Speaker 1: This is Bloomberg day Break Weekend, our global look at
Speaker 1: the top stories in the coming week from our Daybreak
Speaker 1: anchors all around the world. Straight ahead on the program,
Speaker 1: here comes the FED meeting. I'm Amy Morris in Washington.
Speaker 2: I'm Ryan Courtesy in Hong Kong.
Speaker 3: So what's next for the Reserve Bank of Australia continuing
Speaker 3: the pause on interest rates?
Speaker 4: Or Hi?
Speaker 5: I'm Kaylee Liones in Washington, where it looks like the
Speaker 5: twenty twenty four election season is already heating up.
Speaker 6: I'm Stephen Kralen London, where final preparations are being made
Speaker 6: for the coronation of King Charles the Third.
Speaker 7: That's all straight ahead on Bloomberg day Break Weekend on
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Speaker 1: To you, I'm anymore. As we begin today's program with
Speaker 1: a look at the FED, a key index of underlying
Speaker 1: inflation that's closely followed by the Federal Reserve remained elevated
Speaker 1: last month. Joining us now to talk about it and
Speaker 1: some of the other data we've seen in the past week,
Speaker 1: Bloomberg's Michael McKee, our Global Economics and Policy editor, Michael,
Speaker 1: it is a pleasure. Thank you for joining us. We
Speaker 1: had a lot of data out on inflation this past week.
Speaker 1: How does this overall tilt things for you in terms
Speaker 1: of what the Fed does at the upcoming meeting. Let's
Speaker 1: just start with the inflation data that came out Friday.
Speaker 2: Well, basically, I don't.
Speaker 8: Think it changes a whole lot about what they're going
Speaker 8: to do in the market reaction sort of reflects that
Speaker 8: because they had signaled they were going to do another
Speaker 8: twenty five basis points because inflation's too high, and though
Speaker 8: headline inflation in the PCE numbers which they watch came
Speaker 8: down significantly, it's still more than double what the target is.
Speaker 8: So the Federal raised twenty five basis points. We did
Speaker 8: get as sort of flat reading on personal spending. Consumers
Speaker 8: spending in March, and the FEDA will have to decide
Speaker 8: if we're really seeing a whole lot of the previous
Speaker 8: tightenings that they've done hitting the economy and whether there's
Speaker 8: a risk that we go into recession or not. So
Speaker 8: the question will be what they say about what they
Speaker 8: do next, not so much what they're going to do
Speaker 8: on Wednesday.
Speaker 1: A sidebar here, personal spending is unchanged. Personal income rose.
Speaker 1: You mentioned personal spending, So what's happening there when the
Speaker 1: personal income goes up but spending is lower or unchanged.
Speaker 2: Well, it's interesting.
Speaker 8: As long as incomes are going up, people have the
Speaker 8: money to spend, and the savings rate went up, so
Speaker 8: they were socking away some of what they were getting.
Speaker 8: And there has been a theory that they would start
Speaker 8: to run out of money because they would have spent
Speaker 8: down all the stimulus checks they got last year. That
Speaker 8: hasn't happened yet. But we did see a big rise
Speaker 8: in spending in January, a smaller rise in February, and
Speaker 8: now a flat reading for the month of March, which
Speaker 8: suggests consumers are pulling back now. Is that because of
Speaker 8: inflation or just because they bought everything they wanted to
Speaker 8: back in January.
Speaker 2: We don't know.
Speaker 8: So we'll be watching the months to come, as will
Speaker 8: the FED. One thing that happens is we had a
Speaker 8: late easter this year, and usually that affects spending numbers.
Speaker 8: They get moved from one month to another. So let's
Speaker 8: see what happens with April and whether we really have
Speaker 8: a slow down or whether the FED has more work
Speaker 8: to do.
Speaker 1: Is that what the GDP data told you as well?
Speaker 8: Yes, GDP was heavily skewed to improvements in January, and
Speaker 8: things slowed down as the months went on. GDP also
Speaker 8: told us that businesses had stopped investing almost and that
Speaker 8: was a first sign that maybe what the FED has
Speaker 8: done is starting to have an effect on decision making.
Speaker 1: Now, we had a lot of on air guests here
Speaker 1: at Bloomberg over the week that saw recession signs pretty
Speaker 1: much everywhere they looked. They are looking at forward data.
Speaker 1: They claim. The data the FED is looking at is
Speaker 1: backward looking data. Is there validity to that? What say you, Well, there.
