Episode summary
Powell Probe Stirs GOP Concern; Trump Vows 25% Tariff on Iran's Trading Partners | Bloomberg...
Bloomberg Daybreak: US Edition
· · 17 min
Summary
The biggest market and policy story is the backlash to the Justice Department’s grand jury probe of Jerome Powell. The host reports that Washington’s U.S. attorney Janine Pirro subpoenaed the Federal Reserve without seeking DOJ approval, and that key Republicans including Senator Thom Tillis are warning they may block future Trump Fed nominees until the matter is resolved. An analyst says that could effectively freeze the White House’s effort to gain more control over the central bank, especially with the Senate Banking Committee closely divided and 60 votes needed to discharge a contentious nomination.
The episode also covers fresh pressure on the Trump administration from Minnesota, where the state is suing over what officials call an unprecedented surge of ICE and DHS officers. On foreign policy, Trump is weighing a response to deadly protests in Iran and has threatened a 25% tariff on countries doing business with Tehran, a move that could create complications for China and the UAE.
Markets are watching this political turbulence alongside a December CPI report that may be biased higher because of missing October data, and JPMorgan Chase earnings that will set the tone for big banks. The show also notes layoffs at Citi, BlackRock and Meta, plus new headlines on New York nurses striking and housing policy from Governor Kathy Hochul.
Key takeaways
- The host says the Powell probe has triggered rare Republican pushback, with Senator Thom Tillis threatening to oppose any Trump Fed nominees until the matter is cleared up.
- An analyst says Tillis could effectively veto Fed nominees because the Banking Committee is split 13-11 and 60 votes are needed to move a contentious nomination.
- The host says Trump’s proposed 25% tariff on countries that do business with Iran could be hard to implement because China and the UAE are major trading partners.
- The episode says December CPI may show an upward bias because October data were imputed at zero, making the inflation read less reliable.
- The host notes JPMorgan Chase will report with trading and investment banking revenue expected to rise 13% from a year ago and adjusted EPS of $4.92.
Notable quotes
“Senator Tom Tillis, a key GOP member on the banking committee, vowed to oppose any Trump nominees to the Fed until this is resolved”
“they understand how critical the Federal Reserve is, and they are going to push back”
“The state is suing the Department of Homeland Security and Secretary Christy Gnome over the quote unprecedented surge of ICE officers in Minneapolis and St. Paul”
“President Trump plans to meet with advisers today to weigh options on responding to deadly protests in Iran”
How the episode opens
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 with the ongoing controversy around the probe into Jay Powell and the Fed. Bloomberg's John Tucker joins us with the very latest. John, good morning.
And good morning, Nathan. Bloomberg has learned that Washington DC US attorney and former Fox host Janine Piro subpoena the Federal Reserve without ever seeking permission from her bosses at the Justice Department. And she doesn't plan to back down.
The blowback from lawmakers and government officials continues to grow. Federal Reserve Bank of New York President John Williams among those leaping to the defense of Fed chair Jerome Powell. He's proven himself to be a man of impeccable integrity and uh a man who has been uh calmly leading the Federal Reserve.
Former Philadelphia Fed President Patrick Harker says members of Congress can't let this happen.
When you talk to members of Congress on both sides of the aisle, they understand this. They may have different rhetoric out in public, but you talk to them one-on-one, they understand how critical the Federal Reserve is, and they are going to push back. Senator Tom Tillis, a key GOP member on the banking committee, vowed to oppose any Trump nominees to the Fed until this is resolved.
Senate Majority Leader John Thun said the threat of a legal battle with the Fed could make confirming future nominees quote challenging. Axios reported that Treasury Secretary Scott Besson warned President Trump the investigation had created a mess that could be bad for financial markets. And judging by market reaction, investors doubt the probe of the Fed is going to lead anywhere.
In New York, I'm John Tucker, Bloomberg Radio.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed nominee opposition
- trump administration immigration enforcement
- minnesota immigration lawsuit
- 25% tariff on iran trading partners
- iran protests and economic pressure
Companies and tickers mentioned
- Bridgewater Associates
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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