Trump Seeks Minnesota De-Escalation; Fed Officials Near ‘Kumbaya’ Moment on Rates

0:01Bloomberg Audio Studios Podcast 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 the tensions in Minneapolis. President Donald Trump says he is looking to de-escalate after the killings of two U.S. citizens by federal immigration enforcement agents. The president sent in his border czar, Tom Holman, to replace Greg Bovino, the Border Patrol commander who had been the face of the crackdown. But President Trump says he's not letting up with the enforcement. I don't think it's a pullback. It's a little bit of a change.

0:40Everybody in this room that has a business, you know, you make little changes. You know, Bovino is very good, but he's a pretty out there kind of a guy. And in some cases, that's good. Maybe it wasn't good here. President Trump tells Fox News he's largely satisfied with how his team has carried out the operation while acknowledging it may have inflamed tensions. He says Tom Holman has been meeting with Minnesota's governor and the mayor of Minneapolis, and he hears it's going well. But Nathan, there are more signs of tension in Minneapolis.

1:09A man attacked Minnesota Democrat Ilhan Omar during a town hall as she called for consequences over the aggressive enforcement. The man appeared to squirt some kind of liquid on the congresswoman before security and police tackled him. Omar carried on with her speech. Here is the reality that people like this ugly man don't understand. We are Minnesota strong. And we will stay resilient in the face of whatever they might throw at us. And Congressman Ilhan Omar called for ICE to be abolished and for Homeland Security Secretary Kristi Noem to resign or be impeached. And Karen, those calls are growing louder on Capitol Hill.

1:48Senate Minority Leader Chuck Schumer is adding to the pressure on Secretary Noem. Kristi Noem is a liar. She's vicious. She's also incompetent. Donald Trump must fire her at once before another American is killed under her watch. Minority Leader Chuck Schumer spoke on the Senate floor. Two Republican senators, Lisa Murkowski and Tom Tillis, also say Noam should step down. Noam has come under criticism for saying the latest shooting victim in Minneapolis, Alex Preddy, brandished a weapon and committed an act of terrorism. Multiple videos show Preddy holding a cell phone before federal agents tackled and shot him.

2:23White House Deputy Chief of Staff Stephen Miller says Noam's initial statement was based on reports from Border Patrol agents on the ground. He says they may not have followed the administration's protocols in the lead-up to the shooting. Nathan Apple's CEO Tim Cook is weighing in on the fatal shooting of ICU nurse Alex Preddy. In a memo on Apple's employee website, Cook said he is heartbroken by the events and called for calm. Cook added that he discussed the matter with President Trump earlier this week. He had come under fire from employees for attending a White House screening of a documentary on First Lady Melania Trump the evening of the shooting.

2:58We turn now to the weather, Karen, because frigid temperatures are here to stay. And look out, another winter storm may be brewing. Let's get the latest from Bloomberg meteorologist Craig Allen. Not again, Craig. Yeah, Nathan, we're watching that very closely. We're starting off with the bitter cold this morning and even colder as we go through the week, though. Right now, listening to us in Boston, It is 13 with a wind chill of minus three. There are single digit numbers just to the west along 90 up in Massachusetts. Right now, Central Park, 15 with a wind chill of four. And down towards D.C.

3:37at Washington National, it's 18. Dulles, 17, also with wind chills currently in the single digits. As for that storm, it's developing once again and definitely will form off the mid-Atlantic coastline. The question we have right now is whether or not that comes up the coast like it did last weekend or whether or not it'll get pushed just slightly enough out to sea. Something we will watch right through the next several days. And we'll talk about it more coming up in just a little bit. Nathan and Karen. All right. That's Bloomberg meteorologist Craig Allen. Thank you, Craig. We'll be checking back with you throughout the morning.

4:13We want to turn to the markets now and President Trump weighing in on the weakness of the dollar. Bloomberg's John Tucker joins us with the very latest. John, good morning. Good morning, Karen. The dollar suffered its deepest one-day drop since last year's tariff rollout after the president said he didn't think the currency had weakened excessively. No, I think it's great. I mean, the value of the dollar, look at the business we're doing. We asked former Dallas Fed President Robert Kaplan about the assertion a weak dollar makes U.S. goods more attractive. Yes, it is true. A weaker dollar boosts exports.

