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Speaker 1: This is Bloomberg day Break Weekend, our global look at

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Speaker 1: the top stories in the coming week from our day

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Speaker 1: Break anchors all around the world, and straight ahead on

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Speaker 1: the program, a look at Tuesday's US presidential election and

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Speaker 1: what could be at stake for the US economy. Also

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Speaker 1: a preview of this week's Federal Preserve Policy meeting. I'm

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Speaker 1: Tom Busby in New York. I'm Stephen Kyle in London.

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Speaker 2: Work calculating the size of the Bank of England's but

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Speaker 2: just headache.

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Speaker 3: I'm Charlie Pellett, looking ahead to earnings from some of

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Speaker 3: Japan's biggest automakers and the state of the gold trade.

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Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend, The business

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Speaker 4: news you need to wrap up your week. Available on Apple, Spotify,

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Speaker 4: the Bloomberg Business Appen everywhere you get your podcasts.

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Speaker 1: Good day to you. I'm Tom Busby. We begin today's

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Speaker 1: program with this Tuesday's US presidential election and what each candidate,

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Speaker 1: if he or she wins, is hoping to do for

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Speaker 1: the economy. For more, we turned to Mark Niquette, Bloomberg

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Speaker 1: Real Economy Team reporter. Mark. Thank you for joining us. Well,

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Speaker 1: we're getting down to the wire. Right now, this election

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Speaker 1: looks like a toss up, just a few key swing

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Speaker 1: states likely to decide the outcome. I'm going to ask

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Speaker 1: you where the economy is right now. One candidate calls

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Speaker 1: it a disaster. I don't think that's true, but why

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Speaker 1: don't you tell me where we are now?

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Speaker 5: We kind of have a disconnect between an economy that

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Speaker 5: economic indicators show is doing well and is strong, and

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Speaker 5: public perception is measured by poles that the economy is

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Speaker 5: headed in the wrong direction.

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Speaker 6: We had a spate of economic reports this week that

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Speaker 6: would be otherwise you'd think encouraging for Kamala Harris, showing

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Speaker 6: that the economy is doing quite well. We had a

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Speaker 6: GDP report yesterday that showed an annualized rate of two

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Speaker 6: point eight percent in the third quarter, consumer spending was up.

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Speaker 6: On Tuesday, we had a Consumer Confidence report showing that

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Speaker 6: consumer confidence increased in October by the most since March

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Speaker 6: twenty twenty one. And we had a PCE report, you know,

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Speaker 6: so called core personal consumption Expenditures, that showed that overall

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Speaker 6: inflation was down to two point one percent, the lowest

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Speaker 6: since early twenty twenty one. But despite these good economic numbers,

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Speaker 6: polling continues to show that voters think the economy is

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Speaker 6: headed in the wrong direction. They're still stuck on you know,

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Speaker 6: high prices and you know a sense that inflation rate

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Speaker 6: that we've seen come down hasn't translated into their everyday

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Speaker 6: purchases of gas and groceries. So that's sort of the

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Speaker 6: backdrop for the presidential election where you know, we have

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Speaker 6: a race where voters say the economy is their biggest issue,

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Speaker 6: and polls, including our poll Morning Console, show that voters

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Speaker 6: trust Trump Donald Trump more than Kamala Harris.

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Speaker 4: On the economy.

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Speaker 1: Well, because of that, let's talk then about what each

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Speaker 1: candidate is promising to do. You're right, former President Trump,

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Speaker 1: many believe he handled the economy better right now, though

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Speaker 1: it seems to be banking on punishing import tariffs as

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Speaker 1: his chief economic plan. Tariff certainly have their benefits, but

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Speaker 1: is this really going to move the needle on inflation

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Speaker 1: and household budgets.

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Speaker 6: Well, if you talk to most mainstream economists, they'll tell

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Speaker 6: you yes, that there's even forecasts out there that will

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Speaker 6: calculate what impact the proposed tariffs that President Trump, former

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Speaker 6: President Trump has promised on the campaign trail, What impact

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Speaker 6: they would have on the increase in inflation and decrease

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Speaker 6: in gross domestic product. The expectation from most economists is

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Speaker 6: that when you put a tariff on at the size

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Speaker 6: that President Trump is talking about, ten to twenty percent

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Speaker 6: on all imports, on imports from China, that's just going

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Speaker 6: to drive up prices because you know foreign countries, foreign

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Speaker 6: countries don't pay the tariffs. Importers pay the tariffs, and

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Speaker 6: they're passed along to consumers. So the rising prices will,

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Speaker 6: some economists predict, will lead to even stay inflation. Now

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Speaker 6: that the president's former president and his supporters would argue

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Speaker 6: that the inflation didn't spike during his first term when

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Speaker 6: he put in tariffs on China and aluminum and steel imports,

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Speaker 6: and that you know, their projections are that the tariffs

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Speaker 6: will actually help with reshoring of manufacturing and creating of

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Speaker 6: manufacturing jobs in the US and actually increase economic growth.

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Speaker 6: So we'll kind of have to wait and see if

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Speaker 6: former President Trump wins and he does put these tariffs on,

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Speaker 6: you know what impact they would have, because while his

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Speaker 6: supporters say that, you know, there wasn't a spike in

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Speaker 6: inflation during his first term because of the tar see

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Speaker 6: put on. What he's talking about enacting if he elected

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Speaker 6: to another term is substantially higher and broader. Essentially, his

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Speaker 6: proposed tariffs would hit all three trillion of US imports annually.

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Speaker 6: That would have a staggering, staggering, presumably a big impact

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Speaker 6: on economy.

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Speaker 1: Vice President Harris has promised to tackle the high cost

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Speaker 1: of living by boosting new home construction, going after corporations

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Speaker 1: accused of price gouging, and expanding a tax credit for

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Speaker 1: those with young families. And to pay for all that,

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Speaker 1: of course, taxes on the wealthy. What would that mean

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Speaker 1: for inflation and for the economy.

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Speaker 6: Well, that's going to be the big fight next year

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Speaker 6: over taxes. We have the tax cuts that former President

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Speaker 6: Trump enacted when he was in office in twenty seventeen

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Speaker 6: that are expiring at the end of twenty twenty five.

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Speaker 6: So the next president, whether it's Kamala Harris or Donald Trump,

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Speaker 6: and the newly elected Congress will have to deal with

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Speaker 6: taking action on those expiring tax cuts, either extending them

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Speaker 6: as President Trump has talked about doing, or changing them

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Speaker 6: as you mentioned, Kamala Harris has talked about. Vice President

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Speaker 6: Harris has talked about She's suggesting that the tax cuts

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Speaker 6: should be limited to those making four hundred thousand dollars

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Speaker 6: in the less a year, So preserve the tax cuts

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Speaker 6: for middle class, but allow increases for wealthier individuals, and

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Speaker 6: increase the corporate rate to twenty eight percent as a

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Speaker 6: way to, as she would say, you know, have the

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Speaker 6: wealthy and corporations pay their fair share, but also to

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Speaker 6: rai's revenue to pay for, as you mentioned, expanded childcare

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Speaker 6: tax credit, tax credit for first time home buyers, and

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Speaker 6: some other subsidies that she's proposed for small businesses. But

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Speaker 6: that's all going to be up to Congress, and one

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Speaker 6: of the things we'll be watching to see, you know,

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Speaker 6: what kind of party control of Congress we see after

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Speaker 6: the elections on Tuesday. You know, we have a potential

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Speaker 6: for a president elected with full control party control of

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Speaker 6: Congress or divided government, and that will go a long

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Speaker 6: way determining what happens with the tax bill.

