Iran Vows Intensified Response; Senate Rejects War Powers Measure

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1:51Bloomberg 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, the war in the Middle East is now into a sixth day. Israel is carrying out new waves of attacks on Tehran's military and intelligence assets, along with strikes on Hezbollah targets in Lebanon. President Trump says the U.S. is doing very well. Somebody said, on a scale of 10, where would you rate it? I said about a 15. and we're going to continue to do what we have the greatest military in the world by far. President Trump spoke from the White House, and we get more from Bloomberg Middle East anchor Jumana Bersechi in Dubai.

2:35White House Press Secretary Caroline Leavitt went on to say that they're moving to have complete dominance of the skies. And earlier on, I actually conducted an interview with one of the advisors to the Israeli prime minister, and he said that from their perspective, Both Israeli and U.S. operations have already surpassed in the first five days of this war what they thought they could achieve. This is his words, obviously. That's how he's describing it. The U.S. also saying, the Central Command, that they've hit over 2 ,000 targets in Iran over the first five days of the operations. Bloomberg's Jumana Bersetje reports Iran is promising to ramp up retaliatory attacks.

3:11About a dozen nations are involved with Tehran striking U.S. bases and embassies across the Middle East. Turkey came under fire as well yesterday, the first time a NATO member's been targeted. And a U.S. submarine sank an Iranian warship in international waters off Sri Lanka in the first such attack since World War II. Iran is vowing to avenge that strike. Well, on Capitol Hill, Nathan, the Senate has cleared the way for President Trump to keep the war going. A Democratic-led resolution to stop further strikes was blocked by a vote of 47 to 53. Republican Lindsey Graham says the war is justified.

3:46President Trump, after a sincere effort to bring this conflict to a peaceful conclusion, concluded that to continue to allow this regime to move forward would put America at unacceptable risk. And he was right. But Democrat Chris Murphy says Americans are already paying a cost. Oil prices up by 9 percent. Gasoline prices, their largest one-day increase in 20 years. Natural gas prices up 45 percent. The region is in chaos. American consumers are paying the price. And for what? We still don't even know the reason for this war. Senators Chris Murphy and Lindsey Graham spoke on the Senate floor ahead of the vote.

4:32The House plans to vote on a war powers resolution today. Speaker Mike Johnson says he's confident it will fail there as well. A CNN poll taken the weekend the war began found 59 percent of Americans disapproved the strikes on Iran. Karen, former Secretary of State Antony Blinken says real change in Iran will require a sustained military focus that could wear down U.S. weapons stockpiles and leave it vulnerable to attacks from other adversaries. Blinken was the top diplomat in the Joe Biden administration. He's questioning whether this White House is ready for the consequences of a drawn out war.

5:06Blinken spoke with Bloomberg's David Gurra on the latest edition of the Bloomberg Big Take podcast. What I'm worried about, one of the things I'm worried about, and this gets to the second and third order consequences, is we so deplete our arsenal and it takes a long time to rebuild it, that that puts us in a disinventatious position when it comes to, say, a China or a Russia. All of those things need to be factored in. And again, it's one of the reasons why if you're going to undertake something like this, you've got to make sure that you've factored all of that in. And you can catch David Gurra's full conversation with former Secretary of State Blinken on The Big Take wherever you get your podcasts.

5:41Well, Nathan, we are seeing oil on the rise once again this morning. West Texas Intermediate is up 2.2 percent at$76.24 a barrel. Brent is up 1.7 percent at$82.76. Bloomberg Middle East News Director Will Kennedy believes President Trump is closely monitoring the energy market. I do think the oil price is an important calculation for him. And although the price has been significant, it's worth bearing in mind that it's not out of control, that prices in the low 80s are not beyond where they've been in recent years. Prices went well above$100 at the start of the Russia-Ukraine war. So it may be in Washington's calculation that these oil prices are manageable.

6:28Bloomberg's Will Kennedy on Iranian television this morning. A military official claimed Iran has not closed the Strait of Hormuz. The war continues to have a major impact on the airline industry, Karen. The number of canceled flights to Middle East hubs has now surpassed 23 ,000. And thousands of passengers are stranded in the Gulf region, with more than half of all scheduled flights to or from the Middle East canceled. We get the latest from Bloomberg Aviation and Transport reporter Danny Lee. Priority has really been given to people to get out of the region. And we have seen over the recent days the likes of Emirates and Etihad Airlines starting, resuming some flights to get people out.

