Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the
Speaker 1: top stories in the coming week from our Daybreak anchors
Speaker 1: all around the world. Straight ahead on the program, is
Speaker 1: inflation getting worse or slowing down? Time to place your beds.
Speaker 1: I'm Nathan Hagar. I'm Caroline he in London, where we're
Speaker 1: looking at plans for the Queen's state funeral. Brian Curtis
Speaker 1: in Hong Kong. What are the chances the upcoming data
Speaker 1: in China change the picture for markets? I'm Amy Morris
Speaker 1: in Washington, will look into the changing fortunes of the
Speaker 1: Republican Party as the midterm campaigns heat up. That's all
Speaker 1: straight ahead on Bloomberg Daybreak Weekend on Bloomberg Eliven Free
Speaker 1: on New York, Bloomberg one, Washington d C, Bloomberg one
Speaker 1: oh six one, Boston, Bloomberg nine sixties, San Francisco, d
Speaker 1: A B Digital Radio London, Sirius XM one and around
Speaker 1: the world on Bloomberg Radio dot Com and via the
Speaker 1: Bloomberg Business App. Good day to you. I'm Nathan Hagar.
Speaker 1: We begin today's program with a look at inflation and
Speaker 1: whether we could be in line for some relief for
Speaker 1: that I'm joined by Bloomberg's Global Economics and Policy correspondent
Speaker 1: Michael McKee. So, Mike, we're all waiting for the release
Speaker 1: of the August Consumer Price Index on Tuesday. What are
Speaker 1: you expecting. Well, there's a good possibility we could see
Speaker 1: on a month over month basis a slight decline in
Speaker 1: a CPI because energy prices continued to fall during the
Speaker 1: month of August. That made a big difference in July
Speaker 1: when month over month inflation came in basically flat. So
Speaker 1: forecast a consensus forecast at this point for about a
Speaker 1: tenth of a percentage point decline. Now that would only
Speaker 1: push year over year inflation down to about eight point
Speaker 1: one percent, So still very high and something that will
Speaker 1: be concerning Americans. But progress. Yeah, progress, And I guess
Speaker 1: the question is, as it has been for some time,
Speaker 1: whether we've hit the peak of inflation. Can we say that,
Speaker 1: given that so much of it is driven, as you
Speaker 1: rightly point out, by energy and food prices. Yeah, that's
Speaker 1: the problem. Um, in an ordinary world you'd say we'd
Speaker 1: hit the peak. A number of categories are probably going
Speaker 1: to start going down. Now we've seen, UH, car assemblies
Speaker 1: start to pick up, so h new car prices should
Speaker 1: start to fall. Use car prices are already falling, and
Speaker 1: with the decline in how home sales market, we're seeing
Speaker 1: appliances start to uh, you know, stop their increases at
Speaker 1: least put it that way in in some cases fall.
Speaker 1: Even though housing will still contribute to inflation, the things
Speaker 1: we buy two put in our homes may not, so
Speaker 1: that could have a big impact, particularly on core inflation.
Speaker 1: The problem is you have something like Vladimir Putin's addressed
Speaker 1: last week in which he said that the gas is
Speaker 1: going to stay off for a while and Europe's gonna
Speaker 1: have a cold winder oil being fungible around the world,
Speaker 1: a global price. We could easily see headline inflation go
Speaker 1: back up if an energy prices go back up, And
Speaker 1: of course that's something that the Federal Reserve doesn't have
Speaker 1: much control over with the tools it has, and it's
Speaker 1: gonna stay focused on, as you mentioned earlier, the core.
Speaker 1: What are we looking at from the core? Well, we
Speaker 1: are looking at this point, uh for a three ten
Speaker 1: percent gain, that's the consensus so far, and that would
Speaker 1: bring the core rate on a year over your basis
Speaker 1: because of base effects up from where it was was
Speaker 1: five point nine percent of July would go up to
Speaker 1: six in this case, Given where we are with inflation
Speaker 1: and the unique nature of pandemic induced inflationary episode, I
Speaker 1: think the FED would be satisfied to see some of
Speaker 1: the major categories going down even if the overall headline
Speaker 1: inflation doesn't go down. If we get a real surprise
Speaker 1: rise in core inflation, that would certainly seal seventy bases
Speaker 1: point increase at the FED meeting on the twenty one,
Speaker 1: But that's probably baked in anyway. It would take quite
Speaker 1: a fall for the FED to change their minds about that. Now. Yeah,
Speaker 1: it sounds like the Fed itself is almost baked that in,
Speaker 1: given some of the hawkish commentary we've heard in the
Speaker 1: run up, not just to this inflation print, but to
Speaker 1: the decision coming up later this month. Yeah, the Feds
Speaker 1: seems to have gotten more hawkish as time went by,
Speaker 1: and that maybe in part of by product of that
Speaker 1: strong jobs report we got for the month of August.
