1 00:00:02,279 --> 00:00:05,000 Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the 2 00:00:05,000 --> 00:00:07,600 Speaker 1: top stories in the coming week from our Daybreak anchors 3 00:00:07,640 --> 00:00:10,479 Speaker 1: all around the world. Straight Ahead on the program, we 4 00:00:10,520 --> 00:00:13,360 Speaker 1: look to the Fed's preferred gauge of inflation how it 5 00:00:13,360 --> 00:00:16,960 Speaker 1: could affect policy going forward. I'm Nathan Hager in Washington. 6 00:00:17,160 --> 00:00:19,960 Speaker 2: I'm callin kit here in London, where we're looking ahead 7 00:00:19,960 --> 00:00:21,599 Speaker 2: to London Climate Action Week. 8 00:00:21,800 --> 00:00:24,319 Speaker 3: I'm Derek Prisner looking ahead to the latest reading on 9 00:00:24,440 --> 00:00:26,600 Speaker 3: consumer inflation for Australia. 10 00:00:27,560 --> 00:00:31,600 Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 11 00:00:31,600 --> 00:00:35,320 Speaker 4: eleventh three year, New York, Bloomberg ninety nine to one, Washington, DC, 12 00:00:35,840 --> 00:00:40,840 Speaker 4: Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syria 13 00:00:41,120 --> 00:00:44,640 Speaker 4: XM one twenty one, and around the world on Bloomberg Radio, 14 00:00:44,680 --> 00:00:46,840 Speaker 4: dot Com and the Bloomberg Business App. 15 00:00:51,320 --> 00:00:54,000 Speaker 1: Good day to you. I'm Nathan Hager. We begin today's 16 00:00:54,040 --> 00:00:56,720 Speaker 1: program with some key economic data in the US, and 17 00:00:56,760 --> 00:00:58,800 Speaker 1: we are getting a lot of it this week. The 18 00:00:58,840 --> 00:01:02,640 Speaker 1: Federal Reserves prefer Gage of Inflation comes out this Thursday, 19 00:01:03,000 --> 00:01:05,440 Speaker 1: along with an updated reading on economic growth at the 20 00:01:05,480 --> 00:01:07,720 Speaker 1: start of the year, along with a slew of other 21 00:01:07,760 --> 00:01:10,399 Speaker 1: readings to help us get set for the flood of data. 22 00:01:10,880 --> 00:01:15,000 Speaker 1: We're joined by Stuart paul Us, economists for Bloomberg Economics, 23 00:01:15,040 --> 00:01:17,360 Speaker 1: and I'd have to think Stuart, after what we heard 24 00:01:17,440 --> 00:01:20,039 Speaker 1: from the new Fed cherk Kevin Warsh last week about 25 00:01:20,080 --> 00:01:24,320 Speaker 1: the commitment to price stability, the PCEE has got to 26 00:01:24,360 --> 00:01:26,959 Speaker 1: be really top of mind. Is that how you see 27 00:01:26,959 --> 00:01:27,600 Speaker 1: things right now? 28 00:01:28,040 --> 00:01:30,680 Speaker 5: The pce will be top of mind. What's good though, 29 00:01:30,760 --> 00:01:35,119 Speaker 5: is that CPI and PPI are used as the primary 30 00:01:35,120 --> 00:01:38,920 Speaker 5: input for pce inflation. So even going into last week's 31 00:01:39,000 --> 00:01:42,959 Speaker 5: FOMC meeting, central bankers had a pretty good feel for 32 00:01:43,280 --> 00:01:46,360 Speaker 5: what we're likely to see in this upcoming personal income 33 00:01:46,400 --> 00:01:50,480 Speaker 5: and outlays and PCEE inflation report. And frankly, all the 34 00:01:50,560 --> 00:01:53,320 Speaker 5: data that are going to be included in this report, 35 00:01:53,600 --> 00:01:57,120 Speaker 5: which covers everything from income to spending to consumer price 36 00:01:57,160 --> 00:02:02,680 Speaker 5: inflation based on the person consumption expenditures basket, all of 37 00:02:02,720 --> 00:02:05,760 Speaker 5: that data is basically going to affirm the relatively hawkish 38 00:02:05,800 --> 00:02:08,520 Speaker 5: stance that we heard from Kevin Walsh and that we 39 00:02:08,600 --> 00:02:11,959 Speaker 5: saw in the dot plot released by the broader FOMC. 40 00:02:12,320 --> 00:02:15,600 Speaker 1: Okay, So for those who might not be closely keeping 41 00:02:15,760 --> 00:02:20,000 Speaker 1: score on what's fed into PCE. I think from the 42 00:02:20,040 --> 00:02:23,040 Speaker 1: CPI and PPI data you alluded to, we are still 43 00:02:23,560 --> 00:02:26,800 Speaker 1: well above target when it comes to the fed's two 44 00:02:26,880 --> 00:02:28,280 Speaker 1: percent rate that it's shooting for. 45 00:02:28,440 --> 00:02:32,520 Speaker 5: Right absolutely, so we're expecting to see about zero point 46 00:02:32,639 --> 00:02:37,120 Speaker 5: five percent monthly headline PCEE inflation. That's going to boost 47 00:02:37,120 --> 00:02:41,600 Speaker 5: the annual PCE inflation rate to about four point one percent. Now, 48 00:02:41,639 --> 00:02:44,560 Speaker 5: core inflation is a little bit more tame, about zero 49 00:02:44,600 --> 00:02:47,800 Speaker 5: point four percent core inflation on the month, and that'll 50 00:02:47,840 --> 00:02:50,560 Speaker 5: boost the year on year rates about three point four percent. 51 00:02:50,600 --> 00:02:55,200 Speaker 5: So still a significant overshoot even by the FED preferred measures. 52 00:02:55,240 --> 00:02:58,680 Speaker 1: Okay, so how are we looking then at the trajectory 53 00:02:59,200 --> 00:03:03,200 Speaker 1: for inflame right now? Now that we have something of 54 00:03:03,200 --> 00:03:06,840 Speaker 1: a resolution in the Middle East, the oil is starting 55 00:03:06,880 --> 00:03:08,800 Speaker 1: to flow through the strait of horror moves, does that 56 00:03:08,880 --> 00:03:12,160 Speaker 1: affect how you as an economist are thinking about the 57 00:03:12,200 --> 00:03:14,600 Speaker 1: overall trajectory of inflation at this point. 58 00:03:14,760 --> 00:03:17,520 Speaker 5: I actually think that the May inflation readings and the 59 00:03:17,560 --> 00:03:21,120 Speaker 5: PC inflation rating is the last real inflation reading for 60 00:03:21,120 --> 00:03:24,200 Speaker 5: the month of May. I think that those May numbers 61 00:03:24,200 --> 00:03:26,520 Speaker 5: are basically going to be the local peak that we 62 00:03:26,600 --> 00:03:30,120 Speaker 5: see for inflation I'm expecting to see some disinflation coming 63 00:03:30,280 --> 00:03:35,360 Speaker 5: in June and thereafter. And as you mentioned, you know, 64 00:03:35,400 --> 00:03:38,200 Speaker 5: the Memorandum of Understanding, the reopening of the Straight of 65 00:03:38,200 --> 00:03:41,720 Speaker 5: Horror moves both help. It should reduce the energy price 66 00:03:41,840 --> 00:03:45,600 Speaker 5: pressures that have been boosting headline inflation and even bleeding 67 00:03:45,640 --> 00:03:48,440 Speaker 5: into the core a little bit. But beyond that, it 68 00:03:48,480 --> 00:03:52,000 Speaker 5: looks like we're past peak tariff passed through. If you 69 00:03:52,120 --> 00:03:56,080 Speaker 5: rewind the clock a year, it feels like a lifetime ago. Yeah, 70 00:03:56,080 --> 00:03:59,000 Speaker 5: But we were thinking about Liberation Day, we were thinking 71 00:03:59,000 --> 00:04:01,720 Speaker 5: about the implementation of tariffs. We saw a major spike 72 00:04:01,800 --> 00:04:05,120 Speaker 5: in the average effective tariff rate, which had been boosting 73 00:04:05,240 --> 00:04:08,840 Speaker 5: core goods prices over the last year. But now it 74 00:04:08,920 --> 00:04:11,560 Speaker 5: seems like that's starting to fall out of the year 75 00:04:11,640 --> 00:04:14,600 Speaker 5: on year inflation measures. We're starting to see some moderation 76 00:04:14,720 --> 00:04:17,920 Speaker 5: in core goods prices. We're also seeing firms face a 77 00:04:17,960 --> 00:04:21,080 Speaker 5: little bit of pushback when they try to pass through 78 00:04:21,440 --> 00:04:24,520 Speaker 5: higher core goods prices to consumers. So all told, we 79 00:04:24,560 --> 00:04:29,080 Speaker 5: have those two factors in play, mostly on the good side, 80 00:04:29,520 --> 00:04:34,560 Speaker 5: where falling energy prices in June and favorable base effects 81 00:04:34,600 --> 00:04:38,120 Speaker 5: as we pass through peak tariff pass through are going 82 00:04:38,160 --> 00:04:42,840 Speaker 5: to result in a little bit of disinflation in starting 83 00:04:42,839 --> 00:04:45,680 Speaker 5: in June and then probably continuing throughout the second half 84 00:04:45,680 --> 00:04:48,159 Speaker 5: of the year. That's so, with course, barring any sort 85 00:04:48,200 --> 00:04:51,640 Speaker 5: of escalation or re escalation of the war in Iran. 86 00:04:51,680 --> 00:04:55,880 Speaker 1: Certainly, I mean that's a key wild card. But with 87 00:04:55,960 --> 00:04:58,200 Speaker 1: all that said, Stewart, I think one of the last 88 00:04:58,200 --> 00:05:02,120 Speaker 1: times we spoke, you were thinking that the FED could 89 00:05:02,240 --> 00:05:06,279 Speaker 1: have a pretty significant room to stay on pause, if 90 00:05:06,360 --> 00:05:09,760 Speaker 1: not cut, in the months