Trump Attacks Fed Hike, Suggests Tariffs on Europe

SPEAKER_1 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Nathan Hager (0:10)

Good morning, I'm Nathan Hager.

Karen Moskow (0:11)

And I'm Karen Moskow. Here are the stories we're following today.

Nathan Hager (0:16)

Karen, President Trump is criticizing the Fed for deciding to raise interest rates to a range of three and three quarters to four percent. It was a unanimous quarter point hike, the first Fed's increase in borrowing costs more than three years. The president spoke to reporters about Chair Kevin Warsh and the decision.

Donald Trump (0:35)

I'm relying on Kevin, but he's got a very tough board. He's got a board that was put there by a lot of other people, and the interest rates are too high. They're not appropriate. And I talked to Kevin, and I said, You might as well vote with the board because it's not going to matter.

Nathan Hager (0:51)

President Trump went on to say rates should be at 1 percent or lower.

Karen Moskow (0:55)

Kevin Warsh, Nathan, President Trump's pick to lead the Fed, was sworn in less than four months ago. He defied many skeptics with the rate hike.

Kevin Warsh (1:03)

So the labor side of the Fed's congressional remit is in good shape. Yet for more than five years, inflation has been running above target. So our predominant focus is on the price stability side of our mandate. The plain fact is that inflation is too high and has been for too long.

Karen Moskow (1:25)

Traders quickly priced an additional rate increase from Warsh and his colleagues and pushed down their expectations for inflation in coming years. We got this reaction from former Fed regional presidents James Bullard and Patrick Harker.

James Bullard (1:38)

I think this was a pretty good outcome for the Fed. You know, they got their interest rate increase in, which I think was appropriate. Yeah, three more sounds a little high compared to what the committee seemed to be saying. They probably want to see more data before they commit to that.

Karen Moskow (1:54)

And former Fed regional presidents James Bullard and Patrick Harker are reacting to the Fed's rate hikes. Traders are pricing in more than a 50% chance of a hike at the Central Bank's next meeting in late October. King Charles is preparing to host the world's leading tech executives at a royal event in Scotland. And AI is going to be the big topic. Tom McKenzie is covering the meeting in Glasgow.

Tom McKenzie (2:17)

This is quite telling, isn't it, that it falls to King Charles III to try to cajole and browbeat these AI executives to committing that they will build this technology in a way, the King says, that benefits all people. He is also pointing out he wants to see this AI technology to ensure that is not just ecologically sustainable, but interestingly, I thought as well, economically. It seems that this is a king, this is a monarch, this is a palace that wants to use its leverage to bring these executives together to see if there's some kind of consensus that can be formed.

Karen Moskow (2:48)

Bloomberg's Tom McKenzie in Glasgow says, NVIDIA CEO Jensen Wong, OpenAI's Chief Financial Officer Sarah Fryer and Google DeepMind co-founder Demis Hassabis are attending the event.

Nathan Hager (3:00)

Here in the US, Karen, OpenAI CEO Sam Altman will be on the guest list when President Trump hosts China's Xi Jinping for a White House state dinner next week. OpenAI confirmed that to Bloomberg News and a source says former Apple CEO Tim Cook will be there as well, along with NVIDIA's Jensen Wong. The gathering comes as lawmakers debate whether and how to add guardrails to artificial intelligence. Republican Congressman Mike Lawler of New York says there needs to be a whole-of-government approach to regulate AI.

Mike Lawler (3:28)

We want to have standards across the board that all of these AI companies are abiding by to make sure that you don't have a situation of hacking or cyber attacks, and also so that we are prepared in dealing with China, because China is not going to abide by the rules of the road.

Nathan Hager (3:45)

New York Republican Mike Lawler appeared on Bloomberg's balance of power. President Trump has blasted existential fears about AI as a hoax. He said the US needs to maintain its technological edge over China. At the same time, he says he has a great relationship with President Xi.

Karen Moskow (4:00)

None of the latest from the Middle East, Nathan, crude oil, it's falling as Saudi Arabia races to get a key pipeline back online after recent attacks. Sources say the East-West pipeline could be back to about half capacity within days and full operation is expected in six weeks.