Kevin McCarthy Warns on Debt Ceiling & Trump Indictment

to the Trump January sixth Grand Jury. I'm Michael barn More Ahead, I'm John Stash Aaron Sports win for the Knicks, Nets, Rangers, and Yankees, the Mets lost the Masters begins today. That's all straight ahead on Bloomberg day Break, the business news you need disturn your day in just one fifteen minute podcast, each pointing on Apples, Spotify, the Bloomberg Business Appen everywhere you get your podcasts. Good morning, I'm Nathan Hagar and

I'm Karon Moscow. Here are the stories we're following today. We want to begin this morning with some notable comments from the Speaker of the House in an interview with Bloomberg, Kevin McCarthy offered warnings on China and the debt ceiling. Bloomberg's John Tucker joins US Live with the details. Good morning, John. Nathan McCarthy has a message for Wall Street. You should worry about the debt ceiling. He's focused on spending money

we don't have. We're bringing in more revenue than at any time in the history of America, but we're spending more than any time, so we've got to curve the Speaking to Bloomberg, have the Ronald Reagan Library at Los Angeles, the speaker said he remains opposed to increasing the nation's debt limit without curving spending. A default would happen this summer if the two parties can't reach an agreement. Mccarthury also met with Taiwan's president yesterday and moved that upset China.

McCarthy says, too bad. What China needs to understand is they can't dictate who a Speaker of the House can meet with, baby before or friend. China warned of counfeit measures and council quences the arrest of Donald Trump. McCarthy was dismissive, saying, quote, everybody knows this is not a Real Case, Live in the York. I'm John Tucker, Bloomberg Daybreak. All right, John, thanks for the House speakers meeting with Taiwan's president comes as Chinese leader Shijin Ping hosts French

President Emmanuel Macron in Beijing. China's response to McCarthy's meeting has been mostly muted so far, and that contrasts with China's aggressive military response to former House Speaker Nancy Pelosi's visit to Taiwan last summer. Former US Defense Secretary Mark Esberg tells US Beijing's concern should not dictate the US policy on Taiwan. This is how China behaves, right, There's a lot of rhetoric, there's a lot of bluster, and they fly our planes and move ships and do those

types of things. But well, they know better. We are not encouraging Taiwanese independence. But on the other hand, US selected leaders lawmakers have the right to meet whomever they want, wherever they want, wherever, whenever they want. And former US Defense Secretary Mark Asper spoke with Joe Matthew on Bloomberg's Bound on Catch the Show weekdays at one pm Eastern on Bloomberg Radio and Catch Joe's full discussion with Mark Esper on the Sound On podcast. Let's turn back to

markets now, Karen and some highly anticipated economic data. This week's IM reading showed a slowdown in manufacturing. Now all eyes turned to tomorrow's monthly payrolls report. Bloomberg Economics correspondent Michael McKee has a preview. Other labor market data have been somewhat disappointing in recent days, but Wall Street is still leaning towards a stronger than forecast number. That's likely because for the last ten months, jobs have exceeded the

economist forecast. We'll also see the layoff picture when we get jobless claims. Today, they've remained under two hundred thousand. Companies have announced a lot of layoffs in recent months, but they haven't shown up in the data yet, So look for the possibility of a lot of volatility over the next two days. Michael McKee, Bloomberg Daybreak, Orry Mike, thanks well. Tomorrow's data comes on the backdrop of turmoil in the banking industry, and now there's growing concern over

another regional lender. Reports signaled in exodus of deposits at Phoenix based Western Alliance, but the lenders, assuring customers that those estimates were in so dire. Deposits were down eleven percent in the first quarter, but balances increase this month, cutting the decline to nine percent. Shares the bank felt twelve percent yesterday. A Meantimecaren, we have an update on

some recently collapsed regional lenders. Blackrock is helping the government arrange the sale of one hundred fourteen billion dollars in securities held by Signature and Silicon Valley Banks. Bloomberg's Charlie Pellet has the story. The Federal Deposited Insurance Corps said the asset management giant will conduct the sales of twenty seven billion dollars in securities from Signature and eighty seven billion from Silicon Valley Bank. The holdings are mostly agency

mortgage bank securities and collateralized mortgage obligations. The FDIC was appointed receiver for the bank's last month as they collapsed one by the weight of deposit withdrawals in New York. Charlie Pellet Bloomberg Daybreak Right, Charlie, thanks well. Overseas, in Switzerland, we're seeing cuts to bonuses for top bankers following the

acquisition of credit suites. It comes at the demand of the Swiss government, which has ordered bonuses to be cut in half or canceled altogether for top credit suie executives. The steps will affect around a thousand employees and bonuses worth between fifty million and sixty million Swiss francs. And back here in the US, Karen Tiger Global Management is bouncing back from two years of losses. Tiger globals Hedge Fund posted a seven point three percent gain in the

