1
00:00:03,120 --> 00:00:05,840
Speaker 1: This is Bloomberg Daybreak here for this Thursday, the nineteenth

2
00:00:05,840 --> 00:00:08,600
Speaker 1: of January in London. Coming up this hour, a pair

3
00:00:08,640 --> 00:00:11,920
Speaker 1: of doves. Two fed voters say they favored down shifting

4
00:00:11,960 --> 00:00:15,720
Speaker 1: to quarter point rate hikes. Debt sell bonanza, Borow's sell

5
00:00:15,840 --> 00:00:18,279
Speaker 1: more than half a trillion dollars of bonds at the

6
00:00:18,280 --> 00:00:21,880
Speaker 1: start of the year tech sector slump. Microsoft and Amazon

7
00:00:21,960 --> 00:00:25,280
Speaker 1: become the latest big names to announce major layoffs. Starmer

8
00:00:25,360 --> 00:00:29,040
Speaker 1: heads to Davos, leveling up cash criticism and dice and

9
00:00:29,200 --> 00:00:32,960
Speaker 1: non stupid economic policies. Those are the stories we're looking

10
00:00:33,000 --> 00:00:36,400
Speaker 1: at in today's newspapers and nine leanne Garin's plus the

11
00:00:36,479 --> 00:00:40,839
Speaker 1: compensation French Wall Street jant See costs hitting a record

12
00:00:40,920 --> 00:00:45,400
Speaker 1: higherst paid demand spiral. That's all straight ahead on Bloomberg

13
00:00:45,479 --> 00:00:49,120
Speaker 1: Daybreak Europe on d A B Digital Radio, London, Bloomberg

14
00:00:49,120 --> 00:00:53,560
Speaker 1: eleven three oh New York, Bloomberg Washington, d C, Bloomberg

15
00:00:53,600 --> 00:00:57,120
Speaker 1: one oh six one, Boston, Bloomberg nine sixties, San Francisco,

16
00:00:57,320 --> 00:01:00,520
Speaker 1: cyrus XM Channel one nineteen and around on the world

17
00:01:00,640 --> 00:01:04,160
Speaker 1: on Bloomberg Radio dot Com and var the Bloomberg Business Set.

18
00:01:08,080 --> 00:01:10,880
Speaker 1: Good morning, I'm Stephen Carroll and I'm Caroline Hike here

19
00:01:10,920 --> 00:01:13,560
Speaker 1: all the stories that we're following today. A pair of

20
00:01:13,600 --> 00:01:16,200
Speaker 1: Federal Reserve officials who vote on policy this year have

21
00:01:16,280 --> 00:01:19,280
Speaker 1: backed a down shift in the pace of rate rises.

22
00:01:19,640 --> 00:01:22,559
Speaker 1: Dallas FED President Lorie Logan said the US Central Bank

23
00:01:22,640 --> 00:01:26,160
Speaker 1: needs to keep hiking rates, but slowly. A slower pace

24
00:01:26,280 --> 00:01:27,680
Speaker 1: is just a way to ensure we make the best

25
00:01:27,680 --> 00:01:31,360
Speaker 1: possible decisions we can, and if necessary, should adjust our

26
00:01:31,440 --> 00:01:35,840
Speaker 1: overall policy strategy to keep financial conditions restrictive even as

27
00:01:35,840 --> 00:01:39,600
Speaker 1: the pace lows. Lori Logan's view was echoed by Philadelphia

28
00:01:39,640 --> 00:01:43,600
Speaker 1: Fed President Patrick Harker, who says he favors raising rates

29
00:01:43,600 --> 00:01:46,760
Speaker 1: in quarter point increments. There are market at odds with

30
00:01:46,800 --> 00:01:48,840
Speaker 1: comments from f O m C hawks James Bullard and

31
00:01:48,880 --> 00:01:52,559
Speaker 1: the Rtamester who believe it's too soon for a policy downshift.

