1 00:00:03,800 --> 00:00:07,000 Speaker 1: From the Bloomberg Interactive Brokers Studios. This is Bloomberg day 2 00:00:07,000 --> 00:00:08,799 Speaker 1: Break for Wednesday, May seventeen. 3 00:00:09,000 --> 00:00:12,119 Speaker 2: Coming up today, Debt ceiling talks could get more intense. 4 00:00:12,160 --> 00:00:14,720 Speaker 2: With just fifteen days till potential defaults. 5 00:00:14,760 --> 00:00:19,600 Speaker 1: President Biden cuts short his overseas trip to focus on negotiations. 6 00:00:18,840 --> 00:00:21,360 Speaker 3: The Fed pause, debate heats up, and. 7 00:00:21,320 --> 00:00:25,599 Speaker 1: Elon Musk may turn to advertising to sell more Tesla's New. 8 00:00:25,560 --> 00:00:29,360 Speaker 4: York City is looking at standalone school gyms to house migrants. 9 00:00:29,400 --> 00:00:32,440 Speaker 4: Plus a major ruling in North Carolina on an abortion band. 10 00:00:32,640 --> 00:00:33,519 Speaker 4: I'm Michael Barr. 11 00:00:33,560 --> 00:00:37,640 Speaker 5: More ahead, I'm John Stanshdaron Sports Another Aaron Judge, Homer 12 00:00:37,680 --> 00:00:38,319 Speaker 5: to Yankee Wain. 13 00:00:38,360 --> 00:00:40,879 Speaker 6: Another loss for the Mets. The Nuggets took Game one 14 00:00:40,920 --> 00:00:41,640 Speaker 6: from the Lakers. 15 00:00:43,720 --> 00:00:47,120 Speaker 7: That's all straight ahead on Bloomberg day Break, The Business 16 00:00:47,159 --> 00:00:49,640 Speaker 7: News You need to sturn your day in just one 17 00:00:49,720 --> 00:00:54,200 Speaker 7: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg 18 00:00:54,240 --> 00:00:56,920 Speaker 7: Business app, and everywhere you get your podcasts. 19 00:01:00,000 --> 00:01:01,320 Speaker 3: Good morning, I'm Nathan. 20 00:01:01,040 --> 00:01:04,000 Speaker 1: Hager and I'm Karen Moscow. Here are the stories we're 21 00:01:04,040 --> 00:01:05,559 Speaker 1: following today, Karen. 22 00:01:05,640 --> 00:01:08,800 Speaker 2: Debt ceiling talks in Washington are about to get more intense. 23 00:01:08,880 --> 00:01:11,960 Speaker 2: The earliest state for a possible government default is now 24 00:01:12,040 --> 00:01:14,920 Speaker 2: just fifteen days away, and President Biden and House Speaker 25 00:01:15,000 --> 00:01:18,240 Speaker 2: Kevin McCarthy have agreed to keep talking. They'll have a 26 00:01:18,319 --> 00:01:20,800 Speaker 2: smaller group of negotiators in the room to try to 27 00:01:20,840 --> 00:01:24,199 Speaker 2: reach a deal. The President is sounding cautiously optimistic. 28 00:01:24,560 --> 00:01:26,600 Speaker 8: Well, there's still work to do, but I made it 29 00:01:26,640 --> 00:01:29,640 Speaker 8: clear to the Speaker and others that will speak regularly 30 00:01:29,680 --> 00:01:31,640 Speaker 8: over the next several days, and the staff's going to 31 00:01:31,680 --> 00:01:36,520 Speaker 8: continue meeting daily to make sure we do not default. 32 00:01:36,640 --> 00:01:39,160 Speaker 2: And Speaker McCarthy says it is possible a deal can 33 00:01:39,200 --> 00:01:40,559 Speaker 2: get done by the end of the week. 34 00:01:40,840 --> 00:01:41,440 Speaker 3: It's not that. 35 00:01:41,560 --> 00:01:47,240 Speaker 9: Difficult to get to an agreement when you think about limits. 36 00:01:47,240 --> 00:01:50,960 Speaker 9: Save grow the bill we passed, We raise the debt ceiling, 37 00:01:52,160 --> 00:01:55,960 Speaker 9: we cap future spendings. 38 00:01:56,120 --> 00:01:58,520 Speaker 2: So far, there's one thing both sides agree on. They 39 00:01:58,520 --> 00:02:00,960 Speaker 2: say default is not well. 40 00:02:01,000 --> 00:02:03,960 Speaker 1: As talks drag on, Nathan, the President is shortening his 41 00:02:04,080 --> 00:02:06,840 Speaker 1: trip Overseas to focus on negotiations. 42 00:02:07,120 --> 00:02:11,320 Speaker 8: I'm cutting my trip short. I'm postponing the Australia Portional trip, 43 00:02:11,360 --> 00:02:14,960 Speaker 8: and I've tripped my stop in Papua New Guinea in 44 00:02:15,040 --> 00:02:18,360 Speaker 8: order to be back for the final negotiations with congressional leaders. 45 00:02:18,600 --> 00:02:21,080 Speaker 1: President Biden had hoped to use those stops to counter 46 00:02:21,120 --> 00:02:24,280 Speaker 1: Shounas influence in the Asia Pacific region. The White House 47 00:02:24,320 --> 00:02:27,640 Speaker 1: says it looks forward to finding another way to engage 48 00:02:27,639 --> 00:02:29,160 Speaker 1: with those countries in the coming year. 49 00:02:29,320 --> 00:02:29,440 Speaker 10: Well. 50 00:02:29,480 --> 00:02:33,160 Speaker 2: Meantime, Karen, a potential GOP presidential contenders, weighing in on 51 00:02:33,240 --> 00:02:36,840 Speaker 2: monetary policy. Former Vice President Mike Pence is calling for 52 00:02:36,880 --> 00:02:39,560 Speaker 2: an end to the Fed's dual mandate. He says the 53 00:02:39,560 --> 00:02:42,200 Speaker 2: central Bank should focus only on fighting inflation and leave 54 00:02:42,280 --> 00:02:45,480 Speaker 2: job creation to Congress and the President. Pence tells Bloomberg 55 00:02:45,520 --> 00:02:47,960 Speaker 2: the FED should return to its historic mission of ensuring 56 00:02:48,080 --> 00:02:49,440 Speaker 2: sound monetary policy. 57 00:02:49,919 --> 00:02:51,960 Speaker 1: Meantime, Nathan, the debate on what the FED should do 58 00:02:52,080 --> 00:02:53,920 Speaker 1: right now appears to be heating up, and we get 59 00:02:53,919 --> 00:02:55,720 Speaker 1: the details from Bloomberg's John Tucker. 60 00:02:55,840 --> 00:02:59,280 Speaker 11: John and Karen. Investors bet the FED will pause their 61 00:02:59,320 --> 00:03:02,399 Speaker 11: cycle of inter straight hikes next month, but the officials 62 00:03:02,400 --> 00:03:05,240 Speaker 11: who make the decision sound more on the fence. We 63 00:03:05,320 --> 00:03:07,959 Speaker 11: spoke with Richmond FED President Tom Barkin. 