Trump's $5,000 Offer to Voters; Iran Warns of War Escalation

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1:32Bloomberg 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 this morning in Dallas, Texas, where Republicans have kicked off their two-night midterm convention with a keynote speech from President Trump. On November 3rd, the great American majority is going to stand up and continue to make America great again. Over more than 100 minutes, the president urged voters to pretend he's on the ballot in November, and he made a promise if they put Republicans back in the majority. So if the Republicans win, you win with us and you get$5 ,000.

2:17It will be called the Trump dividend. The president didn't offer any details and Republicans have already rejected his calls to pay dividends from tariff revenue. Bloomberg Markets Live executive editor Mark Cudmore reports the markets are already looking past the idea. It's a handout of about one point two trillion dollars into a U.S. economy where growth is absolutely fine and is arguably running hot already. We've already seen pro cyclical fiscal policies. The only concern in the U.S. is that they don't have kind of the understanding of fiscal tightening. So adding another one point two trillion debt to the burden does not really seem to be addressing the right issue.

3:00It's Bloomberg M Live's Mark Cudmore. President Trump also floated his making his tax cuts permanent and eliminating credit card swipe fees in his speech. Following the more than an hour and a half address, the Democratic National Committee put out a statement saying, quote, the biggest liability in American politics right now is Donald Trump, and he just proved it. Well, Nathan, convention goers also heard from Treasury Secretary Scott Besson last night, and he touted President Trump's economic policies in his speech. The president's plan was never just a tax cut, never just a tax cut. His economic program is bolstered by trade deals and deregulation.

3:38And tonight, a new industrial super cycle is moving from investment into production. Treasury Secretary Scott Besson says everything from GDP to factory payrolls is firing up in President Trump's economy. And Karen, the Republican convention also included a surprise appearance from a Democrat. Yes, I'm Senator John Fetterman, Pennsylvania. Yes, I'm a Democrat. Why am I here talking to you today? Because, well, I'm a common sense Democrat. I'm always going to stand with America. I'm always going to reject the extremes in socialism and that anti-American way of life. Senator John Fetterman addressed the crowd in a pre-recorded video introducing fellow Pennsylvania Senator Republican Dave McCormick.

4:22The decision is raising speculation Fetterman might switch parties, but he released a statement after the speech saying he is a lifelong Democrat and he only meant to introduce a great friend and American. Well, Nathan, it was primary day in Rhode Island yesterday. Helena Foulkes defeated Rhode Island Governor Dan McKee in the state's Democratic primary, 62 to 38. In her victory speech, folks called for unity, saying there's a lot of work to do. We may have won the Democratic primary for governor, but let me be clear about what happens next. You will have a governor for everyone. Helena Foulkes is a former senior executive at CVS and the retailer Hudson's Bay.

5:02McKee's defeat marks the first time in more than 30 years that a sitting Rhode Island governor has been beaten in a primary. He's the first governor in any U.S. state to lose a party primary since 2018. And as to who, Helena, folks will face in November, Karen, the Rhode Island Republican race for governor is still too close to call. With 98 % of votes counted, Erin Guckian, an aide to former Governor Don Carcieri, has 50.6 % of the vote. Elaine Polino, former model and actress, has 49.4%. That's more than one point margin, but that's just under 300 votes separating these two candidates. Nathan, while the GOP convention continues in Dallas, so does the war with Iran.

5:44A senior Iranian official says his country is ready for a more intense war and has no intention of backing down against America's naval blockade and attacks on its oil tankers. We get the latest from Bloomberg's Paul Wallace in Dubai. Both sides have shown signs they don't want, if they can avoid it, to return to the all-out war that we saw in March and early April. The Americans have made that pretty clear. Trump does not want energy prices going up anymore from here. He wants them going down a lot. And the Iranians, too, given how much they've been damaged by the war, they don't want a return to sort of total warfare, let's say.

6:20And at the same time, Bloomberg's Paul Wallace reports Iran's leaders see the war as an existential threat that leaves them little choice but to keep fighting. President Trump is predicting the war will end immediately after the election because Iran won't be able to hold out any longer. But the Wall Street Journal reports Vice President J.D. Vance and Secretary of State Marco Rubio have raised the prospect that the war could last into the end of President Trump's term in 2029. Let's turn to some company news now, Karen. Some big news from Apple. New CEO John Turnus has launched the company's first foldable smartphone, a bet that a major iPhone redesign can help energize growth.

