White House Text Breach Fallout, New Tariffs Teased On today's podcast:
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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 what appears to be a major security breach within President Trump's inner circle. A prominent Washington journalist, Atlantic editor-in-chief Jeffrey Goldberg says he was included in a high-level text thread about plans to bomb Houthi targets in Yemen hours before the operation was carried out. Goldberg wrote a 3,500-word piece about it in The Atlantic and discussed it with ABC News.

I get a message request to connect with Mike Waltz, who's the National Security Advisor, or someone who's purporting to be Mike Waltz. Not an unusual thing in Washington. I'm a journalist. I've met him in the past. So I accept it. Jeffrey Goldberg says the chat on Signal included operational details from Defense Secretary Pete Hegseth, including information about targets, weapons, and attack sequencing.

It also revealed some of the Trump administration's internal power dynamics. At one point, Vice President J.D. Vance signaled he opposed the strikes, only to be shot down by an account labeled SM, apparently White House Deputy Chief of Staff Stephen Miller.

Well, Nathan, the White House National Security Council says the text chain appears authentic and they're reviewing how an inadvertent phone number was added to the signal chat. Defense Secretary Pete Hanks says national security was not put at risk. I've heard I was characterized. Nobody was texting war plans. And that's all I have to say about that.

Defense Secretary Hegseth spoke to reporters in Hawaii, and the White House says President Trump has utmost confidence in his team, including National Security Director Mike Walz. But the breach has Democrats in Congress calling for hearings, including Colorado's Jason Crow. The House Intelligence Committee has our worldwide threats hearing on Wednesday, and you bet there's going to be a lot of questions about this.

Well, it still remains to be seen what will actually happen in Congress, if anything. We get more on that from Bloomberg News senior editor Derek Walbank. On the political side, he's going to put congressional Republicans in one world of a bind because they have so far in the second Trump administration.

not had any appetite really at all to try and check the White House as the White House has gone about doing exactly what it wants. Remember, Republicans have unfettered control of Washington just about, and all of the congressional committees that would

lead potential investigations into something of this nature are run by Republicans. At the same time, Democrats are braying for consequences. They see an opportunity to move onto the front foot politically after being really on the back foot for the entirety of this administration to date. Bloomberg's Derek Walbank notes even harmless leaks in other agencies have led to investigations in the FBI or from inspectors general.

Nathan, futures are lower after yesterday's big gains on Wall Street. Stocks registered one of their best sessions of the year, with the Nasdaq 100 adding 2.2 percent amid signs U.S. trade sanctions will be narrower than feared. President Trump also hinted that he may give some countries a break on impending reciprocal tariffs. We may take less than what they're charging because they've charged us so much, I don't think they could take it. In other words, they've charged us so much.

that I'm embarrassed to charge them what they've charged us, but it'll be substantial. And you'll be hearing about that on April 2nd. In remarks heard here on Bloomberg, Trump did say he will announce tariffs on automobile imports in the coming days. Now the latest on efforts to end the war in Ukraine, Karen. U.S. and Russian officials held 12 hours of talks in Saudi Arabia yesterday, and the two sides are expected to release a statement detailing their progress. Ukraine's President Volodymyr Zelenskyy says...

Strong measures will be needed to keep Russia on the path of peace. We need a movement towards real peace, towards guaranteed security. And we all need this. In Ukraine, in Europe, in America. Everyone in the world who wants peace in international relations.

Russia is the only entity that is dragging out this war and mocking our people and the whole world. And to pressure Russia towards peace, strong things, strong steps are needed. As Ukraine's President Volodymyr Zelensky speaking through an interpreter, Zelensky and President Trump still have not signed a pact to give the U.S. part ownership of Ukraine's natural resources.

Well, we turn to the economy now, Nathan. And the head of the Atlanta Fed, Raphael Bostic, tells Bloomberg's Michael McKee that he sees just one rate cut as likely this year rather than two with tariffs impeding progress on disinflation. So I was at two. I moved to one, mainly because I think we're going to see inflation be very bumpy and not move dramatically and in a clear way to the 2% target because that's being pushed back

You know, I think the appropriate path for policy is also going to have to be pushed back in getting us to that neutral level.

