importance of the bank's
Speaker 2: wider restructuring drive.
Speaker 6: We're also looking at the what we do and recognize
Speaker 6: that there are further focus that we can achieve in
Speaker 6: own business, where we will be taking one and a
Speaker 6: half billion dollars from activities that we are currently doing
Speaker 6: that are either non strategic or non returning.
Speaker 2: Hedri they are speaking to Bloomberg at the HSBC Global
Speaker 2: invest Summit in Hong Kong. He went on to say
Speaker 2: the bank expects to double down on investment banking in
Speaker 2: Asia in the Middle East after exiting key businesses in
Speaker 2: Europe and the US.
Speaker 3: The Governor of the Bank of England says Britain needs
Speaker 3: a breakthrough like artificial intelligence to break out of its
Speaker 3: low growth trap. Speaking to students at Leicester University, Andrew
Speaker 3: Bailey said that advanced economies like the UK needed productivity
Speaker 3: enhancing technologies to sustain their aging populations. The Central Bank
Speaker 3: chief went on to say he's not concerned about AI
Speaker 3: taking people's jobs. The speech comes as the financial regulator
Speaker 3: has told firms they can stop following more than one
Speaker 3: hundred pages of guidance on mortgages and investments. It's part
Speaker 3: of a government drive to slash regulation to boost growth now.
Speaker 2: The US and Russian officials held twelve hours of talks
Speaker 2: over Ukraine in Saudi Arabia yesterday. The two sides are
Speaker 2: expected to release a statement detailing their progress later, but
Speaker 2: a Kremlin spokesman said they discuss navigation in the black seat.
Speaker 2: The negotiations follow discussions between the US and Ukraine on Sunday.
Speaker 2: Ukraine's President Vlodomi Zelinsky says strong measures will be needed
Speaker 2: to keep Russia on the path of peace.
Speaker 8: We need a movement towards real peace, towards guaranteed security,
Speaker 8: and we all need this in Ukraine and Europe and America,
Speaker 8: everyone in the world who wants peace in international relations,
Speaker 8: Russia is the only entity that is dragging out this
Speaker 8: war and mocking our people and the whole world. And
Speaker 8: to pressure Russia towards peace, strong things, strong steps are needed.
Speaker 2: Zelinski and President Trump still have not signed a pack
Speaker 2: to give the US part ownership of Ukraine's natural resources.
Speaker 2: Russia has continued to farm missiles and drones at Ukrainian
Speaker 2: cities during the talks.
Speaker 3: Bloomberg understands the Turkey's finance Minister, a mem Shimchek, will
Speaker 3: hold a call with international investors today. The move comes
Speaker 3: as authority you seek to cam markets after days of
Speaker 3: turbulence triggered by the arrest of a key opposition figures.
Speaker 3: According to two sources, the minister's schedule to speak at
Speaker 3: one pm London time in a teleconference. Turkish markets have
Speaker 3: been under pressure since last Wednesday, when Istanbul Mayor Ekrem Immolu,
Speaker 3: we're widely seen as President Erduan's biggest rival, was detained
Speaker 3: and later formally arrested.
Speaker 2: Those are our top stories for you this morning. Thinking
Speaker 2: about the markets. Well, oil ahead of that US Russia
Speaker 2: statement later today, is a bit steadier this morning in
Speaker 2: terms of futures. As for stock futures, they are down
Speaker 2: now three tens of one percent for the US stocks
Speaker 2: fifty futures. US stock futures also in the red. Despite
Speaker 2: the major gains that we saw yesterday, The S and
Speaker 2: pv founder closed up one point eight percent, the third
Speaker 2: best session this year, on the likelihood of less severe
Speaker 2: tariff measures by the Trump administration. The Nasak also close
Speaker 2: by two point two percent. Treasury yields rose yesterday two
Speaker 2: year yelds back above four percent. Tenure yields rose nine
Speaker 2: basis points. Treasuries are steadied this morning, are currently trading
Speaker 2: at four thirty three on ten year yields. But in
Speaker 2: Asia we've seen a cell of the SSCI China Index
Speaker 2: down one point nine percent, the Hanksing Index down more
Speaker 2: than two percent, Chinese tech stocks resuming a slide after
Speaker 2: Monday's short lived gains. Those are the markets.
