Trump Calls for Release of Epstein Jury Documents; Powell Answers Criticism of Fed Renovations

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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1:22At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. it. 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.

2:05Karen, we begin with breaking developments in the Jeffrey Epstein case. President Donald Trump has been under growing pressure from within his own party to release documents related to the late child sex offender. Now, the president has authorized the Justice Department to seek the release of grand jury testimony in the case. The move comes after a Wall Street Journal report that President Trump gave a suggestive letter to Epstein as part of an album for his 50th birthday. House Speaker Mike Johnson says the president is making the right move. We trust the American people. They can draw their own conclusions.

2:35And so he's in the process of releasing the information that can be released that's not held up by a court or involves, you know, victims of crimes or something like that. House Speaker Mike Johnson reacted to the news on Capitol Hill last night. President Trump posted on social media that Attorney General Pam Bondi should produce pertinent grand jury testimony subject to court approval. It's unclear if the courts would release that testimony, which is typically kept secret. As for the journal report on the birthday letter, President Trump is calling that fake news and he's threatening to sue the paper.

3:10Nathan, Federal Reserve Chair Jerome Powell has sent a letter to the White House budget director as he faces mounting pressure over the central bank's$2.5 billion renovation. Powell's letter mostly repeats information from a frequently asked questions page on the Fed's website. The chairman has blamed rising building costs for the overruns. Budget director Russ Vogt says the project has been horribly mismanaged. This is not something the American people should expect from their government. And it comes at the real-world implication of us not having the Fed running a large-ass program that doesn't allow us to bring in the necessary resources to the Treasury.

3:54White House Budget Director Chris Vogt spoke to reporters at the White House. His criticisms come on top of an ongoing push by President Trump and his allies for the Fed to lower interest rates. Well, President Trump's not the only one calling for a rate cut, Karen. Fed Governor Christopher Waller says policymakers should cut this month to support a labor market that is showing signs of weakness. I believe it makes sense to cut the FOMC's policy rate by 25 basis points two weeks from now. And looking to later this year, if, as I expect, underlying inflation remains in check, with headline inflation data reporting modest but temporary increases from tariffs that are not unanchoring inflation expectations and the economy continues to grow slowly, I would support even further 25 basis point cuts to move policy towards neutral.

4:43Fed Governor Christopher Waller spoke in a speech in New York yesterday. Nathan, new developments this morning on the war in Ukraine. European Union states have approved a fresh sanctions package on Russia. And we go to London and get the latest with Bloomberg's Ewan Pods. Ewan. Karen and Nathan, this is the 18th package of EU sanctions against Russia since its invasion of Ukraine. Measures will see about 20 more Russian banks cut off from the international payment system SWIFT and energy exports will be targeted with restrictions on oil processed in third countries, including the blacklisting of a refinery in India, part owned by Russian state oil run company Rosneft.

5:22And the EU cap on Russian oil prices currently set at$60 a barrel will now be cut to$15 below market rates. In London, I'm Ewan Potts, Bloomberg Radio. All right, Ewan, thank you. Let's turn to the markets now. Both the S &P 500 and the NASDAQ are beginning the day near record highs. Shares of Netflix are falling. They're down more than 1%. That's despite earnings for the streaming giant beating investor expectations on every major metric. The world's most popular paid streaming service is also raising its forecast for full year sales and profit margins. Netflix CEO Ted Sarando says his outlook is positive.

6:01We're feeling really good about the business. We had a plan to re-accelerate growth and we delivered on that plan. And engagement, which we view as our best proxy for member happiness, because when people watch more, they stick around longer. So that's retention. Ted Sarando spoke on the Netflix earnings call. Netflix shares have nearly doubled over the past year. Its market value tops$500 billion, making Netflix worth more than Disney, Comcast and Warner Brothers Discovery combined. Nathan, Apple is losing more top talent. MetaPlatforms has hired away a pair of key artificial intelligence researchers from the iPhone maker.

6:38Sources say the move comes shortly after the social networking giant poached their former boss from Apple. And Karen, President Trump's expected to announce policy guidelines for artificial intelligence, calling for easing regulation and expanding energy sources for data centers. The Trump administration's AI action plan will be largely focused on messaging limited to executive branch actions. It will reflect the administration's efforts to promote the adoption of U.S. artificial intelligence globally. Nathan, the total market cap of crypto assets has surged past$4 trillion for the first time.