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Speaker 1: Yeah, you bet well, a lot to look forward to

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Speaker 1: election day Tuesday, November fifth. Our thanks to Mark Niquette,

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Speaker 1: Bloomberg Real Economy Team reporter. But we turned now to

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Speaker 1: the Federal Reserve as policymakers meet again this week on

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Speaker 1: interest rates. For more and what to expect. We turned

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Speaker 1: to Stuart paul Us, economists with Bloomberg Economics now Stewart.

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Speaker 1: FED Chair Jerome Pala has always maintained that FOMC decisions

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Speaker 1: are data driven. And wow, did we get some kind

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Speaker 1: of data point this past Friday, just twelve thousand jobs

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Speaker 1: added in October. Was this just shock to you? And

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Speaker 1: what does it mean for the Fed?

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Speaker 7: We had anticipated actually a slightly worse jobs report. We'd

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Speaker 7: expected total employment to actually decline by about ten thousand jobs.

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Speaker 7: Private employment did decline during the month. A big part

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Speaker 7: of that is the effect of both hurricanes Milton and Hollene,

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Speaker 7: and also the strike at Boeing. We did see about

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Speaker 7: forty five thousand jobs lost in manufacturing, and we think

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Speaker 7: that that's mostly a consequence of the strike at Boeing

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Speaker 7: and knock on effects at parts suppliers. The household survey

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Speaker 7: where we see the unemployment rate actually worse in just

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Speaker 7: a little bit. Now, the headline on employment rate held

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Speaker 7: steady at four point one percent, but that's mostly just

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Speaker 7: a matter of rounding. It's literally just a matter of

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Speaker 7: a few hundreds of a percentage point that is getting

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Speaker 7: rounded away. And that's keeping the unemployment rate at four

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Speaker 7: point one percent, But the actual numbers do look a

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Speaker 7: little bit worse when you look under the surface. Undoubtedly,

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Speaker 7: the labor market is cooling. We also saw earlier last

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Speaker 7: week the total number of job openings declining during the

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Speaker 7: month and the quits rate falling as workers realize and

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Speaker 7: as they come to grips to the fact that it

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Speaker 7: is more difficult to find new employment at higher wages.

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Speaker 7: The Fed is absolutely going to be taking this cooling

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Speaker 7: labor market into consideration what it meets next week to

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Speaker 7: make its next rate cut decision.

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Speaker 1: Now, on the other hand, we have seen some very

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Speaker 1: encouraging economic data as well about GDP, consumer spending, consumer sentiment,

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Speaker 1: and inflation.

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Speaker 7: Right, that's right, So core PCE inflation, the Fed's preferred gauge,

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Speaker 7: came in a bit hot in September, and yes, you're right.

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Speaker 7: Through the third quarter we did see pretty strong growth

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Speaker 7: two point eight percent annualized growth on the back of

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Speaker 7: about three point seven percent annualized consumer spending growth. Now,

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Speaker 7: when we drill down into the data, looks to us

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Speaker 7: like it's mostly employment and employee compensation income, so wage

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Speaker 7: income that's supporting that spending and just an exceptionally low

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Speaker 7: saving rate that it just consumers undersaving to support their

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Speaker 7: spending habit. As the labor market cools, we think that

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Speaker 7: that undersaving is going to go away, consumers are going

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Speaker 7: to get a little bit more cautious, and so a

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Speaker 7: lot of those tailwinds that have been supporting spending we

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Speaker 7: think are going to fase as the labor market cool.

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Speaker 7: So yes, for now, things do look rather strong. They

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Speaker 7: look strong through the GDP numbers. But I think that

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Speaker 7: if you're thinking like the FED, and you're thinking about

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Speaker 7: what it's going to look like down the line, it's

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Speaker 7: time to get a little bit more cautious to think

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Speaker 7: that some of those talwinds might be fading.

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Speaker 1: And the FED still has another meeting in mid December, right,

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Speaker 1: So what's your gut feeling right now after in the

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Speaker 1: wake of this Job's report, dismal report of.

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Speaker 7: What the Fed is going to do, we think that

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Speaker 7: the Fed is going to cut by twenty five basis points,

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Speaker 7: So still another rate cut, still the removal of restrictive policy,

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Speaker 7: not quite getting back to neutral, certainly not accommodative, but

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Speaker 7: a twenty five basis point reduction for November Looking ahead

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Speaker 7: to December, we still think another twenty five basis points

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Speaker 7: is in play. But for a data dependent FED, who's

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Speaker 7: probably going to then slow down its cadence of rate

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Speaker 7: cuts in twenty twenty five, December is going to be

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Speaker 7: more of a knife edge decision. We'll need to see

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Speaker 7: just how much the labor market deterior rates between now

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Speaker 7: and then.

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Speaker 1: Mortgage rates, though, have moved the other way. Why is that?

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Speaker 1: And I mean it's really got to affect housing and

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Speaker 1: people's affordability, But why have we seen six weeks in

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Speaker 1: a row mortgage rates edge a little bit higher.

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Speaker 7: Mortgage rates tend to be benchmarked based on longer term

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Speaker 7: treasury rates, So the Fed is cutting very very short

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Speaker 7: term interest rates, and in fact, by running off its

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Speaker 7: bond portfolio, it's putting upward pressure on long term rates,

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Speaker 7: all at a time when we have on election coming

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Speaker 7: up where the two candidates are spending heavy versus spending heavier.

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Speaker 7: There is no austerity candidate, So I think that the

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Speaker 7: bond market is looking at our fiscal situation as a country,

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Speaker 7: and they're also feeling the effects of the runoff of

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Speaker 7: the Fed's balance sheet, and we're getting some upward pressure

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Speaker 7: on long term yields, and that's pushing up mortgage rates. Again.

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Speaker 7: We think that higher long term rates, it's higher mortgage

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Speaker 7: rates tends to put people in a little bit more

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Speaker 7: bind So even as the Fed is cutting short term

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Speaker 7: interest rates, folks are probably going to need to rain

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Speaker 7: and spending just a bit more, especially as the labor

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Speaker 7: market cools.

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Speaker 6: Yeah.

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Speaker 1: Oh, and it's cool well that two day FOMC meeting

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Speaker 1: kicks off Wednesday, delay to day because of the elections

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Speaker 1: decision expected two pm Wall Street time on Thursday, and

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Speaker 1: our thanks to Stuart paul Us economists with Bloomberg Economics

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Speaker 1: coming up on Bloomberg day Break weekend to look inside

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Speaker 1: the inaugural budget of the UK's newly installed government what

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Speaker 1: that means for the Bank of England. I'm Tom Busby

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Speaker 1: and this is Bloomberg. This is Bloomberg day Break Weekend,

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Speaker 1: our global look ahead at the top stories for investors

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Speaker 1: in the coming week. I'm Tom Busby in New York.

