WEBVTT - Bloomberg Daybreak: October 20, 2022 - Hour 2 (Radio) 0:00:03.160 --> 0:00:06.480 Live from the Bloomberg Interactive Burgers Studios. Is is is Bloomberg 0:00:06.519 --> 0:00:10.320 day Break for Thursday, October two. Coming up this hour, 0:00:10.600 --> 0:00:14.520 stocks drop. I concerned strong inflation and hawkish monetary policy 0:00:14.520 --> 0:00:16.799 will further hit growth. We hear from two more FETE 0:00:16.800 --> 0:00:20.040 officials about the path of rate heights, Tesla shares fall 0:00:20.079 --> 0:00:23.119 as sales misestimates. Can we take it to London released? 0:00:23.120 --> 0:00:27.080 Trust's government looks close to in floating. Justice Department prosecutors 0:00:27.120 --> 0:00:30.200 believe they have enough evidence to George Donald Trump. Plus 0:00:30.280 --> 0:00:33.919 doctors are concerned about children and R s V. I'm 0:00:33.960 --> 0:00:37.440 Michael bar More Ahead, I'm John Stashtown Sports. The Yankees 0:00:37.520 --> 0:00:39.880 lost Game one of the Alcs and used to the 0:00:40.000 --> 0:00:45.240 Nixon Nets. Both lost their season opening. That's all Train 0:00:45.320 --> 0:00:48.720 ahead on Bloomberg day Break on Bloomberg eleven three, on 0:00:48.840 --> 0:00:53.279 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.320 --> 0:00:58.080 six one, Boston, Bloomberg nine sixties, San Francisco, Sirius XM 0:00:58.120 --> 0:01:01.520 one nineteen and around the world on Bloomberg Radio dot 0:01:01.560 --> 0:01:08.080 Com and via the Bloomberg Business app. And Good Morning. 0:01:08.080 --> 0:01:11.240 I'm Karen Moscow. I'm Nathan Hager Bloomberg Daybreak is brought 0:01:11.240 --> 0:01:13.240 to you by B and Y Melon's Pershing Learned why 0:01:13.280 --> 0:01:16.839 the world's most sophisticated wealth management and institutional firms rely 0:01:17.000 --> 0:01:21.039 on Pershing to help them improve profitability, create efficiency, attract talent, 0:01:21.120 --> 0:01:24.160 and manage risk at Pershing, dot com S and b 0:01:24.319 --> 0:01:26.920 futures are lower this morning. It is six o one 0:01:26.959 --> 0:01:29.040 on Wall Street, and we check the markets every fifteen 0:01:29.080 --> 0:01:32.000 minutes throughout the trading day on Bloomberg. Right now, SMP 0:01:32.200 --> 0:01:35.440 futures are done about twelve points down. Futures are little change. 0:01:35.560 --> 0:01:39.040 NASDACK futures down seventy or about six tenths of a percent. 0:01:39.400 --> 0:01:42.319 Ten year Treasury down one thirty second yield four point 0:01:42.360 --> 0:01:45.040 one four percent, and they yield on the two year 0:01:45.160 --> 0:01:48.040 four point five eight percent. Nathan, we'll hear in. This 0:01:48.080 --> 0:01:50.960 morning's drop in futures comes after stocks snap the two 0:01:51.040 --> 0:01:53.680 day winning streak on Wall Street. Treasury yields are trading 0:01:53.720 --> 0:01:56.320 your multi year highs on Mountain. Concerned that a hawk 0:01:56.400 --> 0:01:58.560 ish Fed will raise the odds of a hard landing 0:01:58.840 --> 0:02:01.520 market veteran then it's Artman says, don't expect the Fed 0:02:01.560 --> 0:02:04.480 to change course anytime soon. So when once the Fed 0:02:04.520 --> 0:02:08.280 begins to change its policies, it moves rates farther and 0:02:08.400 --> 0:02:11.400 lasts longer than anybody ever wants to anticipate. When they 0:02:11.440 --> 0:02:14.000 when they ease monetary policy, they take rate slower than 0:02:14.000 --> 0:02:17.320 anybody believes for a longer period of time. When they tighten, 0:02:17.360 --> 0:02:19.639 they take rates higher for a longer period of time 0:02:19.639 --> 0:02:22.040 than anybody wants to anticipate. I think it's going to 0:02:22.080 --> 0:02:25.520 be at least until late in maybe four before the 0:02:26.160 --> 0:02:29.480 long awaited pivot occurs. Dennis Gartman, the former publisher of 0:02:29.480 --> 0:02:31.799 the Gartment Letter, thinks stocks will remain in a bear 0:02:31.880 --> 0:02:34.799 market for some time. Well to be another busy day 0:02:34.840 --> 0:02:38.079 for FED speak Nathan, with four different officials talking at 0:02:38.120 --> 0:02:42.280 separate events yesterday. Chicago FED President Charles Evans said he's 0:02:42.320 --> 0:02:45.160 hopeful the current path for interest