President Trump Weighs Iran Intervention; Fed Meeting Look Ahead
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EasyCater, your business tool for food. To learn more, visit easycater.com slash podcast. 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 begin with the latest developments in the Middle East. Bloomberg News is reporting that President Donald Trump met his national security team in the White House Situation Room for more than an hour yesterday, discussing the escalating conflict between Israel and Iran. The president followed that up with a call to Israel's Prime Minister Benjamin Netanyahu. Before the meeting, the president demanded Iran's unconditional surrender in a post on social media.

Bloomberg's Giovanna Versace says the president also warned of a possible strike against the country's supreme leader, Ayatollah Khamenei.

It seems at this point that Trump's advisors are still divided on the move. Everyone has been trying to guess what the president's next move is going to be. But you can sort of piece together that he's turning more hawkish because of the post that he put out overnight calling the Ayatollah an easy target using the plural we, saying we know where the Ayatollah is hiding. We have complete

domination of the skies and of Iranian air at this point in time. And so that suggests that he does view that the U.S. are somewhat involved already, but whether they want to take it to the next level, of course, is going to be the major decision. Bloomberg's Jumana Versace says U.S. military assets have already started deploying to the region, including tanker aircraft.

Meanwhile, Nathan, the New York Times is reporting U.S. commanders have put troops on high alert throughout the Middle East, with Iran preparing its missiles for possible retaliatory strikes on U.S. military interests. Bloomberg's Paul Wallace says although a strike on Iran is on the table, President Trump may also consider diplomatic options. One interesting meeting to watch is that Trump is going to meet the head of the Pakistani military today,

in Washington. A little unclear exactly what this is about, but Pakistan in some way or another is acting as a mediator for Iran and it's possible that Trump has decided to hear out what Pakistan is saying and what it will tell the US about Iran's intention. The

Bloomberg's Paul Wallace reports the U.S. embassy in Jerusalem has also been closed for the next three days. And in response to all these developments, Karen, Iran's supreme leader posted on social media his country will show no mercy toward Israel. And an Iranian foreign ministry spokesman says, quote, any American intervention would be a recipe for an all-out war in the region.

Well, the latest strikes from both sides have Brent crude trading around $75 a barrel. Nathan and Bloomberg's John Tucker joins us with the latest. John, good morning. Yeah, Karen, both Brent, which is the international benchmark, and West Texas Intermediate closed yesterday at the highest level in almost five months.

And for Ellen Lee at Crossway Capital, it's just one more element of risk for investors. And if oil prices do really spike, it will actually pressure inflation. So, so far things look okay.

But, you know, a lot of uncertainty out there. Iran's crude exporting infrastructure, that's been spared so far, and most of the fallout has been confined to shipping. The Middle East produces about a third of the world's oil, and a wider conflict would drive prices even higher. Now, the biggest concern for the oil market right now centers on the Strait of Hormuz.

Although there are no signs that Tehran is seeking to disrupt shipping through the narrow waterway at the entrance to the Persian Gulf, about a fifth of the world's crude output passes through the strait, including from Saudi Arabia. Meantime, industry figures show that U.S. crude supplies fell by more than 10 million barrels last week. That would be the

biggest decline since last summer. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Leaders of the G7 summit in Canada closely followed developments in the Middle East. After President Trump's early departure from the gathering, the focus turned to Ukraine and meetings with President Vladimir Zelensky. Bloomberg's David Gurra joins with the details from Banff.

Ukraine's President Volodymyr Zelensky met with Prime Minister Mark Carney at the start of the day, and Canada announced more financial support for Ukraine in its fight with Russia. Also announced new sanctions on Russia as well. There was cajoling at the dinner among these leaders, and they were able to convince President Trump to support a statement on the Middle East. They were unsuccessful, however, in getting him to sign on to a statement on Ukraine. Friedrich Murch, the Chancellor of Germany, was convulsed.

cautiously optimistic, as he put it, that Trump will come around and be in favor of applying more sanctions to Russia. David Gurra, Bloomberg News. All right, David, thank you. And in his closing news conference, Canadian Prime Minister Mark Carney was asked about President Trump's comments earlier in the week, where he suggested that Russian President Vladimir Putin was offended when he was thrown out of what was formerly the G8.

With respect to was it personally, it was personally offensive, to put it mildly, to the citizens of Ukraine and the inhabitants of Crimea when Russia invaded in 2014.