64 00:03:08,040 --> 00:03:11,440 Speaker 2: Put me down as tracking the information, tracking the death sailing, 65 00:03:11,480 --> 00:03:14,079 Speaker 2: tracking credit tightening, and we'll make a call when we get. 66 00:03:13,919 --> 00:03:16,280 Speaker 11: Closer to the meeting at the same time, the Chicago 67 00:03:16,320 --> 00:03:19,919 Speaker 11: Fed President, Austin Gulesby says it's too premature to talk 68 00:03:19,960 --> 00:03:23,639 Speaker 11: about cutting rates. He tells Bloomberg decision makers need more 69 00:03:23,760 --> 00:03:25,040 Speaker 11: data and more time. 70 00:03:25,560 --> 00:03:29,280 Speaker 12: Inflation is down and continues to make progress. It's not 71 00:03:29,360 --> 00:03:31,919 Speaker 12: as fast as we wanted it to or we expected 72 00:03:31,960 --> 00:03:36,560 Speaker 12: it to be, and therein lies the that's the note 73 00:03:36,560 --> 00:03:39,320 Speaker 12: of the of the issue of can you get it 74 00:03:39,400 --> 00:03:42,240 Speaker 12: down more without starting a recession? 75 00:03:42,480 --> 00:03:45,400 Speaker 11: Gulesby says, when you have financial stress like the bank 76 00:03:45,480 --> 00:03:48,400 Speaker 11: turmoil plus big rate increases that take a while to 77 00:03:48,440 --> 00:03:50,720 Speaker 11: have their full impact, you want to take those into 78 00:03:50,720 --> 00:03:53,640 Speaker 11: account when you're looking to land the plane. Barking and 79 00:03:53,640 --> 00:03:57,240 Speaker 11: Gulesby spoke to Bloomberg at a Fence symposium in Florida. 80 00:03:57,320 --> 00:03:59,040 Speaker 11: I'm John Tucker, Bloomberg Daybreak. 81 00:03:59,080 --> 00:04:01,800 Speaker 2: Okay, John, thanks and stay tuned for more from Austin Golesby. 82 00:04:01,800 --> 00:04:04,320 Speaker 2: Will bring you our interview with the Chicago Fed president 83 00:04:04,320 --> 00:04:06,040 Speaker 2: coming up shortly on Bloomberg Day Break. 84 00:04:06,280 --> 00:04:08,400 Speaker 1: Well, we moved to corporate news now. Nathan and Elon 85 00:04:08,520 --> 00:04:11,440 Speaker 1: Musk is poised to make another strategy shift at Tesla, 86 00:04:11,480 --> 00:04:14,280 Speaker 1: and now he's eying an advertising strategy to sell more cars, 87 00:04:14,320 --> 00:04:16,240 Speaker 1: and Bloomberg's Ed Baxter has the details. 88 00:04:16,760 --> 00:04:20,120 Speaker 13: Musk says Tesla will dabble in some advertisements. This is 89 00:04:20,120 --> 00:04:23,120 Speaker 13: a major departure for the twenty year old company. At 90 00:04:23,120 --> 00:04:26,440 Speaker 13: the annual shareholders meeting, he said, quote, we'll try a 91 00:04:26,480 --> 00:04:30,440 Speaker 13: little advertising and see how it goes. Tesla has prided 92 00:04:30,480 --> 00:04:32,839 Speaker 13: itself on word of mouth and not needed the cost 93 00:04:32,880 --> 00:04:36,560 Speaker 13: of advertising, Musk says, now it is worth a try. 94 00:04:37,000 --> 00:04:39,040 Speaker 13: He says he's already tipped a toe in the water 95 00:04:39,160 --> 00:04:43,479 Speaker 13: on Twitter, and also the move is not fully formed strategy, 96 00:04:44,000 --> 00:04:46,600 Speaker 13: but a bit of a foot on the accelerator, if 97 00:04:46,600 --> 00:04:50,279 Speaker 13: you will. In San Francisco, I'm at Baxter Bloomberg day Break. 98 00:04:50,360 --> 00:04:51,200 Speaker 3: Okay, Ed, Thanks so. 99 00:04:51,240 --> 00:04:53,279 Speaker 2: Wal Musk may change the way he sells cars, he 100 00:04:53,360 --> 00:04:55,800 Speaker 2: is not changing stands when it comes to working from 101 00:04:55,839 --> 00:04:56,760 Speaker 2: home and Bloomberg. 102 00:04:56,800 --> 00:04:58,760 Speaker 3: Steve Rappaport joins us with more on that. 103 00:04:58,920 --> 00:05:02,080 Speaker 14: Steve, Good morning, Nathan. In Karen Elon, Musk continues his 104 00:05:02,160 --> 00:05:05,479 Speaker 14: crusade against the virtual commute, telling CNBC it's not just 105 00:05:05,520 --> 00:05:08,039 Speaker 14: bad for productivity, it's also morally wrong. 106 00:05:08,240 --> 00:05:10,239 Speaker 11: You're going to make the people who make your food 107 00:05:10,279 --> 00:05:12,360 Speaker 11: that gets delivered that they can't work from home. 108 00:05:13,120 --> 00:05:15,679 Speaker 15: You know, for the people that come fix your house, 109 00:05:15,960 --> 00:05:17,839 Speaker 15: they can't work from home, but you can. 110 00:05:18,640 --> 00:05:20,280 Speaker 3: Does that seem Marley Wright. 111 00:05:20,120 --> 00:05:23,960 Speaker 14: Musk, speaking after Tesla's annual shareholder meeting, also lambasted tech 112 00:05:24,000 --> 00:05:27,200 Speaker 14: workers as the laptop class living in La La Land, 113 00:05:27,400 --> 00:05:30,000 Speaker 14: live in New York. I'm Steve Rappaport Bloomberg Daybreak. 114 00:05:30,040 --> 00:05:32,360 Speaker 1: All right, Steve, thanks well. In banking news this morning, 115 00:05:32,400 --> 00:05:35,279 Speaker 1: we're seeing the former CEO of First Republic Bank blaming 116 00:05:35,360 --> 00:05:38,479 Speaker 1: others for his company's collapse and prepared testimony to be 117 00:05:38,520 --> 00:05:41,880 Speaker 1: delivered to a House committee hearing. Michael Roefler said his 118 00:05:42,000 --> 00:05:45,640 Speaker 1: bank's collapse was due to contagion from other regional bank failures. 119 00:05:45,920 --> 00:05:48,960 Speaker 1: Jpmoregan agreed to buy First Republic earlier this month, after 120 00:05:49,000 --> 00:05:52,360 Speaker 1: it became the second largest bank failure in US history. 121 00:05:52,200 --> 00:05:52,719 Speaker 3: And in Europe. 122 00:05:52,800 --> 00:05:56,080 Speaker 2: Karen UBS estimates the nearly thirty five billion dollar gain 123 00:05:56,240 --> 00:05:59,160 Speaker 2: as a result of its emergency takeover of Credit Suisse. 124 00:05:59,320 --> 00:06:01,640 Speaker 2: At the same time, the Swiss bank warns it faces 125 00:06:01,680 --> 00:06:05,040 Speaker 2: billions in potential legal and regulatory costs from the acquisition. 126 00:06:05,600 --> 00:06:09,440 Speaker 2: UBS stands to benefit from the combined firm's negative goodwill. 127 00:06:09,400 --> 00:06:10,320 Speaker 3: And straight ahead. 128 00:06:10,400 --> 00:06:14,320 Speaker 1: We have your latest local headlines, plus a check of sports. 129 00:06:14,720 --> 00:06:16,560 Speaker 3: And this is Bloomberg. 130 00:06:21,200 --> 00:06:22,400 Speaker 2: I'm how to take a look at some of the 131 00:06:22,440 --> 00:06:24,960 Speaker 2: other stories making news in New York and around the world. 