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Speaker 1: Up later in our program will look ahead to earnings

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Speaker 1: from some of the world's biggest automakers. But first, the

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Speaker 1: UK's new labor government has delivered its first ever budget,

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Speaker 1: boasting one of the biggest tax increases in a generation

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Speaker 1: and changes to the nation's much touted fiscal rules. What

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Speaker 1: will the country's new economic direction mean for the Bank

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Speaker 1: of England. For more, let's go to London and bring

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Speaker 1: in Bloomberg daybreak, Eurobanker Stephen Carroll.

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Speaker 2: Tom The UK's Chancellor of the Exchequer, Rachel Reeves, unveiled

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Speaker 2: a forty billion pound package of tax rises and ramped

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Speaker 2: up borrowing in a dramatic move to meet the Labor

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Speaker 2: Party's pledge to rebuild the UK.

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Speaker 8: Well.

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Speaker 2: One person who'll be keeping a close eye on the

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Speaker 2: developments announced by the chancellors the Government of the Bank

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Speaker 2: of England Andrew Bailey. He and his fellow policymakers are

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Speaker 2: due to make their next interest rate decision in the

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Speaker 2: coming days, just shortly after the budget announcement. Although officials

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Speaker 2: have already opted to lower borrowing costs this year, economist,

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Speaker 2: they're warning that the pain of high rates could be

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Speaker 2: prolonged following Reeves's announcement. It's all the government plans to

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Speaker 2: lift borrowing by one hundred and forty two billion pounds

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Speaker 2: over five years to help fund a massive program of

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Speaker 2: investment and boost public services. Couples with appliged to deliver

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Speaker 2: another large jump in the minimum wage, our potential threats

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Speaker 2: to the BOSIM to keep inflighting low. We discussed how

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Speaker 2: reads as plan my effect personal spending habits with our

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Speaker 2: money distilled columnist John Steppek. Here's what he had to say.

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Speaker 9: I don't get it wrong. I mean I think that

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Speaker 9: it's been the direction of travel has been very clear

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Speaker 9: on property for a long time. And I think if

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Speaker 9: you're someone who still views residential property as a viable

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Speaker 9: investment for an amateur in person or even as an

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Speaker 9: investment asset, you maybe need to have a look at

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Speaker 9: what's happened over the last ten years because the tax

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Speaker 9: benefits have been slashed. You know, this latest move jacking

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Speaker 9: up the stamp duty again is just it's sort of

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Speaker 9: signaling we don't want people you own second homes. And

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Speaker 9: that's before you get to local council taxes in various

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Speaker 9: desirable areas. I mean, the other rabbit obviously is not

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Speaker 9: it's basically saying it didn't happen. We'll defrost the tax

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Speaker 9: thresholds in twenty twenty, twenty twenty night. But of course

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Speaker 9: she's got you know, five years did change on the

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Speaker 9: mean to put that, Yes, it.

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Speaker 2: Has Boombergs John step out there. So will government policy

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Speaker 2: leave the Central Bank wary over the pace of further

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Speaker 2: rate cuts? It's something I've been discussing with Boomberg's chief

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Speaker 2: UK economist Dan Hansen. Give us some context. What has

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Speaker 2: the budget for changed for Andrew Bailey and for BOI

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Speaker 2: policymakers if.

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Speaker 10: You go back to the middle of September, I think

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Speaker 10: it was or not long after the September meeting, Andrew

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Speaker 10: Bailey gave an interview saying that policymakers could be a

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Speaker 10: little bit more aggressive in terms of their speed of

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Speaker 10: rate cuts. I think the budget makes that quite unlikely

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Speaker 10: now in terms of how quickly they ease I think

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Speaker 10: there's sort of the baseline case, and a reasonable base

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Speaker 10: case is that they they may they make a move

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Speaker 10: down in November, but they stick to the mantra that

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Speaker 10: things will be gradual, so they're not going to indicate

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Speaker 10: I don't think that they will speed up the pace

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Speaker 10: of rate cuts for that happen. The data is going

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Speaker 10: to have to really surprise, and it surprised a bit

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Speaker 10: to the downside, but it's not really surprising to the downside,

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Speaker 10: and as you just mentioned there there's this enormous fiscal

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Speaker 10: stimulus that needs to be factored into their thinking now

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Speaker 10: and the national minimum wage hike as well, and that

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Speaker 10: just is just one more reason to think that they're

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Speaker 10: going to move slowly.

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Speaker 2: Let's dig into the borrowing picture and what we learned

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Speaker 2: after the budget from the independent government watchdog, the Office

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Speaker 2: for a Budget Responsibility that kind of crunches the numbers

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Speaker 2: around the announcements being made by the Chancellor and puts

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Speaker 2: them in a look of a long term context. What

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Speaker 2: did they say exactly about what that spending would mean

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Speaker 2: for the inflation outlook and thus the out look?

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Speaker 10: Yeah, yeah, so they said that there would be the

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Speaker 10: way the policy package has been set up, there will

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Speaker 10: be this relatively large near term boost to the economy.

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Speaker 10: So growth next year could be point four point five

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Speaker 10: percentage points higher as a result of the policy package,

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Speaker 10: which is a significant news. Surely, Yes, it's very significant

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Speaker 10: when you're you know, when you're forecasting growth of sort

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Speaker 10: of one ish percent, if you you're going to add

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Speaker 10: sort of point five percentage points to it, that's quite

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Speaker 10: that's quite significant. So and the thing to remember about

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Speaker 10: the Bank of England, which is slightly different to the

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Speaker 10: Office of a bunch of Responsibility, is that the Bank

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Speaker 10: of England thinks the economy's speed limit, so the speed

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Speaker 10: at which it can grow without stoking inflation is low

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Speaker 10: or lower than the Office of a bunch of Responsibility,

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Speaker 10: I should say, So the Bank of England thinks the

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Speaker 10: economy can grow one to one and a half percent

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Speaker 10: somewhere in that range a year without inflation taking off.

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Speaker 10: So if you add in, as I say, this stimulus

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Speaker 10: next year that you know is good and with an

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Speaker 10: economy operating pretty much sort of at full employment for capacity,

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Speaker 10: there is going to be an inflationary impulse from it,

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Speaker 10: maybe point two somewhere between point two point four on

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Speaker 10: CPI inflation over the next eighteen months or so. So

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Speaker 10: that's you know, it's a significant significant boost.

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Speaker 3: So for the outlook for rate then what does that mean?

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Speaker 10: So I think, as I say, I think they're going

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Speaker 10: to cut interest rates at the at the upcoming meeting,

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Speaker 10: I think that's that's sort of pretty much a given.

