US Debt Concern After Tax Bill's Passage; President Trump's Harvard Fight
17:07 Share

This is an iHeart Podcast. 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.

Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey. With smart business buying, get everything you need to grow in one familiar place. From office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon, plus tools that help you save costs and make insights-based decisions. Ready to bring your visions to life? Learn how at AmazonBusiness.com.

Bloomberg Audio Studios. Podcasts. Radio. News.

Good morning, I'm Nathan Hager. And I'm Lisa Mateo. Here are the top stories we're following today. Lisa, we begin in Washington, D.C., where President Trump's massive tax and spending cut bill has taken its first big step on Capitol Hill. It is moving on to the Senate after the mix of tax breaks and cuts to social programs passed the House by the thinnest of margins. House Speaker Mike Johnson says he's confident it's going to get done.

We stand ready to continue our work together to deliver on the one big, beautiful bill, as President Trump named it himself. We're going to send that to his desk. We're going to get there by Independence Day on July 4th, and we are going to celebrate a new golden age in America.

But before that happens, for House Speaker Mike Johnson, lawmakers may have to satisfy bond investors. The yield on 30-year treasuries is back above 5% on concerns the bill will add to the nation's already ballooning deficit. Seema Shah is Chief Global Strategist at Principal Asset Management.

Increasingly, it feels like this administration is going to have to confront the problems because the bond market has lost patience and it's really going to force the issue through to make sure that there is some realization that continuing to expand its deficit, its debt numbers indefinitely, is simply not something which can continue. Seema Shah with Principal Asset. Now, the Trump administration argues the bill will boost business sentiment and unleash economic growth, but higher treasury yields could make it more expensive to

borrow and pile on even more to the government's debt. Nathan, now the latest on another major story in the nation's capital, the killing of two Israeli embassy staffers at a Jewish museum. The suspect, 31-year-old Elias Rodriguez, made his first court appearance on two counts of murder, murder of foreign officials and firearms charges. He

He didn't enter a plea, but interim U.S. attorney for D.C., Jeanine Pirro, says the case is being investigated as a hate crime and an act of terrorism. This is the kind of case that picks at old sores and old scars because these kinds of cases remind us of what has happened in the past.

that we can never and must never forget. Interim U.S. Attorney Jeanine Pirro says the case is eligible for the death penalty, but prosecutors haven't said whether they'll pursue it. Israel's ambassador says the victims, Yaron Lashinsky and Sarah Milgram, were about to be engaged in Jerusalem next week.

Charging documents say the suspect told police he did it for Palestine. He's been ordered to remain in custody until next hearing on June 18th. And Lisa, the Trump administration is making another big move against Harvard, revoking the university's ability to enroll international students.

It says thousands of current students now have to transfer to other schools or leave the country. The Department of Homeland Security says Harvard has created an unsafe campus environment by allowing anti-American, pro-terrorist agitators to assault Jewish students on campus. Former Treasury Secretary Larry Summers is Harvard's president emeritus. This is vicious. It is illegal. It is unwise. And it is very damaging.

Why does it make any sense at all to stop 6,000 enormously talented young people who want to come to the United States to study medicine?

from having that opportunity. Former Harvard president Larry Summers told Bloomberg, quote, this is the stuff of tyranny. The Homeland Security Department also accuses the university of coordinating with the Chinese Communist Party, saying it hosted and trained members of a Chinese paramilitary group as recently as last year. Well, meanwhile, Columbia University, also under continued scrutiny by the Trump administration, a government that has been

In a government inquiry, it's found the Ivy League school violated federal civil rights law by acting with, quote, deliberate indifference toward the harassment of its Jewish students. Columbia has stated that it is, quote, deeply committed to combating anti-Semitism and all forms of harassment and discrimination on our campus. All right, let's turn to markets now, Lisa. Stocks are on track for their worst week in more than a month, and bond markets, as we said, are reflecting investor concerns about ballooning U.S. debt and deficits.

Kathy Jones is Chief Fixed Income Strategist at Schwab Center for Financial Research.

The initial catalyst or the immediate catalyst was the budget bill, which was kind of a final straw for the market saying, OK, there's really no meaningful progress going to be made anytime soon on reducing the deficit. Kathy Jones of Schwab notes 30-year bond yields this week reached a peak of 5.15%. That approached levels last seen in 2007. This morning, the long bond is yielding 5.02%.