first quarter thanks to a rally in tech shares. That advance comes after Tiger tumbled fifty six percent over the past two years. It's only long only fund I should say, plunged sixty seven percent. To recoup client money lost over that span, the funds would need to gain one hundred forty four percent and two hundred and sixteen percent, respectively. It's fifty six degrees in New York. It's going to

be partly sunny today. We'll see some showers in storm this afternoon on our way near eighty laws near fifty tonight. With showers, now, let's look at some of the other stories making news in New York and around the world. With Bloomberg's Michael bar Good morning, Michael, Good morning, Nathan.

Former Vice President Mike Penn says he will now cooperate and testify in the Justice Department's investigation into efforts by Donald Trump and his allies to overturn the results of the twenty twenty election, Layola law professor and former federal

prosecutor Lourie Levenson. So we don't know exactly what Pence will say in the grand jury, but what we do know is that the special prosecutor is getting closer and closer to those who are in former President Trump's inner circle and examining what he anticipated in what he intended to occur. On January sixth, law professor Lourie Levenson, New York City and the Police Benevolent Association have come to

an agreement to pay officers more. Mayor Eric Adams says he and the police union agreed on an eight year deal. When you reflect on it, we all talk about how important public safety is, and year after year, the men and women who place themselves on a front line, can that come to the table and just get the adequate financial support they deserve so they can provide for their families. The agreement with the PBA and the city will cost

roughly five point five billion dollars. The news of the agreement comes as an NYPD officer was shot in Queens yesterday. The twenty two year old officer, who had only been on the job for three months, was shot in the hip after responding to an argument on a bus over a seat. The suspect remains at large. Today, Tennessee House Republicans are set to vote to expel three Democratic colleagues. The Democratic lawmakers demanded action on school shootings as gun

control demonstrators packed the hallways of the state House. Democrat Justin Pearson commandeered the well of the House chambers during a recess to demand action. Republicans say the act of defiance as late at security concerns. Pearson called the vote an unprecedented act of retribution. This becomes a part of a terrible playbook to silence people and to keep things the same. Yesterday's students across the nation walked out of

classrooms demanding gun safety legislation. French President Emanuel mcrosse says Beijing could play a major role in bringing peace to Ukraine across speaking at the start of a three day visit to China, says he would urge President chi Jingping to get deeply involved in this effort. Global news twenty four hours a day, powered by more than twenty seven hundred journalists, analysts and over one hundred and twenty countries. I'm Michael barn This is Bloomberg, Nathan. Thank you, Michael.

Time now for the Bloomberg Sports Update. Good morning, John stahowyad morning. Night of the Nixon. The twenty twenty draft had two first rounders. They took Obi Toppin later on Manuel Quickly In. A year later, they drafted Quinton Grimes. Last night at Indiana, those three guys combined to score one hundred and seven points thirty nine for Quickly, thirty kicks for Grimes, topping at a thirty two. The Knicks outscored the Pacers one thirty eight to one twenty nine.

They played without their top three scorers, Julius Randall, Jalen Brunson and RJ. Barrett. The youngsters took over in place of them. Two games left for the next they are locked in as the fifth scene in the East. The playoffs for them will begin in Cleveland. The Nets need one more victory to secure the sixth scene, which means avoiding the play in a road win for Brooklyn at Lowley Detroit one twenty three to one, O eight, six nets and double figures, led once again by mcel bridges.

With twenty six Rangers also getting ready for the playoffs, they stay hot with the six three win over Tampa Bay at the Garden. Two goals for Chris Stryder He's got thirty five on the season, two for Tyler and Mott. The Blue Shirts bore up three, not being midway through the first period the Yankee opening homestand saw them go four and two. They beat the Phillies four to two. Garrett Coles already two and oh Jose Trevino backed him with a two run homer a pair of run scoring

hits for Glaver. Torres was off to a hot start Mets with a nightmare series at Milwaukee, two losses by a combined nineteen to enough and then the Brew with the sweep, winning seven to six on a walk off home run bottom to night by Garrett Mitchell off Adam Attavino in defeat. Peter Alonzo hit two two run homers. The Mets home opener today postponed until tomorrow and reigns on the forecast for Augusta, Georgia. We'll see if the Masters, which teas off today can finish by Sunday. Hasn't had

a Monday finish since nineteen eighty three. John Stashaward Bloomberg Sports Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on Sirius XM, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hagar. We turned now to our interview with the Speaker of the US House