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Speaker 10: But I think there was there was always a question

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Speaker 10: about whether this meeting they would open the door to

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Speaker 10: going a little bit faster. If things allowed them to,

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Speaker 10: so essentially creating some conditionality in in what they how

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Speaker 10: they'll sort of respond going forward. I think the chances

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Speaker 10: of that now have dropped dramatically, and there was a

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Speaker 10: lot of debate in the market, and a lot of

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Speaker 10: clients I speak to are sort of there's there's a

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Speaker 10: lot of debate about was a lot of debate about

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Speaker 10: December whether they cut again in December, particularly with you

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Speaker 10: know what's going on to the ECB, potentially the FED

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Speaker 10: going twice before the end of the year. I think

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Speaker 10: the budget has made that significantly less likely that they

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Speaker 10: go again in December. I don't think you can preclude

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Speaker 10: a speeding up next year if that, but it will

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Speaker 10: really be about the data. I think if you're if

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Speaker 10: you're sat in on Monetary Policy Committee over the next

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Speaker 10: week or so and you're going to make your decision,

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Speaker 10: which is announced on the seventh of November, you will

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Speaker 10: feel that the implation pitch has become a little bit

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Speaker 10: more cloudy as a result of the budget. So I

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Speaker 10: think for this upcoming meeting, the cautious time will continue.

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Speaker 2: I mean you wonder as well whether people in thread

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Speaker 2: Needle Street we are holding their head in their hand

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Speaker 2: think either have to rethink all of the work they've

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Speaker 2: done before in terms of projections for the economy with

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Speaker 2: everything that happened in the budget because it was a

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Speaker 2: big package. We expected it to be because it had

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Speaker 2: been the first under this current government in the UK.

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Speaker 2: But I mean, is it kind of further down the

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Speaker 2: line if we think past the upcoming meeting, is there

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Speaker 2: a lot in there for the Bank of England to

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Speaker 2: have to try and calculate the effects of down the line?

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Speaker 2: You meant in the national minimum wage increase coming, that's

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Speaker 2: of course a wage inflation issue. We've got the increased

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Speaker 2: payroll taxes on employers for national insurance contributions as well.

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Speaker 2: Down the line, are those things that are going to

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Speaker 2: have that could shift the path for where the Bank

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Speaker 2: of England go.

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Speaker 8: Yeah?

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Speaker 10: Absolutely, I mean I wouldn't you know, I said that

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Speaker 10: I wouldn't like to be in thread Needle Street, as

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Speaker 10: you just said, watching that budget and sort of making

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Speaker 10: the decision about interest rates. I also wouldn't like to

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Speaker 10: be in thread Needle Street putting the forecast together, which

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Speaker 10: is what they're going to have to do at in quickly,

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Speaker 10: pretty quick order to because it would be very It's

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Speaker 10: very unlikely that the forecast that gets published won't have

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Speaker 10: this this impact in it. So they're gonna the Bank's

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Speaker 10: going to have to work pretty quickly to get get

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Speaker 10: it all incorporated. I mean, I think I think they

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Speaker 10: would have been surprised. Bottom line, to sort of go

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Speaker 10: to your point, I think the would have been surprised

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Speaker 10: by the site. They had known there was going to

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Speaker 10: be some stimulus coming. I think the scale of it

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Speaker 10: will have will have surprised them. So Yeah, and I say,

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Speaker 10: going back to how that that will sort of be

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Speaker 10: reflected in their communication, I think, you know, cautious, cautious guidance.

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Speaker 10: But also it's quite possible that we don't get a

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Speaker 10: all of the can voting for a cut again, you know,

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Speaker 10: you get a un get another split vote. I think

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Speaker 10: it just remind us of where we were a last

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Speaker 10: time around. Yeah, in September, it was it was eight

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Speaker 10: to one for a hold, and I think the way

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Speaker 10: the data had been moving there was there was a

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Speaker 10: real possibility that we got a nine nil in favor

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Speaker 10: of a cut in in November. This is all prior

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Speaker 10: to the budget and I think that that in itself

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Speaker 10: may have sort of sent a signal that the idea

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Speaker 10: of a December cut was on was on the cards

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Speaker 10: or a possibility and something that was being seriously considered.

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Speaker 10: Now I think you'll most likely get some at least one,

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Speaker 10: possibly two of the more hawkish members of the committee saying,

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Speaker 10: you know this is this has changed my thinking again,

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Speaker 10: particularly with the I think with the national or national

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Speaker 10: minimum wage increase, so you.

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Speaker 1: Know, all of it, all of it.

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Speaker 10: It's going to have a significant bearing on how the

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Speaker 10: Bank communicates its latest decision.

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Speaker 2: Yeah, it makes the job much more complex as well.

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Speaker 2: Just size us where the BOE is in this, the

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Speaker 2: global landscape of this as well, because obviously we had

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Speaker 2: the big rate cut from the FED and the ECB's

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Speaker 2: one preceeding kind of fairly steadily along the line as well.

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Speaker 2: I mean, is it going to get into a sticky

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Speaker 2: situation for the BOIE if they're not cutting next month,

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Speaker 2: then everyone else is rolling forward and cuts, and of

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Speaker 2: course if that's something that we can better on either.

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Speaker 10: Yeah, I mean there's always that, isn't there the sort

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Speaker 10: of the disconnect between global central banks. I mean, I

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Speaker 10: think you know, you look at the US and we'll

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Speaker 10: get jobs numbers and the like. But you know, the

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Speaker 10: US economy has been holding up pretty well as well.

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Speaker 10: I mean, the European economy does look weaker than it

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Speaker 10: sort of, I think people thought sort of two or

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Speaker 10: three months ago, and that's why the ECB is going sequentially. Yeah,

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Speaker 10: I don't think it's a huge deal if the bank

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Speaker 10: doesn't doesn't follow them one for one, you know, they

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Speaker 10: did obviously on the way up, it was almost sort

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Speaker 10: of matched all all of them did slightly different speeds,

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Speaker 10: but pretty much the same. I think on the way down,

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Speaker 10: I think the idea that the UK, the UK's inflation

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Speaker 10: problem probably is a little bit stickier still holds. So

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Speaker 10: I think the bank probably will be a bit more

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Speaker 10: cautious about how quickly quickly they cut rates. You've got,

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Speaker 10: as to say, in Europe you've got a definitely evidence

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Speaker 10: of a weaker economy. In the US they have a

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Speaker 10: slightly different mandate, which I always people place different weight

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Speaker 10: on this place, quite a lot of weight on it.

438
00:23:26,920 --> 00:23:29,520
Speaker 10: It just makes it easier if you see some signs

439
00:23:29,520 --> 00:23:31,520
Speaker 10: of cracks in the labor market, you can just focus

440
00:23:31,560 --> 00:23:34,359
Speaker 10: on that a little bit more. The bank is just

441
00:23:34,680 --> 00:23:38,480
Speaker 10: in an inflation targeting central bank, that's its mandate. So

442
00:23:38,640 --> 00:23:41,840
Speaker 10: I think it just is going to move more gradually,

443
00:23:43,600 --> 00:23:47,000
Speaker 10: and for us that means at a quarterly pace over

444
00:23:47,080 --> 00:23:49,399
Speaker 10: the course of over the course of twenty twenty five.

445
00:23:49,800 --> 00:23:52,080
Speaker 2: And rates staying a little bit higher on the long

446
00:23:52,160 --> 00:23:53,919
Speaker 2: term or the medium term. Is that a likelihood as

447
00:23:53,920 --> 00:23:54,800
Speaker 2: well or possibility?

448
00:23:55,200 --> 00:23:55,400
Speaker 6: Yeah?

