Five Things You Need to Know to Start Your Day: Americas

Good morning. The Biden administration is considering toughening trade restrictions, weighing on technology shares. And Trump’s plans for ta [View in browser]( [Bloomberg]( Good morning. The Biden administration is considering toughening trade restrictions, weighing on technology shares. And Trump’s plans for taxes, trade and more in an exclusive interview. Here’s what you need to know. — [Morwenna Coniam]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Tough trade talk The Biden administration, facing pushback to its chip crackdown on China, has told allies that it’s [considering using the most severe trade restrictions](available if companies such as Tokyo Electron and ASML continue giving the country access to advanced semiconductor technology. Tech slump Concerns over stricter American trading curbs on China drove tech shares lower globally, with [Nasdaq futures losing more than 1%](. Nvidia, Intel and Apple all fell in trading before the open of US exchanges, while shares of [Dutch chip machinery-maker ASML]( sank in Europe despite posting growth in its order intake last quarter. Meanwhile the dollar tumbled to its weakest level in almost two months, a move amplified by a sharp rally in the Japanese yen that reverberated across global currency markets. Former President Donald Trump also flagged the exchange rate weakness in an interview. Trump talks taxes Trump’s one-time rivals[lined up to praise him]( at the Republican National Convention, saying he’s the best man to become the next president. Meanwhile, Bloomberg Business Week sat down with Trump last month for an exclusive interview where he discussed his proposed plans for taxes, the Fed and more if he wins the election. Trump said he’d bring the corporate tax rate to as low as 15%, allow Federal Reserve Chair Jerome Powell to serve out his term and consider JPMorgan’s Jamie Dimon for Treasury secretary. You can [read it here](. HSBC’s new boss London-headquartered bank HSBC Holdings has named Georges Elhedery its [next chief executive officer](, continuing the lender’s tradition of picking insiders to run the bank. What stands him apart though is that he speaks Mandarin, a key skill for one of his focus areas — [Asian wealth management](. Coming Up… We’ll start the day with some insights into the housing market with MBA mortgage applications, building permits and housing starts data. Later, industrial production and EIA crude inventories are also due and the Fed issues its Beige Book. Fed speakers include Thomas Barkin and Christopher Wallis, while Republican VP nominee JD Vance is scheduled to give a speech at the GOP convention in Milwaukee. On the corporate front, expected earnings include United Airlines, Discover Financial, Johnson & Johnson, Alcoa, First Horizon, US Bancorp and Equifax. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Here's what you need to know about [the policy stances of Trump running mate JD Vance]( - Wall Street starts calling time on[ESG labels]( after backlash - [Amazon advertising portal crashes,]( disrupting Prime Day sale - Paris mayor swims in Seine to show it’s [safe for olympic races]( - [UK pound hits $1.30]( for first time in a year after inflation data And finally, here's what Joe’s interested in this morning If you haven't read it yet, I would highly suggest reading the [full text of the Bloomberg Businessweek]( interview with Donald Trump, which touches on a wide range of topics from interest rates, to Ukraine and Taiwan, the reversal of his stance on banning TikTok, and his take on home affordability. Here's one of the questions that caught my attention: Do you think they should hold off, sir? Do you think they should hold off on lowering interest rates until after the election? Unless they cut other costs commensurate with interest, interest is a very big cost. So it’s hard. But yeah, there is: I have a plan to make up for that with energy cutting. Energy. We can cut energy way down. You know, I always say we have more liquid gold under our feet, which is true. We have more liquid gold than anybody. If we could get energy—energy is such a big cost and interest is such a big cost. But you know, the interest is sort of self-defeating because we have to pay bonds. The bonds are just, it’s eating us alive, the interest payments. I used to say when we had 1% bonds or things and less, I used to say: “Can you imagine if we were paying” and you know, at 1%, it sort of works. It's a Trumpy answer so, you know, it takes a little parsing. But there are still two interesting things here. I'll take the second part first, since that's what really caught my eye. But what's striking is that his comment about "interest is sort of self-defeating because we have to pay bonds" almost sounds like pure Warren Mosler Thought. Mosler (the "Godfather of MMT"), [was on the Odd Lots podcast last week](, arguing rate hikes as a means of fighting inflation, is a losing strategy, because automatically when you raise rates, you increase coupon payments to holders of US Treasuries. And these increased interest payments increase income for US bondholders. And that income then can feed through to higher demand, and therefore upward pressure on prices. Trump basically views rate policy through the same lens as Mosler. It's definitely not the first time Trump has articulated his view of with language that dovetails with the MMT view. [Back in 2016](, Trump talked about the debt with CNN "First of all, you never have to default because you print the money, I hate to tell you, OK?” Of course, to some extent mainstream economists say the same thing, that the US never has to default, and that interest income can become macro-economically destabilizing. Sill Trump foregrounds these points in a way that's rare. As for the top part of his above answer, the point is a little bit more unclear, except that to him, a key element of fighting inflation is producing more energy. It's worth noting here, that the US is producing more oil that an any point in history. Of course, whether the US could be producing more oil (and gas) under more liberal policies is something that is certainly up for debate. Also implicit in his answer is a basic energy-driven view of what causes inflation. Here's a separate question: I want to ask you about inflation. Biden has really been hurt politically by inflation. Partly, it was caused by the pandemic but partly because of his stimulus. What would you have done differently? So inflation was caused by energy. And what he did is he started immediately cutting my energy. We had it down to a level—we had it down to, at some points, $1.50. That was a little bit artificial because we had pandemics, we had a lot of you know a lot of things changed with a pandemic. You have the pandemic period of time and then you have the rest. But we had it down to $1.87. We had it very, very low and doing well and and not in unusual times. Among economists, there would probably be dispute about the line "inflation was caused by energy", since the more standard line would be that there's some deeper drivers that caused all prices to shoot up, including energy. Yet the implication again, from Trump is the view that defeating inflation would involve other levers besides either higher interest rates or lower spending (the more standard playbook). We've seen this idea from the current administration as well, which has transformed the Strategic Petroleum Reserve from a strictly geopolitical hedge (to be used in terms of war or crisis to maintain the flow of oil) into more of a macro lever (selling oil when it's high, buying back when it's cheap). There's much more in the interview, and if you don't want to read the full thing, [then there's a summary of key highlights here](. With Trump now at 70% odds to win the Presidency ([based on the Polymarket betting]() though, it's obviously important to think about his approach to macro. And the fact that he's talking about interest income, and non-monetary levers for keeping inflation known suggests, at least on some level, notions that fit comfortably into certain heterodox perspectives on macro. And of course, Trump's VP nominee has talked about how the [central role of the US dollar]( in global economic activity is a burden, rather than a blessing, which is a notion that's straight out of books like [Trade Wars Are Class Wars](, by Matt Klein and Michael Pettis. There's been a lot of talk (of perhaps dubious validity) about how this isn't the old Chamber Of Commerce Republican party. At least at the instinctual level Trump and Vance have vocalized some generally non-consensus perspectives when it comes to macro management. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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