White House Issues Shutdown Warning; Kimmel Attracts Record Audience

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1:42Bloomberg 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 with politics. With less than a week to go until a possible government shutdown, the White House is telling federal agencies to make plans well beyond what they've done in the past. We get the story from Bloomberg's Gina Cervetti. The White House Budget Office is telling agencies to plan for mass firings during a shutdown. In the past, government workers deemed non-essential have been furloughed and brought back when funding is restored, usually with back pay.

2:21This time, a White House memo is directing agencies to identify programs with discretionary funding that's set to lapse, then draft plans to eliminate jobs that don't align with Trump administration priorities. House Minority Leader Hakeem Jeffries posted on X that Democrats won't be intimidated by the threat of mass firings. President Trump canceled plans to meet with Democrats today on avoiding a shutdown. Funds are set to lapse this Wednesday. Gina Cervetti, Bloomberg Radio. Gina, thank you. A top judiciary official is warning federal courts will run out of money to fully operate as soon as next week if Congress fails to avoid a government shutdown.

3:00Judge Robert Conrad says the judiciary has funds to sustain operations through October 3rd, but tight budgets have reduced the ability to extend operations. Later today, Karen, President Trump meets with the leaders of Turkey and Pakistan. He'll welcome Turkish President Recep Tayyip Erdogan late in the morning. Erdogan is hoping to reset ties that have been shaken by tariffs and Turkey's purchases of Russian weapons. Turkish officials say today's meeting could clear the path for more than$50 billion of deals on U.S. liquefied natural gas, Lockheed Martin fighter jets, and Boeing planes. Then this afternoon, President Trump meets with Pakistan's Prime Minister Shabazz Sharif.

3:38Pakistan's leaders have nominated President Trump for the Nobel Peace Prize. They've credited him with brokering a ceasefire with India in May. Pakistan has secured a 19 % tariff rate, with the U.S. much lower than India's rate of 50%. Let's turn to late night now, Nathan. And Jimmy Kimmel's return to TV drew his biggest audience ever. At the same time, though, ABC is preparing for a legal battle. I'm Bloomberg's John Tucker joins us with the details. John, good morning. And hey, let's start with those ratings for the show. What did they show? Well, Karen, 6.26 million people tuned in to see Jimmy Kimmel live.

4:14We are back to work doing our show. Compare that to 1.55 million viewers. The show has averaged this year. That's according to Nielsen data. Well, the numbers don't include viewers who watch the program on streaming services. And the total was particularly high considering that Nextar Media and Sinclair, two large owners of ABC affiliates, didn't air the show. Together, they reach about 23 % of U.S. households. Now, as far as the legal issues, ABC parent Walt Disney preparing for President Trump to retaliate, the companies anticipating the Trump administration might go after its broadcast TV licenses.

4:53Disney's also seeking regulatory approval from federal agencies for two deals, one to acquire media assets from the NFL, another to merge with FUBU TV with its Hulu live TV service. Last year, Disney did cave, paying$16 million to settle a lawsuit brought by the president over alleged defamatory comments made by ABC News host George Stephanopoulos. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Turning to the economy now, jobless claims, trade, and durable goods orders will be released later this morning, but the real market focus may be on the enormous number of Fed speakers we'll be hearing from today.

5:32Let's get the details from Bloomberg's Michael McKee. By the end of this week, there should be no question about where individual Fed policymakers stand on rate cuts, regulation and the dollar. Fourteen of the 19 members of the Rate Setting Open Market Committee are speaking, including seven today. New Governor Stephen Myron leads off with an interview on Bloomberg Radio this morning, followed by Chicago's Austin Goolsbee, Kansas City's Jeffrey Schmidt, Governors Mickey Bowman and Michael Barr, Lori Logan of Dallas and Mary Daly of San Francisco. What will we learn? If Chairman Powell's comments earlier this week are any indication, maybe not much.

