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Trump Offers Fed Workers Buyouts; Investors Await Tech Earnings & Fed Decision
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Trump Offers Fed Workers Buyouts; Investors Await Tech Earnings & Fed Decision
Update: 2025-01-29
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On today's podcast:
1) Trump Offers Buyouts to Workers Balking at Return to Office
2) Investors Await Mag 7 Earnings & Fed
3) Microsoft Probing If DeepSeek-Linked Group Obtained OpenAI Data
See omnystudio.com/listener for privacy information.
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Transcript
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Bloomberg Audio Studios.
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Podcasts, radio, news.
00:00:52
Good morning.
00:00:57
I'm Nathan Hager.
00:00:57
And I'm Karen Moscow.
00:00:58
Here are the stories we're following today.
00:01:00
Karen, it is a big day as we await mag seven earnings and this afternoon's Fed decision, but we begin in Washington.
00:01:08
Where President Trump has been shaking up the federal government on a number of levels.
00:01:12
Let's start with the latest development.
00:01:14
The president is offering buyouts to federal workers who don't want to comply with his demands to return to the office full time.
00:01:20
A memo titled "Fork in the Road" says the payments will run through September 30th, as long as the employees decide to resign by February 6th.
00:01:28
Democratic Senator Tim Kane isn't buying the president's offer.
00:01:32
He's tricked hundreds of people with that offer.
00:01:36
If you accept that offer and resign, he'll stiff you just like he stiffed the contractors.
00:01:41
He doesn't have any authority to do this.
00:01:44
Do not be fooled by this guy.
00:01:47
Democrat Tim Kane spoke on the Senate floor last night.
00:01:50
The memo from the Office of Personnel Management says the Trump administration is seeking a more streamlined and flexible workforce.
00:01:57
Well, Nathan, the buyout offer comes after surprise moved by the president to block trillions of dollars in government spending only to have it blocked by a federal judge.
00:02:06
On Monday night, the White House ordered agencies to pause all federal assistance to make sure it aligns with President Trump's agenda.
00:02:12
The move led many offices across the country to question whether it would affect medical research, anti-poverty programs, state and local aid.
00:02:19
White House Deputy Chief of Staff Stephen Miller says the review process would only last 90 days.
00:02:24
It's a review process to say that there's for discretionary spending that's not directed by Congress or required by law.
00:02:32
So this would be, for example, something like a contract to a non-governmental organization to teach, say, critical race theory.
00:02:39
But the confusion led the White House to issue a second memo, saying things like Medicaid, Social Security and rental assistance would be left intact.
00:02:47
But the order is on hold for now, as we hear from Bloomberg's Derek Wallbank.
00:02:51
A federal judge did come in and stay a lot of this order.
00:02:55
Basically said, no, we're going to keep this going now, but I want to have some arguments come in later.
00:03:01
So that'll be something that we'll have to watch coming up next week and beyond.
00:03:05
There will be a lot of court action here.
00:03:07
Bloomberg's Derek Wallbank reports that memo gets into a thorny constitutional issue.
00:03:11
Whether the president has authority to halt spending that Congress has already approved.
00:03:16
Staying in Washington, Karen, Robert F.
00:03:18
Kennedy Jr.
00:03:19
is facing confirmation hearings today as he aims to become the next health and human services secretary.
00:03:24
Bloomberg's Amy Morris has a preview from Washington.
00:03:27
In prepared testimony for the Senate committee, seen by Bloomberg News, Kennedy says he's neither anti-vaccine nor anti-industry.
00:03:34
And he says all of his children are vaccinated.
00:03:37
Back in 2023, though, he linked vaccines to autism, something scientists dispute.
00:03:42
Do you believe that autism does come from vaccines?
00:03:45
But today he says he believes vaccines should be left up to the parent not mandated.
00:03:49
His cousin, Caroline Kennedy, has a plea for senators, something her son posted on X.
00:03:54
I urge the Senate to reject his nomination.
00:03:57
RFK Jr.
00:03:58
also changed his stance on abortion after former Vice President Mike Pence opposed his nomination.
00:04:03
In Washington, Amy Morris, Bloomberg Radio.
00:04:05
All right, Amy.
00:04:05
Thank you.
