Two Israeli Embassy Staffers Killed in Washington; Republican Tax Bill Vote
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Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we'll have the latest on the debate over the Republican tax cut bill in just a minute. But we have to begin this morning with a deadly shooting in Washington, D.C. Two staff members of the Israeli embassy were shot and killed.

While leaving an event at the Capital Jewish Museum, the suspect was identified as 30-year-old Elias Rodriguez of Chicago. Police say when he was apprehended, he yelled, free, free Palestine. Here's D.C. Mayor Muriel Bowser. There is no active threat in our community.

What I do know is that the horrific incident is going to frighten a lot of people in our city and in our country. That was Washington, D.C. Mayor Muriel Bowser. And in a social media post early this morning, President Trump said, quote, these horrible D.C. killings based obviously on anti-Semitism must end now. Hatred and radicalism have no place in the USA.

Now, Nathan, to the debate on Capitol Hill. The House is in session right now debating a final version of President Trump's signature tax and spending cut bill. Republican leaders issued the revised tax last night. It includes a higher $40,000 limit on the state and local tax deduction to win over Republicans from high-tax states.

And it speeds up work requirements for Medicaid and ends Biden-era clean energy tax breaks. That's to appease hardline conservatives. Indiana Congresswoman Erin Houchen says there's a lot for Republicans to like. The bill requires states to have skin in the game on SNAP. The bill requires states to be more responsible about how Medicaid is funded. The bill provides needed tax relief for seniors.

These are good things. Republican Aaron Houchin spoke on the House floor last night, but Democrats like Congressman Jim McGovern of Massachusetts are lined up in opposition. Democrats will not stand by and watch Trump and his billionaire friends destroy this country without putting up one hell of a fight.

Congressman Jim McGovern and the Democrats would need just a handful of Republicans to join them to stop the bill. But House Speaker Mike Johnson is hoping to pass the legislation this morning before lawmakers leave for Memorial Day recess. At the White House, Karen, President Trump had a tense encounter with South African President Cyril Ramaphosa. The South African leader came to the Oval Office to try to reset relations.

After the president allowed minority white farmers from the country to claim refugee status in the U.S., Ramaphosa brought two white golfers and his white agriculture minister with him. I would say if there was Afrikaner farmer genocide, I can bet you

These three gentlemen would not be here. That comment from President Cyril Ramaphosa led President Trump to call on White House staff to dim the lights and play a video of crosses representing white farmer deaths. We have thousands of stories talking about it. Sure. And we have...

documentaries. We have news stories. President Trump's confrontation with Ramaphosa comes three months after a similar encounter with Ukrainian President Volodymyr Zelensky. A Ramaphosa spokesman says it was definitely an ambush.

Let's turn to the markets, Nathan. Bond investors are pushing back against President Trump's tax cut plan. And we get that story with Bloomberg's John Tucker. John, good morning. Good morning, Karen. This is a warning sign from the bond market. The yield on the 30-year U.S. government bond pushing to around 5.1 percent, around a two-decade high.

The concern is that the tax bill would add trillions of dollars in coming years to the already bulging budget deficits. At the same time, investor appetite for U.S. assets is drying up a bit across the world. It's a combination that could make interest rates go higher still. It's a challenging environment for investors like Sandy Villery, portfolio manager for Villery & Company.

You look at what happened in 2025 so far, all about the tariffs. Now we've got the new bill that's going to certainly increase deficits a little bit. And we had a, you know, the 20-year auction was certainly weaker. And this all follows the credit downgrade of the U.S. by Moody's last week. George Cantrebon, head of fixed income and trading at DWS America, says...

Make no mistake, the bond market will have its own vote on the terms of the budget bill. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Well, it's not just Treasury yields rising lately, so is Bitcoin. Earlier this morning, the cryptocurrency topped $111,000 for the first time. Right now, it's at $110,300.

Bitcoin's latest milestone comes as President Trump prepares to meet with the biggest holders of his meme coin at a dinner tonight at his golf club just outside Washington, D.C. Bitcoin so far this year is up 17%.

Nathan, JPMorgan Chase CEO Jamie Dimon says he cannot rule out the U.S. economy will fall into stagflation as the country faces huge risks from geopolitics, deficits and price pressures. He spoke earlier this morning to Bloomberg at the bank's Global China Summit in Shanghai.

I think there's a chance that things will, you'll have stagflation. So I'm not saying it's going to happen. I don't want the reader to say he's predicting, I'm not. But we have to be prepared for something like that. I think the global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary. And this is not all an American thing.

