Bessent Calls for Fed Building Review; Stocks at All-Time Highs

0:00Bloomberg Daybreak U.S. Edition is brought to you by OTC Markets Group. OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Learn more at otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer, and is available only through participating broker-dealers. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work.

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1:23So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person. How you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with new developments surrounding Jay Powell and the Federal Reserve's building renovations in Washington. Treasury Secretary Scott Bessent is the latest Trump administration official to pile on.

2:06We get the very latest now from Bloomberg's John Tucker. Good morning, John. Good morning. Nathan Bessent says in a social media post there should be a review of the decision to renovate parts of the Federal Reserve headquarters in Washington. He also says the Fed should conduct what he calls an exhaustive internal review of its non-monetary policy operations. Well, this is just the latest salvo in the Trump administration's relentless attack on the Fed and its leader, Jerome Powell, mostly for refusing to bend to the president's will and lower interest rates. The probe into the headquarters renovation, which is now more than$700 million over budget, has stoke speculation it could provide a way for Donald Trump to fire Powell.

2:47Cost overruns for federal buildings in Washington are hardly unusual. A lesser-known Trump ally, meantime, Congresswoman Alina Paulina has also jumped into the fray, urging the Justice Department to investigate Powell for allegedly misleading Congress about the cost overruns, even though there's no evidence of wrongdoing. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Well, as investors wait to see how the whole Powell saga plays out, stocks continue to reach new heights. The S &P 500 closed at yet another record high yesterday. Wells Fargo's top U.S. equity strategist Christopher Harvey says he expects the S &P 500 to deliver another double-digit increase in the second half of the year.

3:28What we're seeing is the winners continue to win. The Uber cap companies have the higher margins, are gaining more market share. There is a real secular trade in AI that will continue. I was here during the 90s. This is not a fair comparison. It is much stronger and the fundamentals are much better today than they were back then. Harvey is the most bullish strategist tracked by Bloomberg, forecasting the S &P 500 will climb above 7 ,000 by the end of the year. It closed yesterday at just over 6 ,300 for the first time. And Karen, Chris Harvey is not the only one bullish on U.S. equities. A cohort of the world's largest asset managers is leaning harder into the risk asset rally.

4:07Firms such as Invesco, Fidelity International, and J.P. Morgan Asset Management are reinforcing bullish bets across technology shares from the U.S. to Asia, as well as on emerging market assets. The high-octane wager is that while President Trump is threatening to disrupt the economic world order, he will step back from the brink. Nathan, earnings continue to roll in with more than 30 companies in the S &P 500 reporting today, among them General Motors. We get a preview from I'm Bloomberg's Tom Busby. GM is likely to report vehicle sales and market share in the U.S. grew during the second quarter with a lot of help from EVs and lower-priced models like the Chevy Equinox small SUV.

4:45The automaker also likely to stress the biggest hit this year to its bottom line from President Trump's 25 % tariffs on imported cars and auto parts. GM stated previously it expects upwards of$5 billion in tariff impact this year, a third of which it plans to offset through cost-cutting moves. Bloomberg Consensus calls for revenue of$46.27 billion on adjusted earnings per share of$2.33. Tom Busby, Bloomberg Radio. Tom, thanks. As the U.S. imposed deadline on tariff deals draws closer, Commerce Secretary Howard Ludnick met for more than two hours yesterday in Washington with Japan's chief trade negotiator.

5:20Barring a deal, universal tariffs on Japan's exports to the U.S. are set to rise to 25 % on August 1st. That's up from the baseline 10 % and an original 24 % duty. Well, Nathan, Microsoft is still trying to stop hackers wreaking global havoc after they exploited a flaw in the firm's software. Over the weekend, Microsoft released a fix for the vulnerability in servers of the SharePoint document management software, but say they're still working to repair other parts of the system. According to cybersecurity researchers, the flaw was used to break into the file systems of national governments in Europe, the Middle East, and the U.S.

5:55Karen, BlackRock is restricting the use of company devices in China. In an internal memo seen by Bloomberg News, the world's largest asset manager told staff to use temporary loaner phones and not to bring company laptops to China on business trips. The changes come with growing jitters around business travel to China. U.S.-China geopolitical tensions are weighing on global financial firms. Now, Nathan, to the latest on the Jeffrey Epstein case. It's starting to affect legislative business on Capitol Hill. Democrats on the House Rules Committee used a hearing on several Republican bills to call for amendments releasing files on the child sex offender.

6:31That forced Republicans to call off the hearing indefinitely, and it could mean the House heads into its summer recess early. At the White House, Press Secretary Caroline Levitt was asked why President Trump has not called for a full release of the Epstein files. The president has said if the Department of Justice and the FBI want to move forward with releasing any further credible evidence, they should do so. As to why they have or have not or will, you should ask the FBI about that. Meanwhile, the White House says it will remove the Wall Street Journal from the small group of reporters who will be traveling with President Trump on his trip to Scotland later this month.