32
00:01:52,760 --> 00:01:54,440
Speaker 1: We'll be getting more on this story in a moment

33
00:01:54,480 --> 00:01:57,880
Speaker 1: with our chief rates correspondent Garfield renalds Now. Bond sales

34
00:01:57,920 --> 00:02:01,320
Speaker 1: have got off to a record breaking art this year. Globally,

35
00:02:01,400 --> 00:02:04,600
Speaker 1: governments and firms have sold debt worth five hundred and

36
00:02:04,600 --> 00:02:08,120
Speaker 1: eighty six billion dollars so far this January, according to

37
00:02:08,160 --> 00:02:11,880
Speaker 1: Bloomberg calculations, bonds around the world have rallied this year

38
00:02:11,919 --> 00:02:15,040
Speaker 1: after last year's historic route, which drove yields to their

39
00:02:15,120 --> 00:02:19,120
Speaker 1: highest level since the financial crisis. Bloomberg Intelligence forecast that

40
00:02:19,360 --> 00:02:23,440
Speaker 1: US investment grade bonds will return ten percent this year

41
00:02:23,800 --> 00:02:27,680
Speaker 1: after their worst performance in half a century. In two

42
00:02:28,400 --> 00:02:31,960
Speaker 1: top in top corporate news, Microsoft and Amazon are cutting

43
00:02:31,960 --> 00:02:34,280
Speaker 1: a total of twenty eight thousand jobs as growth in

44
00:02:34,360 --> 00:02:38,600
Speaker 1: the tech sector stalls. Both say painful measures are necessary

45
00:02:38,720 --> 00:02:43,560
Speaker 1: to offset slowing sales and a possible recession. Microsoft CEO

46
00:02:43,600 --> 00:02:47,440
Speaker 1: saturn A Dallas says the industry needs to adjust. During

47
00:02:47,440 --> 00:02:50,760
Speaker 1: the pandemic, there was rapid acceleration. I think we're going

48
00:02:50,800 --> 00:02:53,520
Speaker 1: to go through a phase today where there is going

49
00:02:53,560 --> 00:02:57,000
Speaker 1: to be some amount of normalization of the demand. Quite frankly,

50
00:02:57,000 --> 00:02:59,000
Speaker 1: we in the tech industry will also have to get

51
00:02:59,000 --> 00:03:02,080
Speaker 1: efficient range. Not about everyone else doing more with less.

52
00:03:02,120 --> 00:03:03,680
Speaker 1: We will have to do more with less, so we

53
00:03:03,760 --> 00:03:06,639
Speaker 1: will have to show our own productive really gains. The

54
00:03:06,760 --> 00:03:09,400
Speaker 1: Microsoft CEO is speaking in Davos as the firm started

55
00:03:09,480 --> 00:03:12,239
Speaker 1: notifying some ten thousand of its workers that they will

56
00:03:12,280 --> 00:03:15,400
Speaker 1: lose their jobs. The eighteen thousand job cuts at Amazon

57
00:03:15,560 --> 00:03:19,720
Speaker 1: represent about six percent of the online giants workforce now

58
00:03:19,800 --> 00:03:23,080
Speaker 1: costs at Wall streets six biggest banks are expected to

59
00:03:23,160 --> 00:03:26,799
Speaker 1: hit a record breaking three hundred and twenty billion dollars

60
00:03:26,840 --> 00:03:30,640
Speaker 1: as workers look to secure inflation beating pay deals. The

61
00:03:30,760 --> 00:03:33,800
Speaker 1: rise in staffing costs will worry investors who are already

62
00:03:33,840 --> 00:03:38,240
Speaker 1: concerned about higher credit losses and a drop in deposits. Yesterday,

63
00:03:38,280 --> 00:03:41,720
Speaker 1: City Group announced that it's raising compensation for its junior

64
00:03:41,840 --> 00:03:44,920
Speaker 1: investment bankers by as much as fifteen percent, but it

65
00:03:44,960 --> 00:03:49,560
Speaker 1: makes Charlie Pellett says this increase comes during a tough period.

66
00:03:50,680 --> 00:03:53,920
Speaker 1: It comes as many Wall Street piers are cutting jobs

67
00:03:53,960 --> 00:03:58,440
Speaker 1: and slashing bonuses after last year's industry wide deal slump,

68
00:03:58,800 --> 00:04:01,760
Speaker 1: and a sign of the ongoing struggle for financial firms

69
00:04:01,800 --> 00:04:05,200
Speaker 1: to retain staff. The New York based bank is increasing

70
00:04:05,240 --> 00:04:08,720
Speaker 1: base salaries by an average of ten to fifteen percent

71
00:04:08,840 --> 00:04:12,600
Speaker 1: for associates and vice presidents, according to sources. The pay

72
00:04:12,720 --> 00:04:16,520
Speaker 1: bump comes after City Group warned investors that inflation would

73
00:04:16,520 --> 00:04:21,560
Speaker 1: push compensation expenses higher this year in New York. Charlie

74
00:04:21,640 --> 00:04:25,640
Speaker 1: Pellett Bloomberg Daybreak Europe. New Zealand's Prime Minister to send

75
00:04:25,680 --> 00:04:28,480
Speaker 1: to Arderne has says that she is stepping down as

76
00:04:28,520 --> 00:04:32,320
Speaker 1: surprise resignation ahead of a general election later this year.