to come. After what we 91 00:05:09,880 --> 00:05:14,360 Speaker 1: heard from the Chairman last week. Is that still your view? 92 00:05:14,839 --> 00:05:16,240 Speaker 5: Look, I think that the FED is going to do 93 00:05:16,279 --> 00:05:18,440 Speaker 5: their best to sit on their hands. We definitely saw 94 00:05:18,560 --> 00:05:21,360 Speaker 5: from the dots we saw from the forecasts included in 95 00:05:21,400 --> 00:05:24,440 Speaker 5: the summary of economic projections. We also heard it in 96 00:05:24,480 --> 00:05:27,760 Speaker 5: the Chairman's voice and his near singular focus on price 97 00:05:27,800 --> 00:05:31,440 Speaker 5: stability rather than employment. All of those looked at a 98 00:05:31,440 --> 00:05:34,159 Speaker 5: little bit hawkish. That's certainly the case. I'll have to 99 00:05:34,200 --> 00:05:37,200 Speaker 5: concede that point. But one thing that I want everybody 100 00:05:37,240 --> 00:05:40,400 Speaker 5: to be aware of, to really fully understand that it's 101 00:05:40,440 --> 00:05:42,760 Speaker 5: not clear to us, and it's certainly not clear to 102 00:05:42,839 --> 00:05:46,960 Speaker 5: policymakers whether we're seeing a lot of cyclical strength driving 103 00:05:47,040 --> 00:05:51,599 Speaker 5: economic activity or where it's mostly just structural transformation. So 104 00:05:52,080 --> 00:05:55,479 Speaker 5: if we're looking at the totality of the data, layoffs 105 00:05:55,520 --> 00:05:59,240 Speaker 5: and unemployment are low, but hiring is really concentrated in 106 00:05:59,279 --> 00:06:04,119 Speaker 5: industries that structural tailwinds, like healthcare for example. Investment is hot, 107 00:06:04,520 --> 00:06:06,839 Speaker 5: but that's mostly in industries that are focused on on 108 00:06:07,000 --> 00:06:11,720 Speaker 5: shoring and participating in the AI buildout. Residential construction for example, 109 00:06:11,800 --> 00:06:13,920 Speaker 5: is really crummy. We saw that just last week with 110 00:06:14,000 --> 00:06:18,440 Speaker 5: housing starts. Inflation pressures, as I mentioned, mostly downstream of 111 00:06:18,520 --> 00:06:21,160 Speaker 5: Tariff's chips, shortages of the Iran war, and so the 112 00:06:21,240 --> 00:06:26,440 Speaker 5: disinflation that we're getting there again, it's mostly because of 113 00:06:26,760 --> 00:06:29,400 Speaker 5: shifts in the landscape more so than any sort of 114 00:06:29,440 --> 00:06:33,479 Speaker 5: like cyclical factors. So all of those more structural factors 115 00:06:33,480 --> 00:06:35,920 Speaker 5: that are affecting the dynamics of the economy rather than 116 00:06:36,240 --> 00:06:41,880 Speaker 5: extraordinary cyclical strength, actually do keep the door open for 117 00:06:42,920 --> 00:06:45,000 Speaker 5: you know, a cut. I would not be surprised to 118 00:06:45,000 --> 00:06:48,560 Speaker 5: see a cut next year. And it all really depends 119 00:06:48,560 --> 00:06:50,520 Speaker 5: on the trajectory of the labor market in twenty twenty 120 00:06:50,600 --> 00:06:51,400 Speaker 5: seven when that's the. 121 00:06:51,360 --> 00:06:54,880 Speaker 1: Case thanks to this Stuart, as always, that's Stuart paul 122 00:06:55,080 --> 00:06:58,600 Speaker 1: Us economist with Bloomberg Economics. Let's take a look now, 123 00:06:58,640 --> 00:07:01,200 Speaker 1: add some stocks making news the week ahead. I'm Nathan 124 00:07:01,200 --> 00:07:05,000 Speaker 1: Hager here with Bloomberg Equities reporter Avalon Purnell, a head 125 00:07:05,000 --> 00:07:07,920 Speaker 1: of a few pretty interesting earning stories in the coming week. 126 00:07:07,920 --> 00:07:11,480 Speaker 1: We're gonna hear from Carnival cruise lines on Tuesday. It's 127 00:07:11,480 --> 00:07:13,520 Speaker 1: gonna be really interesting to hear from them, especially with 128 00:07:13,600 --> 00:07:15,800 Speaker 1: so many of the headlines around the Middle East driving 129 00:07:15,840 --> 00:07:18,280 Speaker 1: cruise stocks over the last several months. 130 00:07:18,360 --> 00:07:21,840 Speaker 6: Avalon absolutely, I mean, the potential end of the Iran 131 00:07:21,880 --> 00:07:24,640 Speaker 6: war and fuel costs will definitely be top of mind 132 00:07:24,680 --> 00:07:27,240 Speaker 6: for investors as Carnival heads into its second quarter earnings 133 00:07:27,240 --> 00:07:30,400 Speaker 6: on Tuesday. Carnival shares have been on a roller coaster 134 00:07:30,600 --> 00:07:33,840 Speaker 6: ride alongside other traveling cruise names, to say the least, 135 00:07:34,120 --> 00:07:37,120 Speaker 6: since the war started in February. But now with the 136 00:07:37,240 --> 00:07:40,080 Speaker 6: US and Iran saying that they've reached an interim agreement 137 00:07:40,080 --> 00:07:42,800 Speaker 6: to reopen the Strait of her Moves, sentiment is again 138 00:07:42,960 --> 00:07:46,160 Speaker 6: rising in this hard hit sector. Worth mentioning that Wall 139 00:07:46,160 --> 00:07:49,720 Speaker 6: Street still remains cautiously optimistic about the stock Schiefel may 140 00:07:49,720 --> 00:07:51,960 Speaker 6: have put it best at analyst saying that trading cruise 141 00:07:51,960 --> 00:07:54,680 Speaker 6: stocks is beyond difficult because you're trading your view of 142 00:07:54,720 --> 00:07:56,960 Speaker 6: whether the Middle East war will end or not. But 143 00:07:57,120 --> 00:07:59,480 Speaker 6: they remain buyers of Carnival into their earnings because they 144 00:07:59,480 --> 00:08:02,160 Speaker 6: believe the come But he hasn't witnessed any deterioration in 145 00:08:02,200 --> 00:08:05,880 Speaker 6: customer spending Bloomberg Intelligence highlighting that investors will look for 146 00:08:05,920 --> 00:08:09,360 Speaker 6: insight on booking since March, when Carnival reported that eighty 147 00:08:09,360 --> 00:08:11,480 Speaker 6: five percent of capacity had been sold. 148 00:08:11,840 --> 00:08:14,080 Speaker 1: Well, like you said, the stock has kind of been 149 00:08:14,120 --> 00:08:16,600 Speaker 1: all over the map since the start of the year. 150 00:08:16,640 --> 00:08:18,800 Speaker 1: What are we expecting from the options market when it 151 00:08:18,800 --> 00:08:21,080 Speaker 1: comes to how the stock could trade off the back 152 00:08:21,080 --> 00:08:21,640 Speaker 1: of earnings. 153 00:08:21,840 --> 00:08:24,080 Speaker 6: Yes, option data that we are seeing at the moment 154 00:08:24,160 --> 00:08:27,239 Speaker 6: is currently implying about a six percent move after those results. 155 00:08:27,760 --> 00:08:30,560 Speaker 1: Okay, so we'll be keeping an eye on Carnival Cruise 156 00:08:30,560 --> 00:08:34,920 Speaker 1: Line on Tuesday, along with FedEx. Obviously a pretty strong 157 00:08:34,960 --> 00:08:36,959 Speaker 1: bell weather for the economy as a whole. But I mean, 158 00:08:36,960 --> 00:08:39,960 Speaker 1: this stock has been through quite a few changes lately. 159 00:08:40,000 --> 00:08:43,000 Speaker 1: So how's that affecting investor sentiment? 160 00:08:43,360 --> 00:08:45,160 Speaker 6: Yes, I mean FedEx, to say the least, we'll be 161 00:08:45,320 --> 00:08:48,000 Speaker 6: entering a new era when it reports fourth quarter earnings. 162 00:08:48,000 --> 00:08:51,520 Speaker 6: On Tuesday, Justice Mond FedEx completed the spinoff of its 163 00:08:51,679 --> 00:08:54,559 Speaker 6: freight division, and it will also be the first earnings 164 00:08:54,600 --> 00:08:58,000 Speaker 6: call for Claude Russ, who became interim CFO after John 165 00:08:58,000 --> 00:09:01,120 Speaker 6: Dietrich surprise investors by now that he was stepping down 166 00:09:01,120 --> 00:09:03,839 Speaker 6: at the start of this month. Investors expect FedEx to 167 00:09:03,960 --> 00:09:08,600 Speaker 6: continue executing despite inflationary pressures and rising fuel costs tied 168 00:09:08,640 --> 00:09:11,760 Speaker 6: to that war in Iran. Barclay's analysts are expecting solid 169 00:09:11,800 --> 00:09:16,000 Speaker 6: retail performance and also industrial expansion this quarter given strong 170 00:09:16,120 --> 00:09:21,320 Speaker 6: macro transportation indicators, though it is worth noting that Bloomberg 171 00:09:21,320 --> 00:09:23,720 Speaker 6: Intelligence highlighting with the spinoff in the rear view mirror, 172 00:09:23,760 --> 00:09:26,600 Speaker 6: FedEx can potentially begin to focus on its longer term 173 00:09:26,640 --> 00:09:30,320 Speaker 6: financial targets, like pushing its higher margin businesses and also 174 00:09:30,360 --> 00:09:33,160 Speaker 6: improving European results to lift earnings above its twenty twenty 175 00:09:33,240 --> 00:09:33,720 Speaker 6: nine target. 