Trump May Extend Influence to Fed Banks; SpaceX Deploys Satellites in Space

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1:21Learn more at business.optum.com. Bloomberg Audio Studios, podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Lisa Mateo. Here are the top stories we're following today. Lisa, we begin with the latest developments in President Donald Trump's efforts to exert more control over the Federal Reserve. Bloomberg News has learned the Trump administration is reviewing options for exerting more influence over the Fed's 12 regional banks that would potentially extend its reach beyond personnel appointments. This comes as the president tries to oust Fed Governor Lisa Cook on allegations of mortgage fraud.

2:02If he does, it would give the president an opportunity to secure a majority on the seven-person Fed Board of Governors. The president, as heard here on Bloomberg Radio, defended his decision to get rid of Cook at a White House cabinet meeting. She seems to have had an infraction and she can't have an infraction, especially that infraction, because she's in charge of, if you think about it, mortgages. And we need people that are 100 % above board and it doesn't seem like she was. That was President Trump speaking at a cabinet meeting. Now, Fed Governor Cook's lawyer is vowing to file a lawsuit over the president's maneuver to oust her for cause from the Fed Board of Governors.

2:37And Nathan, former Fed Vice Chair Lael Brainard is suggesting there's a real risk of multiple Fed district bank presidents getting removed from office next year as a result of politically charged maneuvering by President Trump. Brainard tells Bloomberg she views the president's attacks on Cook in the context of his broader pressure on the central bank. Well, I think the Federal Reserve is in an incredibly difficult position here. But you have to remember, this is not about an individual governor. This is really an unprecedented attack on the independence of the Federal Reserve as an institution.

3:13Former Fed Vice Chair Lael Brainard warned that any political push to revamp the FOMC would run the risk of stoking inflation and longer-term interest rates. Let's turn to markets now, Lisa, because it's the report investors have been waiting for all week. After the closing bell, NVIDIA reports its latest quarterly earnings. And we get a preview from Bloomberg's Tom Busby. NVIDIA's Q2 results expected to show the boom in AI demand continues. CapEx continues to grow and NVIDIA continues to thrive. With its cutting-edge Blackwell chips now in full production and selling well. One worry for the company, though, is China because of U.S.

3:49restrictions on which chips it's allowed to sell there. And Beijing urging companies there not to use the older, less powerful chips that NVIDIA does export. Bloomberg tech reporter Ian King speaking to Bloomberg TV on Tuesday about this problem. What is the U.S. government going to do next? What is the Chinese government going to do next? What products will be allowed to be shipped there? The unfortunate problem is we don't know. Bloomberg consensus, though, calls for revenue of$46.23 billion on adjusted earnings per share of$1.01. Tom Busby, Bloomberg Radio. All right, thanks, Tom. As we wait at the NVIDIA results, some other stocks making some news this morning.

4:27Bloomberg News has learned the Justice Department is widening its probe of UnitedHealth. Sources say the DOJ's criminal division is digging into the company's prescription management services, as well as how it reimburses its own doctors. The previously unreported areas of the probe show the scrutiny is broader than was known and goes beyond an inquiry into possible Medicare fraud. Shares of UnitedHealth are down about two-tenths of percent in early trading. On the flip side, Lisa, shares of Cracker Barrel are surging more than 7%. The restaurant chains decided to scrap plans for a new logo. Cracker Barrel faced a backlash on social media since changing its vintage logo by removing an image of a man leaning on a barrel while making the lettering more modern.

5:12President Trump weighed in yesterday. He posted on social media that the brand should restore its old logo and apologize. That logo change did lead to a big drop in the share price. Now, Cracker Barrel says, quote, we thank our guests for sharing your voices and love for Cracker Barrel. We said we would listen and we have, end quote. They have. All right, Nathan, now let's get to the latest on President Trump's trade wars. The U.S. has officially slapped 50 percent on India's exports, doubling duties from 25 percent as punishment for buying Russian oil. The change took effect at a minute after midnight after Wall Street time.

5:47Bloomberg Shruti Shrivastava reports it's the highest tariff rate of any country in Asia. U.S. is the largest market export market for India. It's the biggest trading partner with India. And Indian exporters sold some$87 billion goods to the U.S. market last year. That's 2 % of India's GDP. So definitely, you know, such high tariffs, of course, it shuts down the market for Indian exporters. Now they will have to look for other ways, other markets, newer markets to diversify. So, of course, that is going to be a huge impact. Bloomberg's Shruti Srivastava reports the higher tariffs will hit labor-intensive industries, like textiles and jewelry, the hardest.