77
00:04:32,720 --> 00:04:35,640
Speaker 1: After five years in office. Ardern says she no longer

78
00:04:35,720 --> 00:04:40,720
Speaker 1: has the energy or inspiration to seek a third term.

79
00:04:40,839 --> 00:04:43,800
Speaker 1: This summer. I had hoped to find a way to

80
00:04:43,880 --> 00:04:49,200
Speaker 1: prepare not just for another year, but another term, because

81
00:04:49,279 --> 00:04:52,360
Speaker 1: that is what this year requires. I have not been

82
00:04:52,400 --> 00:04:55,440
Speaker 1: able to do that, and so today I'm announcing that

83
00:04:55,560 --> 00:04:58,560
Speaker 1: I will not be seeking re election, and then my

84
00:04:58,640 --> 00:05:02,480
Speaker 1: tierless Prime Minister will conclude no later than the seventh

85
00:05:03,120 --> 00:05:06,920
Speaker 1: of febre Her resignation comes as New Zealand Central banks

86
00:05:06,960 --> 00:05:09,920
Speaker 1: so it believes the country's economy is heading for a recession.

87
00:05:10,400 --> 00:05:12,719
Speaker 1: During was the world's youngest female leader when she took

88
00:05:12,720 --> 00:05:17,000
Speaker 1: part in seventeen at the age of and finally a

89
00:05:17,040 --> 00:05:21,400
Speaker 1: bit closer to us. The Total Energy CEO is urging

90
00:05:21,600 --> 00:05:25,839
Speaker 1: French motorists not to panic by fuel ahead of strikes

91
00:05:25,839 --> 00:05:29,440
Speaker 1: over a government plan to overhaul pensions. Diesel and petrol

92
00:05:29,520 --> 00:05:31,720
Speaker 1: deliveries are set to be paused as part of a

93
00:05:31,800 --> 00:05:35,120
Speaker 1: twenty four hour walkout across France today. The strikes are

94
00:05:35,160 --> 00:05:39,120
Speaker 1: expected to disrupt everything from energy production to manufacturing, as

95
00:05:39,240 --> 00:05:44,880
Speaker 1: labor unions protest President Macross plan to increase the retirement age. Okay,

96
00:05:44,880 --> 00:05:47,960
Speaker 1: those are a few of our top stories this morning. Well,

97
00:05:48,000 --> 00:05:50,440
Speaker 1: I mean speaking of strikes. So now the French are

98
00:05:50,480 --> 00:05:54,760
Speaker 1: are victim to more strike action or protesting for more money.

99
00:05:54,839 --> 00:05:57,719
Speaker 1: Here in the UK on the pay review, we've had

100
00:05:57,760 --> 00:06:00,200
Speaker 1: more announcements and more ballots for strike action and in

101
00:06:00,279 --> 00:06:03,760
Speaker 1: Britain the BMA has come out with this interesting report

102
00:06:03,800 --> 00:06:07,080
Speaker 1: about the government. You know they've been defending not paying

103
00:06:07,160 --> 00:06:10,320
Speaker 1: nurses and others more money because of these independent pay

104
00:06:10,400 --> 00:06:13,000
Speaker 1: review bodies. When the British medical associations that have come

105
00:06:13,000 --> 00:06:16,400
Speaker 1: out with a big report saying look not independence or

106
00:06:16,880 --> 00:06:19,760
Speaker 1: victims of lots of government interference. You know, it's not fair.