132 00:06:24,960 --> 00:06:27,719 Speaker 3: For that, we are joined by Bloomberg's Michael Barr. Good morning, Michael, 133 00:06:27,800 --> 00:06:28,679 Speaker 3: Good morning, Nathan. 134 00:06:28,720 --> 00:06:31,160 Speaker 4: New York City is looking it up to twenty schools 135 00:06:31,200 --> 00:06:35,480 Speaker 4: with standalone gyms to house migrants. Mayor Eric Adams told 136 00:06:35,480 --> 00:06:39,640 Speaker 4: Fox five about sixty five thousand asylum seekers have come 137 00:06:39,880 --> 00:06:43,680 Speaker 4: through the city so far, including forty two hundred last 138 00:06:43,720 --> 00:06:44,520 Speaker 4: week alone. 139 00:06:44,640 --> 00:06:47,480 Speaker 16: I'm really calling on all of us who take notice 140 00:06:47,480 --> 00:06:50,760 Speaker 16: that this is going to impact every city service that 141 00:06:50,839 --> 00:06:52,760 Speaker 16: we deliver to the people of this city. 142 00:06:52,839 --> 00:06:53,640 Speaker 3: And it's just wrong. 143 00:06:53,960 --> 00:06:56,360 Speaker 16: A New York City should not be carrying a burden 144 00:06:56,400 --> 00:06:57,480 Speaker 16: of a national problem. 145 00:06:57,600 --> 00:07:00,760 Speaker 4: Mayor Adams and the city expects as may the fifteen 146 00:07:00,839 --> 00:07:04,440 Speaker 4: buses this weekend. Today is sentencing day for the ices 147 00:07:04,560 --> 00:07:07,520 Speaker 4: inspired terrorists who carried out a deadly attack with the 148 00:07:07,560 --> 00:07:10,640 Speaker 4: truck in New York City. The jury deadlocked on the 149 00:07:10,680 --> 00:07:14,560 Speaker 4: death penalty, so Saifulu Saipov will be sentenced to life 150 00:07:14,640 --> 00:07:17,080 Speaker 4: in prison for killing eight people when he sped down 151 00:07:17,120 --> 00:07:20,600 Speaker 4: a bike path in a rented truck. North Carolina enacted 152 00:07:20,640 --> 00:07:24,480 Speaker 4: a twelve week abortion ban last night. Republicans banded together 153 00:07:24,520 --> 00:07:27,840 Speaker 4: to override Democratic Governor Roy Cooper's veto of the legislation. 154 00:07:28,480 --> 00:07:32,760 Speaker 4: GOP North Carolina Representative Kirsten Baker is a medical doctor. 155 00:07:33,240 --> 00:07:38,800 Speaker 17: This bill represents consensus position of North Carolina's citizens, the 156 00:07:39,000 --> 00:07:44,800 Speaker 17: vast majority of whom support limitations to abortion after twelve weeks. 157 00:07:45,320 --> 00:07:47,680 Speaker 4: This abortion right supporter was also in a rally. 158 00:07:47,960 --> 00:07:57,640 Speaker 17: These legislators are arrogant, shortsighted, ignorant, oh unkind. 159 00:07:58,720 --> 00:07:59,400 Speaker 13: Infuriates. 160 00:08:00,280 --> 00:08:04,160 Speaker 4: The new ban from twenty weeks has exceptions like medical emergencies, 161 00:08:04,440 --> 00:08:07,960 Speaker 4: cases of rape and incest. Tuesday was primary day in 162 00:08:08,000 --> 00:08:11,640 Speaker 4: some states. Voters in Philadelphia have chosen Scherrell Parker as 163 00:08:11,680 --> 00:08:14,720 Speaker 4: the Democratic nominee for mayor. Parker, who got the most 164 00:08:14,800 --> 00:08:17,800 Speaker 4: votes at thirty three percent, will go up against Republican 165 00:08:17,880 --> 00:08:21,600 Speaker 4: David Ow in the November seventh general election. Democrats maintain 166 00:08:21,680 --> 00:08:24,960 Speaker 4: their narrow Pennsylvania House majority by winning a special election, 167 00:08:25,520 --> 00:08:28,400 Speaker 4: and along with it, continue control over how the Chamber 168 00:08:28,440 --> 00:08:32,600 Speaker 4: will handle abortion, gun rights, and election law legislation. Hither 169 00:08:32,720 --> 00:08:35,360 Speaker 4: Boyd won a seat in the Philadelphia suburbs with more 170 00:08:35,400 --> 00:08:39,880 Speaker 4: than sixty percent. Democrat Dan McCaffrey with sixty percent and 171 00:08:40,000 --> 00:08:44,160 Speaker 4: Republican Carolyn Kurt Carluccio with fifty four percent won their 172 00:08:44,200 --> 00:08:47,880 Speaker 4: party's primaries for a vacant seat on the Pennsylvania Supreme Court. 173 00:08:48,280 --> 00:08:52,480 Speaker 4: Attorney General Daniel Cameron has won the Republican primary for 174 00:08:52,640 --> 00:08:56,199 Speaker 4: Kentucky governor with forty eight percent and will face Democratic 175 00:08:56,200 --> 00:08:59,520 Speaker 4: Governor Andy Basheer with over ninety one percent. In November, 176 00:09:00,000 --> 00:09:02,480 Speaker 4: Global News twenty four hours a day, powered by more 177 00:09:02,520 --> 00:09:05,280 Speaker 4: than twenty seven hundred journalist and analysts in over one 178 00:09:05,360 --> 00:09:07,959 Speaker 4: hundred and twenty countries. I'm Michael Barr, and this is 179 00:09:08,000 --> 00:09:08,720 Speaker 4: Bloomberg ninth. 180 00:09:08,800 --> 00:09:15,440 Speaker 2: Thanks Michael, I'm now for the Bloomberg Sports Up Day, 181 00:09:15,480 --> 00:09:16,679 Speaker 2: brought to you by Tri State Outy. 182 00:09:16,679 --> 00:09:17,880 Speaker 3: Good morning, John's stashout. 183 00:09:17,920 --> 00:09:18,720 Speaker 6: Good morning Nathan. 184 00:09:18,760 --> 00:09:21,439 Speaker 5: There was much discussion about Aaron Judge's eighth inning home 185 00:09:21,520 --> 00:09:24,959 Speaker 5: run Monday in Toronto. Cameras caught his eye drifting to 186 00:09:25,000 --> 00:09:28,000 Speaker 5: the Yankee dugout during the at bat, speculation that the 187 00:09:28,080 --> 00:09:31,280 Speaker 5: Yanks may have been relaying signs to him. Judge clearly 188 00:09:31,360 --> 00:09:34,080 Speaker 5: unhappy with the accusation. He came up last night. This 189 00:09:34,240 --> 00:09:35,520 Speaker 5: was also eighth inning. 190 00:09:35,520 --> 00:09:38,800 Speaker 18: Swinging a high drive center field. It is deep here 191 00:09:38,840 --> 00:09:42,000 Speaker 18: by are looking back looking up it. He's got a 192 00:09:42,120 --> 00:09:46,760 Speaker 18: home run off the batter's eye. Aaron Judge is gone yard. 193 00:09:47,080 --> 00:09:50,199 Speaker 18: He says, hey, look at me now, two run shut. 194 00:09:50,559 --> 00:09:53,360 Speaker 18: Yankees take the lead. They're in front five to three, 195 00:09:53,400 --> 00:09:53,679 Speaker 18: and they. 196 00:09:53,640 --> 00:09:54,920 Speaker 6: Beat the Blue Jays six to three. 