Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
The S and P five hundred begins the day at its highest level since April of twenty twenty two. A slow down in inflation is bolstering speculation the Fed is close to ending raid hikes. The consumer Price index rose three percent in June from a year ago. The core measures at its lowest level since twenty twenty one. Former New York Fed President William Dudley thinks the Fed is almost done.
They won't move at the meeting after July. They'll take a break, just like they did this last time, and then we're going to get to November first. What was a long time between now and November first. I can imagine by that point it's possible that they'll see enough news that makes some confident that they've done enough. So I think November rate hike is really up for grabs at this point.
Former New York Fed President William Dudley and investors have another inflation report to watch this morning, the Producer Price Index for June.
Well, one of j.
Powell's harshest critics is calling for the FED to stop raising rates. Nathan. We spoke yesterday after the CPI report with the Massachusetts Democratic Senator Elizabeth Warren.
We have great news today that inflation has been cut by two thirds. So my message is take yes for an answer, Chair Pal, and let's stop with the rate increases.
Done.
And Senator Elizabeth Warren, who once called Powell a quote dangerous man to be running the Fed, made the comments on Bloomberg's balance of power here. More of that conversation a little later in the program.
The economy is also in focus overseas. Karen UK's economy shrank less than expected in May. Gross domestic product fell a tenth of one percent after a two tenths percent gain in April.
And in Asia, Nathan, China's exports fell for a second straight month in June. Exports decline twelve point four percent in dollar terms from a year earlier, while imports dropped six point eight percent. Exports the US fell almost twenty four percent. It's the eleventh straight month of declines.
Well, China's activity online, Karen could be more to more pressure on relations with the US. Sources tell US Commerce Secretary Gina Ramondo's had her emails breached in a hack that came out of China. Amy Morris has the details from our Bloomberg ninety nine one newsroom in Washington.
Officials E Commerce and the State Department were attacked. Described as targeted, The hackers were able to remain undetected for a month after gaining access to email data from around twenty five organizations. In mid May, weeks before Secretary of State Anthony Blincoln met with officials in China, Cyber Defense Agency SISA and the FBI issued a joint advisory urging organizations to harden their Microsoft three sixty five cloud environments.
A Commerce Department spokesman declined to comment nor confirm the breach of Ramondo's emails, which was reported earlier by The Washington Post In Washington, I Mammy Morris, Bloomberg Daybreak.
Amy, thank you. Still the two nations are taking steps to improve relations. Later today in Jakarta, Secretary of State Anthony Blincoln and China's top foreign policy official Wang Yee will hold their second talks in a month.
Certain of corporate news Karen now Disney is extending the contract of CEO Bob Iger for another two years to twenty twenty six. Bloomberg's Ed Ludlow has more from sun Valley, Idaho, where Iiger is attending Allen in Companies annual conference.
Iiger is the story of the Allen and Co. Conference twenty twenty three. It was interesting because he's here with Josh Tomorrow, who's Disney's parks chief, and Dana Walden, who's the TV chief, and both of those names have been touted as potential CEOs of Disney in the future. The turnaround story at Disney, the focus on cost reduction. Iiger's been at the heart of that, and there's been a
lot of discussion about what will happen. Actually in the context of Hulu, Comcast retains a third of it but has the right per the agreement, to require Disney to buy out the rest of the stake. We haven't heard anything about that, but there are a lot of questions that people are asking Disney the main company this year that's in focus. Ed Ludlow from Some Valley, Idaho for Bloomberg News.
All right, Ed, thank you well, Bob Iger is staying on the job. Hollywood actors might be about to walk off theirs, the Actors' union contract with movie and TV producers expired last night, now SAG after members will vote later this morning on whether to strike. Hollywood writers have been on the pick and line since May. If the actors joined them, it would be the first industry wide strike in Hollywood since nineteen sixty.
Finally, four years after Jeffrey Epstein's death in prison by suicide, legal action against former banking executive Jess Staley is revealing a profound relationship between the pair. Bloomberg's Uwan Pots reports.
I miss you. The world is a tough place hanging there. That's what Jess Staley wrote to Jeffrey Epstein in June two thousand and eight, a fortnight after Epstein was jailed and charges of soliciting prostitution from someone under the age of eighteen. A review of thousands of pages of documents and emails suggests the relationship between Epstein and the former JP Morgan executive went far beyond that of banker and clients.