6:57The iPhone Duo opens into a 7.6-inch display. It is the largest screen ever offered on one of these devices. Prices start at$1 ,999 in the U.S. They rise to$3 ,199 for a version with 2 terabytes of storage. Mandeep Singh is Global Head of Tech Research at Bloomberg Intelligence. When you're talking about a$2 ,000 price point, I think it's going to be hard for a lot of people to upgrade. Look, I can see why they had to price it at$2 ,000 because all of their component prices are going up. That's Mandeep Singh of Bloomberg Intelligence. The iPhone duo will be available next month in more than 70 countries and regions.

7:36Let's turn now to the economy, Nathan, where we will get the first of two key inflation readings. This morning, it's the producer price index for the month of August. And Bloomberg's Michael McKee has a preview. The spike in energy prices as the Iran war resumed in August will be reflected in the PPI, sending the annual headline rate back over 5 percent. This month, however, the focus will be on the cost of managing securities on Wall Street. Portfolio management is an imputed measure as opposed to actually collecting prices. Concerned about its accuracy, the government is changing the way it's measured, along with several other imputed sectors.

8:14Economists think that will lower the overall rate of PPI inflation, particularly in the core, and that could have big implications for the Fed. Many of the reformed measurements are inputs into the central bank's target PCE rate. If they do push down PCE significantly, the Fed might have a reason to keep rates on hold next week. Michael McKee, Bloomberg Radio. All right, Mike, thank you. Before that decision next week, the European Central Bank has a decision this morning, and investors are expecting a rate hike. Let's get the latest live with Bloomberg's Ewan Potts. Good morning, Ewan. Nathan and Karen, a rate rise on the cards for the 21 nations which share the European single currency.

8:54All but one analyst in Bloomberg's poll is forecasting a 25 basis point hike by the European Central Bank today. That will take the deposit rate to 2.5%. It's set to be the ECB's second rate increase since the Iran war as higher energy prices drive inflation. CPI now topping 3%. The key question is what happens next? Markets see two or more additional hikes, while economists, not for the first time, well, they're not so sure. In London, I'm Ewan Potts, Bloomberg Radio. All right, Ewan, thank you. Well, meet AskBee, Bloomberg's conversational AI for company and markets research. Ask a question to analyze companies, uncover trends, and explore Bloomberg market intelligence alongside your firm's proprietary data.

9:38Type Ask B Go on the Bloomberg terminal or tap the Ask B icon in the mobile app. Time 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. Authorities in New York City announced security plans for tomorrow's 25th observance commemorating the 9-11 terror attacks and the start of Rosh Hashanah. According to the NYPD, they will have a strong presence across lower Manhattan and at Jewish institutions throughout all five boroughs. Mayor Zoran Mamdani said while there are no specific or credible threats against New York City at this time, they are taking additional precautions.

10:19The NYPD and Secret Service will be implementing heightened security measures. Fencing will be installed to surround the memorial site and other locations in lower Manhattan. There will be security screening for anyone invited to the memorial. And please remember that this event is not open to the general public. Meanwhile, NYPD Commissioner Jessica Tish says even as shootings and murders have fallen to historic lows in the city, hate crimes are moving in the wrong direction through the first eight months of this year. We're learning more about the accident in Miami when an Amazon cargo plane shot past the end of the runway during landing and smashed into vehicles on an airport road.

10:56The NTSB revealing the cockpit voice recorder capturing the pilots cautioning they were too fast. Investigators say a critical braking system was not deployed and the pilots appeared to try to abort the landing, but it was too late. All five people who were in the van were killed in the crash. Meanwhile, the first known lawsuit has been filed in connection with the crash. Attorney Mike Morgan represents the family of one of those killed. Complaints were made by a safety consultant that came in and said that the attention to safety at this Air 21 air carrier is really just lip service. The van was carrying workers at a plane cleaning company.