449
00:23:55,480 --> 00:23:56,000
Speaker 1: Yeah, I think so.

450
00:23:56,160 --> 00:23:58,680
Speaker 10: I mean, there's this huge debate, isn't there globally about

451
00:23:58,680 --> 00:24:01,240
Speaker 10: where rates will eventually set, you know, the neutral rate

452
00:24:01,320 --> 00:24:04,359
Speaker 10: as people call it, the rate that doesn't speed up

453
00:24:04,520 --> 00:24:06,840
Speaker 10: or slow down the economy, the sort of equilibrium interest

454
00:24:06,920 --> 00:24:11,800
Speaker 10: rate in the economy. It's undoubtedly higher than it was

455
00:24:12,040 --> 00:24:15,000
Speaker 10: sort of prior to the pandemic. Is it as high

456
00:24:15,000 --> 00:24:16,800
Speaker 10: as it was prior to the financial crisis?

457
00:24:18,040 --> 00:24:18,560
Speaker 1: Probably not.

458
00:24:18,880 --> 00:24:21,480
Speaker 10: But I think the weight of evidence, given that economies

459
00:24:21,520 --> 00:24:23,960
Speaker 10: have been in the face of the tightening, that we

460
00:24:24,040 --> 00:24:27,920
Speaker 10: saw economies held up pretty well given what was thrown

461
00:24:27,960 --> 00:24:31,000
Speaker 10: at them. You know, the evidence is it is, you know,

462
00:24:31,080 --> 00:24:34,560
Speaker 10: in our view, somewhere probably between three and four percent,

463
00:24:35,080 --> 00:24:37,200
Speaker 10: So somewhere in that range. Knowing exactly where it is

464
00:24:37,320 --> 00:24:38,800
Speaker 10: is very difficult, But if you just sort of split

465
00:24:38,840 --> 00:24:42,920
Speaker 10: the difference around three and a half, you know, maybe

466
00:24:42,960 --> 00:24:45,720
Speaker 10: they're our forecast, they go all the way down to three.

467
00:24:46,240 --> 00:24:49,639
Speaker 10: So but it's it's very uncertain. I think the bigger

468
00:24:49,680 --> 00:24:52,960
Speaker 10: picture is that it is not We're definitely not going

469
00:24:53,000 --> 00:24:56,320
Speaker 10: back to where we were sort of in during the pandemic,

470
00:24:56,480 --> 00:24:58,879
Speaker 10: but even prior to the pandemic of you know, basically

471
00:24:59,000 --> 00:24:59,880
Speaker 10: zero interest rates.

472
00:25:00,240 --> 00:25:03,119
Speaker 2: Okay, Don Hanson, ARCHIFUK Economists, thank you so much for

473
00:25:03,240 --> 00:25:05,000
Speaker 2: joining us, And of course we'll have full coverage of

474
00:25:05,160 --> 00:25:08,359
Speaker 2: that bankving in decision when it comes on Thursday. Across

475
00:25:08,480 --> 00:25:11,400
Speaker 2: our Bloomberg platforms. I'm Stephen Carolyn London. You can catch

476
00:25:11,480 --> 00:25:14,399
Speaker 2: us every weekday morning here for Bloomberg Daybreak Europe, beginning

477
00:25:14,440 --> 00:25:17,879
Speaker 2: at six am in London at one am on Wall Streets.

478
00:25:18,000 --> 00:25:21,119
Speaker 1: Tom, thank you, Steven, And coming up on Bloomberg day

479
00:25:21,160 --> 00:25:25,320
Speaker 1: Break Weekend, an earnings preview from some of Asia's biggest automakers.

480
00:25:25,880 --> 00:25:39,960
Speaker 1: I'm Tom Busby, and this is Bloomberg. This is Bloomberg

481
00:25:40,000 --> 00:25:42,080
Speaker 1: day Break Weekend, our global look ahead at the top

482
00:25:42,160 --> 00:25:45,119
Speaker 1: stories for investors in the coming week. I'm Tom Busby

483
00:25:45,240 --> 00:25:48,560
Speaker 1: in New York. Japan, known for its massive auto industry,

484
00:25:48,560 --> 00:25:52,119
Speaker 1: which accounts for twenty two percent of that nation's sotal exports,

485
00:25:52,200 --> 00:25:55,040
Speaker 1: and this week we'll get a number of key earnings

486
00:25:55,119 --> 00:25:58,199
Speaker 1: reports from that sector. For more, we turned to Bloomberg's

487
00:25:58,240 --> 00:26:01,840
Speaker 1: Charlie Pellett news anchoring the day Break Asia podcast this week.

488
00:26:02,240 --> 00:26:05,800
Speaker 3: Tom will get earnings from some of Japan's largest automakers

489
00:26:05,880 --> 00:26:10,760
Speaker 3: next week, including the likes of Nissan, Honda, and Toyota,

490
00:26:11,200 --> 00:26:14,120
Speaker 3: and joining US now for a closer look. Tatsuo Yoshida,

491
00:26:14,480 --> 00:26:19,200
Speaker 3: senior autos analysts for Bloomberg Intelligence in Tokyo, set the

492
00:26:19,280 --> 00:26:22,119
Speaker 3: landscape for us. What is the backdrop heading into these

493
00:26:22,200 --> 00:26:23,080
Speaker 3: earnings reports.

494
00:26:24,080 --> 00:26:28,080
Speaker 8: Actually, macro environment is pretty much mixed, and then also

495
00:26:28,240 --> 00:26:33,720
Speaker 8: regional autoboon wheel market is also mixed. The macrowise material

496
00:26:33,840 --> 00:26:37,639
Speaker 8: prices is easier than before, and then yen is now

497
00:26:38,160 --> 00:26:42,800
Speaker 8: coming back to the weak as side. This is obviously positive. However,

498
00:26:43,320 --> 00:26:48,399
Speaker 8: inflation is persistent, such as wages and then logistics costs

499
00:26:48,720 --> 00:26:53,520
Speaker 8: those are higher than before. Commenting on the digital automobile market,

500
00:26:54,200 --> 00:26:59,280
Speaker 8: Japan is recovering from the impact of the output cuts

501
00:26:59,520 --> 00:27:05,240
Speaker 8: due to the certification scandal, and then US market, the

502
00:27:05,359 --> 00:27:09,800
Speaker 8: market is kind of stagnant, but stone Japanese makers are

503
00:27:09,840 --> 00:27:14,359
Speaker 8: still have a room for growth. And then China OBOL

504
00:27:14,440 --> 00:27:18,320
Speaker 8: market is gaining momentum due to the government support, but

505
00:27:18,880 --> 00:27:24,040
Speaker 8: Japanese automakers are struggling, mainly because of the lack of

506
00:27:24,520 --> 00:27:29,840
Speaker 8: haartpure new energy vehicles, which is basically battery electric vehicles

507
00:27:30,000 --> 00:27:31,760
Speaker 8: and plugging hybrid vehicles.

508
00:27:31,960 --> 00:27:35,280
Speaker 3: All right, So company by company, let us begin with Toyota,

509
00:27:35,359 --> 00:27:38,240
Speaker 3: the world's top carmaker. What are we looking at there?

