Trump Changes Tone on Powell & Tariffs; Musk Will Refocus on Tesla
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, the big lift in futures comes after President Donald Trump said he never had any intention to fire Federal Reserve Chair Jay Powell. The apparent walkback comes days after the president posted on social media that Powell's termination, quote, cannot come fast enough. And his National Economic Council director told reporters that

Trump was exploring whether he had the authority to remove the Fed chair, but when asked directly yesterday if he wanted to remove Powell, President Trump had this to say.

Never did. The press runs away with things. Now, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates. If he doesn't, is it the end? No, it's not. The Fed has kept interest rates unchanged this year after lowering them by a full percentage point in the last few months of 2024.

Well, Nathan, the apparent easing of White House pressure on the Fed comes as President Trump indicates a willingness to dial down tariff tensions with China. He told reporters he plans to be very nice to China in any trade negotiations and that tariffs could be reduced if the two countries reach a deal. 145 percent is very high and it won't be that high. It's not going to be that high.

It got up to there. We were talking about fentanyl where, you know, various elements built it up to 145. No, it won't be anywhere near that high. It'll come down substantially, but it won't be zero. It used to be zero. We were just destroyed. China was taking us for a ride and it's not going to happen.

And top Chinese officials, including the central bank governor and finance minister, are in Washington for World Bank and IMF meetings this week. In Beijing, Karen, China says the door is wide open to trade talks. A foreign ministry spokesman says China's pointed out early on that there are no winners in tariff and trade wars. Chinese President Xi Jinping says they undermine the legitimate rights and interests of all countries and hurt the world economic order. China's official Xinhua News Agency says she made those comments during a meeting with the president of Azerbaijan.

Well, Nathan, the International Monetary Fund is slashing its global growth forecast and is warning the trade war could spark even more economic pain. The IMF now expects global GDP to grow by just 2.8% versus its previous estimate of 3.3%. IMF's managing director, Kristalina Georgieva, told Bloomberg the risk of a global recession is growing. If we have this cloud of uncertainty coming lower and lower,

making it difficult for the business community and for households to take decisions

we could have a self-inflicted injury that I guarantee you we would regret. And managing director Kristalina Georgieva and the IMF cut its growth outlook for China and the U.S. by more than most countries. And Karen Elon Musk says he plans to keep advocating for President Trump to pull back on tariffs, but he says the issue is entirely up to the president. Musk says tariffs are impacting Tesla, but not as much as its competitors. We are, at the least...

a company the least affected car company with respect to tariffs we do have localized supply chains in both america europe and china so that's uh that puts us in a stronger position than any of our competitors

And Musk's comments came on the Tesla earnings conference call, but it was the billionaire's remarks about his future work with the government that has the stock on the rise this morning. Starting probably in next month, May, my time allocation to Doge will drop significantly. I'll have to continue doing it for, I think, the remainder of the president's term, just to make sure that the waste and fraud that we stopped does not come roaring back.

And shares of Tesla are up 6% in early trading, this despite the EV maker reporting first quarter earnings below estimates. Well, another big tech company is making news, Karen. Job cuts are coming to Intel. We have more on this exclusive story from Bloomberg's John Tucker. John.

Good morning, Nathan. Intel plans to announce cuts to more than 20% of the workforce. That's about 22,000 workers. This is part of the Silicon Valley-based company's first major restructuring under the new CEO, Lipu Tan. Tan, who took over in March, wants to streamline management and reestablish Intel's engineer-driven corporate culture.

He previously announced the struggling chip giant would sell its majority stake in its Altera business and said he intends to spin off some of the Intel non-core business. It's all part of the turnaround efforts there. Intel has fallen behind its rivals at producing AI chips. It also faces the effects of the Trump administration's trade war with China. They do report earnings tomorrow.

Intel shares have slid nearly 20% over the past month. They're down 43% over the past year. And pre-market, the shares right now up over 3%. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thanks. Well, overseas, shares of SAP are up almost 10%. Europe's most valuable company reported first quarter earnings that topped analyst estimates.