JP Morgan Chase Chief Jamie Dimon speaking with Bloomberg's Haslinda Amin at the Bank's Global China Summit in Shanghai. For the full conversation, head over to the Bloomberg Podcast channel on YouTube. And Karen, former New York Fed President and current Bloomberg Opinion columnist Bill Dudley is calling for more transparency and clearer communication from the Fed to better prepare markets and facilitate a smoother policy transmission.

The Fed is basically an outlier. Every other central bank does this in one form or another that are peers of the Fed. And this would actually help the Fed to both communicate and also pivot when things turn out to be different than they expected. If you had that scenario in, say, 2021-22, that inflation might stay higher for longer, that probably made it easier for the Fed to terminate its large-scale asset purchase program earlier.

That was former New York Fed President and Bloomberg Opinion columnist Bill Dudley. The central bank is reviewing its current monetary policy framework, how it sets interest rates, looks at unemployment, and communicates changes to the public. That happens every five years. The Fed's last review was in 2020.

Nathan, President Trump is floating the possibility of taking mortgage giants Fannie Mae and Freddie Mac public. And we get the very latest with Bloomberg's Lisa Mateo. Lisa, good morning. Good morning, Karen. The two companies have been under government oversight since the 2008 financial crisis. Now, both, they've returned to steady profitability with earnings being retained in a post-COVID

Post on Truth Social, President Trump said he would talk over that decision with Treasury Secretary Scott Besson, Commerce Secretary Howard Lutnick, and Bill Pulte. Pulte, he's the director of the Federal Housing Finance Agency, which actually oversees Freddie Mac and Fannie Mae. So what could this do? Well, the move, it could help provide billions of dollars to the U.S. government, kind of soften those concerns about the impact of the president's signature tax cut legislation to the deficit. It could

also give a boost to allies like hedge fund manager Bill Ackman, whose Pershing Square Capital Management has invested in the companies. But then you have critics who say it comes with risks, especially over how much of a government guarantee Fannie and Freddie could still have, which could essentially put more pressure on

mortgage rates. Lisa Mateo, Bloomberg Radio. All right, Lisa, thank you. And in deal news, Honeywell has agreed to buy Britain's Johnson Matthey's Catalyst Technology business for an enterprise value of about $2.4 billion in cash. This gives Honeywell a business that serves pharma and agrochemical companies and has a pipeline of more than 150 projects to help the shift to fewer emissions.

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 federal judge says the White House violated a court order on deportations to third countries with a flight linked to South Sudan. Judge Brian Murphy in Boston said the eight migrants aboard the plane were not given a meaningful opportunity to object that the deportation could put them in danger.

Trina Riamuto is with the National Immigration Litigation Alliance. The government is still refusing to provide due process to our clients, which means they are not giving them notice. The Justice Department has moved to cancel settlements with Minneapolis and Louisville that called for an overhaul of policing following the killings of George Floyd and Breonna Taylor.

Minneapolis Mayor Jacob Fry proclaimed the changes will still be made. Minneapolis is serious about our commitment to police reform, even if the president of the United States is not. We're going to move forward with that work, with or without the White House. Coastal flood advisories are in effect for the New York area. Bloomberg meteorologist Craig Allen has the latest.

This is horrible weather for late May as we approach the holiday weekend here. This is part of the same system that spawned over 160 tornadoes over the last three days across the central portions of the United States. Now it is in a much weakened form, but we are going to get doused by rain heavy at times. There will be flooding right through the morning commute.

Bloomberg meteorologist Craig Allen. Testimony from Sean Diddy Combs' sex trafficking and racketeering trial continues today. Combs' former assistant George Kaplan was on the stand yesterday. Kaplan's been granted immunity from prosecution for his testimony. 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. How can you free your team from time-consuming office tasks? Amazon Business empowers leaders to not only streamline purchasing, but better support their teams.

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Time now for the Bloomberg Sports Update. Here's John Stashower. John, good morning. Good morning, Karen. The Knicks in the first two rounds of the playoffs had their share of comebacks and games pulled out at the end. But Indiana was doing the same thing. Miracle rallies to beat Milwaukee and Cleveland in a game. One of these finals at the Garden. Another huge comeback by the Pacers. The Knicks with seven and a half minutes left at a 16-point lead. Pacers chipped away. Aaron

Aaron Neesmith hit six three-pointers in a five-minute span. He made three threes in 30 seconds when Tyrese Halliburton hit a shot at the buzzer. It looked like a game-winning three, but his toe was on the line, so it forced overtime. And in OT, Pacers held the lead at the end. That is Brunson, picked up by Neymar.