510
00:27:39,200 --> 00:27:46,080
Speaker 8: The company Also situations are mixed Toyota and then together

511
00:27:46,200 --> 00:27:50,600
Speaker 8: with Honda, those two companies are ahead of their guidance tour.

512
00:27:50,800 --> 00:27:55,359
Speaker 8: For example, they are des in Japan is stagnant because

513
00:27:55,400 --> 00:28:00,480
Speaker 8: of the certification scandal, but UH sales and uh us

514
00:28:00,960 --> 00:28:05,399
Speaker 8: and then Cells in India or other part of the

515
00:28:05,480 --> 00:28:09,960
Speaker 8: Southeast Asia countries, those their selves are very strong.

516
00:28:10,720 --> 00:28:13,520
Speaker 3: And Nissan motor Water analysts expecting.

517
00:28:13,160 --> 00:28:19,160
Speaker 8: There Uh Nissan, I think uh, they're behind the guidance

518
00:28:19,760 --> 00:28:23,600
Speaker 8: and then market is a little bit costious about the company.

519
00:28:24,320 --> 00:28:30,320
Speaker 8: And despite the weakening and laterly UH, there still remains

520
00:28:30,359 --> 00:28:32,720
Speaker 8: a possibility of the guidance downgrade.

521
00:28:33,119 --> 00:28:36,919
Speaker 3: How does the global shift to electrification play into these

522
00:28:37,000 --> 00:28:37,840
Speaker 3: coming reports?

523
00:28:38,640 --> 00:28:46,200
Speaker 8: Actually, the electrification is diverse, not just battery electric vehicle

524
00:28:47,200 --> 00:28:53,200
Speaker 8: but also the hybrids. Clublan hybrids also a big part

525
00:28:53,240 --> 00:28:58,400
Speaker 8: of the electrification. Japanese a little bit behind, but the

526
00:28:58,520 --> 00:29:03,440
Speaker 8: electric vehicle advancement. However, they are lutra strong in hybrid

527
00:29:03,520 --> 00:29:07,800
Speaker 8: earthtic vehicles, and then I think hybrid earthic vehicle sales

528
00:29:07,880 --> 00:29:11,600
Speaker 8: at Honda and then Toyota are strong and then driving

529
00:29:11,680 --> 00:29:16,760
Speaker 8: their earnings. Actually Tourda Honda, they're gaining a lot of

530
00:29:16,880 --> 00:29:18,640
Speaker 8: profit from their hybrid vehicles.

531
00:29:19,080 --> 00:29:24,040
Speaker 3: A quick question about tariffs, either declared or potential involving

532
00:29:24,240 --> 00:29:28,200
Speaker 3: Chinese made evs. Do Japanese automakers expect to see any

533
00:29:28,240 --> 00:29:32,040
Speaker 3: potential gains because of tariffs imposed on Chinese vehicles.

534
00:29:32,520 --> 00:29:37,760
Speaker 8: Actually, Chinese and Japanese are not competing head on outside

535
00:29:37,800 --> 00:29:43,520
Speaker 8: of China, so the paddish thing, of course, that may

536
00:29:43,960 --> 00:29:47,600
Speaker 8: benefit the Japanese a little bit, but not significantly.

537
00:29:48,360 --> 00:29:51,280
Speaker 3: And as we get these earnings reports, is there any

538
00:29:51,360 --> 00:29:55,800
Speaker 3: one of the three Nissan, Honda, or Toyota that might

539
00:29:55,960 --> 00:29:57,960
Speaker 3: stand out as an industry bell weather.

540
00:29:59,080 --> 00:30:03,520
Speaker 8: I would expect them may upgrade there through a profit guidance.

541
00:30:03,960 --> 00:30:08,040
Speaker 3: Tatsuo, We thank you, Tatsuo Yoshida, senior Auto's analyst for

542
00:30:08,200 --> 00:30:13,120
Speaker 3: Bloomberg Intelligence, joining us from Tokyo. We move next to

543
00:30:13,240 --> 00:30:17,280
Speaker 3: the hottest commodity on the street, Gold, the precious metal,

544
00:30:17,360 --> 00:30:20,160
Speaker 3: is trading at records, extending a surge that has sent

545
00:30:20,280 --> 00:30:23,680
Speaker 3: gold up over a third this year and joining us

546
00:30:23,720 --> 00:30:28,240
Speaker 3: now George milling Stanley, chief gold strategist at State Street

547
00:30:28,320 --> 00:30:32,200
Speaker 3: Global Advisors, he's in our Hong Kong studios. So, George,

548
00:30:32,440 --> 00:30:35,320
Speaker 3: with gold at a record, what is it that.

549
00:30:35,440 --> 00:30:36,000
Speaker 1: Got us here?

550
00:30:36,600 --> 00:30:38,400
Speaker 11: I think there are really three things that got us

551
00:30:38,480 --> 00:30:40,920
Speaker 11: up here. The first is that central banks have been

552
00:30:41,400 --> 00:30:44,720
Speaker 11: very significant buyers of gold now primarily central banks in

553
00:30:44,760 --> 00:30:48,000
Speaker 11: the emerging markets, buying gold because they didn't have enough

554
00:30:48,080 --> 00:30:51,400
Speaker 11: in their official reserves. And that's been a process that's

555
00:30:51,440 --> 00:30:53,800
Speaker 11: been going on for fourteen straight years, not going to

556
00:30:53,840 --> 00:30:56,680
Speaker 11: go away anytime soon. The second thing, we've seen a

557
00:30:56,720 --> 00:31:00,640
Speaker 11: big revival in investment demand in China. I think Chinese

558
00:31:00,680 --> 00:31:03,840
Speaker 11: investors responding to problems in the stock market related to

559
00:31:03,960 --> 00:31:07,080
Speaker 11: real estate and turning to the traditional alternative, which has

560
00:31:07,120 --> 00:31:09,880
Speaker 11: been gold for a very long period of time. And then,

561
00:31:09,960 --> 00:31:13,080
Speaker 11: for different reasons, we've seen a revival in Western world investment,

562
00:31:13,160 --> 00:31:18,120
Speaker 11: Western Europe and North America, concerned about macroeconomic issues and

563
00:31:18,240 --> 00:31:21,840
Speaker 11: also concerned about geopolitical issues. I think that combination is

564
00:31:21,880 --> 00:31:24,479
Speaker 11: what's driven gold up to a whole succession of all

565
00:31:24,560 --> 00:31:25,480
Speaker 11: time highs this year.

566
00:31:25,800 --> 00:31:30,920
Speaker 3: Well, does the current price of gold then justify current valuations?

567
00:31:32,520 --> 00:31:34,840
Speaker 11: I think it does. I mean, you know, if you

568
00:31:34,920 --> 00:31:38,160
Speaker 11: think about it, the kind of macroeconomic scenario that we're in,

569
00:31:38,560 --> 00:31:42,840
Speaker 11: with inflation still being sticky, especially on the Fed's preferred measure,

570
00:31:44,040 --> 00:31:46,520
Speaker 11: and with the Fed having started to cut interest rates

571
00:31:46,560 --> 00:31:49,880
Speaker 11: and clearly embarking on a sustained period of rate cutting

572
00:31:49,920 --> 00:31:53,040
Speaker 11: that's going to run through next year if everybody is

573
00:31:53,080 --> 00:31:55,840
Speaker 11: to believe it to be believed that I think is

574
00:31:56,000 --> 00:31:59,440
Speaker 11: likely to lead to dollar weakness and then consequently gold strength.