And Atlanta Fed Chief Raphael Bostick now sees price growth returning to the Fed's 2% goal at some point in early 2027. Hear the full conversation on the Bloomberg Talks podcast feed or watch it on the Bloomberg podcast page on YouTube. In company news, Karen, Boeing reportedly wants to withdraw its deal with U.S. prosecutors to plead guilty to misleading regulators prior to two deadly 737 MAX crashes.

The Wall Street Journal is reporting the planemaker is pursuing the maneuver in a bid for potential leniency from the Trump administration, which is reviewing pending white-collar criminal cases.

On the battle for electric vehicle supremacy, Nathan, China's BYD sales last year leapfrogging Elon Musk's Tesla. BYD's sales last year surpassed the $100 billion mark, beating Tesla by more than $2 billion. Still, ARK Investment Management's Kathy Wood remains bullish on Tesla. She spoke with Bloomberg at the HSBC Global Investment Summit in Hong Kong.

We think that robo-taxis will account for 90% of the value of the company in five years. And we're on record saying we believe in five years the stock will hit $2,600. If Tesla hits Cathie Wood's stock price, that would be about 10 times more than its current price.

And 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. The Trump administration is challenging the court order by a federal judge that aimed to halt the deportation of Venezuelan migrants to El Salvador. Yesterday, a D.C. Circuit Court of Appeals heard their case. Judge James Boasberg's order was not followed by Trump administration officials, and hundreds of migrants are at a prison in El Salvador. The

The Trump administration claimed it was justified deporting the migrants because of gang affiliations. During the hearing, one of the judges on the three-judge panel, Patricia Millett, grilled DOJ Deputy Assistant Attorney General Drew Insing. People weren't given notice. They weren't told where they were going. Those people on those planes on that Saturday had no opportunity to file habeas charges.

or any type of action to challenge the removal under the AEA. And you've agreed that two of those airplanes, people were removed under the AEA. Judge Millett went on to say Nazis got better treatment under the Alien Enemies Act.

The United Nations says it will lessen its presence in the Gaza Strip, the move following an Israeli tank strike that hit one of its compounds last week, killing one staffer from Bulgaria and wounding five other employees. United Nations spokesperson Stefan Dujaric.

The Secretary General has taken the difficult decision to reduce the United Nations footprint in Gaza, even as humanitarian needs soar and our concern over the protection of civilians intensifies.

Meanwhile, Al Jazeera says an Israeli airstrike killed one of its journalists in Gaza Monday. Today marks Equal Pay Day. It symbolizes how far into the year a woman must work to earn as much as a man earned in the previous year, on average. The wage gap is even greater for women of color and disabled women. The gender justice nonprofit Equal Rights Advocates says...

says that it's widened last year and it warns that it could get even worse as Trump administration officials try to strip away protections from workplace discrimination. National Campaign Director Deborah Vagent. We are pushing back on the administration's gutting of civil rights enforcement agencies, the very agencies that protect us from employment discrimination.

National campaign director Deborah Vagan says women earn about 75 cents on the dollar when compared to all men. 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.

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Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. It's a race to the finish of the NHL regular season for the last playoff spot in the East. As of now, it belongs to Montreal with the Rangers and Islanders right behind Canadians at 75 points. Have a game tonight in St. Louis. The Rangers have 74. They begin a three-game California trip tonight in L.A. The Islanders are at 74. They hosted Columbus, had leads of 2-0 and 3-2.

Lost 4-3 in a shootout. The Devils also at home. Also lost 4-3 in a shootout. To Vancouver, the Nets and Barclays lost to Dallas. 120-101. The Mavs are at the Garden tonight to face the Knicks who are hoping to get Jalen Brunson back soon for his sprained ankle. And the Celtics win at Sacramento. Jason Tatum sprained his ankle. And the NCAA women's tourney, the star player for...

Top seeded USC, Juju Watkins tore her ACL. She averages 25 points a game. The UConn star Paige Beckers tied a career high 34 points in the Huskies easy win. The Mets after a game with the Yankees in Port St. Lucie now off to Houston for opening day Thursday. Juan Soto's got a 15 year Mets contract excited to start his first season.