197 00:09:54,920 --> 00:09:57,480 Speaker 5: Call on wfan Judge is hitting now five home runs 198 00:09:57,480 --> 00:09:59,920 Speaker 5: the last four games. The win went to Ryan Weber's 199 00:10:00,440 --> 00:10:02,839 Speaker 5: getting seven outs out of the bullpen. Yanks had to 200 00:10:02,920 --> 00:10:07,679 Speaker 5: replace Domingo Herman starting the fourth inning because umpires injected him. 201 00:10:07,720 --> 00:10:11,120 Speaker 5: The ump later said Herman's hand was so sticky he 202 00:10:11,200 --> 00:10:14,160 Speaker 5: had trouble removing it from his own palm. Herman likely 203 00:10:14,240 --> 00:10:16,560 Speaker 5: hit it for a ten game suspension for the Mets, 204 00:10:16,559 --> 00:10:19,000 Speaker 5: their sixteenth lost the last twenty two games Tampa Bay one, 205 00:10:19,040 --> 00:10:22,160 Speaker 5: eight to five. Justin Verlanders first city field start as 206 00:10:22,160 --> 00:10:23,280 Speaker 5: a Met did not go well. 207 00:10:23,320 --> 00:10:25,120 Speaker 6: Gave up six runs in five innings. 208 00:10:25,360 --> 00:10:27,839 Speaker 5: NBA Playoffs, Denver won Game one for the Lakers, one 209 00:10:27,960 --> 00:10:29,680 Speaker 5: thirty two one twenty. 210 00:10:29,360 --> 00:10:31,360 Speaker 6: Six for Nikoliokuds thirty four. 211 00:10:31,160 --> 00:10:35,199 Speaker 5: Points, twenty one rebounds, fourteen assists. The San Antonios first 212 00:10:35,200 --> 00:10:38,280 Speaker 5: won the draft lottery and the prize that comes with it. 213 00:10:38,440 --> 00:10:41,480 Speaker 5: Victor wembin Yama, the seven foot four inch nineteen year 214 00:10:41,480 --> 00:10:45,079 Speaker 5: old Frenchman, the best NBA prospect since Lebron James, two 215 00:10:45,160 --> 00:10:47,640 Speaker 5: days after he lost a Game seven for the tenth time. 216 00:10:47,800 --> 00:10:51,320 Speaker 6: Doc Rivers fired by the Philadelphia seventy six ers. John 217 00:10:51,360 --> 00:10:52,960 Speaker 6: Stash Edward Bloomberg. 218 00:10:52,520 --> 00:10:58,080 Speaker 7: Sports Live from coast to coast, from New York to 219 00:10:58,120 --> 00:11:03,600 Speaker 7: San Francisco, Boston to one nationwide on Siriusxam, the Bloomberg 220 00:11:03,640 --> 00:11:05,640 Speaker 7: Business Appen Bloomberg dot Com. 221 00:11:05,800 --> 00:11:10,600 Speaker 2: This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Starting 222 00:11:10,600 --> 00:11:12,800 Speaker 2: to feel like crunch time in Washington, d C. With 223 00:11:12,840 --> 00:11:15,680 Speaker 2: the possible default deadline for the US government now as soon. 224 00:11:15,559 --> 00:11:17,120 Speaker 3: As fifteen days away. 225 00:11:17,559 --> 00:11:20,240 Speaker 2: House Speaker Kevin McCarthy has said past meetings but the 226 00:11:20,240 --> 00:11:21,600 Speaker 2: White House haven't gone anywhere. 227 00:11:21,640 --> 00:11:24,319 Speaker 3: Now, he says, he sees a hint of progress. 228 00:11:24,760 --> 00:11:27,400 Speaker 9: This one was a little more productive. We're a long 229 00:11:27,440 --> 00:11:30,760 Speaker 9: way apart, but what changed in this meeting was the 230 00:11:30,800 --> 00:11:35,440 Speaker 9: President has now selected two people from his administration to 231 00:11:35,880 --> 00:11:37,560 Speaker 9: directly negotiate with us. 232 00:11:38,000 --> 00:11:40,560 Speaker 2: That was Speaker McCarthy after yesterday's White House talks with 233 00:11:40,600 --> 00:11:43,320 Speaker 2: President Biden and other congressional leaders for more. We were 234 00:11:43,400 --> 00:11:45,800 Speaker 2: joined once again by Julie Norman, co director of the 235 00:11:45,840 --> 00:11:49,120 Speaker 2: Center for US Politics at University College London. 236 00:11:49,240 --> 00:11:50,680 Speaker 3: Juliet's great to speak with you. 237 00:11:50,760 --> 00:11:54,240 Speaker 2: As always, it seemed like both sides made it seem 238 00:11:54,280 --> 00:11:56,200 Speaker 2: like it was a pretty big deal that they've got 239 00:11:56,200 --> 00:11:59,640 Speaker 2: a narrower set of negotiators for the debt sealing talks. 240 00:12:00,160 --> 00:12:01,040 Speaker 3: Is this a big deal? 241 00:12:02,280 --> 00:12:04,559 Speaker 19: Well, there was definitely more of a sense of optimism 242 00:12:04,640 --> 00:12:07,959 Speaker 19: coming out of yesterday's meeting from the congressional leaders who 243 00:12:07,960 --> 00:12:10,600 Speaker 19: are part of that, and that is a definite change 244 00:12:10,600 --> 00:12:13,880 Speaker 19: in tone from where things started over a week ago, 245 00:12:14,320 --> 00:12:16,559 Speaker 19: where I think things are going to start getting difficult. 246 00:12:16,600 --> 00:12:20,280 Speaker 19: Now is the deal that's starting to take shape that 247 00:12:20,280 --> 00:12:22,560 Speaker 19: we're getting some hints of how that is going to 248 00:12:22,600 --> 00:12:25,120 Speaker 19: be received by members of both parties who are going 249 00:12:25,160 --> 00:12:27,480 Speaker 19: to act to vote on this in both the Senate 250 00:12:27,520 --> 00:12:30,840 Speaker 19: and the House. We've already heard some grumbling, some pushbacks 251 00:12:30,880 --> 00:12:33,160 Speaker 19: to some of the measures that are involved in terms 252 00:12:33,200 --> 00:12:36,160 Speaker 19: of actually getting over the line. But the good news 253 00:12:36,160 --> 00:12:38,760 Speaker 19: is things are moving forward. The uncertainty is if it's 254 00:12:38,800 --> 00:12:40,120 Speaker 19: going to be enough to get the votes. 