11:34A brush fire sent smoke rising over the 405 freeway in Los Angeles. It forced the nearby Getty Center to close. According to the L.A. Fire Department, the fire grew to an estimated 25 acres. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm 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. The NFL season is underway. A Super Bowl rematch. The Patriots, who lost the Super Bowl to the Seahawks, led Seattle 10-0, 10-3 in the fourth quarter when the Pats quarterback, Drake, made through three interceptions, including one in the final minute.

12:12Seattle won 13-10. They'll play the women's semifinals at the U.S. Open tonight. Irina Sabalenka, the two-time defending champ, takes on Jessica Pagula. And then Coco Gauff, who won yesterday despite facing two match points, will play Elena Rabacchina. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work. I'm Carol Masser. Has the AI moment arrived at corporate offices worldwide? Not yet. And it's perhaps several years away. according to one survey of corporate recruiters who circle the world's business schools each fall and spring.

12:54Bloomberg's Rob Mandelbaum notes that, according to the Graduate Management Admission Council, the skills recruiters sought most among 2026 graduates of business school master's programs, including MBAs, were communication, problem-solving, and adaptability, which changed little from last year. Training in artificial intelligence tools ranked in the bottom third of the skills list, but recruiters did say AI-specific training will be more important in five years. On that, recruiters rated current graduates as only somewhat prepared or less to work with AI tools and said business schools are not doing a good job of teaching AI skills.

13:31Bottom line, according to the survey, what most companies want when it comes to AI skills is for candidates to be able to automate routine work. 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 ChatGPT.com today by selecting Work Mode. Available on Plus and Pro Plans. This is Alexis Christophoris for Bloomberg Surveillance. AI is everywhere. Outcomes are not. Not because AI doesn't work, but because AI hasn't reached the workflows yet. The campaigns, the launches, the quarterly planning. Those workflows are still run by humans alone.

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15:35This is Bloomberg Daybreak. Good morning, I'm Nathan Hager, and the first night of a rare midterm Republican National Convention is in the books, and President Trump is using it to make an offer to voters if they defy the odds and put the GOP back in the majority. I will issue a dividend to every adult citizen in the United States of America for$5 ,000. That was President Trump in the keynote address from Dallas last night. this morning. We're joined by Bloomberg Political Breaking News editor Alexander Pearson. So, Alex, maybe President Trump was looking to make a splash with this$5 ,000 offer.

16:10Does it look like he did it this morning? Good morning. Good morning, Nathan. Yeah, so he certainly made a splash in terms of raising eyebrows. It's quite the offer to make, given that when you total the amount, it would be more than a trillion dollars that the government would be paying out to U.S. adults in this event that the Republicans win the midterms. So it raised a lot of eyebrows. As to whether it'll change opinions, that remains to be seen. Certainly the reaction so far has been muted or even cautious. So Republican Senator Ted Cruz came out after the speech and said that kind of policy would have to first be assessed in terms of its impact on the U.S.

16:53fiscal position. Also, they'd have to look at how it would even be implemented as a direct payment or tax breaks. And the market itself reacted in a way that suggested they don't think it's going to happen. Investors don't think it's going to happen. Yields didn't really move much. And, you know, given the scale of the proposal, you would have expected to move there had they thought there was any realistic prospect of it being implemented. I also heard some other ideas like making tax cuts permanent, eliminating credit card swipe fees. what to make of those promises as well. Yeah, I mean, that certainly would be popular moves for certain voters.

17:30But as to whether those could pass, that also remains to be seen. President Trump has found it very, very difficult to get a lot of his policies passed, even with this current Republican-controlled Congress. And some of those policies are not very popular with certain lawmakers. So certainly won't be able to get that passed before the midterms and even after the midterms, should the Republicans control Congress, it would still be quite difficult to get a lot of these marquee policies that he's promoting to get passed. For the president to make offers like this, what does it say about the stakes that he sees and Republicans in general see about their chances for maintaining control of the House in November?

18:08It certainly suggests that President Trump and his electoral team, the Republicans in general, are very nervous heading into November, and there are good reasons for that. The polling is not great for President Trump. His handling of the Iran war and the associated energy price increases seen quite negatively by many voters. And also on the issue of all of affordability, there's a lot of blame seen being given to the White House for that. And Republicans and President Trump are acutely aware of that. And so that very much seems to be feeding the reasoning as to why they would announce this now two months ahead of these races in November.

18:49This 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. 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.

19:29Search 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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