Iran Hawks Left Reeling, Warsh Rocks Bond Market, More

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Bloomberg News Now 9 min 8 speakers 4 chapters transcribed 3 months ago
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What is the main topic discussed in this episode?

Ashley Roberts 0:00
The Big Take podcast from Bloomberg News keeps you on top of the biggest stories of the day.
Donald Trump 0:05
My fellow Americans, this is Liberation Day.
Ashley Roberts 0:08
Stories that move markets.
Chair Powell opened the door to this first interest rate cut.
Ashley Roberts 0:14
Impact politics. Change businesses. This is a really stunning development for the AI world. And how you think about your bottom line. Listen to The Big Take from Bloomberg News every weekday afternoon on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Caroline Hepker 0:32
News when you want it with Bloomberg News Now. I'm Caroline Hepker. President Trump has signed an interim deal to end the war with Iran and reopen the Strait of Hormuz. According to a US official, the so-called Memorandum of Understanding is now in effect. However, it's unclear whether Iran has begun taking steps to fully reopen the waterway. Explaining his decision to agree to an interim peace deal, President Trump repeated his insistence that the country would never obtain a nuclear weapon. Yet he went on to suggest that Iran should have the right to enrich uranium for electricity and be allowed to develop ballistic missiles.
Donald Trump 1:13
If other countries have them, it's a little bit unfair for them not to have some. A ballistic missile is not the same thing as what we're talking about when we talk nuclear. But if Saudi Arabia and Qatar and they all have some, I would say in relative proportion, I think it's OK.
Caroline Hepker 1:31
Trump also defended the $300 billion development programme for Iran in the deal while saying that he is ready to release billions of dollars in Iranian frozen assets.
Donald Trump 1:43
We have their money. We have taken their money. It's not our money. It's their money. And we froze it. At a certain point in time, I guess we're going to have to give it back. You know, if we didn't give it back, nobody would ever invest in the dollar again.
Caroline Hepker 1:58
The details of Trump's deal have prompted unusually strident criticism from Iran hawks who say it amounts to a victory for Tehran. Speaking to Bloomberg government, Trump's first-term vice president, Mike Pence, argued that the agreement makes no mention of verifiably dismantling the country's nuclear weapons programme. The signing of the deal with Iran capped off Emmanuel Macron's last time hosting a G7 summit. Our reporter James Walcock has more on that now.
James Woolcock 2:31
It started with a fight, then came flattery, before finally a surprise deal was signed. The G7 might sound closer to the plot of reality TV, perhaps The Apprentice, though with far more Chanel bags. The other notable theme was gentle teasing about football and how countries are doing in the World Cup. But the carefully choreographed event was designed by host France to impress Trump and bring him closer to Europe's view on Ukraine. In that regard, it seems to have been a success.

What recent developments have occurred regarding the Iran deal?

James Woolcock 3:00
In London, James Wilcock, Bloomberg Radio.
Caroline Hepker 3:03
Now, traders have piled into bets on rate hikes after Fed Chair Kevin Walsh used his first rate decision press conference to emphasise that the central bank won't tolerate high inflation. As expected, policymakers voted unanimously to hold interest rates steady in a range of 3.5% to 3.75%. However, it was Kevin Walsh's comments to reporters after the decision that caught the attention of markets.
Kevin Warsh 3:30
Persistently high prices are a burden for the American people, but the recent past need not be prologue. I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.
Caroline Hepker 3:48
Walsh largely sidestepped a question on why the Fed didn't go ahead and raise interest rates now, given that inflation is running at more than double the US central bank's 2% target. Meanwhile, the Bank of England is expected to leave interest rates unchanged today after UK inflation came in steadier than expected. Both traders and economists believe that rates will be held at 3.75% even with the recent energy shock. Hugh Gimbert is global markets strategist at JPMorgan Asset Management.
Hugh Gimber 4:20
We see no reason for central banks here to be hiking rates, not only because oil prices are coming down, but particularly given the softness in labour markets and wages especially.

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