Speaker 1: And if inflation doesn't fall a lot, then it just
Speaker 1: it makes their decision a whole lot easier. Uh. I
Speaker 1: think Jim Bullard put it best. Uh, He's been a
Speaker 1: hawk all along of pushing for seventy five basis points,
Speaker 1: and he said, if you're going to get to a
Speaker 1: certain level, which they all agree they need to do
Speaker 1: slightly restrictive, why wait, do it now, and then if
Speaker 1: you need to you can reverse it. But by dragging
Speaker 1: it out, you only let inflation get more firmly entrenched.
Speaker 1: And so I think that's kind of what they've all embraced.
Speaker 1: There's a tactical, uh question about how high you need
Speaker 1: to go, whether they need to go over four percent
Speaker 1: or not, what is restrictive, but the strategy is all
Speaker 1: kind of the same. We get up to that restrictive
Speaker 1: level and leave it there for a while. Yeah, I
Speaker 1: was gonna say, I'm sure there's a lot of discussion,
Speaker 1: a lot of debate about whether we're already in restrictive territory,
Speaker 1: even though, as you say, the markets are expecting that
Speaker 1: rates are going to continue going higher, and even if
Speaker 1: it starts too slow, we are going to see further
Speaker 1: increases for the rest of this year. Yeah, this is
Speaker 1: where we get a little nerdy and point out that
Speaker 1: the FED looks at the long term neutral rate as
Speaker 1: about two and a half percent. That would be with
Speaker 1: unemployment somewhere in the low four percent rate and inflation
Speaker 1: somewhere around two percent. But since inflation is elevated and
Speaker 1: unemployment is lower than what the Fed thinks is a
Speaker 1: neutral level, it is likely that the Fed thinks the
Speaker 1: neutral rate is temporarily much higher. In other words, it'll
Speaker 1: it'll take more of rate increase to bring down the
Speaker 1: inflation rate to what it thinks is neutral, and then
Speaker 1: they could bring down UH interest rates. So you could
Speaker 1: expect that the Fed is going to get to somewhere
Speaker 1: in the vicinity of foreign if we have a surprise,
Speaker 1: go over it UH and hold it there for quite
Speaker 1: some time. Unless we get signs of recession. It is
Speaker 1: likely that we're going to leave interest rates in this
Speaker 1: neighborhood or above for at least a year. All right, Mike,
Speaker 1: thanks for being with us. That's Bloomberg Global Economics and
Speaker 1: Policy correspondent Michael McKean, and coming up on Bloomberg Daybreak weekend,
Speaker 1: we turned to the UK with Britain in ten days
Speaker 1: of mourning following the death of the Queen. I'm Nathan
Speaker 1: Hagar and this is Bloomberger. This is Bloomberg Daybreak weekend.
Speaker 1: Our global look ahead at the top stories for investors
Speaker 1: in the coming week. I'm Nathan Hagar. Up. Later in
Speaker 1: our program we'll look at the Chinese economy, but first
Speaker 1: we head across the pond to the UK, where the
Speaker 1: British people lost their queen this week. Now the country
Speaker 1: enters a period of mourning. For more on the details
Speaker 1: and the path ahead, we turned to BLUEMBERG Daybreak Europe
Speaker 1: anchors Caroline Hepger and Stephen Caroll. Nathan. The Queen died
Speaker 1: peacefully at balm Mole on Thursday, the eighth of September,
Speaker 1: and on Friday the nation went into a period of
Speaker 1: ten days of morning. What are we expecting over these
Speaker 1: coming days, Well, the lying in state of the Queen,
Speaker 1: King Charles the Third's first speech to the nation as King,
Speaker 1: and of course then the state funeral of Queen Elizabeth.