4:44However, we have in the United States has 39 trillion of debt on its way to 40 trillion plus. And when you have that much debt, I think stability of the currency probably trumps exports. President Trump's seeming indifference to the dollar's drop is seen by some as another signal to sell the currency and accelerate the quiet quitting of assets like U.S. Treasuries. And this dollar debasement pushing gold to a record high. Dollar DXY down a tenth of a percent this morning. Gold at 53.12 an ounce. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thanks for all this. As the Federal Reserve gets ready to make its first rate decision of the year, that's coming up this afternoon.

5:25And after three consecutive cuts, the central bank is widely expected to leave rates unchanged. We get a preview from Bloomberg's Michael McKee. Today's question for the Fed, will it be policy or politics? The central bankers won't be changing the benchmark lending rate, and there's no new dot plot and no new economic forecasts. For the markets, the issue is whether they get any kind of hints about when or if rates will be cut again. But for Washington and Wall Street, the overriding question is what impact President Trump's threats might have had on the policy committee and whether they have convinced Jay Powell to stay on as governor when his term as Fed chair expires in May.

6:03Will Powell repeat his angry response to being subpoenaed by the Justice Department or will he seek to de-escalate? Any suggestion Powell may stay on to handicap Trump's efforts to control the Fed will have an impact on the rate outlook. Michael McKee, Bloomberg Radio. All right, Mike, thanks. Be sure to stay with Bloomberg for full coverage of the Fed decision on a special edition of Bloomberg Surveillance. It starts at 1.30 p.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcast channel on YouTube. Earnings, Nathan, also in focus after the closing bell. Microsoft Meta Platforms and Tesla all report this afternoon.

6:39and we get a preview with Bloomberg's Tom Busby. Meta's continued investment into AI infrastructure is key for investors after CEO Mark Zuckerberg vowed to spend$600 billion on AI projects before the end of this decade, with several data centers already under construction. Also key, Meta's advertising revenue and user data from Facebook, Instagram, and WhatsApp. Bloomberg Consensus calls for total revenue of$58.41 billion for its fourth quarter on earnings per share of$8.19. Meantime, Microsoft is expected to report a 15 % rise in sales for its second quarter, but also a record$36.2 billion in just three months on server farms and AI chips to run them.

7:20And thanks to expected growth in its Azure cloud computing unit, Bloomberg consensus calls for revenue of$80.3 billion on earnings per share of$3.92. Tom Busby, Bloomberg Radio. All right, Tom, thanks. Tech earnings are in focus overseas as well. We heard from chip machine maker ASML. The Netherlands-based company says fourth quarter orders far exceeded analyst expectations. The rapid development of artificial intelligence infrastructures, boosting demand for ASML's cutting-edge chip-making machines. The company also says it plans to cut about 1 ,700 jobs. That represents about 4 % of ASML's workforce.

7:57And the shares this morning are up nearly 5%. Back here in the States, Nathan, another chipmaker soaring after releasing earnings. Shares of Texas Instruments are up more than 7%. The chipmaker gave a robust forecast for the first quarter, indicating that demand for industrial equipment and vehicles is recovering from a rough patch. On the flip side, Karen, shares of luxury retailer LVMH are down more than 7%. Sales at its key fashion unit fell over the holiday season as the Louis Vuitton owner continues to suffer from sluggish demand.

8:32Time 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. New calls to lower the temperature in the Persian Gulf are coming from the United Nations. It comes as President Trump promised to pressure Iran following the violent crackdown on protests within the country. U.N. Secretary General Antonio Guterres is asking for maximum restraints from all parties regarding the escalating tensions in the region. Spokesman Stefan Dujaric on the arrival of the USS Abraham Lincoln aircraft carrier in the Middle East near Iran's border.

9:11The Secretary of State is very concerned indeed about the reported military buildup in the Persian Gulf region. Meanwhile, activists say more than 6 ,200 people have been killed in Iran's crackdown on nationwide protests, and many more are feared dead. In North Texas, three young brothers drowned in an icy pond. The boys were only 6, 8, and 9 years old. Their mom, Cheyenne Hangman, says they were playing near a pond in Bonham when the ice broke and the boys fell in. Hangman jumped in after them but was unable to get them out. I tried to fight for my kids' life where I had to watch them struggle and drown and I couldn't help them.

