Debt Ceiling Stalemate; Santos Faces Criminal Charges

From the Bloomberg Interactive Burgers Studios. This is Bloomberg day Break for Wednesday, May tenth.

Coming up today, Debt ceiling talks continue after the first meeting between President Biden and Speaker McCarthy.

Congressman George Santos has indicted on federal charges.

Former President Trump is found liable for sexually assaulting Egene Carol.

And Wall Street awaits the latest reading on inflation.

Governor Heppel says New York State is preparing for an influx of asylum seekers. Plus we're learning more about the gunman who killed eight people on the Texas mall. I'm Michael Barr. More ahead, I'm.

John Stave Sharon Sports. The Yankees won, the Mets lost, The Devil's lost Game four, The Knick seb Game five tonight.

That's all straight Ahead on Bloomberg day Break, The business news you need to starn your day in just one fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business app, and everywhere you get your podcasts.

Good morning, I'm Nathan Hager.

And I'm Karen Moscow. Here are the stories we're following today.

We have a slew of political news this morning. Not much progress came from yesterday's debt ceiling meeting at the White House, as the US inches closer to a first ever default. Amy Morris has details from our Bloomberg ninety nine to one newsroom in Washington. They will have another meeting on Friday. House Speaker Kevin McCarthy.

I didn't find progress. Staff will continue to.

Meet, but President Biden called it a productive meeting and says default is not an option.

Our economy would fall into a significant recession. It would devastate retirement accounts, increase borrowing costs. According to Moodies, nearly eight million Americans would lose their job.

For now, the intensified negotiations can at least temporarily assuage markets before June first, that's when Treasury Secretary Janet Yellen has warned the nation risks default in Washington. I'm Amy Morris, Bloomberg Daybreak.

All right, Amy, thanks.

Well.

Even if KNG Vris and President Biden reach a debt ceiling deal, the process could threaten economic growth, especially if it involves cutting infrastructure spending. That's a view from Morgan Stanley Wealth Management Chief investment Officer Lisa Shalott.

It matters, you know, to forward looking expectations of growth in terms of what is cut, those things have been a support to growth and if we need to take that out of the forward forecasts, that is going to dampen economic growth.

Morgan Stanley's Lisa Shallett is watching for what Treasury Secretary Janet Yellen will do after she gets approval to extend borrowing.

Well outside of the debt ceiling, Karen, The political headlines are hitting George Santos this morning. The congressman from New York will now face criminal charges stemming from campaign finance laws. Bloomberg's Ed Baxter has the story.

Santos, who took office despite fabricating much of what he claimed about his education and career, has been indicted on federal charges. Bloomberg sources say charges could be unsealed as early as today, and that he could be prosecuted on Long Island. Santos reported he loaned his campaign over seven hundred thousand dollars and claimed to be worth between two point six and eleven point two million dollars. House Speaker Kevin McCarthy says if Santos is convicted, he would have

All right, and thanks well. Donald Trump is also on the front pages this morning, and new York jury found the former president liable for sexually assaulting a woman and then defaming her. We get the details from Bloomberg's John Tucker in New York, John Karen.

The jury returned its verdict sam to just three hours of deliberations. Trump's claims he could not have assaulted Egene Carroll because she was not his type was at the center of the case. Carol's attorneys managed to use those words against him. I showed video from his deposition where he confused Carol for ex wife Marla Maples when shown a photover Trump released a series of videos on social media last night with his response.

I don't even know who this woman is.

I have no idea who she is, where she came from.

In a statement, Carol said this victory is not just for me, but for every woman who suffered because she was not believed. The jury stopped short of finding Trump liable for rape. He must pay her five million dollars in damages, three million of it for defamation. Trump will appeal the verdict in New York. I'm John Tucker Bloomberg Daybreak.

