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This is the Bloomberg DAYBAC podcast, available every morning on Apple, Spotify or wherever you listen. It's Tuesday, the twenty fifth of March in London. I'm Caroline Hepka.
And I'm Stephen Carroll. Coming up today.
Donald Trump's top team accidentally includes a journalist in their group chat discussing military strikes.
The US President shows further confusion about his plans for sweeping levies as he talks of exemptions for some countries.
Plus the Bank of England Andrew Bailey says Britain needs AI to boost its long term growth prospects.
Let's start with a roundup of our top stories.
The Trump administration is confronting a major security breach after a journalist was inadvertently added to a text group by US National Security Advisor Mike Waltz. The group chat on the Signal messaging app, was used to discuss detailed plans to bomb hoothy targets and Yemen, and it included the US Defense Secretary, vice President, Secretary of State, and Director
of the CIA, along with other top officials. Speaking to ABC News, The Atlantics editor in chief Jeffrey Goldberg said at first he thought the group was a hoax.
It seemed completely absurd to me that the national security leadership in the United States would be meeting on a messaging app to discuss forthcoming military action, and that they would also sort of invite the editor of The Atlantic magazine.
Jeffrey Goldberg went on to say that at one point, Defense Secretary Pete Hegseth shared a post that included what he said were operational details of forthcoming strikes on Yemen, including information about targets, weapons the US would be deploying, and attack sequencing. Speaking after The Atlantic published its story, Hegseeth sought to dismiss the claims in this exchange with a reporter.
How did you learn that a journalist was privy to the target, the types of weapons used, I've.
Heard I was characterized.
Nobody was texting war plans, and that's all I.
Have to say about that.
Hegsath's efforts to play down the league came as White House National Security spokesman Brian Hughes said the message thread appears to be authentic and that they were reviewing how an inadvertent number was added to the chain.
The private texts among top US officials also revealed how some members of the Trump administration feel about their European allies. With more here is Bloomberg's James Wilcock.
Back and forth between Vice President JD. Vance and the Defense Secrety Pete Hegseth will make for particularly troubling reading in many European capitals. A user identified Advance in the chat wrote, it plans to strike who the targets? Quote I just hate bailing Europe out again. Heg Seth reportedly responded three minutes later, quote VP, I fully share your
loathing of European free loading. It's pathetic. White House National Curity Advisor Mike Waltz goes on to say that the US would taliate the cough associated with the strike on the Hoho thies and levy them on the Europeans at Donald Trump's request. The US president claimed to be unaware of the breach when asked about it an event later Monday. His spokeswoman, Caroline Levitt said in the statement he has the utmost confidence in his national security team, including Waltz.
In London, James Wallcock Bloomberg Radio.
Donald Trump says his TARAF rollout on the second of April, will feature rates on a country by country basis, corresponding to trade barriers on US products. Speaking to reporters, the president twice signals that trading partners may be given exemptions or reductions.
We may take less than what they're charging because they've charged us so much.
I don't think they could take it.
In other words, they've charged us so much that I'm embarrassed to charge them what they've charged us. But it'll be substantial, and you'll be hearing about that on April second.
Trump's comments so at further confusion about it is plans for a sweeping tariff announcements scheduled for next week, which he's dubbed Liberation Day. The President also said he planned to proceed with tariffs on auto imports over the next few days, as well as measures targeting lumber and semiconductors down the road.
HSBC is considering outsourcing parts of its trading business to save on technology costs. Bloomback has learned that internal discussions have been held at the bank about sending some of its fixed income orders to an outside market maker like Jane Street or Citadel. In a separate exclusive interview with Bloomberg. HSBC CEO Georgel Hedri stress the importance of the bank's wider restructuring drive.
We're also looking at the what we do and recognize that there are further focus that we can achieve in own business, where we will be taking one and a half billion dollars from activities that we are currently doing that are either non strategic or non returning.
Hedri they are speaking to Bloomberg at the HSBC Global invest Summit in Hong Kong. He went on to say the bank expects to double down on investment banking in Asia in the Middle East after exiting key businesses in Europe and the US.
The Governor of the Bank of England says Britain needs a breakthrough like artificial intelligence to break out of its low growth trap. Speaking to students at Leicester University, Andrew Bailey said that advanced economies like the UK needed productivity enhancing technologies to sustain their aging populations. The Central Bank chief went on to say he's not concerned about AI taking people's jobs. The speech comes as the financial regulator has told firms they can stop following more than one
hundred pages of guidance on mortgages and investments. It's part of a government drive to slash regulation to boost growth now.
The US and Russian officials held twelve hours of talks over Ukraine in Saudi Arabia yesterday. The two sides are expected to release a statement detailing their progress later, but a Kremlin spokesman said they discuss navigation in the black seat. The negotiations follow discussions between the US and Ukraine on Sunday. Ukraine's President Vlodomi Zelinsky says strong measures will be needed to keep Russia on the path of peace.
