Trump's Call with Putin; Gabbard Confirmed as Spy Chief
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the latest efforts to end the war in Ukraine. President Trump says he has agreed to start negotiations to end the conflict in a phone call with Russian President Vladimir Putin. Here was the president as heard on Bloomberg Radio. I'll be dealing with President Putin largely on the phone and we ultimately expect to meet. In fact, we expect...

that he'll come here and I'll go there. And we're going to meet also probably in Saudi Arabia the first time we'll meet in Saudi Arabia, see if we can get something done.

But we want to end that war. That war is a disaster. Critics say President Trump is sweeping aside three years of U.S. policy with this call and blindsiding European allies. Defense Secretary Pete Hegseth says Trump's call with Putin is not a betrayal. Certainly not a betrayal. As I said to our allies yesterday, we recognize the incredible commitment that has been made over many years. And no country...

as the President Trump has pointed out, has made a larger commitment. Defense Secretary Pete Hegseth spoke earlier in Brussels.

Meanwhile, Nathan, the president's effort to shrink the size of the federal government continues, but his so-called buyout offer to federal workers has fallen short. And Bloomberg's John Tucker joins us this morning with the details. John, good morning. Good morning, Karen. Only 75,000 federal employees signed up for the voluntary resignation program, so that makes up about 3% of the civilian federal workforce. The White House had previously set the goal at 5 to 10%. Well, this now increases the likelihood of

deeper mass firings. In an executive order signed earlier this week, as Elon Musk stood alongside him, President Trump ordered agency heads to promptly undertake preparations to initiate large-scale reductions in force. Musk has been the driving force behind the effort to reduce the size of government through his so-called Department of Government Efficiency. And he just spoke about the effort at the annual World Government Summit.

it's kind of like if they're leaving a weed if you don't get remove the roots of the weed then it's easy for the weed to grow back but if you remove the roots of the weed

It doesn't stop weeds from ever growing back, but it makes it harder. A U.S. district judge in Boston did clear the way for the buyouts of the federal workers ruling yesterday that their unions don't have legal standing to sue. In New York, I'm John Tucker, Bloomberg Radio. Thanks, John. While the president moves ahead with shrinking the government, one major move is on hold for now. A federal judge in Washington, D.C., has blocked the president from removing the head of the independent agency,

that protects government whistleblowers. The administration did not give a reason for firing Hampton Dellinger as head of the Office of Special Counsel, but in a temporary restraining order, U.S. District Judge Amy Berman Jackson said the move plainly goes against U.S. law. The Justice Department says it will appeal.

Later today, Nathan, the Senate is set to vote on confirming Robert F. Kennedy Jr. as Secretary of Health and Human Services. The 71-year-old is expected to pass through the full Senate despite concerns some Republicans have raised about his views on vaccines. But Republican Senator and Dr. Bill Cassidy says his worries have been put to rest.

Mr. Kennedy and the administration reached out seeking to reassure me regarding their commitment to protecting the public health benefit of vaccination. Senator Cassidy spoke in the Senate floor last week. Robert F. Kennedy Jr.'s confirmation would place him in charge of $1.7 trillion in spending on vaccines.

food safety, and government health insurance programs. Meanwhile, Karen Telsey Gabbard has been sworn in as Director of National Intelligence after she won Senate confirmation in a mostly party-line vote. Gabbard is promising to get right to work.

Unfortunately, the American people have very little trust in the intelligence community, largely because they've seen the weaponization and politicization of an entity that is supposed to be purely focused on ensuring our national security. Tulsi Gabbard didn't specify how U.S. intelligence has been weaponized or what changes she might make. Her office also says she plans to attend the Munich Security Conference this weekend. Well,

We turn to the markets now, Nathan, and earnings are in focus this morning in Europe. Shares of Barclays are down 5%. The British Bank's results did beat estimates, but the firm left its guidance for next year unchanged. Barclays CEO C.S. Venkatakrishnan says he expects to benefit from a loosening of U.K. regulations. I expect...

that you will see some rebalancing. But, you know, I should say that we want the rebalancing in the context of strongly regulated markets. We think all the major banks, us included, are advocates of a well-regulated financial system. It's what makes London great.