Speaker 1: Now I expect the mood in London will no doubt
Speaker 1: be extremely somber in the coming days. Stephen, Yes, already
Speaker 1: we could see in the mere moments after the news
Speaker 1: was announced, already the formal process was in place. The
Speaker 1: new Prime Minister, Liz Trust said that Queen Elizabeth the
Speaker 1: Second was the rock on which modern Britain was built
Speaker 1: her predecessor. Boris Johnson also commenting saying that in the
Speaker 1: hearts of every one of us there was there is
Speaker 1: an ache at the passing of our queen, a deep
Speaker 1: and personal sense of loss, far more intense perhaps than
Speaker 1: we expected. Interesting that he reflects on that point of
Speaker 1: her being such a constant in people's lives in this country,
Speaker 1: and how even though she was ninety six years old,
Speaker 1: it still has come as a shock and and deeply
Speaker 1: affected so many people here. Yeah. Absolutely, I think the
Speaker 1: nation was already on alert on Thursday when on Bloomberg
Speaker 1: Radio we were focused, of course on the economics and politics.
Speaker 1: We were watching the brand new Prime Minister delivering a
Speaker 1: significant speech on energy bills, and in Parliament at some
Speaker 1: point after that speech, key politicians were added a slip
Speaker 1: of paper. Then we got the Bucking and Palace release
Speaker 1: of a statement about the Queen's health. That really did
Speaker 1: put the country on notice about the gravity of the situation.
Speaker 1: It wasn't though, until six thirty or around that point
Speaker 1: on Thursday evening, that we learned of the death of
Speaker 1: the Queen. As that news has been thinking in here,
Speaker 1: we've been speaking to Charles Anson, whose communications consultant and
Speaker 1: a former press secretary to the Queen. He was speaking
Speaker 1: to us on Bloomberg Radio and here some of his
Speaker 1: reflections on the Queen's legacy and what might be to
Speaker 1: come under King Charles the Third. The reason that the
Speaker 1: British monarchy has survived and prospered over a thousand years,
Speaker 1: with difficult times and good times as well. The reason
Speaker 1: it has survived it has been able to adapt, and
Speaker 1: none more so than in these last seventy years have
Speaker 1: changed since the Second World War. And what the Queen
Speaker 1: has brought is a sort of steady modernizing approach of
Speaker 1: the monarchy, whilst remaining herself the same character she was
Speaker 1: when she stood and knelt in Westminster Abbey her coronation.
Speaker 1: And I think that combination of appearing to be the
Speaker 1: same whilst being open to new ideas and new ways
Speaker 1: of doing things has served the monarchy very well and
Speaker 1: reflects that there's society in the country that we now
Speaker 1: live in. And I think the process and embracing change
Speaker 1: in a very quiet sort of way has been very effective.
Speaker 1: And of course this has been admired by other great
Speaker 1: political figures around the world. News Mandela Barack Obama virtually
Speaker 1: every American president has valued the Queen's and take on things.
Speaker 1: Her experience is enormous, and she's used it and projected
Speaker 1: Britain in a way that has been a touching to
Speaker 1: many people. Given that legacy and influence of the Queen,
Speaker 1: what sort of king do you think that Charles will be? Well?
Speaker 1: I think each monarch brings his own his or her
Speaker 1: own style and some beliefs to the role, But essentially
Speaker 1: the core value of the monarchy is to remain politically
Speaker 1: neutral above the political fray, and to work for society
Speaker 1: and the nation as a whole. And I think the
Speaker 1: aim very much of the Prince of Wales now King
Speaker 1: Charles the Third, and of his mother, Queen Elizabeth, was
Speaker 1: to try to make a better world, one that was
Speaker 1: more tolerant, one that was more stable and steady, and
Speaker 1: one that was able to deal with adversity as well
Speaker 1: as with triumph. And I think that combination of quiet
Speaker 1: steadiness making the world a certainly better place is a
Speaker 1: tremendous ingredient in the world where politics is often a
Speaker 1: very rough business, and the constitutional monarchy there's an overlay
Speaker 1: to the political and economics society and God embodies a
Speaker 1: set of values about decency, about tolerance, about fairness, about inclusion,
Speaker 1: about good relations with people in the matter what their
Speaker 1: religion are, what their color are, so and so forth.
