Next Steps in Russia-Ukraine Peace Process; Bessent Says China Tariff Status Quo 'Working Pretty Well'

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1:51Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. 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 the latest on efforts to end the war in Ukraine. European leaders are seizing on President Trump's support for a plan that would involve sending European troops to Ukraine as part of a potential peace deal with Russia. Those security guarantees could take shape as soon as this week. White House Special Envoy Steve Witkoff discussed it on Fox News. The Ukrainians actually can make a peace deal if they want to.

2:37Now, we're not suggesting that they have to take it. the president has also said it's going to be for President Zelensky to make that judgment call. And I think that judgment call is all going to be it's going to begin with security guarantees. That was White House Envoy Steve Whitcoff speaking on Fox News. We get more from Bloomberg Opinion columnist Mark Champion. Trump has said that he will support some kind of security guarantees. The British and French had long been talking about a coalition of the willing. So what we're looking at at the moment is British and French and some other troops on the ground and then U.S.

3:16support for that. So intelligence, air cover, logistics, etc. All the things that the Americans have plenty of capacity for and the Europeans don't. Bloomberg Opinion columnist Mark Champion says European military officials plan to meet with their U.S. counterparts in coming days to flesh out those security guarantees. Now, Nathan, the latest on the trade war. Treasury Secretary Scott Besson says the status quo is working when it comes to the tariff set up with China. He discussed it in an interview with Fox News. China is right now the biggest revenue line in the tariff income. So, you know, if it's not broke, don't fix it.

3:53We have had very good talks with China. I imagine we'll be seeing them again before November. Treasury Secretary Scott Besson's comments indicate an opening for President Trump to meet with Chinese President Xi Jinping. Still, the trade dispute is causing some pain. President Trump has called on China to massively step up soybean purchases. It is yet to do so. And the Trump administration is set to step up scrutiny of steel, copper, lithium and other imports from China to ensure they're not made with forced labor. Well, Karen, President Trump's pursuit of wealth while in office has reached another level.

4:29Bloomberg's John Tucker's here with more. What are we talking about here, John? Well, Nathan, President Trump has bought hundreds of bonds since he returned to office, including those sold by companies affected by changes to federal policies that he's championed. According to some required disclosures, there have been 690 transactions worth at least$103.7 million, the first of which was made the day after the inauguration. Unlike his predecessors, Mr. Trump didn't divest or move his assets into a blind trust. Now, his business operates in several areas that intersect with presidential policy. In addition to municipal bonds, the president bought corporate debt in Qualcomm, Home Depot, T-Mobile U.S., and also debt from Facebook owner Meta Platforms.

5:14His net worth, by the way, is pegged at$6.4 billion by the Bloomberg Billionaires Index. In New York, I'm John Tucker, Bloomberg Radio. go. All right, John, thank you. An ally of President Trump is asking Attorney General Pam Bondi to look into Fed Governor Lisa Cook's mortgages, and we get more with Bloomberg's Denise Pellegrini. Federal Housing Finance Agency Director Bill Pulte suggests Cook may have committed a criminal offense by falsifying bank documents and property records to acquire more favorable loan terms. In a letter seen by Bloomberg, he alleges Cook signed a mortgage agreement for a property in Michigan, claiming it would be her primary residence for at least a year and then two weeks later claimed the same thing on a residence in Georgia.

5:55Pulte's effort comes as President Trump and Pulte press the Fed to lower interest rates and Fed Chair Jay Powell to resign before his term as chair expires in May. Cook was nominated by President Biden. She became the first black woman to serve on the Board of Governors. Her term expires in 2038. Denise Pellegrini, Bloomberg Radio. All right, Denise, thank you. The countdown is underway for this week's big economic event, the Kansas City Fed's annual economic policy symposium kicks off tomorrow in Jackson Hole, Wyoming. Fed Chair Jay Powell speaks on Friday. Tom Keene will be in Jackson Hole covering it all for Bloomberg.

6:30I really think Jackson Hole is going to be extraordinary this year. It's going to be one of the two or three great meetings going back to the crash of 2007, what we saw into 08 and 09. But this year with the twist of the politics of Donald Trump and the whole battle of central bank independence, Michael McKee leading our coverage. He's been there already talking to Michelle Bowman. There'll be some other key conversations. But the immediate idea here is not so much will they cut rates, but why they would cut rates looking at the inflation dynamic and the jobs dynamic as well. It's going to be an eventful Friday.