6:05We've not had much in the way of economic data that could shape the vote at the end of next month. Michael McKee, Bloomberg Radio. San Francisco Fed President Mary Daly says further interest rate cuts are likely needed, but the central bank should approach those with caution. Daly spoke at an event at the University of Utah. Now, my own view is that further policy adjustments are likely. Will they come right now, this year, or going forward? It's hard to say. But what's really important is that making those policy adjustments will likely be required to balance both of our goals, keep pressure on inflation to bring it to price stability, and offer support to the labor market to ensure that it stays near full employment.

6:50San Francisco Fed President Mary Daly says she fully supported the central bank's decision last week to cut interest rates for the first time since December. Looking at the equity markets this morning, Karen, futures are kind of taking a breather this morning following back-to-back losses on Wall Street. Amanda Agati is chief investment officer of asset management at PNC Bank. She remains bullish. With the Fed in rate cutting mode here, the backdrop is pretty supportive for markets. But I think at some point, you know, things are going to get a little bit choppy. You know, we can't be priced for perfection here in a backdrop that is not necessarily perfect.

7:25But I do think that the earnings growth backdrop in particular looks really interesting and somewhat bullish heading into 2026. PNC Bank's Amanda Agati says stocks may rise another three to five percent by the end of this year. In company news, Nathan, Intel shares are up another three and a half percent this morning following yesterday's six percent gain. Bloomberg News has learned that chipmaker is seeking an investment from Apple. We're told it's part of Intel's effort to bolster business now that it's partially owned by the U.S. government. Bloomberg's Ryan Gould broke the story. This obviously comes on the back of both the U.S.

8:03government investing in Intel directly, one of its largest shareholders, and also would potentially follow a$5 billion investment from both NVIDIA and a$2 billion investment from SoftBank. I guess one way to put this all together there is, you know, Intel is on the comeback. And Bloomberg's Ryan Gould reports Intel also has reached out to other companies about possible investments and partnerships. And Karen HSBC says it's made a tech breakthrough deploying quantum computing in financial markets. The bank says it's the first time real trades have been used at scale to show the potential benefits of this emerging technology.

8:41Bloomberg's Tiwa Adebayo has more from London. Now, this wasn't live trading. It was a trial. It was also a collaboration with IBM. They used their most advanced Heron quantum processor. And they say that that shows they're able to attain a 34 percent improvement in predicting how likely a bond will trade at a given price. That was Bloomberg's Tiwa Autobio.

9:08Time 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. The motives of a shooter who authorities say opened fire from a roof onto a U.S. ice location in Dallas remain unclear. The man used a rifle to kill one detainee and wound two others in a transport man before taking his own life. The suspected gunman has been identified as Joshua John and was 29 years old. Authorities say he seemed to fire indiscriminately. The FBI said ammunition found at the scene contained anti-ICE messaging.

9:45Vice President J.D. Vance spoke about the deadly shooting, calling it politically motivated. You don't have to agree with Donald Trump's immigration policies, but if your political rhetoric encourages violence against our law enforcement, you can go straight to hell and you have no place in the political conversation of the United States of America. House Minority Leader Hakeem Jeffries also commented on the shooting, saying the level of political violence in the country is far too high. We need leadership that brings people together, not national leadership that tears people apart. Authorities say no ICE agents were injured and the surviving detainees are in critical condition.

10:27The NYPD arrested a man after a tourist was killed and her husband was critically injured after they were struck by a vehicle in midtown Manhattan. It happened yesterday afternoon at 40th Street and 5th Avenue. According to police, a blue Toyota van hit the pedestrians believed to be tourists from Germany and then fled the scene. The woman, also in her 50s, died at the scene. Her husband is in critical condition. The driver, a 40-year-old man, was arrested at 8th Avenue and West 38th Street. Palestinian leader Mahmoud Abbas will speak before the U.N. General Assembly today. Abbas will speak virtually.