Speaker 1: And I think you know, under in reign of the
Speaker 1: new King, it will be interesting to see how King
Speaker 1: Charles the Third takes forward and this sense of inclusion
Speaker 1: in society which he has spent over the fifty years
Speaker 1: and promoting and encouraging amongst young people of different colors
Speaker 1: and religions in the sort of modern society that we
Speaker 1: have now. And I think that's a forceful influence. It's
Speaker 1: not a party political influence, but for the body politics
Speaker 1: ahult to have a constitutional monarchy doesn't interfere with the
Speaker 1: day to day political process, but there's art and minds
Speaker 1: of that monarchy are for the changes needed in the
Speaker 1: mode societies and make it work well and to make
Speaker 1: it work more fairly. I think there are a great
Speaker 1: force for good in that respect. And I think whether
Speaker 1: you're a monarchist or not, our constitutional monarchy is a
Speaker 1: mechanism that offers a bit more stability and prospect for
Speaker 1: sensible change, for good manners and for high standards in
Speaker 1: society and particularly in political and public life. And they
Speaker 1: said that example in the Queen is a superb an
Speaker 1: exemplar of that. That's trans Anson, former Press Ecretary to
Speaker 1: the Queen. How fascinating to hear those insights from someone
Speaker 1: who knows the royal family so well about the challenges
Speaker 1: not insignificant face King Charles the Third, he is seventy
Speaker 1: three years old and we know him well. Of course,
Speaker 1: he is the oldest person to accede to the throne
Speaker 1: in British history. We know and understand how much rests
Speaker 1: now upon his shoulders. But I think Stephen, over these
Speaker 1: coming days, I and many Britain's will be grieving, no doubt,
Speaker 1: quite personally for the loss of the longest reigning monarch
Speaker 1: in British history. We're going to be continuing our reporting
Speaker 1: here on Bloomberg Radio as we look to the state
Speaker 1: funeral of Queen Elizabeth the Second and we commemorate her
Speaker 1: life and times. I'm Stephen Carroll in London. You can
Speaker 1: catch us every weekday morning here for Bloomberg Daybreak Europe,
Speaker 1: starting at six am in London and one am on
Speaker 1: Wall Street. Nathan, thank you, Caroline and Stephen, and coming
Speaker 1: up I'm Bloomberg Daybreak Weekend. How much is China's economy
Speaker 1: really slowing? I'm Nathan Hager, and this is Bloomberg broadcasting
Speaker 1: live from the Bloomberg Interactive Broker Studio in New York.
Speaker 1: Bloomberg eleven three oh to Washington, d C, Bloomberg to Boston,
Speaker 1: Bloomberg one O six one to San Francisco, Bloomberg nine
Speaker 1: six to the country Sirius XM Channel one nineteen to
Speaker 1: London d A B Digital Radio, and around the globe
Speaker 1: the Bloomberg Business Act and Bloomberg Radio dot Com. This
Speaker 1: is Bloomberg day Break Weekend. I'm Nathan Hager with your
Speaker 1: global look ahead at the top stories for investors in
Speaker 1: the coming week. China's economy has been experiencing some pacups,
Speaker 1: we'll call them, and we may learn more in the
Speaker 1: comic week about just how big the challenges or problems
Speaker 1: really are in Beijing for more. Let's head to Hong
Speaker 1: Kong and Bloomberg Daybreak Asia host Brian Curtis. Nathan will
Speaker 1: get a slew of Chinese data in the coming week
Speaker 1: that will shed further light on the health of the economy.
