Trump's Fed Worker Buyout Plan on Hold; Amazon Can't Keep Up with AI Demand

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Good morning.

I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.

Karen, we begin in our nation's capital. That's after a federal judge blocked President Donald Trump's plan to eliminate up to ten percent of the federal workforce. There was so called buyout. Bloomberg Zamy Morris reports from Washington. It isn't really a buyout. It's called a deferred resignation. But hours before the midnight deadline for workers to apply, the judge sided with several labor unions that had requested a temporary

I don't believe it's been funded. I don't believe Donald Trump has any history of ever paying his bills, and I fear that federal employees may be marked for riffing, potentially without any conversation.

The administration says as many as sixty thousand government workers have accepted the offer to reside with the promise of being paid their regular salary through September. In Washington, Amy Moore as Bloomberg Radio all.

Right, Amy, thank you well. Treasury Secretary Scott Besson says he personally vetted the Treasury employees on Elon Musk's Government Efficiency Team with read only access to federal payment data. Besson added that there has been no tinkering with the Department's payment system. We spoke exclusively with Besson on DOGE.

There's a lot of misinformation out there. First of all, when you say the DOGE team, these are Treasury employees.

Are two Treasury.

Employees, one of whom I personally interviewed in his final round. There is no tinkering with the system. They are on read only, they are looking. They can make no changes. It is an operational program to suggest improvement.

And that's Treasury Secretary Scott Besson speaking of the Bloomberg Sila Mosen. You can catch the full interview on the Bloomberg Big Take podcast. Get it on Apples, Spotify, and always on the Bloomberg terminal.

Well, Karen.

President Trump's laying out more of his tax priorities. He met with congressional Republicans at the White House to discuss what he wants to see in a tax bill this year. White House Press Secretary Caroline Love It says the President wants to make good on his promises from the campaign.

No tax on tips, which is obviously a very public campaign promise that the President made, no tax on seniors social Security, no tax on overtime pay, renewing President Trump's twenty seventeen middle class tax cuts.

White House spokeswoman Caroline Lovit also highlighted two items that weren't discussed during the campaign, ending the carried interest tax break that lets private equity managers pay lower rates on their investments, and ending tax breaks for sports team owners. The White House says the President also wants to expand the deduction for state and local taxes. That's a priority for our Republicans from high tax states.

One of President Trump's latest efforts to reshape the federal government is facing high profile resistance. The head of the Federal Election Commission, Ellen Wintraub, said she was fired in a letter from their resident, but she's not leaving. Wind Troub posted a copy of the letter on x and wrote, quote, there's a legal way to replace FEC commissioners. This isn't it.

Well, Karen, for the first time, I'm sorry. For the third time in just two weeks, there may be another deadly disaster over US guys. Bloomberg's John Tucker is here now with what we know.

John Nathan.

A Bearing Air flight has been reported missing as it was headed to Noel, Alaska, with nine passengers and a pilot on board. This happened at about four pm local time yesterday. The rescue crews are scaring the ground for any sign of the wreckage of this Cessna jet. If no survivors are found, the tragedy would mark one of the worst concentrated periods in aviation history in the US.

All right, John, thank you.

Well.

We now turn to the markets, where mag seven is in focus once again. Shares of Amazon are down more than three percent in early trading. The company is warning investors that it could face capacity constraints in its cloud computing division. That despite plans to invest about one hundred billion dollars this year, with most of the money going toward data centers, homegrown ships, and other equipment to provide artificial intelligence services here CEO Andy Jasse on the company conference.

Call, AI represents for sure the biggest opportunity since cloud and probably the biggest technology shift and opportunity and business since the Internet, and so well, I think that both our business, our customers as shareholders will be happy medium to long term that we're pursuing the capital opportunity and the business opportunity.

In AI and Amazon CEO Andy Jasse He says the AI race will likely way down profits, operating income will be fourteen billion to eighteen billion dollars, and that's below analyst estimates.

Well, soon the focus is going to turn to the economy. Karen investors are waiting for the January jobs report. Economists are looking for an edition of one hundred and seventy five thousand jobs. Let's get a preview from Bloomberg's Michael McKee.

