This is "Balance of Power," live from Washington, D.C. From Bloomberg's Washington, D.C. studios to our TV and radio audiences worldwide, welcome to "Balance of Power." President Trump nominates Stephen Miran to be the next Fed Governor today. Coming up: the signing of an executive order targeting banks for alleged political discrimination after the President said he was personally denied access to financial services by major banks for ideological reasons. Plus, companies scramble as new U.S. tariffs take effect. The fresh test for the global economy tonight with the arrival of sweeping duties on imports. The next steps in the President's push to reshape global trade and the impact on investors and consumers up ahead. Also tonight, Vladimir Putin and President Trump finalizing details for a meeting in the next few days according to the Kremlin. A Kremlin official saying a venue has been agreed upon. With the White House response and what could be a breakthrough in the peace process when we speak with former U.S. Ambassador to Ukraine Bill Taylor. And the FBI agreeing to assist state authorities in locating Democratic lawmakers who fled Austin to block a vote on new congressional maps. What the senior Senator from Texas is saying about his request to the FBI up ahead. We start with big news coming out of the White House a short time ago. The President announcing his pick for the newly vacated Federal Governor seat. The President posting on Truth Social, "It is my great honor to announce I have chosen the current Chairman of the Council of Economic Advisers to serve in the just-vacated seat on the Federal Reserve Board until January 31, 2026. In the meantime, we will continue to search for a permanent replacement." We were joined by Stephen Miran on the early edition of "Balance of Power," and he talked to me about the search for a permanent Fed Governor. Bloomberg's Michael McKee joins me from Bloomberg World Headquarters in New York. His Bloomberg reporting has been on top.
Maybe he can help shape the policy going forward. The issue is he is going to leave the CEA, so if he does that, it seems logical that the President would appoint him permanently to that seat if he decides that he can take a chance that Jay Powell will resign in May when his term is up as Chair, or if he decides to promote Chris Waller, our other scoop today, to the Chair's job who already has a seat.
We talked to Stephen Miran about that, this scoop that there is a new frontrunner. We asked about his thoughts on Mr. Waller and if he was advising the President to go in that direction.
I think Governor Waller has built up a really impressive record in the last few years at the Fed with his predictions about inflation, with his predictions about where Fed policy needed to move to respond to that inflation, and I think he has done himself a big credit recently as well not succumbing to the tariff derangement syndrome that many others throughout the country, but particularly at the Fed, seem to have succumbed to.
I don't know if he came up with tariff derangement syndrome. That's a good one.
There's not going to be another open seat that they can be sure of, so by putting Waller in there, they have enabled the President to fill the Kugler seat with somebody who would spend longer on the Fed. The other thing is that Waller has espoused the view that the President has clung to that there should be rate cuts. Waller is not going to do 300 basis points, but he would be in favor of a lower neutral rate. The interesting question, though, is if Waller were nominated to be Chair, he would not take over until next June, and if that were the case, we do not know what the economy will need. Perhaps by that time, inflation breaks out, and the President is tweeting every day that we need to raise rates. Anything is possible, but Waller seems more aligned with the President and some others, and he does seem to check a couple of other boxes that would make it convenient for him to be picked.
It was a busy day in the throes of August from tariffs taking effect sending countries scrambling to the President's meeting with Russian President Vladimir Putin. The President was up late posting just before 12:00 a.m. on Truth Social, "It's midnight" -- all caps -- "billions of dollars in tariffs now flowing into America." Are the numbers that we see here going to be in place from now on?
Unfortunately for those seeking clarity or certainty, we still have a long ways to go. We had those that have reached deals with the U.S. still seeking clarity on what these deals entail including Japan, the EU, and Vietnam, and then we have potential escalation in some of the ongoing bilateral trade spats, and of course we have looming sectoral tariffs and ongoing court cases about whether many of these tariffs are even legally sound. I think we are still a ways off from being fully finished with this trade war.