rates will be enough 0:02:45.200 --> 0:02:48.400 to bring down inflation. Wages are going up, and that's 0:02:48.400 --> 0:02:50.919 not that's not a bad thing, but if it gets 0:02:50.960 --> 0:02:54.679 caught up in costs price uh, you know, spiral, that 0:02:54.800 --> 0:02:57.239 that would be bad. And so making sure that we've 0:02:57.280 --> 0:03:00.640 got monetary policy at a sufficiently restrictive dance so that 0:03:00.680 --> 0:03:03.640 we're not inducing inflation. We're trying to get it down. 0:03:04.080 --> 0:03:07.600 Chicago FED President Charles Evans and his colleagues have aggressively 0:03:07.720 --> 0:03:10.920 raged benchmark interest rates this year from nearly zero to 0:03:11.080 --> 0:03:14.320 just above three percent, and expect another big rate increase 0:03:14.360 --> 0:03:17.200 in next month's meeting. Karen. We spoke about the move 0:03:17.280 --> 0:03:20.680 with St. Louis Federal Reserve Bank President James Bullard. The 0:03:21.400 --> 0:03:24.160 November meeting has been more or less priced in the 0:03:24.240 --> 0:03:30.240 market at at the seventy basis point number. Again, you know, 0:03:30.639 --> 0:03:32.600 I think you do want to wait till you actually 0:03:32.600 --> 0:03:34.920 get to the meeting, see what the situation is there. 0:03:35.840 --> 0:03:38.119 The December meeting is a little farther away. We will 0:03:38.160 --> 0:03:41.040 have more data at that point. St. Louis FED President 0:03:41.160 --> 0:03:43.880 James Bullard made the comments in an exclusive interview with 0:03:43.920 --> 0:03:47.200 Bloomberg's Kathleen Hayes here. More of that conversation coming up 0:03:47.200 --> 0:03:49.680 in minutes here on Bloomberg Daybreak, I'll we turned to 0:03:49.760 --> 0:03:52.560 earnings now, Nathan. We get results from nearly two dozen 0:03:52.600 --> 0:03:55.720 companies in the S and p fon hunry today, disappointing 0:03:55.760 --> 0:03:59.320 numbers from Tesla after the bell has shares down almost 0:03:59.400 --> 0:04:02.680 six perst and this morning sales fell short of estimates, 0:04:02.680 --> 0:04:06.080 and that's being blamed on delivery and production bottlenecks still 0:04:06.160 --> 0:04:09.960 CEEO Elon Musko says demand for his company's cars remains strong. 0:04:10.440 --> 0:04:13.160 Looking forward to a record breaking pupil so it really, 0:04:13.280 --> 0:04:15.080 you know, knock on wood, it looks like we'll have 0:04:15.240 --> 0:04:18.440 an epic end of her. Elon Musk said Tesla could 0:04:18.520 --> 0:04:22.120 repurchase five to ten billion dollars of its shares, subject 0:04:22.120 --> 0:04:25.040 to board approval and review. The stock has lost more 0:04:25.080 --> 0:04:27.440 than a third of its value so far this year. 0:04:27.680 --> 0:04:30.400 It's different story this morning at IBM Karen that stock 0:04:30.520 --> 0:04:33.640 is up about three percent. Company reported better than expected 0:04:33.680 --> 0:04:37.120 sales and affirmed its cash flow forecasts. Analysts say that's 0:04:37.120 --> 0:04:40.360 a signed Demand for software mainframe computers and hybrid cloud 0:04:40.360 --> 0:04:44.560 services remains steady and Asia. Overnight, Nathan stocks fell that 0:04:44.640 --> 0:04:48.120 came off their lowest levels. That's after Bloomberg News reported 0:04:48.320 --> 0:04:52.560 China is considering relaxing quarantine rules. We get the recap 0:04:52.640 --> 0:04:56.440 from Bloomberg's Juliette Sally in Singapore. Good morning, Juliette, Good 0:04:56.440 --> 0:04:58.480 morning Nathan and Karen. The off show you one gained 0:04:58.480 --> 0:05:00.960 from record lows against the gre back on the news. Well, 0:05:01.080 --> 0:05:05.000 China CS three hundred erased earlier losses. Chinese text talks 0:05:05.000 --> 0:05:07.560 in Hong Kong also paired earlier steep losses on news 0:05:07.640 --> 0:05:11.400 China is holding emergency talks with chip firms after US curbs. 0:05:11.600 --> 0:05:14.360 The Ozzy dollar declined as hiring down under almost stalled 0:05:14.400 --> 0:05:18.120 in September, and Japan's benchmark bond yield climbed above the 0:05:18.160 --> 0:05:22.040 Central Banks policy ceiling, prompting monetary authorities to announce an 0:05:22.120 --> 0:05:25.839 unscheduled bond purchase to rain it back in in Singapore. 