7:09Indeed. And Tom Keene is going to be a key part of Bloomberg's Jackson Hole coverage. It all finishes up with a special edition of Bloomberg Surveillance on Friday, 9 a.m. Eastern with Tom, Mike McKee and Lisa Abramowitz. Plus, watch for special episodes of the Odd Lots podcast. Joe Weisenthal and Tracy Alloway will be taping several conversations from the event as well. Well, Nathan, Tom mentioned Mike McKee's interview with Michelle Bowman. The Fed vice chair says she's focused on her current role overseeing bank regulation, even as she's reported to be under consideration by President Trump to lead the central bank.

7:41Bowman says she's pushing ahead with plans to rewrite capital rules for large banks and cracked down on debanking. It's important to understand that the president issued an executive order because it is a problem in the banking system. And one of the first things that I did in assuming this role was to rescind all of our guidance and to change our supervisory materials that referenced reputational risks so that we could ensure that the Federal Reserve is no longer including that in our examinations or in our supervisory activities. And Fed Vice Chair Michelle Bowman was one of two Fed members who dissented against the decision to again hold rates steady last month.

8:19In Europe, Karen, UK inflation has surged to an 18-month high. Let's go to London and get the details with Bloomberg's Ewan Potts. Ewan. Nathan and Karen, consumer prices here in the UK were 3.8 percent higher in July than a year ago, with the rate of increase picking up from June's reading of 3.6%. Surging food, fuel and transport prices were to blame. And the Bank of England will also be casting a wary eye over hot services inflation, with that reading coming in at 5 % year on year. Policymakers will be hoping the latest price pressures are transitory. But for now, traders are betting the UK's central bank is done with rate cuts for 2025.

8:59In London, I'm Ewan Potts, Bloomberg Radio. All right, Ewan, thanks. Well, futures are lower Once again, following yesterday's tech-fueled sell-off on Wall Street, the Nasdaq dropped to 1.5%. Bloomberg Markets reporter Valerie Teitel says the decline's got many by surprise. There really was, frankly, no catalyst in the market yesterday, which is leading many to believe that this is just position squaring ahead of a big risk event on Friday with Jerome Powell's Jackson Hole speech. But it was quite a tumultuous session across tech. NVIDIA had its worst session since April, down 3.5%. And take a look at Palantir.

9:34It was down almost 10 percent. So a lot of these recent AI darlings came under a bit of pressure. Bloomberg's Valerie Teitel says stretched valuations are partly to blame for the sell-off. The Nasdaq 100 is trading at 27 times expected profits in the next 12 months. Well, one tech stock that bucked the trend, Karen, was Intel. Those shares surged 7 percent yesterday. In fact, the struggling chipmakers rallied 28 % this month, adding about$24 billion to Intel's market value. The gains come on reports of the U.S. government in talks for a potential equity stake, as well as plans for a$2 billion investment from Japan's SoftBank group.

10:12Intel now trades at 53 times profits projected over the next 12 months. That's the highest since the dot-com era more than two decades ago. Well, Nathan, retail earnings continue this morning with the latest quarterly numbers from Target, and we get a preview with Bloomberg's Tom Busby. Target stores have seen lower sales for the last few quarters because of weaker discretionary spending, calls for a boycott of the chain for ditching its DEI initiatives, worries about tariff-related price hikes, and after it lost its cheap, chic cachet. So investors are eager, eager to hear about the chain's turnaround efforts and getting back to its roots of stylish products at affordable prices.

10:49Bloomberg consensus, though, calls for another 3 % drop in comp sales with net revenues of$24.93 billion and adjusted earnings per share of$2.02. Tom Busby, Bloomberg Radio. All right, Tom, thank you. Could be rough along the shore. The beaches in New York City are closed to swimmers today and tomorrow. And expanding Hurricane Aaron is poised to bring rough surf and life-threatening currents to a large swath of the East Coast. Let's get the update from Bloomberg meteorologist Craig Allen. From the Maryland Eastern Shore through Delaware, the Jersey Shore, all of Long Island's south shore, and it goes on up into eastern sections of New England.

11:27There are various marine alerts in effect from now till the end of the week. Rip current statements, beach hazard statements are in effect. A high surf advisory is in effect from the Jersey Shore across Long Island, and there is a coastal flood watch in effect. And Bloomberg meteorologist Craig Allen says farther north, the waves are expected to crest up to 13 feet on south-facing beaches in Nantucket and Martha's Vineyard in Massachusetts with rough surf for Cape Cod as well.

