Trump Moves to Fire Fed Governor Cook; Trump Latest Tariff Threat

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. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else.

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1:24Healthcare just got less painful. 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, investors are bracing for a possible historic legal fight between the White House and the Federal Reserve. President Trump has moved to oust Fed Governor Lisa Cook following allegations she falsified mortgage documents. Cook has responded once again, saying the president has no authority to fire her and she won't quit. We get more from Bloomberg Economics reporter Katya Dmitrieva. She's on the FOMC, importantly.

2:08That's the committee that votes to set interest rates. Importantly, she's also the first black woman to serve on the Fed board and was appointed by Biden in 2022. And her term wasn't said to expire until 2038, so more than a decade from now, up until these allegations. So the allegations stemmed from Bill Pulte, who's the federal housing finance agency head, and he posted on social media alleging that Cook had committed mortgage fraud. Bloomberg's Katya Dmitrieva reports Lisa Cook's lawyer is planning to take, quote, whatever actions are needed to prevent President Trump's, quote, illegal action.

2:46Forcing Cook out would give the president an opportunity to secure a four-person majority on the Fed's seven-member board of governors. While reaction pouring into this showdown between the White House and the Fed, Nathan, Danielle DiMartino Booth is a former advisor to the president of the Dallas Federal Reserve. There is indeed the opportunity for Governor Cook to immediately go to the courts and ask for an injunction such that she stay in her position while the courts decide what the path is going to be. Again, I'm no legal expert, but everything that I've read this evening since this news hit suggests that she can indeed make every attempt to stop this right now.

3:29Former Dallas Fed advisor Danielle DiMartino Booth. Now, no charges have been filed against Cook, though a Justice Department official last week signaled possible plans to investigate her. Well, Lisa, President Trump is also issuing a new trade threat against countries with digital services taxes. In a social media post, he said he will impose fresh tariffs and export restrictions on advanced tech and chips unless other nations drop measures that he says discriminate against U.S. tech. Polka Mishra with Javelin Wealth Management says this adds more uncertainty to the tech sector. Canada did give in on the digital tax, but Europe is holding firm.

4:08So it's again, we feel that you can't make long term predictions based on a tariff being announced or threatened now and then being taken off again or some deal being struck. So I still think that it's probably going to be again a negotiation, some deals being struck. Javelin Wealth's Polka Mishra says she does not think President Trump's tariff threats will derail the overall AI rally. Well, later this week, Nathan, China is sending a key trade negotiator to Washington as the latest 90-day tariff pause with the U.S. continues. The Wall Street Journal reports Chinese Vice Commerce Minister Li Chenggang will meet with U.S.

4:47Trade Representative Jameson Greer and Treasury Department officials, along with U.S. business figures. President Trump says when it comes to trade with China, the U.S. has the upper hand. They have some cards. We have incredible cards, but I don't want to play those cards. If I played those cards, that would destroy China. I'm not going to play those cards. President Trump says the U.S. cards include parts of Boeing planes that he says he held back due to China's policies on rare earth magnets. China halted most shipments of those key minerals to the U.S. in April, but agreed to normalize flows as part of the latest trade truce.

5:22Well, we're looking at stocks in France this morning, Lisa. They are down 1.8 percent. That's with French Prime Minister Francois Beirut calling a confidence vote that may topple his government as soon as next month. We get more from Bloomberg's Caroline Kona in Paris. Francois Beirut's idea was to anticipate the social anger by calling this vote of no confidence two days before several far-left groups have threatened to totally block the country on September 10th. So trying to avoid some sort of general strike and general protest in the streets. But clearly, since François Beirut presented his initial budget plan mid-July with 44 billion euros of savings, he hasn't really managed to convince French public opinion that this is the right way to go.