176 00:09:34,080 --> 00:09:36,880 Speaker 1: And yeah, so it'll be interesting to see how that goes. 177 00:09:36,920 --> 00:09:39,120 Speaker 1: But I mean, this stock in particular has been on 178 00:09:39,240 --> 00:09:42,760 Speaker 1: a pretty solid run since even before the start of 179 00:09:42,800 --> 00:09:46,200 Speaker 1: the year. When you have the FedEx freight business in 180 00:09:46,240 --> 00:09:48,680 Speaker 1: the rear view, how is that expected to affect the 181 00:09:48,720 --> 00:09:50,079 Speaker 1: performance going forward? 182 00:09:50,360 --> 00:09:52,959 Speaker 6: Well, going forward, They're hoping that this will allow FedEx 183 00:09:52,960 --> 00:09:56,360 Speaker 6: to hone in on the really quality areas of its 184 00:09:56,400 --> 00:09:59,800 Speaker 6: business and help to expand margin. And also worth noting 185 00:09:59,800 --> 00:10:01,840 Speaker 6: that options data at the moment is currently implying a 186 00:10:01,880 --> 00:10:04,760 Speaker 6: nearly seven percent move after those results, although we will 187 00:10:04,800 --> 00:10:07,640 Speaker 6: also hear from that spinoff later that week as well, 188 00:10:07,720 --> 00:10:09,680 Speaker 6: so we'll see how the two go head to head. 189 00:10:09,920 --> 00:10:12,800 Speaker 1: Oh wow, So even more reason to keep an eye 190 00:10:12,880 --> 00:10:17,600 Speaker 1: on FedEx and FedEx Freight. Not only that, on Thursday, 191 00:10:18,080 --> 00:10:20,640 Speaker 1: we're going to hear from Darden Restaurants. I mean, every 192 00:10:20,720 --> 00:10:23,360 Speaker 1: time I think about Darden, I think about all of Garden, 193 00:10:23,440 --> 00:10:27,080 Speaker 1: but I mean I'm always surprised by how many restaurants 194 00:10:27,080 --> 00:10:30,200 Speaker 1: are under the Darden umbrella, not just for casual dining, 195 00:10:30,240 --> 00:10:31,320 Speaker 1: but fine dining as well. 196 00:10:31,679 --> 00:10:34,520 Speaker 6: Yeah, you're absolutely right. Darden is the parent company behind 197 00:10:34,520 --> 00:10:38,320 Speaker 6: popular chains like Rufe, Chris Longhorn Steakhouse, and my dad's 198 00:10:38,320 --> 00:10:40,160 Speaker 6: personal favorite Cheddar Scratch Kitchen. 199 00:10:40,640 --> 00:10:42,120 Speaker 3: But nice. 200 00:10:42,320 --> 00:10:44,720 Speaker 6: We will be gaining some more visibility on the American 201 00:10:44,760 --> 00:10:48,840 Speaker 6: consumer Thursday when Darden reports for quarter earnings, Worth noting 202 00:10:48,880 --> 00:10:50,680 Speaker 6: that they do continue to outperform the S and P 203 00:10:50,760 --> 00:10:54,280 Speaker 6: five hundred consumer discretionary sector and investors are expecting the 204 00:10:54,320 --> 00:10:57,240 Speaker 6: print to keep that trend going. City Analysts writing that 205 00:10:57,320 --> 00:11:00,640 Speaker 6: they expect another solid quarter marked by comparative girl continuing 206 00:11:00,720 --> 00:11:05,079 Speaker 6: to outpaced industry. Raymond Jane's expecting a strong fourth quarter, 207 00:11:05,240 --> 00:11:08,960 Speaker 6: noting that solid casual dining segment trends in recent months, 208 00:11:09,400 --> 00:11:11,880 Speaker 6: and also worth noting that options data at the moment 209 00:11:11,920 --> 00:11:15,000 Speaker 6: is currently implying about a four percent move after those results. 210 00:11:15,200 --> 00:11:17,640 Speaker 1: Okay, so maybe a little bit of a pop there. 211 00:11:17,640 --> 00:11:19,800 Speaker 1: But you have to wonder, when you know, there's so 212 00:11:19,880 --> 00:11:23,240 Speaker 1: much talk about a K shaped economy, whether consumers are 213 00:11:23,240 --> 00:11:25,640 Speaker 1: thinking about pulling back some on some of the more 214 00:11:25,960 --> 00:11:30,280 Speaker 1: discretionary sides of the economy, whether a company like Darden 215 00:11:30,600 --> 00:11:33,400 Speaker 1: could see a hit from something like that if people 216 00:11:33,440 --> 00:11:36,760 Speaker 1: are thinking, well, you know, maybe I would rather stay 217 00:11:36,760 --> 00:11:39,760 Speaker 1: and home and cook for myself rather than go out 218 00:11:39,760 --> 00:11:41,920 Speaker 1: for a nice meal for a change. 219 00:11:42,240 --> 00:11:44,520 Speaker 6: Absolutely, and I mean it's also not just that. We're 220 00:11:44,559 --> 00:11:48,920 Speaker 6: also thinking about the impact of GLP ones on various restaurants. Obviously, 221 00:11:49,040 --> 00:11:52,800 Speaker 6: fast dining fast food is going to be very impacted 222 00:11:52,800 --> 00:11:55,559 Speaker 6: by GLP ones, especially as they continue to grow in 223 00:11:55,600 --> 00:11:59,720 Speaker 6: popularity in the US, But for companies like a Darden, restaurants. 224 00:12:00,000 --> 00:12:01,840 Speaker 6: Analysts have said they're really looking for some of these 225 00:12:01,920 --> 00:12:05,400 Speaker 6: chains to launch more smaller plates, more chicken options for 226 00:12:05,520 --> 00:12:07,440 Speaker 6: customers who are looking for a healthier option on the 227 00:12:07,440 --> 00:12:10,480 Speaker 6: menu and are really conscious about protein, and so that 228 00:12:10,520 --> 00:12:12,920 Speaker 6: will also be something to be interesting to keep an 229 00:12:13,000 --> 00:12:15,920 Speaker 6: eye on as we see the report later this week. 230 00:12:16,080 --> 00:12:19,840 Speaker 1: That's Bloomberg Equities reporter Avalon Pernell coming up on Bloomberg 231 00:12:19,920 --> 00:12:23,400 Speaker 1: day Break weekend. We'll look ahead to London Climate Action Week. 232 00:12:23,559 --> 00:12:37,080 Speaker 1: I'm Nathan Hager, and this is Bloomberg. This is Bloomberg 233 00:12:37,160 --> 00:12:39,880 Speaker 1: Daybreak weekend, our global look ahead at the top stories 234 00:12:39,880 --> 00:12:43,199 Speaker 1: for investors in the coming week. I'm Nathan Hager in Washington. 235 00:12:43,320 --> 00:12:45,120 Speaker 1: Later in the program will get you set for some 236 00:12:45,160 --> 00:12:49,160 Speaker 1: important economic data coming out in Australia this week. But first, 237 00:12:49,240 --> 00:12:52,000 Speaker 1: the world's facing an uptick in extreme weather events, and 238 00:12:52,120 --> 00:12:55,200 Speaker 1: Europe is no exception. While one of the hottest World 239 00:12:55,200 --> 00:12:58,120 Speaker 1: Cups on record is underway on this side of the Atlantic, 240 00:12:58,160 --> 00:13:01,400 Speaker 1: Europe is enduring a fresh wave of weather warnings and 241 00:13:01,440 --> 00:13:04,880 Speaker 1: it's having an impact on climate, resilience, energy security, man 242 00:13:05,000 --> 00:13:07,920 Speaker 1: everyday life. For more. Let's go to London and bring 243 00:13:07,920 --> 00:13:10,559 Speaker 1: in Bloomberg Daybreak you're a banker, Caroline hepger. 244 00:13:10,440 --> 00:13:13,079 Speaker 2: Nathan, would you believe it's the UK, which is rarely 245 00:13:13,120 --> 00:13:16,360 Speaker 2: known for hot weather, now faces its second heat wave 246 00:13:16,440 --> 00:13:19,080 Speaker 2: in a matter of weeks. Yellow weather warnings have been 247 00:13:19,120 --> 00:13:22,240 Speaker 2: issued across Europe and here in London. It's spurring a 248 00:13:22,360 --> 00:13:26,120 Speaker 2: national debate about renewable energy, housing policy and even the 249 00:13:26,200 --> 00:13:29,600 Speaker 2: role of air conditioning. While the Iraan War has already 250 00:13:29,640 --> 00:13:33,320 Speaker 2: spurred inflation across the continent and focus minds on our 251 00:13:33,400 --> 00:13:37,080 Speaker 2: collective dependence on fossil fuels, Europe and the world must 252 00:13:37,120 --> 00:13:41,640 Speaker 2: now grapple with another cost, the twenty trillion dollars which 253 00:13:41,640 --> 00:13:45,480 Speaker 2: Bloomberg Intelligence estimates will have to be spent on extreme 254 00:13:45,600 --> 00:13:49,559 Speaker 2: weather over the next decade. Initiatives like the upcoming London 255 00:13:49,600 --> 00:13:53,520 Speaker 2: Climate Action Week will look to harness the power of 256 00:13:53,600 --> 00:13:57,600 Speaker 2: London for global and local climate action. Sherry Hickock is 257 00:13:57,640 --> 00:14:01,920 Speaker 2: the CEO of Climate Impact Partners and says that the 258 00:14:02,120 --> 00:14:05,720 Speaker 2: kind of engagement from local government and the business world 259 00:14:06,120 --> 00:14:10,000 Speaker 2: is needed more now than ever before. Despite some political 260 00:14:10,080 --> 00:14:14,000 Speaker 2: backlash to the idea from opposition political parties, she says 261 00:14:14,040 --> 00:14:17,800 Speaker 2: there's actually been a surge in corporate climate investing. 262 00:14:18,440 --> 00:14:21,760 Speaker 7: I think what we see in the continued growth in 263 00:14:21,800 --> 00:14:25,560 Speaker 7: the commitments is that it isn't a short term gain. So, 264 00:14:25,600 --> 00:14:29,240 Speaker 7: as you said, corporate commitments are up seventy two percent. 