Speaker 8: Is validity to it. Most of the data, just by
Speaker 8: its very nature is backward looking because it's compiled what's
Speaker 8: already happened. But some of the data that people focus on,
Speaker 8: including employment, is even more backward looking in the sense
Speaker 8: that the last thing companies want to do is get
Speaker 8: rid of people, and that's especially true now after they
Speaker 8: had a hard time hiring people back after the pandemic.
Speaker 8: So the last sign you're going to get perhaps of
Speaker 8: recession is a change in the labor market. That said,
Speaker 8: the labor market is still remaining very strong. We'll see
Speaker 8: next Friday whether we get a strong reading for the
Speaker 8: April jobs report, But what we've seen in terms of
Speaker 8: jobless claims, things like that have shown that right now
Speaker 8: we are not seeing companies back off.
Speaker 1: This is your wheelhouse watching everything the FED says and does.
Speaker 1: Are you noticing any subtle shifts slightly that would tee
Speaker 1: us up for what they might be thinking about doing
Speaker 1: next after the meeting?
Speaker 2: Not really.
Speaker 8: Those who think they should do more have basically said
Speaker 8: they should do more, people like Jim Bullard of Saint
Speaker 8: Louis suggesting that we need to go above five and
Speaker 8: a half to get restrictive enough monetary policy. But most
Speaker 8: have stayed with the idea that five point one percent
Speaker 8: as an effective rate, which they put into the dot plot,
Speaker 8: is going to be good enough. And five point one
Speaker 8: as an effective rate would imply that the range would
Speaker 8: be from five to five and a quarter, So that
Speaker 8: would mean one more rate increase and then they could
Speaker 8: decide whether they.
Speaker 2: Need any more or not.
Speaker 8: And the suspicion, basically among analysts is that we're going
Speaker 8: to see the FED on hold because they've gotten close
Speaker 8: enough to a restrictive level and there are concerns about
Speaker 8: going too far, so they'd like to wait and see
Speaker 8: what happens in the economy before they get before they
Speaker 8: would do anything more.
Speaker 1: And we are talking with Bloomberg's Michael McKee, our Global
Speaker 1: Economics and Policy editor, and let's build a little bit
Speaker 1: about what you were talking about just now. Any sign
Speaker 1: the FED might be thinking about the split economy, wealthier
Speaker 1: people doing pretty well, those on the lower end of
Speaker 1: the pay scale struggling to make ends meet. We've seen
Speaker 1: plenty of surveys that show quite a number of people
Speaker 1: of all ages living hand to mouth, a lot of millennials,
Speaker 1: by the way, in a recent study that shows that
Speaker 1: generation gap is growing.
Speaker 2: I was going to ask you, can you lend me
Speaker 2: ten dollars for lunch?
Speaker 8: No, the FED would say, there isn't much they can
Speaker 8: do about it. What they can do is try to
Speaker 8: set the economic conditions that would provide for maximum employment.
Speaker 8: Because if you have a job, you have a much
Speaker 8: better chance of having enough money to at least eat on.
Speaker 2: And that was.
Speaker 8: Their policy leading up to the pandemic, that they would
Speaker 8: keep rates low because they wanted to spread the good
Speaker 8: labor market conditions to those who were at the lower
Speaker 8: end of the income scale. And coming out of the pandemic,
Speaker 8: we did see that wages for people on a percentage
Speaker 8: comparison basis, wages for people at the lower ends went
Speaker 8: up faster than for people at the higher end. Now
Speaker 8: that started to change some, but the Fed can't do
Speaker 8: a whole lot about it. Their first priority is inflation,
Speaker 8: so they're going to keep interest rates high, and that
Speaker 8: will hurt people who would like to borrow and can't
Speaker 8: afford higher interest rates. So to that extent, there is
Speaker 8: a problem. But as long as unemployment remains very close
Speaker 8: to the levels it is now, people are still doing okay.
Speaker 8: But inflation is a tax, and if you spend most
Speaker 8: of your money on food or energy, it's gonna really
Speaker 8: hurt you.
Speaker 1: We saw some housing numbers as well this past week.
Speaker 1: What about the housing market is happening? What's that tell you?
Speaker 8: Well, the housing market is usually one of the first
Speaker 8: and I think this time was as well to respond
Speaker 8: to higher increase in interest rates, because that's the cost
Speaker 8: of buying.
Speaker 2: A house, is what we pay for your mortgage.
