Harvard Foreign Student Ban 'Stuff Of Tyranny', Tax Bill Unsettles Bond Market
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Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Daybreak Europe podcast available every morning on Apple, Spotify or wherever you listen. It's Friday the 23rd of May in London. I'm Caroline Hepker. Coming up today, the Trump administration blocks Harvard from enrolling foreign students and warns other universities could be next. The

The yield on 30-year treasuries heads back above 5% as Trump's big, beautiful tax bill moves to the Senate. Plus, seeing into the future, Apple hopes to release a set of smart glasses by the end of next year. Let's start with a roundup of our top stories.

The Trump administration has blocked Harvard University from enrolling international students. In a statement, the U.S. Department of Homeland Security accused Harvard of fostering anti-Semitism while also claiming that the institution's leadership was coordinating with the Chinese Communist Party.

Speaking on Fox News, Homeland Security Secretary Kristi Noem warned that the administration is considering blocking international enrollment at other universities. There should be a warning to every other university to get your act together. Get your act together because we are coming to make sure that these programs, that you are facilitating an environment where students can learn, where they're safe and that they're not discriminated against online.

based on their race or their religion. Anti-Semitism will not be stood for and any participation with a country or an entity or a terrorist group that hates America and perpetuates this kind of violence, we will stop it.

Kristi Noem appearing there on Fox News as the administration said that existing international students must transfer or lose their legal status in the US. The response from Harvard that the government's latest action is unlawful. Harvard President Emeritus and former US Treasury Secretary Larry Summers blasted the Trump administration's decision saying that it goes against the principles of democracy. Harvard has unlawfully

a clear necessity right now. Resist and reform. Resist because this is the stuff of tyranny. And if an institution like Harvard with a $52 billion endowment, with the staggering network of alumni that we have,

If it can't resist these kinds of movements towards tyranny, I don't know what other American institution will be able to do that.

Larry Summers speaking there to Bloomberg. The blockade on international student enrolment will compound the financial pressures for Harvard. The Trump administration has already frozen more than $2.6 billion of funding for the university and cut off future grants over the school's handling of alleged anti-Semitism and government demands for more oversight.

Meanwhile, the U.S. Supreme Court has shielded the Federal Reserve from President Trump's push to fire top officials at independent federal agencies. In a ruling on Thursday that allowed the administration to oust officials at two other agencies, it called the Fed a uniquely structured quasi-private entity.

The decision will likely quell concerns about the ability of the president to fire Fed Chair Jerome Powell. President Trump sent conflicting signals last month.

saying that Powell's termination cannot come fast enough, before then telling reporters he had no intention of firing him. U.S. House Republicans have passed a major tax cut bill, which is increasingly giving the bond market indigestion. The Senate is yet to weigh in on the bill, which promises to extend tax cuts from President Trump's first term in office with added exemptions.

Principal Asset Management's Chief Global Strategist Seema Shah says the package is on a collision course with the markets. Increasingly, it feels like this administration is going to have to confront the problems because the bond market has lost patience and is really going to

force the issue through to make sure that there is some realisation that continuing to expand its deficit, its debt numbers indefinitely, is simply not something which can continue. Seema Shah adds that she already sees pressure in equity markets from high bond yields and warns that that may grow. The 30-year Treasury bond touched 5.15% yesterday before paring back to 5.09%.

US President Donald Trump initiated a phone call with Japan's Prime Minister Shigeru Ishiba and discussed tariffs for the first time since April. The conversation between the two leaders comes as Tokyo's top negotiator travels to the US for another round of trade talks. According to

Ishiba, President Trump avoided saying anything specific about tariffs, whilst he, for his part, reiterated Japan's existing stance on levies. The two agreed that they're looking forward to meeting in person at a group of seven leaders gathering in June in Canada, according to

Ishiba. Christine Lagarde has warned international trade will never be the same after US tariff tensions. This was during an interview with the Canadian Broadcasting Corporation. Speaking on the sidelines of the G7 finance officials meeting, the ECB president did note that she expects further negotiations over international levies. In a separate interview, Lagarde said that the impact of tariffs on inflation is hard to gauge for Europe

policymakers, making it a, quote, delicate situation. ECB officials are widely expected to lower borrowing costs in two weeks' time, with inflation heading towards the 2% goal in Europe and US tariffs also weighing on the European economy.