Perhaps it's reversion to the mean. Economists anticipate we had much slower job growth in January after December's blowout report. January also a month when holiday helped leaves payrolls, and this year there are also likely significant job losses from the fires in Los Angeles. Unemployment, however, is forecast to be reassuring no change, indicating that while companies may not

Radio, All right, Mike, thanks, as we await that rapport. Dallas Fed President Lourie Logan is skeptical that more rate cuts are necessary. She's spoke at an event in Mexico City.

I what if inflation comes in close to two percent in coming months, Well, that would be good news. It wouldn't necessarily allow the FMC to cut rates soon in my view, and.

Dallas FED President Lorie Logan did say the Fed would likely lower rates if the labor market deteriorated. Time now over 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.

Get ready for another round of winter weather this weekend, Bloomberg Medeu Religious Rob Carolyn as the.

Latest, Michael, Yet another winter storm headed towards the mid Atlantic and Northeast for this weekend. Winter storm watches of up for the New York City area and for Boston. Saturday night and into Sunday. We'll see snow, sleet, and rain developing in the district. Tomorrow afternoon it changes to rain there not a big deal, but we could see three to five inches of snow in the city during Saturday night and into Sunday, and more the same in Boston. I'm Rob Carolyn, Bloomberg Radio.

Thanks Ron.

Panama's president is calling a statement by the US State Department in absolute falsehood. The department writing American vessels would no longer have to pay charge fees at the Panama Canal. The dispute comes days after Secretary of State Marco Rubio's first overseas trip to the Central American country. Rubio says he's not confused about the situation.

I respect very much that Panama has a process. They're democraticly elected government.

They have rules, they have laws.

They're going to follow their process, but our expectations remain the same.

Panama's President, Jose Roe Milinos, says that he will speak with President Trump today. Ron Supreme leader says that negotiations with America are not in tell gent wise or honorable. After President Trump floated nuclear talks with tey ron I, had Toola al Kameni also suggested that there should be no negotiations with such a government, but stop short of

I'm trying to hold on, you know, but most I will go up as a dollar buck.

I don't even want to do.

That, Bonavita says. An average case of eggs used to be sixty to seventy dollars. Now he's paying over two hundred and twenty dollars. Global News twenty four hours a day and whenever you want it with Bloomberg News.

Now.

I'm Michael Barr, and this is Bloomberg.

All right, Michael Barr, thank you time now for the Bloomberg Sports Update, brought to you by Trying Staineoudie. Here's John Stashauer. John, Good morning, gim MONI Karen.

For the first time ever, brothers will be members of the Pro Football Hall of.

Fame, but not the Mannings.

Many Giants fans were hoping Eli would join Peyton, but Eli did not get in, and on the first ballot anyway, former Green Bay whiteout Sterling Sharp was named and he joined his brother Shannon also named production former Chargers tight end Antonio Gainton, eight time Pro Bowler, six time Pro Bowl cornerback Eric Allen, and pass rusher Jared Allen. The four player class the smallest in twenty years also in

Losing or diversities and the injuries that I went through, you know the reason why I'm able to be at.

The age I am.

And after all those injuries, I never gave up.

I never lost hope.

You know, I just thought that I always saw this moment coming. I always saw this success coming. At the time, I thought it was going to be still in the New York Giant uniform.

The Chiefs are one point favorite with the Eagles, so Super Bowl fifty nine expected to be a close one. Kansas City's won seventeen straight one score games, and his three recent Super Bowl wins, Chiefs trailed in the fourth quarter every time Dallas lost at home to Vegas three to one. The Capitols won four to three at Philadelphia.

John Stan Shaward Bloomberg Sports carry.

Coast to coast on Bloomberg Radio, nationwide on Serious XM, and around the world on Bloomberg dot Com and the Bloomberg Business app. This is Bloomberg Daybreak.

Good morning.

I'm Nathan Hager bringing you now our extended conversation with Treasury Secretary Scott Besson, speaking with Bloomberg Salaiah Mosen from the cash room of the Treasury Department in Washington, d C. They talked about Beson's plans for the dollar, tariffs trade and more, but they began by addressing Elon Musk and the Government Efficiency Team's involvement with the Treasury's federal payment system.