11:06Yesterday, Ukraine's President Volodymyr Zelensky told the U.N. that international diplomacy is failing his country and that the only way to stop the fighting is to fight back militarily. As Russia's war against my country goes on, people are still dying every week. Yet, there is no ceasefire because Russia refuses. 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. It was a big night for American League home run hitters.

11:44in New York. Aaron Judge, two home runs, numbers 50 and 51 on the season. The Yankees beat the White Sox 9-1 and they move into a tie for first place in the AL East with Toronto and then in Seattle, Cal Raleigh with two home runs, numbers 59 and 60. The Mariners beat the Rockies 9-2. They've won 60 the last 17. Seattle has clinched the AL West. Their three teams vying to make the last playoff spot in the National League all lost. The Mets remain one game ahead of the Reds and Diamondbacks. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

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13:20Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

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15:03We'll be right back. 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. Six days to go until a possible government shutdown in Washington, and the White House is apparently telling agencies to make more drastic preparations than they've done before. A memo has gone out calling for mass firings if they can't reach an agreement with Democrats by Wednesday. House Minority Leader Hakeem Jeffries says Democrats are still willing to negotiate. If the government shuts down, it will shut down because Donald Trump and Republicans in the House and the Senate have made that decision to intentionally inflict pain on the American people.

15:45It was House Minority Leader Hakeem Jeffries. For more on this, we're joined by Bloomberg News Editor Alexander Pearson. And Alex, I know in the past when there have been government shutdowns, the non-essential workers get furloughed. And then when the funding comes back, they usually get back pay. But this memo about mass firings does seem to take things pretty far. Good morning. Yeah, good morning, Nathan. Thanks for having me. Yeah, that's right. Previously, non-essential workers usually would get furloughed in this kind of situation and then return and get back pay. But this memo from the Office of Management and Budget, which was sent out yesterday to federal agencies, actually outlines or actually asked for plans to fire those non-essential workers, or at least some of them that are not aligned with Trump administration priorities if there is no government funding resolution by the end of the month.

16:36And that certainly is, you know, new and quite a significant move by this administration. Of course, this comes just a couple of days after President Trump was set to meet with Democrats at the White House to try to come to some kind of impasse around the health care demands that Democrats have made. That meeting's been called off. can we view this as potentially a negotiating tactic on the White House's part? Yeah, I think that's accurate. I think this is most likely an attempt by the administration to up the ante on congressional Democrats who haven't budged from the provisions that they want to add to the stopgap measure to fund the government.

17:16And certainly, you know, if Democrats will not be wanted to be seen to be the party that, a, were associated with a government shutdown, but also a government shutdown that could lead to mass firings of federal employees, especially after all of the firings that have occurred in the federal government since the Trump administration took office in January. And we've seen reports that those firings have been reversed in some cases, that some agencies may have felt like the layoffs went too far. Where are Democrats on this right now? What is the reaction from the Democratic Party to this memo? Right now, the reaction has been, you know, understandably hostile.

17:58Hakeem Jeffries tweeted out overnight, responding to a report on this memo that, you know, this was unacceptable, was essentially his message to Russell Voigt, the head of the Office of Management and Budget. So their message is very much, you know, we're not intimidated by this tactic. We're going to continue making the demands that we've been making to fund the government past September 30th. So that's the message right now, whether, you know, they'll be able to stick to that for the next few days, you know, which we have to see. And in just 30 seconds, I mean, if this layoff process goes forward, I mean, that could have a major economic impact, wouldn't it?

18:37That's true. Yeah. I mean, you know, government spending obviously makes up quite a significant chunk of economic activity, particularly the federal government. So, you know, the longer a shutdown drags on, the more of an impact it can have on overall economic activity. So, you know, both sides will ultimately want to come to a resolution if it comes to a shutdown, but obviously they want to avoid a shutdown to begin with. So the next few days are going to be very interesting to see who might, you know, compromise first to try and get to a resolution. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

19:15Look 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. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.

19:53I'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. Thank you.

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