A German software company says profit was fueled by its pivot to cloud services. Let's pivot back here to the U.S., Karen, as the standoff continues between the Trump administration and Harvard University over more than $2 billion in federal funds. The nation's oldest university sued this week to unlock that money, saying the government made unconstitutional demands to overhaul Harvard's governance, hiring, and diversity programs.

Former Harvard president Larry Summers says the university does need to change its approach to anti-Semitism, but he hopes cooler heads prevail. I think there's a risk on both sides. I want to make sure that Harvard does carry through with necessary reform. But gosh, we can't have the government ordering universities around in violation of all the processes that are prescribed by law.

Former Harvard president and current Bloomberg contributor Larry Summers says the government should recognize Harvard's making changes and keep the money flowing through that process. Summers was a guest on Bloomberg's Wall Street Week. It's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A solemn procession brought the body of Pope Francis to St. Peter's Basilica this morning. Amen for me.

The Pope's body will now lie in state. Heads of state are expected for the funeral Saturday in St. Peter's Square. But the three days of public viewing are largely for the faithful to mourn the 88-year-old Pope. Sister Jeanette Cadet is a spiritual leader who served under the Pope in Rome. He was somebody that I will never forget because he was so personal and funny.

Personal and funny and full of joy and hope. Francis died Monday after suffering a stroke. Health and Human Services Secretary Robert F. Kennedy Jr. questioned the need for all children to get COVID shots amid reports that the U.S. government is considering revoking its current vaccine recommendations.

Kennedy says President Trump doesn't believe that anybody should get mandatory vaccines and people should make that choice for themselves. His comments come after Kennedy announced earlier a government campaign to phase out petroleum-based dyes from the nation's food supply, saying it makes children sick. They want to eat petroleum. They ought to add it themselves at home.

They shouldn't be feeding it to the rest of us. The move will trigger changes in scores of products on grocery store shelves.

Crews are battling a forest fire in southern New Jersey. It has shut a stretch of the Garden State Parkway, sparked evacuations, and threatens to snarl commuters. The fire has grown to 8,500 acres with 3,000 residents evacuated, inching closer to the Oyster Creek Nuclear Power Plant. This resident says he felt helpless as flames and smoke spread out. As the day progressed, it was kind of scary. You didn't know exactly what was going to happen.

Should you leave? Should you stay? What should you take with you? The fire is only 10% contained.

Finally, opening statements are scheduled for this morning in New York in former movie mogul Harvey Weinstein's rape retrial. It will be with a majority female jury with seven women, five men, and six alternate jurors. Weinstein, who is 73, has pleaded not guilty and denies any rape or sexual assault. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on Emirates.com. Fly Emirates. Fly better.

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Time now for the Bloomberg Sports Update, and here's John Stashower. John, good morning. Good morning, Karen. High hopes for the Mets this season. Made it to last year's NLCS, then added Juan Soto, who has not broken out yet, but the Mets pitching has been outstanding at 2.37.

They've got MLB's lowest team ARA, and the Mets keep winning at Citi Field. Now 11-1. They beat the Phillies 5-1. This time it was Griffin Cannon working five strong innings, four relievers, then hurled four scoreless, allowing only one hit. A little payback for the Cleveland Guardians, who lost last year's ALCS to the Yankees. They scratched across three runs, sixth inning, beat the Yanks for the second night in a row, 3-2. Red Sox beat Seattle 8-3. Nationals 7-0 over the Orioles.

home teams won in the NBA playoffs, Indiana and Oklahoma City. Both now have two nothing series leads. The Lakers got 31 points, a near triple double from Luka Doncic, won a low scoring 94 to 85 game of Minnesota. That series tied at one. The Devils are banged up for their series with Carolina. They scored first about four minutes in, but the Hurricanes who won game one, four to one,

took game two, three to one. Also winning the Stanley Cup playoffs, Florida, Minnesota, and Toronto in overtime. The NFL draft begins tomorrow night in Green Bay, and the Tennessee Titans have confirmed they are not trading the first overall pick. Unless everyone is wrong, they're taking quarterback Cam Ward. Cleveland picks second, may well take Colorado's two-way star, Travis Hunter. He plays wide receiver and cornerback. If the Browns don't take him, the Giants might with the third pick. Here's Giants coach Brian Dayball on Hunter.