I think we have a really talented group. We have a lot of guys. We have a lot of outfielders. We have a lot of infielders. So I think we are really loaded as a team. Can't wait to see these guys going out there. Definitely we have to go through some of my best cities and spring training. So deal with some injuries and stuff like that. But I think we're going to be fine. The Yankees finish the spring today in Miami, then come home for Thursday's opener with Milwaukee. John Staschauer, Bloomberg Sports, Karen Natham.

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 and the White House appears to be in damage control after Atlantic Magazine Editor-in-Chief Jeffrey Goldberg posted a lengthy story saying he was included in a high-level text chain about plans to attack the Houthis in Yemen. And while the White House says the messages in Goldberg's story appear authentic...

Defense Secretary Pete Hegseth says, quote, nobody was texting war plans.

This is a guy that pedals in garbage. This is what he does. I would love to comment on the Houthi campaign. And that was Defense Secretary Pete Hegseth commenting in Hawaii after this story broke in Washington. And we're joined now by Bloomberg News senior editor Bill Ferrys. Bill, from what Jeffrey Goldberg is reporting in this lengthy story on the Atlantic website, it is difficult to say if we have seen a breach like this before. Good morning.

Hey, good morning, Nathan. Yeah, really just jaw-dropping story there from Jeffrey Goldberg. Just, you know, giving insights into how this signal group was created and what they were discussing, not realizing that there was a journalist invited into the group,

with them. And Goldberg talks about how he wasn't sure if this was, you know, a hoax, an attempted phishing attempt against him or something else until he's sitting in the parking lot after hearing that strikes are about to be unleashed on Yemen. And he's waiting and waiting and then goes on to Twitter to see the first reports confirming that basically everything he'd been seeing unspool on his signal app was true.

So really shocking breach of security norms and also a huge embarrassment for an administration that has really kind of campaigned and tried to – well, it's taken pride in what it says is its strong position against security breaches. I mean, yeah. I mean it goes into the idea that –

The Pentagon has said it was going to go after leakers. The last time there was, I mean, there wasn't an incident like this, but when details about Elon Musk going to the Pentagon for a meeting came out, Defense Secretary Hegseth came out and said that they were going to really go after the leakers. I mean, what could that mean for this message?

Well, it's going to, you know, I think we're still going to see the repercussions playing out. You know, again, yeah, this administration, you know, this is a president who faced charges of mishandling classified material at Mar-a-Lago, who ran against Hillary Clinton years ago, partly on criticism of her decision to use a private server. So it's been a part of their DNA to say that they're strong on

on classification and protecting national security. And to see this happen with not just senior aides, but really the most senior aides. Marco Rubio was on there. Defense Secretary Pete Hegseth. Tulsi Gabbard, the DNI. It's just really stunning. And I think it raises a lot of big questions about has this happened before with other people who were inadvertently invited into chat groups? Why are they discussing such things?

sensitive information in a chat app like Signal. I don't think it's any secret that Washington officials like to use messaging apps, but you typically do it for scheduling meetings and other kind of not top secret issues. To go into battle plans is something really we haven't seen before. In the early moments here, Bill, we've seen sort of circling the wagons around National Security Advisor

Mike Waltz, who Goldberg says invited him into this chat. But could we see heads roll over this or at least can we see hearings over this? I think for sure we're going to see hearings. I mean, just by a remarkable stroke of timing, you know, you have the heads of the intelligence agencies, including DNI, Gabbard, expected up on the Hill twice this week to talk about worldwide threats.

But you're right. I think there's going to be a lot of questions about Mike Waltz. I think the indications we're getting from the White House is that they're going to see how this plays out. He's already lasted longer than Donald Trump's first national security adviser in his first term, Michael Flynn, lasted. But this is a huge breach by the person who's seen as supposed to be really the arbiter of the national security industry.

agencies for the White House. Just 30 seconds left, Bill. What could this mean for information sharing among allies?

Yeah, I think it's going to raise a lot of questions among other countries about what they can share and with the U.S., whether they can trust it. But the reality is other countries, even European allies, they rely a lot more on U.S. intelligence than the U.S. relies on them. So it will probably still be in their benefit to share info. But I think it's going to raise some questions about how much they share.

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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