107
00:06:19,760 --> 00:06:21,719
Speaker 1: We need to scrap this idea. Yeah, this is we're

108
00:06:21,720 --> 00:06:25,599
Speaker 1: looking ahead towards the national day of action from the

109
00:06:25,640 --> 00:06:28,400
Speaker 1: TUC on the first of February. Blimberg calculations say that

110
00:06:28,440 --> 00:06:30,960
Speaker 1: almost half a million workers were ready to strike on

111
00:06:31,080 --> 00:06:34,440
Speaker 1: that day. As we've had unions representing civil servants, teachers,

112
00:06:34,520 --> 00:06:37,680
Speaker 1: university staff and train drivers saying that their workers will

113
00:06:37,720 --> 00:06:39,760
Speaker 1: be ready to go out on strikes or perhaps the

114
00:06:40,160 --> 00:06:42,240
Speaker 1: February first date is going to be mirroring what we're

115
00:06:42,240 --> 00:06:45,080
Speaker 1: seeing in France today. We've got schools, clothes transport disrupted,

116
00:06:45,320 --> 00:06:48,880
Speaker 1: hospitals disrupted. Petrol stations also are going to be affected

117
00:06:48,920 --> 00:06:51,400
Speaker 1: by the strike in France today as well. Yeah, absolutely

118
00:06:51,400 --> 00:06:53,680
Speaker 1: that on strike. So just want to can I sandwich?

119
00:06:53,720 --> 00:06:56,360
Speaker 1: In this other story that caught my high always veteran

120
00:06:56,480 --> 00:06:59,760
Speaker 1: investor Helena Helena Morrissey, she's always interesting to watch. One

121
00:06:59,760 --> 00:07:01,640
Speaker 1: of the most prominent women in the city of London.

122
00:07:01,839 --> 00:07:05,000
Speaker 1: She's launching this program to train women to break into

123
00:07:05,040 --> 00:07:08,640
Speaker 1: the top jobs in money management. And this Pathway program

124
00:07:08,680 --> 00:07:13,240
Speaker 1: apparently selected sixty women from a number of different businesses

125
00:07:13,480 --> 00:07:16,600
Speaker 1: to try to get those top jobs, of them still

126
00:07:16,600 --> 00:07:19,559
Speaker 1: occupied by men in the UK. Anyway, Helen and morris

127
00:07:19,640 --> 00:07:23,160
Speaker 1: is she's always pretty fascinating. Definitely, Okay, Well up next,

128
00:07:23,280 --> 00:07:26,560
Speaker 1: Kiris Darmer heads to Davos the Red Wool Mrs on

129
00:07:26,640 --> 00:07:29,920
Speaker 1: some leveling up cash and Dyson says that stupid policies

130
00:07:29,920 --> 00:07:35,200
Speaker 1: are holding back the British economy. Now the Paper Review

131
00:07:35,400 --> 00:07:38,160
Speaker 1: on blue Birdday Break Europe, the news you need to

132
00:07:38,200 --> 00:07:41,800
Speaker 1: know from today's papers. We're joining us here from more

133
00:07:41,800 --> 00:07:44,680
Speaker 1: on those stories is Bloomberg's Leanne Garon's good morning to you,

134
00:07:44,840 --> 00:07:47,720
Speaker 1: Leeann the finantal Times headline Let's start there, Starmer to

135
00:07:47,760 --> 00:07:50,760
Speaker 1: tell Davos he wants to fix post Brexit relationship with

136
00:07:50,800 --> 00:07:54,320
Speaker 1: the EU. Well, kis dumb and Rachel Reeves have given

137
00:07:54,400 --> 00:07:57,880
Speaker 1: this joint interview to the Ft Stephen and that says

138
00:07:57,920 --> 00:08:01,160
Speaker 1: they head off to Davos today. Starmer told the paper

139
00:08:01,240 --> 00:08:04,960
Speaker 1: that the Labor Party would rebuild the UK economy on

140
00:08:05,000 --> 00:08:09,560
Speaker 1: the rock or fiscal and financial responsibility. This is not

141
00:08:09,680 --> 00:08:12,280
Speaker 1: the first time we've heard this heard him say this,

142
00:08:12,480 --> 00:08:14,960
Speaker 1: just to make that clear. Also that he wants to

143
00:08:15,000 --> 00:08:18,880
Speaker 1: improve Britain's relations with the EU because the post Brexit

144
00:08:18,960 --> 00:08:23,520
Speaker 1: trade deal is jamaging the UK economy as everyday passes.