6:14Bloomberg's Caroline Kono says the far-right National Rally Party, the leftist France Unbowed, the Greens and the Socialists all say they will vote against the September 8th motion, which could force Beirut to submit his government's resignation. Well, turning back to the markets now, Nathan, we are just one day away from the eagerly earnings report from NVIDIA. Bloomberg's Kriti Gupta says the results could have a major impact on global markets. This is a big one this time around for a couple of reasons. NVIDIA has grown into not only the most expensive and largest company in the world, but also one that has a lot of ripple effects.

6:52Because from a thematic trading point of view, it has geopolitical implications. It means big things for other mega cap tech players like Apple, Amazon, Alphabet, even though they're not all in the same category of company necessarily, they are still mega cap tech. And then of course, it kind of sets the bar for other chip companies as well. Bloomberg's Kriti Gupta says NVIDIA is the biggest weight in the S &P 500 at almost 8 percent. And staying in the tech space, Lisa, Elon Musk is suing Apple and OpenAI, accusing them of colluding to block rivals in the artificial intelligence market. In the federal lawsuit, Musk's X and XAI claim Apple's integration of chat GPT into iPhones gives it an unfair monopoly, deprives consumers of choice.

7:36Mark Gurman is covering this story for Bloomberg. Elon is right. They do give pretty hot promotion to some of the other AI companies in the App Store. They haven't done a lot of that promotion for Grok. And so maybe we'll see more of that from Apple. But all in all, I find this lawsuit to be frivolous. I don't personally consider it an antitrust situation, but it's obviously not up to me to decide. And it is a little surprising that Elon Musk actually went through with this. Bloomberg's Mark Gurman says Musk is seeking billions of dollars in damages. Apple hasn't commented, but OpenAI is dismissing the case as harassment.

8:08And a new research report finds artificial intelligence is making it harder for entry-level workers in the U.S. to find jobs in fields like software development and customer service. Stanford University researchers say they found that over the last three years, employment has dropped 13 % for people who were just starting out in fields determined to be the most exposed to AI, things like accountants, developers, and administrative assistants.

8:37All 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. Illinois Governor J.B. Pritzker and Chicago Mayor Brandon Johnson held a joint news conference slamming reported efforts by the government to potentially call up the National Guard in Chicago just days after the Guard was deployed across Washington, D.C. Earlier Monday, inside the Oval Office, President Trump called the city a killing field. Chicago, everybody knows how bad it is. Everybody standing there knows.

9:12We know you don't have to be doing any studies. Governor Pritzker. Donald Trump looked at the assembled cameras and asked for me personally to say, Mr. President, can you do us the honor of protecting our city? Instead, I say, Mr. President, do not come to Chicago. According to Chicago police, violent crimes are all down from 2024, including a 33 percent reduction in homicides. Kilmar Abrego Garcia is protected from re-deportation for now. A federal judge ruled that the government is forbidden from sending Abrego Garcia to Uganda while the matter is litigated. The Salvadoran immigrant was mistakenly deported in March.

9:57He was returned to the U.S. in June, then charged with human smuggling, and is now detained by ICE in Baltimore. The co-founder of Mexico's powerful Sinaloa cartel pleaded guilty Monday to federal drug trafficking charges. 75-year-old Ismael Zambada Garcia, who is also known as El Mayo, pleaded guilty in a Brooklyn courthouse, including engaging in a continuing criminal enterprise for 35 years. Judge Brian Kogan said he would sentence Zambada to life in prison. Attorney General Pam Bondi. El Maya will spend the rest of his life behind bars. He will die in a U.S. federal prison where he belongs.

10:43A.G. Bondi says Zambada Garcia admitted in court to, quote, directing people under my control to kill others to further the interests of my organization. Global News 24 hours a day, and whenever you want it. With Bloomberg News Now, I'm Michael Barr, and this is Bloomberg. Thank you, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in Dan Schwartzman. Thanks, Nathan. Major League Baseball scoreboard, the Mets dominate the Phillies 13-3, while the Yankees double up the Nationals 10-5. Elsewhere, division leaders, the Blue Jays, the Brewers, and the Dodgers all win, as do the Red Sox and Mariners, who get another homer from Cal Raleigh, his 50th, while the Tigers lose their second straight.

