Fed Served With DOJ Subpoenas; Iran Says Protests Quelled After Hundreds Reported Killed

The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand, but by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S&P 500. Or, if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by public investing. Brokred services by Open to the Public Investing Inc. member FINRA and SIPC. Advisory services by Public Advisors LLC, SEC registered advisor. Complete disclosures available at public.com slash disclosures. When you're running a business, the best days are the ones where priorities stay on track. For mid-size and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting. risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Bloomberg Audio Studios, Podcasts, Radio News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with an escalation in the feud between President Donald Trump and Fed Chair Jerome Powell. This time, the Justice Department is involved. Bloomberg's John Tucker Carlson joins us with the very latest John. And Nathan, Federal Reserve Chair Jerome Powell says the U.S. Central Bank has been served grand jury subpoenas from the Justice Department threatening a criminal indictment. Jerome Powell made the announcement in an extraordinary video statement released last night.

Given your explicit admissions regarding your intention to carry out military aggression against Iran, within the framework of legitimate self-defense, we do not consider ourselves limited to reacting only after an attack occurs, and we will act based on concrete indications of threat. That was Iran's parliament speaker speaking through an interpreter. Communications in Iran remain largely cut off, and that has made it difficult to track the full scope of the protest movement. Well, Nathan, we want to turn now to new developments involving Greenland. Danish broadcaster TV Chu says top diplomats from Denmark and Greenland will meet Secretary of State Marco Rubio in Washington on Wednesday. Denmark is banking on the meeting to diffuse President Trump's renewed push on Greenland. The president insists ownership of the island is a key issue. Look, if we don't take Greenland, Russia or China will, and I'm not letting that happen. If we don't take... Greenland. Russia or China will take Greenland. And I am not going to let that happen. Is there any deal they can offer you? Yeah, sure. I'd look to make a deal with them. It's easier. But one way or the other, we're going to have Greenland. Meanwhile, Bloomberg News has learned a group of European countries led by the UK and Germany as discussing plans for a military presence in Greenland. Meanwhile, Karen, President Trump is signaling he is leaning toward excluding ExxonMobil from his push for U.S. oil majors to rebuild Venezuela's petroleum industry. The president says he's displeased with the company's response to his initiative. Reviving oil and undoing years of underinvestment and mismanagement in Venezuela would, by some estimates, require $100 billion. dollars and take a decade. Well, back here, Nathan, tensions are made high in Minneapolis. Days after an immigration and customs enforcement officer shot and killed a woman drive during a tense confrontation in her car. Now Homeland Security Secretary Kristi Noem says even more federal agents are headed to the city. We're sending more officers today and tomorrow. They'll arrive. There'll be hundreds more in order to allow our ICE and our Border Patrol individuals that are working in Minneapolis to do so safely. Homeland Security Secretary Kristi Noem appeared on the Fox News program Sunday morning futures, but the debate continues over whether ICE agent Jonathan Ross was justified in shooting Renee Good with multiple videos of the incident adding to the furor. Democratic Senator Tina Smith of Minnesota is saying that federal investigators need to work with state and local law enforcement. We need to have a fair and unbiased investigation so we can gather all of the evidence and all of the information and we can know exactly what's happening. And what I think is going on here is the administration does not want that to happen. And that looks to me like a cover up. Minnesota Democrat Tina Smith appeared on ABCs this week. Heardt every Sunday on Bloomberg Radio. Turning back to markets now, Karen, besides Fed pressure, investors have another thing to focus on this week. Bank earnings. Let's get a preview of that.

from Bloomberg's Charlie Pellett. The results from the nation's biggest banks will give us the first glimpse into how Wall Street navigated the last months of 2025 amid President Trump's trade wars and ongoing geopolitical tensions. Betsy Grasick is global head of banks at Morgan Stanley. Our setup is a positive for Tuesday kickoff. And what I think matters is both the outlook here for earnings as well as the pent-up backlog building in the capital markets. J.P. Morgan Chase reports Tuesday. Citigroup Bank of American Wells Fargo all report on Wednesday in New York. Charlie Pellett, Bloomberg Radio. All right, Charlie, thank you. Credit card companies falling in early trading. The drop comes after President Trump said that credit card lenders would be in violation of the law if they do not heed his call to cap interest rates at 10% for one year. Right now, Capital One and Synchroni Financial are both down about 9%. And American Express is down more than 4%. Walmart, Karen, is up more than 3.5%. The retail giants getting ready to join the NASDAQ 100 index replacing AstraZeneca. takes effect before the market opens January 20th. Walmart's edition follows its move last year to shift its stock listing from the New York Stock Exchange to the NASDAQ. And in Europe, Nathan Heinegan, looking for a new boss. CEO, Don Fendon Brink, is stepping down after six years at the helm of the brewer. The move comes months after the company warned on profit over falling beer sales.

Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. About 16,000 nurses at New York City hospitals are set to strike any moment now if the union does not reach a contract agreement with private hospitals soon. It would be considered the largest nurses strike in city history. Their contract expired December 31st. The union, the New York State Nurses Association, is still in talk. with those private hospitals. They want higher pay and safer working conditions. It comes as flu cases are spiking in New York. Governor Kathy Hochul has declared a state of emergency ahead of the potential strike, pleading with both sides to stay at the table. This could jeopardize the lives of thousands of New Yorkers and patients. 42 states, including New York, are seeing high or very high levels of flu activity. A plan protest in Westwood, California by Los Angeles's Iranian community was disrupted Sunday afternoon when a U-Haul truck drove into the crowd. After running to get out of the way, people went after the driver dragging him out of the cab of the box truck. LAPD, Captain Richard Galbadon was asked about charges against the driver. It's an open traffic investigation. We're looking at a possible assault with a deadly weapon, the deadly weapon being the vehicle being used, but that's ongoing right now. Captain Galbadan says the driver's identity has not been released and is being treated at a local hospital for injuries. Paul. Thomas Anderson's ragtag revolutionary saga won battle after another, and the Shakespeare drama Hamnet took top honors at Sunday's 83rd Golden Globes. Anderson became just the second filmmaker in Golden Globes history to ever sweep best film, best director, and best screenplay. Only Oliver Stone for Born on the 4th of July managed the same feat. Timothy Salome won his first Golden Globe for Marty Supreme. My dad instilled in me a spirit of gratitude growing up. Always be grateful for what you have. It's allowed me to leave this ceremony in the past, empty-handed. My head held high, grateful just to be here. But I'd be lying if I didn't say those moments didn't make this moment that much sweeter. Sinners won for best score in cinematic and box office achievement. The ceremony was broadcast on CBS. Global news, 24 hours a day. And whenever you want it with Bloomberg News now. I'm Michael Barr. And this is Bloomberg, Karen. Thanks, Michael. Time now for our Bloomberg Sports Update, and for that we bring in John Stash Hour. Thanks, Karen. The NFL playoff triple-hunter began in Jacksonville. The Bills and Jaguars, six lead changes, four in the fourth quarter. Josh Allen's touchdown run with just over a minute to play, gave Buffalo a 27 to 24 victory. It's the bill's first playoff road win since 1992. Next stop, Philadelphia, the 49ers, a trick-play touchdown, first play of the fourth quarter, and then with five minutes to go. Christian McCaffrey scored on a pass from Brock Purdy. Dehrone the Eagles, 2319. Last night, the Patriots beat the Chargers 16 to 3. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this.

Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S&P 500. Or, if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokridge services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors LLC, SEC registered advisor. Complete disclosures available at public.com slash disclosures. Hi, I'm David Weston. Join me every week for the Wall Street Week podcast to hear stories of capitalism from around the world. From geopolitical tensions and central bank decisions to artificial intelligence, energy, and infrastructure, we sit down with the CEOs, economists, policymakers, and thought leaders whose decisions are shaping markets everywhere we find them. Subscribe to the Wall Street Week podcast on Apple, Spotify, or anywhere you listen.

Coast to coast on Bloomberg Radio, nationwide on SiriusXM, and around the world on Bloomberg.com and the Bloomberg business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. The Federal Reserve is facing even more political and legal pressure now with Chair Jerome Powell saying the Justice Department has served subpoenas against the central bank over his testimony about the Fed's building renovations, but Jerome Powell is vowing to stand firm. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do. with integrity and a commitment to serving the American people. That was, Chair Jerome Powell, in a video statement last night. And this morning, we're joined by Bloomberg's DC Breaking News editor, Alexander Pearson. Alex, to say there's new pressure on the Fed, maybe a real understatement. Now, what do we know more about these subpoenas that the chairman announced last night? Good morning. Good morning, Nathan. Yes, this was really quite an escalatory move by the Trump administration yesterday. And so far, we've actually heard very little from the administration. We got this announcement from Chairman Jerome Powell. about the subpoenas, but we've not yet heard from the Department of Justice or Attorney General Pam Bondi yet. We did get some comments from President Trump yesterday as he was traveling, saying that he was not aware of the subpoenas, but he thought that they had nothing to do with interest rates as Chairman Jerome Powell contended that the move was about. Well, we are getting some information, though, aren't we about who may be behind these subpoenas? I mean, there has been an ongoing pressure campaign, as you say, against the Federal Reserve coming out of the Trump administration. Absolutely, yes. So we do have, this has not been confirmed yet officially, but we have our own reporting indicating that the housing finance director Bill Pulte was really a driving force behind these subpoenas. He's long been a very vehement critic of Jerome Powell and also the Federal Reserve's pace of cutting rates last year. And we have it that he has been sort of pushing this, but he's obviously has a in Trump, someone who is also very much believing that the Federal Reserve has not been cutting rates aggressively enough and has now, you know, it's now escalated at this point where actually there's a threat of a criminal indictment.