7:06But clearly for now, there's a pretty broad disruption overall. It's Bloomberg's Danny Lee. And the State Department says 17 ,500 Americans have safely fled the region. It's urging others to register via its website. Nathan, Amazon also being impacted by the war in the Middle East. drone strikes have damaged three facilities operated by Amazon in the United Arab Emirates and Bahrain. And Israel and the U.S. have reportedly hit at least two data centers in Tehran, one of them connected to the Islamic Revolutionary Guard Corps. Karen Goldman Sachs, CEO David Solomon, says he is surprised so far by the reaction to the Iran attacks in the markets.

7:44But in an interview with Bloomberg, he says he does not see complacency. I think there's a lot of uncertainty around the direction of the conflict, how it will be resolved, what the off-ramps are. And I think it's fair to say when you look at markets, market reactions have been relatively benign. And I certainly could have seen over the last couple of days a little bit more volatility. But I don't think people are being complacent. I think that market participants are looking and trying to say, how is this going to play out? What's the end game? And catch the full interview with Goldman Sachs CEO David Solomon on Bloomberg's new video experience on the Bloomberg Business app.

8:22Nathan, Fed Governor Stephen Myron is still pushing for interest rate cuts, even with the war in Iran. And we spoke with Myron yesterday. I think it's a moment to continue acting. We have I have policy. I have projections for unemployment. I have projections for labor markets. So do my for inflation. So do my colleagues. And I believe it's appropriate to continue acting in accordance with those projections until you get evidence that you have to change your projections. And thus far, the evidence from events over the weekend haven't led me to change any of my forecasts for the labor market for inflation over the medium term.

8:53So it's too early to respond to them. Fed Governor Stephen Myron says it's too soon to say how the war will affect the U.S. economy. And other Fed officials have said the risk of higher oil prices is clouding their outlook. Turning to the equity markets, Karen, futures have turned a touch lower this morning following yesterday's gains on Wall Street. Shares of Broadcom are still in the green, up 7 % in early trading. The company expects AI chip sales to top$100 billion next year. Broadcom also delivered a better-than-estimated quarterly outlook and announced a stock buyback plan worth as much as$10 billion.

9:26Well, in Asia, Nathan, China has set its lowest growth target since 1991. as policymakers finally appear to acknowledge the difficulties facing the economy, including deflation, tariff risks, and the property sector. And here's Chinese Premier Li Qiang speaking through an interpreter in Beijing earlier this morning. The main targets for development this year are as follows. GDP growth of 4.5 to 5 percent. While striving for better in practice. And that's China's Premier Li Qiang. Hanging over any projection is a summit between leader Xi Jinping and President Trump, which could determine the level of tariffs charged on Chinese goods.

10:08And this programming note, Karen, as we've just seen this past weekend, markets may close on Friday, but the world doesn't. That's why we're bringing you a new live radio and TV show. Bloomberg This Weekend is looking beyond the daily headlines to the bigger themes driving politics, business and culture. Join David Gura, Christina Ruffini, and Lisa Matteo for smart conversations and in-depth interviews that help make sense of the week that's been and what comes next. Get Bloomberg this weekend live, Saturdays and Sundays from 7 a.m. Eastern on Bloomberg Radio, Bloomberg Television, and the Bloomberg Business app.

10:43Time 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. and the House Oversight Committee has voted to subpoena Attorney General Pam Bondi as part of its investigation into convicted sex offender Jeffrey Epstein. Commerce Secretary Howard Lutnick has also agreed to answer questions about his past ties to Epstein, including emails showing a visit to Epstein's private island years after Lutnick says he cut off contact. Democratic Congressman Stephen Lynch of Massachusetts is a senior member of the committee.

11:20With Pam Bondi, it's a different situation. She has withheld meaningful and important documents from Congress. She scrubbed the information that she gave to Congress from all references to Donald Trump. Lynch says the Trump administration had six million documents. They gave us three million. Minnesota Governor Tim Walz and State Attorney General Keith Ellison appeared before the House Oversight Committee to testify about alleged fraud in state programs. The committee accused Walls and Ellison of knowing about alleged fraud for years and failing to act on it. Committee Chair James Comer accused the leaders of ignoring warnings from more than 30 whistleblowers.

