Donald Trump and Hillary Clinton both took big steps toward their parties’ nominations yesterday with convincing wins in the New York primaries. Efforts to stop them look increasingly futile. You can read our take on Trump’s win here, and Clinton’s here.
Fortune’s Steve Gandel sat down with Trump during the voting to try and get a clearer sense of his thinking about economic policy. We will publish the full interview tomorrow, but have posted a story this morning in which the almost-nominee says he likes Janet Yellen’s low interest rate policies, but would likely replace her as Fed chief when her term ends.
“I think she’s done a serviceable job,” Trump said when asked about Yellen. “I don’t want to comment on reappointment, but I’d be inclined to put other people in.”
Trump called low interest rates “the best thing we have going for us,” and said higher rates would be “scary” for the U.S. economy. Not sure how to square that with his recent comments to the Washington Post that we are in “a financial bubble.”
He also backed off comments to the Post that he would eliminate the $19 trillion national debt in eight years – a virtually impossible goal. “You could pay off a percentage of it, depending on how aggressive you want to be,” he said. “I’d rather not be all that aggressive.”
Fortune has spent the last couple of months taking a close look at Trump’s record as a businessman, and trying to divine lessons from that as to how he would run the country. Our story will appear in the May magazine, and be published online tomorrow. So stay tuned.
In the meantime, news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
• E.U. Opens A New Front Against Google
It's been widely flagged, but now it's official. The European Union has opened a second probe against Google for allegedly abusing its dominance of the Android mobile operating system. Competition Margrethe Vestager said Google's insistence that mobile phone makers pre-install Google's own applications on devices "denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players." It may still be too early to speak of an outright Crusade against U.S. tech companies by Europe, but given the outstanding cases against Apple, Amazon and Qualcomm (to say nothing of Facebook's issues in Germany), it looks less like an exaggeration with each passing week. Financial Times, subscription required
• Intel Honors the Ghost of Andy Grove
Intel is cutting 11% of its workforce over the next year to avoid being sucked under by the sinking PC and laptop business that was its mainstay for years. It's a testimony to the dictum of its late leader, Andy Grove, that 'only the paranoid survive'. Another conspicuous part of Tuesday's release was that CFO Stacy Smith will get a new job heading sales, manufacturing and operations, in what looks like a clear case of active succession planning by CEO Brian Krzanich and President Murthy Renduchintala. Fortune
• UnitedHealth Quits Most ACA Health Exchanges
UnitedHealth Group Inc is exiting most of its Obamacare health insurance exchanges next year. The hope that it would enrol enough new members to defray the big rise in associated costs hasn’t materialized, according to CEO Stephen Hemsley (the new members tend to be shorter-term and higher-risk, he noted). As a result, hundreds of thousands of Americans need to find a new insurer at the end of this year. UnitedHealth’s move puts it at odds not only with the Obama administration that invested so much political capital in the ACA, but also with its biggest competitors. Anthem and Aetna have both also lost money on the state exchanges at the heart of the new system, but are toughing it out: Anthem’s CEO Joseph Swedish has said it’s committed to the system, while Aetna’s Mark Bertolini is working with the government at trying to make it more sustainable. Both are likely to stay in the system—at least as long as they’re waiting for government approval of their respective acquisitions of smaller rivals Humana and Cigna. Fortune
• United Continental Set to Cave
United Continental Holdings is set to give into activist investors' pressure for more influence at the company, according to Reuters. The country's no. 3 airline by traffic will announce new board appointments on Wednesday, but it's not a total defeat: PAR Capital Management and Altimeter Capital Management, which own 7.1% of the company, will only get three of the six seats they were looking for. Barney Harford, former CEO of online travel services company Orbitz Worldwide Inc, and Edward Shapiro, a partner at PAR, will join United's board immediately, while a third candidate will be agreed mutually within six months, according to Reuters' sources. WSJ, subscription required
Around the Water Cooler
• Toshiba CEO Bites the Bullet
Toshiba Corp's CEO Masashi Muromachi is expected to confirm his resignation later today, an outcome that has seemed inevitable since the scale of the Japanese giant's accounting scandal became clear last year. A company committee is meeting Wednesday to approve the resignation, according to Reuters, who report that his successor is likely to be one of his three deputies. It isn't yet clear which one. The news comes as Toshiba prepares to write down the value of its stake in U.S. nuclear subsidiary Westinghouse by around 200 billion yen ($1.83 billion), Reuters sources say. The nuclear business has been hobbled by the Fukushima disaster in 2011. Fortune
• Putin Shows His Funny Side
Remember Yukos? It was the giant Russian oil company whose destruction cemented Vladimir Putin's power and tamed the Yeltsin-era oligarchs. On Wednesday, a Dutch arbitration court ended a decade-long legal struggle for restitution by its former owners, overturning an earlier award of $50 billion in damages. In possibly the most ironic press release ever, the Russian government called the ruling "a vindication of the rule of law." It's a major victory for the Russian state--and the ruling will also be greeted with relief by BP, which has a stake of nearly 20% in Rosneft, the company that swallowed Yukos after a rigged trial of its boss, Mikhail Khodorkovsky. Reuters
• Yahoo Gets Some Bids
The competition for Yahoo's legacy business looks like boiling down to a three-way contest between Verizon and two private equity-backed bids. One, as expected, is being backed by the U.K.'s Daily Mail & General Trust, which bid jointly with TPG. The other, intriguingly, is from former Yahoo CEO Ross Levinsohn, together with Bain Capital and Vista Equity Partners, according to The Wall Street Journal. The celebrations of the eventual winner are likely to be muted: Yahoo's 1Q earnings release Tuesday showed revenue fell 18% on the year to its lowest level since CEO Marissa Mayer took over. WSJ, subscription required
• The Hellish Price of The E.U.'s Deal With Turkey
Meanwhile, a million miles away from corporate and financial boardroom dramas and intrigues, the real world is looking like a passable version of Dante's Inferno again. The Times of London reports that Turkish border guards have shot and killed women and children fleeing their homes in Syria as they tried to reach safety on the other side of the border. This is how U.S. ally Turkey is enforcing a deal with the E.U., brokered by U.S. ally and Time's Person of the Year Angela Merkel, to stop the flood of migrants into Europe. It feels like another Aylan Kurdi moment. And we all know how effective that was in stopping the Syrian war. The Times, subscription required