575
00:31:59,760 --> 00:32:03,720
Speaker 11: And the geopolitical background a conflict in Europe with the

576
00:32:03,760 --> 00:32:06,040
Speaker 11: potential to turn nuclear at the push of a button,

577
00:32:06,600 --> 00:32:09,320
Speaker 11: and the Middle Eastern conflict having now spread way beyond

578
00:32:09,400 --> 00:32:12,600
Speaker 11: Israel's borders where it was confined at the beginning, and

579
00:32:12,720 --> 00:32:16,200
Speaker 11: now including open warfare with Iran and Lebanon, and the

580
00:32:16,240 --> 00:32:19,080
Speaker 11: potential for that to get even worse. I think all

581
00:32:19,160 --> 00:32:22,240
Speaker 11: of those things together historically have been very helpful for gold,

582
00:32:22,960 --> 00:32:25,680
Speaker 11: and right now they're continuing to be very very supportive,

583
00:32:25,680 --> 00:32:27,680
Speaker 11: which is why we keep hitting this succession of all

584
00:32:27,760 --> 00:32:28,320
Speaker 11: time highs.

585
00:32:28,640 --> 00:32:30,920
Speaker 3: Well, let me throw in one more piece of uncertainty,

586
00:32:31,000 --> 00:32:34,360
Speaker 3: and that is the American presidential election. Potentially what might

587
00:32:34,440 --> 00:32:35,720
Speaker 3: that mean for the price of gold.

588
00:32:36,360 --> 00:32:40,320
Speaker 11: I'm guessing that whoever becomes the president, we're going to

589
00:32:40,400 --> 00:32:45,760
Speaker 11: see continued spending, whether it's spending on domestic programs from

590
00:32:45,800 --> 00:32:49,040
Speaker 11: the Democrats, or whether it's spending to finance, whether it's

591
00:32:49,200 --> 00:32:52,360
Speaker 11: it's tax cuts. We're going to see bigger deficits whoever

592
00:32:52,440 --> 00:32:54,800
Speaker 11: becomes the president, and that I think is going to

593
00:32:54,920 --> 00:32:58,640
Speaker 11: lead to further dollar depreciation and quite possibly a renewal

594
00:32:58,720 --> 00:33:01,320
Speaker 11: of inflation, which could be really very very damaging. At

595
00:33:01,360 --> 00:33:04,719
Speaker 11: this point, as long as we avoid the dreaded trifecta,

596
00:33:04,760 --> 00:33:07,840
Speaker 11: as long as we avoid one party getting the presidency,

597
00:33:08,200 --> 00:33:11,160
Speaker 11: the House, and the Senate, which I think has always

598
00:33:11,240 --> 00:33:14,400
Speaker 11: led to extremism in the past, I think that as

599
00:33:14,440 --> 00:33:16,800
Speaker 11: long as we get the checks and balances that the

600
00:33:16,960 --> 00:33:20,640
Speaker 11: US system is designed to incorporate, then I don't think

601
00:33:20,680 --> 00:33:23,080
Speaker 11: that there is anything likely to be bearish for gold

602
00:33:23,120 --> 00:33:25,520
Speaker 11: in there at all. My sense is that you know,

603
00:33:25,960 --> 00:33:30,160
Speaker 11: with likely increase spending, likely increased deficits, I've been hearing

604
00:33:30,200 --> 00:33:33,640
Speaker 11: for twenty years that our deficit is unsustainable and we

605
00:33:33,800 --> 00:33:36,440
Speaker 11: keep sustaining it somehow or other. I think that all

606
00:33:36,520 --> 00:33:39,560
Speaker 11: of those things are going to lead to dollar depreciation,

607
00:33:40,000 --> 00:33:43,000
Speaker 11: and that should lead in turn to a stronger goal price.

608
00:33:43,560 --> 00:33:47,120
Speaker 3: What happens if we don't quickly know the election outcome,

609
00:33:47,240 --> 00:33:49,320
Speaker 3: how might that play into the price of gold.

610
00:33:50,040 --> 00:33:51,560
Speaker 11: I think all that would do, and I think is

611
00:33:51,600 --> 00:33:53,640
Speaker 11: a very real possibility of that, given the way some

612
00:33:53,760 --> 00:33:56,400
Speaker 11: of the candidates are talking, I think that all that

613
00:33:56,520 --> 00:33:59,080
Speaker 11: would do is simply add to the general feeling of

614
00:33:59,200 --> 00:34:03,320
Speaker 11: geopolitical uncertainty, the uncertainty about the conflict in Ukraine and

615
00:34:03,400 --> 00:34:05,520
Speaker 11: the conflict in the Middle East. And if we have,

616
00:34:06,360 --> 00:34:09,280
Speaker 11: let's hope it's not an armed conflict in the United States.

617
00:34:09,520 --> 00:34:12,400
Speaker 11: But if we have a contentious election, which I think

618
00:34:12,520 --> 00:34:15,120
Speaker 11: is a very likely outcome, I think that's simply going

619
00:34:15,200 --> 00:34:17,919
Speaker 11: to be even further positive for gold. I don't see

620
00:34:17,920 --> 00:34:20,040
Speaker 11: any negatives out there right now. It's hard to see

621
00:34:20,280 --> 00:34:22,439
Speaker 11: where the headwinds might be coming from from the gold

622
00:34:22,480 --> 00:34:22,960
Speaker 11: point of view.

623
00:34:23,160 --> 00:34:25,440
Speaker 3: Well, certainly, we've got a lot ahead on the calendar.

624
00:34:25,480 --> 00:34:28,920
Speaker 3: In addition to the presidential election, there's also a Federal

625
00:34:29,120 --> 00:34:32,680
Speaker 3: Reserve meeting. What assumptions are you and your colleagues making

626
00:34:32,719 --> 00:34:36,040
Speaker 3: about the Federal Reserve and the pace of further rate cuts.