11:22No upsets in the men's draw at the U.S. Open as Carlos Alcaraz and Jack Draper advance the second round. And the women's draw six-seed mass and Keyes is ousted in the first round by Renata Zarazua. Meanwhile, 45-year-old Venus Williams played her first Grand Slam match in two years, falling to Karolina Muchova in three sets. It's cut day in the NFL. Active rosters have to be trimmed to 53 by 4 p.m. Eastern time today. That's your Bloomberg Sports Update. 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?

12:00Designed 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. 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. 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. This is the Bloomberg Tech Minute, brought to you by ChatGPT.

12:44Now with ChatGPT Work, I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

13:27The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting Work Mode, available on Plus and Pro Plans. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals.

14:06Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. 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. It is a threat the President Donald Trump's been making for days, even as late as last week's Jackson Hole Symposium, whether to fire Federal Reserve Governor Lisa Cook.

14:49President Trump, you're going to fire Lisa Cook, the Fed governor, over her mortgage fund? I'll fire her if she doesn't resign, yeah. What she did was bad, so I'll fire her if she doesn't resign. And now President Trump is moving to follow through on that thread, posting on social media he has sufficient cause to fire Cook for allegedly making false statements on mortgage loans. But Cook is questioning the president's authority, vowing to stay on the board. Joining us now, Bloomberg Economics reporter Katya Dmitrieva. Katya, good morning. This seems like a culmination of a threat that the president has been making for some time.

15:24But with Cook vowing to stay on, where does this go from here? Good morning. Good morning and good evening here in Hong Kong. I mean, that's kind of the big question, right? We're in completely uncharted territory here with this move. We've never had a president before getting rid of a Fed governor in this way. And suffice to say, by social media as well, because this all, of course, stems from that social media post by Bill Pulte, the federal housing finance agency head, who told his followers and told the world essentially that Cook had committed mortgage fraud. And just to catch people up on this, if they hadn't been tuning in in recent days, basically the allegations are that she purchased two homes within the span of a year in different states.

16:13And both of them were using, putting down that it was going to be her primary residence. So raising some eyebrows there. And to be clear, no charges have been filed, even at this point, even as the president is said he's moving towards firing her. And Cook has said, of course, that she's innocent and she'll be staying in the role. And of course, that raises a lot of questions, not the least of which is whether a president could fire a Fed governor for cause on an issue like this and on an issue that hasn't been fully litigated yet. Yeah, and technically they can. So technically a president can.

16:52And the reasons are quite broad. So there's generally three buckets that would give a president the right to fire a Fed governor. It's inefficiency, neglect of duty and malfeasance. A president hasn't fired a governor before, though. So this is a lot of kind of untrodden ground. But what we do know legally what what could happen if Trump does move forward to remove her from the role, then she has the ability and her lawyers have the ability to take this to court and to litigate it. So she would be able to get reinstated in her role, continue as that litigation is ongoing and would probably go up to the Supreme Court.

17:30Now, she has said and her lawyers have said that they'll do everything in their power. And they, in fact, called Trump's actions illegal. And as far as we know, what she's told us is that she's not going to be, in her words, bullied into leaving her position. She's going to stay in the position for now. Now, we know the president has been threatening this for some time, but I've got to ask, you know, why do this now when we've gotten indications that Jackson Hole just last week from Chairman Powell that he's at least open to cutting interest rates? Got about 30 seconds left. Yeah, that's a great question.

18:04I mean, if you're in the markets right now, maybe you think that he's angling to cut rates sooner and really make sure that they cut rates. I mean, look, what we've heard from officials is that they're just doing their job. They're going after an official who has done some questionable things on their mortgage application. But you do have to look at the numbers. If she leaves, that's four members of the board, a majority, a voting majority on the FOMC who would be Trump allies. So the math kind of works in his favor as well. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

18:44Look 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. 21. 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.

19:22I'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.

19:33Thank you.

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