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Speaker 1: By from the Bloomberg Interacted Berker Studios. This is Bloomberg

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Speaker 1: day Break for Wednesday, March twenty second. Coming up today,

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Speaker 1: the Fed is caught between inflation and a banking crisis

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Speaker 1: as investors await today's rate decision. UK inflation jumps ahead

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Speaker 1: of tomorrow's Bank of England meeting. New developments on a

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Speaker 1: possible rescue of First Republic Bank, and game stops sores

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Speaker 1: as the video game retailer posts a surprise prophet Chinese

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Speaker 1: president she has left Moscow after a three day state

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Speaker 1: visit with Vladimir Putin. Plus new developments in a cold

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Speaker 1: murder case on Staten Island. I'm Michael Barner. What We're

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Speaker 1: a hand? I'm John Stash. Aaron's towards a win for

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Speaker 1: the Islanders, losses for the Rangers, Devils, and that's Japan

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Speaker 1: beat the US and won the World Baseball Classic. That's

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Speaker 1: all straight ahead on Bloomberg day Break, The Business News

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Speaker 1: you need, disturb your day, and just one fifteen minute

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Speaker 1: podcast each pointing on Apple's Spotify, The Bloomberg Business Appen

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Speaker 1: everywhere you get your podcasts. Good morning, I'm Nathan Hagar

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Speaker 1: and I'm Kieron Moscow. Here are the stories we're following today.

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Speaker 1: We begin with today's FED meeting. It seemed like a

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Speaker 1: slam dunk just over a week ago, but now there

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Speaker 1: are questions about whether the Fed will raise rates. This afternoon,

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Speaker 1: we get the latest from Bloomberg's Michael McKee. This is

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Speaker 1: the first meeting in a very long time where nobody

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Speaker 1: on Wall Street really knows what the Fed will do.

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Speaker 1: Two weeks ago, it was a question of whether they

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Speaker 1: raised rates half or a quarter percentage point, But disruptions

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Speaker 1: to the banking system now have many investors betting the

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Speaker 1: central bank won't raise rates at all. Financial shares have

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Speaker 1: calmed a bit in the last two days, and markets

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Speaker 1: have almost gotten back to pricing one quarter point move.

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Speaker 1: Do Fed officials still need to do crisis management or

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Speaker 1: can they go back to their focus on inflation, which

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Speaker 1: remains far above target? Michael McKey, Bloomberg Daybreak Right, Mike,

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Speaker 1: thanks well. The banking crisis is putting FED chair J

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Speaker 1: Powell in a tough predicament today. That's according to Bloomberg

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Speaker 1: opinion calumnist Muhammed Aliarian, It's going to be really tough

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Speaker 1: to sit in, really really tough. I think he's got

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Speaker 1: a stick to the framework that the European Central Bank

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Speaker 1: said out very well, and President la god had a

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Speaker 1: masterclass in her press conference on this, which is we

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Speaker 1: are aiming both for christ stability and for financial stability,

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Speaker 1: and we have tools to address both of these things,

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Speaker 1: and we must not sacrifice either of them. Bloomberg opinion

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Speaker 1: calumnist Muhammadhlarian said the fedge it still high rates by

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Speaker 1: twenty five basis points. Well. Complete coverage of today's FED

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Speaker 1: decision and news conference coming up on a special edition

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Speaker 1: of Bloomberg Surveillance. It all starts at one thirty pm

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Speaker 1: Eastern on Bloomberg Radio and Television, Well Karen. Inflation is

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Speaker 1: also front and center in Europe this morning. A head

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Speaker 1: of tomorrow's Bank of England rate decision, prices in the

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Speaker 1: UK unexpectedly rose for the first time in four months.

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Speaker 1: Bloomberg's Lizzie Burden has more from London. If you're one

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Speaker 1: of the hawks on the committee, like Catherine Man, you're

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Speaker 1: going to be feeling vindicated. She's been warning about the

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Speaker 1: persistence of stubbornly high inflation, about getting in control of

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Speaker 1: inflation expectations. You've already seen ECB doing fifty basis points.