0:05:25.920 --> 0:05:29.799 Juliet Sally Bloomberg Daybreak, Juliet Banks and Europe. This morning, 0:05:29.800 --> 0:05:32.640 it's all about politics, UK Prime Minister of Liz Trust 0:05:32.680 --> 0:05:35.320 as government could be on the brink of collapse. Let's 0:05:35.360 --> 0:05:37.279 go to London and get the latest with bloombergs You 0:05:37.360 --> 0:05:39.640 and Parts. Good morning You, and good morning Nathan and Karen. 0:05:39.680 --> 0:05:42.840 It has been a chaotic twenty four hours at Westminster. 0:05:42.920 --> 0:05:45.200 One of the most senior members of the British government 0:05:45.240 --> 0:05:47.920 has been fired. As she went, she criticized the Prime 0:05:47.960 --> 0:05:51.960 Minister and accused list Trust of breaking key pledges. Later, 0:05:52.080 --> 0:05:55.080 dramatic scenes in Parliament with the ports of lawmakers man 0:05:55.120 --> 0:05:58.320 handled into voting with the governments. Just weeks after she 0:05:58.400 --> 0:06:00.760 took over. Many members of her own set the policy 0:06:00.839 --> 0:06:04.040 are openly saying they want Liz Trust to go. Who 0:06:04.080 --> 0:06:07.599 would replace a is another question in London. Immuno sin 0:06:07.600 --> 0:06:10.280 by Daybreak very new and thanks now to the latest 0:06:10.279 --> 0:06:14.240 in the war in Ukraine, President Vladimir'szlenski is now urging 0:06:14.240 --> 0:06:17.800 people to use as little electricity as possible. He says 0:06:17.880 --> 0:06:21.240 Russia has destroyed much of the country's power infrastructure with 0:06:21.279 --> 0:06:25.600 Iranian made explosive drones. Ukraine is assembling its own army 0:06:25.600 --> 0:06:28.599 of drones to monitor the front lines. It's enlisted actor 0:06:28.680 --> 0:06:31.640 Mark Hamill to help bring it together through Ukraine's United 0:06:31.640 --> 0:06:35.280 twenty four fundraising arm The Star Wars actor tells Bloomberg 0:06:35.279 --> 0:06:38.839 President Zelenski asked him to join the effort very simply. 0:06:39.480 --> 0:06:45.200 Ukraine needs drones, and you know they define war outcomes. 0:06:45.240 --> 0:06:49.120 They are they protect their land, their people there, They 0:06:49.160 --> 0:06:52.640 monitor the border, their their eyes in the sky. And 0:06:52.680 --> 0:06:55.760 Mark Hamill's spoke of our Washington correspondent Joe Matthew on 0:06:55.800 --> 0:06:59.400 Bloomberg Sound on Catch the show weekdays at five pm 0:06:59.400 --> 0:07:03.320 Eastern on Bloomberg Radio SMP futures right now are down 0:07:03.960 --> 0:07:08.159 ten points. Dal futures are higher now up seven. NASTAC 0:07:08.240 --> 0:07:11.680 futures are lower by sixty nine points ten. Your treasuries 0:07:11.680 --> 0:07:14.160 down two thirty seconds. The yield four point one four. 0:07:14.680 --> 0:07:17.800 Straight ahead your latest local headlines in the check of sports. 0:07:17.840 --> 0:07:24.960 This is Bloomberg six oh seven on Wall Street, forty 0:07:24.960 --> 0:07:27.200 five degrees in Central Park, still dealing with the crash 0:07:27.240 --> 0:07:31.120 westbound Jackie Robinson Parkway Union Turnpike. Michael barrs here with 0:07:31.120 --> 0:07:33.000 Warre on what's going on in New York and around 0:07:33.000 --> 0:07:35.400 the world. Good morning, Michel, Good morning Nathan. A group 0:07:35.440 --> 0:07:39.280 of Justice Department prosecutors believe there is sufficient evidence to 0:07:39.440 --> 0:07:43.520 charge Donald Trump with obstruction of justice. Bloomberg sources say 0:07:43.560 --> 0:07:46.760 they are building other cases as well. Sources say they 0:07:46.760 --> 0:07:49.520 believe all charges should be complete by the end of 0:07:49.520 --> 0:07:52.960 the year. Former President Trump has finished his deposition in 0:07:53.000 --> 0:07:56.160 the case brought by a woman who claims he sexually 0:07:56.160 --> 0:07:59.760 assaulted her and then defamed her online, saying she was 0:07:59.800 --> 0:08:03.720 a liar. Trump has claimed the entire defamation lawsuits should 0:08:03.720 --> 0:08:07.360 be dismissed because he was president and was immune to charges. 