255 00:12:40,480 --> 00:12:42,440 Speaker 2: What provisions are you looking at that might have the 256 00:12:42,480 --> 00:12:44,040 Speaker 2: most difficulty on Capitol Hill. 257 00:12:45,160 --> 00:12:48,840 Speaker 19: Yeah, so the main sticking point will likely be increasing 258 00:12:48,920 --> 00:12:53,160 Speaker 19: work requirements for different kinds of aid, for a medicaid 259 00:12:53,400 --> 00:12:57,000 Speaker 19: for snaps sometimes known as food stamps, and for other 260 00:12:57,040 --> 00:13:00,520 Speaker 19: assistance to needy family. So this is an area that 261 00:13:00,559 --> 00:13:05,160 Speaker 19: Republicans really want to see a budget decrease and to 262 00:13:05,160 --> 00:13:08,960 Speaker 19: see stricter requirements. Many progressive Democrats are digging in and 263 00:13:09,000 --> 00:13:11,360 Speaker 19: saying this is something they will not vote for. So 264 00:13:11,600 --> 00:13:14,040 Speaker 19: I think this is where the compromises are going to 265 00:13:14,520 --> 00:13:16,760 Speaker 19: need to be hashed out over the next couple of days, 266 00:13:16,800 --> 00:13:20,160 Speaker 19: and where we probably will see some Democrats at least 267 00:13:20,160 --> 00:13:22,760 Speaker 19: pushing back against this deal because of that provision, but 268 00:13:23,080 --> 00:13:25,280 Speaker 19: they will probably Yeah. 269 00:13:24,880 --> 00:13:27,400 Speaker 2: Sure, are they the kind of Are they the kind 270 00:13:27,520 --> 00:13:31,520 Speaker 2: of negotiations that could lead to the possibility that we 271 00:13:31,600 --> 00:13:34,719 Speaker 2: get something like a short term debt seiling increase to 272 00:13:35,320 --> 00:13:38,439 Speaker 2: allow for those differences to be hashed out later. I mean, 273 00:13:38,440 --> 00:13:42,040 Speaker 2: that's something that both McCarthy and Biden have said they 274 00:13:42,080 --> 00:13:46,079 Speaker 2: don't want to have a short term debt sailing increase exactly. 275 00:13:46,200 --> 00:13:48,480 Speaker 19: And so this is one of the tricky things right 276 00:13:48,520 --> 00:13:50,680 Speaker 19: now is that some of the budget talks that are 277 00:13:50,720 --> 00:13:53,440 Speaker 19: being discussed, I think in good faith by both sides, 278 00:13:53,880 --> 00:13:56,240 Speaker 19: would usually need more time to actually figure out the 279 00:13:56,240 --> 00:13:58,400 Speaker 19: details of what they would look like, especially these things 280 00:13:58,400 --> 00:14:00,839 Speaker 19: that are going to have direct impacts on a lot 281 00:14:00,880 --> 00:14:03,360 Speaker 19: of Americans. So one option would be to have a 282 00:14:03,400 --> 00:14:05,560 Speaker 19: sort of pact that there would be a limit on 283 00:14:05,600 --> 00:14:08,760 Speaker 19: domestic spending with maybe some short term things that do 284 00:14:08,880 --> 00:14:13,560 Speaker 19: go through immediately, such as using unspent COVID funds, maybe 285 00:14:13,600 --> 00:14:16,600 Speaker 19: speeding up permit processes, things where there's already some agreement, 286 00:14:16,640 --> 00:14:18,360 Speaker 19: if you can get those on the table, get the 287 00:14:18,400 --> 00:14:20,400 Speaker 19: debt ceiling passed, and work out some of these budget 288 00:14:20,400 --> 00:14:23,960 Speaker 19: details in the future, that's one option. Again unclear if 289 00:14:23,960 --> 00:14:25,800 Speaker 19: both parties would go for that in the Congress. 290 00:14:26,440 --> 00:14:29,560 Speaker 2: It's pretty notable as well that President Biden is going 291 00:14:29,600 --> 00:14:32,520 Speaker 2: to be cutting the Australia and Papua New Guinea portion 292 00:14:32,640 --> 00:14:36,320 Speaker 2: of his seven day overseas trip short to focus on 293 00:14:36,360 --> 00:14:41,720 Speaker 2: these negotiations. What's the potential geopolitical impact there for not 294 00:14:42,120 --> 00:14:43,560 Speaker 2: visiting those countries. 295 00:14:44,440 --> 00:14:47,360 Speaker 19: Yeah, so it's definitely unfortunate. I mean, it is notable 296 00:14:47,640 --> 00:14:49,720 Speaker 19: and right I think that Biden is still attending the 297 00:14:49,760 --> 00:14:53,280 Speaker 19: G seven, which is in Japan, notably this year Obviously, 298 00:14:53,320 --> 00:14:55,840 Speaker 19: one of the big long term foreign policy challenges for 299 00:14:55,960 --> 00:14:58,640 Speaker 19: the US and for Biden is the Pacific is China 300 00:14:58,640 --> 00:15:00,400 Speaker 19: in particular, and that's going to be a big part 301 00:15:00,480 --> 00:15:04,040 Speaker 19: of these G seven discussions. He had hoped to continue 302 00:15:04,040 --> 00:15:06,880 Speaker 19: that with a high profile visit to both Australia, a 303 00:15:06,920 --> 00:15:10,040 Speaker 19: meeting of the Quad, and then also importantly engaging with 304 00:15:10,240 --> 00:15:12,600 Speaker 19: Pacific island groups with this first time visit to Papua 305 00:15:12,600 --> 00:15:15,080 Speaker 19: New Guinea. So it's definitely a loss for Australia, definitely 306 00:15:15,080 --> 00:15:17,440 Speaker 19: a loss for Papua New Guinea, and it does I think, 307 00:15:18,200 --> 00:15:20,960 Speaker 19: you know, it's not great for Biden administration trying to 308 00:15:20,960 --> 00:15:23,360 Speaker 19: get traction in the Pacific, But those allies, I think 309 00:15:23,720 --> 00:15:26,000 Speaker 19: know that the commitment is there. They'll try and reschedule 310 00:15:26,040 --> 00:15:28,600 Speaker 19: when they can. And the reality is that if the 311 00:15:28,720 --> 00:15:31,680 Speaker 19: US doesn't get this debt sealing thing resolve, the whole 312 00:15:31,680 --> 00:15:33,200 Speaker 19: world's going to be affected by it. So at the 313 00:15:33,320 --> 00:15:34,880 Speaker 19: end of the day, it's sort of an everyone's interest 314 00:15:35,040 --> 00:15:36,920 Speaker 19: to have the attention where it needs to be. Most 315 00:15:36,960 --> 00:15:38,280 Speaker 19: pragmatically at the moment. 316 00:15:38,440 --> 00:15:41,440 Speaker 2: You said it's a loss for Australia and Papua New Guinea, 317 00:15:41,520 --> 00:15:46,040 Speaker 2: is it a gain for China. 318 00:15:44,360 --> 00:15:47,720 Speaker 19: Potentially, Yes, I mean I think China and as well 319 00:15:47,720 --> 00:15:49,720 Speaker 19: as Russia. I mean, they would probably like nothing more 320 00:15:49,760 --> 00:15:52,160 Speaker 19: than to see this debts somethly thing blow up for 321 00:15:52,280 --> 00:15:55,640 Speaker 19: the US to have a default. I think they will 322 00:15:55,680 --> 00:15:58,040 Speaker 19: paint it as look, how much the US is in trouble. 