9:51First responders and a neighbor pulled them from the freezing water, but they did not survive. A federal judge in New York is holding a hearing today on the future of the city's congestion pricing program. The MTA is suing the Transportation Department, which is trying to shut it down. City leaders say the toll plan is cutting traffic and raising millions. Global news, 24 hours a day and whenever you want it. With Bloomberg News Now, 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. It looked like Novak Djokovic was going to be ousted in the quarterfinals of the Australian Open.

10:29Lorenzo Musetti won the first two cents, but in the third, he injured his right thigh, had to retire. Jessica Pagula won her quarterfinal match over fellow American Amanda Anisimova. Nebraska in college basketball took its 20-0 record to Michigan. Two teams both ranked in the top five. The Wolverines won 75-72. UConn beat Providence. The Huskies are 20-1. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots.

11:11Visit Bloomberg.com slash podcast offer to learn more. 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. After two deadly shootings of U.S. citizens in less than a month, President Donald Trump is looking to a leadership shuffle to turn around a volatile immigration enforcement surge in Minneapolis. We have Tom Holman there now. We put him in there. He's great. And they met with the governor, the mayor, everybody else. And we're going to de-escalate a little bit.

11:47That was President Trump speaking to Fox News in Iowa ahead of a rally on the economy. Joining us now is Bloomberg News national security reporter Nick Wadham. So Nick, it's early days now with Tom Holman in Minneapolis. But are we seeing signs the tensions are cooling now? Good morning. Morning. Yeah, I think what you're seeing right now is President Trump essentially saying he wants to climb down a little bit after the two shootings. I mean, this issue has proven to be so divisive, and you have seen some conservatives, some members of Congress, even some members of the MAGA base, particularly on the issue of gun rights, because the second American who was killed, Alex Preddy, was carrying a gun that he was permitted for.

12:29So it's a very complicated issue for the president that sort of you see the clash of two of his priorities. Obviously, Republicans have tended to support this very strong immigration crackdown. But there is a sense right now that when you see the federal agents who killed Freddie and the video evidence suggests that he had already been disarmed by the time he was shot. The president, I mean, it's an extraordinary situation to hear President Donald Trump say he wants to de-escalate a little bit in that quote you just played. So very much a reflection of where his mind is right now. You have to wonder whether things are de-escalating when, even with this leadership shuffle, the president is, at least for now, saying he's standing by his Homeland Security Secretary, Kristi Noem, who's come under fire for her initial comments about the shooting.

13:16And now on Capitol Hill, we're hearing even more calls for her to resign. Yeah, I mean, again, two very competing interests from the president. One is you may see a certain amount of displeasure from him against Kristi Noem. But at the same time, it has been very much a policy of his in the second term where he does not want to fire his cabinet secretaries and his top leadership. So in the first term, it was basically a carousel of officials. He had several defense secretaries, chief of chief of staff was a rotating job, national security advisor. There was there was so much turnover and he got a lot of criticism from that.

13:54At this time around, he has really almost to a person not fired or replaced anyone in his group because he wants to project an aura of stability. So what you're sort of seeing more is that officials will stay in their posts, but they might get sidelined. We're still waiting to see some evidence of that with Kristi Noem. But for the moment, at least, really a determination not to have as high turnover as he had in the first term. And how high can we say tensions are now? when we saw these videos just last night of Democratic Congresswoman Ilhan Omar apparently getting attacked at a town hall. Right.

14:34So, I mean, the immediate tension and anxiety around that stepped-up enforcement action seems to have eased somewhat. You are not seeing the open clashes between protesters and federal agents. They have pulled back a little bit, and you're seeing a lot of conversations between state leaders who were Democrats and the Trump administration. But when you see that Ilhan Omar attack, what that really reflects is the much deeper and broader sort of tension and anxiety around her in particular, given the degree to which the administration has vilified her. Now, I should say we don't really know much about the person who sprayed that liquid and was involved in that incident.

15:18And he, Ilhan Omar, has really been a longtime target of the president's. But that also reflects this much broader issue where Congress people have been going out and some are even reluctant to do town halls because the atmosphere is so charged. And there is so much tension and anxiety between the right and left and in the United States right now. 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.

15:57Wall 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. I'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.

16:44Thank you.