Bloomberg Daybreak: US Edition

Today's top stories, with context, in just 15 minutes.

On today's podcast:

1) The US and China have sealed a two-month extension to their trade truce, according to Treasury Secretary Scott Bessent. Xi Jinping is visiting the US for the first time in eleven years, and has stated he is "confident" the trip would produce "fruitful results." The truce extension ensures stability until 2027, but expectations for major breakthroughs have been low, with the US yet to be satisfied with China's offer on rare earths and possibly other issues.

2) Iranian President Masoud Pezeshkian said his country won’t allow freedom of navigation through the Strait of Hormuz while sanctions and a US blockade remain in place. Pezeshkian’s address laid out conditions before any meaningful talks with the US can resume, including the US immediately lifting a naval blockade and unfreezing Iranian assets. Iran is ready to resume talks about ending the conflict with the US but will not respond to threats, and will not give up the right to develop nuclear technology for economic purposes.

3) Yields on the US government’s longest-dated bonds climbed to the highest level in more than two decades, the latest milestone notched in an extended bond selloff driven by inflation and fiscal concerns. The rate on 30-year Treasuries rose as much as four basis points on Thursday to 5.44%, the highest since 2004, after Brent crude oil prices jumped. It follows a surge this week that left yields across maturities around the highest levels since 2007. Pressure on long-dated bonds has mounted as economic growth, elevated energy prices as well as inflation and heavier government borrowing prompt investors to demand more compensation for locking up money for decades.

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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) President Trump said his officials had “very good” talks with Iranian envoys in New York, reviving hopes for a diplomatic off-ramp. Iran laid down “firm positions” for the reopening of the Strait of Hormuz, including the US immediately lifting a naval blockade, unfreezing Iranian assets and ending the war “on all fronts." Trump said the three-hour session was “very productive” and another was being planned for the near future, but it’s not clear what, if any, progress was made in New York.
2) President Trump is welcoming Xi Jinping to Washington for a state visit focused more on pageantry than policy, with low expectations for breakthroughs on long-standing feuds between the world’s biggest economies. The trip will include meetings on thorny issues such as trade and Taiwan, as well as a state dinner, with both sides having lowered expectations for either breakthroughs or bust-ups. Fault lines remain beneath the diplomatic efforts, including US concerns over China's grip on rare earths and Chinese opposition to a proposed US weapons package for Taiwan.
3) Several Senate Republicans are breaking from President Trump on issues such as the Iran war and fuel prices ahead of the Midterm elections. Republican lawmakers are calling for measures to reduce fuel costs, including a ban on diesel exports and releasing supply from the Northeast Home Heating Oil Reserve. Senate Armed Services Chair Roger Wicker is one such name, saying he wouldn't have scheduled such a lavish welcome for Chinese leader Xi Jinping. Wicker says he hopes President Trump asks about China's military buildup and support for Iran during tomorrow night's state dinner.

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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) Chinese and US officials discussed artificial intelligence, investment and trade in New York on Monday. The talks focused on delivering on what’s been agreed by the US and Chinese lead negotiators, according to China’s Vice Finance Minister Liao Min. A trade truce extension is possible, with US Trade Representative Jamieson Greer saying a three to six-month extension is possible.
2) Oil erased earlier gains on a report that Iran could reopen the Strait of Hormuz if the US lifted a blockade of its ports. Japan’s Kyodo News Agency reported that Iran has proposed to reopen Hormuz within seven days if the American blockade is lifted. It said Iran is trying to break a prolonged stalemate in the conflict and that the proposal will be used as the basis for discussions with mediating countries at the United Nations General Assembly. President Trump is set to address the United Nations General Assembly in New York later on Tuesday, and may meet with his Iranian counterpart, Masoud Pezeshkian, on the sidelines. Al Jazeera also cited Iran’s Revolutionary Guard as saying it could negotiate to end the war if the country’s national interest required it.
3) President Trump is set to sign a security deal with Denmark and Greenland to end a bitter dispute over the Arctic island, expanding Washington’s military role. The deal will leave Greenland under Danish sovereignty, with Prime Minister Mette Frederiksen saying it's "a good agreement" that benefits all sides. The US plans to reopen one military base in southern Greenland and establish a second site on the country’s east coast, according to people familiar with the matter.

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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) US and Chinese officials offered upbeat assessments of their talks on artificial intelligence, trade and investment, signaling a mutual desire to steady ties ahead of this week’s summit between leaders Donald Trump and Xi Jinping.China’s top trade negotiator, Li Chenggang, said the talks were held in a “good atmosphere” as he left JPMorgan Chase & Co.’s headquarters in New York on Sunday, while US Treasury Secretary Scott Bessent lauded “very successful” discussions. The Chinese official Xinhua News Agency called the exchange “candid, in-depth and constructive.”
2) Oil dropped for a fourth day, with Brent set for the longest run of declines since June, as traders tracked diplomatic efforts to end the US-Iran war and signs cargoes are still getting through the Strait of Hormuz.
3) The settlement talks between Paramount Skydance Corp. and California officials over the planned acquisition of Warner Bros. Discovery Inc. are said to include a financial penalty if the company fails to make good on a promise to distribute 30 films per year in theaters.Paramount would have to pay $30 million for each film that falls short of that goal, according to two people familiar with the discussions who asked to not be identified because the negotiations are private. It could also be forced to sell its stake in Miramax, the studio behind movies such as Pulp Fiction, if it fails to meet the target, one of the people said.

