White House Debt Ceiling Meeting; Losing Confidence in Powell

From the Bloomberg Interactive Burgers Studios. This is Bloomberg Daybreak for Tuesday, May ninth. Coming up today, All eyes.

On the White House ahead of a key meeting on the debt ceiling.

Americans lose confidence in the Federal Reserve and share Jay Powell.

Ubs reshuffles its management team, the first move since the takeover of Credit Suisse.

And shares of Palenteer surge on strong demand for artificial intelligence tools.

Calls continue for charges in the death of a New York subway writer. Plus Senate Democrats won the list of gifts from a billionaire to Justice Clarence Thomas. I'm Michael Barr Moore Ahead, I'm.

John Stasharon's words.

The Knicks lost again in Miami, trailed the series three to one. The Lakers beat the Warriors, The Yankees beat the ad.

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

Good morning, I'm Nathan Hager.

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

The latest on the debt ceiling. The White House and congressional leaders meet today to work on a path toward an agreement. Amy Morris has a preview from our Bloomberg ninety nine to one newsroom in Washington.

The possibility of a short term fix for the debt standoff has gained traction since Treasury Secretary Janet Yellen warned the US maybe unable to service debt come June first. Republican Senator Bill Cassidy of Louisiana tells Bloomberg that could work, but it depends on the White House.

I think a short term debt ceiling increase would do a little bit of a cooling off period. But you're going to ask if the president is not going to engage, what does buying short term mean.

Former Democratic Senator from Indiana Tim Romer tells Bloomberg's sound on that a short term extension is the more likely outcome, but there are other options to watch for.

Or you try to circumvent the process, either with the fourteenth Amendment, or you have a discharge petition on the House War and Democrats try to couldjol and persuade five Republicans to get something cleaner down on the House floor.

Today's meeting starts at four at the White House in Washington. I'm Amy Moore, is Bloomberg Daybreak?

All right, Amy, thank you. Well, a dead ceiling deal will get done. That's a view from Bill Gross, the former chief investment officer at PIMCO. In the meantime, he recommends buying short term treasury bills.

I think it's ridiculous. You know, it's always resolved, and not that it's one hundred percent chance, but I think it gets resolved. I would suggest for those that are less concerned, similar to myself, that they, you know, they buy a one month two month treasury bill at i'm much higher rate than that they get with a longer term treasury bill.

Bill Gross made the comments in an interview with Bloomberg, saying short dated bills have seword since Treasury Secretary Janet Yellen war and the government could run out of cash in June.

Well, when it comes to the dead ceiling, Karen, the Federal Reserve is staying on the sidelines. At the same time, were learning confidence in chair j Palell is falling. Let's get the details from Bloomberg's John Tucker.

John, and not many people trust j. Palell to do the right thing, Nathan. The results of a GALLA poll out this morning show the lowest level of confidence recorded since they began tracking public perception of the Central Bank chief in two thousand and one. Only thirty six percent of you as adults say they have a great deal or a fair amount of confidence that the chairman would do the right thing for the economy is popularity fell as inflation rows and interest rates marched higher, and the

Right, thanks John Well.

Regional banks are in focus in the Golden State today. California says it's boosting scrutiny of lenders with over fifty billion dollars in assets at Baxter. Has a story from our Bloomberg nine to sixty newsroom in San francisc le Go.

This, of course, is more in the fallout from the collapse of Silicon Valley Bank. The Department of Financial Protection and Innovation says it plans to overhaul its processes with more personal scrutiny of staffing policies and technology deficiencies. In interviews with employees, there were constant complaints and criticism regarding

Goldman Sachs has agreed to settle accusations that systematically underpaid women. We get more on that from Bloomberg's Doug Prisner.

We're told Goldman struck a deal with lawyers representing about twenty eight hundred women in a class action. They had claimed the firm discriminated against them in pay and promotions. We are told Goldman will pay two hundred and fifteen million dollars to end the lawsuit. About a third of the settlement is expected to be set aside for attorney fees. The upcoming trial was scheduled for next month in New York.

All right, Doug, thanks well over in Europe today, CEO Sergio or Mati is overhauling the management team at UBS. Tom Tuckner will replace Sarah Youngwood as chief financial officer. It's the first staffing move since the takeover of Credits Suites. We get more from Bloomberg's menus Cranny.

Be a veteran and what you will find is this is what's coming through from Amati's appointment. Business about people that he knows, people who he trusts, people who's been around. He knows how they make decisions, you know how they act in an integration.

And Bloomberg's menus Cranny says. UBS also appointed former Credit Suite CEO of Rick Kerner to its top management body.

Ran here and the US here ensures of palent Here are surging. There are more than nineteen percent of the pre market. The company gave a strong earnings forecast and said demand for its new artificial intelligence tool is unprecedented volunteer works with governments and corporations with sensitive networks. It offers services to analyze information like criminal databases, DMV records, or phone data and more.

Changes on the way of Twitter, Nathan. The company will soon remove accounts that have been inactive for several years. That's the word from Elon Musk, who warns that users could see follower accounts drop after the purge.

Time and not to take a look at some of the other stories making news in New York and around the world. For that were joined by Bloomberg's Michael Barr Good Morning, Michael.

Good Morning, Nathan. Protesters in New York City once again called for charges after the death of a New York Subway writer with a history of mental illness. Last evening, demonstrators and police clashed near the Broadway Lafayette Street station, where Jordan Neely died after he was put in a chokehold,

The City of New York right now is on the edge of making things much much worse, destroying many more lives, hurting many more people. That is what Mayor Adams and his plan is going to do.