265 00:14:29,320 --> 00:14:31,880 Speaker 7: We have now seventy two percent of the global fortune 266 00:14:31,920 --> 00:14:34,760 Speaker 7: five hundred with at least one climate goal. That's three 267 00:14:34,880 --> 00:14:36,360 Speaker 7: times since twenty nineteen. 268 00:14:36,800 --> 00:14:40,600 Speaker 2: That was Sherry Hiccock, the CEO of Climate Impact Partners 269 00:14:40,600 --> 00:14:43,760 Speaker 2: there speaking to Bloomberg. But will that be enough to 270 00:14:43,840 --> 00:14:48,720 Speaker 2: combat the panoply of looming threats from heat waves to drought, 271 00:14:48,920 --> 00:14:52,760 Speaker 2: to flood risks and food shortages. Tooting me now to 272 00:14:52,800 --> 00:14:57,360 Speaker 2: discuss is Bloomberg's weather and climate reporter Joe Wurtz and 273 00:14:57,680 --> 00:15:01,160 Speaker 2: Bloomberg's Green reporter Olivia Rudgar. Welcome to both of you, 274 00:15:01,240 --> 00:15:04,600 Speaker 2: and thanks for taking the time to speak to us. Joe, 275 00:15:04,760 --> 00:15:07,760 Speaker 2: let's start by thinking about the heat wave looming in 276 00:15:07,840 --> 00:15:10,200 Speaker 2: Europe right now. What does it mean for the environment 277 00:15:10,520 --> 00:15:12,200 Speaker 2: and for the economy? 278 00:15:12,600 --> 00:15:15,000 Speaker 8: Right So, that heat wave is building right now in 279 00:15:15,040 --> 00:15:18,400 Speaker 8: France really is kind of where things are really starting 280 00:15:18,440 --> 00:15:21,480 Speaker 8: to cook over there. And this is a one of 281 00:15:21,520 --> 00:15:25,040 Speaker 8: these high pressure systems that we saw earlier in late May, 282 00:15:25,120 --> 00:15:27,720 Speaker 8: so a very similar setup and they are looking at 283 00:15:27,760 --> 00:15:31,600 Speaker 8: some really scorching temperatures, and also day after day after 284 00:15:31,680 --> 00:15:34,840 Speaker 8: day of really warm nights too. They call these tropical nights. 285 00:15:34,840 --> 00:15:37,800 Speaker 8: These are when temperatures don't dipple of twenty degrees at night. 286 00:15:38,360 --> 00:15:40,800 Speaker 8: We could be in for days of that in France 287 00:15:40,800 --> 00:15:43,440 Speaker 8: and in Paris there, and you know, we're already seeing 288 00:15:43,600 --> 00:15:46,600 Speaker 8: some market ripples from this. You know, the rivers in 289 00:15:46,600 --> 00:15:49,120 Speaker 8: France are starting to get warm. They use those rivers 290 00:15:49,120 --> 00:15:52,920 Speaker 8: to cool nuclear plants, and when those river temperatures get hot, 291 00:15:53,000 --> 00:15:55,920 Speaker 8: they can't produce as much nuclear energy and they have 292 00:15:55,960 --> 00:15:59,000 Speaker 8: to limit outputs. So EDF and France has already said 293 00:15:59,240 --> 00:16:02,320 Speaker 8: they might have to start limiting power at these plants, 294 00:16:02,480 --> 00:16:05,280 Speaker 8: and so the effects of this heat are already starting 295 00:16:05,320 --> 00:16:06,600 Speaker 8: to trickle in. 296 00:16:06,920 --> 00:16:10,440 Speaker 2: Yeah, gosh, that is surprising, isn't it that the impact 297 00:16:10,560 --> 00:16:13,320 Speaker 2: is so significant. I mean, we know that productivity drops, 298 00:16:13,320 --> 00:16:15,960 Speaker 2: for example, when it gets very hot. There's also the 299 00:16:16,040 --> 00:16:20,800 Speaker 2: risk of fire of wildfires in Europe, which we often 300 00:16:20,840 --> 00:16:23,120 Speaker 2: see over the summer, and then deaths, you know, increase 301 00:16:23,200 --> 00:16:25,560 Speaker 2: as well because of the heats. There are lots of consequences, 302 00:16:25,560 --> 00:16:28,480 Speaker 2: aren't there for people. There's also there've been quite a 303 00:16:28,520 --> 00:16:32,360 Speaker 2: lot of talk about the al Ninia effect. Now that 304 00:16:32,480 --> 00:16:34,920 Speaker 2: is actually not very familiar to a lot of people 305 00:16:35,000 --> 00:16:37,240 Speaker 2: in Europe. It's something that affects other parts of the 306 00:16:37,280 --> 00:16:41,680 Speaker 2: world more. That could shave trillions of you know, very 307 00:16:41,720 --> 00:16:44,920 Speaker 2: fragile global economy. It's expected to be really really strong 308 00:16:45,000 --> 00:16:46,640 Speaker 2: this year. Why and what is it? 309 00:16:47,440 --> 00:16:49,920 Speaker 8: Yeah, this is a lot of people aren't familiar, really 310 00:16:49,920 --> 00:16:52,840 Speaker 8: thin because it's actually pretty far away geographically from Europe. 311 00:16:52,880 --> 00:16:56,000 Speaker 8: This is an area of the Pacific Ocean that is 312 00:16:56,560 --> 00:16:59,120 Speaker 8: warming up. It warms up on these kind of seasonal cycles, 313 00:16:59,160 --> 00:17:01,360 Speaker 8: and we're in for one of these seasonal cycles. But 314 00:17:01,400 --> 00:17:04,160 Speaker 8: it's happening on top of warming that has already occurred 315 00:17:04,400 --> 00:17:07,360 Speaker 8: as the climate's getting warmer and through climate change. And 316 00:17:07,560 --> 00:17:10,800 Speaker 8: the projections are that this only could be you know, 317 00:17:10,840 --> 00:17:14,960 Speaker 8: potentially unprecedented. This we're looking at a potential record breaking heat. 318 00:17:15,119 --> 00:17:19,080 Speaker 8: And this weather pattern, even though it's cyclical, you know, 319 00:17:19,600 --> 00:17:23,760 Speaker 8: it has global ramifications. It affects weather patterns all over 320 00:17:23,800 --> 00:17:27,840 Speaker 8: the world. It shifts rainfall, increases heat in some areas, 321 00:17:28,240 --> 00:17:30,400 Speaker 8: makes it less rainy in some areas and more rainy 322 00:17:30,400 --> 00:17:33,280 Speaker 8: in others. But this is happening on top of inflation 323 00:17:33,359 --> 00:17:36,840 Speaker 8: that's already occurring largely due to the war in the 324 00:17:36,840 --> 00:17:40,600 Speaker 8: Middle East, and you know, big impacts especially in food 325 00:17:40,640 --> 00:17:45,840 Speaker 8: systems and agriculture, drought, wildfire, severe flooding in some areas. 326 00:17:45,880 --> 00:17:48,760 Speaker 8: So yeah, the last one, the one in the last 327 00:17:48,800 --> 00:17:51,879 Speaker 8: big one in twenty fifteen and twenty sixteen was like 328 00:17:52,080 --> 00:17:56,360 Speaker 8: seven point six trillion dollars you know to the economy here. 329 00:17:56,400 --> 00:17:59,560 Speaker 8: So yeah, we're approaching that now and it's officially on 330 00:17:59,600 --> 00:18:01,160 Speaker 8: and one peak for months to come. 331 00:18:01,440 --> 00:18:05,280 Speaker 2: So this is the backdrop then to London Climate Action Week. 332 00:18:05,800 --> 00:18:08,679 Speaker 2: I'll also add that the backdrop of course is the 333 00:18:08,720 --> 00:18:12,480 Speaker 2: World Cup as well, and there's expected to be very 334 00:18:12,600 --> 00:18:16,040 Speaker 2: very high heat at many of those matches. Again that's 335 00:18:16,640 --> 00:18:21,160 Speaker 2: difficult for some European football playing nations, and a lot 336 00:18:21,200 --> 00:18:24,200 Speaker 2: of weather warnings there too. But I wanted to pick 337 00:18:24,280 --> 00:18:26,960 Speaker 2: up with the Olivia on what Joe was saying there. 338 00:18:27,040 --> 00:18:29,600 Speaker 2: It's not just about heat, it's also about water and 339 00:18:29,640 --> 00:18:32,440 Speaker 2: it's about flooding. And we've been writing a lot about 340 00:18:32,680 --> 00:18:35,760 Speaker 2: the unseasonable weather that we've been having here in the UK, 341 00:18:35,960 --> 00:18:37,919 Speaker 2: but it's kind of an example of what is happening 342 00:18:37,920 --> 00:18:41,720 Speaker 2: in many countries. We've had this record setting May in 343 00:18:41,840 --> 00:18:45,119 Speaker 2: terms of the temperatures, but now very very wet June. 344 00:18:45,600 --> 00:18:47,679 Speaker 2: It's not just kind of heat waves and air conditioning 345 00:18:47,800 --> 00:18:50,040 Speaker 2: we're thinking about. It's also the flood risks too. 346 00:18:50,960 --> 00:18:51,160 Speaker 4: Yeah. 347 00:18:51,160 --> 00:18:52,720 Speaker 9: Absolutely, And I think the thing that you see in 348 00:18:52,720 --> 00:18:55,120 Speaker 9: the UK is what was historically a sort of very 349 00:18:55,119 --> 00:18:58,480 Speaker 9: temperate climate that moved within you know, specific parameters most 350 00:18:58,480 --> 00:19:01,400 Speaker 9: of the time, to something that's a little bit more dramatic. 