Speaker 3: In a moment, we'll bring you more and Andrew Bailey's
Speaker 3: comments on how the UK can tackle its problem of
Speaker 3: low growth. But the story that's got our attention this morning,
Speaker 3: even the headline itself, seems incredible. The Trump administration accidentally
Speaker 3: texted me its war plans.
Speaker 1: This is the piece from the Atlantics. Jeffrey Goldberg.
Speaker 3: We heard from him there a moment ago, publishing this
Speaker 3: account of how he was accidentally added to a group
Speaker 3: chat on the Signal app with this group of top
Speaker 3: US officials to identify themselves as the Defense Secretary, u S,
Speaker 3: Secretary of State, National Security Advisor, et cetera. They detailed
Speaker 3: plans about their attack on Yamat. It's a chrono logical
Speaker 3: account in many ways of exactly how things unfolded and
Speaker 3: includes a lot of Jeffrey Golberg's skepticism when he was
Speaker 3: added tode that he thought essentially was a hoax.
Speaker 1: Yeah, he did. He was very wary.
Speaker 2: Look, this is an extraordinary moment, I think, and his
Speaker 2: account of the messages and the sequencing running up to
Speaker 2: the attacks that he then he was so skeptical. He
Speaker 2: was wondering whether the details around the plans of the
Speaker 2: attacks on Yemen were real And he only really understood
Speaker 2: that this probably was the real thing when he did
Speaker 2: see the explosions in the reports of explosions in Sona
Speaker 2: in Yemen.
Speaker 3: Well, this is the story with major consequences. Let's bring
Speaker 3: in our senior editor, Derek Wallbank to discuss. Derek, an
Speaker 3: extraordinary security breach by any account, How damaging is this
Speaker 3: for the White House?
Speaker 9: Well, thank you so much for having me.
Speaker 10: Yeah.
Speaker 9: I think that this is something that is going to
Speaker 9: reverberate for quite a while.
Speaker 5: Now.
Speaker 9: How it reverberates very much remains to be seen, and
Speaker 9: depends in large part on how Republicans in Congress are
Speaker 9: going to address it. So far, we have seen sort
Speaker 9: of vague language talking about needing to to figure out
Speaker 9: what happened, but it's fallen far short of cries for
Speaker 9: full throated investigations, and it's really not gone anywhere near
Speaker 9: the idea that heads need to roll over it metaphorically speaking, right,
Speaker 9: And so it's one of those situations where Republicans do
Speaker 9: hold all leavers of power in Washington, and thus this
Speaker 9: is a sort of own self police, owned self situation,
Speaker 9: as one would say here in Singapore. That having been said,
Speaker 9: Democrats are going to try and make a meal of this.
Speaker 9: Democrats have been on the defensive for the last several months,
Speaker 9: looking for a way in, looking for sort of anything,
Speaker 9: as it were, and they are absolutely, you know, appalled
Speaker 9: at this minute. And where this is particularly I think
Speaker 9: in light of the fact that Republicans have made such
Speaker 9: a big deal about methods of communication. One only needs
Speaker 9: to remember the but her emails, stuff with Hillary Clinton,
Speaker 9: right private server, all of those things. And so there
Speaker 9: are charges from Democrats not just of that this was
Speaker 9: horrible operation security, but also stunning amount of political hypocrisy.
Speaker 2: Indeed, but then concerns about, you know, what the actual
Speaker 2: content of this might have meant had a kind of
Speaker 2: hostile actor been able to see this. The White House
Speaker 2: confirming the tech exchange appeared to be genuine. What has
Speaker 2: the Trump administration responded?