Now, here in the UK, consumer confidence rebounded slightly in May on the back of trade deals and an interest rate cut. Gfk's sentiment gauge surprised upwards, rising three points from April to minus 20. Bloomberg's James Walcock has the story. Rising bills, fears around growth and global economic uncertainty. You'd expect a healthy dose of negativity, but consumers seem to be looking on the bright side of life.

The latest GfK survey's upwards surprise suggests the Labour government's series of deals is shifting the public mood marginally upwards.

But will the sentiment feed through into reality, particularly GDP and spending metrics? That is what the government will be hoping. In London, James Wilcock, Bloomberg Radio. And lastly, Apple is aiming to release new smart glasses at the end of next year as part of its push into AI-enhanced gadgets.

The tech giant is looking to challenge competition from rivals, including Meta,

known for their AI Ray-Bans. And those are our top stories for you this morning. So, in terms of the markets, then Asian shares are rebounding. The MSCI Asia Pacific Index is actually up half of 1%. And you've got gains across Asia this morning. Thinking about stock futures then for the US, we're pretty range bound actually. The S&P 500 E-mini is not going anywhere. US stocks 50 futures are up by a 10th

of 1%. Bonds and the dollar gained on Thursday. You've got, though, the dollar resuming weakness this morning down by three-tenths of 1%. And, of course, we've been closely watching long-term borrowing costs, the 30-year yesterday, which remains above 5% this morning. Looking at the 10-year U.S. yield, we trade now at 453. Bitcoin has drifted

And oil prices are down gold, though, higher, six-tenths of 1%. So that's a look at the markets. Now, in a moment, we're going to bring you more on today's top story, the Trump administration's fight with Harvard and the growing unease in bond markets about President Trump's tax and spending bill, which squeaked through a vote in Congress on Thursday. But before we get to those, another story that caught my eye today,

I know you know we're obsessed with food, but this story did catch my eye because now I have some great foodie recommendations for London from the wonderful Eileen Bagbo, who's been writing about chefs creating incredible, innovative Caribbean food in London.

And they're on a mission, she says, to bring recognition and a Michelin star to their cuisine. So she's been talking to people like Dominic Taylor, who has a new restaurant in Ladbroke Grove in London, if you're a resident in the city, after his standout residency at the Palm

Court at the Langham Hotel. His dishes including rum, raisin, pork belly, crispy spiced banana blossoms. Yes, maybe I'm hungry. It's Friday morning. But she's also spoken to a lot of other chefs, including Jason Howard. And she lists a lot of different restaurants in London, like Soul Mama in Stratford and Jam Delish in Islington. Anyway, gave me inspiration for my weekend. I hope it's inspired you to go out and eat something delicious in London. I'll put a

note actually in our show notes to the story by Eileen Bagbo at Bloomberg so that you can get all the details. Now, the Trump administration has blocked Harvard University from enrolling international students, citing the university's failure to condemn anti-Semitism. It is a major escalation of a fight with elite U.S. universities. Joining me now is Bloomberg's EMEA news director, Roslyn Matheson. Morning, Ros.

How does the Trump administration justify this? What does it say about revoking Harvard's Student and Exchange Visitor Program, which is the official name?

Well, that's right. As you say, they're threatening to do this. They've actually given Harvard 72 hours to come good. And what they say is they've been trying to get Harvard to turn over a lot of information on their students. So some of the student records, their own internal records for disciplinary action, if any, video footage and so on, because the broader allegation, of course, is that Harvard has fostered a climate of anti-Semitism in its student body and on campus.

as a whole and that Harvard has actually apologised for that already saying that yes there was some anti-Semitism related to protests over Israel's war in Gaza but equally it's been declining to turn this information over and so now we see the escalation which is if you don't turn this over in 72 hours we're going to

make it impossible for you to have international students, which would be a massive, massive escalation for Harvard and really call into question. So university has been around for hundreds of years. And, but if you've 30% of your student body, you know, comes from abroad, the question is what does it do to Harvard's ability to keep going? So what's the university saying and doing about this?