00:04:06
And to hear RFK Jr.'s confirmation hearings stay with Bloomberg.
00:04:09
We will have full coverage starting at 10 a.m.
00:04:12
Wall Street time right here on Bloomberg Radio and on the Bloomberg Podcast page on YouTube.
00:04:17
Well, Nathan President Trump has threatened to impose a 25% tariff on Canadian goods on Saturday, February 1st.
00:04:24
Kristia Freeland, who is running to succeed Prime Minister Justin Trudeau, is urging the government not to wait to respond.
00:04:31
Bloomberg, David Guras and Toronto for an exclusive sit-down with Freeland.
00:04:35
Kristia Freeland sent shockwaves through Canada when she stepped down as Prime Minister Trudeau's deputy in December.
00:04:41
In her resignation letter, she accused him of failing to prepare Canada adequately for a second Trump term.
00:04:47
Now, Freeland is making a bid to lead Canada's Liberal Party and to be the next Prime Minister.
00:04:52
And she says weakness is a provocation for President Trump.
00:04:56
And capitulation is not a negotiating strategy.
00:04:59
Well, I think we should start responding today.
00:05:04
I think that we should publish for consultation a retaliation list.
00:05:10
I think it should be massive, right?
00:05:12
It should be 200 billion.
00:05:14
That's not saying that we retaliate at 200 billion, but giving us a menu, like a smorgasbord of choices.
00:05:22
And we need to publish it now, because when President Trump says America first, I believe him.
00:05:29
Freeland says Canada needs to appeal directly to Americans, so they understand what's at stake if there's a trade war.
00:05:36
In Toronto, David Guras, Bloomberg Radio.
00:05:39
Okay, David, thank you.
00:05:40
Turning to markets.
00:05:41
Now, tech stocks saw rebound on Wall Street yesterday.
00:05:44
It came as we have new developments involving the Chinese artificial intelligence startup Deepseek.
00:05:50
For that, we're joined by Bloomberg's John Tucker.
00:05:52
Morning, John.
00:05:53
And Nate, let's start with the markets.
00:05:55
Relative sense of calm prevailed after that pretty rough start to the week following a plunge that erased almost $600 billion in value Monday.
00:06:03
Nvidia rallied 8.9% with a punishing selloff and tech stocks spelled opportunity for dip buyers following the round investors poured $4.3 billion into the tech heavy invest go QQQ ETF.
00:06:17
It's biggest one day haul in three years.
00:06:20
Now, meantime, some of the shine may have come off the Chinese AI startup Deepseek source to say Microsoft and open AI are investigating whether the data output from open AI's technology was obtained.
00:06:32
In an unauthorized manner by a group linked to Deepseek in New York, I'm John Tucker, Bloomberg Radio.
00:06:39
Great.
00:06:39
John, thank you all shares of ASMR are so ring.
00:06:42
They're up almost 9% overseas.
00:06:45
The Dutch company's booking orders were worth twice as much as analysts expected as the artificial intelligence boom fuels demand for its chipmaking machines.
00:06:53
Man, the tech earning story is going to continue here in the US.
00:06:56
Karen, we're going to start to get results of the magnificent seven today.
00:07:00
Let's get a preview now from Bloomberg's Tom Busby.
00:07:03
Microsoft meta and Tesla all reporting their latest quarterly results today.
00:07:07
Revenue at Microsoft expected to grow 11% its lowest increase in a year and a half.
00:07:11
Meta expected to post a 17% spike in revenue on a boost in advertising.
00:07:16
Investors will want to know more about its plans to spend $65 billion to grow out its AI strategy.
00:07:22
And Tesla expected to report weaker gross margins after slashing prices on vehicles and because of unfavorable exchange rates.
00:07:29
But investors eager to hear a timeline for its long awaited lower price vehicle.
00:07:33
Tom Busby, Bloomberg Radio.
00:07:35
All right, Tom.
00:07:36
Thank you for turning to the economy.
00:07:37
We get the Fed's first policy decision of the year and the first Donald Trump back in office.
00:07:43
Bloomberg's Michael McKee is a preview.
00:07:45
Discretion is likely the better part of valor for the Fed today with inflation sticky and Donald Trump's fiscal policies incomplete and unclear.