Let's go now to that conversation right now.

There is widespread concern about the DOGE team's access to sensitive payment systems. Are you worried at all that that access and that tinkering of the payment systems could affect the Treasury's market or cause any disruption?

Good, well, Hilia, thank you for asking me about that, because there's a lot of misinformation out there. First of all, when you say the doche team, these are Treasury employees. Are two Treasury employees, one of whom I personally interviewed in his final round. There is no tinkering with the system. They are on read only. They are looking. They can make no changes. It is an operational program to suggest improvement. So we make one point three billion payments a year.

The letter that the Treasure Department sent earlier this week talked about how the team currently does not have access to change the system. Have they at any point this year had the ability to make changes.

Absolutely not.

This is no different than you would have at a private company. And by the way, the ability to change the system sits over at the Federal Reserve, so it doesn't even lie in this building. So they could make suggestions on how to change the system, but we don't even run the system.

And if they ask for if they request the ability to change the system, would you grant that.

No, again, they have no ability to change the system. I have no ability to grant that change. That they can make suggestions, then it would go to the Federal Reserve and just like any large erp system, there would be tests. There would be this, there would be that, and then the FED will determine whether these changes are robust or not.

As the Secretary of Treasure, you also oversee the IRS. Do you know what kind of access the team has to IRS data or individual taxpayer data?

Well, I'm glad you asked that too, because look, the RIRs, the privacy issue is one of the biggest issues, and over the past four years we've seen a lot of leaks out of there. The IRS systems are quite poor. When I started college in nineteen eighty, I learned the program in Cobyl. I think there are twelve different systems at the IRS that still run on Cobyl. But as of now there is no engagement at the IRS, and if.

They request that access, would you sign off on that request?

They haven't, so we'll take that when it comes to it. I think there is a lot to do there, but the president was elected with a big agenda and to the extent that getting the IRS in better shape is part of that. Sure, because look, with the IRS, what am I concerned about? I am concerned about collections, I'm concerned about privacy, and I am concerned that the system is robust. But do you see customer service?

But do you think that if they ask for access that is something you would consider signing off on.

There are a lot of things I'd consider. But look, we're in the middle of the ex filing season right now. We even with the government buyouts that are being that expire at midnight tonight, we have the mandated that the IRS customer facing employees that they're not eligible for that until May fifteenth. So I don't imagine anything's going to go on at the IRS until then or beyond.

Elon Musk just a few half an hour ago tweeted out that Treasury needs to stop approving certain payments. Has your staff tried to block any payments here at Treasury, we have not and.

I'm glad you asked that too.

And just to put in perspective, Elon and I are completely aligned in terms of cutting waste and increasing accountability and transparency.

For the American people.

I believe that this dose program, in my adult life is one of the most important audits of government or changes to government structure.

We have seen that. When I was in my twenties, we.

Had the Grace Report, and there's some great suggestions that came out of that never implemented under Clinton and Gore. I think it was to government efficiency or reduce government.

Nothing happened.

So President Trump came in, there's a big agenda, and I think that there are gigantic cost savings for the American people here. And I think it's unfortunate the way the media wants to lampoon what is going on. These are highly trained professionals. This is not some roving ban going around doing things. This is methodical and it is going to yield big savings.

At any point, would you heed what Musk just tweeted and stop payments come from coming through Treasury.

Well, most of that happens above us, that it comes from the Department and the agencies. We are doing a complete review, and I want to emphasize to you and everyone watching that it is an operational review, It is not an ideological review. We want to make sure that the American people are getting the best practices, and I don't think that's happening right now.

The systems here at Treasury they're known to be a little antiquated, but very very sensitive, but also they're working. I'm hearing Bloomberg. We hear a lot about investors being concerned that this could hit markets in some way or start to cause a loss of confidence. What as a long time hedge fund and investor like, do you have a response to those concerns.

People shouldn't be concerned that Treasury we move deliberately.

And we fix things. That's the way we work.

So everyone should know that all the payments are going to be made, they're going to be in good order, and at the end of this review, they're going to be substantial savings for the American taxpayer.

Mister Secretary, you have experienced in currency markets, and now, as in your new role, you oversee US currency policy. I'd like to ask you what does a strong dollar mean?