351 00:19:01,480 --> 00:19:03,960 Speaker 9: So we see these much bigger swings from you know, 352 00:19:04,000 --> 00:19:07,200 Speaker 9: we had over thirty degree temperature heat waves I'm sorry, 353 00:19:07,320 --> 00:19:09,160 Speaker 9: I'm in Celsius rather than fary high. 354 00:19:09,480 --> 00:19:10,119 Speaker 5: We'll forgive you. 355 00:19:10,200 --> 00:19:13,520 Speaker 9: Yeah, in May, which is very unseasonally hot, and then 356 00:19:13,600 --> 00:19:15,440 Speaker 9: you know, it swings away again and we get really 357 00:19:15,440 --> 00:19:19,320 Speaker 9: really heavy rainfall. And that is climate driven because you know, 358 00:19:19,359 --> 00:19:22,760 Speaker 9: for every degree of extra warming in the atmosphere, it 359 00:19:22,800 --> 00:19:24,719 Speaker 9: means that it can hold that much more moisture. And 360 00:19:24,760 --> 00:19:27,960 Speaker 9: so when we do get those summer downpours, they are 361 00:19:28,000 --> 00:19:30,920 Speaker 9: heavier than they historically would have been. And the other 362 00:19:30,960 --> 00:19:33,080 Speaker 9: thing I think that's interesting in the UK and also 363 00:19:33,119 --> 00:19:34,960 Speaker 9: you know other places that we're not used to this 364 00:19:35,080 --> 00:19:38,280 Speaker 9: type of dramatic climatic shift, is that our infrastructure and 365 00:19:38,320 --> 00:19:42,320 Speaker 9: our buildings are not well adapted to this level of 366 00:19:42,359 --> 00:19:45,240 Speaker 9: heavy rainfall. So you see the risk of surface water 367 00:19:45,280 --> 00:19:48,239 Speaker 9: flooding is rising really significantly at the same time as 368 00:19:48,240 --> 00:19:51,480 Speaker 9: we're paving over a lot more land, and that increases 369 00:19:51,520 --> 00:19:54,240 Speaker 9: that risk on top of the extra rainfall, and this 370 00:19:54,359 --> 00:19:58,159 Speaker 9: is something that insurers increasingly are very concerned about. You know, 371 00:19:58,160 --> 00:20:01,000 Speaker 9: it comes down to even a garden level, thinking about 372 00:20:01,000 --> 00:20:05,200 Speaker 9: how people are managing their own garden space. Increasing the 373 00:20:05,240 --> 00:20:08,240 Speaker 9: people are paving over, you see more astroturfh around, putting 374 00:20:08,240 --> 00:20:11,360 Speaker 9: in driveways, which maybe makes their life easier, but insurers 375 00:20:11,400 --> 00:20:14,000 Speaker 9: are actually very concerned about that as a risk. That 376 00:20:14,200 --> 00:20:17,520 Speaker 9: accentuates the impact of surface water flooding and can cause 377 00:20:17,560 --> 00:20:21,120 Speaker 9: you know, really significant property damage and really traumatic experiences 378 00:20:21,200 --> 00:20:22,840 Speaker 9: as well for people affected by it. 379 00:20:23,040 --> 00:20:26,520 Speaker 2: Yeah, I've been very interested to read your climate change newsletter, 380 00:20:26,840 --> 00:20:30,360 Speaker 2: the content that you put out regularly on those issues. 381 00:20:30,400 --> 00:20:32,880 Speaker 2: The paving over of front gardens in London. I mean, 382 00:20:33,240 --> 00:20:36,440 Speaker 2: it's down to the micro level, but this is where 383 00:20:36,480 --> 00:20:39,840 Speaker 2: you see kind of a climate change really large. 384 00:20:40,480 --> 00:20:40,880 Speaker 10: Joe. 385 00:20:41,000 --> 00:20:44,280 Speaker 2: Another area that has been fascinating when we're talking about 386 00:20:44,520 --> 00:20:46,800 Speaker 2: how unusual it used to be to have air conditioning 387 00:20:46,840 --> 00:20:49,959 Speaker 2: in London, but now it's becoming much more common, and 388 00:20:50,000 --> 00:20:52,560 Speaker 2: maybe this is also something that in many more cities 389 00:20:52,640 --> 00:20:55,879 Speaker 2: is becoming more common. I mean, AC in the United 390 00:20:55,880 --> 00:20:59,680 Speaker 2: States takes up a huge chunk of energy consumption. It's 391 00:20:59,720 --> 00:21:02,200 Speaker 2: become much more common across Europe and elsewhere. 392 00:21:02,600 --> 00:21:05,080 Speaker 8: You know, it is becoming more common here, It's becoming 393 00:21:05,359 --> 00:21:09,480 Speaker 8: more common across Europe. We've seen installation rates across Europe. 394 00:21:09,640 --> 00:21:13,880 Speaker 8: Adoption of AC installed in homes and businesses is low 395 00:21:13,920 --> 00:21:16,960 Speaker 8: in the UK, but people's interest in cooling down when 396 00:21:17,000 --> 00:21:19,439 Speaker 8: these heat waves hit is very high. We saw a 397 00:21:19,520 --> 00:21:23,280 Speaker 8: huge jump in purchases of these portable air conditioning units 398 00:21:23,280 --> 00:21:26,360 Speaker 8: and fans, you know, at retailers here in the UK, 399 00:21:26,720 --> 00:21:29,399 Speaker 8: you know, at Curryes saw like a twenty seven hundred 400 00:21:29,440 --> 00:21:33,480 Speaker 8: percent increase in portable air conditioning sales year over year 401 00:21:33,600 --> 00:21:36,359 Speaker 8: during that that May heat wave that we just had. 402 00:21:36,840 --> 00:21:41,159 Speaker 8: John Lewis saw an eight hundred percent surge. While their 403 00:21:41,400 --> 00:21:44,320 Speaker 8: adoption rate installation rate of these air conditionings is pretty 404 00:21:44,320 --> 00:21:48,159 Speaker 8: low in buildings when that heat hits, people will spend 405 00:21:48,200 --> 00:21:49,919 Speaker 8: money to stay cool. 406 00:21:49,800 --> 00:21:53,720 Speaker 2: But surely that's massively inefficient Olivia. I mean, and there 407 00:21:53,920 --> 00:21:57,520 Speaker 2: is the push pulls in there between climate change policy 408 00:21:57,520 --> 00:22:00,240 Speaker 2: and then what people actually do when they heat. 409 00:22:01,480 --> 00:22:03,639 Speaker 9: Yeah, so part of the problem in the UK is 410 00:22:03,640 --> 00:22:06,320 Speaker 9: that we just haven't designed our buildings really in any era, 411 00:22:06,400 --> 00:22:09,080 Speaker 9: including the modern era, to cope well with heat, and 412 00:22:09,160 --> 00:22:11,840 Speaker 9: so you know, it doesn't actually take a huge amount 413 00:22:11,880 --> 00:22:14,280 Speaker 9: of heat for people to start to get really uncomfortable 414 00:22:14,560 --> 00:22:17,359 Speaker 9: sometimes in homes and other buildings as well, things like 415 00:22:17,359 --> 00:22:19,600 Speaker 9: care homes and hospitals. That's one of the things the 416 00:22:19,600 --> 00:22:24,280 Speaker 9: Climate Change Committee really highlighted, and you know, the current 417 00:22:24,320 --> 00:22:28,760 Speaker 9: building policies, especially in London, really try and dissuade people 418 00:22:28,800 --> 00:22:31,080 Speaker 9: from getting their conditioning. You have to in a lot 419 00:22:31,080 --> 00:22:32,920 Speaker 9: of places, you have to jump through hoops, you have 420 00:22:32,960 --> 00:22:35,520 Speaker 9: to get planning permission, if you're a leaseholder you're own 421 00:22:35,520 --> 00:22:38,000 Speaker 9: a flat. It can also be quite complex, and so 422 00:22:38,040 --> 00:22:39,600 Speaker 9: what people are actually doing is going out and buying 423 00:22:39,600 --> 00:22:43,160 Speaker 9: these portable systems, which the types of ones that Joe 424 00:22:43,200 --> 00:22:45,040 Speaker 9: references that you can buy from Curries or John Lewis, 425 00:22:45,600 --> 00:22:48,199 Speaker 9: which are, as you say, much less efficient than a 426 00:22:48,280 --> 00:22:51,359 Speaker 9: real kind of fixed system. So in some ways we 427 00:22:51,400 --> 00:22:54,560 Speaker 9: sort of currently have the worst of both worlds because 428 00:22:54,560 --> 00:22:57,120 Speaker 9: people are still they need to be cool and their 429 00:22:57,119 --> 00:23:00,320 Speaker 9: home or whatever building they're living in is not well 430 00:23:00,320 --> 00:23:03,920 Speaker 9: adapted so they're having to do something, but doing something 431 00:23:03,920 --> 00:23:06,280 Speaker 9: that's more sort of fixed and permanent is quite difficult. 432 00:23:06,520 --> 00:23:08,480 Speaker 2: Just tell us a little bit about the politics in 433 00:23:08,520 --> 00:23:12,480 Speaker 2: the UK. I mean, climate change is a reality in 434 00:23:12,520 --> 00:23:15,119 Speaker 2: countries around the world, including in Britain, but there is 435 00:23:15,200 --> 00:23:19,000 Speaker 2: still climate denialism, isn't there. How have you seen that, Olivia? 