French Premier Lecornu Resigns; Trump Pushes for Israel-Hamas Deal

0:28The news doesn't stop on the weekends. We put the past week's events into context, examining what happened in the markets and the world. Then on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television, listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast. That's Bloomberg this weekend, Saturdays and Sundays starting at 7 a.m. Eastern on February 28th. Make us part of your weekend routine on Bloomberg Television, Radio, and wherever you get your podcasts.

1:09Bloomberg 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 politics in Europe and a ramped up political crisis in France. The country's prime minister, Sébastien Lecornu, has resigned just a day after President Emmanuel Macron named a new government that was broadly criticized. We get more from Bloomberg's Jean d 'Albard in Paris. It is still a serious situation, but it is only a political crisis yet, and it doesn't look like a fiscal, no, an economic crisis. It will be for President Macron to decide.

1:51A resignation, we think it's pretty unlikely. So either he appoints a new prime minister or he calls for a new election, new general elections. But we don't think it will solve the situation because the political situation is so fragmented in France that even new general elections won't solve the problem. That's Bloomberg's Jean Delbarre. We are seeing an impact in the markets this morning. Stocks in France are down 1.7 percent. Well, Nathan, we turn now to the latest developments to end the war in the Middle East. Israel and Hamas are preparing for indirect negotiations in Egypt as hopes are rising for a possible ceasefire in Gaza.

2:28Begin more with Bloomberg's Dan Williams in Jerusalem. Well, we have delegations converging on Egypt, the Red Sea resort of Sharm el-Sheikh. There will be more proximity talks. Hamas will never engage directly with Israel, so there'll be mediation by the Egyptians, by a Qatari technical team, which is also expected in Qatar, you remember, along with Egypt. Those were the two Arab powers that have mediated previous ceasefires. But now what's being discussed is a peace plan put forward by President Trump last week. Peace meaning that this will not just be a self-interested, time-bound cessation or suspension of hostilities, but an end to the war and, according to the plan, an end to Hamas institutionally in the Gaza Strip.

3:18And Bloomberg's Dan Williams in Jerusalem says a swap of Israeli hostages and Palestinian prisoners would happen immediately upon securing an agreement while Hamas's disarmament would come in a second stage. Turning back to the U.S. now, Karen, it is the sixth day of the federal government shutdown, and the White House is signaling the first rounds of federal layoffs could begin as soon as today. Government worker unions have filed an emergency request with a federal judge in San Francisco to try to keep that from happening. President Trump was asked about his job cut plans on his way back from a Navy celebration in Virginia.

3:51It's taking place right now, and it's all because of the Democrats. The Democrats are causing the loss of a lot of jobs with their, it's a shutdown. It's their shutdown, not our shutdown. It's their shutdown. Despite President Trump's comments, it's not immediately clear if layoffs have taken place yet. Meantime, the Senate is set to vote again today on a stopgap spending bill that has failed four times before. Senate Minority Leader Chuck Schumer says House Speaker Mike Johnson's refused to negotiate with Democrats on extending health care subsidies. We've tried 45 days and 45 days and 45 days from March on.

4:25We asked them to vote on it three times. The Republicans in the Senate, they voted no three times. But Speaker Johnson says there's time to negotiate once the shutdown's over. The funding runs out December 31st. The month of October is a critical time for us to get to this, but we can't when Chuck Schumer keeps voting to shut the government down for political reasons. Speaker Johnson and Leader Schumer appeared on CBS's Face the Nation, heard Sundays on Bloomberg Radio. Well, Nathan, a federal judge has temporarily blocked the Trump administration from deploying any National Guard troops to Oregon during protests against an immigration crackdown.

5:02U.S. District Judge Karen Immergut, a Trump appointee, issued a temporary order late Sunday that will last at least 14 days, halting the administration's plan to deploy hundreds of troops from California and Texas to Portland. Back to the markets now, Karen. Stocks in Japan surged to an all-time high as Sanae Takeichi, a pro-stimulus conservative, is poised to become Japan's first female prime minister. While equity investors embraced the news, bond markets did not. Longer-dated Japanese bonds slid, and we get more from Bloomberg's Sherry On in Tokyo. We know that Sanaya Takeuchi is a nationalist.