12:02What we've uncovered in Minnesota is not a paperwork error or a few bad actors slipping through the cracks. It is sustained failure of leadership. Walls defended their leadership, saying the allegations are being used as rationale for President Trump's deadly immigration raids in the state. In Minnesota, if you defraud public programs, if you steal taxpayer money, we'll find you, we'll prosecute you, we'll convict you, and we'll throw you in jail. Ellison says Operation Metro Surge did nothing to address fraud in our state, harmed our economy, and scarred our people. U.S. and Canadian military aircraft were sent to the skies in response to an ultimately unfounded security threat on a Scandinavian Airlines flight bound for Newark Airport.

12:50The plane landed safely. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. Lou Holtz has passed away at the age of 89, a member of the College Football Hall of Fame. He took over at Notre Dame in the mid-1980s in his third season. He coached the Irish to the national championship. The Patriots have released wide receiver Stefan Diggs after just one season with them. He played well, but this saves them$16 million in the salary cap.

13:23Diggs becomes a free agent. Kansas City Chiefs have traded cornerback Trent McDuffie to the L.A. Rams. The Chiefs get the Rams' first-round pick and three other picks. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business.

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15:20Coast 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. On day six of the U.S.-Israeli war with Iran, there is little sign of letup on either side, and President Trump continues to make the case that he was justified in going after Tehran. They're attacking their neighbors, they're attacking their, in some cases, allies, or not so long ago allies. And, you know, it's really a nation that was out of control. It was President Trump at the White House. We're joined now by Bloomberg News Middle East Breaking News editor Patrick Sykes.

15:59Patrick, thanks for coming back on with us. If you could get us updated on the latest that's been happening in the region. Good morning. Morning, yeah. I think pertinent to those Trump comments there, just, you know, since yesterday we've seen the first incidents both on Turkish soil with a ballistic projectile intercepted above Turkey yesterday, and then today, just a short while ago, the first incident in Azerbaijan with a drone being, a drone falling on Azeri territory. So I think, yeah, again, just indicating even if perhaps the overall volume of the volleys of missiles being fired might be falling from Iran, we're still seeing the conflict sprawl out in terms of geography.

16:41And we also saw yesterday the first strike by a U.S. submarine on a surface vessel since World War II off India's backyard. What does that tell us about the potential scope of this conflict, Patrick? Yeah, absolutely. I mean, I think it just shows that the U.S. is prepared to go far, far away from Iranian shores, Iranian territory, in pursuit of these objectives that it's laid out. I think the maritime aspect of it is also important because Iran was saying just earlier today that it will make America regret that particular attack, that incident. And I think that matters because of all the munitions that Iran will have around the Persian Gulf and all the tensions around shipping there at the moment.

17:28I think it's going to give Iran an extra incentive to try and target shipping, perhaps even military shipping in the region. As the conflict continues, Patrick, we've seen some headlines across the Bloomberg terminal of Iran saying it had offered some deal terms before the conflict began. Tell us more about that and what to make of it. Yeah, that panicked the market a bit because it was sort of recirculated comments. They were actually made kind of overnight a few hours ago by a deputy foreign minister in Iran. But it shows just how on edge the market is that they were reacting. The idea was that Iran was willing to give up not its nuclear program, as some had reported, but the highly enriched stockpile of uranium that it's built up if it was able to get something attractive in exchange.

18:15I think substantively that wasn't really new to us, but I think, as I said, the market reaction just shows how eager people are for new information and the level of anticipation that's out there. I imagine it resurfaces the question of the ultimate end goal for the U.S. and Israel. If that kind of offer of giving up just enriched uranium wasn't enough, what could the potential end goal be for the U.S. and Israel at this point? Yeah, I think part of the problem is that those goals, you know, frequently though we see them being laid out, they tend to vary, right, day to day, week to week. Sometimes it's about a nuclear bomb, which of course Iran says it doesn't have anyway.

18:57Sometimes it's about missiles, other times it's about threats to the region. The current line that, you know, I think it was the U.S. saying they want to remove Iran's ability to project threats is obviously a little bit more ambiguous than some of the above, which, again, I think just leaves a lot more room for the conflict to spiral and in turn for Iran to keep ramping up from its side. In our last 30 seconds, with airline cancellations piling up, how are Western citizens getting out at this point? Yeah, there's still a lot of panic and confusion, I think with some mixed guidance from some of the countries in the West, but still many, many people stuck in the Gulf, coming through the Gulf or further afield stuck.

19:43And I think some countries have been trying to send aid. Individual companies will likely be looking at potential evacuation options, but it's still all, I'd say, rather unclear for the moment. 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. You 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.

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