627
00:34:36,440 --> 00:34:40,040
Speaker 11: I think that you know, Jerome Powell has said explicitly

628
00:34:40,200 --> 00:34:43,040
Speaker 11: and many many times that he plans to be driven

629
00:34:43,120 --> 00:34:45,840
Speaker 11: by the data, and that he's also trying not to

630
00:34:45,920 --> 00:34:49,680
Speaker 11: be to put too much emphasis on any one month's

631
00:34:49,880 --> 00:34:53,399
Speaker 11: particular set of economic statistics, because these are always open

632
00:34:53,480 --> 00:34:57,279
Speaker 11: to revision. But if everything stays pretty much the same

633
00:34:57,320 --> 00:34:59,560
Speaker 11: as we are right now, and he doesn't get any

634
00:34:59,600 --> 00:35:02,840
Speaker 11: major surprises in the data, then it looks like the

635
00:35:02,960 --> 00:35:06,240
Speaker 11: market consensus is right. The market consensus has now settled

636
00:35:06,280 --> 00:35:09,560
Speaker 11: on two more twenty five basis point rate cuts, one

637
00:35:09,600 --> 00:35:12,200
Speaker 11: at the November meeting, one at the December meeting, and

638
00:35:12,320 --> 00:35:16,640
Speaker 11: then a sustained succession of small twenty five basis point

639
00:35:16,719 --> 00:35:19,920
Speaker 11: rate cuts through the whole of twenty twenty five to

640
00:35:20,080 --> 00:35:22,880
Speaker 11: bring Fed funds rate down to somewhere around about the

641
00:35:22,960 --> 00:35:26,279
Speaker 11: three percent level, probably a little bit higher than the

642
00:35:26,480 --> 00:35:29,640
Speaker 11: sustainable normal rate, the neutral rate, if you like, as

643
00:35:29,680 --> 00:35:32,640
Speaker 11: some of the economists want to call it. But jer

644
00:35:32,680 --> 00:35:35,279
Speaker 11: own power is indicated if the data keep coming in

645
00:35:35,360 --> 00:35:38,560
Speaker 11: the way that they are. Strong economy, some signs of

646
00:35:38,640 --> 00:35:40,720
Speaker 11: a little wobble here and there in the labor market,

647
00:35:41,440 --> 00:35:45,280
Speaker 11: but nothing really dramatic. Then that will be the lightly outcome.

648
00:35:45,400 --> 00:35:47,840
Speaker 11: Two more rate cuts this year, and then a succession

649
00:35:47,880 --> 00:35:50,759
Speaker 11: of rate cuts next year, and then somewhere toward the

650
00:35:50,880 --> 00:35:53,719
Speaker 11: end of twenty twenty five, the Fed will will take

651
00:35:53,760 --> 00:35:57,719
Speaker 11: a little pause and have another macro view, if you

652
00:35:57,920 --> 00:36:00,719
Speaker 11: like the view from thirty five thousand, fear to see

653
00:36:00,760 --> 00:36:04,719
Speaker 11: exactly where the general economy is and where all the

654
00:36:04,800 --> 00:36:07,520
Speaker 11: other indicators that they're looking at, especially the labor market.

655
00:36:08,000 --> 00:36:10,120
Speaker 11: But Jerome Powell has made it very clear that he

656
00:36:10,280 --> 00:36:14,520
Speaker 11: still wants to see an extended period of below trend growth,

657
00:36:14,840 --> 00:36:17,840
Speaker 11: and he has seen nothing like that, and certainly in

658
00:36:17,880 --> 00:36:20,680
Speaker 11: the last twelve months, and there are no real signs

659
00:36:20,920 --> 00:36:24,080
Speaker 11: of anything like an extended period of below trend growth.

660
00:36:24,440 --> 00:36:27,040
Speaker 11: That's what he wants to see, So he's not going

661
00:36:27,160 --> 00:36:29,200
Speaker 11: to rush cutting interest rates at all.

662
00:36:29,680 --> 00:36:32,399
Speaker 3: Quick question about demand. You are talking to us from

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00:36:32,560 --> 00:36:35,759
Speaker 3: Hong Kong. China and India are the world's two top

664
00:36:35,880 --> 00:36:40,280
Speaker 3: gold consumers. Is the demand story for the precious metal

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00:36:40,440 --> 00:36:41,920
Speaker 3: the same in both countries.

666
00:36:42,640 --> 00:36:42,680
Speaker 8: No.

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00:36:42,880 --> 00:36:45,520
Speaker 11: I think there are very very different dynamics in each country.

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00:36:46,280 --> 00:36:49,719
Speaker 11: We have seen We've seen pretty good jewelry demand in

669
00:36:49,880 --> 00:36:54,360
Speaker 11: China that nothing outstanding. We've seen stellar investment demand, I

670
00:36:54,400 --> 00:36:57,600
Speaker 11: think because the Chinese investor is frightened of his stock

671
00:36:57,680 --> 00:37:01,200
Speaker 11: market right now. India's a very very different story. What

672
00:37:01,320 --> 00:37:05,840
Speaker 11: we have in India is that demographics population growth is

673
00:37:05,920 --> 00:37:10,200
Speaker 11: definitely on gold side, with strong population growth there unlike China,

674
00:37:11,200 --> 00:37:15,800
Speaker 11: and the economic factors are also on gold side. The

675
00:37:15,920 --> 00:37:19,760
Speaker 11: Indian economy has been growing, the IMF seems to believe

676
00:37:20,320 --> 00:37:22,680
Speaker 11: from the most recent report. I think that India was

677
00:37:22,719 --> 00:37:25,920
Speaker 11: really the one country that got top marks there and

678
00:37:26,000 --> 00:37:30,040
Speaker 11: they're expecting seven percent economic growth this year and probably

679
00:37:30,120 --> 00:37:33,200
Speaker 11: better than that next year. They're expecting the Indian economy

680
00:37:33,239 --> 00:37:36,600
Speaker 11: to overtake the Chinese economy in size because the Chinese

681
00:37:36,640 --> 00:37:39,880
Speaker 11: economy has turned into some decline with the growing of

682
00:37:39,920 --> 00:37:43,760
Speaker 11: the population. Very much different dynamic from what's happening in India.

683
00:37:44,880 --> 00:37:47,799
Speaker 11: And of course, you know, we are now well into

684
00:37:47,880 --> 00:37:51,560
Speaker 11: the Indian wedding season, which will run through until next

685
00:37:51,680 --> 00:37:54,040
Speaker 11: May or June, depending on where in India one lives,

686
00:37:54,440 --> 00:37:56,760
Speaker 11: and that has always been very good for an uptick

687
00:37:56,840 --> 00:38:00,359
Speaker 11: in gold jewelry demand there. But investment demand is also

688
00:38:00,480 --> 00:38:03,080
Speaker 11: running strong in both countries, and I think it's very

689
00:38:03,120 --> 00:38:05,279
Speaker 11: important to look at both of those dynamics.

690
00:38:05,600 --> 00:38:10,600
Speaker 3: George milling Stanley, Chief gold Strategist at State Street Global Advisors.

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00:38:11,080 --> 00:38:14,239
Speaker 3: I'm Charlie Pelloton, New York in for Doug Chrismer this week.

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00:38:14,600 --> 00:38:18,360
Speaker 3: You can join Doug weekdays on the Daybreak Asia podcast.

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00:38:18,840 --> 00:38:21,799
Speaker 3: It's available wherever you get your podcasts.

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Speaker 1: Tom, and that does it for this edition of Bloomberg

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00:38:25,080 --> 00:38:27,719
Speaker 1: Daybreak Weekend. Join us again Monday morning at five am

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00:38:27,800 --> 00:38:30,640
Speaker 1: Wall Street Time for the latest on markets overseas and

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00:38:30,719 --> 00:38:33,680
Speaker 1: the news you need to start your day. I'm Tom Buzzby.

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00:38:33,920 --> 00:38:36,759
Speaker 1: Stay with us. Top stories and global business headlines are

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00:38:36,760 --> 00:38:37,839
Speaker 1: coming up right now