Speaker 8: So we did see a real drop off in home
Speaker 8: sales and a drop in the number of homes that
Speaker 8: were for sale.
Speaker 2: That seems to.
Speaker 8: Be starting to turn a little bit, which is hard
Speaker 8: for the FED to figure out. This has taken a
Speaker 8: long time for it to play out in the economy.
Speaker 8: It's a weird post pandemic situation, but we're starting to
Speaker 8: see housing be less of a drag. It's not it's
Speaker 8: not healed, it's not better, it's not a thing you
Speaker 8: want to go rushing out to invest in, but it
Speaker 8: is starting to be less of a drag, which could
Speaker 8: mean good news for the FED because a lot revolves
Speaker 8: around housing and the economy, not only just the cost
Speaker 8: of construction and that sort of thing, but also when
Speaker 8: you buy house, buy new carpets or new furniture or
Speaker 8: things like that. It can make a big difference when
Speaker 8: housing is significantly growing.
Speaker 1: What's the key factor for you? What piece of data
Speaker 1: really tells the whole story or does that even exist?
Speaker 8: There's nothing that tells the whole story, but I think
Speaker 8: the things that you're looking at are a combination of
Speaker 8: the jobs report.
Speaker 2: You want to see the economy. What the FED wants.
Speaker 8: To see is that we create fewer jobs each month.
Speaker 8: We want to create enough jobs to give one to
Speaker 8: everybody who's looking for one, but not so many that we.
Speaker 2: Have trouble attracting workers.
Speaker 8: And the same time, then we are looking at the
Speaker 8: inflation data, and you picked your indicator, but basically you
Speaker 8: want to see inflation continuing to come down month over month,
Speaker 8: so the progress is being made. Those are the two
Speaker 8: things that sort of signal what the FED is going
Speaker 8: to do and where the economy is now. For the
Speaker 8: next meeting and a couple of meetings after that, we're
Speaker 8: also going to be looking at the Senior Loan Officers
Speaker 8: Survey to see if all the problems that we have
Speaker 8: had in the banking system turn into lack of credit.
Speaker 8: If banks pull back on lending because they're nervous about
Speaker 8: all this, that could hurt the economy. That could slow
Speaker 8: the economy even more. It could affect what the FED does.
Speaker 8: They may not feel like they have to raise rates
Speaker 8: as high if banks are tightening credit significantly. But we
Speaker 8: just don't know at this point yet, and that will
Speaker 8: come out the week after next, so we still have
Speaker 8: to wait.
Speaker 1: That was our Global Economics and Policy editor Michael McKee,
Speaker 1: coming up on Bloomberg day Break weekend. In the UK,
Speaker 1: the final preparations are underway for the coronation of King
Speaker 1: Charles the Third and maybe more. As this is Bloomberg,
Speaker 1: this is Bloomberg Daybreak weekend, our global look ahead at
Speaker 1: the top stories for investors in the coming week. I'm
Speaker 1: Amy Morris in Washington. Up later in our program. It's
Speaker 1: not even summer yet, but the November twenty twenty four
Speaker 1: US presidential election is coming right at us, fast and furious.
Speaker 1: But first, in the UK, the final preparations are underway
Speaker 1: for the coronation of King Charles the Third. The event
Speaker 1: will be marked with a church service and an extra
Speaker 1: holiday in the UK, and an expected influx of visitors
Speaker 1: from around the world. For more, let's head to London
Speaker 1: and bring in Bloomberg Daybreak Europe anchor Stephen Carroll.
Speaker 6: Amy. It's been almost eight months since Queen Elizabeth the
Speaker 6: Second passed away and King Charles the Third was elevated
Speaker 6: to the throne. Next weekend, we'll see the formal events
Speaker 6: marking his coronation, an event that hasn't happened in the
Speaker 6: UK in seven years. To discuss what is planned, I'm
Speaker 6: joining Studio Bio UK correspondent Lizzie Burden and by Bloomberg
Speaker 6: Pursuits reporter Sarah Rappaport as well. Welcome to you both. Lizzie,
Speaker 6: can you talk us through exactly what events are planned
Speaker 6: for the coronation, or at least what we know about
Speaker 6: them at this stage.