00:07:54
There's little reason for the central bankers to make a move on interest rates now.
00:07:58
The same logic applies to Chair Jay Powell in his post meeting news conference.
00:08:03
Expect him to try to make as little news as possible, avoiding forecasts and dodging any what would you do if questions.
00:08:11
After cutting rates 100 basis points over the past three meetings, this one may be the quietest in some time.
00:08:18
Michael McKee, Bloomberg Radio.
00:08:20
All right, Mike.
00:08:21
Thank you.
00:08:21
Well, stay tuned for Bloomberg's live coverage of the Fed decision.
00:08:24
It begins at 1 30 PM Wall Street time on Bloomberg Radio and the Bloomberg podcast page on YouTube.
00:08:31
Time now for a look at some of the other stories making news in New York and around the world.
00:08:37
And for that, we're joined by Bloomberg, some Michael Barr, Michael Good morning.
00:08:40
Good morning, Karen.
00:08:41
There were at least three ice raids in New York City on Tuesday.
00:08:44
At least 20 people were taken into custody.
00:08:47
Frank Tarantino, DEA special agent in charge of the New York division says more multi-agency raids are likely.
00:08:55
This is part of the drug trafficking community.
00:08:57
This is exactly what we are designed to do.
00:09:00
And as to target the most significant drug traffickers and drug trafficking organizations who are causing the most harm.
00:09:05
And some of those happen to be criminal legal aliens.
00:09:08
Newly sworn in, DHS secretary Kristi Nome showed up for a major arrest in the Bronx.
00:09:14
President Trump will sign the Lincoln Riley Act into law today.
00:09:18
The House passed the legislation a week ago, named for a 22-year-old nursing student in Georgia, who was murdered by an undocumented immigrant.
00:09:26
The bill expands the federal government's mandate to detain undocumented immigrants.
00:09:31
Former New Jersey senator Bob and DHS will be sentenced alongside two co-defendants in a New York courtroom after being convicted on 16 counts of bribery, extortion, conspiracy,
00:09:42
and obstruction of justice.
00:09:43
The trial for his wife, Nadine, on similar bribery and corruption charges has been postponed until Marches.
00:09:50
She continues treatment for breast cancer, but DHS's lawyers filed a motion for a new trial, which the trial judge denied.
00:09:58
The White House confirmed with the Biden administration had said in December, "Those drones flying over New Jersey, near President Trump's Bedminster Gulf Resort, were not a threat."
00:10:08
New White House press secretary Caroline Levin.
00:10:11
The drones that were flying over New Jersey in large numbers were authorized to be flown by the FAA for research and various other reasons.
00:10:20
Spokesperson Levin adds some of the drones also belong to hobbyists.
00:10:23
Global News 24 hours a day, and whenever you want it with Bloomberg News Now, I'm Michael Barron.
00:10:29
This is Bloomberg, Karen.
00:10:30
Alright, Michael Barron, thank you.
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Here's John Stashauer, John Good Morning.
00:11:57
Good morning, Gary.
00:11:58
The St.
00:11:58
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00:12:06
It was easy in D.C.
00:12:07
66 to 41.
00:12:09
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00:12:12
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00:12:12
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00:12:14
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As well as things have gone this season for St.
00:12:44
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00:12:48
Pirates lost by 2 to Providence, now 1-9 in the Big East.
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Michigan State now 9-0 in the Big 10.
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Spartans are out of Minnesota.
00:12:53
Showed out on the S.D.C.
00:12:53
Kentucky 1 at Tennessee.
00:12:55
NBA and Philly Sixers beat the Lakers.
00:12:57
Tyrese Maxxie scored 43.
00:12:58
Nixon Nuggets tonight at the Garden.
00:13:01
Where the Rangers got shut out by Carolina 4-0.
00:13:05
So two home losses after the Rangers have gotten at least a point in 10 straight games.
00:13:09
They are again now on the outside looking in for a playoff spot.
00:13:12
As are the Islanders, but they had a big third period at UBS scoring four times to beat Colorado 5-2.
00:13:18
Bruins lost in Buffalo 7-2.
00:13:20
Capitals won in Calgary 3-1.