Speaker 9: That's exactly right, and I do think that that's one
Speaker 9: of the things that's going to be very in focus.
Speaker 9: There was no obvious I guess I would say, no,
Speaker 9: no obvious, no public outfall of this in terms of
Speaker 9: US security in that particular mission. The mission went through
Speaker 9: as it was meant to go. From all that we
Speaker 9: know so far, there were no lives lost. But certainly
Speaker 9: this is one of those things that that that will
Speaker 9: be you know, looked at it. Certainly if if you
Speaker 9: were if you were an adversarial power, you would be
Speaker 9: thinking to yourself, right now, oh wow, we have we
Speaker 9: have way more opportunity to intercept the true thoughts. And
Speaker 9: the other thing that I would mention is that there
Speaker 9: was a tremendous amount of valuable knowledge gleaned from being
Speaker 9: able to see to sort of open the curtain and
Speaker 9: see what the real thoughts happened to be. Who is
Speaker 9: in the room for these conversations. That's really useful. What
Speaker 9: are the arguments and where you know, where are people
Speaker 9: coming from? That's also useful. And I think that is
Speaker 9: going to be something that that friends and foes alike
Speaker 9: are going to be studying.
Speaker 3: Meanwhile, following the latest on the tariff news as well,
Speaker 3: Donald Trump speaking about this yesterday, promising some sector specific
Speaker 3: levies ahead of the announcement. We've been looking towards next
Speaker 3: week of the broader what Trump described as reciprocal tariffs
Speaker 3: as well. What more did we learn about the president's plans.
Speaker 9: Well, I think the biggest thing that we learned overnight
Speaker 9: was that the US administration is really open to the
Speaker 9: idea of negotiated carve outs, if one will. This is
Speaker 9: something that I think that a lot of countries have
Speaker 9: been trying to figure out how to secure to little
Speaker 9: end so far. But Trump was basically suggesting that the
Speaker 9: reciprocal tariffs may not be fully reciprocal, and there were
Speaker 9: some suggestions that there could be deals cut. Now, Trump,
Speaker 9: you know, fancies himself a master negotiator and the chief
Speaker 9: deal maker, and if I'm countries from Britain to Australia,
Speaker 9: I've been looking for ways to try and figure out
Speaker 9: how not to get socked with reciprocal tariffs. India certainly
Speaker 9: has and it made a lot of moves there as well.
Speaker 9: So there are a lot of countries trying to figure
Speaker 9: out how to do this, and they got a very
Speaker 9: clear indication that such a thing as possible. Now how
Speaker 9: that would look, We have no real idea in fact,
Speaker 9: what these tariffs are going to look like at all.
Speaker 9: We don't really have too much of an idea except
Speaker 9: that the initial sort of maximal level of five thousand
Speaker 9: plus individual tariff decisions across all those product lines, multiplied
Speaker 9: by one hundred or more countries and economies, that just
Speaker 9: sort of massive matrix of tariffs is just not going
Speaker 9: to be the way, and it's going to be vastly
Speaker 9: simplified from there. To add carve outs on top of that,
Speaker 9: this is not going to look necessarily as much as
Speaker 9: the Trumpet administration had initially started talking up, even though
Speaker 9: it may wind up in its collectivity being one of
Speaker 9: the largest tariff implementations in a century or more.
Speaker 2: Derek, thank you so much for being with us this morning.
Speaker 2: That is our senior editor, Derek Wallbanks, So taking us through.
Speaker 2: The main stories are from the tomp White House of
Speaker 2: course today on tariffs and also on that major security.
Speaker 1: Breach here in the UK.
Speaker 3: The Bank of England governor says Britain needs a breakthrough
Speaker 3: like artificial intelligence to cancel the collapse and its long
Speaker 3: term growth rate. Andrew Bailey was speaking before the Chancellor's
Speaker 3: Spring statement tomorrow, Rachel Reeves is expected to announce billions
Speaker 3: of pounds and spending cuts report. Two out of bio
Speaker 3: joins us. Now for more TIBA. What did Andrew Bailey
Speaker 3: then have to say about growth?