Well, a worldwide survey of businesses shows those most worried about tariffs are in the U.S. Bloomberg's John Tucker following that story. Good morning. Good morning, Lisa. 5,700 international firms in 13 countries were surveyed by HSBC. About a quarter of U.S. companies say they're forecasting their revenues will be cut by more than half over the next couple of years because of the impact of the Trump tariffs on their supply chains.

By contrast, Chinese businesses, they appear to be more optimistic, with only a quarter projecting an impact of 25% or more on revenues. Overall, HSBC found widespread concern about the tariffs. Vivek Ramachandran is head of global trade solutions at HSBC. Everyone we've spoken to is planning to reshape their supply chains, look at new markets, or change their business model. Two-thirds of the respondents say they had already experienced cost increases due to the tariffs,

and the trade uncertainty. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. And speaking of tariffs, stick with Bloomberg. We're going to have a conversation with Treasury Secretary Scott Besant. He'll be sitting down with Bloomberg's David Weston at our global headquarters in New York City. You can catch that conversation at 1130 a.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg podcast page on YouTube.

Well, Nathan, President Trump has initiated a phone call with the prime minister of Japan. This is just as Tokyo's top negotiator left for the U.S. for another round of trade talks. Prime Minister Shigeru Ishiba speaking through a translator says the two had a 45-minute conversation. We didn't discuss any details about tariffs. Japan's stance of seeking the removal of additional tariffs remains unchanged.

The other side also made no specific mention of this matter. The phone call between the two leaders was the first since early April when the U.S. ramped up its tariff against nations around the world, including Japan. Well, Lisa, top holders of President Trump's meme coin and other guests were greeted by protesters as they arrived for a dinner with the president at his golf club outside Washington last night. The gathering has faced criticism from Democrats who cited conflicts of interest

and the potential of selling access to the president, particularly to people from foreign countries. Here's White House Press Secretary Caroline Leavitt. The president is attending it in his personal time. It is not a White House dinner. It's not taking place here at the White House. Here's White House spokeswoman Caroline Leavitt. And at the dinner, President Trump gave a speech reiterating his pledge to make the U.S. the world's crypto capital.

All right, it's time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Lisa. Millions of people are planning to travel by either planes, trains, or automobiles as we start the Memorial Day travel rush. How is the weather looking for holiday travel? Bloomberg meteorologist Craig Allen has the latest.

There will be gradual improvement with each passing day as we go into the holiday weekend, especially in and around New York City and Point South. It'll take longer for some of the northern areas, like upstate New York or into New England from Boston on north, for it to gradually clear out and get a little bit better. But the trend is a better one overall, and we can expect temperatures to moderate too. By the time we get to Memorial Day itself, it should be back into the upper 60s to mid-70s.

Bloomberg meteorologist Craig Allen. The Sean Diddy Combs sex trafficking and racketeering trial will resume next Tuesday. Yesterday, fellow rapper and actor Kid Cudi, whose real name is Scott Muscati, took the witness stand. He testified about his relationship with Diddy's ex, Cassie Ventura, and violence that he says he was the victim of about 14 years ago.

Cuddy testified shortly after Combs found out he had been dating Ventura, someone set his car on fire. Combs has pleaded not guilty to all charges.

The music agency Sound Talent Group says three of its employees died on the private plane that crashed into a San Diego neighborhood on Thursday. And that includes Dave Shapiro, the agency's co-founder. Shapiro is listed as the owner of the plane and has a pilot's license. Six people were on that Cessna. It originated out of New Jersey's Teterboro Airport. The

The jet crashed into a neighborhood of U.S. Navy-owned housing in San Diego during foggy weather, igniting several homes and numerous vehicles parked on the street. This woman who lives there says the crash spilled jet fuel down the street. There's fire all in front of my house.

I didn't know. I just kept hearing explosions. And the fire was up to, like, right in front of my front door. So I'm trying to figure out how to escape with my kids. Despite the destruction, officials say no one on the ground was killed. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Lisa. Thank you, Michael.

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.

Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey. With smart business buying, get everything you need to grow in one familiar place, from office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon, plus tools that help you save costs and make insights-based decisions. Ready to bring your visions to life? Learn how at amazonbusiness.com.

All right, it's time now for our Bloomberg Sports Update. For that, we bring in John Stashower. Good morning, John. Good morning, Lisa. When we last saw the Knicks, they were suffering through the worst blown lead in an NBA playoff game in at least 27 years. There was a point in Game 1 with Indiana that the Knicks' win probability was said to be 99.7%. But it's the Pacers who won, bringing a 1-0 lead to Game 2 tonight at the Garden. Here's the Knicks. Mikael Bridges.