7:04The president is suing the paper over a report that he gave Epstein a suggestive birthday letter more than 20 years ago. In other media news this morning, Karen, billionaire Patrick Soon-Shiong is planning to take the Los Angeles Times public over the next year. Soon-Shiong told Jon Stewart's The Daily Show he will allow the public to have ownership of the paper. If an initial public offering goes ahead, the L.A. Times will join the New York Times and News Corporation among the largest publicly traded news organizations. And Nathan, Stephen Colbert appeared on his first late show since CBS announced it's canceling the program when his contract runs out in May.

7:40He used his opening monologue to declare the gloves are off against President Trump and CBS parent company Paramount Global. Over the weekend, somebody at CBS followed up their gracious press release with a gracious anonymous leak saying they pulled the plug on our show because of losses pegged between$40 million and$50 million a year. 40 million's a big number. I could see us losing$24 million, but where would Paramount have possibly spent the other 16 million? Oh, yeah. Stephen Colbert's reference there to Paramount's$16 million settlement with President Trump over a 60-minute interview he claimed was deceptively edited.

8:21The comedian also responded to the President's Truth social post that he absolutely loved that Colbert got fired with an expletive.

8:32Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A federal judge has sentenced an ex-Kentucky police officer to 33 months in prison for using excessive force during the 2020 deadly Breonna Taylor raid. The judge declined a U.S. Justice Department recommendation that he should serve just one day. Brett Hankinson, who fired 10 shots during the raid but didn't hit anyone, was the only officer on the scene charged in the black woman's death. He is the first person sentenced to prison in the case that rocked the city of Louisville.

9:09Ben Crump is the Taylor family attorney. We had the honor of fighting with this family for five years now to get equal justice. Ben Crump says even though the family thought Hankinson should have gotten more prison time, they are grateful. New York City former interim police commissioner Thomas Donlan has filed a$10 million defamation claim against Mayor Eric Adams for reportedly suggesting he was mentally unfit for the job of top cop. The filing comes less than a week after Donland sued Adams and his top deputies, accusing them of operating the department as a criminal racket that punished whistleblowers.

9:49A spokesperson for Adams dismissed the allegation as yet another frivolous attempt to seek compensation at the taxpayer's expense. The Pentagon has ordered the U.S. Marines to leave Los Angeles after more than a month in the city. The departure of the 700 Marines first deployed on June 9th during protests against the administration's immigration policies comes days after the military reduced the presence of the National Guard. Mayor Karen Bass says she appreciates the sacrifices the National Guard soldiers are making, but says there needs to be priorities. We need the National Guard to assist us and prepare for fire season, not for an inappropriate deployment where they are just guarding a building that is not under attack.

10:35Tributes continue to come in for actor Malcolm Jamal Warner, who played Theo Huxtable on The Cosby Show. Police say Warner died in an accidental drowning off Costa Rica's Caribbean coast, where he was on a family vacation. Malcolm Jamal Warner was 54. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. All right, Michael Barr, thank you.

11:26dealer. In the first half of 2026, over$28.1 billion U.S. dollars traded on Moon ATS. Learn more about Moon ATS. Visit otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer. This is the Bloomberg Tech Minute, brought to you by ChatGPT. Now with ChatGPT Work, I'm Carol Masser. Bill Gates Breakthrough Energy Ventures is betting on a cheaper way to produce clean jet fuel and made its first investment from a fund that is backed by Alaska Air, American, and several other carriers. The investment is aimed at accelerating the commercialization of clean aviation fuel.

12:10The recipient is Boston-based Lydian, which is developing lower-carbon jet fuel made from hydrogen and carbon dioxide and is one of a growing number of companies developing next-generation clean jet fuel technology. Lydian says it can reduce capital expenses by more than 50 % compared with competing technologies. Lowering those costs is seen as crucial to making sustainable aviation fuel, or SAF, commercially viable, as it remains far more expensive than conventional jet fuel. Today, clean fuels represent a tiny fraction of the overall market. That's the Bloomberg Tech Minute, brought to you by ChachiPT.

12:49Put ChachiPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting work mode. Available on Plus and Pro Plans.

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14:05Time now for the Bloomberg Sports Update. Here's John Stashauer. John, good morning. Good morning, Karen. The Yankees went to Toronto three weeks ago, gave up 36 runs, lost all four games, and that's why in their return, they trailed the Blue Jays by three games. They scored first. Fourth inning. First pitch. He's tried to deep lap. That's hit well. Going back, Snyder. Running out of room. Goodbye into the bullpen. Big G, Giancarlo Stanton gives. The Yankees a 1-0 lead, leading off the fourth. On WFM, but that was the Yankees' only run. They had only four other hits. Toronto scored four times in the fifth.