436 00:23:19,680 --> 00:23:22,000 Speaker 9: Yeah, well, I think a lot of people thought that 437 00:23:22,119 --> 00:23:24,880 Speaker 9: we'd sort of vanquished climate denialism in the UK, and 438 00:23:25,600 --> 00:23:28,359 Speaker 9: that's not currently the case because, you know, like a 439 00:23:28,400 --> 00:23:31,600 Speaker 9: lot of places, there's been the rise of more populist politics, 440 00:23:32,280 --> 00:23:35,560 Speaker 9: and here that is particularly expressed in the Reform Party 441 00:23:36,000 --> 00:23:39,520 Speaker 9: and you know their policy around climate change. We interviewed 442 00:23:39,600 --> 00:23:42,240 Speaker 9: Richard Tice on the Zero podcast. My colleague Akshat Rathi 443 00:23:42,320 --> 00:23:45,399 Speaker 9: interviewed him a few weeks ago, and you know, he 444 00:23:45,520 --> 00:23:48,560 Speaker 9: is very dismissive of the human impact on the climate. 445 00:23:48,880 --> 00:23:51,919 Speaker 9: And his argument is really, well, we should just adapt 446 00:23:51,920 --> 00:23:53,760 Speaker 9: to it. You know, we should forget trying to cut emissions. 447 00:23:53,840 --> 00:23:55,800 Speaker 9: You know, it's too expensive, it's waste of time. We 448 00:23:55,800 --> 00:23:58,320 Speaker 9: should just spend loads of money on adapting to it. 449 00:23:58,680 --> 00:24:00,800 Speaker 9: The problem with that is that if we kind of 450 00:24:00,800 --> 00:24:04,240 Speaker 9: allow climate change to run away, and you know, we 451 00:24:04,280 --> 00:24:07,320 Speaker 9: get temperature rises. We're already on course for way over 452 00:24:07,359 --> 00:24:09,680 Speaker 9: one point five degrees of temperature rises by mid century, 453 00:24:10,119 --> 00:24:12,920 Speaker 9: you know, even more than that. Adapting to that, it's 454 00:24:12,960 --> 00:24:14,439 Speaker 9: like sort of trying to fill up a bucket that's 455 00:24:14,480 --> 00:24:16,639 Speaker 9: got holes in it. You're really trying to keep up 456 00:24:16,680 --> 00:24:18,960 Speaker 9: with something that is happening on a scale that we're 457 00:24:18,960 --> 00:24:22,280 Speaker 9: just not used to as human beings. And the cost 458 00:24:22,320 --> 00:24:25,400 Speaker 9: of that, you know, he says, it's fairly kind of minimal, 459 00:24:25,520 --> 00:24:28,200 Speaker 9: and it's sort of as much more cost effective than 460 00:24:28,480 --> 00:24:30,600 Speaker 9: mitigating I think there are a lot of experts in 461 00:24:30,640 --> 00:24:32,560 Speaker 9: the climate space that would disagree with that. 462 00:24:32,960 --> 00:24:36,560 Speaker 2: My thanks there to Bloomberg's Joe Worth and Olivia Rodguard 463 00:24:37,000 --> 00:24:39,520 Speaker 2: well with former US Sector of State John Kerry and 464 00:24:39,560 --> 00:24:42,560 Speaker 2: former UK Prime Minister Boris Johnson, both scheduled to speak 465 00:24:42,640 --> 00:24:45,160 Speaker 2: at London Climate Action Week in the next few days. 466 00:24:45,160 --> 00:24:48,639 Speaker 2: We will have full coverage of the convergence of climate 467 00:24:48,840 --> 00:24:53,439 Speaker 2: and finance across Bloomberg platforms. I'm Caroline Hepge here in London. 468 00:24:53,480 --> 00:24:56,080 Speaker 2: You can catch us every weekday morning for Bloomberg Daybreak 469 00:24:56,119 --> 00:24:58,400 Speaker 2: you at beginning at six am in London. That's one 470 00:24:58,440 --> 00:24:59,399 Speaker 2: am on Wall Street. 471 00:24:59,520 --> 00:25:02,800 Speaker 1: Nathan, Thanks Caroline, and coming up on Bloomberg day Break weekend, 472 00:25:02,840 --> 00:25:06,639 Speaker 1: we'll look ahead to price pressures down Under. I'm Nathan Hager, 473 00:25:06,800 --> 00:25:20,119 Speaker 1: and this is Bloomberg. This is Bloomberg Daybreak weekend, our 474 00:25:20,160 --> 00:25:22,919 Speaker 1: global look ahead, the top stories for investors in the 475 00:25:22,960 --> 00:25:26,000 Speaker 1: coming week. I'm Nathan Hager in Washington. It's not just 476 00:25:26,040 --> 00:25:28,960 Speaker 1: the Federal Reserve getting ready for inflation data. This week, 477 00:25:29,000 --> 00:25:30,919 Speaker 1: we also get a fresh look at how much price 478 00:25:30,960 --> 00:25:34,400 Speaker 1: is arising in Australia. For more, let's get to Doug Prisner, 479 00:25:34,400 --> 00:25:36,760 Speaker 1: host of the Bloomberg Daybreak Asia podcast. 480 00:25:37,000 --> 00:25:40,720 Speaker 3: Thanks Nathan. Last week, the Reserve Bank of Australia warned 481 00:25:40,720 --> 00:25:44,800 Speaker 3: that inflation is still too high. OURBA Governor Michelle Bullock 482 00:25:44,840 --> 00:25:47,639 Speaker 3: said inflation is likely to remain high for some time 483 00:25:48,040 --> 00:25:51,120 Speaker 3: as higher fuel prices feed through to prices of other 484 00:25:51,160 --> 00:25:54,320 Speaker 3: goods and services. Now this week we'll get the report 485 00:25:54,400 --> 00:25:58,280 Speaker 3: on Australian consumer prices and to help us preview the numbers, 486 00:25:58,560 --> 00:26:01,920 Speaker 3: let's bring in Bloomberg Economy for Australia and New Zealand 487 00:26:02,240 --> 00:26:06,160 Speaker 3: James McIntyre. James joins from our studio in Sydney. Thank 488 00:26:06,200 --> 00:26:09,560 Speaker 3: you for being here. So last week, the RBA left 489 00:26:09,600 --> 00:26:13,320 Speaker 3: its official cash rate unchanged at four point three five 490 00:26:13,359 --> 00:26:16,840 Speaker 3: percent now to be fair, the central Bank has raised 491 00:26:16,920 --> 00:26:19,240 Speaker 3: rates three times already this year to try to get 492 00:26:19,280 --> 00:26:23,280 Speaker 3: inflation back to target, and yet price stability is still 493 00:26:23,320 --> 00:26:26,479 Speaker 3: a problem. Does it all come down to higher energy 494 00:26:26,520 --> 00:26:28,760 Speaker 3: costs as the result of the war in Iran. 495 00:26:29,840 --> 00:26:32,479 Speaker 11: Well, what the RBA has been worried about there is 496 00:26:32,520 --> 00:26:35,280 Speaker 11: that there was a lot of strength in the economy 497 00:26:35,320 --> 00:26:37,119 Speaker 11: at the end of the year, and it looked like 498 00:26:37,240 --> 00:26:39,840 Speaker 11: in the beginning of the year before the outbreak of 499 00:26:39,880 --> 00:26:43,600 Speaker 11: conflict with Iran, things were going quite strong, and they 500 00:26:43,640 --> 00:26:46,000 Speaker 11: were worried that inflation was going to take off a 501 00:26:46,040 --> 00:26:49,040 Speaker 11: bit from the other side of the economy when you 502 00:26:49,080 --> 00:26:51,960 Speaker 11: throw an energy shock onto that. That was when they 503 00:26:52,000 --> 00:26:55,520 Speaker 11: decided to pull the trigger and act, and they did 504 00:26:55,520 --> 00:26:58,400 Speaker 11: that three times. So it's unsurprising that they did take 505 00:26:58,440 --> 00:27:00,600 Speaker 11: a chance to take a little bit of a breather 506 00:27:02,000 --> 00:27:04,480 Speaker 11: after three rate hikes in a row. But they are 507 00:27:04,560 --> 00:27:07,960 Speaker 11: still concerned and really want to talk tough, and they 508 00:27:08,000 --> 00:27:10,360 Speaker 11: have done that. They've continued to talk tough to try 509 00:27:10,400 --> 00:27:14,280 Speaker 11: and make sure they get inflation expectations staying on a lock. 510 00:27:14,560 --> 00:27:18,560 Speaker 11: As the energy in inflation shock works its way through 511 00:27:18,600 --> 00:27:20,359 Speaker 11: the system over the course of coming months. 512 00:27:20,480 --> 00:27:22,639 Speaker 3: So from what I understand, James, it's not just the 513 00:27:22,680 --> 00:27:26,160 Speaker 3: headline reading that's a problem. It's underlying inflation. I think 514 00:27:26,160 --> 00:27:28,240 Speaker 3: that's a little more concerning. Do I have that right? 515 00:27:29,119 --> 00:27:29,480 Speaker 11: You do? 516 00:27:29,600 --> 00:27:29,840 Speaker 12: You do? 517 00:27:30,000 --> 00:27:32,280 Speaker 11: That's right? And so what we've got with the headline 518 00:27:32,359 --> 00:27:35,800 Speaker 11: is actually we've had some retreat. We've got a little 519 00:27:35,800 --> 00:27:38,560 Speaker 11: bit of a pullback. It was surprisingly weaker at the 520 00:27:38,600 --> 00:27:42,600 Speaker 11: headline number in April, and that was because of government 521 00:27:42,600 --> 00:27:46,560 Speaker 11: initiatives to have fuel excise tax, so it really helped 522 00:27:46,640 --> 00:27:50,240 Speaker 11: to mute and damp some of that energy shock at 523 00:27:50,240 --> 00:27:54,280 Speaker 11: the bowser, at the at the petrol pump for consumers. 