Speaker 9: So it's expected to be about half the length and
Speaker 9: a quarter of the guest list of the Queen Elizabeth's
Speaker 9: coronation back in nineteen fifty three, so about an hour
Speaker 9: and a half long and two two hundred guests. You're
Speaker 9: going to have the service at Westminster Abbey on May
Speaker 9: the sixth. It'll start about eleven am London time, or
Speaker 9: probably precisely. Knowing these kind of events and at the
Speaker 9: time of recording with you now, the Royal family hasn't
Speaker 9: officially released the order of service, but we do know
Speaker 9: that the day begins with the King's procession from Bookingham
Speaker 9: Palace to Westminster Abbey. You'll likely hear the Archbishop of Canterbury,
Speaker 9: just In well be presenting the new king to the
Speaker 9: people and inviting them to say God Save King Charles.
Speaker 9: Then he'll receive holy communion. He'll be anointed with oil.
Speaker 9: Anyone who watches the crown will know that that's the
Speaker 9: bit that might not be televised because it's holy. It's
Speaker 9: a tradition that can be traced back to the Old Testament.
Speaker 9: It symbolizes the divine blessing of the monarch. And you'll
Speaker 9: be pleased to hear that the oil isn't made anymore
Speaker 9: of whale's stomach lining as it was in nineteen fifty three.
Speaker 9: The new recipe is made of oil's harvested.
Speaker 10: Green for the new king.
Speaker 9: He's under that from the mount of Olives, and they've
Speaker 9: been pressed just outside Bethlehem. They've been perfumed with essential oils.
Speaker 6: Lovely, Okay, Well your painting has the floral picture.
Speaker 9: Well, it's not over yet. Then he's going to be
Speaker 9: invested with his regalia, his crown, his ring, his scepter,
Speaker 9: and then he'll be crowned by the archbishop, rise from
Speaker 9: the coronation chair and sit on the throne. And that's
Speaker 9: usually the point at which the aristocracy would pay homage
Speaker 9: to him. By touching the crown, kissing his hand. But
Speaker 9: that bit again is likely to be slimmed down because
Speaker 9: the number of hereditary pays in the House of Lords,
Speaker 9: of course has been cut. And then you'll have the
Speaker 9: King and the Queen Consort Camilla going back to Bookingham
Speaker 9: Palace in an even bigger procession than they arrived in.
Speaker 9: You'll have thousands of armed forces personnel. And then when
Speaker 9: they get to the palace only the working royals will
Speaker 9: stand on the balcony for the wave. Should we practice
Speaker 9: our wave?
Speaker 6: Okay, So a lot of preparation clearly has gone into this, and.
Speaker 10: Don't forget the Golden State coach.
Speaker 6: Very true, very import something to watch out for.
Speaker 9: Notoriously uncomfortable.
Speaker 6: Right, you haven't been in it, I have.
Speaker 10: To say to Buckingham Palace, Lizzie.
Speaker 6: So some of the details still yet to be publicly announced,
Speaker 6: but we do There has been a lot of discussion
Speaker 6: about who's going to this event.
Speaker 2: What do we know.
Speaker 9: Yeah, we're expecting an array of foreign royals, heads of
Speaker 9: state and politicians and that's actually new because previously the
Speaker 9: ceremony was meant to be between the monarch and their
Speaker 9: people in the presence of God. But King Charles is
Speaker 9: said to be inviting the likes of the Sultan of Brunei,
Speaker 9: the King of Jordan. They're friends of his and it's
Speaker 9: also a gesture of soft power and diplomacy. You're also
Speaker 9: likely to get lots of politicians. Originally we're told it
Speaker 9: was expected to be about twenty MP's and twenty peers,
Speaker 9: but the Telegraph newspapers reporting that those numbers have more
Speaker 9: than doubled now because everybody's been jostling for an invitation,
Speaker 9: and of course all his life the king has been
Speaker 9: very involved with charity work. So there'll be lots of
Speaker 9: representatives of as many causes. But who isn't coming is
Speaker 9: probably going to get as much attention as who is.
Speaker 4: So.
Speaker 9: Joe Biden, the US President, has already confirmed that he's
Speaker 9: sending his wife Jill instead. That's maybe a sign of
Speaker 9: Britain's diminished place in the world since nineteen fifty three.
Speaker 10: The American presidents never go right, I mean, historically they've
Speaker 10: never been to a coronation. I mean, Jill's going, but
Speaker 10: it's not as a snob, it's just well, he's been
Speaker 10: at pain. Look great for American presidents. You're having the
Speaker 10: way American about to actually got a coronation.