145
00:08:23,600 --> 00:08:27,600
Speaker 1: So a clear criticism of what the Conservatives have eaked

146
00:08:27,600 --> 00:08:31,800
Speaker 1: out and the two senior Labor politicians both really criticized

147
00:08:31,920 --> 00:08:35,199
Speaker 1: Rushy Sunac in this article and that is for missing

148
00:08:35,480 --> 00:08:39,400
Speaker 1: the World Economic Forum this year and another thing. Bloomberg

149
00:08:39,480 --> 00:08:42,480
Speaker 1: will be speaking to Rachel Reeves at three pm UK

150
00:08:42,600 --> 00:08:45,640
Speaker 1: time today, so do stay tuned and watch out for this.

151
00:08:46,040 --> 00:08:49,000
Speaker 1: But once again this seems to be like Labor's chance

152
00:08:49,160 --> 00:08:53,559
Speaker 1: to embrace a global capitalism as shift in the party

153
00:08:53,640 --> 00:08:58,600
Speaker 1: Caroline very interesting. The Times front page leveling up cash

154
00:08:58,880 --> 00:09:03,520
Speaker 1: favors the our feast over red Wall. Yes, so the

155
00:09:03,559 --> 00:09:06,400
Speaker 1: problem of leveling up Carolina is back, and this time

156
00:09:06,520 --> 00:09:10,640
Speaker 1: MPs are accusing the government of really making a mockery

157
00:09:10,679 --> 00:09:14,079
Speaker 1: of leveling up. That's as a Southeast will be handed

158
00:09:14,120 --> 00:09:19,240
Speaker 1: more regeneration money today and that's more than the Northeast,

159
00:09:19,360 --> 00:09:23,360
Speaker 1: Yorkshire and also the West Midlands. So one hundred and

160
00:09:23,440 --> 00:09:27,200
Speaker 1: eleven communities across the whole of the country will benefit

161
00:09:27,240 --> 00:09:31,720
Speaker 1: from the second round of leveling up funding, but fifty

162
00:09:31,760 --> 00:09:36,480
Speaker 1: two Tory constituencies benefit and that's more than twice as

163
00:09:36,480 --> 00:09:41,040
Speaker 1: many as those are represented by Labor MPs. And this

164
00:09:41,200 --> 00:09:45,360
Speaker 1: round has been criticized also by Tory MPs and seats

165
00:09:45,360 --> 00:09:48,080
Speaker 1: in the North and in the Midlands who missed out

166
00:09:48,480 --> 00:09:53,040
Speaker 1: and are accusing Sunac of really favoring the self and

167
00:09:53,080 --> 00:09:57,600
Speaker 1: also just basically touching on the failings of leveling up

168
00:09:57,640 --> 00:10:00,679
Speaker 1: when it comes to the money and to dividing it

169
00:10:00,760 --> 00:10:04,720
Speaker 1: correctly across the different regions. Okay, that's in the Times.

170
00:10:04,720 --> 00:10:09,240
Speaker 1: The Telegraph lead story reads Dyson stupid short sighted policies

171
00:10:09,280 --> 00:10:12,040
Speaker 1: holding back the economy. Well, I don't think he held back,

172
00:10:12,040 --> 00:10:14,440
Speaker 1: did he I think it was pretty blunt there. Yeah,

173
00:10:14,440 --> 00:10:18,480
Speaker 1: exactly so. James Dyson, the billionaire entrepreneur, as I said,

174
00:10:18,559 --> 00:10:22,640
Speaker 1: completely bluntly, wrote exclusively in the Telegraph and says growth

175
00:10:22,679 --> 00:10:26,559
Speaker 1: has become a dirty word amid tax rises and also

176
00:10:26,760 --> 00:10:30,480
Speaker 1: red tape. He warns that the short sighted and stupid

177
00:10:30,559 --> 00:10:34,720
Speaker 1: economic approach, for she soon acts government is keeping Britain

178
00:10:34,760 --> 00:10:39,080
Speaker 1: in a state of COVID inertia. So so James heavily

179
00:10:39,080 --> 00:10:43,080
Speaker 1: criticized the burden of regulations and increasing tax on companies,

180
00:10:43,520 --> 00:10:48,160
Speaker 1: arguing the Tories seem to think penalizing the private sector

181
00:10:48,800 --> 00:10:51,680
Speaker 1: is a free win at the ballot box. So the

182
00:10:51,800 --> 00:10:55,479
Speaker 1: broadside from one of the country's most prominent brexityre businessman