0:08:07.800 --> 0:08:10.480 In New York, Trump once again said E. Gene Carroll 0:08:10.600 --> 0:08:14.400 was lying and quote not his type. Former Vice President 0:08:14.400 --> 0:08:17.320 Mike Pence said he would not necessarily vote for Donald 0:08:17.320 --> 0:08:20.679 Trump if he runs for president in twenty four Pence 0:08:20.720 --> 0:08:24.400 has been visiting early voting states, fueling speculation he might 0:08:24.560 --> 0:08:28.120 run for president. At an appearance at Georgetown University, a 0:08:28.160 --> 0:08:31.040 student asked Pence if he would vote for his former 0:08:31.160 --> 0:08:35.160 running mate in the next presidential election. If Donald Trump 0:08:35.240 --> 0:08:38.280 is the Republican nominee for presidents in Twente treunch, fool, 0:08:38.280 --> 0:08:46.720 will you vote for him? Well, there might be somebody 0:08:46.760 --> 0:08:50.760 else I'd prefer more. The former Vice president predicted Republican 0:08:50.840 --> 0:08:53.560 wins in the mid term elections, but took veiled jabs 0:08:53.559 --> 0:08:57.320 at candidates who run on opposition to Democrats without offering 0:08:57.360 --> 0:09:01.280 policy alternatives. Hospitals and that least twenties six states and 0:09:01.320 --> 0:09:04.120 the District of Columbia say they are struggling with an 0:09:04.160 --> 0:09:08.360 early surge in pediatric respiratory illnesses like r S, V 0:09:08.679 --> 0:09:12.800 flu and the common cold. Connecticut Children's Hospital physician in 0:09:12.920 --> 0:09:16.840 chief Dr. Je Salazar says two years of COVID pandemic 0:09:16.920 --> 0:09:20.839 measures may have left kids immune systems unprepared for the 0:09:20.960 --> 0:09:26.000 usual respiratory viruses, which has dramatically altered the normal epidemiology 0:09:26.240 --> 0:09:31.000 of this virus RS specifically, and the other viruses rhinovirus, 0:09:31.120 --> 0:09:34.480 adnavirus and the introvirus which have been We're more severe 0:09:34.520 --> 0:09:37.960 than they normally are. Dr Salazar says the timing is 0:09:38.000 --> 0:09:41.120 off generally. This is something seen in late winter early spring. 0:09:41.559 --> 0:09:44.320 Global News twenty four hours a day on air and 0:09:44.520 --> 0:09:47.959 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:09:48.000 --> 0:09:50.920 journalists and analysts more than a hundred twenty countries. Michael 0:09:50.960 --> 0:09:58.480 bar this is Bloomberg, Nathan, Thanks Michael, six o nine 0:09:58.480 --> 0:10:00.320 on Wall Street. Time for the Bloomberg sport stuff they 0:10:00.400 --> 0:10:03.559 brought you by Fry State OUTI. Here's John Stansharks. All right, Nathan, 0:10:03.600 --> 0:10:06.120 the Alcs underway and Houston. Good start for the Yankee. 0:10:06.160 --> 0:10:08.880 Seconding home run for Harrison Vader, who kids you just 0:10:09.000 --> 0:10:12.160 to provide surprising power, his fourth homer of the postseason. 0:10:12.480 --> 0:10:15.400 Astros tied it up. Game one was one one, sixth 0:10:15.440 --> 0:10:18.400 inning OH two and Garry L. Cranks it's left. Stanton 0:10:18.480 --> 0:10:23.760 is going back at the wall looking up silet UTAs 0:10:25.320 --> 0:10:28.600 and the Astros leading to the one they'll pitch to McCormick. 0:10:29.520 --> 0:10:31.880 It's ash rise is pretty deep to right center. Touch 0:10:31.960 --> 0:10:34.320 is going back at the wall. Look it up. It's 0:10:34.320 --> 0:10:39.920 a good bye. Chas McCormick ghost teach the Astros go up. 0:10:41.160 --> 0:10:44.480 K b Amy both homers off Clark Schmidt inning later, 0:10:44.600 --> 0:10:47.839 Jeremy Painia homer off Frankie Montas Astro's one four to 0:10:48.400 --> 0:10:51.640 fromain unbeaten the postseason. Justin Verlander gave up the Bader 0:10:51.720 --> 0:10:53.760 home run, but only two other hits. He struck out eleven. 0:10:53.760 --> 0:10:57.520 The Astros of the team struck the Yanks out seventeen times. 0:10:57.600 --> 0:11:00.199 Game two is tonight. Luis Sevareino on him on for 0:11:00.240 --> 0:11:03.319 the yankst San Diego. The Phillies, having won the NLCS 0:11:03.360 --> 0:11:05.920 opener to nothing, led for nothing, but the Podres came 0:11:05.920 --> 0:11:07.960 back to win eight to five or five on fifth 0:11:08.000 --> 0:11:10.120 and ain't one. Soto had a big hit, so did 0:11:10.160 --> 0:11:14.080 Padres Capcher Austin Nola. He was facing his brother Nix 0:11:14.120 --> 0:11:17.040 and Nets lost their openers in different fashion. Tight game 0:11:17.040 --> 0:11:19.440 in Memphis after the Knicks rally from nineteen down, but 0:11:19.480 --> 0:11:23.000 the Grizzlies one in overtime one fifteen to one twelve. 