Does not sound like a clearing event for the market certainly. There's also the prospect of massive geopolitical development with the Kremlin telling us that they are putting the final touches on an in-person meeting. Venue selected between President Trump and Vladimir Putin. We do not have details on that meeting and the White House has not confirmed what the Kremlin is telling us. We do know that President Trump has said that Zelenskyy needs to either meet first with Vladimir Putin or needs to be at the table for a three-way conversation. Will Putin green-light that idea? Hard to imagine Putin green-lighting that idea after many months refusing to accept it. The other thing that is looming is Trump's deadline for Putin to agree to some sort of cease-fire with Ukraine, so I think one question that always looms in the back of my mind when it comes to Moscow is: is this some sort of delaying tactic to extend that deadline or try to give Trump a reason for backing down from his prior threats of more sanctions?
Thank you so much for the insights. Joining us for more on this proposed meeting, William Taylor, the former U.S. Ambassador to Ukraine in both the George W. Bush and Obama administrations. Ambassador, it is great to have you here on Bloomberg TV and Radio. The going logic in Washington right now is that an in-person meeting would represent a win in itself for Vladimir Putin. Is that how you see this?
It is. Vladimir Putin clearly wants this meeting. I have already started working on preparing for that meeting. They are looking for a venue. They say they have a venue. This is all the way in front of what is going on in Washington, as you point out. Putin clearly wants this meeting. This is a way for him to get back in, to come in from the cold, to basically rejoin polite society. He is an indicted war criminal. He has been a pariah, and he looks for this to get him back in.
The idea of President Zelenskyy being at the table is fascinating given the relationship he has right now with Vladimir Putin. President Trump says he is open to a Trump/Putin meeting without Zelenskyy, but there was also a suggestion that Zelenskyy meet first with Putin. Does any of this sound realistic or does the stipulation of Zelenskyy's involvement keep a meeting from happening at all?
The general principle has been over time, over past administrations, including this one, is nothing about Ukraine without Ukraine. That is, Ukraine needs to be there when its fate is being discussed, when a cease-fire is being discussed. A cease-fire is between two parties, between the Russians and Ukrainians, so the Ukrainians have to be there for any of that kind of discussion. That is going to be very important. Putin has shown a reluctance to meet with Zelenskyy, and the relationship between Zelenskyy and Trump has improved dramatically over the past several weeks and has gotten much better than it was earlier in the administration.
President says secondary tariffs on countries buying oil from Russia go in place tomorrow with or without a meeting or whatever progress could be inferred from these talks. Do you believe that is the case, and will the President bring them down once he gets in a room with Putin?
First of all, some of those tariffs are already on. President Trump has put tariffs on India for buying oil from Russia. I think the tariff is at 50% on India. That is a major blow to one of the two big purchasers of Russian oil. The goal is to reduce the flow of money, of cash into the Russian economy so they have a harder time pursuing this war against Ukraine. The other big one, though -- you are right -- is tariffs on imports from China if China continues to buy oil from Russia. That could come.
Do those secondary tariffs change behavior? Nothing has yet when it comes to Putin.
You are exactly right. Even more important is what President Trump announced earlier, about two weeks earlier, weapons. He had been hesitant to provide new weapons to Ukraine, and he has decided that the Europeans can buy weapons from American suppliers, and then the Europeans will provide those weapons to Ukraine. That is a big change for this administration from earlier parts of this administration. That is a message to Putin that he cannot outlast us. His only way of winning this thing in his mind is to outlast us, and that is a message on both the tariffs but also the weapons, is a message that he cannot outlast us.
I think the mission of Trump, Zelenskyy, and Putin all at the same table here, and the idea that you testified in the impeachment inquiry for Donald Trump in November of 2019 -- to what extent does the perfect phone call inform outcomes at the negotiating table?
I think not at all. I think we are well past all of that. I think it's clear what we are talking about here is this war, which, of course, did start in 2014, but the big war started in 2022, and that is what President Trump is focused on. He has been focused on that since the campaign last fall. He said he could do it in 24 hours, but he has focused a lot of his own, personal attention and that of his administration to this war. He wants to end the fighting. He wants to end the war. If he does, he is in line for a big prize, and that is the goal. That is what is driving this right now.
You don't mean that literally, I'm guessing? Nobel?