00:13:22
Spring training begins in a couple of weeks, and Peter Lanzo still without a team.
00:13:25
A report from the Met's network SNY that he and his agent Scott Boros are willing to go perhaps well into spring training before signing.
00:13:33
John Stachauer Bloomberg Sports.
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Coast to coast on Bloomberg Radio.
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Nationwide on Sirius XM and around the world on Bloomberg.com and the Bloomberg Business Out.
00:13:45
This is Bloomberg Daybreak.
00:13:47
Good morning.
00:13:47
I'm Nathan Hager.
00:13:49
President Trump's bid to shake up Washington ascending shockwaves across the country and the latest move is a buyout offer to federal workers who don't want to return to the office full time.
00:14:00
Democratic Senator Tim Cain is sounding a warning.
00:14:04
You will regret it just like these contractors who did work for this guy when he was a businessman.
00:14:10
And the buyout offer comes after the White House moved to block trillions of dollars in government spending only to have a judge put that order on hold.
00:14:19
Less than 24 hours later joining us now, Bloomberg's Kevin White Law.
00:14:23
It has been a pretty headspinning couple of hours in the nation's capital and beyond Kevin.
00:14:30
Good morning.
00:14:31
Let's start with this new buyout offer just because it is the newest thing.
00:14:34
Something we've seen in the private sector, but is it going to fly in the federal government?
00:14:39
Well, you know, obviously, Donald Trump is in the business.
00:14:42
He thinks of trying to shrink the government.
00:14:44
Some would say break the government.
00:14:47
Some would say fix the government.
00:14:49
But one way or the other, he is looking to essentially get rid of a number of federal employees that he sees are an obstacle to enacting his agenda.
00:15:02
The federal government workers obviously say that they're applying the law.
00:15:04
They work for part.
00:15:05
They're not partisan.
00:15:06
They work for whichever party.
00:15:08
That's the entire ethos of the federal bureaucracy, but that's definitely not the way Donald Trump sees it.
00:15:13
So the buyout offer is very much an effort to just say, well, here's one way out.
00:15:18
And obviously, I think Donald Trump knows that some of the broader efforts, which we expect to include reclassifying a bunch of federal employees, long time civil service employees as political.
00:15:30
And political roles so that they can be fired.
00:15:33
That's going to get challenged in court.
00:15:34
So I do think this is sort of an effort to say, well, people want an easy way out here it is.
00:15:40
And I think it's not it's not coincidental that this sort of comes amid all of these orders to free spending and the broader tumult over what the role of the federal government is going to be in the coming years.
00:15:52
Well, let's talk about this order that's now been put on hold at least temporarily by a federal judge was really interesting to see that this was seen as a review to ensure that spending that's been authorized by Congress aligns with President Trump's agenda.
00:16:10
I mean, where could this go from here?
00:16:11
Well, obviously, it was stopped almost immediately, but it has still, you know, at least temporarily by a judge, but it will still cause all kinds of confusion over what the role is of the federal government when it comes to this because obviously normally spending is Congress's purview.
00:16:29
And so I do think it does raise some very fundamental questions over exactly how and where when the money is authorized and spent.
00:16:38
So it's not clear that this Republican Congress is going to want to take on the president over this issue, but normally it is something that that that prerogative that Congress has that lawmakers have defended very,
00:16:50
very seriously.
00:16:51
In the meantime, it's caused all kinds of confusion and disrupted payments to vendors and to nonprofits and to, you know, everything from school lunches to to to to to to other aid programs.
00:17:06
So I do think it is going to raise some fundamental questions down the line over how reliable any of these federal programs are for for for the people and the companies,
00:17:19
the contractors and the workers that have all come to depend on just 30 seconds left, Kevin.
00:17:22
But did we get any clarity on what programs were covered under this order before it was temporarily halted?
00:17:27
I mean, they had to put out two memos to try to provide some guidance.
00:17:31
Right.
00:17:31
It does seem that the first one was written so broadly that it stopped all kinds of things they probably didn't intend to that got noticed more widely than they intended.
00:17:39
I think the problem here is the Trump administration simply underestimates just how important so many so many of these programs are to so many people including their own voters and their own constituents and their own party lawmakers in their own party.
00:17:54
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