And so there should be some rebalancing, but in the context of a well-regulated financial system. Barclay's CEO, C.S. Venkatakrishnan, says traders turned in their best fourth quarter performance in at least a decade as President Trump's election spurred volatility across asset classes. In Asia, Karen, shares of Alibaba gained almost 3%. The e-commerce giant's chairman, Joe Tsai, has confirmed Apple's iPhones will use his firm's AI technology.

China is Apple's most important market after the U.S. It's the biggest market in the world for smartphones, computing, and artificial intelligence. Back here in the U.S., Nathan shares of Cisco surging more than 6%. The country's largest seller of networking gear gave an upbeat sales forecast for the current quarter. Cisco was helped by companies spending more on infrastructure to take advantage of AI technology.

On the flip side, Karen, shares of Reddit are down 14.5%. User growth at the social networking platform missed Wall Street estimates for the fourth quarter. Reddit's blaming a change in Google's algorithm that impacted search traffic. Now, despite this morning's losses, Reddit's stock has increased more than six-fold since it went public last March.

And finally, Nathan, it's officially over. Honda and Nissan have formally ended negotiations to combine. It brings a swift end to a partnership that would have created one of the world's biggest automakers. Still, both companies say they will continue their strategic partnership with Mitsubishi and collaborate on in-house development of batteries, autonomous driving, software, and electric vehicle technology.

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. The Trump administration is suing New York over a 2019 law that allows undocumented immigrants to obtain state identification while shielding their data from federal authorities.

The lawsuit seeks to overturn the green light law that prohibit police officers during traffic stops to ask for immigration status. Attorney General Pam Bondi. New York has chosen to prioritize illegal aliens over American citizens. It stops. It stops today.

New York Governor Kathy Hochul and Attorney General Letitia James have responded, defending the law and accusing the Trump administration of seeking to access New Yorkers' data without a judicial warrant. New York Mayor Eric Adams is facing pushback over a planned visit today with Trump border czar Tom Homan. City and union leaders are accusing the mayor of selling out to get his corruption case dismissed by Trump's Justice Department.

A recent directive from the mayor instructs municipal employees to allow ICE agents into city buildings if they fear for their safety. Mayor Adams, during a city event, is standing by his work. Look at what I have done, how I have recovered this city, how we have fought for the safety of everyone in our care. There's nothing going to change with that. There's a level of consistency, what we have accomplished, and we're going to continue to do that.

Meanwhile, Mayor Adams is reportedly exploring the idea of possibly running in the spring Republican primary. The New York Times reports, according to a GOP official, Adams, a Democrat, has privately weighed for weeks whether to change his party affiliation or seek a waiver to run in both the Democratic and Republican primaries. In Washington, D.C. Students matter!

Our students matter! Parents, educators, community leaders, and elected officials gathered on the Capitol grounds to protest Department of Education cuts proposed by President Trump. They also protested student civil rights protections that have been curtailed or eliminated by Trump's executive orders. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Karen. Sorry, Michael Barr. Thank you.

Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Nixon Hawks at the Garden. Last game before the All-Star break. High scoring affair that went to overtime and saw Atlanta have a late lead. Hawks lead by one. 20 seconds remaining. The shot clock is off. Brunson defended by Daniels. Brunson puts it up. 149-148.

With 11 seconds remaining. That was the final MSG at the Colt. Jalen Brunson, the last of his 36 points. Carl Anthony Towns the night after scoring 40 in the win at Indiana scored 44. He made 7 of 10 three-pointers, 26 points for Precious Achua. Nets also at home beat Philadelphia 196. Nets have won three straight, six and seven. Only loss was last week to Washington, the worst team in the league. In Boston, Celtics beat the Spurs. Jason Tatum scored 32. He has scored over 100 points over his last season.

Three games. St. John's atop the Big East, but the Red Storm's 10-game winning streak came to an end. Villanova's Tyler Perkins, a three-pointer with eight seconds left. The Wildcats won 73-71. Duke got 27 from star freshman Cooper Flagg. An easy win over Cal.