I do mean it literally. If he brings peace on a just and lasting basis that the Ukrainians can agree on, the Europeans can agree on, and there is justice and a lasting peace, sure, that is worthy of a prize.
Come back and talk to us if that happens. William Taylor, former U.S. Ambassador to Ukraine, enjoyed the conversation. Thank you for the insights. Coming up, President Trump calling on the Intel CEO to resign immediately. First, the President is doubling tariffs on India to 50% over his purchasing of Russian oil as we were just discussing with the Ambassador. We will get into this with Daniel Tennenbaum next on "Balance of Power," Bloomberg TV and Radio.
Last week, it was announced that our economy grew at levels that we have not seen in a long time, but the real levels of growth will be judged a year from now when you start seeing some of these incredible plans. We have a market which is at way above average valuations with way above average earnings expectations with way below average volatility at a time when the economy is clearly slowing and the tariff bill which we know is coming has not even started to be paid yet. I'm telling you, the thing that has gone up is stock prices, and success of our country. I think it will be bad in a number of places. I will say that U.S. companies and consumers will feel the pain. I think we are at the beginning stages of seeing some of the impacts on goods prices.
President Trump with his view of the impact on the economy along with some experts contradicting those statements. The President's new tariff rates in effect, only hours old. Scarlet Fu joins us from World Headquarters in New York. Here we go again. Happy Liberation Day all over again. We are still pretty close to record highs.
You could say the reaction from markets was kind of a collective shrug because stocks did open higher before losing steam. A lot of buying has left the S&P 500 little changed and the Nasdaq in the green. You can see the Dow Industrials losing ground and the dollar little changed. This chart tells the story of the stock market. The President referenced how the stock market was doing well. Tariffs are a major headwind around Liberation Day, but investors adjusted to the reality, which is there will be tariffs and they will be higher than what we had a year ago and the White House is using tariffs as a negotiating tactic for extracting concessions from other companies. Companies have adjusted as well and you can look further than, for instance, what has happened with Apple, rounding off a two-day 8.4 percent rally, bumping up against its long-term trendline. The stock at $220 a share. This is believed that Tim Cook, the CEO, has found a way to avoid the extra tariffs President Trump is betting on semiconductors. President Trump says Apple plans to spend an additional $100 billion on manufacturing to gain an exemption from these additional tariffs. We are also keeping an eye on Caterpillar. The stock declining following an analyst downgrade from Morgan Stanley, which says the results should be viewed in the context of a tariff headwind because these are very real costs of doing business. The analyst also says Caterpillar does not have as much pricing power as it might have thought. We also want to keep an eye on Eli Lilly, falling on some disappointing data related to its weight loss pill. These losses have dragged the entire pharmaceutical sector lower. We saw pharma stocks as the worst performing industry group in the S&P 500 among two dozen groups. You can see a big step lower for Eli Lilly shares. Finally, Intel down after President Trump urged the CEO to step down over what he called conflicts of interest. This follows Senator Tom Cotton raising questions about the Malaysian-born CEO, his ties to China as well as investments in Chinese semiconductor companies, so that is something we will keep an eye on for you.
Just what Intel shareholders needed now. For more on the impact of these tariffs, we turn to Daniel Tennenbaum, Partner at Oliver Wyman, Nonresident Senior Fellow at the Atlantic Council. It's great to have you. We spent the last few weeks, months, talking about the taco trade and what we just heard from Scarlet, the market hanging below recent levels. You are using a new term, empanada. Everybody makes promises and doesn't do anything.
The market is not really seeing through to what some of these tariffs mean, and ultimately, that does mean increased prices to consumers. If it is raw materials impacted by tariffs, companies maintain stockpiles in the U.S., ultimately those will run out. China, for instance, still has that edge on rare earth elements that they can ebb and flow what they are allowing to the U.S. The market is not really pricing in some of these broader impacts. I'm not sure it is putting those pieces together yet until the consumers really feel the pain.
Or is Wall Street also waiting for a China deal? Not all of this is sewn up yet. We have an elusive China deal and a few other things to come back on including sectoral tariffs. We can get into chips if you want, but wouldn't a deal with China buoy spirits in this market?
From what we have seen, these deals are really high-level frameworks. We have seen the President go back and forth on a number of issues, not just tariffs. Certainly we have seen that on Russia in the last 24 hours, but it is hard for people to really find a clear course for how to manage their business going forward. I do think we are seeing a number of businesses in their earnings announce losses, and that is growing. Some are absorbing prices today, but that will not last much longer. As we move into the holiday buying season, consumers feel the pain, and that will be the question of if the market reacts then.
I'm glad you mentioned the holidays. If you got an item on a boat from China by August 7, you are not paying tariffs when you get to port. These ships on the way now I presume are full of goods that will be scooped up the minute they get here. Does this front-running continue?
I think it definitely does. You are seeing companies try to push through shipments in these moments where tariffs are at least as clear as they could be or as low as they may be for the time being. I think there's a practical challenge that there is not enough guidance for companies to go off of to understand how to navigate some of these tariff issues. Even looking at some of the customs information that is going out to brokers, it is not that straightforward. Depending on the goods and when it hit the water and when it is offloaded at the ports. There's a lot of confusion in how this is rolling out, particularly in the changes being so dynamic.
I want to ask you about the secondary tariffs that would be going into place tomorrow, presumably against countries that are buying oil from Russia. One already in place arguably is the extra 25% on India. On "Bloomberg Surveillance" yesterday, a senior Council on Foreign Relations fellow talked about India's lack of leverage when it comes to negotiating with the U.S.
India is in the crosshairs. China should be as well. It is the other large buyer, but India does not have the leverage China has in terms of rare earth magnets. It really does have that trump card over the United States when it comes to negotiating anything these days.
I'm pretty sure India says it's going to continue buying Russian oil.
It is also important to remind people, the viewers, the U.S. purchased $3 billion in goods from Russia last year. It is hardly isolated, and India is hardly alone in buying Russian oil. Heidi mentioned China, even a larger purchaser, but that is the challenge with these tariffs. We are essentially taxing the purchase of goods at the cost of Ukraine and what is happening to them in the war, rather than sanctions, which could potentially cut off certain Indian financial institutions, companies from accessing the U.S. market as a real penalty for continuing to buy Russian oil. Really, all we are doing is enriching the U.S. through this scheme. I don't think this is going to move the needle at all in stopping them from purchasing Russian oil.
Really have an end to it. You see this so-called extra tariff on India as a sanction, actually, from the United States?
No, it is a tax. The point I'm making is that sanctions would likely be more impactful to try to stop them or slow them from continuing to purchase goods. Sanctions will really cut them out of certain parts of the economy more broadly from even accessing the dollar. That would likely have a bigger, more rapid impact if you want them to stop buying Russian oil.
Taxes are added but behaviors do not change. Really great to talk to you. Great to have you with us on Bloomberg. Coming up, the FBI is set to assist in locating Texas lawmakers who fled the state, at least according to Republican Senator John Cornyn. We will bring you the details. But first, how CEOs are watching the President pressure bank leaders and head of Intel. Next on Bloomberg.
This is "Balance of Power" on Bloomberg TV and Radio. President Trump urged Intel's CEO to resign due to what he calls conflicts of interest. The President writing this morning on Truth Social that the CEO of Intel is highly conflicted, he wrote, and must resign immediately, he wrote without providing evidence or additional detail. He did not respond to a request for comment on President Trump's post. Joining us now is Bloomberg's Ian King, who is live in our San Francisco bureau. What's the conflict? We understand this has something to do with the Intel CEO's relationship with the P.R.C.
It is not for me to comment on what the President is up to other than to tell you that his comments this morning came on the back of a letter from the Senator yesterday basically saying what you just said, which is that the current CEO of Intel has these ties with the People's Republic of China based on past activities, past roles he has had and past investments that he has made, and therefore, that makes him have a conflict of interest at a company which is so important to the U.S. economy and security, and the President apparently riffed on that and said that he should step down.
This is news that arrives just hours after President Trump said he would impose a 100 percent tariff on chips and semiconductor imports. This rolled out of the Oval Office during a news conference last night with some exemptions for companies moving production back to the United States.