Well, Johnny, remains to be seen what impact Trump's legal problems have on his presidential bid, but we're getting where to Wall Street. Titan has met with another presumed Republican candidate. Billionaire Steve Schwartzman recently visited Ron DeSantis, but we're told the meeting left Schwartzman unconvinced of the Florida governor's White House prospects. Bloomberg News has learned for now, the Blackstone

Meantime, Nathan, the White House remains focused on immigration concerns. President Biden is warning of tumultuous conditions at the the US Mexico border when pandemic era restrictions are lifted tomorrow.

We also are in the process of setting up resident offices in Columbia and other places where you can or someone seeking to Solenton go first. So but it remains to me seen it's going to be chaotic for a while.

And President Biden said he spent close to an hour speaking with Mexican President Andreas Manuel Lopez Obrador about the situation here.

There are signs tensions between the US and China are starting to soften. Sources tell US US trade representative Catherine Tie plans to meet China's commerce minister in Detroit later this month. This will be the most senior in person encounter between the nations since the US shotdown at alleged Chinese spy balloon in early February.

And finally, Nathan, we're looking at a big day on the economic front. While Street awaits the latest reading on inflation, CPI data for April is expected to show high prices remain a concern for the Fed. We get a preview from Bloomberg's Michael McKee.

Higher interest rates have helped cut inflation in half over the past nine months. Now, he kind of has say for the hard rents and rising wages for hard to find employees, particularly in the service sector, will break progress towards the Fed's goal of an average two percent inflation rate. The central bankers think progress will continue if slowly. They will leave rates high to ensure that happens, and not worry too much about month to month inflation data unless

Time now to take a look at some of the other stories making news in New York and around the world. For that, we are joined by Bloomberg's Michael Barr. Good Morning, Michael, Good morning, Nathan. New York is bracing for a surge migrants after Title forty two expires tomorrow. For months, migrant workers crossing the southern border have been bussed up from Texas the states like New York to be sheltered while

There's a lot of people.

We have five thousand openings for farm workers.

The farmers are asking us to.

Try and make this happen.

So it's a multi faceted challenge, but my team has been heavily engaged.

Governor Ockle says she signed an executive order to call up the National Guard. The White House is reacting to last week's death of a homeless New York subway writer. According to a statement, Jordan Neely's killing was tragic and deeply disturbing. Our hearts go out to the family and loved ones. We firmly believe that the events surrounding his

He had Neo Nazi idiation, he had patches, he had tattoos, even his signature, you know, verified.

That Sibley says the suspected gunman had eight weapons on him. Buddy Holly is top dog at Westminster. The petitpassant graffon ven Den beat out more than twenty five hundred of the canines to take best in Show at America's premier dog show and a first for the Breed Global News twenty four hours a day, powered by more than twenty seven hundred journalist and analysts in over one hundred twenty anti countries. I'm Michael Barr. This is Bloomberg Nather.

I want to ask you to pronounce that breed again. Thank you, Michael. It time down for our Bloomberg Sports Update. Good morning, John, Staneshawer.

Good morning Nathan. The day did not begin well for the Mets with the news that Max Schurzer was not going to be able to make his start in Cincinnati next spasm, so David Peterson rushed up from Syracuse and dropped.

To one and five.

The Reds led seven to one in the fifth inning, the met rally fell short. Cincinnati won seven to six, and the Mets have now lost twelve of their last fifteen, eight games behind Atlanta. Justin Verlander starts tonight at the Stadium. Welcome back Aaron Judge, he had missed the last ten games. Yankees got home runs from Clabor Torres and Jake Bowers. They both drove in three runs in a ten to five win over Oakland, who fell to eight and twenty nine.

Thibodel went forward to win a series. So all we're thinking about is win the next game. Go quarter by quarter, win the first quarter, win, the second quarter, win the third, win the fourth, and then the next day we'll worry about the next day. Just while we're doing is thinking about the next game.

Nicks have yet to beat the Heat when they've had Jimmy Butler. He set out the only game the Heat lost. Lakers are up three one. They've got Game five tonight at Golden State. John Stash Edward Bloomberg's Toys.

