Trump Tax Bill Passes Key Hurdle; Traders Await June Jobs Report

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1:22Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. Let Cincinnati insurance make your bad day better. Find an independent agent at CINFIN.com. 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 in the nation's capital where debate continues on Capitol Hill on President Trump's multi-trillion dollar tax and spending package. Early this morning, House Republicans overcame a critical procedural hurdle moving toward a final vote on the so-called Big Beautiful Bill earlier this morning.

2:10On this vote, the yeas are 219. The a's are 213. The resolution is adopted. And debate, as we say, continues setting up a final vote later this morning. House Speaker Mike Johnson can afford only three Republican defections in the tightly divided House, but he projected confidence ahead of that procedural vote. We're in a good place right now. This is the legislative process. This is exactly how I think the framers intended for it to work. And House Speaker Mike Johnson predicted the bill would get across the finish line in time for the president's July 4th deadline tomorrow. Tomorrow, Johnson lost just one Republican in the procedural vote, Brian Fitzpatrick of Pennsylvania.

2:50Now, a key issue for many reluctant Republicans is the cost of the measure. The$3.4 trillion Senate bill adds more to the deficit than an earlier House version that clocked in at$2.8 trillion. Nathan, House Republicans are projecting optimism. Financial Services Committee Chairman French Hill joined Bloomberg yesterday, saying cooler heads will prevail to move the bill forward. I believe this bill is the best the two houses can produce, accomplishing both President Trump's goals as well as the goals that both conservative and more moderate Republicans have in the House. Despite French Hill's efforts to rally Republican support, there won't be a single vote from Democrats.

3:29Florida Representative Debbie Wasserman Schultz also spoke earlier with Bloomberg. If they wanted to extend those tax cuts to the wealthiest, most fortunate Americans, you know, be my guest. But don't skew the tax breaks so disproportionately to people who are already successful and leave the middle class out. Democratic Representative Debbie Wasserman Schultz added that she believes expiring tax cuts should be dealt with in separate legislation. Despite Republicans controlling both the House and Senate, President Trump's signature legislation has run into resistance from cost-conscious conservatives and swing district moderates who worry about cuts to safety net programs.

4:09Of course, Karen, any changes to the measure would have forced the Senate to vote again on the bill, blowing past President Trump's July 4th deadline, potentially adding weeks of delay. Meanwhile, Nathan, we're learning details about another piece of the president's economic agenda, trade. The president announced on social media yesterday that the U.S. agreed to a trade deal with Vietnam. The president says there's a zero tariff on U.S. products sold to Vietnam and that it includes a 20 percent tariff on Vietnamese exports and a 40 percent levy on goods deemed to be trans-shipped through the country.

4:43Greta Peisch, former general counsel to the Office of the U.S. Trade Representative, said the agreement raises a number of questions. You know, the devil will be in the details, as they say. the truth social post by the president was pretty broad brush. It will be interesting to see, you know, are all products treated the same? Are these across the board tariff treatments? Are there any non-tariff barriers that are addressed? And that's former USTR general counsel Greta Peisch. China says it's examining the U.S.-Vietnam trade deals and would retaliate if its interests are hurt. Also happening in D.C., Karen, the Trump administration's lifted curbs on chip design software sales in China as both sides implement their trade deal to ease restrictions on critical technologies.

5:26The Commerce Department informed the world's three leading chip design software providers they no longer need government licenses to do business in China. One of those companies, Siemens, already says it has restored full access to its products for Chinese customers. Nathan, we turn now to the closely followed verdict of Sean Diddy Combs. A judge has denied bail for the music executive after a mixed verdict cleared him of the top charges in his sex crimes case. Bloomberg's Michael Barr joins us with the latest from New York. Good morning, Michael. Good morning, Karen. The rap music mogul was convicted of federal prostitution related offenses, but acquitted of sex trafficking and racketeering charges.

6:03The jury cleared him of charges that could have put him behind bars for life. Defense attorney Mark Agnofilio. We had a wonderful jury. They listened to every word and they got the situation right or certainly right enough. The judge denied Combs bail, citing a pattern of violence. The 55-year-old Combs has been in jail since his September arrest. He still stands convicted of two counts that carries a maximum of 10 years each in prison. In New York, I'm Michael Barr, Bloomberg Radio. All right, Michael, thank you. Let's turn to markets now. Following another record close for the S &P 500, futures are holding steady as we get ready to wrap up the holiday shortened trading week.