To you.

Well, First of all, the strong dollar policy is completely intact with President Trump, and I am very happy at his Economic Club of New York speech in August when he re emphasized the importance of maintaining the dollar reserve currency status. But let's think about what does a strong dollar mean. It really means four things. One that when we think about a fiat currency, a piece of paper is credibility. So a strong dollar is credibility and a rule of law that.

Is backing it up. Too.

It means a composite price in the screen the Bloomberg Currency Index, that is the dollar moving up against that. Three, it is a bilateral price. So what's important to remember is the dollar is either a week or strong versus something else. So we want the dollar to be strong. What we don't want is other countries to weaken their currencies to manipulate their trade.

And then, fourth that we want to have.

The best policies that create the environment for a strong dollar.

Let's talk about other nations and how they manage their currencies. The President has asked for a tariff study from several of his cabinet officers or incoming cabinet officers. Do April first, and the Treasury piece of that is to assess how to handle when foreign nations manipulate their currencies. Do you see any evidence of manipulation in foreign exchange rate markets right now?

Well, well, wait till the study comes out. But I think just intuitively, you and I could agree that when you see the accumulation of these large surpluses that there is not a free form trading system that's going. It could be due to the level of the currency. It could be due to trade restrictions, it could be due to some interest rate repression policy.

So it could be any of those.

Are there any countries that you're monitoring or watching specifically right now? I know the President in the past has labeled China as a currency manipulator. Do you see any other nations that need to be closely watched?

Well, I think we'll see on April first. And as you know that China's the most imbalanced unbalanced economy in the history of the world, and they are in a deep recession right now. They're experience in deflation and they're trying to export their way out of that, and we can't allow that. We want fair trade, and part of that is taking a strong position on the currency and the terms of trade.

Mister Secretary, you said yesterday in an interview that the Trump administration is more focused on long term gields than what the Federal Reserve is doing, which is a bold statement. I want to ask, how do you plan to keep a lid on yields considering the deluge of debt issuance that is coming down the pike and also some of the inflationary risks that are ahead.

Well, one of the things I wanted to emphasize is that we are not focused on the whether the Fed is going to cut not cut.

What we are focused.

On is lowering rates, So we are less focused on the specific of rate cuts and how do we get the whole curve down. I mentioned that the tenure I believe is the important price to focus on its mortgages, it's long term capital formation. So and look, I think with the President's policies of energy dominant, it's deregulation and non inflationary growth, I think that the tenure is going

We just wanted to raise it less.

The Democrats want to raise it more taxes. Democrats want tax increases. We want tax cuts. What nobody's singing about is what if the S actually went down? What if it actually goes down because of everything we're doing right now?

But what about the inflation concerns that are stemming from the tariffs and tariff threats.

Look that I'm not sure that where this narrative the tariffs for the country putting on the tariffs is inflationary. That we could have a small one time price adjustment that as we saw in Trump one point zero, that the deregulation and the other policies, we stayed right around the Fed's target level.

So I'm unconcerned about that.

I think especially that China, now given all their excess capacity, will no matter the level of the tariffs, will end up eating quite a bit.

There's a lot of uncertainty around tariffs. We see them threatened or signaled and that they're taken back. It appears as if this administration might be unfriendly to businesses.

Is that right?

Really, I think it's just the opposite. I think this is the pro business administration and history and everything we are doing is going to increase the after tax return capital and as a result, working Americans will have very high real wage growth. That what we've seen over the past four years is the government and government adjacent sectors providing the employment growth. And why have we experienced a

We're seeing companies already under some stress from the tariff threats, China is investigating Google, and also, as you know, are well aware that business is like to be able to plan ahead. But with so much policy uncertainty, that predictability factor is gone. That all points to a little bit of a tougher environment.

Well, look, I think the best thing we can do for predictability is make the tax cuts and jobback permanent. That would be the single best thing we could do for predictability. We can go back to the one hundred percent expencing and add some new features that I think business is going.

To be very happy with.

But again the most important thing is that it filters down to working wages, which is what we saw the President Trump's first administration.

This is Bloomberg Daybreak, your morning podcast and the stories making news from Wall Street to Washington and beyond.

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