Quite a start to the four-nation face-off, the round-robin event that has replaced the NHL All-Star Game in Montreal. Nathan McKinnon scored in the opening minute. Canada led 3-1 third period. Sweden rallied the tie. Toronto's Mitch Marner scored six minutes into overtime. Canada won 4-3. Sidney Crosby assisted on the game winner. It was his third assist of the night.

Also in Montreal tonight, it's the U.S. against Finland. It took until the start of spring training, but free agent infielder Alex Bregman has a deal. After nine years playing third base for Houston, Bregman is going to the Red Sox, where they already have an all-star third baseman, Rafael Devers. The plan is for Bregman to play second base. He agreed to three years, $120 million. John Staschauer, Bloomberg Sports, Karen Nathan.

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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 is reversing three years of U.S. policy on the war in Ukraine in a phone call with Russian President Vladimir Putin. The president says he has agreed to begin negotiating an end to the war with Russia's leader, and it's left European allies reeling. But Trump says...

It'll all work out. I think we're on the way to getting peace. I think President Putin wants peace and

President Zelensky wants peace. And that was the president speaking from the Oval Office. Let's bring in Bloomberg News senior editor Bill Ferrys for more on this. Of course, Bill, there had been speculation almost from the time President Trump was inaugurated that there may be some kind of call between himself and the Russian president. Now it seems to be unfolding in a way that is really worrying European allies now. Good morning.

Good morning, Nathan. Yeah, that's exactly right. President Trump announcing that he had this call that wasn't scheduled in advance publicly, at least, that he had this call with Vladimir Putin. He announced it on social media. Of course, there's a lot of European leaders and defense officials gathered in Munich for a security conference. They were all taken very much by surprise. In the past, in these kind of situations, a U.S. president would often reach out to the allies to talk to them, consult with them,

ahead of a call like that. But President Trump coming out and saying that he and Vladimir Putin agreed to begin peace talks over the conflict in Ukraine. He's assigned a team that includes Secretary of State Marco Rubio and Director of the CIA John Ratcliffe to begin some of those talks.

And then he said that he would be calling Ukrainian President Volodymyr Zelensky to inform him of the call. So letting the world know and then calling Zelensky to talk to him about the substance of the conversation. So a big change from previous administration and from the European policy of no talks about Ukraine without Ukraine.

So we'll see where this goes. But Europe definitely reeling from this latest move by the Trump administration. And to that point, Bill, from the comments that we've heard from Defense Secretary Pete Hegseth about Ukraine's aspiration to join NATO being unrealistic and the pre-2014 borders not being realistic as well, it seems like the beginning of the negotiating position for Ukraine is pretty difficult.

Yeah, exactly. I think that's been the criticism of this very public approach with Defense Secretary Hegseth saying Ukraine's membership in NATO is not a realistic goal. And then, as you mentioned, saying that basically going back to a pre-2014 world, which is when Russian troops invaded and took over Ukrainian Crimea,

saying that that's really not going to be probably part of it. So immediately suggesting that Russia will probably get to hold on to quite a bit of territory. So I think a lot of people are seeing that as perhaps undercutting Ukraine's position. Ukraine does have a swath or a small piece of Russia as well. So there's potential talk about trading territory for territory.

But it's definitely, you know, it's perhaps not surprising, a very different approach from what we've seen the last three years from the U.S. And obviously we're seeing a very different approach when it comes to the federal government. Back in Washington, the president determined to shrink the size of the federal workforce. It seems like this buyout.

has fallen short of the White House goals. In our last minute, Bill, what does that mean potentially for federal employees who didn't take the deferred resignation offer?

Well, it leaves them in a lot of uncertainty. It looks like about 75,000 federal employees did opt in for this voluntary resignation program to get paid through September. That is perhaps about 3% of the civilian federal workforce. The White House wanted something more like 5% to 10%. There are reports out there in Washington Post, New York Times, about some agencies like GSA already starting to notify some workers of layoffs.

We'll have to see how far they're able to go. There's certainly going to be a lot of lawsuits and questions about the legality of this going forward. 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 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. 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.

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