Speaker 10: Well, in short, he said there's not much of it
Speaker 10: at the moment and that we need to do something
Speaker 10: to buck the trend. So, the Bank of England Governor
Speaker 10: was delivering a lecture at Leicester University and really his
Speaker 10: key message was that the UK needs a growth shake up,
Speaker 10: something that will still mulate it massively to avoid that
Speaker 10: collapse he was speaking about. He talked about the sharp
Speaker 10: slowed down in productivity which he says has actually been
Speaker 10: taking place since even before the financial crisis and resulting
Speaker 10: in a decline in living standards. And it's because of
Speaker 10: this decline that Andrew Bailey wants us to look to technology.
Speaker 10: He gave the example of general purpose technologies like the
Speaker 10: steam engine and the computer, and he says they can
Speaker 10: really move the neasle when it comes to growth in
Speaker 10: the economy. He even went as far as to say
Speaker 10: that the country needs what he's calling a technological breakthrough
Speaker 10: to counter the collapse of its long term growth rate.
Speaker 10: So a real sense of urgency there from Andrew Bailey
Speaker 10: in his eyes, just as inventions like the steam engine
Speaker 10: propelled us during the Industrial Revolution, he thinks AI in
Speaker 10: this instance can be the saving grace, primarily because of
Speaker 10: its ability to enhance productivity, particularly as the population ages,
Speaker 10: and he thinks that the technology is a necessary component
Speaker 10: for growth in hanalies because of this.
Speaker 2: Yeah, I mean that's interesting. A lot of people sort
Speaker 2: of have high hopes for AI. It's about sort of delivery,
Speaker 2: and there's a big risk on the horizon, which is
Speaker 2: trade tariffs.
Speaker 1: Oh yeah, Karrolyn.
Speaker 10: That's the question on everybody's mind, especially as we approach
Speaker 10: what Donald Trump has labeled Liberation Day, and that's on
Speaker 10: April the second, when he slated to reveal tariffs that
Speaker 10: offset levies on US goods. But for his part, Andrew
Speaker 10: Bailey did actually acknowledge what he's identified as large imbalances
Speaker 10: within the trading system, So he actually called out China
Speaker 10: as a country running huge trade surpluses. He didn't go
Speaker 10: quite as far as to endorse President Trump's strategy with tariffs,
Speaker 10: but he did describe those imbalances within the current system
Speaker 10: as the main driver of a high tariff environment. But
Speaker 10: where Bailey does differ from Trump, who of course referred
Speaker 10: to tarifs as the most beautiful word in the dictionary,
Speaker 10: is that he thinks we should look to rebalance that
Speaker 10: system through effective multilateral processes rather than those levees.
Speaker 3: This all happening, of course, ahead of the spring statement
Speaker 3: tomorrow from the Chancellor. The government has repeatedly said that
Speaker 3: growing the economy is its number one priority, So ahead
Speaker 3: of the Spring statement, the financial regulator has announced some
Speaker 3: changes which train just cutting some of the barriers to growth.
Speaker 10: Yeah. So we have had from the Financial Conduct Authority
Speaker 10: today that it's dropping the requirement of finance firms to
Speaker 10: follow more than one hundred pages of now perhaps outdated
Speaker 10: guidance on products such as mortgages and investments. It's something
Speaker 10: that Rachel Reeves has talked about a lot, including during
Speaker 10: her latest interview with Bloomberg last week, where she talked
Speaker 10: about slashing regulatory barriers to growth. And this news comes
Speaker 10: today as the FCA publishes its five year strategy, and
Speaker 10: that's got folks on helping consumers, fighting crime, supporting growth,
Speaker 10: and crucially becoming a smarter regulator. That's according to a
Speaker 10: statement released from the Body today.
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Speaker 1: I'm Caroline Hepka and I'm Stephen Carroll.
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