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Speaker 1: It was a debate over whether you prioritize cutting inflation

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Speaker 1: show confidence in the banking system, or whether you reckon

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Speaker 1: that that banking stress has tightened financial conditions enough that

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Speaker 1: it's done the work for you. I think that this

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Speaker 1: tips the argument a bit more towards prioritizing inflation. Bloomberg's

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Speaker 1: Lizzie Burden says uk CPI rose ten point four percent

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Speaker 1: in February as food and drink prices sort at their

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Speaker 1: fastest pace in forty five years. Well, banking, of course,

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Speaker 1: is also a front and center in Europe. Nathan. After

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Speaker 1: taking over credits Sweet, sa Ubys is now offering to

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Speaker 1: buy back bonds sold before the acquisition. UBS says it'll

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Speaker 1: buy back three billion dollars of bonds sold just days

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Speaker 1: before the deal. In light of the quote exceptional developments

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Speaker 1: that took place on Sunday. Back here in the US, Karing,

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Speaker 1: the future of First Republic Bank remains in question, and

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Speaker 1: we get the latest live with Bloomberg. Steve Rappaport, Good morning, Steve,

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Speaker 1: Good morning, Nathan and Karen. The answer to First Republic's

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Speaker 1: problems could be a joint solution from the public and

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Speaker 1: the private sectors. Sources tell us big banks and US

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Speaker 1: officials are exploring government backing to encourage a deal for

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Speaker 1: propping up the lender. Some options on the table include

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Speaker 1: offering liability protection and more flexibility for capital rules. While

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Speaker 1: investors have expressed interest in helping the firm's unrealized losses

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Speaker 1: remain a concern. First Republic shares are up three percent

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Speaker 1: in early trading, Live in New York. I'm Steve Rappaport,

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Speaker 1: Bloomberg Daybreak. All right, Steve, thanks, So there's some other

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Speaker 1: stocks on the move this morning. Shares of game Stop

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Speaker 1: are surging. They are up more than thirty eight percent

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Speaker 1: in the pre market. That's after the video game retailer

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Speaker 1: reported a surprise profit. Game Stop reported net income of

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Speaker 1: forty eight million dollars for its first profit in two years,

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Speaker 1: and that rally in game Stop shares. Karen has some

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Speaker 1: other so called meme stocks on the rise as well.

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Speaker 1: Look at AMC Entertainment. It's up nine and a half

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Speaker 1: percent in early trading. There doesn't appear to be any

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Speaker 1: catalyst for that game outside of game Stop. And on

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Speaker 1: the flip side, Nathan shares of Nike. They're lower, down

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Speaker 1: one and a half percent. The company did post profit

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Speaker 1: above estimates, but it also says gross margins for the

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Speaker 1: year would be at the low end of expectations. Let's

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Speaker 1: turn to politics now. Karen in New York. Today, security

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Speaker 1: barricades remain up outside the Manhattan Criminal Court ahead of

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Speaker 1: a possible indictment of former President Donald Trump. We get

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Speaker 1: the very latest life from Bloomberg's John Tucker, John and Nathan.

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Speaker 1: The former president could be indicted by a Manhattan grand

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Speaker 1: jury as soon as this week, potentially charged with falsifying

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Speaker 1: business records connected to hush money payments. Trump issued a

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Speaker 1: call in to his supporters to protest a bomb threat

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Speaker 1: closed the court yesterday. Among his supporters, Brian Style, the

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Speaker 1: Republican chair of the House Administration Committee, he fired off

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Speaker 1: a letter to Manhattan DA Alvin Bragg, asking him to

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Speaker 1: answer questions about his investigation. I think there's appropriate questions

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Speaker 1: in a case that this significant is to why it's

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Speaker 1: moving forward in the way it is. I think the

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Speaker 1: American people deserve to know, then, sir, leave, asked Congress

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Speaker 1: Bryan Style spoke to Joe Matthew on Bloomberg Sound on.