7:11It follows a sweeping push on Capitol Hill to regulate the sector, and Bloomberg's Michael Barr reports. The House passed the first federal legislation to regulate stablecoins backed by President Donald Trump and Republicans. The Senate passed it earlier. Supporters say the legislation imposes federal or state oversight on dollar-linked tokens and could unlock faster and cheaper forms of payment. It could also bring legitimacy to a$265 billion market. Critics, including Senator Elizabeth Warren and Representative Maxine Waters, warn that the new stablecoin regulatory regime won't do enough to protect consumers.

7:47They say it could lead to pressure for government bailouts if issuers of the digital tokens fail. Michael Barr, Bloomberg Radio. All right, Michael, thank you. More changes are coming to Paramount Global's CBS network. You'll notice them if you stay up for it. The Late Show with Stephen Colbert is going to air its last episode in May of next year. CBS says it is purely a financial decision. It comes days after Colbert condemned Paramount's settlement of President Trump's lawsuit over a 60-minute story. In his first show, Back from Vacation, Colbert called it, quote, a big fat bribe. Paramount is in the process of being acquired by Skydance Media.

8:28Time 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 Monica Ricks. Monica, good morning. Hey, good morning, Karen. Well, first there was the Senate. Now the House has voted to claw back about$9 billion in funding that currently goes to foreign aid and public broadcasting. This happened just a few hours ago on Capitol Hill. Majority Leader Steve Scalise calling those cuts necessary. Let's finally get control over waste, fraud and abuse. We started it in the one big beautiful bill. We're continuing it here and we're going to continue it through the appropriations process.

9:02Democrats say the cuts will hurt America's standing in the world and put residents in rural communities at a disadvantage without access to public media. The White House has unveiled why President Trump's displayed swollen ankles and a bruised hand lately. Bloomberg's Amy Morris has details from Washington. President Trump has been diagnosed with chronic venous insufficiency. That means damaged valves struggle to keep blood flowing from the legs back to the heart. It is not life-threatening, but it could lead to more serious problems. Press Secretary Caroline Levitt on the medical exam. Bilateral lower extremity venous Doppler ultrasounds were performed and revealed chronic venous insufficiency, a benign and common condition, particularly in individuals over the age of 70.

9:49The 79-year-old Trump has ankle and leg swelling related to the disease and bruising on his hand. In Washington, Amy Morris, Bloomberg Radio. Federal immigration officials now have access to personal information on all of the nation's 79 million Medicaid participants, including their addresses and social security numbers. ICE plans to use that info now to track immigrants who may not be living in the U.S. legally. And a 23-year-old's facing charges now after fighting with a flight attendant and trying to open a plane door mid-flight. The SkyWest flight had to make an emergency landing in Cedar Rapids, Michigan last night.

10:26The 23-year-old's facing disorderly conduct and assault, among other charges. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Monica Ricks and this is Bloomberg. Karen, Nathan. All right, Monica, thank you. 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.

11:00to 4 a.m. Eastern, Sunday through Thursday. Extend 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 U.S. 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. 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.

11:43It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling.

12:18The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients.

12:52And those prescriptions, Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

13:12Time now for the Bloomberg Sports Update brought to you by Flushing Bank, and here's John Stashauer. John, good morning. Good morning, Karen. After the opening round of the Open Championship at Royal Portrush, five golfers from five different countries shared the lead at four under four. The lone American Harris English, he's got an early tee time today. The South African Christian Buzedenhut is on the course now, still four under. And Brian Harmon has now moved into the shared the lead, also four under. Scotty Scheffler, minus three, goes off just after 10 o 'clock today. Rory McIlroy yesterday shot one under, felt the support of playing in his native Northern Ireland.

13:46I feel the support of an entire country out there, which is a wonderful position to be in. But at the same time, you don't want to let them down. So, you know, there's that little bit of out of pressure. But I felt like I dealt with it really well today. Certainly dealt with it better than I did six years ago. You know, so I was, you know, just hopping it off to a good start and get myself into the tournament. Also one under going into today, John Rahm, Shane Lowry, who won that last open at Royal Port Rush and 55-year-old Phil Mickelson. Baseball's back. We last saw the Red Sox. They were red hot, reeling off 10 wins in a row.

14:18They'll take on the Cubs in a day game at Wrigley. The Sox only a game behind the second-place Yankees, who played tonight at Atlanta. The Mets are home for Cincinnati. A couple of signings of note, TJ Watt in Pittsburgh, staying put with the Steelers three years,$123 million, all but$15 million of it guaranteed. He'll make slightly more than another defensive lineman, Cleveland's Miles Garrett. Watt will make more than any non-quarterback ever has. And Damian Lillard spent 11 years in Portland, went to Milwaukee, got hurt, got released. He's going back to the Trailblazers, although due to the injury, he won't play next season.