5:39We know that she's a fan of Margaret Thatcher, a fan of heavy metal music as well. But it's really the pro-growth policies that Sanaya Takeuchi has talked about that is really the focus for investors. She's talked about the BOJ's easy monetary policy, toned down her rhetoric during this election campaign. But we know that she wants to continue expanding fiscal policy. She's promised cash handouts, tax rebates, hinting at raising the tax-free income allowance as well. Bloomberg's Sherry Ahn in Tokyo. Japan's Nikkei index surged four and three quarters percent. Nathan, here in the U.S., futures are higher as you begin a new trading week.

6:15The S &P 500 sits at an all-time high, coming off six straight days of gains. Amy Wu Silverman is head of derivative strategy for RBC. Here we are with markets at all-time highs. Skew is relatively low. You know, all the hedges that had been placed were not monetized because the markets kept going up. And when I talk to investors, they say this just feels like the most reluctant rally. And RBC's Amy Wu Silverman, the S &P 500 is at more than 14 percent so far this year. And this morning, Karen Bloomberg Economics is out with its latest outlook for global interest rates. And we get the details on that from Bloomberg's John Tucker.

6:54Good morning, John. And Nathan, the forecast highlights a significant difference. The U.S. will be cutting rates and much of Europe will stay put. According to Bloomberg Economics, the Fed's going to follow up its cut last month with two more by year end and continue with quarterly cuts in the first nine months of 2026. By contrast, Western European central banks are forecast to be on hold. The Fed officials next gather at the end of the month. The FOMC is in something of a bind. if they cut rates too fast, the long-predicted acceleration in inflation from tariffs could materialize. By not cutting fast enough, the labor market could quickly go south.

7:31In the meantime, the European central bank officials have made it clear they're comfortable with rates where they are at present, concluding that inflation won't stray too far from their 2 % target. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. And company news, Boeing may soon be increasing its manufacturing output. Bloomberg News has learned Boeing is guiding suppliers that 737 max output could reach a 42-jet monthly tempo as early as October. To reach the first step in returning 737 output to pre-COVID levels, Boeing must still convince the FAA that its factories and suppliers can keep pace while maintaining quality.

8:10Time 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. The Supreme Court's term begins today. The High Court will hear a number of cases this year, some on its emergency docket, concerning the limits on executive authority of the president in situations involving the firing of agency heads and imposing tariffs without congressional approval. Last term, the Supreme Court addressed the scope of nationwide injunctions as applied to the birthright citizenship order.

8:42Now the justices potentially could be taking up whether that is constitutional. Two men accused of setting a Boston police cruiser on fire are scheduled to be in court today. It comes after a group looking to race on the city streets over the weekend. Cops arrived to break up the crowd of more than 100 people on Massachusetts Avenue in Tremont Street. Several vehicles were blocking the intersection. Cops say they were ready to race and broke it up. And that's when the violence began. Someone smashed the back windshield. Officers came out of the vehicle. Fireworks were thrown inside and the cruiser burst into flames.

9:19Two people from Rhode Island were arrested, but Boston Police Commissioner Michael Cox expects there will be more. We will get every video and every piece of evidence we can to find every individual that was involved. The officers were not injured. At least five people were killed after Russia launched drones, missiles, and guided aerial bombs at Ukraine overnight in a major attack that officials there said targeted civilian infrastructure. Ukrainian President Volodymyr Zelensky says Moscow sent over 50 ballistic missiles and about 500 drones into nine regions. It's Breast Cancer Awareness Month and time to remind people about the importance of early detection, starting with the very first breast exam.

10:02Dr. Darian Sutton says men can get breast cancer as well. If you have a family history, if you have a genetic risk, it's not just for women, it's for all humans. If you have that BRCA gene, you need to talk to your doctor about additional screening, but knowing the symptoms, if there is a change in your chest, if you have a new lump, if there's a change in your nipple, or there's any concerning signs, you need to talk to your doctor to get evaluated. Dr. Sutton spoke to ABC. Global News 24 hours a day and whatever you want it with Bloomberg News Now. I'm Michael Barr, and this is Bloomberg, Karen.