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Speaker 1: Former President Trump had expected to be arrested yesterday Live

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Speaker 1: in New York on John Tucker Bloomberg Daybreak. It's forty

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Speaker 1: seven degrees in New York. It's going to be sundy

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Speaker 1: today with hins and the upper fifties clouds roll in tonight.

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Speaker 1: We'll get down to the upper forties. Time now to

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Speaker 1: take a look at some of the other stories making

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Speaker 1: news in New York and around the world, with Bloomberg's

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Speaker 1: Michael bar Good morning, Michael, Good morning, Nathan. Chinese leader

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Speaker 1: Shijingping is left Moscow, wrapping up a three day visit,

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Speaker 1: shortly after Japanese Prime Minister Fumio Kashino left Kiev. Meanwhile,

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Speaker 1: the USS statements coming from China and Russia about a

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Speaker 1: proposed peace plan for Ukraine our off target, Bloomberg said

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Speaker 1: Baxter as the story the White House has neither Kiev

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Speaker 1: nor Washington can even consider it. National Security Council spokesman

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Speaker 1: John Kirby says there is no mention of backing off

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Speaker 1: occupied land. He and his regime keeps pairting the Russian

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Speaker 1: propaganda that this is somehow the more of the West

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Speaker 1: on Russia, that it's some sort of existential threats in

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Speaker 1: Mister Putin that's just a bunch of molarchy. Mukraine posed

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Speaker 1: no threat to anybody, let alone Russia. Kirby says Putin's

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Speaker 1: aim at having she in Moscow is to get a

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Speaker 1: promise of more lethal aid, which to this date, he says,

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Speaker 1: they've not seen any evidence of his doing. In San Francisco,

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Speaker 1: I'm at Baxter Bloomberg Daybreak. A cold murder case on

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Speaker 1: Staton Island is getting new interest. Investigators say they have

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Speaker 1: identified the body of a woman who was found brutally

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Speaker 1: beaten and lit on fire on Staton Island in nineteen

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Speaker 1: ninety one. The woman, who was only known by a

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Speaker 1: scorpion tattoo on her right buttocks, has been identified as

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Speaker 1: Christine Belusco of Clifton. They also said Belusco had a daughter,

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Speaker 1: now believed to be in her early thirties, who investigators

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Speaker 1: are trying to locate. Beluso's killer is still on the loose.

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Speaker 1: Marine animal welfare officials say eight dolphins have died after

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Speaker 1: they became stranded on a beach in New Jersey. Marine

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Speaker 1: Mammal Stranding Centers said on Facebook that the pod had

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Speaker 1: become stranded on Sea Isle. City staff and a veterinarians

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Speaker 1: say two of the dolphins had already died and the

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Speaker 1: condition of the others was rapidly deteriorating. The MMSC says

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Speaker 1: the decision was made to euthanize the other six. A

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Speaker 1: cow caused quite the commotion in Brooklyn. A young black

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Speaker 1: calf somehow escape from a truck outside of slaughterhouse and

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Speaker 1: made a break for it, running through the streets of

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Speaker 1: Canarcy until the crew rounded her up and put her

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Speaker 1: back in the vehicle. This man watched the whole thing

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Speaker 1: play out. The people from the slaughterhouse had actually come

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Speaker 1: with their equipment and stuff, and they were trying to

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Speaker 1: you know, blast of it and get it into the truck.

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Speaker 1: But she was feisty. She didn't want to go. No

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Speaker 1: word on whether the slaughterhouse would now consider sparing him.

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Speaker 1: Global News twenty four hours a day by more than

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Speaker 1: twenty seven hundred journalists, analyist and over one hundred twenty countries.

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Speaker 1: Michael Bard, this is Bloomberg, Nathan. I'm not going to

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Speaker 1: tell you where I'd placed my bets. Thank you, Michael.