183
00:10:55,920 --> 00:10:59,120
Speaker 1: comes as the first signs of a battle on tax

184
00:10:59,200 --> 00:11:02,840
Speaker 1: cuts emerge. And this comes ahead of the budget which

185
00:11:02,880 --> 00:11:07,800
Speaker 1: is happening on March the fifteen. And he also said,

186
00:11:08,080 --> 00:11:11,480
Speaker 1: I found this quite interesting. He said that the country

187
00:11:11,520 --> 00:11:15,520
Speaker 1: has been badly damaged, but the workers have because they're

188
00:11:15,559 --> 00:11:19,320
Speaker 1: losing their self belief and work ethic because the government

189
00:11:19,360 --> 00:11:22,679
Speaker 1: hasn't forced them to go back into the office. That

190
00:11:22,720 --> 00:11:26,080
Speaker 1: will be very controversial, won't won't it? Um? Yeah, I mean,

191
00:11:26,160 --> 00:11:29,920
Speaker 1: Dyson is is a controversial business figure. So yeah, interesting

192
00:11:29,960 --> 00:11:32,360
Speaker 1: that he didn't mince his words in terms of what

193
00:11:32,400 --> 00:11:34,920
Speaker 1: he thought of this toy government Lee, I goes, thank

194
00:11:34,960 --> 00:11:37,880
Speaker 1: you so much for that. Look at the newspapers. Now,

195
00:11:37,920 --> 00:11:41,440
Speaker 1: an important market dynamic seems to have been broken, the

196
00:11:41,480 --> 00:11:44,280
Speaker 1: idea that poor economic news will spur the FED to

197
00:11:44,440 --> 00:11:48,560
Speaker 1: slow rate hikes, feeling riskier assets including stocks. To delve

198
00:11:48,559 --> 00:11:50,960
Speaker 1: into this, we've got our chief rates corresponding, Garfield Roynalds

199
00:11:51,120 --> 00:11:53,679
Speaker 1: with us. Garfield is great to have you. Now you've

200
00:11:53,679 --> 00:11:55,800
Speaker 1: been warning about this issue for a while. But talk

201
00:11:55,920 --> 00:11:58,000
Speaker 1: us through what happened with the latest data we got

202
00:11:58,040 --> 00:12:01,280
Speaker 1: out of the US yesterday. Yeah, well, in the latest

203
00:12:01,360 --> 00:12:05,240
Speaker 1: day that we had retail sales industrial production coming in

204
00:12:06,040 --> 00:12:09,600
Speaker 1: much weaker than expected. Uh. And on the one hand,

205
00:12:09,640 --> 00:12:13,280
Speaker 1: this is this is sort of the trend that equities

206
00:12:13,800 --> 00:12:17,400
Speaker 1: and bonds had both been rallying on because of the

207
00:12:17,520 --> 00:12:21,560
Speaker 1: perception that the feds steepest year of tightening in at

208
00:12:21,640 --> 00:12:25,280
Speaker 1: least a generation was going to bring the economy to

209
00:12:25,679 --> 00:12:28,839
Speaker 1: a slowdown, and then the Fed would respond by not

210
00:12:28,920 --> 00:12:33,280
Speaker 1: just halting rate hikes but eventually turning to rate cuts.

211
00:12:33,800 --> 00:12:37,360
Speaker 1: The difficulty is that from the stocks point of view.

212
00:12:37,720 --> 00:12:40,920
Speaker 1: If you took that that perspective, then you're looking past

213
00:12:40,960 --> 00:12:44,960
Speaker 1: the idea that with the FED determined detained inflation, inflation

214
00:12:44,960 --> 00:12:47,440
Speaker 1: is still high. The only way you're going to get

215
00:12:48,040 --> 00:12:51,040
Speaker 1: an earlier than expected end to rate heights and move

216
00:12:51,120 --> 00:12:53,640
Speaker 1: towards rate cuts is if you have a very very

217
00:12:53,679 --> 00:12:57,840
Speaker 1: severe economic slowdown indeed, and that then becomes very hard

218
00:12:57,880 --> 00:13:03,400
Speaker 1: to square with a buoyant stock market. Okay, how then

219
00:13:03,440 --> 00:13:05,920
Speaker 1: in that case do you view the hawkish FED comments

220
00:13:06,440 --> 00:13:10,760
Speaker 1: that we've had out Well, the hawk is comments, and