And we know that Chairman Bill Pulte has also been a driving force behind the pressure campaign on Fed Governor Lisa Cook, the accusations of mortgage fraud that continue to play themselves out in the courts. Put this in that context as well. I mean, it really does seem like there is just unrelenting pressure on the Fed at this moment. Yeah, absolutely. It really just keeps escalating. And as you say, another federal board member, Lisa Cook, is also under investigation for alleged mortgage fraud. That's now going to go to the Supreme Court. And, you know, this is all basically at its most simple level. It's really just the Trump administration's frustration with the Federal Reserve as it is constituted right now. in its caution with cutting interest rates. Jerome Powell and other Federal Reserve board members are still a bit cautious about elevated inflation, about inflationary pressures from tariffs. And so they have been cutting, but cutting at a relatively cautious rate, sort of pace. And Trump and his allies have, you know, repeatedly ever since taking office last year, called for far more aggressive stance on interest rates. And what could this mean for, you know, some of the other aspects of this that we're watching going forward? I mean, we're expecting that President Trump at any moment really is going to be announcing his replacement for Chair Jerome Powell. What kind of pressure does that potentially put on who that next pick could be? That's right. So currently President Trump is considering a number of names to replace Chairman Jerome Powell when his term as chairman ends in May. And really, these moves against Chairman Jerome Powell and other members of the Federal Reserve is also seen as a signal to whoever succeeds Jerome Powell in that position, obviously with the intention of... making sure that they somewhat tow the line of the administration when it comes to setting monetary policy. And we've also heard from at least one Republican senator, Thom Tillis, saying that with this kind of pressure on Chairman Jerome Powell, he may be reticent to cast any vote in favor of confirmation for the next Fed chair. I mean, it puts a signal out there as well, doesn't it? That whoever comes out there is going to face a pretty tough road for confirmation while this continues to play out. Absolutely. And it's notable, given that Thom Tillis is also a Republican senator. And, you know, that is also just emblematic of really quite a lot of anxiety, not just within government, within Congress, but also in the wider markets as to Trump's campaign here. There is a sort of sense that he won't really go too far in threatening Fed independence, but, you know, each move that he makes has been quite escalatory. And that's probably led.

people like Thom Tillis to come out and really quite vehemently oppose what's being done and to threaten the nomination of any future nominee to the Federal Reserve Board. And while we continue to watch this pressure on the Fed, we're monitoring developments as well in Iran, where the regime there appears to be under the kind of pressure that it hasn't seen in many years with these street protests that have been underway since late last year. What's the latest there, Alex? Yeah, so it's now entering its third week of quite violent protests in Iran with hundreds of people who have been killed, thousands have been arrested, and President Trump has, ever since they erupted, very strong support for the protesters, without really elaborating what kind of support he might offer them. Last night, he did say that he was considering military options, and there was a report from the Wall Street Journal yesterday, earlier, sorry, said that he would meet with some of his senior advisors to discuss those options. It's not really clear what exactly he might choose. There are a number of things he could do. There could be a direct military strike. There could be some sort of cyber attack. There could be maybe a tightening of sanctions on Iran. So right now we don't really know where the administration is leaning, but they're certainly considering an action that could be quite severe for Iran should these protests continue. And it's kind of difficult at this point to gauge just how serious a threat these protests are to the regime given. that the internet is blocked in much of the country. But what is the sense that we're hearing from some activist groups and other observers as to where this could go from here with these protests continuing, Alex? Got about a minute left. Yeah, I mean, really, it's the most sort of, these protests are the biggest challenge for the Islamic Republic since really 1979, according to many observers, given that they, that the economy is, you know, is not doing well. There is a currency crisis right now, and that actually sparked these protests a couple of weeks ago. And going forward, they're not really showing any signs of abating. And so if they continue, it could become a threat for the regime there. And as you say, we don't really know with crystal clarity what's going on on the ground. But Trump himself actually did say yesterday that he would potentially contact Elon Musk to try and get a Starling connection to try and get more information about what's happening there, just given that we can't, given that the internet's been cut off in the country, know all of the facts. 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 991 in Washington, Bloomberg 929 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 Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak. When you're running a business, the best days are the ones where priorities stay on track. For mid-size and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting. risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Get essential news on the people and companies pushing the tech sector to new frontiers. Hi, I'm Ed Ludlow. Join me for Bloomberg Tech, a daily podcast focused exclusively on technology, innovation and the future of business. Every weekday, we bring you the latest insights on Silicon Valley's top companies and conversations with tech's biggest decision makers. Listen to Bloomberg Tech on your commute home and stay ahead of the news cycle. Subscribe today on Apple, Spotify, or anywhere you listen.