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Speaker 1: Time half of the Bloomberg sports that they brought to

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Speaker 1: you by Trice stayed out. He Good morning, John stash Our,

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Speaker 1: Good morning Nathan on Hollywood like script to finish the

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Speaker 1: World Baseball Classic Japan with a one run lead of

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Speaker 1: the nineteenning and who do they call on to close

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Speaker 1: things out? But show a Otani? And who does he

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Speaker 1: face to get the final out? But his angel's teammate

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Speaker 1: Mike Trout generally considered the two best all around players

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Speaker 1: in the sport, and Otani struck Trout out. Japan won

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Speaker 1: the championship game three to two. Had Barkley's Nets lost

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Speaker 1: to Cleveland one fifteen one O nine, there was a

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Speaker 1: moment of silence for Willis Reid. He was once the

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Speaker 1: Nets coach, also once their general manager. But Reid, who

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Speaker 1: passed away at eighty, obviously known mostly as an all

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Speaker 1: time great Nick and for what he did May eighth,

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Speaker 1: nineteen seventy. Limping onto the court for Game seven, they questions,

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Speaker 1: will Willis reed play to night? I think we've seen

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Speaker 1: woman coming up that trade on the harkcard white spot?

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Speaker 1: What elbout his person show? He only scored four points

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Speaker 1: that night, for it was felt the motion he brought

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Speaker 1: by fighting through his leg injury inspired the Knicks to victory.

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Speaker 1: Read with captain the Knicks to another title three years later,

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Speaker 1: still the only two championships in Knick's history. Rangers Devil's

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Speaker 1: Islanders all at home at the Garden. Rangers at a

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Speaker 1: third period lead but lost to Carolina three to two,

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Speaker 1: and Newark, Minnesota top the Devil's two one and over

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Speaker 1: time with the Ubs Arena all Islanders seven to two

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Speaker 1: over Toronto. Ionna moved quickly the day after Rick Petino

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Speaker 1: left for Saint John's, The Gales replaced him with Toban Anderson,

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Speaker 1: who had just coached Fairley Dickens into that stunning upset

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Speaker 1: win in the NCAA. Turner John Stashatward Bloomberg Sports Live

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Speaker 1: from coast to coast, from New York to San Francisco,

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Speaker 1: Boston to Washington, d C. Nationwide on Sirius XAM, the

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Speaker 1: Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak.

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Speaker 1: Good morning, I'm Nathan Hagar. Let's bring you an interview

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Speaker 1: now with the former CEO of Morgan Stanley and Credit Suite.

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Speaker 1: That's John Mack. He sat down for an interview with

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Speaker 1: David Weston on Bloomberg Wall Street Week. They discussed financial

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Speaker 1: stability and risk management. In light of the collapse of

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Speaker 1: credit Suis had several US regional banks. John Max says

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Speaker 1: it is imperative that people believe in the stability of banks.

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Speaker 1: He says executives and government officials are well aware of

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Speaker 1: the risks of a collapse in confidence. Let's bring you

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Speaker 1: part of our conversation now with John Mack. I think

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Speaker 1: the transition from being a Swiss private bank to a

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Speaker 1: publicly held bank, that the rules and reporting have changed.

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Speaker 1: I mean the Swiss banks. I remember years ago when

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Speaker 1: I was there, you could go down in their vaults.

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Speaker 1: He would see pieces of art locked up, things like that,

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Speaker 1: And I think they had a real advantage of bank secrecy.

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Speaker 1: They had a lot of people around the world who

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Speaker 1: want to be protected, and we put money in there

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Speaker 1: and knowing it would be secure, safe and secret do

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Speaker 1: and the world's changed, and that's what they're dealing with

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Speaker 1: because they need to change with it. What didn't they

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Speaker 1: get from your point of view, I mean, you've spent

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Speaker 1: a lifetime in banking, you know banking. What didn't they

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Speaker 1: understand you need to build financial service business built on

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Speaker 1: trust and built on not hiding money or putting money

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Speaker 1: in different spots, but you need to be opened. You

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Speaker 1: need to give a return on the investments or the

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Speaker 1: assets someone gives you, and just having bank secrecy is

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Speaker 1: not enough. And I don't think they got that. And

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Speaker 1: for years the Swiss was a haven for people all

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Speaker 1: over the world who wanted to put money away. They

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Speaker 1: did and you know, for those who are putting the