221
00:13:11,080 --> 00:13:14,280
Speaker 1: I mean there are are somewhat nuanced. There's a willingness

222
00:13:14,320 --> 00:13:17,120
Speaker 1: to reduce the pace of hikes to twenty five basis

223
00:13:17,160 --> 00:13:19,320
Speaker 1: points of meeting, but they still want to go on

224
00:13:19,400 --> 00:13:22,000
Speaker 1: hiking into restrictive territory and then hold it there for

225
00:13:22,040 --> 00:13:25,520
Speaker 1: a long time. This is the playbook that the Federal

226
00:13:25,600 --> 00:13:29,320
Speaker 1: Reserve outline, that they would be willing to risk causing

227
00:13:29,320 --> 00:13:33,280
Speaker 1: severe economic pain until they were sure that inflation was

228
00:13:33,360 --> 00:13:36,000
Speaker 1: tamed and that they would learn from the lessons of

229
00:13:36,040 --> 00:13:40,400
Speaker 1: the nineteen seventies and eighties, when the Central Bank back

230
00:13:40,480 --> 00:13:44,760
Speaker 1: then was perceived as having been too willing to stop

231
00:13:44,920 --> 00:13:49,080
Speaker 1: rate hikes early because of recession fears and ended up

232
00:13:49,160 --> 00:13:54,200
Speaker 1: creating a longer term, more difficult inflation problem that then

233
00:13:54,280 --> 00:14:00,200
Speaker 1: required some very very extreme monetary medicine indeed before could

234
00:14:00,240 --> 00:14:03,760
Speaker 1: be brought under control. So that fits with what the

235
00:14:03,800 --> 00:14:08,640
Speaker 1: Fed has been saying, and perhaps with what up until

236
00:14:08,679 --> 00:14:10,720
Speaker 1: now the markets have not been listening to them about.

237
00:14:11,760 --> 00:14:15,000
Speaker 1: So in that context, then, given those lessons that may

238
00:14:15,040 --> 00:14:16,840
Speaker 1: or may not have been learned, is a soft landing

239
00:14:16,880 --> 00:14:19,120
Speaker 1: still possible for the US or is it just wactional thinking.

240
00:14:20,280 --> 00:14:22,920
Speaker 1: It's a soft lanning is possible, but it's more of

241
00:14:23,080 --> 00:14:29,480
Speaker 1: a uh, you know, probably a less than even chance

242
00:14:29,560 --> 00:14:34,120
Speaker 1: would be at the possibly yeah, so terbut learning is

243
00:14:34,160 --> 00:14:37,760
Speaker 1: more likely. The feed themselves have said if they do

244
00:14:38,440 --> 00:14:42,920
Speaker 1: engineer of soft landing, that will be an extraordinary achievement,

245
00:14:42,960 --> 00:14:45,120
Speaker 1: because they said right at the start they see that

246
00:14:45,160 --> 00:14:48,920
Speaker 1: as being a very difficult outcome to achieve. Not impossible,

247
00:14:49,160 --> 00:14:53,160
Speaker 1: but very difficult. This is Bloomberg Daybreak Europe, your morning

248
00:14:53,200 --> 00:14:55,800
Speaker 1: brief on the stories making news from London to Wall

249
00:14:55,840 --> 00:14:58,880
Speaker 1: Streets and beyond. Look for us on your podcast feed

250
00:14:59,000 --> 00:15:02,400
Speaker 1: every morning on Apple, Spotify, and anywhere else you get

251
00:15:02,400 --> 00:15:05,360
Speaker 1: your podcasts. You can also listen live each morning on London,

252
00:15:05,440 --> 00:15:08,200
Speaker 1: d A B Radio, the Bloomberg Business app, and Bloomberg

253
00:15:08,280 --> 00:15:11,480
Speaker 1: dot Com. Our flagship New York station, is also available

254
00:15:11,520 --> 00:15:15,640
Speaker 1: on your Amazon Alexa devices. Just say Alexa Play Bloomberg.

255
00:15:16,760 --> 00:15:19,440
Speaker 1: I'm Caroline Hitka and I'm Stephen Carroll. Join us again

256
00:15:19,480 --> 00:15:22,040
Speaker 1: tomorrow morning for all the news you need to start

257
00:15:22,080 --> 00:15:32,560
Speaker 1: your day right here on Bloomberg Daybreak Europe