Live from coast to coast, from New York, tes En Francisco, Boston to Washington, DC nationwide on sirisxam The Bloomberg Business Appened Bloomberg dot Com. This is Bloomberg Daybreak.

Good morning.

I'm Nathan Hager. The first meeting on the debt ceiling between President Biden and Speaker McCarthy has ended with an agreement to keep talking. Both sides planned to meet again Friday to discuss ways to avoid a government default. But the President is drawing a line in the sand.

I made clear during our meeting that default is not an option. Repeated that time and again. America is not a dead beat.

Nation President Biden following that White House meeting yesterday. This morning, we're joined by Greg Valier, chief US policy strategist at AGF Investments. Greg, good morning. I know expectations are pretty low going into this meeting, anyway. Did they meet your expectations.

My expectations, Dathan, We're pretty low, and they weren't met. Very inconclusive, not success full, huge differences between the two parties. They have to say something positive, and therefore they have announced that I have another meeting on Friday. You know, maybe there'll be an agreement on a couple of areas of spending cuts. But times running out. I mean, I don't see a deal for weeks, which means to me there's going to have to be an extension.

Is there going to be a default? Is that still a possibility?

You can't totally rule it out. I think the markets have been too sanguine, although treasury yields, especially short treasuries for bills, have begun to reflect some anxiety. But no, I think at some point it might not be until a fall. At some point I think we will get a deal, but default is definitely on the table as a possibility.

You mentioned as they did that. There's going to be more talks on Friday. We're told as well. They are going to be behind the scenes discussions that have we've were told kicked off yesterday leading up to that highest level meeting on Friday. What kind of progress, if any, could we see in the behind the scenes discussions.

Yeah, I think there's an agreement, and even Biden would agree on maybe clawing back some pandemic aid that went to states that haven't spent all the money. There might be some restrictions on people who get federal benefits like food stamps who were unwilling to work. There might be an agreement on a spending cap for a year or two.

Now.

There's so much going on in Washington apart from the debt ceiling talks. Although this could be related given that Congressman George Santos is part of a very slim majority in this House of Representatives. Now he's facing potential he is facing criminal charges. Where do you see this going, Greg.

Well, probably at some point with his resignation. I don't think it's imminent. But Nathan, let me tell you, I was taken aback yesterday that all the attention was on Santos and of course the Donald Trump legal defeat, and virtually no attention was on the death ceiling. It's like the death ceiling still has not acquired a sense of urgency.

Well why do you think that is, Greg, Why don't we see that sense of urgency right now?

Well, it's a good question, Nathan, and I would say it's because the markets. The stock market has not shown any anxiety. As I mentioned, the short end of the bond market has. But I think for stock investors there's a feeling that at some point will get a deal. And that's probably right, but I think we're weeks or months away from getting any kind of a deal.

Well, it does kind of feel like we have a hil on of headlines coming out of Washington, a lot of headline risks coming out with the Santos legal pressures, and now former President Trump being found liable in the eging Carol case, just as he's getting ready to take the stage with CNN network that he's repeatedly called fake news and not wanted to talk to literally for years. Now, how do you see all this playing out in the presidential race as the former president takes the stage tonight?

What a dichotomy right now? Among ordinary Republican voters, the Republican base, Trump's got a lead of like thirty points against Ron DeSantis. But among Republicans I talk to here inside the Beltway in Washington, there's great anxiety that if Trump is the nominee, he would lose and he'd probably drag down House and Senate seats. So you've got this great division within the Republican party that I think is going to persist for quite a while.

In just about thirty seconds left, with so many big donors on the sidelines, do you see anyone breaking through to get donors to get back in the game.

Yeah, that's a really interesting angle. I think there are some other possible candidates. Joe Manchin still has the itch, and what if Kevin McCarthy gets a budget deal, could he all of a sudden plunge in. There's lots of other possibilities, including Glenn Youngkin, the Governor of Virginia. But for right now, I think things will stay frozen until we get the budget story resolved.

This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington and beyond.

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