0:11:23.080 --> 0:11:25.680 John Moran thirty four points. Julius Randall led the Knicks 0:11:25.679 --> 0:11:28.480 with twenty four gruff opener for R. J. Barry shot 0:11:28.520 --> 0:11:30.600 three of eighteen and in Brooklyn and Kyrie Irving was 0:11:30.640 --> 0:11:34.000 six of nineteen. Pelicans all over the next one thirty 0:11:34.280 --> 0:11:37.480 to one oh eight. Zion Williamson back from New Orleans. 0:11:37.520 --> 0:11:41.040 He scored twenty five. John's dash are Bloomberg Sports nank okay, John, 0:11:41.040 --> 0:11:43.840 thank you? Has it be? Futures down down thirteen point 0:11:43.880 --> 0:11:46.880 staff futures lower again, They're down fifteen points. Dance next, 0:11:46.920 --> 0:11:51.080 Futures leading the declines. UH down seventy nine points now 0:11:51.160 --> 0:11:54.559 for a drop of seven tenths of one. The ten 0:11:54.640 --> 0:11:57.640 year treasuries down three thirty seconds, yield four point one 0:11:57.679 --> 0:11:59.680 four percent yield on the two year right now four 0:11:59.720 --> 0:12:08.000 point five eight. You're listening to Bloomberg Daybreak. The Bloomberg 0:12:08.000 --> 0:12:09.880 Sports Report was brought to you by Audie. Don't let 0:12:09.880 --> 0:12:12.000 someone else drive off in the Audi Model. You've always 0:12:12.000 --> 0:12:14.120 wanted to visit your local price State Audie Dealer to 0:12:14.160 --> 0:12:16.440 get behind the wheel of yours today, or visit Autie 0:12:16.480 --> 0:12:23.880 Offers dot com for more information, markets, headlines and breaking 0:12:23.880 --> 0:12:26.760 news twenty four hours a day at Bloomberg dot com, 0:12:26.880 --> 0:12:30.439 The Bloomberg Business at and at Bloomberg Quick Tape is 0:12:30.440 --> 0:12:39.920 a Bloomberg business flash, and I'm Karen Moscow. European stocks 0:12:39.920 --> 0:12:43.600 and US DOT Index futures are lower amid rising bond yields, 0:12:43.640 --> 0:12:47.000 with investors concerned that strong inflation and hawkish monetary policy 0:12:47.040 --> 0:12:49.840 will further slow the global economy. We check the markets 0:12:49.840 --> 0:12:52.800 every fifteen minutes throughout the trading day on Bloomberg. Right now, 0:12:52.840 --> 0:12:55.280 U s and P futures are down about thirteen points down. 0:12:55.320 --> 0:12:58.440 Futures are little changed, and as DAGG futures are down 0:12:58.520 --> 0:13:01.320 seventy six, down about seven tents of upper set. The 0:13:01.400 --> 0:13:03.839 decks in Germany is down about eight tens of upper cent, 0:13:03.960 --> 0:13:06.880 and your treasury down to thirty seconds yield four point 0:13:06.920 --> 0:13:09.040 one four percent, the yield on the two year four 0:13:09.080 --> 0:13:12.160 point five eight percent. Nimex screwed oil up one point 0:13:12.160 --> 0:13:14.360 seven percent of a dollar forty three at eighty six 0:13:14.400 --> 0:13:17.040 dollars ninety eight cents of barrel comic scold up two 0:13:17.040 --> 0:13:19.360 tens per cent or three dollars sixty cents at sixteen 0:13:19.400 --> 0:13:23.640 thirty seven ninety ounce. The euro point four against the dollar, 0:13:23.720 --> 0:13:26.040 British found one point one two oh one and the 0:13:26.160 --> 0:13:29.280 end one forty nine point eight four and bigit coin 0:13:29.480 --> 0:13:32.240 is down a quarter percent. It's at nineteen thousand, one 0:13:32.320 --> 0:13:35.400 hundred fifty dollars. That's a Bloomberg Business Flash. Now here's 0:13:35.440 --> 0:13:37.920 Michael Barr with more on what's going on around the world. 