Canadian Prime Minister Mark Carney also announced billions in aid for Ukraine and sanctions on Russia. And back in Washington, Karen, the Supreme Court is being asked to weigh in on President Trump's economic agenda. Two family-owned toy companies are asking the high court to consider striking down many of the president's tariffs. The companies argue that the massive impact on businesses and consumers requires immediate intervention rather than waiting for a federal appeals court to rule. They're seeking a definitive Supreme Court ruling by the end of this year.

Turning now to the markets and the Fed, Nathan, where officials are widely expected to leave interest rates unchanged for a fourth straight meeting today. Bloomberg's Michael McKee has a preview of the June decision. The Fed may have to put an expiration date on their decisions today. With policymakers already conceding no change in interest rates, the focus will be on their latest economic projections and the dot plot guide to what those projections mean for future policy moves.

Investors think we'll see a more hawkish tilt, with unemployment and inflation forecasts rising. Both would suggest slower growth. The central bankers are also expected to shave their outlooks for rate cuts this year to one from two. But with tariffs and tax cuts still to be determined, whatever they predict might have to be revised fairly soon.

Michael McKee, Bloomberg Radio. All right, Michael, thank you. Stay with Bloomberg for full coverage of the Fed's decision and Jay Powell's news conference. That's on a special edition of Bloomberg Surveillance beginning at 1.30 p.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcast page on YouTube. And ahead of that, Karen, the Fed and other bank regulators are planning to reduce a key capital buffer known as the Enhanced Supplementary Leverage Ratio.

by up to one and a half percentage points for the biggest lenders. The revisions would bolster banks' roles as intermediaries in the market, but some experts argue easing the ratio might not encourage banks to buy more treasuries and could make the financial system more fragile.

Well, in New York, Nathan, city Comptroller Brad Lander was arrested outside of immigration court in lower Manhattan yesterday. Lander is running in next week's Democratic primary for mayor. He says he locked arms with an undocumented immigrant in an apparent effort to shield the person from detention. All I tried to do was just hold Edgardo's arm and ask the ICE agents, do you have a warrant?

And they would not show me the warrant. And I said I'd let go of his arm as soon as they showed it to me. And they did not show it to me. And you saw what happened. I will say they treated me just fine after that.

Sitting alongside New York City Comptroller and mayoral candidate Brad Lander was New York Governor Kathy Hochul, who said Lander's arrest marked a sorry day for New York. In the race for New York City Mayor Mike Bloomberg, the founder and majority owner of Bloomberg LP has endorsed former New York Governor Andrew Cuomo.

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. In the wake of the Minnesota shootings, lawmakers in D.C. were given an emergency briefing. Democratic Senator Amy Klobuchar of Minnesota spoke on the Senate floor remembering state lawmaker Melissa Hortman, who was killed along with her husband.

They were great neighbors, wonderful friends, and great parents to their beloved children, Sophie and Colin. Reaction continues from top Democrats after President Trump said calling Minnesota Governor Tim Walz following Saturday's deadly shootings would be a, quote, waste of time. State Attorney General Keith Ellison was one of the lawmakers on the suspect's hit list. He fundamentally doesn't understand what it means to be the president of the United States.

Meanwhile, a bipartisan group of lawmakers called out Utah Senator Mike Lee over his social media post, appearing to mock the assassination. Lee writing, this is what happens when Marxists don't get their way, and saying nightmare on Wall Street, a reference to state's governor, Tim Walz.

Leah has since deleted the post. In Virginia, former state delegate Jay Jones won Tuesday's closely watched Democratic state primary for attorney general. Jones will face Republican Attorney General Jason Meares in the November general election.

A dangerous tropical storm is turning near the southern Mexico coastline in the Pacific. Bloomberg meteorologist Craig Allen reports Eric is expected to get stronger. The tropical Pacific remains very active and this storm, named Eric, is going to rapidly intensify today and become a hurricane with possible winds of 100 miles per hour or stronger.

There will also be life-threatening flash flooding as well as mudslides possible in the hillier terrain, dangerous storm surge and rip currents along the coastline.

Eric is moving northwest towards the southern Mexico coastline and could make landfall tonight or early Thursday. Bloomberg meteorologist Craig Allen. And as we've been reporting, New York City Comptroller and Democratic mayoral candidate Brad Lander was arrested by masked ICE agents at Federal Immigration Court in Lower Manhattan. In Foley Square, protesters gathered in Manhattan after Lander's arrest. He is under attack!