of Representatives. Republican Kevin McCarthy of California, joined Bloomberg's and Marie Hordern for a conversation last night on geopolitics, the debt ceiling battle, and the indictment of former President Donald Trump. They spoke as the Speaker met with the President of Taiwan, sighing when a meeting that has been criticized by China as Beijing remains sensitive to the issue of Taiwan's independence. Let's listen into that interview now with how Speaker Kevin McCarthy,

who begins by discussing US China relations. If we want to make sure that we foster democracy and peace and make sure we don't get into any type of conflict, people need to sit down. And what China needs to understand is they can't dictate who a Speaker of the House can meet with, baby before or friend for the same moment that McCrone sitting down with President She, I think that's great. I would sit down with President she think spear thinking Beijing, I would gladly. I've I've been

there three times. I think it's important that we meet together. And one of the things I think that America has failed upon is that we've never spoken with one voice when it comes to China. We've gone from administration administration. So when I became Speaker, we created this Select Committee and at one hundred forty six Democrats vote for You've watched Democrats and Republicans here together. I think that would even foster a stronger relationship with China, because China would

understand where our boundaries are. They won't worry about well one party saying something you've watched in Congress this year, our only movement when we spoke about China, we spoke one hundred percent of members of Congress voted for that resolution against Bloom. It's the one area really of bipartisanship. I'd say, well, I think we're getting more of it. Okay, Well, that's I guess of every bill we pass have been bipartisan.

I want to ask you about what type of support there would be though, if there was to be an invasion, if Beijing were to invade. You talked about arms sales here that need to get there quicker. But what would that look like just militarily or would you send American lives? See, this is a hypothetical question we would never want to get to. So what you're looking at what we're doing today, is how do we make sure that question never comes

to fruality. So what you would learn from Ukraine itself, because if we're looking back on Ukraine in twenty fifteen, when I went to the White House to advocate with President Biden to sell javelins, you want determined, you want them not to be able to come in. And that's the same thing we're talking now. In those six assurances, we provided that we would continue to fund weapons to Taiwan.

But what we should do is speed up that process that they can defend themselves, so you don't have conflict, you don't have war, You communicate with one another. We build greater technology from sciences to health with them. I think that fosters a safer world. We continue to advocate here of Reagan Library, democracy, freedom, peace, and that's what Taiwan has. When it comes to Ukraine, though, there are some in your caucus in the Republican Party who are wavering,

they don't want to send all this support. Where do you think those votes would be if it came to sending that type of support to Taipei. Well, let would be really clear here. What we're founding in Ukraine is we want to see a path that we can win. Not that you just said a check, but what we're watching what's happening in America today, it looks a lot like nineteen thirty six. You're having from China to Russia, to North Korea to Iran coming together like an access

of power. So as Americans, you want to be able to foster that nothing comes to an element of what we watched in the past that history has taught us. So no, I think in our party you would find that we would fund so Ukraine would win because the same aspect would be that would probably deter any action in Taiwan. But what we can learn from the actions of Ukraine, don't wait till conflict happens, be able to

sell the weapons now so there is never conflict. There's even a bill potentially of outlining what the sanctions would look like. Did sign when invite you to Taiwan? No, we didn't talk anything about that money you planning to go. That's what everyone wants to have. You know what, I just got in the job. I'm not in one hundred days, so I don't have plans to go someplace else you'd like to look. I love the ability of one day maybe I could go. But what I'm looking at right

now is the idea of building America's economy. How do I bring down the energy costs for Americans? How do I make our streets safer? How do we secure the border to stop Fenton Off from coming across? Now, those are places we're going to differ with Democrats, but we are united here, and we had Republicans and Democrats together speaking with one voice, which I think will make the world safer and make sure we don't have confidence another item on that to do unless you have is the

debt ceiling. Yes, right now, you and the White House for having this standoff. If President Joe Bien does not come to the table with these negotiations, will you put that bill on the floor. Will you pass a bill regarding the debt ceiling? What type of ability want? We're never going to move a bill that just raises the debt.

I've been very clear with the President. I mean, think about what the Congressional Budget Office has said, right, we're going to pay in the next ten years, ten point five trillion just an interest since more than our defense budget, well since nineteen forty child today, in eighty three years, we've only spent nine trillion on terriest. We're about to be at the tipping point one twenty percent of GDP. We've never been here with the amount of debt that

we had since World War Two. So what I've told the President is listen, we're bringing in more revenue than at any time in the history of America, but we're spending more than any time. So we've got to curve that. What we can do is we can build our economy, make it stronger. We could put in work requirements, we can cap how fast government? Are you going to put this all in a billy? And unfortunately I try to sit down with the president and the president doesn't want

to communicate. We're out of session right now. When we come back, you might make some news. Okay, So okay, we get back to session. Maybe a timeline. Do you have any plans to talk to Wall Street because there are starting to grow some concerns. Yeah, they should. They should be concerned because I sat down with the president of February first, and the president never wants to meet.