County Executive Day has declared a state of emergency. Jury deliberations are expected to begin today at former President Trump's civil trial in New York. It stems from the alleged rape of writer e Jen Carroll in the nineteen nineties. Trump denies that had happened. Democratic members of the Senate Judiciary Committee have asked billionaire Republican donor Harland Crowe to lay out in detail any gifts or payments made to Supreme Court Justice Clarence Thomas and his family. As a

Thank you, Michael. Time now for our Bloomberg Sports Update. Good morning, John stan Scheller, Good.

Morning eighth in. The Knicks just play two games in Miami. Ninety six minutes and they trailed for ninety five minutes and twenty seven seconds, never led. Game three held two very brief one point leads in the first quarter last night. At one point, they did cut the Heat's lead down to three.

It never got closer in.

Miami won one oh nine, one oh one and the Heat and now lead the series three to one. Nicks beating at their own game. Normally they have the rebounding advantage. Miami out rebounded them by nine. They grabbed thirteen on the offensive end. Julius Randall was asked about it.

They wanted more Honda. You know, I spend who we are all year and we got to find a way to, you know, step up and make those plays who want to keep the season.

The lost five at the Garden.

Tomorrow with the Knicks facing elimination, the Lakers trailed Golden State of the fourth quarter rally to win by three in La, up three to one on the Warriors. The other two series are tied at two, with Game five tonight Celtics and sixers in Boston Phoenix. In Denver, Nuggets staring Nikola Jokins not suspended. He was fined twenty five thousand dollars for that incident with what it first appeared to be just a Sun's fan was actually the owner

Sports Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on Syria is exam the Bloomberg Business Appen Bloomberg dot Com.

This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. The political lines have been drawn ahead of today's high stakes meeting on the debt ceiling between President Biden and congressional leaders. White House Press Secretary Karine Jean Pierre.

We should not have House Republicans manufacturing a crisis on something that has been done seventy eight times since.

Nineteen sixty Republican Senator Bill Cassidy.

The President needs to show leadership, not just say I want it exactly the way I want it, and I will talk to you otherwise.

Senator Cassidy spoke with Bloomberg ahead of this meeting that is set to get underway after the closing bell. Ahead of it. We are joined now by John Rain's director with the Global Insights and Analysis team at S and P Global. John, it's great to speak with you again. I did find it interesting that they did schedule this meeting after trading ends on Wall Street today. I wonder if they're trying to minimize whatever market impact could come out of what's discussed.

I think you raise a good point there, which is that I think they do want to kind of push this later in the day, potentially even after the media cycle and the nightly news broadcast are out there. I mean, obviously we're not expecting huge developments today. This is almost a meet and greet atmospheric meeting, and really the big news out of today is are they going to meet again?

And if they are, when can this really be a meet and greet? Though, when we are hearing from Treasury Secretary Janet Yellen that that's so called X state for potential default could come in just about three weeks, just a little bit more than three weeks time.

Right, So, I mean, like obviously, although this particular meeting might not necessarily lead to some type of rapid advancement in the negotiations, they're going to have to get there, and they're going to have to get there quick. I mean, there's only six more legislative days before the end of the month where we're going to have both, you know, a House and the Senate in session and Pride and inside DC.

So they're going to have to start moving in the direction.

Of either some type of negotiated solution or what we're beginning to hears you elaborated earlier is the possibility of type of short extension, whether it's one to two weeks, or whether we're looking at conjoining these negotiations with the government funding, which of course will end out at the end of September.

And that's what the President has insisted that he does not want to do. He does not want to tie this to government spending. Are you seeing any signs that he's willing to bend on that point?

I think even announcing the dates that the idea that he's willing to negotiate on government funding We've heard hints from various members of the administration that they think a short term extension would be possible, the White House would be amenable to that are signs that they're willing to kind of link this up.

We've seen this in the past and debt sealing.

Crisis as before, So therefore, I wouldn't be surprised that this is something behind the scenes that there are already somewhat pushing, with almost the House understanding that maybe a debt you know, some type of resolution here, it's going to take longer than three weeks.

We've also heard Republicans insisting that the President needs to speak, particularly with the House Speaker Kevin McCarthy on this, and even a Senator McConnell, who was involved in the negotiations more than a decade ago, is saying that he doesn't have some kind of secret deal to get something done. He's insisting that he's going to stay on the sidelines.

Well, we don't.

I mean obviously that those are the atmospherics that we're going to be seen later on today and that's what we're going to be seeing in this first week or so. But behind the scenes, we're going to see moderates within both parties kind of trying to hash out a deal. So it's important, i think in some respects because McConnell was so instrumental in getting deals in the past. So if he sits on the back bench this year and then it's really just McCarthy and Biden McCarthy.

And somewhat to somewhat dependent.

On those conservative Republicans and sot there any deal that he ends up making is maybe going to cost him boats within his caucus to.

Keep his speakership.

So therefore, despite the the fact that we're likely to see these guys coming out of this press conference saying, hey, listen, we have a new date, we're looking forward.

Things are moving, you know, in a positive direction.

At the end of the day, it's going to be moderates within both parties that are actually going to be able to push a deal across the finish line.

Is there enough support for a moderate deal in Congress when you have a lot of very conservative Republicans that Speaker McCarthy Hinges onto maintain his speakership. We got about a minute left here.

Sure, yeah, I think in all honesty, it will be difficult if the White House doesn't budget at all. In House Republicans don't budget all, it doesn't really matter. I mean, I think both parties necessarily will not necessarily vote that thing again across the finish line.

But at some.

Point, you know, just as we get sooner and sooner and we really understand the limits that the US is facing, I think the moderates take the forefront end end of actually creating a deal.

For no other reason, they're gonna have to.

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

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I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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