Bloomberg Businessweek

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A federal judge rejected as improper Justice Department subpoenas issued to the Federal Reserve Board seeking records relating to its renovations of its headquarters and Chair Jerome Powell’s comments to Congress about the project.

US District Judge James Boasberg said the government had advanced no evidence to justify the subpoenas and said they clearly reflected an “improper motive” of retaliating against Powell over policy differences. Jeanine Pirro, who leads the US Attorney’s Office for the District of Columbia, called the ruling wrong and said they would appeal the decision.
The White House didn’t immediately respond to a request for comment. The Fed declined to comment.

“A mountain of evidence suggests that the government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning,” Boasberg said. “On the other side of the scale, the government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the court can only conclude that they are pretextual.”

DOJ issued subpoenas to the Fed in January threatening a criminal indictment, Powell said at the time. The subpoenas are related to the Fed’s ongoing $2.5 billion renovation of its headquarters in Washington and testimony Powell provided about the construction before the Senate Banking panel last year.

Powell, in an unusually forceful video response to the subpoenas, characterized the investigation as motivated by the Fed refusing to set interest rates according to the preferences of President Donald Trump.

Kevin Warsh, a former Fed governor, has been nominated by Trump to replace Powell when the latter’s term as chair ends in May. North Carolina Republican Thom Tillis, a member of the Senate Banking Committee, has vowed to block any Fed nominations as long as the DOJ investigation of Powell remains unresolved. Tillis reiterated that commitment this week.

Today's show features:
Elliot Stein, Bloomberg Intelligence Senior Litigation Analyst
Mike Collins, PGIM Fixed Income Managing Director & Executive Portfolio Advisor
Oleksandr Komarov, Kyivstar CEO
Katrina Manson, Bloomberg News Reporter covering Tech and National Security
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Today the world of private equity and credit is a rancid pool of conflicts and illegality that cannot possibly be seen as superior to public markets. Private equity executives even enjoy special tax provisions from Congress for "carried interest" to reward them for their efforts in soaking investors. Advocates of private schemes like crypto tokens, which are explicitly not considered securities, buy and sell Members of Congress like chattel.

Chris Whalen, former banker and risk analyst weighs in on the latest concerns in private credit on the back of this week’s headlines including JPMorgan Chase restricting some lending to private credit funds after marking down the value of certain software-linked loans in its portfolios. AS well as Morgan Stanley and Cliffwater capping withdrawals from their private credit funds
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The people, companies and trends shaping the global economy.
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

Iran’s new supreme leader said the Strait of Hormuz should remain shut and Tehran will look to open other fronts in the war if the US and Israel persist with their attacks.

In his first public comments since succeeding his father at the weekend, Mojtaba Khamenei said the Islamic Republic would seek to ensure the critical waterway for oil and gas stays effectively closed — maintaining a choke on supplies that’s triggered a surge in global energy prices.

His statement — published on state media on Thursday — came as US President Donald Trump said preventing Iran from having nuclear weapons and being a threat to the Middle East is “of far greater interest and importance to me” than the cost of oil.The defiance shown by both leaders indicates that the war in the Middle East isn’t close to a de-escalation after almost two weeks of fighting. Israel launched a fresh wave of large-scale strikes across Iran on Thursday, while the Islamic Republic stepped up attacks on Dubai and shipping assets.

Today's show features:
Jennifer Welch, Bloomberg Economics Chief Geoeconomics Analyst
Rockford Weitz, Tufts University's Fletcher School of Law and Diplomacy Professor of Practice & Director of the Maritime Studies Program
Jason Greenblath, American Century Investments Senior Portfolio Manager
Michael Lohan, CEO of IDA Ireland
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WWE Superstar Charlotte Flair (Ashley Fliehr) has joined Self-Care Is For Everyone (SCIFE) as the brand’s first Angel Investor and official Brand Champion. Ashley’s investment will directly fund SCIFE’s expansion from a viral apparel-led advocacy brand into a multi-platform mental health media and product company. For Ashley, this investment is deeply personal — as an elite performer who has navigated the pressures of global visibility, injury, reinvention, and resilience, she believes mental strength and emotional well-being are foundational to long-term success.

Backing SCIFE is her commitment to normalizing self-care conversations and ensuring mental health support is accessible, aspirational, and stigma-free for the next generation. She speaks with Bloomberg's Carol Massar and Norah Mulinda.
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The people, companies and trends shaping the global economy.
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

A key measure of US inflation was tame at the start of the year. But another metric is shaping up to paint a very different picture.Wednesday’s report on the consumer price index showed core inflation, which excludes food and energy costs, was mild in both January and February — a pleasant surprise as companies tend to raise prices at the turn of the year. Yet economists expect another gauge, one preferred by the Federal Reserve and set for release on Friday, was probably rather strong in both months.

The fact that the personal consumption expenditures price index has been outpacing the CPI is already unusual. Typically it’s been the other way around, as a higher weighting on housing costs in the CPI tends to keep that measure relatively elevated.
Now the wedge appears to be deepening. Should the core PCE rise 3.1% in the year through January as economists expect, it would exceed the annual core CPI by one of the widest margins in decades.

The divergence began before the Iran war, which has sent oil prices sharply higher and renewed risks of a broader acceleration in inflation. That puts the Fed in a tough spot. While policymakers are broadly expected to leave interest rates unchanged next week, a sustained pickup in price pressures would make it difficult for officials to justify resuming rate cuts in coming months to shore up a fragile labor market.

The PCE price index, a product of the Bureau of Economic Analysis, draws from the CPI for several price categories. In the wake of the latest CPI data, economists were quick to boost their forecast for the February core PCE price index, which is due April 9. Several projected it would rise 0.4% for a second month, with some penciling in a bigger pickup.

Today's show features:
Yelena Shulyatyeva, The Conference Board Senior US Economist, on today's CPI reaction as we count down to next Fed decision
Gerry Doyle, Bloomberg News Global Defense Editor on Iran’s Cheap, Plentiful Weaponry Puts US Military Under Strain
Gary Evans, US Antimony CEO on the company's $27M award from Dept of Defense under the Defense Production Act
Ellen Wald, Transversal Consulting & Atlantic Council Senior Fellow on the latest in the oil markets
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