So Harvard says that they defend the right to have international students, that they welcome international students. They're working to be able to preserve this and that they have students from 140 countries around the world. And they point out it doesn't just enrich Harvard, the university, but obviously the greater area because Harvard...

Students come and pay tuition, but they also come and eat, live, spend and so on. And so you're talking about quite a big part of the economy as well for the US. And so they haven't said what they're going to do, if anything, legally. Of course, there's other legal action going on with Harvard over some of the funding that's been frozen or lost legally.

$2.6 billion of it. And so do they go down the route? Do they argue that due process was not followed here? If they're going to do legal action, you'd imagine they'd have to announce that pretty quickly. Yeah, it's a huge part of America's soft power, isn't it? Larry Summers was sort of talking about that, that these students coming from abroad, they create businesses, they invent things, you know, they're the best and the brightest, you know, according to him. Anyway, Homeland Security Secretary Kristi Noem, though, was clear, wasn't she, that in

in terms of the warning to other universities that they need to get their act back together. What do you think is going to mean for higher education in the US? Well, we can also see potential warnings against Columbia University. So it's not just Harvard that seems to be targeted here potentially. And as you say, the broader message around international students, but not just students, but academics,

This goes to the heart, really, of the ability of the US to bring in smart people to do science, to do research, to innovate and to contribute to the US economy through that and do those people, rather than going into the US, start to look to go elsewhere. So you can see we get all those questions around brain drain that come up. Do academics, do students opt to go elsewhere? And so do you see the US...

bit by bit, slowly lose out. Yeah. Okay, Ros, thank you so much for being with us this morning. It certainly caught the attention of our readers. They are the most well-read stories at the moment, two or three of the top-read stories on the Bloomberg terminal around Harvard. That was Bloomberg's EMEA News Director, Roslyn Matheson.

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Now, President Trump has passed his tax bill in the House. Now, the signature legislative package goes to the Senate. But the bond market is showing the unease of investors. 30 U.S. Treasury yields reached a peak of 5.15% in the U.S. this week. Bloomberg Markets Live's Trashist, Mary Nicola, joins me this morning. Hi, Mary. Hi, good morning. How much do the bond markets dislike, even hate, this Trump tax cut bill?

Yeah, it's very clear that the pressure is going to remain on the bond markets because the overall tax bill has been more about tax cuts than spending cuts. And that is obviously not sitting well with bond markets, with bond investors. And of course, now that it's passed...

the House, it's going to go to the Senate. And of course, that's going to be a drawn out process as well. So tensions aren't going anywhere in the bond markets. And I think if you look at the longer end, I think they're likely to stay elevated for quite some time as the focus shifts on fiscal sustainability and how much can this actually hold up.

Yeah, absolutely. It passed 215 to 214 votes in the House. So it really was close. The Trump administration argues the bill will boost and increase business sentiment, unlock spending and investment. It's promising growth effectively. Is that not enough?

Especially with what's happening on the tariff side, and there's still a lot of uncertainty. So if we look at what we saw from corporate earnings and corporate outlooks, the main thing, yes, corporate earnings were fine, but it was the outlooks. The outlooks were concerning. There was a lot of murkiness surrounding the outlook for a lot of companies with even some questioning how things would unfold, especially with retailers and Walmart even questioning

raising concerns about increasing prices over the next few months. So if you still have that policy uncertainty, it may not be enough to, with the tariff uncertainty, it may not be enough to overshadow some of the benefits that can come through from the tax bill. And of course, the fact that you don't have fiscal sustainability as well, that's going to keep markets nervous.

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London DAB Radio, the Bloomberg Business App and Bloomberg.com.

Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa, play Bloomberg 1130. I'm Caroline Hepke. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day, right here on Bloomberg Daybreak Europe.

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