Speaker 1: Markets in China have been choppy for months now in
Speaker 1: light of further COVID lockdowns, the property crisis, a tough
Speaker 1: regulatory overhanging, and rising geopolitical tensions. Joining us to see
Speaker 1: what it all means here for markets going forward in
Speaker 1: China is Sophia Orte Costa, Bloomberg's chief China market correspondent. Sophia,
Speaker 1: thanks very much for taking some time with this. So
Speaker 1: the c s I three, it's interesting it had strong
Speaker 1: outperformance against global peers from the period of April until
Speaker 1: about the end of June, and then all of a sudden,
Speaker 1: the door was slammed and we've been grinding lower from
Speaker 1: that time. What happened, Yeah, there was a sense that
Speaker 1: the worst was kind of over around April in terms
Speaker 1: of lockdowns, COVID zero and also the property market. That's
Speaker 1: kind of when officials and authorities in a Chinese hits
Speaker 1: he started rolling back some of the strictest measures around
Speaker 1: prop to around housing. That's also when we saw the
Speaker 1: officials really react quite strongly to the risk of the
Speaker 1: mortgage boycott's kind of going out of control. So there
Speaker 1: was a little bit of faith in financial markets that
Speaker 1: um that things would get better. The problem is these
Speaker 1: rebounds really don't last inflows don't stick, and nothing really
Speaker 1: changes despite vows of more action from Beijing. The problem
Speaker 1: really is when we saw that economic data actually turn
Speaker 1: worse after the summer, people really started thinking that actually,
Speaker 1: you know, now is not the right time to buy,
Speaker 1: and confidence really really really declined from there. And it's
Speaker 1: both internal and external demand that is lagging, yes, exactly,
Speaker 1: I mean within China domestically. The problem is the fiscal
Speaker 1: stimulus plans and the the surprise interest rate cuts. Um,
Speaker 1: they're really not that's all on the demand side of things, um. Sorry,
Speaker 1: on the supply side of things, it's not doing anything
Speaker 1: to stir up demand. UM. When you have retail sales
Speaker 1: really low. I mean we're getting uh and the number
Speaker 1: for August is expected to be around three point growth UM.
Speaker 1: But that's not that's not great when you consider the
Speaker 1: impact of COVID zero and the never ending extended lockdowns
Speaker 1: in big cities like cheng Do. That is the key thing,
Speaker 1: and that kind of stops everything else from being effective.
Speaker 1: It doesn't matter what Bijing does, the more vows of
Speaker 1: more action and actual action keep falling flat. In terms
Speaker 1: of the stimulus, I mean, we can't say that policymakers
Speaker 1: haven't acted. They have rolled out measures, but it's just
Speaker 1: no shock and awe. It's been drip, drip drip. Now,
Speaker 1: if we were to get a U shape recovery, plenty
Speaker 1: of economists tell us on our show Bloomberg Dave brak
Speaker 1: Asia that that's what we can expect, the U shaped recovery.
Speaker 1: If we were to get that, what might the catalysts be?
Speaker 1: I spoke to someone this this week. Actually, it will
Speaker 1: be a long grind. There is expectation of a U
Speaker 1: shaped recovery. We we do have the Key Party Congress
Speaker 1: on October sixteenth, and my sense that there's so much
Speaker 1: baked into, so much expectation of of some kind of
Speaker 1: pivot after that. The question for me is what would
Speaker 1: the pivot look like. It doesn't look like she jumping
Speaker 1: is really easy off on the COVID zero Pulsey and
Speaker 1: that is Brian, really the biggest overhang in markets. The
Speaker 1: catalyst would be a suggestion that that will be pulled back.
Speaker 1: We know that that will be gradual and we know
Speaker 1: what it's like. I mean here in Hong Kong it's
Speaker 1: been a very slow reopening, but any kind of sense
Speaker 1: or sign that China is moving in the right direction
Speaker 1: in terms of opening up the economy and opening up
Speaker 1: its borders would be a significant catalyst for markets. We
Speaker 1: had the regulatory overhang, which seems like it would never
Speaker 1: go away, and I'm not sure that it has, but
Speaker 1: it does seem like it doesn't really get as much
Speaker 1: attention right now. It seems like they've backed off a
Speaker 1: little bit on that side of things. Could that possible
Speaker 1: happen with dynamic zero, Brian, It's all about watching the
Speaker 1: signs and seeing where China is going. If we do get,
Speaker 1: for example, m a relaxation of cross border testing, or
Speaker 1: if we get any sense that there are more flights
Speaker 1: from overseas into China, or if even within China there's
Speaker 1: an easing of movement between provinces, that would be a
Speaker 1: very good sign, at least from where we're standing, that
Speaker 1: that China is moving forward with this. Thanks so much
Speaker 1: for joining us to take a close look at this,
Speaker 1: Sophia or Too Acosta, Bloomberg's chief China market correspondent. I'm
Speaker 1: Brian Curtis, along with Doug Krisner. You can catch us
Speaker 1: every weekday here for Bloomberg Daybreak. Asia, beginning at six
Speaker 1: am in Hong Kong and six pm on Wall Street. Nathan,
Speaker 1: Thank you, Brian. And coming up on Bloomberg Daybreak weekend,
Speaker 1: the GOP gets ready to try to end internal bickering
Speaker 1: with a new platform. I'm Nathan Hagar, and this is Bloomberg.