It points to regular and repeated contact, including trips to Epstein's properties and sharing tips on how to negotiate multimillion dollar salaries. The findings he also shows Staley wanted to keep Epstein's accounts at JP Morgan when other executives wanted him gone. JP Morgan's top lawyer wrote in twenty eleven that Epstein is not an nonall person in any way he should not be a client. The lawsuit, which alleges JP Morgan knowingly benefited from Epstein's sex trafficking, is scheduled
for trial in October in London. I'm Une Potspin, Big.
Day Break, thanks you, and in response to that story, as spokeswoman for JP, Morgan told Bloomberg quote, any association with Epstein was a mistaken in hindsight, we regret it, but we did not help him commit his heinous crimes. We would never have continued to do business with him if we believed he was engaged in an ongoing sex trafficking operation.
End quote.
Jess Staley's previously denied wrongdoing and knowledge of Epstein's sexual crimes. His lawyer declined to comment on this report. This is Bloomberg Time now for a look at some of the other stories making news in New York and around the world, and for that were joined by Bloomberg's Michael bar Good morning.
Michael, Good morning. Nathan. President Biden is in Finland, NATO's newest member as he raps up his five day trip to Europe. Biden, while in Lithuania for the NATO summit, says now is the time that allies need to come together. After Russia invaded Ukraine.
Today, our lines remains a bulwark of global security instability, as has been for more than seven decades. NATO is stronger, more energized, and yes, more united than ever in its history.
Meanwhile, Turkish President race of Tia Bertawan vowed to speed up the ratification of Sweden's membership of NATO when his country's parliament returns from a two month summer recess. Funeral services take place today for one of the two Newark firefighters killed in last week's cargo ship fire at Port Newark. This morning's funeral for Augusto Akabub, who was forty five, will be held at the Cathedral Basilica of the Sacred Heart in Newark. Meanwhile, of viewing will be held at
the same church tonight for the other firefighter killed. The funeral for Wayne Brooks Junior, who was forty nine, is tomorrow. Several NATO swept through areas west of Chicago last night. McCook Fire Chief David Delish, we have wires down throughout town. Poll snapped.
We lost a couple structures as the roofer's bowling off this building.
A tornado touchdown near Chicago's O'Hare International Airport, disrupting hundreds of flights. There were no immediate reports of injuries. After hearings on Capitol Hill, the FBI Agents Association issued a statement in support of Director Christopher Ray, saying despite he did political rhetoric, they will continue to handle themselves with professionalism and integrity. Ray, who was appointed by Donald Trump, test fight on Capitol Hill. He defended his agency against Republican attacks.
Today's FBI leaders reflect the best of our organization, an organization that's made up of thirty eight thousand men and women who are patriots, professionals, and dedicated public servants.
And that is the real FBI House. Republicans criticized that raise agency targets conservative Americans and was heavy handed in the FBI raid at Trump's mower Lago estate. Global News twenty four hours a day, powered by more than twenty seven hundred journalists and analysts in over one hundred and twenty countries. Michael Barr, This is Bloomberg, Nathan.
Thanks Michael, time now for our Bloomberg Sports update here Sean Stshard, Thanks Dathan.
Moving closer to that deadline day for Saquon Barkley at the Giants by four o'clock Monday, either Barkley has a new long term deal or he'll be forced to either plan on the franchise tag, make ten million or sit out, and there was an ESPN report that he is considering doing that at least for the start of the season. Barkley said to be looking to make fourteen million a year. That's what running backs Christian McCaffrey and Alvin Kamara earned,
but Giants could have concerns with Barkley's injuries. Last season was his first healthy one since he was a rookie. Upset at the Gold Cup Soccer and San Diego US lost in the semifinals to Panama in penalty kicks, earliest US defeat the this event since twenty fifteen. And Wimbledon Women's semifinals. Today, two unseated players meet Alena Svidolina, she's already beaten four previous Grand Slam winners, and Marquete Andrewsova. She's beaten four seeded players she had never before advanced
past the second round. Arena Sabolenka, who's from Belarus, was not allowed to play Wimbledon last year. She won the Australian Open earlier. This year, she's only lost one set so far, and today's Sabolenka takes on Tunisia's I'm Jeburg. Yesterday, Carlos Alcaraz advance with Danil Medvedev. He took out the American Chris Eubanks, who had a two set to one lead. When the Yankees return of the field tomorrow at Colorado, they'll have their new hitting coach, Sean Casey.