6:46Despite continued uncertainty over interest rate cuts and the president's economic agenda, investors are cautiously optimistic. That includes Morgan Stanley Cross Assets CIO Jim Karen, who thinks there is upside risk to the market. When we saw the upside surprise in earnings in the first quarter, typically what analysts would do is they would increase their full year earnings run rates and their earnings forecast. They didn't. They actually took it down because of the tariff uncertainty. There's still a lot of uncertainty relative to the pricing and earnings going forward. We think that earnings are underestimated.

7:19That's the upside risk that I believe is underappreciated by markets. And Jim Caron of Morgan Stanley says he thinks the economy will muddle through tariff uncertainty without a recession. And Nathan, investors will keep a close sigh on the June jobs report today, which is expected to show a hiring slowdown. Bloomberg's Michael McKee has a preview. It would take a lot to actually put a rate cut on the table for this month's Fed meeting, but the idea it could happen will keep traders glued to their screens this morning. While the consensus forecast is for jobs growth to have slowed in June, it's not seen dropping enough to worry policymakers.

7:53Unemployment is forecast to tick up, but Fed officials have said they wouldn't be concerned until it hits 4.5 percent or so. Yesterday's negative ADP print, however, has raised questions about whether and by how much the numbers could undershoot consensus. The Fed, though, has early access to the ADP numbers, and officials haven't expressed any concern. Michael McKee, Bloomberg Radio. All right, Mike, thank you, and please stick with Bloomberg for full coverage of the June jobs report. It's due out at 8.30 a.m. Wall Street time. We'll have commercial-free coverage on Bloomberg Surveillance with Tom Keene and Paul Sweeney on Bloomberg Radio and the Bloomberg Podcast page on YouTube.

8:30Well, Karen, while President Trump and his advisors are thinking over replacements for Fed Chair Jerome Powell, they're running into a significant complication. Let's get more on that story now from Bloomberg's John Tucker. What's the complication, John? Well, it's actually not clear that Powell will leave, Nathan. The Fed chief has repeatedly declined to say whether he's going to step down when his four-year term as chair expires in May or remain on the Fed board. That's something he could technically do until his tenure as a governor expires in January 2028 at a central bank forum in Portugal this week.

9:04The Fed chair was asked by Bloomberg to respond to the barrage of attacks and personal insults from President Trump. I'm very focused on just doing my job. I mean, the things that matter are using our tools to achieve the goals that Congress has given us, maximum employment, price stability, financial stability. And that's what we focus on, 100%. And the pressure's building. President Trump has posted on social media, Powell should resign immediately, referring to him as too late. And Trump ally Bill Pulte, who leads the Federal Housing Finance Agency, has called on Congress to investigate Powell, alleging without evidence that his recent testimony to the Senate was deceptive.

9:44In New York, I'm John Tucker, Bloomberg Radio.

9:50Time 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. and federal authorities are investigating an incident when a small skydiving plane went off the runway at Cross Keys Airport in Williamstown, New Jersey, about 25 miles southeast of Philadelphia. The 15 people on board the single-engine Cessna were injured, but for now, all survived. Andrew Halter with Gloucester County Emergency Management. I mean, just the fact that we have 15 people that are still with us here today, some of minor injuries, I think is fantastic and remarkable.

10:26I think it's, again, a joint effort between probably the pilot's initiative as well as all public safety providers that were out on scene. Andrew Halter with Gloucester County says the plane crashed in a wooded area near the airport after the pilot reported engine trouble. Brian Kohlberger pleaded guilty to murder and the stabbing deaths of four University of Idaho students. He entered the plea in a deal with prosecutors that will allow him to avoid the death penalty. Prosecutors say he sneaked into a rental home in Moscow, Idaho, and stabbed the students in 2022. In court, Judge Stephen Hippler read the plea agreement to Koberger.

11:05Have you had enough time to decide whether or not to plead guilty? Yes. Are you pleading guilty freely and voluntarily? Yes. Given your choices, do you believe it's in your best interest to plead guilty? Yes. Have you discussed fully the matter of pleading guilty with your attorney, and are you satisfied with the advice you've received? Yes. No motive has emerged for the killings. Fourth of July holiday traffic has been heavy for days and it will only get worse. Highways continue to be jammed on a busy day to travel by car. It's either putting yourself in the right mindset or leaving very, very early.