And what's interesting, So as long as your communications are just these letters, Yeah, I'm very concerned about the death set up. I want to make sure that we don't have conflict. And you've watched with the Democrats spending so much that brought us inflation, and now we have the issue. Now we have issues in the Trump administration. It was a clean raise three times. Well, let's be very clear about this. They added five point nine trillion since they

came in. Remember what Milton Freeman said, I'm sure he's your favorite economists. Only one place can have a favorite economist. But you know what, there's only one place that can create inflation. Government, they spent too much. You watch it their inflation reduction. Now you're finding it costs three times as much as they said. And they increased discretionary spending by thirty percent. When we were in power eight years, we didn't increase it one dollar. We decreased it ten millions.

And now they've got a banking issue because they raised interest rates. So we want to make the economy our fed raised interest rates. I'm just well, you have to because you know what Milton Freeman on bolcase, Inflation is very high and has to be stop and starting the economy. Remember what Milton Freeman said, you could only cure inflation if the interest rate is higher than inflation. But remember what this administration said that inflation was transitory. Yellen actually

had to apologize. And then what we watched he attacked on the energy policy of America, so the cost went up, which added greater inflation. Then watch what they had done on foreign policy, the missteps in f Ahanistan that now made the world less safe. That are our friends are now going to China. Now what also happened too in

this aspect of what he's happening. We're watching that OPEC is now raising the price of oil because they're cutting production because America has cut productions, and we would make global emissions lower if we gave more of America production because our natural gas is cleaner. If we took away Russian natural gas for one year, you would cut two hundred and eighteen million tons of CO two emission in one year. So if you want to lower gloss Russian no, no, no, no.

I want to do is let America unshackle. What's holding us back? We produced a natural gas which is forty one percent cleaner in Russia and sell it around. Yeah, what does that look like? Well with the Wall Street I want to be very straight and forward with them. We can't continue down the path that we are right now. The CBO says, if nothing happens, the trust funds of the Highway, Medicare, and Social Security, they're going to get

cut based upon the President. He's cutting those programs and what doesn't want to cut him in his budget bill? What the President is cutting him because what happens is they go broke in the next two years because the increased spending by five point nine trillion. You can't afford it. And I don't want to do that I want to save them. So we have to spend less money than we spend before. Let's put in work requirements, less cap of the future of what a potentially is getting part

of the bill. I also need to ask you about the former president Donald Trump thirty four felony charges. Republicans say, this is a weak case that Alvin Brand, the Manhattan District Attorney, brought forward, and I was there at the court. If it's I do, If it's a weak case, then why not just that the legal system work as it does for Americans every single day. You know what's so interesting? You say, Republicans say that, you know, some Democrats not

just some A lot. Cuomo said that the New York Times. Everybody knows this is a weak case. Everybody knows this is political. But what's really happening here If we sit back, remember this is not an Attorney general of the state. This is not even the DA of New York City. He's a borough DA who ran on a campaign that he was going to indict the president. He ran on a campaign getting money from sorrows. This is what's going to cause damage. You just watch today Republicans and Democrats

sitting together talking about a serious issue. Then you watched a political person go out and try to sue a former president who's running again and bring politics into it. So what's going to happen. Are we going to find a small da from a small county in a red state start to sue Biden when he leaves office. That's not America. America bleeds in the rule of law, and the way he's stretching this, everybody knows this is not

a real case. So I think for the health of America, listen to the Republicans and Democrats alife and stop playing politics with our law. Just one final question you mentioned obviously it's not as a former president he is the front runner for twenty twenty four. Would you welcome more individuals getting involved in this race for twenty twenty four? Look, everybody could make their own decision. There. Think there's gonna be a lot of people running on both sides of

the aisle. I don't know that President Biden has President Biden hasn't even announced yet. There's a lot You got the governor of California traveling to other states. He runs to the White House when the president's out of town. So there's a lot of people questioning whether Biden even runs. I think a lot of people are going to camp put you here apart, and I think I think democracy is good. I think ideas are good and people can

get out and talk about it. This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify, and anywhere else you get your podcasts. You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three zero in New York, Bloomberg ninety nine one in Washington, Bloomberg one oh six one in Boston, and Bloomberg nine to sixty

in San Francisco. Our flagship New York station is also available on your Amazon Election devices. Just say Alexa play Bloomberg eleven thirty plus listen coast to coast on the Bloomberg Business app, Serius XM Channel one nineteen, the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager and I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak