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Speaker 1: Broadcasting live to New York, Bloomberg eleventh to Washington, d C,

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Speaker 1: Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco, Bloomberg

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Speaker 1: the globe the Bloomberg Radio Plus Happen Bloomberg dot Com.

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Speaker 1: This is Bloomberg Surveillance. Good morning, It's a thirty on

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Speaker 1: Law Street and Michael McKee along with Tom keene or

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Speaker 1: economic indicators are brought to you by Commonwealth Financial Network.

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Speaker 1: When it's time to change the conversation, talk with a

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Speaker 1: broker dealer r I A that's ready to listen, call

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Speaker 1: six four six two three three or visit Commonwealth dot

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Speaker 1: com to learn more. It's gotta minyell Juedi, I said

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Speaker 1: at the Bloomberg First Word Desk. For the income and

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Speaker 1: spending numbers, Michael, good morning, Consumer spending topping forecast up

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Speaker 1: one percent and April adjusted for inflation, also topping forecast

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Speaker 1: up point six percent. Personal income up point four percent,

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Speaker 1: in line with four cats inflation gauges attached to this report,

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Speaker 1: all indicating tame inflation again. Consumers spending up one percent

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Speaker 1: in April, topping forecast income up point four percent. At

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Speaker 1: the Bloomberg First Quark desk. I'm Vididal Judaece Bloomberg Radio.

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Speaker 1: Let's go back to New York. Thanks so much, my god.

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Speaker 1: Let's say just the economics before we get the Deutschent

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Speaker 1: Bank um here pretty much on plan. I mean, is

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Speaker 1: what I see real personal spending higher than survey. Yeah,

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Speaker 1: and that's important. It does suggest that Americans after some

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Speaker 1: week uh spending numbers in the first quarter have come

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Speaker 1: back uh one percent. Now you had a revision to

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Speaker 1: March from tenth game to flat, so it's really a

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Speaker 1: nine tenths game, but that's two tenths better and one

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Speaker 1: percent is a very large increase um even inflation adjusted,

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Speaker 1: it's a six tenths of eight percent. Personal incomes up

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Speaker 1: four tenths and I was just looking at the numbers

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Speaker 1: time and within the personal income breakdown wages in salarys,

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Speaker 1: we're up half a percent. That's the strongest since January.

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Speaker 1: And that's what really matters to people is what they

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Speaker 1: have left over. Disposable incomes up exactly and get real

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Speaker 1: on real disposable income up four four point zero percent.

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Speaker 1: That that's really a very better than good move I

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Speaker 1: don't really see it in the two year yield yet,

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Speaker 1: but that'll be worth watching. I'm also looking, Mike. Here

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Speaker 1: there it is a savings rate, wow, five point seven

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Speaker 1: for the month of April um It's down from five

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Speaker 1: point nine, but it suggests that people were we're willing

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Speaker 1: to spend. I'm looking at the first quarter number. I'm sorry,

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Speaker 1: so yeah. The the important thing here is this is uh,

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Speaker 1: the most recent of the numbers, since uh, it's not

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Speaker 1: part of quarterly figures yet. And then the inflation numbers.

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Speaker 1: This is what the FET is watching. And the month

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Speaker 1: to month numbers come in stronger than they have. The

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Speaker 1: pc E month over month, up three tenths as opposed

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Speaker 1: to a one tenth game in March, and on a

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Speaker 1: year over year basis, we're up over one percent one

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Speaker 1: point one percent now from eight tenths. So inflation moving

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Speaker 1: in the direction the FED wants to see. It's amazing

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Speaker 1: and what you don't see, folks, that we get with

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Speaker 1: our great statistical team at Bloomberg is on the Bloomberg

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Speaker 1: screen in the famous amber and black more than any

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Speaker 1: other survey, Mike. When I look at personal income and spending,

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Speaker 1: it's a real snapshot of what we're actually doing with

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Speaker 1: our money. It's it's not esoteric thirty five thousand feet economics.

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Speaker 1: Not that we would ever talk about esoteric economics with

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Speaker 1: Megan Greener, Manuel life Asset. She's the chief economist. They're

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Speaker 1: joining us from today. She's not one to two skyscrapers

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Speaker 1: to gaze out West towards Fenwade Park and the first

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Speaker 1: place Red Sox. Two skyscrapers New John Hancock and all

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Speaker 1: John Hancock, Megan, good morning. These numbers. These numbers, Megan,

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Speaker 1: are I guess you would put them in the category

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Speaker 1: of if you had a scale, they would be on

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Speaker 1: the side of waiting the Fed towards moving in June. Yeah,

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Speaker 1: I think so. I mean I have always thought that

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Speaker 1: the markets were underpricing the probability of the June hike. UM.

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Speaker 1: I think if the Fed can possibly justify a rate

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Speaker 1: hike in June, they'll go ahead and do so. The

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Speaker 1: biggest risk, of course, is not what's happening in the US,

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Speaker 1: this um Brexit referendum. In the UK, UM the remain

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Speaker 1: camp has started to pull a bit ahead, so that

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Speaker 1: could mollify that said UM in terms of hiking and

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Speaker 1: June but you know, the other alternative is to wait

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Speaker 1: until July. UM. The only problem with that is that

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Speaker 1: then we don't have a press conference. So the fact

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Speaker 1: could try to UM communicate everything very clearly for a

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Speaker 1: rate hike in July at their June press conference. If

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Speaker 1: they're going to do that, though, financial conditions will tighten,

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Speaker 1: so they sort of might as well just go ahead

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Speaker 1: and hike. And yeah, that's what everybody's saying July, and

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Speaker 1: we don't worry about a press conference. But you know,

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Speaker 1: if you don't do it in June, you pretty much

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Speaker 1: have to come out in the statement and say we're

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Speaker 1: going to do it in July if that's what you

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Speaker 1: want the markets to do, and as you say, just

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Speaker 1: why not? Why not do it? UM? The numbers, Well,

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Speaker 1: we've got a whole week of data here, but when

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Speaker 1: you see the inflation numbers, it does suggest they're getting

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Speaker 1: what they want. Yeah, it's certainly getting closer. Janet Yellen

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Speaker 1: has repeatedly mentioned that the better inflation data that we've

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Speaker 1: seen over the past six months maybe transitory UM, particularly

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Speaker 1: looking at core inflation or core pc UM off the

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Speaker 1: back of year and your comparisons dropping out of some

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Speaker 1: of the healthcare data. So that's put up red pressure

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Speaker 1: on it um and that won't be sustained. UM. So

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Speaker 1: you know, the big question is whether Llen and the

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Speaker 1: rest of the FOMS you think that is sustainable or

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Speaker 1: if that is transitory. Um, No matter what happens. Incidentally,

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Speaker 1: I think the the US all or will continue to strengthen,

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Speaker 1: whether the FED hikes in June or waits until December,

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Speaker 1: partly because of what the FED does, but also because

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Speaker 1: of what every other central bank will be doing, which

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Speaker 1: is easing really aggressively, well very quickly. Thirty seconds left.

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Speaker 1: How high does the dollar go? Because if it if

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Speaker 1: it doesn't go too high, then the Fed's not going

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Speaker 1: to care. As Bill Dudley says, that's kind of the point. Yeah.

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Speaker 1: So I think because of the foreign exchange channel for

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Speaker 1: every other central bank, it's pretty impaired now. It will

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Speaker 1: go higher, but not nearly as much higher or as

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Speaker 1: quickly as we saw last year. So the dollar appreciated

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Speaker 1: about by that last year, we won't see that this year.

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Speaker 1: Maybe you know, another five percent appreciation. Megan Green with

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Speaker 1: us with Manuel life, she has another life. Her terrific

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Speaker 1: important article in Foreign Affairs magazine Megan Green and Daniel

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Speaker 1: Kellerman on migration and immigration. Megan mentioned Brexit and Bromaine

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Speaker 1: and the idea of the wild are being immigrant slash

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Speaker 1: migrant dynamics and continental Europe. That will be an important

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Speaker 1: discussion that we will talk about. She's very pessimistic on

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Speaker 1: the Turkey euro exit futures. Up three, Let's check in

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Speaker 1: with Michael Barr and get the latest world in national

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Speaker 1: headlines now night time, Thank you very much. In fourteen,

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Speaker 1: the Brasos River in southeast Texas was bone dry. Today

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Speaker 1: it's a totally different story. The Brausos is forecast. I

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Speaker 1: hit a record crashed in Fort Bend County, raising the

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Speaker 1: flood worries in the region. At least six people have

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Speaker 1: died in the area after four days of torrential rains

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Speaker 1: and floods. The Bronzos River Authority map shows all eleven

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Speaker 1: of the reservoirs that are fed by the Brasos are

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Speaker 1: at at least ninety five percent capacity. The small town

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Speaker 1: of Thompson is about thirty miles south of Houston. Thompson

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Speaker 1: Mayor Freddy Newson was asked if his home is in

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Speaker 1: danger from blood waters. I'm gonna be able to stay

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Speaker 1: in man. I've got waters around it, but I don't

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Speaker 1: think you're able to be getting into my into my home.

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Speaker 1: Newsome has been leading voluntary evacuations in a small town

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Speaker 1: South Korea's military says North Korea's latest rocket fizzle today.

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Speaker 1: It is the fourth in a series of high profile

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Speaker 1: failures that's somewhat temperate relations and worries about the North

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Speaker 1: pushing quickly toward its goal of a nuclear missile that

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Speaker 1: can reach the US. China wants to strengthen relations with

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Speaker 1: the Philippines and incoming president or if you go to

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Speaker 1: turret Chinese presidents. She Jingping made the statement after bilateral

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Speaker 1: ties have been strained by tensions over conflicting claims in

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Speaker 1: the South China. Seat Global News twenty four Hours a Day,

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Speaker 1: Michael bar Mike Tom, Thank you, Michael, I'm now for

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Speaker 1: the land over Participani Bloomberg. NBC Sports Update with John

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Speaker 1: Tesha all right, Mike. The Warriors not only made regular

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Speaker 1: season history the most wins ever, they became only the

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Speaker 1: Tan team ever to win a playoff series after trailing

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Speaker 1: three games to one. Remember, they lost games four and

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Speaker 1: five by a total of fifty two points for that

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Speaker 1: to comeback win in Game six. They came home, spotted

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Speaker 1: Oklahoma City at thirteen point lead, but won the third

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Speaker 1: quarter of twelve. They won Game seven nineties, six to eight.

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Speaker 1: Eight three points shooting carried them. Both Steph Curry and

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Speaker 1: Clay Thompson broke the previous record for most threes in

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Speaker 1: a series together they made sixty two. They made thirteen.

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Speaker 1: Last night, Curry had a game my thirty six and

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Speaker 1: the NBA Finals is a rematch of last year. Calves

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Speaker 1: and Warriors starting Thursday in Oakland. Was last night the

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Speaker 1: last game for Kevin Durant with the Thunder. He'll be

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Speaker 1: a free agent in a month. Stanley Cup Final on

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Speaker 1: the way in Pittsburgh. Two rookies Bryan Rust and Connor

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Speaker 1: Sears cord And made a part first period for the

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Speaker 1: Penguins San Jose with two in the second, stayed that

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Speaker 1: way till late third when Nick Benito scored. Penguins won

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Speaker 1: three two game twoes Tomorrow. The Yankees, who won Sunday

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Speaker 1: with only one hit managed was five last night, a

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Speaker 1: four two loss at Toronto. Like last week, Marco Ostrada

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Speaker 1: bet Vanova the Mets over the struggling White Sox won

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Speaker 1: nothing as for one day anyway, Matt Hart, he looked

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Speaker 1: like his old self. Seven scoreless hittings, Neil Walker, seventh

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Speaker 1: inning homer, the only run. New first baseman James Loney

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Speaker 1: makes his debut tonight. We're at the Bloomberg NBC Sports

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Speaker 1: Update on John Stay. Yea, thanks so much. You look

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Speaker 1: at that bounds, currencies, communities a churn here, very range

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Speaker 1: bound recently. But news flow up and coming over the

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Speaker 1: next few days. Features up to down, features up thirty

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Speaker 1: when the fixed trading before the opening up point seven five,

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Speaker 1: big points thirteen point eight seven. So that's just the

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Speaker 1: jumble right now, Mike. When I walked in the door,

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Speaker 1: the two year point nine three percent lower yield over

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Speaker 1: the last three hours point five still elevated over where

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Speaker 1: we were long agoing far away on a Friday. Did

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Speaker 1: you have a good weekend, Michael? Did you go to

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Speaker 1: x men or no, Allison, We went to the beach,

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Speaker 1: went to the beach. First beach weekend, was there. There

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Speaker 1: was no ice person in water early for me because

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Speaker 1: like one day the third week of August, we're up

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Speaker 1: with a toe in good morning. The Sports Report brought

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Speaker 1: to you by land Over Precipitate if it's in your

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Speaker 1: nature to cast off the every day and seek adventure.

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Speaker 1: The Discovery sport was built to help your search. Visit

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Speaker 1: land Over Precipitate dot com or call Landover, Above and Beyond.

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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the Radio Plus mobile app, and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm kerin Moscow.

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Speaker 1: This update has brought to you by the American Arbitration Association.

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Speaker 1: Consumer spending climbed in April by the most and almost

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Speaker 1: seven years. Consumer purchases climbing one percent last month after

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Speaker 1: a little change in March, and personal income climbed four

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Speaker 1: tenths percent for a second month. Great Planes Energy agreed

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Speaker 1: to buy west Star Energy, the biggest utility in Kansas,

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Speaker 1: for eight point six billion dollar. Says. Power companies across

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Speaker 1: the US, facing week demand and rising operational costs look

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Speaker 1: to consolidate treasuries, losing their edge over stocks as the

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Speaker 1: U S economy expands enough to push the Federal Reserve

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Speaker 1: toward raising interest rates. We checked the markets every fifteen

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Speaker 1: minutes throughout the trading day on Bloomberg SNP even A

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Speaker 1: futures up two points, DOWI Mini futures of twenty nine

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Speaker 1: nasdachimny futures up six decks. In Germany's down three tenths

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Speaker 1: per cent ten your treasury down eight thirty seconds, the

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Speaker 1: yel eight percent, nim X screwed oil up four tens

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Speaker 1: per cent or twenty cents to forty nine fifty four

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Speaker 1: of arrel comes golled down four tenths per cent or

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Speaker 1: four dollars fifty cents to twelve twelve twenty an ounce,

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Speaker 1: the euro a dollar eleven forty nine, a en one

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Speaker 1: eleven point one seven. And hackers infiltrated times my Space

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Speaker 1: social network and made certain data available. And an online

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Speaker 1: hacker forum that was shortly before the Memorial Day weekend.

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Speaker 1: That's a Bloomberg business flash, Tom and Mike Karen, thanks

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Speaker 1: so much. It is on Wall Street. The following is

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Speaker 1: from Bloomberg View opinions and from Bloomberg columnists. I'm justin

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Speaker 1: fox a columnist for Bloomberg View. After almost a century

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Speaker 1: of making cars and selling them in more or less

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Speaker 1: the same way, automakers are worried that the business of

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Speaker 1: automotive transportation might be about to change radically. Now carmakers

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Speaker 1: sell vehicles to customers through dealers usually and often provide financing.

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Speaker 1: In a future dominated by self driving cars, and maybe

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Speaker 1: that car ownership will give way to on demand mobility.

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Speaker 1: A car shows up, takes you where you need to go,

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Speaker 1: and moves on to the next passenger. That's what Uber

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Speaker 1: and other ride hailing companies are banking on, and lately

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Speaker 1: auto executives have been falling over themselves to collaborate with

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Speaker 1: and invest in these companies. Just this week, Toyota announced

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Speaker 1: an alliance with Uber, in Volkswagen would get a tel

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Speaker 1: Aviv based rival. It's understandable that the automakers want in

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Speaker 1: on what maybe the future of driving in a world

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Speaker 1: of on demand mobility. Though it's Uber get Lift and

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Speaker 1: they're ilk that will be interacting directly with consumers, building

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Speaker 1: brand loyalty and gaining knowledge. Somebody has to build the

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Speaker 1: vehicles that will settle us all around. So there will

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Speaker 1: still be automakers, but the cars they make risk becoming

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Speaker 1: interchangeable commodities. I'm justin Fox, columnist for Bloomberg View. For

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Speaker 1: more Bloomberg opinion and commentary, please go to Bloomberg View

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Speaker 1: dot com or view go on the Bloomberg terminal. This

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Speaker 1: has been Bloomberg View and Bloomberg View commentaries can be

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Speaker 1: heard hourly weekdays. The Brexit Votever, you didn't on Bloomberg

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Speaker 1: Radio we are back, began Green is that chief kind

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Speaker 1: of a stead manulife into somebody who follows what is

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Speaker 1: going on around the world very closely. She's been talking

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Speaker 1: up the situation with Europe lately and immigration and that

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Speaker 1: is the key issue for a lot of people in

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Speaker 1: the Brexit debate. Megan, you said it might put the

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Speaker 1: Fed on pause. Uh, what is the real issue in

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Speaker 1: terms of immigration for the United Kingdom? Yeah? I mean

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Speaker 1: I could sit here and make sophisticated and economics arguments

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Speaker 1: for why the UK should absolutely choose to say in

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Speaker 1: the EU. But I think for Joe six Pack on

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Speaker 1: the street in the UK, um it really does come

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Speaker 1: down to migration, and there's real concern among a lot

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Speaker 1: of people here that um player foreigners taking their jobs.

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Speaker 1: But they're overwhelming their schools, bankrupting their national health services

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Speaker 1: as well. So if the UK does choose to leave

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Speaker 1: the EU, it will end up having to leave the

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Speaker 1: Single Market if it wants to cut down on that

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Speaker 1: kind of immigration. If you look at the actual statistics, however, UM,

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Speaker 1: EU migrants in particular contribute massively to the UK economy UM,

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Speaker 1: and they're actually met contributors to UM the government, so

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Speaker 1: they are providing more in tax revenues than they are.

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Speaker 1: So unfortunately the arguments are all wrong, but you know,

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Speaker 1: it's never stopped politicians UM from ignoring statistics. Actually, I

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Speaker 1: think it would be in Britain. It would be Joe

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Speaker 1: six point six pack, right, that's right. The argument for

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Speaker 1: the pro brexit camp is that maybe they could do

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Speaker 1: something like UH Norway UH and and still have the

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Speaker 1: trade relationship without having the full membership in the U

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Speaker 1: and therefore without having the UM the the overwhelming bureaucracy

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Speaker 1: that they decry. Would that work? Is that a possibility? Well? So,

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Speaker 1: if the UK were to choose Norway's model, it would

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Speaker 1: still have to pay a lot of money into the

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Speaker 1: EU budget UM, and it would maintain a financial services

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Speaker 1: passport into the rest of the EU, so it would

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Speaker 1: still be part of the Single Market um. But of

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Speaker 1: course the UK would have to accept UM EU citizens

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Speaker 1: working UH in the UK as well, so it would

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Speaker 1: be part of you know, freeze movements, um ability to

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Speaker 1: work um. Like I said, the biggest reason a lot

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Speaker 1: of people are voting to leave the EU is presumably

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Speaker 1: that they're against migration, so um the Norway model would

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Speaker 1: actually solve that issue. Give us an update on this

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Speaker 1: from from your study of this and your work with

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Speaker 1: Foreign Affairs magazine. I just went to the Telegraph, which

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Speaker 1: I believe. I can say Folks has a clear tone

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Speaker 1: towards approving of Brexit, and there's a tweet or alive

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Speaker 1: whatever on their website. The English Channel could turn into

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Speaker 1: the med quote with fleets of small boats coming over unquote.

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Speaker 1: This isn't done Kirk, but it's almost a done Kirk

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Speaker 1: mentality within your research for your Foreign Affairs article. How

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Speaker 1: prevalent is that within the EU and within Great Britain. Well,

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Speaker 1: so I think that argument is actually right. If the

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Speaker 1: UK leave the EU, it will be easier to stop

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Speaker 1: migrants coming from other EU countries, but it will be

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Speaker 1: much harder for the UK to stop refugees, for examples,

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Speaker 1: from coming over. And that's mainly because the U in

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Speaker 1: France currently have an agreement so that border controls happen

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Speaker 1: in France. That's why you have a massive refugee camp

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Speaker 1: in kel or have had one. Um, the second the

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Speaker 1: UK leave the EU, the French have already said that

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Speaker 1: that border will will move right on over to the

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Speaker 1: UK and so that will become the UK's problem. So

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Speaker 1: you could see boats going across the channel. Um. So

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Speaker 1: I do think that that's a real risk, and it's

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Speaker 1: an argument that hasn't been made a whole lot. Let's

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Speaker 1: get an update as long as we're talking Brexit on grexit. Uh,

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Speaker 1: you had written earlier this year that July would be

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Speaker 1: the time to watch because the migrant crisis wasn't would

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Speaker 1: be in full cry then with the weather, but with

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Speaker 1: if if the deal with Turkey holds, have the Greeks

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Speaker 1: dodged a problem for now? Yeah? So I think that probably, um,

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Speaker 1: the can has been kicked beyond July now and it

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Speaker 1: looks like Greece will get it next trench of funding. UM.

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Speaker 1: Don't mistake that for the Greek crisis being solved. Of course,

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Speaker 1: it just means that we'll get through until this fall

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Speaker 1: before Greece will come back into the headlines um and ate.

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Speaker 1: The EU Turkey deal has um flowed the trickle of

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Speaker 1: refugees into Greece significantly. That may also because be because

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Speaker 1: the border between US shut around the same time. UM

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Speaker 1: That EU Turkey deal is unraveling as we speak, so

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Speaker 1: I think it's a matter of months before it it

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Speaker 1: falls apart. So air to On will certainly drag that

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Speaker 1: out as he tries to extract more from the ear um.

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Speaker 1: But I do think that it will fall apart and

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Speaker 1: we'll see refugees going again. One more question we could

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Speaker 1: megan very quickly. Will this debate being enough of a momentary,

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Speaker 1: sudden or exogenous shock to change the vote? I mean

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Speaker 1: that that's strident about it. I don't think so. I

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Speaker 1: think that it will be pushed off beyond the Brexit referendum.

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Speaker 1: The one thing that could really shift the Brexit referendum

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Speaker 1: would be a terrorist attack, and I think that that

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Speaker 1: that's a huge risk. Thank you, Began, Green greatly appreciate it.

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Speaker 1: With manual life not only work on the domestic economy

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Speaker 1: or research notes on the FED, but also an important

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Speaker 1: article again in Foreign Affairs magazine. Mike, this is what

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Speaker 1: I love about our our guests. They have these tangents

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Speaker 1: they go off on. It's like William Stanley Jevons who

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Speaker 1: dragged us into marginalia in economics, the calculus the next

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Speaker 1: if you will. They also studied sun spots in his

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Speaker 1: spare time. You know, did the whole spots sun spot

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Speaker 1: thing way before the modern day. Megan just with a

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Speaker 1: cottage industry. They're smart thinking. She's on top of definitely

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Speaker 1: on top of that stuff, and it's kind of want

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Speaker 1: to go to people we want to talk to. Uh,

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Speaker 1: here's a really interesting statistic. There are people who who

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Speaker 1: look at these things. Uh. We were talking about Donald

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Speaker 1: Trump and effect obviously that people either love him or hatium.

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Speaker 1: How does it show up economically? Price Nomics, which is

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Speaker 1: a website devoted to statistics in economics, I looked at

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Speaker 1: with the help of one of their travel search engines,

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Speaker 1: UH data on bookings at Trump hotels. They found bookings

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Speaker 1: at Trump hotels are fifty lower than the same period

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Speaker 1: a year ago. Yeah, he seems to have offended enough

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Speaker 1: people that they don't want to stay in his hotels. Well, yeah,

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Speaker 1: the notoriety on that. I'm gonna say ten weeks ago

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Speaker 1: is one k Oberman lives in the Upper east Side

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Speaker 1: and one of his towers, and I believe Kay Oberman

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Speaker 1: exited he which is no surprise at Keith obermanum is well.

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Speaker 1: Most of these towers. He doesn't own most of the

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Speaker 1: apartments and things with his name on it. He just

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Speaker 1: leases his name to it. And Keith was at a

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Speaker 1: Mets game and and somebody like was making a joke

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Speaker 1: about where he lived. He said, that's enough. I don't

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Speaker 1: Trump International Hotel in Las Vegas bookings down over a

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Speaker 1: year ago. Wow, that's that's something. And and thanks again

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Speaker 1: to all of our Sunday I guess we did Chuck

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Speaker 1: Todd today and we'll have many others through the week.

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Speaker 1: But I really can't say enough about Bloomberg Radio and

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Speaker 1: the effort Sunday beginning at eleven am to be informed

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Speaker 1: about the Sunday discourse. We're very proud that we can

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Speaker 1: bring that to your features up three down, Features up

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Speaker 1: thirty three yields now higher the tenure yield one point

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Speaker 1: eight nine percent. Bloomberg Surveillance