11:42Sunday is considered one of the busiest days to travel on the road and airports will also be packed. Oh, good. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. That sounds like you're traveling. All right, Michael Barr, thank you. 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. It's designed to help you move from a chaotic starting point to a reviewable first version.

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14:15Time now for the Bloomberg Sports Update, brought to you by Flushing Bank. Here's John Stashauer. John, good morning. Good morning, Karen. The ESPN report is that the Knicks are closing in on a deal with Mike Brown, and that the 55-year-old former coach in Cleveland, L.A., and Sacramento is expected to be the guy to replace the fire. Tom Thibodeau-Brown would join the Knicks with plenty of NBA coaching experience. Nine years ahead, coach 13 in assistant. Yankees in Toronto. And in the blink of an eye, the Yanks were trailing 7-0. The Blue Jays hit two and three-run homers and a seven-run first inning off Will Warren.

14:49Down 8-0. The Yanks began a furious comeback. They trailed 9-7 in the eighth. Had a man on. And the captain at the plate. Trilled to left field. There it goes. See ya. Tie ball game. The Yankees have come all the way back. A two-run moonshot. Off the bat of judge. It's 9-9. On the Yes Network, the Blue Jays, however, scored two in the bottom of the eighth. And they won at 11-9. They've taken the first three of the series. And they're now tied for first of the Yanks. In Citi Field, doubleheader split. First, Milwaukee, 7-2. Joey Ortiz at a grand slam. And then the Mets, 7-3. A Brandon Nimmo slam.

15:29In L.A., Clayton Kershaw took the mound, eating three strikeouts for 3 ,000. He got the milestone in the fifth inning. He's the 20th member of the club. The only retired pitchers with 3 ,000 Ks that are not in the Hall of Fame, Roger Clemens and Curt Schilling in Wimbledon. Francis Tiafoe is out. Fellow American Taylor Fritz still in after his second five-set victory. John Stashauer, Bloomberg Sports. 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, and it is going down to the wire.

16:07Debate continues on Capitol Hill this morning on President Donald Trump's signature tax and spending cut bill ahead of a final vote on the multi-trillion dollar measure. House Minority Leader Hakeem Jeffries putting in his final words on the One Big Beautiful Bill Act ahead of a final vote later this morning. Joining us now, Terry Haynes, the founder of Pangea Policy. Good to speak with you this morning, Terry, as we continue watching this debate. Is final passage a done deal at this point? Good morning. Good morning, Nathan. I think it's all but certain. Yeah, there are probably a couple of deals to be worked out.

16:44But, you know, I think markets are going to see a final vote here probably before United States markets open today. Let's talk about what this bill could do ahead of final passage. We've talked about the potential deficit impact, the potential debt impact. What do you see as the impact of this bill? Fundamentally, it provides markets a lot of certainty. I know they price it all in, or a lot of it in anyway, but it should be remarked upon and understood. you've got a situation where six months ahead of a deadline that would have ended the 2017 tax cuts, markets now have certainty on tax. They have much more certainty on manufacturing incentives going forward.

17:30They have certainty that there won't be a debt and deficit ceiling issue that tends to pop up every few years when the previous one expires. and they're in a situation also where there's more tariff certainty than there was before. That's trending in the right direction, although it's nowhere near there. So, you know, we're increasing certainty for United States economic policy, and that's likely to be a market positive overall. We had a lot of holdout Republicans on both sides of the Republican spectrum withholding their votes on this measure. Could we see the one big beautiful bill followed by a bunch of smaller, less beautiful bills to satisfy those factions?

18:20I think what's going to happen, I think it's a fine question. I think what's going to end up happening in the latter half of the year is really two things. One is Congress turns to spending bills after the August recess. That is going to be a long slog and not very pretty, not quickly resolved, and will tend to confirm markets' views that the political situation in the United States is not yet ready to confront serious debt and deficit reduction. But as Besset will be out there saying, it's a process quite a lot. Secondly, the recalcitrant members are recalcitrant for a lot of reasons. Some political, some they want more support from Trump in the midterms.

19:05Some, like Brian Fitzpatrick, the sole Republican, though, on the rule this morning, want more clarity about Ukraine, for example, and why the United States stopped delivering arms. And so those situations will get taken care of, but I think they're sideshows. 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.

19:53Plus, 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.

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