0:13:38.000 --> 0:13:40.920 Michael Karen, thank you very much. Russia has declared its 0:13:40.920 --> 0:13:44.400 intention to increase its targeting of Ukraine's power, water, and 0:13:44.480 --> 0:13:47.439 other vital infrastructure in its latest phase of the nearly 0:13:47.520 --> 0:13:51.560 eight month old war. Ukrainian President volodimir's Lensky says that 0:13:51.640 --> 0:13:54.440 Moscow's forces have the story thirty percent of the country's 0:13:54.480 --> 0:13:58.520 power stations since October ten. In baseball, the Yankees lost 0:13:58.520 --> 0:14:02.280 Game one of the ALCS against the Astros. In the NLCS, 0:14:02.400 --> 0:14:04.880 Padres even the series at a game of piece after 0:14:04.920 --> 0:14:08.360 beating the Phillies eight five. NBA mix nets lost their 0:14:08.400 --> 0:14:12.480 season openers the Wizards. One Global News twenty four hours 0:14:12.480 --> 0:14:15.559 a day on air and on Bloomberg Quicktake, powered by 0:14:15.600 --> 0:14:19.040 more than twenty seven hundred journalists and analysts in more 0:14:19.080 --> 0:14:21.960 than one hundred twenty countries. I'm Michael Barr, and this 0:14:22.120 --> 0:14:25.200 is Bloomberg. Nathan. Thanks Michael. Six nineteen on Wall Street 0:14:25.280 --> 0:14:28.560 Live from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:14:28.720 --> 0:14:30.600 Daybreak and now we want to bring you our exclusive 0:14:30.600 --> 0:14:34.119 interview with St. Louis Federal Reserve President Jim Bullard. Bloomberg's 0:14:34.160 --> 0:14:37.000 Kathleen Hayes sat down with Bollard yesterday for a conversation 0:14:37.040 --> 0:14:40.440 about inflation and the FEDS rate hike path. They talked 0:14:40.440 --> 0:14:43.120 about the data the FEDS considering in its inflation fight, 0:14:43.360 --> 0:14:45.840 what's to come at next month's f o MC meeting, 0:14:45.880 --> 0:14:48.880 and why twenty three could be eight deflation every year 0:14:49.040 --> 0:14:51.720 let's listen in It seems like every time we get 0:14:51.760 --> 0:14:55.520 together there's something in the background, there's something big going on, 0:14:56.080 --> 0:14:58.680 and I would say this time it is the fact 0:14:58.680 --> 0:15:02.040 that the latest inflation in data have been disappointing. You've 0:15:02.080 --> 0:15:04.480 done three hundred basis points of rate highs since March. 0:15:05.000 --> 0:15:07.440 The headline CPI is stalling out just over eight percent 0:15:07.480 --> 0:15:11.360 year over a year, core number continuing to rise, and 0:15:11.360 --> 0:15:14.040 the employment market still tight in terms of jobs and 0:15:14.480 --> 0:15:17.520 the economy not slowing down. So what's gone wrong? All 0:15:17.520 --> 0:15:21.040 those rate highs? What have they done? Uh? Well, I 0:15:21.080 --> 0:15:24.640 do think they will have an impact and in some 0:15:24.680 --> 0:15:27.320 ways have had an impact I would cite the housing 0:15:27.360 --> 0:15:31.880 market in particular where it appears left. Uh, you know, 0:15:32.160 --> 0:15:35.480 increase in rates has has really changed the dynamics there. 0:15:35.600 --> 0:15:38.760 So that's someplace that I would say they are not 0:15:38.960 --> 0:15:43.160 long and variable legs there. You know, that market anticipated 0:15:43.280 --> 0:15:49.360 fed moves that before they were even in train the spring, 0:15:50.280 --> 0:15:53.120 and so that that's a place where we've seen impact 0:15:53.880 --> 0:15:57.040 right away. But you know, it's a big ship and 0:15:57.360 --> 0:15:59.720 it takes a while to steer the ship. And so 0:16:00.720 --> 0:16:03.400 the housing market is not the whole economy. So it 0:16:03.440 --> 0:16:06.400 certainly isn't and it's certainly not the main one of 0:16:06.440 --> 0:16:09.560 the main things driving inflation. Now. Of course, prices have fallen, 0:16:09.880 --> 0:16:12.520 but our rents are important though they certainly aren't. They 0:16:12.600 --> 0:16:14.600 certainly aren't. And in fact, that's one reason why people 0:16:14.600 --> 0:16:17.600 are so worried about inflation staying high. Next here is 0:16:17.640 --> 0:16:20.280 that those rents are the way they are calculator, they're 0:16:20.280 --> 0:16:24.760 gonna spread out over several months. Yeah, but we're aware 0:16:24.880 --> 0:16:27.720 of the legs and the calculation, and so we'll take 0:16:27.800 --> 0:16:30.560 that on on board and take a look at that. 0:16:30.680 --> 0:16:35.960 But yeah, you're right, the core measure of PC inflation 0:16:36.120 --> 0:16:39.880 is still on the high fours, and the Dallas Fed 0:16:39.960 --> 0:16:43.960 trim mean four point seven five or so UM, so 0:16:44.520 --> 0:16:48.120 pretty high inflation in the US, even if you try 0:16:48.200 --> 0:16:51.000 to trim out some of the more volatile components. So 0:16:51.520 --> 0:16:53.880 we're gonna have to get that turned around, moving in 0:16:53.920 --> 0:16:56.640 the right direction back towards two percent. You know, there's 0:16:56.640 --> 0:17:00.360 an old actiment monitory policy, especially when you have inflation 0:17:00.440 --> 0:17:03.960 like this that's very high, that hasn't cooled off, that 0:17:04.080 --> 0:17:06.639 to get it under control, you have to get the 0:17:06.680 --> 0:17:11.520 funds rate above the rate of inflation. You're pretty far 0:17:11.600 --> 0:17:16.399 from there now. Another reason to think that maybe again 0:17:16.440 --> 0:17:19.280 that the tell of risks here is that you're going 0:17:19.320 --> 0:17:21.359 to have to do more. Some people are talking about 0:17:21.400 --> 0:17:23.760 five percent and have been for a while. If we 0:17:23.800 --> 0:17:26.040 get driven to that, it will be because of the data. 0:17:26.200 --> 0:17:30.440 I mean, the markets are expecting inflation to fall. We've 0:17:30.480 --> 0:17:34.440 been expecting inflation to fall. I've been expecting inflation to fall, 0:17:34.520 --> 0:17:38.720 and it hasn't so far. But I think in the 0:17:38.760 --> 0:17:42.240 first half of three that's still the expectation. And so 0:17:42.359 --> 0:17:44.920 you will get to some point where inflation has come 0:17:44.960 --> 0:17:47.880 down some and and you might get to this situation 0:17:47.880 --> 0:17:50.080 where the policy rates above the inflation rate. Is one 0:17:50.119 --> 0:17:54.159 of the reasons that you are still, you know, looking 0:17:54.480 --> 0:17:58.960 betting on this this inflation coming down is and not 0:17:59.000 --> 0:18:00.919 having to the rate move the rate a lot more 0:18:00.920 --> 0:18:03.560 restricted is because you're gonna stay aggressive with great heights 0:18:03.720 --> 0:18:07.800 right now. Uh, seventy five basis points uh in November, 0:18:07.880 --> 0:18:10.080 and then there's seventy in December. I know you don't 0:18:10.080 --> 0:18:12.639 like your prejudge meetings. However, if you look at how 0:18:12.680 --> 0:18:15.600 the factors are stacking up, is that a likely outcome 0:18:15.680 --> 0:18:18.320 in terms of what you're going to vote for? The 0:18:18.560 --> 0:18:21.920 November meeting has been more or less priced in the markets. 0:18:22.320 --> 0:18:26.959 Uh at at the seventy five basis point number. Again, 0:18:27.160 --> 0:18:29.280 you know, I think you do want to wait till 0:18:29.320 --> 0:18:31.560 you actually get to the meetings, see what the situation 0:18:31.680 --> 0:18:35.080 is there. The December meetings a little farther away, we 0:18:35.119 --> 0:18:37.160 will have more data at that point. I don't want 0:18:37.160 --> 0:18:41.600 to prejudge exactly. UH. You know what I'd what i'd 0:18:41.600 --> 0:18:46.320 support at that meeting. Uh. And then in I think 0:18:46.359 --> 0:18:50.560 we'll be closer to the point where we can run 0:18:50.680 --> 0:18:55.320 what I would call ordinary monetary policy or an uh 0:18:55.400 --> 0:18:58.040 A monetary policy where now you're at the right level 0:18:58.040 --> 0:19:01.480 of the policy rate, you're putting downward shround inflation, but 0:19:01.600 --> 0:19:05.080 you can adjust as the data come in in three 0:19:05.119 --> 0:19:07.920 and so I think up to now we've been uh, 0:19:07.960 --> 0:19:09.920 you know, we started off at a very low level. 0:19:10.119 --> 0:19:13.400 That's why we've moved so fast, so far, so quickly. 0:19:14.560 --> 0:19:17.479 But at some point we'll get to a level that 0:19:17.600 --> 0:19:21.040 the Committee judges will be sufficient to put meaningful downward 0:19:21.040 --> 0:19:23.960 pressure on inflation. Then we'll be able to adjust from there. 0:19:24.000 --> 0:19:27.520 Not that there wouldn't be further adjustments, but they would 0:19:27.560 --> 0:19:29.760 be dated. They would be more based on the data 0:19:29.840 --> 0:19:31.920 coming in, as opposed to us trying to get off 0:19:32.000 --> 0:19:35.640 zero enough to some level that's reasonable. That was St. 0:19:35.680 --> 0:19:39.359 Louis FED President James Bullard speaking with Bloomberg's Kathleen Hayes. 0:19:39.440 --> 0:19:42.240 You can catch the full interview on Bloomberg dot com 0:19:42.400 --> 0:19:46.480 or on the Bloomberg terminal. Right now, SMP futures are 0:19:46.640 --> 0:19:50.440 down eleven points. Now. Futures have been swinging between gains 0:19:50.440 --> 0:19:53.400 and losses this morning. Right now they're up by three points. 