14:52Kaitlin Clark won't play in tomorrow's WNBA All-Star game in Indianapolis. She won't even compete in the three-point contest due to her joint injury. Over 40 WNBA players, including Clark, met to discuss labor negotiations and then put out a statement that said the only thing more unsustainable than the current system is pretending it can go on forever. John Stash, Bloomberg Sports. Karen, Ethan. 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 bringing you a conversation now with the president of the San Francisco Fed, Mary Daly.

15:32She sat down with Bloomberg's Michael McKee at the Rocky Mountain Economic Summit in Victor, Idaho. They talked about the possibility of rate cuts, recent pressure on Chairman Powell, and the impact of tariffs on the economy. Let's listen in. For me, what is really important is looking at the incoming information, how close we are. I think one of the Pauls said, you know, we're really close. We have an economy that's working. We have solid growth. We have a solid labor market. You know, the consumers are spending, but they're, you know, making their way in their families. Ultimately, what is still bothersome is we haven't achieved price stability.

16:09And I define price stability this way. I do think it's sort of an ethos part. It's when people don't have to worry about inflation. When I go out and ask people across the 12th district, across the country, what's your top worry? And they stop saying inflation? Well, then that's going to be a victory because they suffered for too long. And remember, inflation is like the largest tax people pay. It's an unpredictable tax. You're on a treadmill. You earn well, you invest in your business, and inflation erodes your well-being. So I think ultimately that's what we have to think about. And that's really enough to think about, frankly.

16:43And that's where my focus is. So other things are not distracting us from our core missions. And our core missions, as we all know, have come from Congress. Essentially, you're saying we are going to remain focused on inflation. We're not going to consider cutting rates until we are sure inflation is coming. I did not say that. Okay. I'm putting words in her mouth to make it easier for the headline writers. I know that. And so that's why I said I did not say that so that they understand the next part of that. No, seriously, I think right now when I look at the economy and policy, I see them as both in a good place.

17:17But when I look out, we really have interest rates for a significant number of years now in restrictive territory. And what we have is an underlying economy that is responding to those higher interest rates. You have growth slowing. The frothy labor market that was pervasive after the pandemic has now moved to a more sustainable place. People are getting jobs, but firms are finding it easier to find workers and importantly, keep workers so that they're not constantly on that revolving door of train a worker, the worker leaves. So I think those are all good positions. Then we have inflation coming down.

17:53And if we extract or move away from just the goods price inflations, which do show those numbers have been showing and certainly showed in this week's print, the effect of tariffs, some of those being passed through. But if you look at the other areas of inflation, you just don't see that inflation is pushing back up. You see it gradually going down. And housing services inflation, which has long been elevated, has been coming down over this year. services, inflation without housing has been coming down slowly, but coming down. So I see these as the result of the policy that we have in place. But at some point, if you hold the economy too tight, the reins were in horse country.

18:35If you hold the bridle too tight, you actually end up stopping. And if you stop, then you take the problem people did have, which was inflation and turn it into a problem that they don't have, which is the labor market. Could you explain to this audience and, of course, the guy at 1600 Pennsylvania Avenue, if he's listening, how you put all that together and decide when do interest rates come down? Well, there's always been three scenarios that were possible. So the first scenario was that we'd get the tariff effect and it would spill over into all other sectors. So if the price of a tariff good goes up, then your person cutting your hair, since we were talking about barbers earlier, raises his or her prices.

19:16and suddenly you've got spillover, that would make it more persistent. We haven't seen any evidence that that's occurring. And I think that the house price inflation, the house services inflation, and the services inflation coming down reassures you that we're not getting that persistent component. So then there's two other scenarios. One is that you get the tariff effect, but it's relatively contained and it becomes a one-off. And the second is you just don't see much of the effect because what happens is that as the tariffs settle in to whatever level they're going to be, firms who are importing from other countries say, you take half, I'll take half to the country.

19:52Then down the supply chain or the production chain, you're splitting it all the way. And so by the time it hits consumers, it's a more muted impact than what is the announced tariffs. One of the pieces of evidence we have for that is that the effective tariff rate as of last week was calculated around 16%, but tariff revenue is only 8%. So that tells you there's some splitting, there's some leakages, some workarounds. Companies are very innovative. They're figuring out other ways to do things. And this is a global shock. And so companies across the globe are figuring it out. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

20:32Look 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. 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.

21:10I'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.

21:28When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at the Hartford.com slash risk mitigation.

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