What would you do?

Bird builds nest in most obvious tree

I am sitting in the hot tub this fine Sunday morning, having my second cup of coffee and listening to the birds. I spot one busy little Phoebe collecting building materials from the garden.
She is smiling, she seems so happy. Do birds smile?

She seems overjoyed in finding all this great pieces of plant material that will be perfect for her new digs. She has chosen the best tree in the neighborhood. Our New Zealand Tea Tree, which is in full bloom. It is a happy sight to see. As I type this blog entry, I can see that she is still at it. It is like she bought a million dollar home with no money down, no interest payments.
I swear this bird looks happy.

What do I do? I know this tree is to low to the ground to be safe for a nest.
My cat doesn't hunt, but other's do. I can't imagine that she will safely raise her babies here.
Do I chase her away? Do I take apart the nest?
Do I let her be?