11:57Time 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. Israel's military is set to start the call up of around 60 ,000 reserve soldiers for a stepped up offensive in Gaza against Hamas. Prime Minister Benjamin Netanyahu recently authorized to take over by ground troops of Gaza City in a bit, he says, to destroy Hamas's remaining strongholds. Hamas has agreed to a new ceasefire plan put forward by Egypt and Qatar, but Israel has yet to respond. Today, the Texas House is set to vote on redistricting maps, ones which had prompted some Democrats to leave the state in an effort to delay the vote.

12:40While Democratic representatives have returned, a number of them have been spending the night at the Capitol building. Democratic lawmakers say they were forced to accept police escorts by the Texas Department of Public Safety so they wouldn't leave the state again. Those who refused could not leave the legislative building. State Representative Retta Andrews-Bowers says some of her colleagues are staging a sleep-in. We are being subjected to extreme and unnecessary measures. Taxpayer dollars should not be wasted following elected officials around like criminals. Fellow Texas Democrats joined Representative Nicole Collier, who initially refused to agree to the escort and stayed overnight on the House floor.

13:26Homeland Security Secretary Kristi Noem said President Trump ordered the entire southern border wall to be painted black. Noem says it's to stop migrants from crossing because it will be too hot to touch. A dangerous heat wave has descended on much of California and the U.S. Southwest, with triple-digit temperatures expected along with a higher risk of wildfires. Dr. Ariel Cohen with the National Weather Service. Temperatures this warm will be capable of creating an environment where extreme heat-related illnesses and even fatalities are a possibility. Dr. Cohen said there could be a significant fire risk in the mountains and foothills north of the greater Los Angeles area.

14:08Global news 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen. Michael Barr, thank you.

14:21Time now for the Bloomberg Sports Update. Here's John Stashauer. John, good morning. Good morning, Karen. Back in late March, second game of the Yankees season. They did something they had never done before. They hit nine home runs last night at Tampa Bay. They had hit eight when Jose Caballero, who the Yankees just acquired from the Rays, was at the plate. One, two. High fly ball. Deep left field. Simpson back. Track. Wall. See ya. The ninth home run for the Yankees. They've tied the most that they have ever hit in a game in team history. And the Yankees were lucky 13. They're up 13-3. Yes, Network's second home run for Caballero.

15:01Giancarlo Stanton hit two. So did Cody Bellinger. Throw in Jazz Chisholm. Ben Rice on the 40th of the season for Aaron Judge. Yanks are the first team in MLB history to have two nine home run games in the same season. 13-3 was the final over Tampa Bay. The Yanks' fourth win in a row. Third straight win for the Mets at three different stadiums. An 8-1 round in Washington. The Mets hit four homers. Mark Vientos, Brett Beatty, Juan Soto, and Jeff McNeil. David Peterson struck out ten. He's thrown 25 consecutive scoreless innings against the Nationals. At Fenway, Red Sox get a game-tying two-run home in the ninth inning from their new pickup, Nathaniel Lowe, but Baltimore won 4-3 in 11.

15:40American League division leaders met in Detroit. Tigers on a Glaber-Torres hit in the tenth inning, beat Houston 1-0. Daniel Jones spent six seasons with the Giants, had some good moments, plenty of bad ones, a lot of injuries, and last year the Giants gave up on him. Indianapolis just named Jones its starting quarterback. He beat out Anthony Richardson, who the Colts took with the fourth pick of the draft two years ago. A lot of mixed doubles played at the U.S. Open. It became clear success in singles doesn't always mean doubles as well. Carlos Alcaraz lost his first match. So did Novak Djokovic.

16:12Four teams won two matches. It'll be back at Ash Stadium tonight for the semis and finals. John Stash, Howard, Bloomberg Sports, Karen A. Stay with us. More from Bloomberg Daybreak coming up after this. Bloomberg Daybreak U.S. Edition is brought to you by OTC Markets Group. Thinking about joining the exploding overnight market space, but unsure where to start? Designed to meet the needs of a growing international investor base, 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.

16:49Extend your trading day and trade global securities in U.S. dollars through a FINRA-licensed broker-dealer. In the first half of 2026, over$28.1 billion US 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. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions.

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18:16Coast 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. Security guarantees. They are quickly becoming more a part of the conversation as President Donald Trump tries to broker a peace deal between Russia and Ukraine. A plan to provide European troops could take shape as soon as this week. And White House Press Secretary Caroline Levitt says the U.S. supports it with some limitations. U.S. boots will not be on the ground in Ukraine, But we can certainly help in the coordination and perhaps provide other means of security guarantees to our European allies.