323 00:15:58,120 --> 00:16:01,400 Speaker 19: They can't even keep their own you know, government going 324 00:16:01,400 --> 00:16:04,960 Speaker 19: their own budget together, so they will usually likely pounce 325 00:16:05,000 --> 00:16:07,320 Speaker 19: on things like this and make a story out of it. 326 00:16:07,440 --> 00:16:09,840 Speaker 19: So that's unfortunate. But again, at the end of the day, 327 00:16:10,160 --> 00:16:11,800 Speaker 19: Biden probably does need to be here to get this 328 00:16:11,840 --> 00:16:13,880 Speaker 19: thing over the line, and that's just the way it 329 00:16:13,880 --> 00:16:14,840 Speaker 19: has to be at the moment. 330 00:16:15,240 --> 00:16:17,640 Speaker 2: Yeah, it looks like we could potentially see the President 331 00:16:17,960 --> 00:16:20,920 Speaker 2: with his mind on both sides of the Pacific as 332 00:16:20,960 --> 00:16:23,880 Speaker 2: the debt ceiling fight goes on, and of course building 333 00:16:23,960 --> 00:16:26,440 Speaker 2: up these relationships at the G seven in Japan. 334 00:16:26,560 --> 00:16:29,000 Speaker 3: As always great to get your thoughts. Thanks again for 335 00:16:29,040 --> 00:16:29,520 Speaker 3: being with us. 336 00:16:29,600 --> 00:16:33,119 Speaker 2: Julie Norman, co director of the Center for US Politics 337 00:16:33,400 --> 00:16:37,000 Speaker 2: at University College London with us this morning. Now let's 338 00:16:37,000 --> 00:16:40,680 Speaker 2: turn our attention from the debt limit to monetary policy. 339 00:16:40,840 --> 00:16:44,920 Speaker 2: In Washington at the Federal Reserve, some officials are signaling 340 00:16:44,960 --> 00:16:47,400 Speaker 2: they'll take a pause when it comes to rate hikes, 341 00:16:47,440 --> 00:16:51,200 Speaker 2: but they're not committing to one. Chicago Fed President Austin 342 00:16:51,240 --> 00:16:54,920 Speaker 2: Goldsby discussed inflation and the impact of rates with Bloomberg's 343 00:16:54,960 --> 00:16:56,400 Speaker 2: Michael McKee late yesterday. 344 00:16:56,760 --> 00:16:58,080 Speaker 3: Let's listen to that conversation. 345 00:16:58,200 --> 00:17:02,520 Speaker 15: Now, you've told people that you're a little nervous about 346 00:17:02,520 --> 00:17:05,880 Speaker 15: where we are after five hundred basis points of increases, 347 00:17:05,960 --> 00:17:08,440 Speaker 15: and you'd like to see how the economy is going 348 00:17:08,440 --> 00:17:11,000 Speaker 15: to evolve, which everybody is sort of taking. As you're 349 00:17:11,040 --> 00:17:15,080 Speaker 15: suggesting a pause in June, what would it take to 350 00:17:15,119 --> 00:17:18,200 Speaker 15: get you to go the other way? Inflation is still high? 351 00:17:18,359 --> 00:17:21,520 Speaker 15: Would it take much to convince you to vote for 352 00:17:21,600 --> 00:17:22,560 Speaker 15: another rate increase. 353 00:17:23,800 --> 00:17:27,879 Speaker 12: I don't get into the hypothetical, and I haven't committed 354 00:17:28,119 --> 00:17:32,440 Speaker 12: or decided anything. I think it's a mistake for us 355 00:17:32,440 --> 00:17:36,280 Speaker 12: to commit our our decisions weeks before the meeting when 356 00:17:36,320 --> 00:17:39,200 Speaker 12: we're still going to get a lot more information. As 357 00:17:39,240 --> 00:17:41,960 Speaker 12: I say it, I'm just like an old fashioned data dog, 358 00:17:42,160 --> 00:17:47,960 Speaker 12: and the past evidence in the data has been that 359 00:17:48,040 --> 00:17:51,920 Speaker 12: when you have financial stresses like the bank stresses we're 360 00:17:51,920 --> 00:17:56,760 Speaker 12: going through now, and when you have big rate increases, 361 00:17:57,359 --> 00:18:02,080 Speaker 12: that take a while to have their full impact, you 362 00:18:02,320 --> 00:18:05,760 Speaker 12: at least want to take those into account when you're 363 00:18:06,920 --> 00:18:08,879 Speaker 12: looking at landing the plane. 364 00:18:09,760 --> 00:18:13,520 Speaker 10: I think the good news is you've seen some. 365 00:18:13,400 --> 00:18:17,080 Speaker 12: Of the froth taken. The froth off in the labor markets. 366 00:18:18,119 --> 00:18:21,879 Speaker 12: We've so far been doing pretty well that job vacancies 367 00:18:21,880 --> 00:18:26,560 Speaker 12: are coming down without the unemployment rate going up. And 368 00:18:26,680 --> 00:18:31,760 Speaker 12: the overriding goal is let's get the inflation back to 369 00:18:31,920 --> 00:18:35,720 Speaker 12: target without generating recession. That's what I want, and that's 370 00:18:35,840 --> 00:18:37,240 Speaker 12: kind of the FED mission. 371 00:18:37,520 --> 00:18:41,560 Speaker 15: Well, you said that you almost dissented at the last meeting, 372 00:18:41,600 --> 00:18:43,439 Speaker 15: but you were persuaded to go along. 373 00:18:43,760 --> 00:18:46,159 Speaker 10: Was it a close call? I didn't say that I 374 00:18:46,200 --> 00:18:47,119 Speaker 10: almost dissented. 375 00:18:47,840 --> 00:18:51,240 Speaker 12: They someone asked me, was it a close call? 376 00:18:51,320 --> 00:18:52,040 Speaker 10: And I said yes. 377 00:18:52,160 --> 00:18:55,000 Speaker 12: I think I can't speak for anybody else, but for me, 378 00:18:55,280 --> 00:18:58,280 Speaker 12: I felt it was a close call. Two meetings ago, 379 00:18:59,119 --> 00:19:01,840 Speaker 12: the data had come in was looking pretty hot. We 380 00:19:01,880 --> 00:19:08,320 Speaker 12: hadn't had any financial stresses, and the argument for the 381 00:19:09,000 --> 00:19:12,480 Speaker 12: improved let's call it the improved economic outlook in the 382 00:19:12,640 --> 00:19:17,320 Speaker 12: SEP was making people a little anxious on the side 383 00:19:17,520 --> 00:19:21,440 Speaker 12: of how much inflation might might still be stored in there. 384 00:19:21,960 --> 00:19:26,240 Speaker 12: Then one meeting ago before this past meeting, we got 385 00:19:26,280 --> 00:19:30,720 Speaker 12: the bank stresses and incorporated that into our plan. So 386 00:19:30,920 --> 00:19:34,399 Speaker 12: at the last meeting, you had not seen yet in 387 00:19:34,480 --> 00:19:38,440 Speaker 12: the data, and in my conversations with financial market and 388 00:19:38,640 --> 00:19:44,679 Speaker 12: bank participants, you had not yet seen credit crunch taking 389 00:19:44,720 --> 00:19:47,960 Speaker 12: place in the data. So I felt that at the 390 00:19:48,080 --> 00:19:50,720 Speaker 12: end of the day, staying on the plan that we 391 00:19:50,880 --> 00:19:53,840 Speaker 12: had outlined, knowing that there was going to be some 392 00:19:53,920 --> 00:19:55,439 Speaker 12: bank stress did make sense. 