So it was just like them last five minutes, you know, and learning from it and just owning up to it and knowing what we got to do better. So it's not really crazy. Nothing to, you know, obviously we want that game back, but, you know, it's the seven-game series, so it was just...

Come out and be better, you know, play a whole 48 minutes next game. Game two in the West, they gave Oklahoma City star Shea Gilgis Alexander his MVP award. Then he scored 38 points, led the Thunder to a 118-103 win over Minnesota for a 2-0 series lead. Florida Panthers appear on their way to a third straight Stanley Cup final with a chance to repeat...

As cup champions, the Panthers won 5-0 at Carolina. Now go home up to Zen. Yankees and Rangers stadium matinee with Yankee rookie infielder Yorbit Vivas at the plate. Fifth inning. Vivas has run deep to right field. Ball is gone. Sia, his first big league home run.

♪♪

136 games, which would shatter the modern record set by the White Sox last year. They only lost 121. Mets and Dodgers start a series tonight at Citi Field. Red Sox and Orioles a day-night doubleheader at Fenway after last night's rainout. The Nationals won their fifth in a row, 8-7, 10 innings over Atlanta. John Stasiewicz, Bloomberg Sports, Lisa 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 am Nathan Hager. And President Donald Trump's one big, beautiful tax and spending cut bill may be making progress on Capitol Hill, but it may have to run through the gauntlet of a bond market that's raising a lot more alarm bells about what the legislation could mean for the country's already big deficit. Ella Hoja is head of fixed income at Newton Investment Management.

The danger for now is that this fiscal phenomenon feeds on itself. If it's a global phenomenon and you're seeing yields at the long end go up, that should be somewhat of a concern, certainly for risky assets and certainly for policymakers as well as they have to finance at much higher interest rates. That's Ella Hojove, Newton Investment Management. For more, we're joined by Bloomberg News Global Business Editor Joshua Galou. And Josh, we do still have a 30-year yield above 5%. It had been as high as 5.15 before backing off.

It gets your attention, but you got to wonder whether it gets Washington's attention. Good morning. Good morning. Yes, I think that the bond markets have been really clear about how they feel about this tax bill. You know, you saw the Moody's downgrade last week and the markets have responded as one would expect. Frankly, this bill adds anywhere from, you know, estimates range from about 10%.

two to two and a half trillion to more than five trillion dollars to the deficit over the over the 10 year over the 10 year horizon that it's that it legislates for. So

The markets aren't happy and this, you know, honestly, it creates big problems for the economy when the country has to borrow at these high costs. It's a compounding problem. So we'll have to see what happens as the bill now moves to the Senate. The Senate wants even more tax breaks and they're going to push for some of the business tax breaks that are set to phase out over the course of the bill's life.

to make those instead permanent, which would actually put more pressure on the borrowing. So we'll have to see what happens there. They're rushing it through as well. And this could result in more cuts to programs like Medicaid, SNAP, the nutritional program for kids of low-income households, and some of the other provisions that could come up.

like the state and local tax deduction that was so hardly fought in the House. So we'll have to see what comes out of there. But they're really trying to push it through to get it to Trump's desk by July 4th, which is an ambitious timeline. Yeah, less than two months from now. And while the bond market may be trying to put pressure on senators, President Trump and the administration are putting even more pressure on Harvard University now to pretty unprecedented levels in terms of their enrollment, Josh.

JOSHUA SHARFSTEIN: Indeed. This is a massive escalation of their policies toward higher education. They've been running towards elite schools for the past couple of months. So yesterday, Homeland Security revoked Harvard's ability to enroll international students. And it also said that current students who are internationals would have to either transfer to a new school or lose their status.

And it, of course, that's about a quarter of Harvard's population. This all stems from, you know, the administration's desire to crack down on what it's calling sort of lack of control to police anti-Semitism and also other diversity, equity, inclusion policies that it's that it's pointed to over the course of the last few months. It's a very aggressive policy.

policy, something that is unprecedented, as you said. And Harvard, of course, is challenging them in court. And we'll have to see how that goes. 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 Nathan Hager. And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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. Smart business buying tools enable buyers to find and purchase items fast so they can focus on strategy and growth. It's time to free up your teams and focus on your future. Learn more about the technology, insights, and support available at amazonbusiness.com.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more. This is an iHeart Podcast.