We need a movement towards real peace, towards guaranteed security, and we all need this in Ukraine and Europe and America, everyone in the world who wants peace in international relations, Russia is the only entity that is dragging out this war and mocking our people and the whole world. And to pressure Russia towards peace, strong things, strong steps are needed.
Zelinski and President Trump still have not signed a pack to give the US part ownership of Ukraine's natural resources. Russia has continued to farm missiles and drones at Ukrainian cities during the talks.
Bloomberg understands the Turkey's finance Minister, a mem Shimchek, will hold a call with international investors today. The move comes as authority you seek to cam markets after days of turbulence triggered by the arrest of a key opposition figures. According to two sources, the minister's schedule to speak at
one pm London time in a teleconference. Turkish markets have been under pressure since last Wednesday, when Istanbul Mayor Ekrem Immolu, we're widely seen as President Erduan's biggest rival, was detained and later formally arrested.
Those are our top stories for you this morning. Thinking about the markets. Well, oil ahead of that US Russia statement later today, is a bit steadier this morning in terms of futures. As for stock futures, they are down now three tens of one percent for the US stocks fifty futures. US stock futures also in the red. Despite the major gains that we saw yesterday, The S and pv founder closed up one point eight percent, the third best session this year, on the likelihood of less severe
tariff measures by the Trump administration. The Nasak also close by two point two percent. Treasury yields rose yesterday two year yelds back above four percent. Tenure yields rose nine basis points. Treasuries are steadied this morning, are currently trading at four thirty three on ten year yields. But in Asia we've seen a cell of the SSCI China Index down one point nine percent, the Hanksing Index down more than two percent, Chinese tech stocks resuming a slide after
Monday's short lived gains. Those are the markets.
In a moment, we'll bring you more and Andrew Bailey's comments on how the UK can tackle its problem of low growth. But the story that's got our attention this morning, even the headline itself, seems incredible. The Trump administration accidentally texted me its war plans.
This is the piece from the Atlantics. Jeffrey Goldberg.
We heard from him there a moment ago, publishing this account of how he was accidentally added to a group chat on the Signal app with this group of top US officials to identify themselves as the Defense Secretary, u S, Secretary of State, National Security Advisor, et cetera. They detailed
plans about their attack on Yamat. It's a chrono logical account in many ways of exactly how things unfolded and includes a lot of Jeffrey Golberg's skepticism when he was added tode that he thought essentially was a hoax.
Yeah, he did. He was very wary.
Look, this is an extraordinary moment, I think, and his account of the messages and the sequencing running up to the attacks that he then he was so skeptical. He was wondering whether the details around the plans of the attacks on Yemen were real And he only really understood that this probably was the real thing when he did see the explosions in the reports of explosions in Sona in Yemen.
Well, this is the story with major consequences. Let's bring in our senior editor, Derek Wallbank to discuss. Derek, an extraordinary security breach by any account, How damaging is this for the White House?
Well, thank you so much for having me.
Yeah.
I think that this is something that is going to reverberate for quite a while.
Now.
How it reverberates very much remains to be seen, and depends in large part on how Republicans in Congress are
going to address it. So far, we have seen sort of vague language talking about needing to to figure out what happened, but it's fallen far short of cries for full throated investigations, and it's really not gone anywhere near the idea that heads need to roll over it metaphorically speaking, right, And so it's one of those situations where Republicans do hold all leavers of power in Washington, and thus this is a sort of own self police, owned self situation,
as one would say here in Singapore. That having been said, Democrats are going to try and make a meal of this. Democrats have been on the defensive for the last several months, looking for a way in, looking for sort of anything, as it were, and they are absolutely, you know, appalled at this minute. And where this is particularly I think in light of the fact that Republicans have made such
a big deal about methods of communication. One only needs to remember the but her emails, stuff with Hillary Clinton, right private server, all of those things. And so there are charges from Democrats not just of that this was horrible operation security, but also stunning amount of political hypocrisy.
Indeed, but then concerns about, you know, what the actual content of this might have meant had a kind of hostile actor been able to see this. The White House confirming the tech exchange appeared to be genuine. What has the Trump administration responded?
That's exactly right, and I do think that that's one of the things that's going to be very in focus. There was no obvious I guess I would say, no, no obvious, no public outfall of this in terms of US security in that particular mission. The mission went through as it was meant to go. From all that we know so far, there were no lives lost. But certainly this is one of those things that that that will
be you know, looked at it. Certainly if if you were if you were an adversarial power, you would be thinking to yourself, right now, oh wow, we have we have way more opportunity to intercept the true thoughts. And the other thing that I would mention is that there was a tremendous amount of valuable knowledge gleaned from being able to see to sort of open the curtain and see what the real thoughts happened to be. Who is
in the room for these conversations. That's really useful. What are the arguments and where you know, where are people coming from? That's also useful. And I think that is going to be something that that friends and foes alike are going to be studying.