Well, it takes a long time to evaluate him because there's a lot of tape. It's really remarkable what he has done and the ability to perform at that level, not really getting a rest. The Patriots have the fourth overall pick. The Jets have the seventh. John Stasch, Bloomberg Sports, Karen Nathan.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. President Donald Trump appears to be softening his tone when it comes to the Fed and China. With both the U.S. and China leveling triple-digit tariffs against each other, the president now says he plans to be very nice in any negotiations. We're doing fine with China. We're doing fine with every country.

I think almost every country, everybody wants to have involvement with the United States. And that was President Trump speaking in the Oval Office. This morning, we were joined by Bloomberg News senior editor Derek Walbank. So there we heard the president, Derek, saying he plans to play nice, not just with China, but other countries. But where do things stand substantially when it comes to the trade dispute between the U.S. and China? Good morning.

Good morning, Nathan. Let me underline the word that you said substantially, right? Because it's different than sentimentality. And we've seen a little bit of a sentiment uptick in markets following not just the China trade remarks, but also the remarks that Trump made about not wanting to fire Jay Powell. On the trade side...

Nothing has changed on the substance right now. What you've gotten is a sort of underlining from the president of something that I think he and his team had been sort of marking, which was that the China tariffs right now are intended to be at their high water mark, and that provides...

a certain amount of security against potential downside additionally. He's also sort of talking up the idea that they would like to get a deal. But let's stress here, while there are plenty of options to begin them, there are no current options.

high-level talks between the U.S. and China. And indeed, when we're talking about easier deals to make, you would think easier deals anyway, with top allies, be that Japan, be that the United Kingdom, be that Israel, whoever you might want to put into there, we still have not seen the first of those deals

actually come to fruition. So the idea that China, which would be hypothetically a lot more fraught, the idea that we might be coming down anytime soon because a deal might be signed, there's not necessarily talks in the works yet. So all of that feels a little bit preliminary. And there's still a question, isn't there, Derek, about

what the president wants out of a trade deal with China. We've heard a lot of different commentary about what the end goal is here. Or with anyone, really. It's one of the things that I think a lot of nations are trying to ask themselves right now is what does the U.S. want? What is the full scope of demand? And what are the key points that they really need to insist on? You know, we got some clarity with the U.K. that there may be asks

chiefly around agricultural imports, about certain specific tariff lines, autos, things of that nature. And we've heard from Trump, say in certain other cases, he's mentioned automobiles again, or another example with Japan, and he's mentioned agriculture in other settings.

But what exactly that whole thing looks like that will get a deal done very much remains to be seen. You know, you look at Israel, pulled off a lot of the tariff barriers that they had on the United States before Trump's Liberation Day announcement and got hit with a 17 percent levy anyway.

It's hard to kind of see exactly where the frame of these deals are, though at some point this rhetoric is we're in a 90-day window. At some point, the rhetoric has to turn to reality to keep up this sentiment uptick. And the rhetoric around the Fed is that the president says he never had any intention of firing Jay Powell. There's the question about whether he could do that, but he's still talking about wanting to lower interest rates. So where is the pressure on the Fed in our last 30 seconds?

Well, I think, Nathan, the pressure on the Fed comes into the fact that Donald Trump believes he has a First Amendment right to say exactly what he wants on the Fed, and he is going to continue doing it. He is going to use that megaphone to say exactly what he wants out of the Fed. Right now, what he wants is lower rates. He wants them now. He wanted them before, but he really wants them to go now as quick as possible.

And look, even if Jay Powell's job seems safe for right now, he's still going to hear from the president about exactly what the president thinks he needs to do. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg.

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I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak. Big news! Verizon Small Business Days are here from April 21st through 27th. Book your appointment today to make our experts your experts. Get a free tech check, special deals, and personalized advice. Call 1-800-483-4428.

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