393 00:19:56,080 --> 00:20:00,800 Speaker 10: Now you've seen more slowing coming in. 394 00:20:01,320 --> 00:20:06,560 Speaker 12: You've seen even numbers that were relatively strong, like retail sales, 395 00:20:07,040 --> 00:20:11,679 Speaker 12: they were lower than expected. And if in nominal terms, 396 00:20:11,720 --> 00:20:14,359 Speaker 12: retail sales were up for tenths of a percent, but 397 00:20:14,480 --> 00:20:18,440 Speaker 12: inflation was up four tenths of a percent, it's worth remembering, 398 00:20:18,640 --> 00:20:21,200 Speaker 12: you know that what actually matters is the real economy. 399 00:20:21,320 --> 00:20:24,959 Speaker 15: When the FED raises interest rates, banks always tighten their 400 00:20:25,000 --> 00:20:28,320 Speaker 15: credit standards and loan demand goes down. So are you 401 00:20:28,480 --> 00:20:32,480 Speaker 15: or the people in your district seeing something worse than 402 00:20:32,560 --> 00:20:34,240 Speaker 15: what ordinarily would have happened. 403 00:20:34,920 --> 00:20:37,560 Speaker 10: That's that's an important point to make. 404 00:20:37,760 --> 00:20:41,320 Speaker 12: That one of the mechanisms a monetary policy when you 405 00:20:41,400 --> 00:20:44,520 Speaker 12: raise the interest rate is lending standards go up. 406 00:20:44,520 --> 00:20:49,119 Speaker 10: It's harder, it's harder to get credit. Businesses choose not 407 00:20:49,280 --> 00:20:51,640 Speaker 10: to borrow as much because borrowing is more expensive. 408 00:20:52,200 --> 00:20:56,679 Speaker 12: That's the key, that's the fundamental question is is there 409 00:20:56,720 --> 00:21:01,840 Speaker 12: a reason to think that the financial can additions are 410 00:21:01,920 --> 00:21:06,760 Speaker 12: tighter than just what the interest rate says. In previous 411 00:21:06,840 --> 00:21:11,480 Speaker 12: times of bank stress, they definitely have been, And if 412 00:21:11,520 --> 00:21:17,320 Speaker 12: you look at the Senior Lending Officer Opinion survey put 413 00:21:17,359 --> 00:21:21,480 Speaker 12: out by the FED as rates went up, you did 414 00:21:21,520 --> 00:21:24,600 Speaker 12: see tightening before there ever was the bank stress. But 415 00:21:25,920 --> 00:21:28,880 Speaker 12: we definitely need to get a handle on how much 416 00:21:29,080 --> 00:21:33,040 Speaker 12: on top of the interest rates this is doing. And 417 00:21:33,600 --> 00:21:38,159 Speaker 12: you've seen throughout the market numbers that range from a 418 00:21:38,800 --> 00:21:42,480 Speaker 12: what to be the Fed's fund equivalent of this bank 419 00:21:42,560 --> 00:21:45,880 Speaker 12: stress kind of the lowest you've seen is that it's 420 00:21:46,040 --> 00:21:49,280 Speaker 12: the equivalent of another twenty five basis points, and there's 421 00:21:49,280 --> 00:21:53,119 Speaker 12: some saying it's like one hundred basis points one hundred 422 00:21:53,119 --> 00:21:57,360 Speaker 12: and fifty basis points increase on top of monetary policy. 423 00:21:57,480 --> 00:22:00,880 Speaker 12: So if that does some of the work of monetary policy, 424 00:22:00,920 --> 00:22:01,320 Speaker 12: you just. 425 00:22:01,200 --> 00:22:02,359 Speaker 10: Got to take that into account. 426 00:22:02,440 --> 00:22:05,199 Speaker 15: Well, speaking of the work, you guys are focused entirely 427 00:22:05,280 --> 00:22:08,000 Speaker 15: on inflation and bringing it down, but we haven't seen 428 00:22:08,000 --> 00:22:10,320 Speaker 15: a lot of movement after a quick drop from nine 429 00:22:10,359 --> 00:22:12,040 Speaker 15: to a round five, we haven't seen a lot of 430 00:22:12,040 --> 00:22:16,440 Speaker 15: movement in inflation. Are you convinced that you've put enough 431 00:22:16,560 --> 00:22:18,000 Speaker 15: restraint on the economy. 432 00:22:20,320 --> 00:22:23,800 Speaker 10: I don't know if we've put enough restraint. That's what 433 00:22:23,880 --> 00:22:24,600 Speaker 10: we got to watch. 434 00:22:25,600 --> 00:22:29,280 Speaker 12: Inflation is down and continues to make progress. It's not 435 00:22:29,400 --> 00:22:31,960 Speaker 12: as fast as we wanted it to or we expected 436 00:22:31,960 --> 00:22:37,280 Speaker 12: it to be, and therein lies. That's the note of 437 00:22:37,320 --> 00:22:40,880 Speaker 12: the issue of can you get it down more without 438 00:22:41,240 --> 00:22:42,160 Speaker 12: starting a recession? 439 00:22:42,160 --> 00:22:42,720 Speaker 10: Because we have a. 440 00:22:42,760 --> 00:22:45,560 Speaker 12: Dual landing, we got to look at employment and inflation 441 00:22:45,720 --> 00:22:50,560 Speaker 12: by law, both not just one. I think you've seen 442 00:22:50,680 --> 00:22:54,640 Speaker 12: goods prices already come down as we shift back to 443 00:22:54,680 --> 00:23:00,720 Speaker 12: spending our money on services. Housing inflation hasn't come down yet, 444 00:23:00,760 --> 00:23:03,600 Speaker 12: but we expect it to because of the components, it 445 00:23:03,680 --> 00:23:06,840 Speaker 12: kind of moves with a lag. And then this question 446 00:23:06,920 --> 00:23:10,480 Speaker 12: of services has been more persistent than we thought it 447 00:23:10,520 --> 00:23:14,880 Speaker 12: would be. But you've seen sprices coming down in that 448 00:23:15,119 --> 00:23:19,080 Speaker 12: space as well. So I think those things, plus the 449 00:23:19,119 --> 00:23:25,600 Speaker 12: fact that inflation expectations have remained pretty well anchored, tells 450 00:23:25,640 --> 00:23:28,440 Speaker 12: you there is at least there are at least some 451 00:23:28,560 --> 00:23:32,400 Speaker 12: forces that are going to keep moving in that direction. 