0:19:53.760 --> 0:19:56.600 NASDAC future is still lower, down sixty five points ten. 0:19:56.640 --> 0:20:00.520 Your treasuries down to thirty seconds, the yield four point one. 0:20:02.040 --> 0:20:08.800 This is Bloomberg Bloomberg eleven three oh weather, sunny, breezy, 0:20:08.880 --> 0:20:11.440 upper fifties. That's all we'll get to today, low sixties, 0:20:11.440 --> 0:20:15.600 sunshine Tomorrow, milder Saturday, the hind near seventy degrees, low 0:20:15.680 --> 0:20:18.920 sixties Sunday with showers moving in right now forty four 0:20:18.960 --> 0:20:25.480 in Central Park. Broadcasting live from the Bloomberg Interactive Broker's 0:20:25.480 --> 0:20:28.880 studio in New York. Bloomberg E Living Free On to Washington, 0:20:28.960 --> 0:20:33.080 d C. Bloomberg On to Boston, Bloomberg one O six one, 0:20:33.160 --> 0:20:36.640 to San Francisco, Bloomberg nine sixty to the country Sirius 0:20:36.800 --> 0:20:39.960 XM Cho one nineteen and around the globe the Bloomberg 0:20:40.000 --> 0:20:43.879 Business apt in Bloomberg Radio dot com. This is Bloomberg 0:20:44.000 --> 0:20:52.359 Daybreak six thirty on Wall Street. Good morning, I'm Nathan 0:20:52.359 --> 0:20:55.200 Hager and I'm Karen Moscow, and we're just about three 0:20:55.240 --> 0:20:57.560 hours away from the open of US training time to 0:20:57.600 --> 0:20:59.479 the five Things so you need to notice start your 0:20:59.560 --> 0:21:04.240 day to you buy Interactive Brokers. Interactive Brokers charges margin 0:21:04.320 --> 0:21:06.440 loan rates from three point five eight percent to four 0:21:06.480 --> 0:21:09.400 point five eight per cent rates subject to change. Learn 0:21:09.440 --> 0:21:13.560 more at ibkr dot com. Slash compare up first markets 0:21:13.680 --> 0:21:17.400 enter today after stock snapped a two day winning streaky Yesterday, 0:21:17.440 --> 0:21:20.879 concerns continue to swirl about hawk ish FED policy. Silver 0:21:20.960 --> 0:21:24.480 Crest head of Investment Policy Robert Teeter says timing will 0:21:24.480 --> 0:21:27.400 be everything. The timeline question, I think is in focus 0:21:27.400 --> 0:21:29.080 here and it's a matter of do we get inflation 0:21:29.160 --> 0:21:31.480 under control? Do we get the Fed pausing before you 0:21:31.480 --> 0:21:33.239 start to see some of that pass through, whether it's 0:21:33.280 --> 0:21:35.959 lagged effects or otherwise, onto the consumer and onto earnings. 0:21:35.960 --> 0:21:37.920 And so that's really the race that's in place right 0:21:37.920 --> 0:21:40.760 now is which happens first, the break in inflation or 0:21:40.800 --> 0:21:43.600 a break in the economy. Robert Teeter with Silver Crust 0:21:43.640 --> 0:21:47.240 Asset Management says, if consumer spending says strong, it will 0:21:47.280 --> 0:21:49.720 help the Fed bring down inflation. And today I'll be 0:21:49.720 --> 0:21:52.800 another busy one for FED speakers, Karen. Four different officials 0:21:52.840 --> 0:21:55.880 or at separate events today yesterday are Kathleen Hayes sat 0:21:55.920 --> 0:21:58.760 down with St. Louis FED President James Bullard, who indicated 0:21:58.800 --> 0:22:01.520 there's still no clue your timeline for a FED pivot. 0:22:01.640 --> 0:22:03.920 We started off at a very low level. That's why 0:22:03.960 --> 0:22:08.560 we've moved so fast, so far, so quickly. But at 0:22:08.600 --> 0:22:11.240 some point we'll get to a level that the Committee 0:22:11.280 --> 0:22:14.840 judges will be sufficient to put meaningful downloard pressure on inflation, 0:22:14.920 --> 0:22:17.080 then we'll be able to adjust from there. Catch our 0:22:17.119 --> 0:22:19.840 full interview with St. Louis President James Bullard on Bloomberg 0:22:19.880 --> 0:22:22.080 dot com or on the Bloomberg terminal. The Fed gets 0:22:22.080 --> 0:22:24.879 another key data point this morning, with weekly jobless claims 0:22:24.920 --> 0:22:27.480 due out at eight thirty am. All Street Time. Let's 0:22:27.480 --> 0:22:30.119 turn earnings now, Nathan. Nearly two dozen companies in the 0:22:30.240 --> 0:22:32.920 U S and P five port today anytime shares a. 0:22:33.000 --> 0:22:35.520