Speaker 1: This is Bloomberg Daybreak Weekend, our global look ahead at
Speaker 1: the top stories for investors in the coming week. I'm
Speaker 1: Nathan Hagar. The Republican Party is getting ready to try
Speaker 1: to end its internal bickering with a new GOP platform.
Speaker 1: For more on exactly what they're doing ahead of the
Speaker 1: mid terms, let's go to Amy Morris in the Bloomberg
Speaker 1: newsroom in Washington. Amy, that's right, Nathan. Republican leaders are
Speaker 1: aiming to unveil a unified party platform. House Minority Leader
Speaker 1: Kevin McCarthy planning to do this in September on the nineteenth.
Speaker 1: Joining me now to talk about this, Bloomberg political reporter
Speaker 1: Gregory Cordy. Greg thanks so much for joining us. We
Speaker 1: really appreciate taking the time. Sure, now, the Republicans really
Speaker 1: trying to get off the back foot here, tell us
Speaker 1: what their strategy is. Well, one of the things they're
Speaker 1: trying to do is to uh present a campaign that's
Speaker 1: more than just being against President Joe Biden and his agenda,
Speaker 1: but trying to give voters something to vote for. And
Speaker 1: so what they're gonna be doing UH in later this
Speaker 1: month is going to the city outside of Pittsburgh, Pennsylvania,
Speaker 1: which is significant in and of itself, to unveil this
Speaker 1: commitment with America, which is a uh something that kind
Speaker 1: of harkens back to New Gingrich's Contract with America back
Speaker 1: when Republicans took the House for the first time in
Speaker 1: decades and sort of layout what their agenda would be
Speaker 1: if they took back the House. So it includes things
Speaker 1: like of the economy, uh, emphasizing energy production, on safety,
Speaker 1: talking about building that border wall that President Trump didn't
Speaker 1: quite finish, also just holding the Biden administration to account
Speaker 1: with more aggressive congressional oversight. Was back in June of
Speaker 1: last year the Republicans first started working on this, and
Speaker 1: of course that was a much different political environment when
Speaker 1: uh Joe Biden was a lot more popular. But as
Speaker 1: the President's popularity has waned a little bit as inflation
Speaker 1: has gone up, the economy is is certainly a lot
Speaker 1: different than it was a year or two ago. Talking
Speaker 1: to Republican strategists and posters, they've they've seen this momentum
Speaker 1: on paper, it's the great time to run as a Republican,
Speaker 1: and yet they're struggling. You see a lot of more
Speaker 1: Democratic enthusiasm in part because of the abortion issue, but
Speaker 1: also the president's approval is coming back, and so yes,
Speaker 1: this is an acknowledgement by Republicans that they need something
Speaker 1: more than maybe just against everything that Joe Biden is doing.
Speaker 1: They need to tell people what they're going to do.
Speaker 1: By the way, that sets up to the table when
Speaker 1: Republicans hope to take back the way out. And the
Speaker 1: thing about this happening though in a mid term election year,
Speaker 1: is that mid terms are primarily about anchor. People do
Speaker 1: come out because they're against something, and that's why it
Speaker 1: usually favors the party that's out of power. Well, now
Speaker 1: here's a very emotional issue that now has energized the
Speaker 1: other side and sort of balanced that. And so the
Speaker 1: only thing that mid terms are is that you talk
Speaker 1: to political scientists, uh, they are thermostatic, and what they
Speaker 1: mean by that is that voters tend to sort of
Speaker 1: adjust the temperature up or down based on where they
Speaker 1: think the center should be. And if voters since that
Speaker 1: the country is moving too far in one direction or
Speaker 1: the other, uh, they'll try to dial the thermostatic back
Speaker 1: to the center. Usually in the president's first two terms,
Speaker 1: the president takes the country in his direction. But there's
Speaker 1: a lot of sort of countervailing factors here, and the
Speaker 1: abortion issue is one where voters might decide that no, uh,
Speaker 1: we we you know, we're maybe moving too far to
Speaker 1: the right on the issue and try to dial the
Speaker 1: country back a little bit more towards the middle. Meanwhile,
Speaker 1: we've been seeing reports some of your reporting the Democrats
Speaker 1: now have been getting more than double the money in
Speaker 1: the bank than Republicans as far as his cofers. Yeah,
Speaker 1: there's two issues here. One is the fundraising and environment
Speaker 1: that we're in for the past of a few cycles
Speaker 1: is really driven by these small dollar donors. Really on
Speaker 1: post side. Trump is very effective in raising money from
Speaker 1: small dollar donors, but also there's a number of people
Speaker 1: on the left and then the Democratic Party that can
Speaker 1: do that as well. But the other issue is also