10:33Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. The Toronto Blue Jays, after winning game one of the ALDS 10-1, won game two over the Yankees 13-7. So Toronto will take a 2-0 series lead to New York. Seattle beat Detroit 3-2. That series is tied at one. An upset in Sunday night football at Buffalo. New England won 23-20. Philadelphia blew a two-touchdown lead and lost at home to Denver 21-17, so there are no undefeated teams left in the NFL. There's only one winless team. That's the Jets. That's your Bloomberg Sports Update. Stay with us.

11:10More from Bloomberg Daybreak coming up after this. Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London. We're the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy.

11:47We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts.

12:25Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. The political crisis in France has hit a whole new level. The country's prime minister, Sebastian LeCornu, has resigned less than 24 hours after President Emmanuel Macron named a new cabinet that drew criticism from seemingly all sides, including from some within it. For the very latest, we're joined by Bloomberg Daybreak Europe anchor Stephen Carroll. Stephen, good morning. I'm honestly losing track of how many prime ministers France has had in just this year. What did Le Cornu in? Good morning. Good morning, Karen and Nathan.

13:01Look, this is now the shortest tenure for a prime minister. That's a record that has only been held since last December, when you might remember Michel Barnier went. But Sébastien Le Cornu has gone after 27 days in the job and just 14 hours after he unveiled his new cabinet, which is also the shortest in history as well. This is the same problem that has bedevilled every French Prime Minister since the National Assembly snap elections last summer. This is a question around being unable to form a majority in Parliament. Sébastien Le Cornu has been the third Prime Minister since that fractured Parliament was returned to try to build a coalition.

13:38He's been speaking in the past hour outside his office in Paris talking about how he negotiated as well as he could behind the scenes. He couldn't see signs that he would be able to build a sufficient coalition to pass a budget through Parliament or indeed address many of the other key political issues that France is facing. He had promised not to use the constitutional override mechanism that he has available to him to force the budget through Parliament. He told the other parties he wanted to build a compromise with them. But he says the other parties weren't willing to agree, even though they had made some signs in private that they were willing to soften on some of their positions.

14:18There was no consensus to be built, and that's why he decided to resign. Now, one of the key difficulties he had was after unveiling his range of ministers yesterday, is that one of his most important partners in his very minority government, the centre-right Republicans party, they had already said they weren't happy with the lineup of ministers that were announced, despite the fact that their leader, Bruno Vertailleau, kept his job as interior minister in the reshuffle there. So they were an unhappy partners. They were due to hold a meeting around now to try and discuss their position in a government, a government that no longer exists.

14:54So now that Le Corneau's out, it raises the question once again about whether anybody is going to be able to get a budget through this National Assembly, whether anyone can be prime minister. We've had so many at this point. So what are the options going forward, Stephen? It's the same three options that we had a month ago, that we had at the end of last year, and that we had in September of last year when President Emmanuel Macron has been picking prime ministers. He can try again. He can pick somebody else from his own political family or from a different political family within the parliament.

15:27We've talked many times over the past few months about the key role the centre-left Socialist Party played and whether or not they could be tempted into government. The last time around, they set out a very clear agenda of measures that weren't palatable to the centre or the centre-right. So that presents the same problem, even if you did let them lead a government as to how you would build a coalition for a budget. So that's one choice. Go back to find another prime minister and try again. You can call elections to the National Assembly, what Emmanuel Macron did in June of last year. But the polls don't indicate that you would end up with any greater consensus in Parliament now than you did before, although arguably French people are as sick of this political turmoil as the markets appear to be.

16:10The third option, very unlikely, Emmanuel Macron himself has ruled it out, would be that he would resign and call an early presidential election. Those are the options. They don't get any easier, and it's difficult to see the path forward. Given the fact that President Macron appointed a cabinet that didn't include too many changes, it does appear likely, doesn't it, that the president would try to stick it out. But is he feeling any pressure at this point to make some changes here? Ultimately, yes. But the changes that he can make are only going to produce, it would appear, limited results. whether he'll attempt again to go back to some of those parties and build a coalition or a which is what we thought he was doing the last time around build a consensus around some sort of budget proposals before putting a government into place is a question but we need to keep an eye on the markets and all of this as well we've had french stocks selling off particularly french banks but those government bond yields part of the problem in france's difficult budget calculus rising again and the spread between french and german yields what we use as a gauge of risk in europe when it comes to how investors are viewing French debt, that's widened to the widest since last December, two political crises ago, if you're counting.