452 00:23:32,480 --> 00:23:36,280 Speaker 15: Well, your background suggests that you care a lot about employment, 453 00:23:36,480 --> 00:23:39,560 Speaker 15: and obviously it is one of the mandates, as you mentioned, 454 00:23:40,720 --> 00:23:42,800 Speaker 15: do you think that the data that we're seeing now 455 00:23:42,840 --> 00:23:47,040 Speaker 15: and you could include retail sales today industrial production, suggests 456 00:23:47,080 --> 00:23:50,760 Speaker 15: that the soft landing scenario is any stronger than it 457 00:23:50,880 --> 00:23:51,560 Speaker 15: had been. 458 00:23:52,080 --> 00:23:54,680 Speaker 10: So any more likely mean more strong. 459 00:23:54,800 --> 00:24:01,919 Speaker 12: Yeah, I'm definitely hopeful in that there are one group 460 00:24:02,040 --> 00:24:05,440 Speaker 12: that looks at the labor market and that its prized 461 00:24:05,600 --> 00:24:12,320 Speaker 12: measure of tightness is the vacancies to unemployment ratio, and 462 00:24:12,480 --> 00:24:17,800 Speaker 12: that ratio hit record highs and it's come down a lot. 463 00:24:18,280 --> 00:24:22,640 Speaker 20: It's still the level is still higher than it was before, but. 464 00:24:22,800 --> 00:24:27,200 Speaker 12: It's come down in a way that hasn't tanked the 465 00:24:27,280 --> 00:24:28,080 Speaker 12: labor market. 466 00:24:29,000 --> 00:24:30,640 Speaker 10: The danger, of course, is. 467 00:24:30,680 --> 00:24:34,399 Speaker 12: If you get a recession and you try to land 468 00:24:34,440 --> 00:24:35,760 Speaker 12: the plane nose down. 469 00:24:36,960 --> 00:24:39,840 Speaker 10: Tends to be that the labor markets, when they deteriorate, 470 00:24:39,880 --> 00:24:43,159 Speaker 10: they deteriorate rapidly. The unemployment rate goes way up. 471 00:24:43,200 --> 00:24:47,080 Speaker 12: You see layoffs, and everybody's trying to avoid that if 472 00:24:47,119 --> 00:24:47,840 Speaker 12: at all possible. 473 00:24:48,080 --> 00:24:52,320 Speaker 15: You probably would see if you looked at a spread 474 00:24:52,359 --> 00:24:54,760 Speaker 15: that you're but you've been put by Wall Street on 475 00:24:54,800 --> 00:24:57,480 Speaker 15: the sort of the dubbish side at this point, whatever 476 00:24:57,520 --> 00:25:01,080 Speaker 15: a dove means these days, what would you say to 477 00:25:01,119 --> 00:25:03,840 Speaker 15: the idea of rate cuts in the sense that Wall 478 00:25:03,880 --> 00:25:06,159 Speaker 15: Street is already thinking that you're probably going to have 479 00:25:06,200 --> 00:25:06,520 Speaker 15: to do that. 480 00:25:06,640 --> 00:25:09,480 Speaker 12: But yeah, look like the thing is, I've said the 481 00:25:09,680 --> 00:25:12,360 Speaker 12: very first speech that I gave is when I took 482 00:25:12,400 --> 00:25:16,760 Speaker 12: over in Chicago, emphasize I'm not a fan of setting 483 00:25:16,800 --> 00:25:21,320 Speaker 12: monetary policy based on what the market says, or try 484 00:25:21,400 --> 00:25:23,920 Speaker 12: to predict how the market's going to react. I think 485 00:25:24,359 --> 00:25:28,040 Speaker 12: the overwhelming thing that the Fed's got to do is 486 00:25:29,119 --> 00:25:31,920 Speaker 12: pursue the dual mandate. It's about the real economy. It's 487 00:25:31,920 --> 00:25:34,640 Speaker 12: about inflation, which is too high, but at least we're 488 00:25:34,640 --> 00:25:39,520 Speaker 12: making progress, and is about the employment mandate, where the 489 00:25:39,600 --> 00:25:46,320 Speaker 12: job market remains quite strong. And so I think it's 490 00:25:46,480 --> 00:25:50,120 Speaker 12: far too premature to be talking about rate cuts and 491 00:25:50,280 --> 00:25:51,320 Speaker 12: premature to. 492 00:25:51,400 --> 00:25:54,399 Speaker 10: Be saying, even for the next meeting, are we going 493 00:25:54,440 --> 00:25:55,960 Speaker 10: to pause, are we going to raise? Are we going 494 00:25:56,040 --> 00:25:58,920 Speaker 10: to cut? We got to get as much data. 495 00:25:58,720 --> 00:26:01,399 Speaker 20: As we can, and it hooves us at a moment 496 00:26:02,240 --> 00:26:06,320 Speaker 20: where we followed the strangest business cycle in history with 497 00:26:06,800 --> 00:26:09,920 Speaker 20: one of the strangest credit conditions that we've. 498 00:26:09,720 --> 00:26:10,800 Speaker 10: Seen in decades. 499 00:26:11,960 --> 00:26:14,640 Speaker 12: We got to look at a lot more measures than 500 00:26:14,880 --> 00:26:20,320 Speaker 12: just unemployment, inflation, and wages in the kind of the 501 00:26:20,320 --> 00:26:24,639 Speaker 12: conventional box of numbers that we looked at in the 502 00:26:24,840 --> 00:26:25,480 Speaker 12: well you get. 503 00:26:26,119 --> 00:26:28,640 Speaker 15: Your next meeting is June fourteenth. The next CPI report 504 00:26:28,720 --> 00:26:31,399 Speaker 15: is June thirteenth. Can we call you up in the 505 00:26:31,440 --> 00:26:34,960 Speaker 15: Fed meeting room and ask you what you think? Austin Goilsby, 506 00:26:35,000 --> 00:26:37,199 Speaker 15: thanks very much for joining us today, the President of 507 00:26:37,240 --> 00:26:39,000 Speaker 15: the Chicago Federal Reserve. 508 00:26:40,680 --> 00:26:43,760 Speaker 21: This is Bloomberg Daybreak Today, your morning brief on the 509 00:26:43,760 --> 00:26:47,200 Speaker 21: stories making news from Wall Street to Washington and beyond. 510 00:26:47,840 --> 00:26:50,600 Speaker 1: Look for us on your podcast feed at six am 511 00:26:50,680 --> 00:26:54,399 Speaker 1: Eastern each morning, on Apple, Spotify, and anywhere else you 512 00:26:54,400 --> 00:26:55,399 Speaker 1: get your podcasts. 513 00:26:55,400 --> 00:26:58,040 Speaker 21: You can also listen live each morning starting at five 514 00:26:58,080 --> 00:27:00,680 Speaker 21: am Wall Street Time, on Bloomberg eleven three to zero 515 00:27:00,720 --> 00:27:04,200 Speaker 21: in New York, Bloomberg ninety nine one in Washington, Bloomberg 516 00:27:04,200 --> 00:27:07,240 Speaker 21: one oh sixty one in Boston, and Bloomberg ninety sixty 517 00:27:07,359 --> 00:27:08,320 Speaker 21: in San Francisco. 518 00:27:08,680 --> 00:27:11,840 Speaker 1: Our flagship New York station is also available on your 519 00:27:11,880 --> 00:27:16,960 Speaker 1: Amazon Alexa devices. 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