524 00:27:55,040 --> 00:27:57,000 Speaker 11: We'll see a little bit more of that in the 525 00:27:57,040 --> 00:28:00,960 Speaker 11: May data. But what we've got on the underlying inflation 526 00:28:01,080 --> 00:28:04,720 Speaker 11: is that's remaining a little bit stickier. Three point three percent, 527 00:28:04,960 --> 00:28:08,800 Speaker 11: probably up to three point four on our numbers for 528 00:28:08,880 --> 00:28:11,479 Speaker 11: the month of May, and that's above the RBAS two 529 00:28:11,520 --> 00:28:14,879 Speaker 11: to three percent band. It has come off a little, 530 00:28:15,320 --> 00:28:17,639 Speaker 11: but there's a long way to go, and that's what 531 00:28:17,640 --> 00:28:20,160 Speaker 11: we think the Central Bank is concerned about and why 532 00:28:20,240 --> 00:28:23,000 Speaker 11: even though they're on hold now and could be on 533 00:28:23,040 --> 00:28:25,480 Speaker 11: hold for quite some time. They're going to continue to 534 00:28:25,600 --> 00:28:29,199 Speaker 11: articulate a very concerned and tough stance and keep that 535 00:28:29,280 --> 00:28:30,560 Speaker 11: threat of further hikes alive. 536 00:28:30,720 --> 00:28:34,160 Speaker 3: So what are you expecting to see in the upcoming 537 00:28:34,280 --> 00:28:36,720 Speaker 3: data this week when it relates to consumer prices. 538 00:28:37,440 --> 00:28:40,320 Speaker 11: Yeah, so we're expecting to see on a month on 539 00:28:40,440 --> 00:28:46,440 Speaker 11: month outcome, a decline in prices. A pullback in those 540 00:28:46,760 --> 00:28:49,320 Speaker 11: gasoline or we call it petrol prices at the pump 541 00:28:49,800 --> 00:28:53,120 Speaker 11: is a big part of that story. There are usually 542 00:28:53,120 --> 00:28:55,239 Speaker 11: some seasonal things that are a little bit damper, but 543 00:28:55,280 --> 00:28:58,040 Speaker 11: on a year on year we're expecting the inflation at 544 00:28:58,040 --> 00:29:00,640 Speaker 11: the headline level to fall from four point two in 545 00:29:00,680 --> 00:29:04,680 Speaker 11: April down to four for May, but at the trim 546 00:29:04,680 --> 00:29:08,520 Speaker 11: mean level that's likely to stay elevated at moving in 547 00:29:08,560 --> 00:29:11,000 Speaker 11: the other direction from three to three to three four. 548 00:29:11,320 --> 00:29:14,800 Speaker 11: These are the monthly da data though that is a 549 00:29:14,840 --> 00:29:17,840 Speaker 11: new development for Australia. We've had a monthly CPI now 550 00:29:17,960 --> 00:29:21,600 Speaker 11: for a little while. The RBA is still focusing in 551 00:29:21,640 --> 00:29:24,320 Speaker 11: on the quarterly numbers and so we've got another month, 552 00:29:24,560 --> 00:29:27,880 Speaker 11: the June data, which will then be the Q two, 553 00:29:28,480 --> 00:29:31,760 Speaker 11: the second quarter CPI. That's going to be the big 554 00:29:31,840 --> 00:29:33,640 Speaker 11: key one that the RBA is really going to be 555 00:29:33,640 --> 00:29:34,120 Speaker 11: focused on. 556 00:29:34,480 --> 00:29:36,920 Speaker 3: So what is the market right now expecting in terms 557 00:29:36,960 --> 00:29:38,960 Speaker 3: of further tightening from the Reserve Bank. 558 00:29:39,840 --> 00:29:43,800 Speaker 11: Well, market expectations have pulled back a little. If we 559 00:29:43,800 --> 00:29:46,760 Speaker 11: were to circle back, probably a month ago, we were 560 00:29:46,800 --> 00:29:50,280 Speaker 11: seeing further hikes being priced in by the market, but 561 00:29:50,320 --> 00:29:54,120 Speaker 11: that has really dialed back, and it's dialed back for well, 562 00:29:54,120 --> 00:29:59,120 Speaker 11: one particularly important reason. Not just what's happened with the 563 00:29:59,160 --> 00:30:01,680 Speaker 11: reopening of the rate of Hall moves and that news 564 00:30:01,720 --> 00:30:06,680 Speaker 11: that we should see some easing of the energy supply 565 00:30:06,800 --> 00:30:11,800 Speaker 11: shock that's come there. What we have seen domestically is 566 00:30:11,840 --> 00:30:15,040 Speaker 11: actually quite important, and we've seen the Economic Surprise Index 567 00:30:15,080 --> 00:30:19,520 Speaker 11: for Australia, that Citybank Economic Surprise Index really fall into 568 00:30:19,560 --> 00:30:23,840 Speaker 11: deeply negative territory. It wasn't just the April CPI surprising 569 00:30:23,840 --> 00:30:27,080 Speaker 11: on the downside, but the labor market data surprised on 570 00:30:27,160 --> 00:30:29,720 Speaker 11: the downside as well, showing that we actually had a 571 00:30:29,800 --> 00:30:32,320 Speaker 11: fall in jobs and a spike up in the unemployment rate. 572 00:30:32,600 --> 00:30:34,720 Speaker 11: If we get some more signs of that weakening in 573 00:30:34,760 --> 00:30:36,920 Speaker 11: the labor market, that's really going to cause a bit 574 00:30:36,960 --> 00:30:39,600 Speaker 11: of tension for the RBA with their dual mandate. 575 00:30:39,760 --> 00:30:41,680 Speaker 3: So I understand that there is a bit of softening 576 00:30:41,680 --> 00:30:43,520 Speaker 3: in the labor market, and I guess you could make 577 00:30:43,560 --> 00:30:46,400 Speaker 3: the case that that's to be expected given the tightening 578 00:30:46,400 --> 00:30:50,800 Speaker 3: that the RBA is already executed, if I can use 579 00:30:50,840 --> 00:30:53,360 Speaker 3: that term. But I'm curious about how well wages are 580 00:30:53,400 --> 00:30:54,360 Speaker 3: holding up right now. 581 00:30:55,320 --> 00:30:59,160 Speaker 11: Yeah, so wages at the private sector level are okay, 582 00:30:59,280 --> 00:31:02,520 Speaker 11: they're in the zone in terms of the RBA's zone 583 00:31:02,520 --> 00:31:06,680 Speaker 11: of comfort. There. We did have a minimum wage decision, 584 00:31:06,800 --> 00:31:09,400 Speaker 11: so there is a portion of the labor market. There's 585 00:31:09,560 --> 00:31:12,800 Speaker 11: a federal or a national minimum wage for Australia and 586 00:31:13,440 --> 00:31:17,640 Speaker 11: around about twenty percent of wages across the economy are 587 00:31:17,840 --> 00:31:22,920 Speaker 11: influenced by an annual decision on that wage or match it. 588 00:31:23,400 --> 00:31:26,360 Speaker 11: And what we had there was we had that minimum 589 00:31:26,400 --> 00:31:29,719 Speaker 11: wage increase come through at four point seventy five percent, 590 00:31:30,160 --> 00:31:32,920 Speaker 11: and that's a little bit higher than we might have 591 00:31:32,960 --> 00:31:36,600 Speaker 11: been expecting. What the Wage Tribunal opted to do was 592 00:31:36,720 --> 00:31:41,280 Speaker 11: to protect low wage workers from the impacts of inflation 593 00:31:41,400 --> 00:31:44,680 Speaker 11: that they experienced last year. Now, unfortunately, what that means 594 00:31:44,760 --> 00:31:49,680 Speaker 11: is it pushes up those costs for that section of 595 00:31:49,720 --> 00:31:52,320 Speaker 11: the labor market, and as a result, that means it's 596 00:31:52,480 --> 00:31:54,680 Speaker 11: a little bit more difficult and makes inflation a little 597 00:31:54,720 --> 00:31:58,360 Speaker 11: bit stickier to come down, especially if other workers in 598 00:31:58,440 --> 00:32:01,480 Speaker 11: the other eighty percent of the labor market have a 599 00:32:01,520 --> 00:32:04,400 Speaker 11: look at that what those low wage workers are getting 600 00:32:04,400 --> 00:32:07,400 Speaker 11: and say, you know, to their employers, I want the same, 601 00:32:07,480 --> 00:32:10,160 Speaker 11: Please that that is a little bit of a challenge. 602 00:32:10,200 --> 00:32:13,320 Speaker 11: So there's a little bit of I guess weakness in 603 00:32:13,320 --> 00:32:15,920 Speaker 11: the labor market that helps the RBA keep a little 604 00:32:15,920 --> 00:32:20,200 Speaker 11: bit of a lid on the risk of that fairly 605 00:32:20,240 --> 00:32:24,120 Speaker 11: solid wage game that came through proliferating more broadly across 606 00:32:24,160 --> 00:32:27,840 Speaker 11: the overall wage complex and keeping inflation pressures lingering or 607 00:32:27,880 --> 00:32:29,000 Speaker 11: sticky in the system. 608 00:32:29,240 --> 00:32:31,840 Speaker 3: So, given everything that we're talking about here, I'm wondering 609 00:32:31,880 --> 00:32:36,800 Speaker 3: how well household spending is holding up. Are things okay? 610 00:32:36,880 --> 00:32:39,719 Speaker 3: Are they stable? Are they beginning to soften a bit? 611 00:32:39,760 --> 00:32:41,800 Speaker 3: What's happening when it comes to household spending. 612 00:32:42,720 --> 00:32:46,160 Speaker 11: Well, we've had the household spending data for April show 613 00:32:46,200 --> 00:32:49,960 Speaker 11: that there was a little a substantive dip month on 614 00:32:50,120 --> 00:32:54,120 Speaker 11: month of about one percent, but compared to a year, 615 00:32:54,160 --> 00:32:57,960 Speaker 11: it's running just under five percent. And that's in norminal terms. 