6:27Electronics and pharmaceuticals are exempt for now. That includes Apple's massive new factory investments in India. And Lisa, President Trump is once again warning of serious consequences if Russia and Ukraine don't end their war. Here was the president again at that cabinet meeting heard live on Bloomberg Radio. I want to get it to start. And it will not be a world war, but it will be an economic war. And an economic war is going to be bad. And it's going to be bad for Russia. And I don't want that. The president was asked if he has a timetable for Russian President Vladimir Putin to meet with Ukrainian President Vladimir Zelensky before he would impose sanctions.

7:04The president raised the possibility of bilateral talks during his Alaska summit with Putin. But more than a week after that gathering, there is no meeting scheduled between Putin and Zelensky. In other news, Nathan, SpaceX is celebrating a successful test flight of Starship. Five, four, three, two, one. As heard here live on Bloomberg, the vehicle lifted off from SpaceX's South Texas launch facility called Starbase. Its super heavy booster successfully separated from the Starship spacecraft as planned and then splashed down in the Gulf of Mexico. Advertised as the largest and most powerful rocket ever built, Starship is a centerpiece of the company's plans to send huge batches of its Starlink Internet satellites into the Earth's orbit and carry humans to the moon and eventually to Mars.

7:55I don't know if we could call this out of this world news, Lisa. Maybe we could. Taylor Swift and her football boyfriend, Travis Kelsey, had a big announcement. Are you ready for it? Well, fans were certainly ready for it. They announced in a five-part Instagram post, they're engaged. Now the news has online betting markets soaring. Prediction market website Kalshi says gamblers made about$80 ,000 worth of bets on when the wedding will be in the hours after Taylor Swift's post. On Polymarket, bettors are gambling on when the couple might have a baby, if the singer's going to headline the 2026 Super Bowl halftime show.

8:35Travis Kelsey is making some news of his own. He's teaming up with American Eagle on a co-branded collection.

8:45All right, time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Lisa. in New York City and New York state officials are bristling at President Trump's thoughts of deploying National Guard troops to the city to take on crime. Governor Kathy Hochul says she spoke with President Trump. Hochul says she told the president the additional troops are not necessary. I was very gracious. I just said, I'll tell you what, Mr. President, if I think I need help from the National Guard beyond what I'm already doing, I know where to find you.

9:20New York Mayor Eric Adams says he does not see a need to place federal troops in the city, saying they are doing an amazing job. Meanwhile, Mayor Adams offered an apology to New Yorkers for the corruption scandals connected to his administration. Adams, speaking to Bloomberg, was asked about a former aide, Winnie Greco, giving more than$100 in a potato chip bag to a reporter for the city at a campaign rally in Harlem. I'm not going to be judged by a red envelope in a paper bag. I'm going to be judged by how I improved the lives of New Yorkers. It was a stupid thing to do. I don't understand the conversation she had with the reporter.

9:58I don't have the history of it. It's not something that we would do in our campaign. I made that clear. I don't know what that was about. The damaging news story came as seven people, including Adams' former top aide, Ingrid Lewis Martin, were indicted on bribery and corruption charges. Adams said he has no plans to drop out of the November election. Polls show he is in fourth place in a five-person field behind Democratic nominee Zoran Ramdani, former Governor Andrew Cuomo, and Republican Curtis Sliwa. The Israeli military says its double strike on a Gaza hospital that killed 20 people targeted what it believed was a Hamas surveillance camera.

10:38The dead included five journalists. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in Dan Schwartzman. Thanks, Nathan. In Major League Baseball, the Mets beat the Phillies on a Brandon Nimmo walk-off single 6-5. The Yankees knock off the Nationals 5-1. Elsewhere, the Red Sox shut out the Orioles 5-0. Blue Jays fall to the Twins 7-5. Brewers slip past the Diamondbacks 9-8. The Tigers lose to the A's 7-6. While the Dodgers double up the Reds 6-3.