17:24And that is an issue that will weigh on Emmanuel Macron's mind because he knows there are a series of deadlines approaching for a budget. One has to be sent to Brussels to the European Commission for approval within the next couple of weeks. And an effort to try and put that together and to stop a position where we're going to end up with The rollover budget at the end of the year, with the pain that would inflict on both French taxpayers and on the state, is one that he'll be sure to try to avoid. But as I say, at this point, there are no easy paths out of this crisis. And to that point, Stephen, as you say, the CAC in Paris is down 1.7%.

18:00So, yeah, there is pain in the market this morning as well. Thank you for this, Stephen, for the update. That's Bloomberg Daybreak Europe anchor Stephen Carroll with us this morning. Karen. Nathan, we're coming up on two years since the Hamas attack on Israel that sparked a devastating war in Gaza. President Trump is urging both sides to seal the deal on his plan to end the conflict. Indirect talks are set to begin today in Egypt. Israeli Prime Minister Benjamin Netanyahu says he thinks peace is possible. I hope it will happen, but I can't guarantee that it will happen. And so if it doesn't happen, what President Trump has said is that he will back Israel completely in acting forcefully against Hamas.

18:38And that was Israeli Prime Minister Benjamin Netanyahu in an interview with Euronews. And joining us this morning from Jerusalem is Bloomberg News reporter Dan Williams. Dan, good morning. What do you make right away of those comments from Netanyahu? Is that any sign that peace can be reached here? Well, it's either or. It's the president of the United States, Trump, who described this deal, this proposal, as one that would bring peace. He says peace after 3 ,000 years of conflict. So he definitely sees an epical opportunity here. Whether all that will be achieved may be in doubt, because right now what we have is a partial Hamas agreement following a full embrace of the proposal by Netanyahu, a partial Hamas agreement to enter into it, meaning Hamas has said it's open to releasing the remaining 48 hostages and then discussing the other clauses of the proposal.

19:39Hamas' misgivings are over the demand that it relinquish its weaponry, that it fully relinquish power. Effectively, this proposal would see Hamas ousted from the Gaza Strip and end of Hamas institutionally in exchange for the physical survival of the remaining Hamas members who would presumably be offered an amnesty. So it would appear that all parties are getting together. They don't want to miss up an opportunity for that hostage release. But Netanyahu is making quite clear, and he does have vocal support from Trump on this, that if Hamas doesn't get with a program for what remains of the plan, Israel is ready to redouble its attacks in the Gaza Strip, where it already controls something between 70 and 80 percent of the territory, a territory that's really been laid ruin by this two-year-old war, that Israel is prepared to go in and, in his words, finish the job by effectively crushing Hamas militarily and seeing an end to that regime.

20:38Yeah, and their talks are going on today. Who is taking part in these talks today specifically? Well, we already have the Hamas delegation there. It's led by the de facto leader of Hamas outside Gaza, a man who was actually out of public sight for a number of weeks because he was among the leaders of Hamas that were targeted in a failed Israeli assassination strike in Qatar. Doha, the capital of Qatar, Qatar like Egypt, has been mediating between Hamas and Israel during this war. So he has now led this delegation to Egypt, specifically the Red Sea resort of Sharm el-Sheikh. In the coming hours, we're expecting an Israeli delegation, a working delegation to be out there.

21:23Basically, what we're waiting for here, or the Israelis are waiting for, is a sign that Hamas really is on board with and able to deliver those 48 hostages, at which point Netanyahu's top advisor, Strategic Affairs Minister Ron Dermer, would join the Israeli delegation. We're also expecting Jared Kushner and Steve Witkoff, two main envoys on this, in Sharm el-Sheikh. It's unclear if they've arrived or when they would be arriving, but it would appear that they, like Minister Dermer of Israel, may be waiting to ensure that there's no backsliding, reneging, time-buying on the part of Hamas. Trump, for his part, has said that he won't be patient beyond a few days.

22:05So did Secretary Rubio. Everyone, I think, would like to see this concluded, at least the hostage stage concluded, in the coming days within this week.

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