I was a player for twelve years. There's not one moment where you don't think, men, I'd love to be in the pinstripes, like the.
History, you know, the story franchise, all the players you know have an opportunity to wear the pinch stripes is just I think it's a dream for any player in this industry.
Casey will try and improve the Yankees poultry team batty average of two thirty one. John stash Ellen Bloomberg.
Sports from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on siriusxam the Bloomberg Business app in Bloomberg dot com.
This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Elizabeth Warren is making a plea to Powell halt the raid hikes. The Democratic senator from Massachusetts joined our Joe Matthew and Kaylee Lines on Bloomberg's Balance of Power for an exclusive conversation. They covered an array of topics, including the Federal Reserve Chief Jerome Powell, as well as big banks and the Microsoft activision deal. Let's go to part of their conversation.
If he stops the extraordinary rate increases that he's been doing, then we will have made it through this. We have great news today that inflation has been caught by two thirds. So my message is take yes for an answer, Chair Pal, and let's stop with the rate increases. Done well well, Senator Warren.
Of course, monetary policy is only one responsibility of the federalers or the other is supervision. I know an issue very near and dear to your art, especially in light of the bank failures we have seen this year. The Vice share of Supervision, Michael Barr, has recently laid out proposals to strengthen capital requirements for the largest banks out there. Most importantly, are you satisfied with his proposal? And do you think he has the authority within the Federal Reserve to see it through?
So let me invert those The answer is, he clearly has the authority to be able to put in higher standards and to be able to enforce those higher standards. And the second part is bar is headed in the right direction. Is it enough? No, we still have a lot of problems. We have too much concentration in the banking industry. We have more too big defailed banks than we did back when the economy crashed in two thousand and eight, and the two big defailed banks are bigger
than they were back then. So you know, we're not out of the woods yet. But I feel a lot better when I read Michael Barr talking about how we need to tighten down on bank regulation.
Go Michael, Senator, you held a hearing on bank insolidation today. Understanding your concerns about the big banks, as you just mentioned, too big to fail? How about small and medium sized banks? Should they be allowed to get married so they can better compete?
So the problem that we have faced is of course, more and more concentration at the top, and always keep in mind the implications of that. One is obviously, too big to fail puts our entire economy at risk. But the other half is to remember that it is these small banks that are the ones that actually do the small business lending, and that drives our economy and it also drives employment. That these small businesses are the engine of our economy, and anything that wipes those banks out
is bad idea. Finding ways to keep those banks open as independent or allied banks, I'm in favor of that. But the problem we've got is the big banks are the ones who come in snap up the little banks. Oh, they make a handful of promises about how nothing will change, and then those banks disappear, so that we now end up, for example, in a third of all rural counties in America,
there is no small independent bank. There's nobody there who actually understands the local economy and who is willing to get to know the business that wants to borrow that money and sees that as their job in banking. That's not where the giants are. They don't do the small business lending. And that's the concern that I have about concentration.
So we know you have concerns about concentration and concerns about some other issues that we do want to get with you. Senator first though, if I could ask you about a hearing you in prior to today. You have some concerns about Senator Tommy Tubberville in the blockade he has put on the promotions of members of the military. Given those concerns about how that affects military readiness in the US military families, what do you think you can do to blunt that impact? What workarounds do you see?
So this is the problem we've got right now. You know, I am the chair of the Subcommittee on Personnel on the Senate Armed Services Committee, so I'm there on front lines hearing from the families who now are in a position saying where do we register our kids for school. I've heard from families who say, we've already sold our house because we thought we were moving this summer so that our active duty service member was going to be deployed somewhere else around the country or around the world.
Profound impact on families, profound impact on our military readiness. Are former Secretaries of Defense, our current Secretary of Defense. Our former secretaries of Defense who are Republican appointees have all said this undermines military readiness. But here's the problem. The Democrats can't stop Tommy Tuberville from what he's doing.
It is the Republicans who need to do this. The Republicans need to say, you are a member of our party, you are putting national security at risk, You are insulting and undermining military families in this country. Cut it out, because that's the only way we can unlock this hold and actually move through what is now literally hundreds of military promotions and assignments that are just dead in the water at this point.