616 00:32:58,160 --> 00:33:02,920 Speaker 11: That's an okay outcome. But what we should be seeing 617 00:33:03,000 --> 00:33:05,080 Speaker 11: is we should be expecting that to fall. It's not 618 00:33:05,320 --> 00:33:10,440 Speaker 11: just the petrol prices or those gasoline prices coming back 619 00:33:10,480 --> 00:33:15,400 Speaker 11: thanks to initiatives by the government to deliver some price 620 00:33:15,440 --> 00:33:19,320 Speaker 11: relief and tax relief on those. We've got rate cuts 621 00:33:19,320 --> 00:33:22,120 Speaker 11: being a factor here, but we've also got a negative 622 00:33:22,160 --> 00:33:27,560 Speaker 11: wealth effect coming through. Australia's house prices have finally shown 623 00:33:27,680 --> 00:33:31,120 Speaker 11: signs of cracking. There's a two speed market at play. 624 00:33:31,400 --> 00:33:35,880 Speaker 11: Smaller capital cities and the mining and resource states of 625 00:33:35,920 --> 00:33:40,000 Speaker 11: Western Australia and Queensland house prices continue to be quite 626 00:33:40,240 --> 00:33:43,240 Speaker 11: deliver quite strong and robust gains there. But in the 627 00:33:43,280 --> 00:33:45,760 Speaker 11: two major capital cities which are the big key anchors 628 00:33:45,760 --> 00:33:49,960 Speaker 11: for the economy, Sydney and Melbourne, we've seen prices weakening 629 00:33:50,040 --> 00:33:54,440 Speaker 11: since November last year, before the RBA started hiking rates, 630 00:33:55,200 --> 00:33:58,240 Speaker 11: and those rate hikes have exacerbated, especially at the top 631 00:33:58,320 --> 00:34:02,240 Speaker 11: end of the market, have exacerbated that slide in those 632 00:34:02,280 --> 00:34:04,760 Speaker 11: house prices, and so we could be seeing in those 633 00:34:04,800 --> 00:34:08,640 Speaker 11: two major economies, two major markets Sydney and Melbourn, big 634 00:34:08,680 --> 00:34:10,960 Speaker 11: anchors for the economy, a bit of a negative wealth 635 00:34:10,960 --> 00:34:13,719 Speaker 11: effect coming through and weighing on the consumer side there 636 00:34:13,760 --> 00:34:15,759 Speaker 11: as well. So there's a lot of headwinds on the 637 00:34:15,760 --> 00:34:21,000 Speaker 11: consumer story right now, and that should be something that well, 638 00:34:21,080 --> 00:34:23,560 Speaker 11: the RBA is going to be keeping a close eye 639 00:34:23,560 --> 00:34:25,840 Speaker 11: on and making sure that it isn't something that tips 640 00:34:25,840 --> 00:34:30,360 Speaker 11: over into too much of a downward spiral for demand, 641 00:34:30,520 --> 00:34:33,000 Speaker 11: which could mean that that labor market story goes from 642 00:34:33,000 --> 00:34:37,000 Speaker 11: one of softness that helps keep wage pressures in check 643 00:34:37,360 --> 00:34:40,640 Speaker 11: to one that actually is heading more towards a downturn 644 00:34:40,800 --> 00:34:43,600 Speaker 11: that could spill into a recession. 645 00:34:43,719 --> 00:34:45,960 Speaker 3: James, thank you so very much for helping us understand 646 00:34:46,000 --> 00:34:48,680 Speaker 3: the nuances of what is happening right now in the 647 00:34:48,719 --> 00:34:53,200 Speaker 3: Australian economy as we look ahead to this week's inflation data. 648 00:34:53,360 --> 00:34:57,600 Speaker 3: James McIntyre here is Bloomberg Economist for Australia and New Zealand. 649 00:34:58,080 --> 00:35:01,960 Speaker 3: Staying in Australia, Prime Minister and Thanny Albanizi has resisted 650 00:35:02,040 --> 00:35:05,840 Speaker 3: calls from making deeper cuts to immigration. That's even though 651 00:35:05,920 --> 00:35:10,839 Speaker 3: Australia is facing demographic pressures. The fertility rate is at 652 00:35:10,880 --> 00:35:14,359 Speaker 3: a record low. To get some perspective, my colleague Heidi 653 00:35:14,400 --> 00:35:19,080 Speaker 3: Straudwat spoke with professorial fellow Roger Wilkins from the University 654 00:35:19,120 --> 00:35:20,520 Speaker 3: of Melbourne. 655 00:35:20,520 --> 00:35:23,040 Speaker 10: You kind of need one if you don't have the other. Right, 656 00:35:23,080 --> 00:35:26,480 Speaker 10: we know the replacement rate has been below target for decades. 657 00:35:26,800 --> 00:35:30,920 Speaker 10: Now are there options other than migration, given it continues 658 00:35:30,960 --> 00:35:32,279 Speaker 10: to be a political flashpoint? 659 00:35:33,120 --> 00:35:34,040 Speaker 5: Not a lot of options. 660 00:35:34,120 --> 00:35:37,799 Speaker 12: I mean, it's declining fertility is not unique to Australia, 661 00:35:37,880 --> 00:35:44,160 Speaker 12: but it does pose a very difficult policy problem. I 662 00:35:44,160 --> 00:35:45,840 Speaker 12: think it's going to be something that's very hard to 663 00:35:45,880 --> 00:35:49,440 Speaker 12: turn around. I mean, policy can have some impact in 664 00:35:49,480 --> 00:35:54,000 Speaker 12: reversing it, but I think Australia's longer term economic interests 665 00:35:54,000 --> 00:35:56,920 Speaker 12: are in maintaining a healthy immigration program. 666 00:35:57,280 --> 00:35:59,520 Speaker 10: You're completely correct, of course, to point out that this is 667 00:35:59,560 --> 00:36:01,719 Speaker 10: not a proper that's unique to Australia. You only have 668 00:36:01,760 --> 00:36:03,480 Speaker 10: to look to the likes of Japan to see what 669 00:36:03,520 --> 00:36:06,640 Speaker 10: that aging population future might look like. But I do 670 00:36:06,719 --> 00:36:10,080 Speaker 10: wonder have there been any successful policies when it comes 671 00:36:10,120 --> 00:36:12,760 Speaker 10: to encouraging and getting the birth rate back up, because 672 00:36:12,760 --> 00:36:16,960 Speaker 10: we know that things like you know, baby bonus haven't 673 00:36:17,000 --> 00:36:19,080 Speaker 10: exactly been effective in the longer term. 674 00:36:19,520 --> 00:36:22,400 Speaker 12: No, although of course that was a short lived policy, 675 00:36:22,520 --> 00:36:26,200 Speaker 12: particularly so in the early two thousands when Australia had 676 00:36:26,320 --> 00:36:32,040 Speaker 12: quite large cash payments made to new parents. It reached 677 00:36:32,040 --> 00:36:36,440 Speaker 12: a peak of around seven thousand dollars Australian per child, 678 00:36:37,600 --> 00:36:40,319 Speaker 12: but that only lasted for a very short period and 679 00:36:40,360 --> 00:36:43,920 Speaker 12: we did see a bump up infertility rates at the time. 680 00:36:44,080 --> 00:36:47,839 Speaker 12: So I think there is some merit in programs like that, 681 00:36:47,920 --> 00:36:52,680 Speaker 12: where large cash payments at around the time of birth, 682 00:36:52,680 --> 00:36:56,040 Speaker 12: they have a salience that perhaps works better than things 683 00:36:56,080 --> 00:37:01,400 Speaker 12: like childcare subsidies, which can be somewhat called for people 684 00:37:01,400 --> 00:37:05,680 Speaker 12: to understand and really fully appreciate in terms of the 685 00:37:05,719 --> 00:37:08,000 Speaker 12: fact factoring in whether to have a child or. 686 00:37:07,960 --> 00:37:12,200 Speaker 10: Not, the factor of a falling birth rate, of potential 687 00:37:12,200 --> 00:37:15,840 Speaker 10: limitations on migration of an aging population. What's the overall 688 00:37:15,880 --> 00:37:17,080 Speaker 10: impact on the labor market. 689 00:37:17,880 --> 00:37:23,400 Speaker 12: Well, I mean it's certainly in the broader context, Australia 690 00:37:23,960 --> 00:37:27,759 Speaker 12: is an aging population, not aging as fast as many 691 00:37:27,840 --> 00:37:32,000 Speaker 12: other OECD countries, but nonetheless aging, and so you have 692 00:37:32,080 --> 00:37:35,840 Speaker 12: a smaller proportion of your population of prime working age, 693 00:37:35,880 --> 00:37:42,759 Speaker 12: and so that certainly raises challenges for longer term living standards. 694 00:37:43,719 --> 00:37:46,879 Speaker 12: And it also that changing structure of the population also 695 00:37:46,960 --> 00:37:49,880 Speaker 12: has implications for the structure of the labor market. 696 00:37:49,960 --> 00:37:53,680 Speaker 3: That was Roger Wilkins, Professorial Fellow from the University of Melbourne, 697 00:37:53,840 --> 00:37:57,440 Speaker 3: speaking with Bloomberg's Heidi Stroud Watts. I'm Doug Prisner. You 698 00:37:57,480 --> 00:38:00,560 Speaker 3: can catch us weekdays for the Daybreak Asia podcast. It's 699 00:38:00,560 --> 00:38:02,719 Speaker 3: available wherever you get your podcast. 700 00:38:03,120 --> 00:38:05,600 Speaker 1: Nathan, Thanks Doug, and that does it for this edition 701 00:38:05,640 --> 00:38:08,640 Speaker 1: of Bloomberg Daybreak Weekend. Join us again Monday morning at 702 00:38:08,640 --> 00:38:11,240 Speaker 1: five am Wall Street Time for the latest on markets 703 00:38:11,280 --> 00:38:13,879 Speaker 1: overseas and the news you need to start your day. 704 00:38:14,280 --> 00:38:17,480 Speaker 1: I'm Nathan Hager. Stay with us. Top stories and global 705 00:38:17,560 --> 00:38:21,080 Speaker 1: business headlines are coming up right now.