New York Governor Kathy Ogle says charges filed against Lander have been dropped. 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. For enterprise organizations, managing all your food needs is a tall order.

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Time now for the Bloomberg Sports Update brought to you by Flushing Bank. And here's Dan Schwartzman. Dan, good morning. Good morning, Karen and Nathan. Florida Panthers repeating as Stanley Cup champions, defeating the Oilers in game 6-5 to 1 behind four Sam Reinhart goals to take the series four games to two. Panthers are the third NHL team to win back-to-back championships this century following the Tampa Bay Lightning's who accomplished the feat in 2020 and 2021.

Sam Bennett taking on the Conn Smythe Trophies playoff MVP after scoring 15 postseason goals. Bennett on what it took to beat the Oilers. Guys were willing to do whatever it takes to shut them down. And some guys played some big minutes shutting down some, I mean, two of the best players in the world. And that's not an easy job by any means, so...

Major League Baseball action. Yankees lose their fifth straight while being shut out for the third straight game, falling to the Angels in the Bronx for nothing. Yankees scoreless streak extending to 29 innings with the Bombers last scoring Saturday against the Red Sox. Elsewhere, Mets lose in 10 innings to the Braves 5-4. Orioles defeat the Rays 5-1. Nationals fall to the lowly Rockies 10-6. Cubs get past the Brewers 5-3, while the Dodgers outlast the Padres 8-6.

Mets will be without starter Tyler McGill for at least a month after placing the right-hander on the 15-day injured list with a sprained right elbow. McGill is 5-5 on the season and 14 starts with a 3.95 ERA. Oklahoma City Thunder looking to finish off the Indiana Pacers Thursday night in Indianapolis to secure the franchise's first NBA championship since moving to OKC. That's your Bloomberg Sports Update. I'm Dan Schwartzman, Karen and 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 Trump is weighing his options now six days into the fighting between Israel and Iran. His calls for unconditional surrender from the Iranians are fueling speculation that the U.S. could become more directly involved. Wesley Clark is the former NATO Supreme Allied Commander Europe.

I think you're going to end up with a regime change out of this and the question is,

who's going to take charge and how is it going to work? We sure didn't do a very good job in Iraq in 2003. Retired General Wesley Clark speaking to Bloomberg this morning. We're joined by Bloomberg News Senior Editor Bill Ferrys. And Bill, that really is one of the questions surrounding this as President Trump considers what to do. Is this about regime change or is it about Israel's goal of decimating Iran's nuclear and ballistic missile programs? Good morning.

Good morning. Thanks for having me. I mean, it's very hard to separate those two questions you just posed. They're very much wrapped around each other. I mean, Israel has said its goal here is to eliminate the threat, to eliminate Iran's nuclear program.

for the long term. And U.S. President Donald Trump has repeatedly said that Iran cannot be allowed to have a nuclear weapon. Whether that's a possible goal without regime change is really doubtful at this point. We're in the sixth day of these two countries, Iran and Israel, firing back and forth

at each other. And the rhetoric, as you mentioned, is becoming, I think, even more heated. A lot of questions about where the U.S. stands and what Donald Trump will eventually do. But he did have that meeting in the Situation Room with his advisers, and he did have a call with Netanyahu afterwards.

and posting that statement calling for the unconditional surrender of Iran and saying that the U.S. could even, saying that the U.S. knew the whereabouts of Ayatollah Khomeini and that he's saying he is, quote, an easy target, but we are not going to take him out, at least not for now. So very tense situation. And Iran coming back and warning that

Any U.S. action in Israel, Israel's offensive risks putting American assets at risk and would result in all out war. And coming out of this meeting, Bill, you have to wonder who's got the president's ear, because this has to be pitting some of the, you know, defense hawks in the GOP with the MAGA wing of President Trump's party.

Well, it absolutely is. It is really ripping the Trump movement in half right now. I mean, you have influential outsiders like Tucker Carlson really pushing back on the idea that the U.S. should be involved, saying, you know, this is Israel's—basically saying it's a war of choice by Israel. And then you have people like Senator Lindsey Graham from South Carolina, who have long been hawks on Trump.

on Iran and saying that, you know, this is kind of the opportunity. This is the time. Iran's defensive systems are degraded. A lot of its leadership, military leadership has been taken out. Now is the time for the U.S. to get involved and help use its weaponry to help eliminate this nuclear program.

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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