Yeah, we'd like to stay in touch with you on that story, Senator, with regard to your committee position, it's important to us and our viewers and listeners. I do want to ask you about something and some news that you and your colleagues are making today, releasing a report and calling on federal officials to investigate tech giants and
namely Meta, the company behind Facebook, for somehow colluding. Maybe you can be more specific than I with the major tax preparers like H and R Block taking millions of people's personal and private information and giving it to Facebook, presumably to sell ads. If this is true, Senator, this is outrageous. Who's going to go to jail for this?
So you ask exactly the right question. People went to tax preparers and, by the way, paid them to prepare their taxes, and then it turns around that the tax preparers gave access to all of this private information about names and dependents and whether or not you had medical expenses, all kinds of information to companies like Meta. Now we
did the independent investigation. I did this with other Senators, and we send it over to the Department of Justice because there's federal law on this that no one is permitted to share tax information without the permission of the taxpayer, and I feel pretty clear that these tax companies did not get that permission. But I want to take this
one more turn if I can. These are the same tax preparers who right now are lobbying right here in Washington trying to make sure that the IRS program to permit free filing, to let people just go to the IRS, go to a website, and if you've got pretty simple taxes, fill it out on the website and instantaneously you're done. Letting people do that. The tax preparers are trying to
block the irs from doing that. Why because they break in the money every time somebody has to spend two hundred bucks or four hundred bucks or six hundred bucks to get one of them to prepare the taxes. You know, this really is back to that fundamental question whose side is government on and the taxpayers want government on their side.
We're trying to get the government on the side of the taxpayers so they can do free filing and not have to worry about these companies that are giving their data a way to outfits like Meta.
Well, as we talk about these companies, these large technology companies, other news came this week and that Lina CON's FTC was Delta blow in court on the Microsoft Activision Blizzard deal. Are you concerned, Senator, that the courts are going to steiny the efforts of competition regulators in the US.
Look, I think.
This is a bad decision. At the end of the day, the judge believed of Meta when they said, you know, we're going to do just fine and made a bunch of promises down the line for what they're going to do. That doesn't change the fact that the merger itself is not legal we have an opinion from the judge. I want to commend the FTC for taking on hard cases, taking on big companies, taking on cases that in the past often.
Just slid through.
Look at our clear violations of the law. I applaud what the FTC has done, and I say stay after it. Their job is to get out there and enforce the laws. And if sometimes a court just wants to head in a different direction, it doesn't change the fact that the FTC is right to promote competition and to enforce the law as it is written.
Well.
Lastly, then Senator, maybe we'll take it another step even further from there. As we talk about the idea of tech companies combining, or any companies for that matter, whether it's in the defense space or anywhere else that you have expressed concerns about. Is anyone talking about breaking up big tech if they are also too big to fail, whether it's Google or another company that you might have in mind. We've been down this road before with the aforementioned Microsoft.
Yeah, you know, I think that talking about breaking up these companies is right, and particularly breaking off pieces of this company. You know, my favorite example here is Amazon. Look at what Amazon does. It runs the platform on which buyers and sellers come together, collects all that information, and then becomes a competitor on the platform that runs its own Amazon businesses, sometimes under the Amazon label and sometimes under labels that nobody would ever figure out that
that's Amazon. To me, it's kind of like you could be an umpire in baseball, or you can have a team, but you don't get to do both at the same time. And so there's an example for me, those two should be broken apart. Concentration in industry after industry after industry is a threat to our economy. It is a threat to innovation and ultimately often leads to price gouging, whether it's consumers or the government. You mentioned the defense industry.
Over the space of twenty years in America, we've gone from having fifty five competitors for those defense contracts down to five. And you know what they're looking for, even more consolidation. When a little business starts up, they do one of two things. They either smash it or they buy it up and put it into one of the big ones. And that's how it is that the United States government ends up paying three hundred and eighty five dollars for some valve that costs fifteen dollars off the shelf.
We pay, and we pay through the nose. For concentration in the defense industry, in the banking industry, in big tech, in big pharma, and seeing the FTC, the DOJ Antitrust Division, and what we should be doing here in Congress is promoting competition. I believe in markets. I believe in the power of markets, but they only work if we enforce the rules that cape competitors going rather than monopolists.
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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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