18:54The president understands security guarantees are crucially important to ensure a lasting peace. It was White House spokeswoman Caroline Levitt. For more, we're joined by Bloomberg Opinion columnist Mark Champion. Mark, good morning. Of course, all this is coming after that extraordinary summit at the White House with President Zelensky and several other European leaders. How could we see security guarantees take shape in the coming days? Good morning. Good morning. Well, I mean, what seems to be happening is that we've long had this proposal from the British and the French to form a coalition of the winning and to settle troops into Ukraine as part of any ceasefire deal, peace settlement.

19:34And the idea, it's been a very problematic question. A, these countries don't have a lot of combat troops available. B, they don't really have a lot of the logistics and other things that would be necessary to have a sustained force there of a size that would really matter. And then finally, they don't have the heft as a deterrent force. It might almost be an invitation for Russia to have a shot at them if the US didn't stand behind them as a threat that if you attack these, then we can pile in with air power, etc., and make problems for you. So that's always been quite a difficult question. And what they're really doing now is they've got a green light from the Americans who had not before said that they would get involved and provide what's called a backstop.

20:34Now they have that after the meeting in Washington. So they're able to sort of move forward. But it's really important to remember that this is what's required to make a settlement possible for the Ukrainians. That's what they need. It's not necessarily what Russia wants or will help to get them to a ceasefire. So it's very important to keep this in perspective as to whether it's bringing us closer to a settlement or whether we're just sort of arranging the chairs for the moment when Russia actually wants one. Does this imply that this could further inflame the situation if Russia doesn't accept something like this?

21:19Well, I don't think it inflames it any further. It just means that it won't happen. So in other words, you'll have organized a system in principle that you would like to put there. The Russians have already said they don't want any NATO member troops in Ukraine and that that's a non-starter for them. So if these troops were going to go in, either you need them to change their mind or they will go in as a hostile force and they will have to be ready for combat. So it changes the whole texture of that. The British and French clearly have said that they intend this not as a hostile force, but as a peacekeeping force.

22:00So it remains an extremely complicated problem to solve. And we're only in the kind of foothills of doing so. And of course, this is coming after the Europeans got something of support from President Trump for this plan at the White House this week. Is there a sense on the European side that that support is firm, that that green light is going to stay green? I think they're just massively relieved that they got buy-in from the U.S. After Alaska, there had been a real concern that President Trump had once again flipped to accept the Russian narrative and was going to treat Ukraine as the problem, the impediment to a settlement.

22:45He didn't do that. He didn't have a major bust up in the White House. He allowed the Europeans to come and put their case. So, you know, that was a it's a it's a low bar, if you like. But they they they were expectations were very low and very fearful. And it went much better than they thought. So where is the bar then when it comes to the backstop that Europe is hoping the U.S. will provide? We heard the press secretary at the White House, Caroline Levitt, say that boots on the ground from the U.S. won't be part of the equation. That's something that's been ruled out for quite some time. What is Europe looking for from the U.S.

23:27to further support for their troop plan? Yes. Well, I mean, essentially what they want is logistical support. You know, so they don't need so much airlift in this case, but that's something they have very little of. They want ammunition and weapons supplies. They'll need, you know, protection, air defense protection. And they will, I think most of all, want the deployment of the U.S. Air Force so that if there is a problem, the U.S. can credibly say, you know, we're ready to come in, defend these troops to, you know, do harm to any Russian missiles and the air defenses protecting that missile system.

24:19we're ready to deal with that. So that's really what they are looking for. They never expected U.S. boots on the ground. That's what this coalition of the willing, you know, that was the premise for creating it, that it was going to have to be a European force. And of course, President Trump is very hopeful that all this is going to lead to bilateral discussions between the Russian President Putin and Ukrainian President Zelensky. Does this get those two sides closer to sitting at a table with each other? Well, I think, again, what it does is to sort of open the question that hadn't really been open before.

25:01So, you know, the Russians are now having to respond to that, to deal with it. It doesn't mean they're going to do it. So, for example, you know, the foreign minister, Sergei Lavrov, he just said recently in response to this, he said, well, you know, we're going to have to, we are open to this. But, you know, first it will require a number of meetings by technical groups. Then gradually we'll move up and do all the preparation that you'd normally have. So, you know, it's a way of saying, well, yes, but, you know, whenever we're ready. And that could be, you know, a long time from now. It could be never.