Speaker 1: the Burnley and Republicans have been spending money this cycle
Speaker 1: earlier than they've had to in part because they're defending
Speaker 1: some seats that they didn't think that they would have
Speaker 1: to defend as aggressively. We've had a number of high
Speaker 1: profile Republican retirements, people like Senator Pat Toomey in Pennsylvania,
Speaker 1: Rob Portman in Ohio, Richard Burr and North Carolina. All
Speaker 1: of those have opened up these currently Republican seats and
Speaker 1: into pretty competitive elections, maybe more competitive than than the
Speaker 1: Republicans had bargain bargain force. So they have to hold
Speaker 1: those seats, us to have to pick up some seats
Speaker 1: in places like Arizona or Georgia if they're going to
Speaker 1: take control of the Senate. And so the Senate map
Speaker 1: is a lot more unpredictable than it was, maybe even
Speaker 1: just a year ago. So then what would be more
Speaker 1: significant for either Republicans or Democrats for any candidate out there.
Speaker 1: Is it money in the coffers or vote or turnout
Speaker 1: or are those so closely linked. It's hard to say,
Speaker 1: you know, I think in the end of at the
Speaker 1: end of the day, elections are decided by vote and
Speaker 1: not money. And there's certainly a number of examples where
Speaker 1: a candidates who spend less money but has an effective
Speaker 1: message can win, but you know, the money can be
Speaker 1: a great equalizer, and so it's not that it's unimportant.
Speaker 1: But I also am starting to get the sense out
Speaker 1: there that, you know, we're just so deluged with these
Speaker 1: political messages, but also people are are are attention is
Speaker 1: so much more fragmented than it was a decade or
Speaker 1: two ago, with people watching consuming their entertainment differently, and
Speaker 1: the political campaigns have been sort of struggling to keep
Speaker 1: up to where people are To get their attention. It's
Speaker 1: not always on the local eleven o'clock news running a
Speaker 1: thirty second add it's gonna get people's attention, people have
Speaker 1: to be a lot more creative and use social media,
Speaker 1: and if they can do that in a cost effective way,
Speaker 1: that can be very effective as well. And we are
Speaker 1: talking about the mid terms and the changing fortunes of
Speaker 1: the GOP. Bloomberg political reporter Gregory Cordy is with us now, Uh, Gregory,
Speaker 1: is the dream of a red wave starting to fade?
Speaker 1: We had almost gotten to the point of thinking it
Speaker 1: was a foregone conclusion. It's largely an expectations game, especially
Speaker 1: in the House. Is we just discussed with the Senate
Speaker 1: that's a little bit unpredictable because Candida quality matters a lot.
Speaker 1: There's only so many chess pieces on the board, and
Speaker 1: in a in a weird year, anything can happen. In
Speaker 1: the House is a lot more predictable that the House
Speaker 1: races are much more tied to the president popularity. And
Speaker 1: as I said, that long term trend all the way
Speaker 1: back to the Civil War is that in all but
Speaker 1: about three or four elections since then, the party out
Speaker 1: of power games seats and very often takes back the
Speaker 1: House if they don't already control it. And so, uh,
Speaker 1: it's sort of baked in. In this cycle, Democrats control
Speaker 1: the House by only about five seats. Uh, any kind
Speaker 1: of a slight wind is going to push Republicans in
Speaker 1: the power there. But again, then it becomes how big
Speaker 1: of a wave is it. In nine and two thousand
Speaker 1: and ten, when during the President Obama's first mid term,
Speaker 1: Republicans pick up sixty three seats, that's sort of the
Speaker 1: high water mark. Nobody expects the Republicans to be able
Speaker 1: to repeat that performance. But a year ago we were
Speaker 1: talking about maybe thirty thirty five, forty seats. Now the
Speaker 1: prognosticators are talking maybe a little more like five seats,
Speaker 1: and some of the models have it as you as
Speaker 1: maybe ten or fifteen. And the size of Kevin McCarthy's
Speaker 1: majority is going to be important if he's going to
Speaker 1: put together a governing coalition that can elect him speaking
Speaker 1: speaker and actually get something done. So yeah, that it's
Speaker 1: not just whether the Republicans take back the House, it's
Speaker 1: how big of a majority they can build, uh, towards
Speaker 1: momentum towards There's been a lot of attention paid to
Speaker 1: the I don't want to call it a chasm, but
Speaker 1: a bit of a rift, let's say, between progressive Democrats
Speaker 1: and your more traditional middle of the road Democrats. If
Speaker 1: we could turn the spotlight a minute onto the GOP,
Speaker 1: there is a similar rift there some open feuding between
Speaker 1: say Florida Senator Rick Scott Minority Leader Mitch McConnell um.