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Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week.

• In the US – we look at upcoming home building data
• In the UK – we preview elections in Germany
• In Asia – we discuss President Xi's visit to the US this week

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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) The US is expected to hold off announcing new tariffs on China and other trading partners until after next week’s summit between Presidents Xi Jinping and Donald Trump, according to people familiar with the matter, a delay that could preserve such a threat as leverage in the negotiations.
2) The current round of panic over artificial intelligence is based on the conviction that the technology has slipped out of human control to do its own bidding in several recent incidents. To some disillusioned AI researchers — and some senior employees at leading AI companies — this is an early sign of a true threat to human civilization. But other experts in the field are pushing back, claiming that such talk allows companies to sidestep accountability for real-world impacts of their technology. Critics see AI’s environmental impacts, the threat of job displacement, or the potential for mass surveillance as more urgent targets for policymakers.
3) At least two liquefied natural gas shipments transited the Strait of Hormuz this week as producers look for ways to increase flows to a market struggling with a lack of supply and surging prices.A tanker that loaded at Qatar’s Ras Laffan export plant in late August appeared in the Gulf of Oman earlier this week, according to ship-tracking data compiled by Bloomberg, indicating it had passed through the contested waterway. The vessel wasn’t sending a signal when it traversed Hormuz, but jamming and interference is common in the area, complicating efforts to ascertain the exact location of ships.

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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) The Federal Reserve raised interest rates by a quarter percentage point and plans an additional hike later this year to contain inflation. Chairman Kevin Warsh said the action shows the Fed is serious about delivering on the price stability objective and removing a dose of accommodation. The rate increase defied President Trump, who said on social media that US interest rates should be at 1% or lower and called for lower interest rates.
2) President Trump said he will put very serious tariffs or stop trading with Europe if he thinks the European Union's push to make Canada a potential associate is harmful to the US. European Commission President Ursula von der Leyen proposed Canada becoming the first associate member of the European Union, saying she would like to work with Canadian Prime Minister Mark Carney on the idea. Trump's comments risk further inflaming a simmering trade war between the US and Canada, with Trump having already imposed tariffs on Canadian goods and restricted Canadian goods from federal government purchases.
3) OpenAI shared several undisclosed incidents of its AI models misbehaving and unveiled a new framework for tracking and disclosing such occurrences going forward. The company detailed various instances of its artificial intelligence models misbehaving, including fabricating missing data and attempting to bypass network restrictions. OpenAI said it does not believe that the AI industry has solved alignment and monitoring to a sufficient degree to continue responsibly scaling at maximum speed for much longer.

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Bloomberg's Tom Keene, Jon Ferro and Lisa Abramowicz discuss remarks from Fed Chair Kevin Warsh following the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance. 

The Federal Reserve raised interest rates by a quarter percentage point and penciled in an additional hike later this year, steps aimed at containing inflation that will test Chairman Kevin Warsh’s relationship with President Donald Trump.

Wall Street traders drove stocks to the lowest since July on bets the Federal Reserve will keep raising rates to combat inflation after delivering its first hike in three years.

In his remarks to reporters, Fed Chair Kevin Warsh restated his concerns over inflation, saying too many categories of products and services were showing annualized price gains above 3% on a 6- and 12-month basis.

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The Federal Reserve raised interest rates by a quarter percentage point and penciled in an additional hike later this year, steps aimed at containing inflation that will test Chairman Kevin Warsh’s relationship with President Donald Trump.

“Today’s policy action will support a timelier return to the committee’s 2% goal,” officials said in a statement following the move Wednesday, referring to inflation. It was the US central bank’s first rate increase since July 2023.

Bloomberg's Tom Keene, Jon Ferro and Lisa Abramowicz break down the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.

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Today's top stories, with context, in just 15 minutes.
On today's podcast:
1) Senior Trump administration officials met with Anthropic's top Washington executive to discuss artificial intelligence safety risks. Tensions between Anthropic and the administration were reignited by a essay posted by the company's CEO Dario Amodei, who called for government regulation and urged pacing development of the most advanced AI systems. President Trump dismissed fears about AI risks as "a hoax" and rejected the idea of new rules, while leading AI developers have begun discussing AI safety concerns among themselves.
2) The Federal Reserve is expected to lift interest rates on Wednesday for the first time since 2023 as policymakers lose confidence that inflation will cool sufficiently without at least a nudge from the central bank. A rate hike could provoke fresh criticism from the White House, with President Donald Trump recently arguing that the US should have the lowest borrowing costs in the world. The Fed will release a post-meeting statement and updated economic forecasts and rate projections on Wednesday, with Chairman Kevin Warsh scheduled to hold a post-meeting press conference 30 minutes later.
3) European Commission President Ursula von der Leyen proposed Canada becoming the first associate member of the European Union. Von der Leyen discussed closer cooperation with Canada on manufacturing, tech, defense and energy, and cited the Arctic as a “flagship joint project.” Canada's priority list includes concluding the ratification of CETA, the EU-Canada Comprehensive Economic and Trade Agreement, and ironing out differences over EU's carbon pricing tool and rules.

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