11:11The Texas Rangers getting some bad news as Nathan Evaldi will miss the rest of the regular season due to a rotator cuff strain. On the season, the righty is 11-3 with a 1.73 ERA. At the U.S. Open, two-time Grand Slam winner Kokogov struggles to get past Isla Tomljanovic in three sets in the first round. Meanwhile, both Iga Sviantek and Amanda Nisimova advance in trade sets. In the men, draw top seed Yannick's center Alexander Zverev, Alex Diminar, and Tommy Paul all move on to the second round. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

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14:20Plus, you'll get expert help, fast turnaround times, and their 360-degree guarantee, so you can be 4imprint certain your order will arrive on time and look exactly right. Whatever your goal, 4imprint makes it easy to find your perfect promo match. Explore the possibilities today at 4imprint.com. 4imprint. 4certain. Coast to coast on Bloomberg Radio, nationwide on SiriusXM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. President Donald Trump says he is ready for a legal fight over his effort to fire Federal Reserve Governor Lisa Cook.

15:01And he's already talking about the influence he hopes to wield over central bank policy. We'll have a majority very shortly, so that'll be great. Once we have a majority, housing is going to swing and it's going to be great. People are paying too high an interest rate. That was President Trump speaking at a cabinet meeting heard live on Bloomberg Radio. And for more, we're joined by Bloomberg's Kriti Gupta. So, Critty, the president is making it plain. He really has that this is about trying to secure a majority on the Fed Board of Governors. But now we're hearing that he's looking for ways to extend his influence beyond the board.

15:36What are we hearing? We're hearing that there's a lot of concern about how he can actually do that. Remember, there are seven members of the Federal Reserve Board. There are other voting members as well. There's a clear question here of just how much authority he actually has in terms of firing as opposed to replacing, as opposed to influencing policy. And we've had kind of touch points of this throughout history with various presidents, but never to this extent and never an outright question of to what extent some of the replacements of the Federal Reserve come at the discretion of the president.

16:09And the question is they're basically looking at the legality of how they can do that, not just with Lisa Cook, but with others as well. One of the key things that they've named in terms of a potential Lisa Cook replacement, if that does indeed go through and is deemed appropriate by the Supreme Court, is the idea of moving around temporary seats. So, for example, Stephen Mirren, who is the current nominee to replace Adriana Kugler after her resignation, a thought that Donald Trump had proposed in the last 24 hours is moving him into Lisa Cook's seat for a longer, her longer term until 2038. Again, the legality of that, given Adriana Kugler's term ends in January and that temporary position will be there until January, is also up for debate.

16:52So his team is reported to be looking into these matters and is looking into ways that they can get around what tradition suggests. Now, we've heard some concern raised by former Fed Vice Chair Lyle Brainerd in an interview on Bloomberg Radio and Television saying that even regional bank presidents could be worrying about their jobs as well. Could the president go after the regional banks when those positions are decided on by the banks themselves? I mean, that's the key question here, and that's the speculation. I love what Lael Brainard also had said about the way that you can interpret this in the markets, which is that this idea of Fed independence, this idea of Fed credibility, even on the regional level, is a crucial one because that's where the market is freaking out on the bond perspective from the long end.

17:38And she made the very clear connection that if you undermine that independence, that is going to show up in the very part of the bond market curve that influences housing, which, as we also know, in the last 24 hours, Donald Trump made it very clear that he is trying to bring down housing prices. So this is a big debate now in the market community of whether or not these moves are actually as effective as he hopes them to be. You mentioned the freak out in the bond market, but you look at the futures contracts this morning, not a whole lot going on. You have to wonder whether investors on that side of the market are just bracing for what we hear from NVIDIA later today.

18:12Absolutely. It feels like the debate about whether the tech story or the bond market Fed story, Trump's pun not intended, is the bigger story for this week. Because not only do we have NVIDIA, we have PCE data on Friday as well. But NVIDIA is really crucial. Look, this is the A++ student trying to impress a market that is expecting the world from it. Some key pieces here are not only going to be where it's getting its revenue from, is it the hyperscalers, but also what it's going to say about the development of its Blackwell chip and the development of its H20 business, specifically to China, since we had kind of that start and stop over the summer about whether or not they could ultimately export those chips to China with the U.S.

18:54government. and also making it clear that China, at least from a regulatory authority perspective, has discouraged some of its local use of that chip as well. What that read-through is into NVIDIA's bottom line, that's of key importance today. 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.

19:36Plus, 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 Nathan Hager. And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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