Speaker 1: Give us some insight and a little shine, a little
Speaker 1: light on what's going on behind the scenes. Yeah. Rick
Speaker 1: Scott is the Republican Senator from Florida, and he's important
Speaker 1: because he is the chairman of the National Republican Senatorial Committee,
Speaker 1: that's the fundraising and campaign arm of Senate Republicans. And
Speaker 1: it's his job to get Republicans elected in Senates so
Speaker 1: that Republicans can take back control of the Senate. Mitch McConnell,
Speaker 1: the Senator from Kentucky, is the minority leader, the Republican
Speaker 1: leader in the Senate, and so it's also his job
Speaker 1: to do that. But there they didn't sort of a
Speaker 1: cross purposes at times of the past few months. And
Speaker 1: I'll started earlier this year when ricks Got built his
Speaker 1: own platform without really talking to anybody else in the
Speaker 1: Republican caucus in the Senate, that they would talk about
Speaker 1: things like sun setting every federal law but putting on
Speaker 1: a deadline so every federal law would expire after five years.
Speaker 1: And Democrats were quick to point out that would include
Speaker 1: programs like Medicare and Social Security that a lot of
Speaker 1: Americans depend on. But also making sure that everybody pays
Speaker 1: at least some tax, which would obviously be a uh
Speaker 1: an in tax increase on some of the poorest Americans.
Speaker 1: Not a popular idea in in either party as it
Speaker 1: turns out. So that was the policy riff that started this,
Speaker 1: and now there's sort of a disagreement on Republican strategy
Speaker 1: and trying to take back the Senate. Uh, in terms
Speaker 1: of what races to focus on, what the fundraising strategy
Speaker 1: should be, that the spending strategy should be. And so
Speaker 1: now Mitch mc conall is uh, sort of really focusing
Speaker 1: on his own effort. He's got his own separate campaign
Speaker 1: effort called the Senate Leadership Fund, trying to raise money
Speaker 1: in a super packet. It's to support Republican candidates for
Speaker 1: the Senate. He's complained about candidate quality being an issue.
Speaker 1: There are a lot of candidates on the ballot for
Speaker 1: Republican that have no prior political experience, but they got
Speaker 1: there because they had the endorsement of former President Trump
Speaker 1: UM and so that there's But basically what this all
Speaker 1: comes down to is things aren't going quite as planned
Speaker 1: for Republicans. Uh. And though maybe there's already some finger
Speaker 1: pointing going on in case things don't work out and
Speaker 1: Democrats continue to hold the Senate or maybe even pick
Speaker 1: up seats. All right, thank you, Gregory so much. Gregory
Speaker 1: Cordy covers politics for Bloomberg News, and that is what
Speaker 1: is going on in the nation's capital. For more of
Speaker 1: our political news coverage, you can tune into Balance of
Speaker 1: Power with David Weston weekdays at noon Wall Street Time,
Speaker 1: and sound On with Joe Matthew week days at five
Speaker 1: pm Wall Street Time. Right here on Bloomberg Radio, I'm
Speaker 1: Amy Morris and this is Bloomberg. Nathan. All right, thank
Speaker 1: you Amy. That was Amy Morris reporting from our Bloomberg
Speaker 1: newsroom in the nation's capital. And that does it for
Speaker 1: this edition of Bloomberg day Break Weekend. Join us again
Speaker 1: Monday morning, five am Wall Street Time for the latest
Speaker 1: on markets overseas and all the news you need to
Speaker 1: start your day. I'm Nathan Hagrin and this is Bloomberg