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Speaker 1: money in, it made a lot of sense. But long term,

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Speaker 1: I think it really helped hurt the Swiss banks in

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Speaker 1: a competitive way. What do you expect Calm Color and

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Speaker 1: Ubas to do with great species, Well, I think they'll

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Speaker 1: look number one or they're overlaps, and there'll be a

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Speaker 1: lot of overlaps. And you want to get the best

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Speaker 1: people from each institution and still have those lines of businesses,

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Speaker 1: but with a better ROLO decks of who are the

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Speaker 1: talent of people in THEO the two banks. So I

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Speaker 1: see it business as usual, but I think it will

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Speaker 1: be a smaller institution when they put them together, and

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Speaker 1: I think they will focus on performance, not just bank secrecy.

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Speaker 1: You've spent a lifetime managing risk, is it likely they'll

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Speaker 1: take a less risk? Already we've had calm callers said

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Speaker 1: we want to cut back on the investment bank. We're

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Speaker 1: not as interested an investment bank. Would you expect to

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Speaker 1: sort of the sort of profile the bank to shift, Yeah,

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Speaker 1: I do, But I think that's universal. I think the

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Speaker 1: big banks who've had big trading positions and taken a

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Speaker 1: lot of risks, I think they've all dialed that back,

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Speaker 1: and clearly a Swiss is going to do that now.

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Speaker 1: When I was there, it was first Boston was their

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Speaker 1: investment bank, and the amount of risk that we took

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Speaker 1: was really out of proportion what we should have been doing.

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Speaker 1: So I think all the banks are focused a lot

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Speaker 1: more on risk. I think their regulators are better at

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Speaker 1: defining and seeing the risk. But I think banks have

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Speaker 1: to maintain confidence in their institution, so I think most

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Speaker 1: of these banks are going to be much more conservative

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Speaker 1: in the risk they take. We have our own problems

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Speaker 1: with banks right now in the United States, starting with

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Speaker 1: Silicon Valley Bank going beyond that. At the same time,

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Speaker 1: is this similar to what you saw in twenty eight,

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Speaker 1: two and nine, again you were running Morgan Stanley. Do

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Speaker 1: we have a similar issue now, you know, David, I

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Speaker 1: don't think so. I think the banking issue at Silicon

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Speaker 1: Bank is pretty straightforward what they were doing, who they

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Speaker 1: were underwriting, who they were lending money to. We were

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Speaker 1: just taking market risk. We were not taking tremendous credit risk,

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Speaker 1: either with companies or with individuals. A lot of our

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Speaker 1: risker and government securities and just loading up the balance

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Speaker 1: sheet saying there's making a bet on interest rates, not

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Speaker 1: on credit. So I think the difference today is the

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Speaker 1: credit risk, not so much the interest rate risk. There

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Speaker 1: are a lot of institutions, banks, as well as the

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Speaker 1: corporations that maybe have based their whole theory on low

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Speaker 1: interest rates forever, which we're not going to have. So

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Speaker 1: how much risk is there in terms of interest rate

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Speaker 1: risk in the system do you think? I don't think

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Speaker 1: as much as we've seen in the past. I mean

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Speaker 1: I don't. I just don't see banks, and again I've

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Speaker 1: been retired for a while. I don't see them taking

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Speaker 1: all that kind of risk to try to get earnings up.

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Speaker 1: They're always that it's going to be a risk in

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Speaker 1: the marketplace. There's always interest rate at risk. But I

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Speaker 1: think all the banks are much more discipline and the

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Speaker 1: kind of risk they want. I also think the Federal

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Speaker 1: Reserve and regulators are much more astute at looking at

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Speaker 1: these balance sheets and the risk they're taking. The risk

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Speaker 1: should be in helping build businesses, not speculating in the market,

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Speaker 1: but in the risk of making these big loans and

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Speaker 1: taking a lot of exposure if the markets change in

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Speaker 1: these companies. I think that has really been dialed back.

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Speaker 1: This is Bloomberg Daybreak Today, your morning brief on the

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