Down by three. Here is a three for the tie. Short. Caught by Hart. Out to Towns. To tie. No. Rebound. Fought for. Loose. Bridges has got it. Clock is ticking. Arms. It's Indiana.

with point two to go on tnt indiana stole game one 138 135 halliburton 31 points knee smith scored 30 took nine three-pointers missed only one in defeat jalen brunson 43 points carl anthony towns went for 35 game two tomorrow as expected

Oklahoma City's Shea Gilgis-Alexander is the NBA's MVP. Drama at the Garden and in the Bronx. Jason Dominguez, a walk-off home run to start the bottom of the ninth inning. Yankees, the 4-3 win over Texas. Much-needed win for the Mets. 5-1 over the Red Sox. The Dallas Stars with a five-goal third period beat Edmonton 6-3 to start the NHL's West Final. The tush push survives the vote to ban it.

It was 22-10. 24 votes were needed. Longtime Indianapolis Colts owner Jim Irsay has passed away at 65. It was his father who moved the Colts from Baltimore to Indy. Jim Irsay took over in 1997. He had health issues the past few years. John Staschauer, 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. They have been at it all night and into the morning on President Trump's one big beautiful bill act. The final version of the massive tax and spending cut package has changes meant to satisfy both ends of the Republican spectrum. Heading into the final vote, House Speaker Mike Johnson was hopeful. This is a...

A massive piece of legislation with lots of moving parts. So we'll see what happens. But I think we're going to get this job done and we're going to do it by Memorial Day. That was House Speaker Mike Johnson ahead of the debate now underway on Capitol Hill. Addresses the cap on salt and provides tax relief to hardworking. This is New York Republican Mike Lawler, who had been one of the Republican holdouts pushing for a higher state and local tax deduction limit in this legislation. Joining us for the very latest is Bloomberg News senior editor,

Bill Ferrys. Bill, good morning. It did take a lot of changes to get this bill to where it is on Capitol Hill. Can you walk us through some of them? Good morning.

Yeah, good morning, Nathan. As you set it up there, it looks like we are getting very close to that vote up on the House side. And what has really gotten us there, the breakthrough, was appeasing, I think, both ends of the Republican spectrum here who were in opposition to this legislation just a few days ago. So they have raised that deduction for state and local taxes.

up to $40,000 with some changes that come in the years ahead, allowing it to increase a bit.

uh, with inflation and things like that. Uh, and they've also decided to speed up some of the cuts to, uh, to Medicaid that have made it quite controversial with, uh, both Democrats and even some Senate Republicans. But some of those, uh, cuts to Medicaid coming as soon as December, 2026, which is interesting timing, of course, because that will be just, uh, just after the midterm elections. So, uh,

Both sides on the both sets of opponents on the Republican side getting a little bit more of what they wanted. But I think even with a possible passage early this morning in Washington, there is a long road ahead for this bill once it heads over to the Senate. Yes, certainly. It raises the question, doesn't it, of whether any of these changes will survive Senate scrutiny?

Yeah, absolutely. I mean, the Medicaid cuts, we've already seen a number of Republican senators talking about it, even when they weren't being accelerated to the end of next year. So that's going to be a real sticking point. A lot of those red states have a lot of Medicaid clients on their rolls. So it's going to be it's going to be a big fight.

This is not done yet, but it does look like an important victory perhaps for Speaker Mike Johnson, assuming he can get through the next couple hours and get this vote passed. In our last minute, Bill, not too far from Capitol Hill, we've had a really unsettling incident outside the Capitol Jewish Museum, a deadly shooting overnight.

Yeah, it looks like around 9 p.m. last night, a young couple leaving an event at the Capital Jewish Museum near near Third and F Street downtown, shot and killed by a gunman who apparently had been kind of walking back and forth out front and was, according to witnesses, saying free, free Palestine. He was taken into custody.

and seems to be talking to police, but obviously a big outpouring of support for the victims and their families from Israel's president, Prime Minister Donald Trump, Senate Democratic Leader Chuck Schumer, and of course Mayor Muriel Bowser and others. So a very tragic event.

last night on the streets there of downtown D.C. 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.com.

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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.

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