Meanwhile, following the latest on the tariff news as well, Donald Trump speaking about this yesterday, promising some sector specific levies ahead of the announcement. We've been looking towards next week of the broader what Trump described as reciprocal tariffs as well. What more did we learn about the president's plans.
Well, I think the biggest thing that we learned overnight was that the US administration is really open to the idea of negotiated carve outs, if one will. This is something that I think that a lot of countries have been trying to figure out how to secure to little end so far. But Trump was basically suggesting that the reciprocal tariffs may not be fully reciprocal, and there were
some suggestions that there could be deals cut. Now, Trump, you know, fancies himself a master negotiator and the chief deal maker, and if I'm countries from Britain to Australia, I've been looking for ways to try and figure out how not to get socked with reciprocal tariffs. India certainly has and it made a lot of moves there as well. So there are a lot of countries trying to figure out how to do this, and they got a very
clear indication that such a thing as possible. Now how that would look, We have no real idea in fact, what these tariffs are going to look like at all. We don't really have too much of an idea except that the initial sort of maximal level of five thousand plus individual tariff decisions across all those product lines, multiplied by one hundred or more countries and economies, that just sort of massive matrix of tariffs is just not going to be the way, and it's going to be vastly
simplified from there. To add carve outs on top of that, this is not going to look necessarily as much as the Trumpet administration had initially started talking up, even though it may wind up in its collectivity being one of the largest tariff implementations in a century or more.
Derek, thank you so much for being with us this morning. That is our senior editor, Derek Wallbanks, So taking us through. The main stories are from the tomp White House of course today on tariffs and also on that major security.
Breach here in the UK.
The Bank of England governor says Britain needs a breakthrough like artificial intelligence to cancel the collapse and its long term growth rate. Andrew Bailey was speaking before the Chancellor's Spring statement tomorrow, Rachel Reeves is expected to announce billions of pounds and spending cuts report. Two out of bio joins us. Now for more TIBA. What did Andrew Bailey then have to say about growth?
Well, in short, he said there's not much of it at the moment and that we need to do something to buck the trend. So, the Bank of England Governor was delivering a lecture at Leicester University and really his key message was that the UK needs a growth shake up, something that will still mulate it massively to avoid that
collapse he was speaking about. He talked about the sharp slowed down in productivity which he says has actually been taking place since even before the financial crisis and resulting in a decline in living standards. And it's because of this decline that Andrew Bailey wants us to look to technology. He gave the example of general purpose technologies like the steam engine and the computer, and he says they can really move the neasle when it comes to growth in
the economy. He even went as far as to say that the country needs what he's calling a technological breakthrough to counter the collapse of its long term growth rate.
So a real sense of urgency there from Andrew Bailey in his eyes, just as inventions like the steam engine propelled us during the Industrial Revolution, he thinks AI in this instance can be the saving grace, primarily because of its ability to enhance productivity, particularly as the population ages, and he thinks that the technology is a necessary component for growth in hanalies because of this.
Yeah, I mean that's interesting. A lot of people sort of have high hopes for AI. It's about sort of delivery, and there's a big risk on the horizon, which is trade tariffs.
Oh yeah, Karrolyn.
That's the question on everybody's mind, especially as we approach what Donald Trump has labeled Liberation Day, and that's on April the second, when he slated to reveal tariffs that offset levies on US goods. But for his part, Andrew Bailey did actually acknowledge what he's identified as large imbalances within the trading system, So he actually called out China
as a country running huge trade surpluses. He didn't go quite as far as to endorse President Trump's strategy with tariffs, but he did describe those imbalances within the current system as the main driver of a high tariff environment. But where Bailey does differ from Trump, who of course referred to tarifs as the most beautiful word in the dictionary, is that he thinks we should look to rebalance that system through effective multilateral processes rather than those levees.
This all happening, of course, ahead of the spring statement tomorrow from the Chancellor. The government has repeatedly said that growing the economy is its number one priority, So ahead of the Spring statement, the financial regulator has announced some changes which train just cutting some of the barriers to growth.
Yeah. So we have had from the Financial Conduct Authority today that it's dropping the requirement of finance firms to follow more than one hundred pages of now perhaps outdated guidance on products such as mortgages and investments. It's something that Rachel Reeves has talked about a lot, including during her latest interview with Bloomberg last week, where she talked
about slashing regulatory barriers to growth. And this news comes today as the FCA publishes its five year strategy, and that's got folks on helping consumers, fighting crime, supporting growth, and crucially becoming a smarter regulator. That's according to a statement released from the Body today.
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