14:41The Bo Bichette two-run double and then consecutive throwing errors by the left side of the Yankee infield. Oswald Peraza and Anthony Volpe, who leads the league in errors. The Blue Jays won 4-1. at Citi Field. Mets trail the Angels 4-0, 5-2 in the seventh. Juan Soto two-run single tied the game in the eighth. Big double by Francisco Alvarez just back from the minors. Mets had runners at second and third. They bring the left-hander Brock Burke into pitch, and Carlos Mendoza's going to stick with Ronnie Mauricio. He's three for 26 against left-handers, Garrett. The infield's in. Ronnie pulls one to third.

15:14Grabbed on a hop to throw. Oh! It gets away. And he scores. Alvarez will stop at third. Wow. And the Mets take the lead at the bottom of the eighth. On SNY, they scored again, won 7-5. The go-ahead run scoring and a play at the plate after a ground at a third in the eighth, just as was the case in the win Sunday over Cincinnati. Mets still throw the Phillies by a half game. The Phillies beat the Red Sox 3-2 on a walk-off catcher's interference call. Tenth inning, first time a game has ended like that since 1971. The Nationals top the Reds 10-8. Eleventh win in a row for now first place, Milwaukee.

15:49He's 6-0 at Seattle. Chris Paul says his 21st season in the NBA will likely be his last. At age 40, he signed with the L.A. Clippers. Kaitlyn Clark still has the groin injury. Won't play for Indiana in Brooklyn tonight against the Liberty. John Stashauer, Bloomberg Sports, Karen and Nathan. Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan. Hager, and there is little let up this morning to the Trump administration's pressure on the Fed and chair Jerome Powell. Treasury Secretary Scott Besant is now among those calling for a full review at the central bank with a focus on its two and a half billion dollar renovation.

16:31But White House spokeswoman Caroline Levitt says President Trump's pressure on Powell will only go so far. He has no plans to fire the Fed chair, but he has been very transparent in expressing his displeasure with Jerome Powell's management of the Fed and also his policies. White House spokeswoman Caroline Levitt. Joining us this morning, Terry Haynes, the founder of Pangea Policy. Terry, it's great to speak with you. In Secretary Besson's social media post calling for this review, he said, quote, significant mission creep and institutional growth have taken the Fed into areas that potentially jeopardize the independence of its core monetary policy mission.

17:07What do you make of this angle of the pylon that we're seeing on Chairman Powell? Good morning. Hi, good morning, Nathan. A couple of things. One is that, you know, I'm a big believer that Powell stays. I told markets last week seven reasons why that was the case. And on top of it, I find Besant's doing here interesting because Besant is not going after, as he said, the core monetary policy functions of the Fed. He's looking at the Fed as a kind of the standard regulatory stuff that the Fed does. And, you know, it's entirely appropriate for the Congress, the president to be looking at those functions.

17:50And it's entirely appropriate to want to try to figure out how they can best make the Fed focus on its core mission. I look at it as a little less meddling, but at root, it's still the same kind of irritant that won't get Trump anywhere because fundamentally what we're trying to do here is move blame from Trump onto Powell for the stubbornness of inflation. This kind of review that Secretary Besant is calling for sounds like the kind of thing that could linger into the next Federal Reserve chairman. Do you expect something like that to fall on the plate of whoever President Trump appoints next?

18:31Oh, I do expect that, firstly. Secondly, I think it's overdue. It's been a quarter of a century or more since the Fed has undertaken a real serious look at exactly what it does comprehensively and how it does. And thirdly, I'll point out at least some candidates, former Governor Warsh comes to mind first, have been calling for exactly that kind of revamp. uh congresswoman uh republican anna paulina luna has uh called for a criminal referral for uh fed chairman powell over his testimony about the renovation do you see that going anywhere i don't uh i think it's unserious uh uh pal you know her the core of luna's concern is allegedly is uh powell committing perjury in front of the committee on the renovations uh if you look at the statements that she cites and the context, there's absolutely no basis for that.

19:29I think this is not legal advice, but there isn't any basis for it. And I think it frankly backfires on Luna and on Trump, particularly if the Justice Department investigates, they find nothing. If they refuse to investigate, Luna looks foolish. So either way, it's a bad look. In our last minute, Terry, it looks like the Jeffrey Epstein case is affecting policymaking on Capitol Hill with this House Rules Committee hearing getting stalled over Democrats calling for full release of the Epstein files. Where do you see this going? Well, I see people, first, they're all going to Reagan National to get flights as quickly as possible.

20:08Secondly, I think they've tied themselves into knots on this, and Congress is good at tying itself into knots. I think what ends up happening is basically they're going pencils down for the August recess with the idea that Bondi or somebody is going to be able to release a lot of files. And when they release a lot of files, it takes the political pressure off the warring sides of the House. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen.

20:47You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

21:37Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person, how you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. You already know how AI is changing how everyday work gets done, how much ground you can cover, and how fast a team can scale.

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