Bloomberg Daybreak: US Edition

The Federal Reserve raised interest rates by a quarter percentage point and penciled in an additional hike later this year, steps aimed at containing inflation that will test Chairman Kevin Warsh’s relationship with President Donald Trump.
“Today’s policy action will support a timelier return to the committee’s 2% goal,” officials said in a statement following the move Wednesday, referring to inflation. It was the US central bank’s first rate increase since July 2023.
Bloomberg's Tom Keene, Jon Ferro and Lisa Abramowicz break down the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.
See omnystudio.com/listener for privacy information.

Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) Senior Trump administration officials met with Anthropic's top Washington executive to discuss artificial intelligence safety risks. Tensions between Anthropic and the administration were reignited by a essay posted by the company's CEO Dario Amodei, who called for government regulation and urged pacing development of the most advanced AI systems. President Trump dismissed fears about AI risks as "a hoax" and rejected the idea of new rules, while leading AI developers have begun discussing AI safety concerns among themselves.
2) The Federal Reserve is expected to lift interest rates on Wednesday for the first time since 2023 as policymakers lose confidence that inflation will cool sufficiently without at least a nudge from the central bank. A rate hike could provoke fresh criticism from the White House, with President Donald Trump recently arguing that the US should have the lowest borrowing costs in the world. The Fed will release a post-meeting statement and updated economic forecasts and rate projections on Wednesday, with Chairman Kevin Warsh scheduled to hold a post-meeting press conference 30 minutes later.
3) European Commission President Ursula von der Leyen proposed Canada becoming the first associate member of the European Union. Von der Leyen discussed closer cooperation with Canada on manufacturing, tech, defense and energy, and cited the Arctic as a “flagship joint project.” Canada's priority list includes concluding the ratification of CETA, the EU-Canada Comprehensive Economic and Trade Agreement, and ironing out differences over EU's carbon pricing tool and rules.
See omnystudio.com/listener for privacy information.

Today's top stories, with context, in just 15 minutes.

On today's podcast:

1) The Supreme Court refused to clear the Postal Service to enforce new restrictions on mail-in ballots for the congressional midterm elections, rebuffing the Trump administration’s request to intervene. The court denied the Justice Department’s request to lift a Boston federal judge’s order that barred the Postal Service from making its new mail-in ballot rules mandatory through the November contests. The Supreme Court's decision means that the Postal Service cannot enforce the new rules for the midterms, but the legal fight over whether the agency can ultimately adopt the rules for future election cycles may still continue.

2) The 10-year US Treasury yield rose to the highest in almost two decades, driven by surging energy prices, mounting debt and inflation. The yield on the global bond benchmark rose to 5.02% on Tuesday, surpassing a peak from 2023 to hit the highest since 2007. The pressure in the bond market raises the stakes ahead of the Federal Reserve’s interest-rate decision, where investors expect officials to raise short-term borrowing costs for the first time since July 2023.

3) President Trump's opposition to guardrails on artificial intelligence puts him at odds with lawmakers from both parties who have AI safety fears. Trump belittled a push led by Anthropic PBC and OpenAI to slow work on cutting-edge systems, dismissing existential fears about AI as "a hoax." Lawmakers are working on legislation aimed at addressing AI safety concerns, including a bipartisan group of senators who are working on legislation requiring top AI developers to prevent catastrophic risks.Eric Mollo
See omnystudio.com/listener for privacy information.

Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) Anthropic and OpenAI are promising measures to rein in the pursuit of cutting-edge AI models to better understand the risks posed by the technology following a series of security breaches. The two companies' calls to slow down AI development may be resisted by forces in the tech industry, financial markets, and the Trump administration, which has staked its economic agenda on aggressive AI advancement. Anthropic CEO Dario Amodei has proposed opening the company's doors to third-party evaluators to review new systems before their release, and OpenAI CEO Sam Altman has said he likes the idea and plans to implement it at his company.
2) Oil prices rose after Saudi Arabia closed a major crude pipeline following attacks, disrupting a key route that bypasses the Strait of Hormuz. The closure may lead to output cuts if it is prolonged, according to June Goh, senior oil market analyst at Sparta Commodities SA. A meeting between Iran and several Gulf nations on creating a temporary shipping lane through Hormuz was postponed, amid a rapid military advance by Iranian-backed Houthi militants in Yemen.
3) The Fed faces pressure to hike interest rates to tame elevated inflation, which puts Chair Kevin Warsh on a collision course with President Trump, who has pressed the central bank to slash rates. Trump has repeatedly argued that US borrowing costs should be the lowest in the world, and a rate hike could lead to a public rebuke from the president, damaging Warsh's credibility. Warsh is trapped in an institutional vise, where he must balance the Fed's independence with the president's pressure, and a decision to hike or hold rates could have consequences for inflation and the administration's economic goals.
See omnystudio.com/listener for privacy information.

Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week.
In the US – a look ahead to the next FOMC decision, along with a focus on 3 stocks for the week ahead.
In the UK – a look ahead to Sweden’s general election.
In Asia – a look ahead to the next monetary policy decision from the Bank of Japan.
See omnystudio.com/listener for privacy information.