Speaker 9: Right, He's been at pains to say that it isn't
Speaker 9: to snow. Yeah, so that's the official line, and I
Speaker 9: shouldn't like to descend into royal tittle tuttle Stephen. But
Speaker 9: even though it's a slimed down version compared to Queen
Speaker 9: Elizabeth's second coronation, you'll still see almost the whole royal
Speaker 9: family except the Duchess of Sussex, indeed.
Speaker 6: Of which much much ink has been spilled. So, Sarah,
Speaker 6: those are some of the invited guests. But there's a
Speaker 6: lot of people who are coming to the UK for
Speaker 6: this event. This is something that you've been writing about.
Speaker 6: Tell us about what the expectations are around tourism.
Speaker 10: Well, a lot of Americans are coming. Funnily enough, there's
Speaker 10: a study saying Americans will be outspending Brits by a
Speaker 10: great deal at London hotels over the long weekend.
Speaker 9: Don't you always yes.
Speaker 10: But in this case there's more so than usual, by
Speaker 10: a good eight percent in the data. So they're going
Speaker 10: to account for thirty two percent of all revenue in
Speaker 10: London hotels over the coronation weekend. Normally we account for
Speaker 10: twenty four, so it's a nice, a nice big jump. Okay,
Speaker 10: you know, Americans don't have a royal family, as we're
Speaker 10: all aware, maybe the Kardashes or the Kennedys, but not
Speaker 10: an official royal family. We're going to come. All the
Speaker 10: hotels are really jumping on the bandwagon. The Dorchester brought
Speaker 10: out their nineteen fifty three decour It looks amazing. If
Speaker 10: you want to go to Park Lane and have a look.
Speaker 10: All the hotels have more tea than you can Chuck
Speaker 10: and Buck in Boston, Harbor King themed cocktails, teas, royal stays.
Speaker 6: So there's real business in this.
Speaker 10: Business, and the hotels are getting booked up. The Goring,
Speaker 10: which famously Cape Middleton State app before she got married,
Speaker 10: is fully booked and that's one of the closest hotels
Speaker 10: to Buckingham Palace. So there's a lot of business in
Speaker 10: there for tourists and it is largely Americans wanting to
Speaker 10: come and splash the cash. With the week pound as well,
Speaker 10: it's easier for them to come and do that.
Speaker 9: Should happy to be my flat too?
Speaker 6: What about then the offerings that have been put on
Speaker 6: for toys. You talk about some of the food and
Speaker 6: drink options. There sarah that that have been laid out
Speaker 6: for the visitors who are coming, But what about activities?
Speaker 6: Are the things that are going on in London that people.
Speaker 10: Can for a very rich visitors. Royal Salute is launching
Speaker 10: a twenty five thousand dollars bottle of whiskey for the
Speaker 10: King Charles, a third edition.
Speaker 2: Wow.
Speaker 10: I actually went to the launch party was at Westminster Abbey,
Speaker 10: so an after hours tour. I got to see the
Speaker 10: place where Charles will be crowned, and out of dinner
Speaker 10: and tried this whiskey.
Speaker 6: Yeah.
Speaker 10: I mean it's print on a cards the listed company, right,
Speaker 10: and they're putting on a King Charles edition. And yeah,
Speaker 10: twenty five thousand dollars. If you don't have that, there's
Speaker 10: plenty of other fun places to get cocktails or drinks
Speaker 10: or do walking tours and get the history right. Because
Speaker 10: the city's not seen a coronation in seventy years. You
Speaker 10: don't have to be a royalist to think it's a
Speaker 10: little bit exciting for a historical event to watch it.
Speaker 6: Yeah, and for many people it's a one cent a
Speaker 6: lifetime chance to be in the city where it's happening.
Speaker 10: Most people wereun around the last time there was one.
Speaker 6: Indeed, like, broadly speaking, is this expects to be a
Speaker 6: big boost for UK tourism.
Speaker 9: It isn't.
Speaker 10: It isn't. UK tourism is actually doing quite well already.
Speaker 10: There's a lot of pent up demand and like I
Speaker 10: said about Americans already here, they're aready spending a lot
Speaker 10: of money.
Speaker 6: And Lizzie, let's let's talk a bit about the the
Speaker 6: backdrop to all of this economically, I mean, could this
Speaker 6: actually be an important boost to the UK economy.
Speaker 9: Well, certain sectors will hopefully get a boost, So UK
Speaker 9: Hospitality reckons that pubs and restaurants will get a three
Speaker 9: hundred and fifty million pound boost to sales. But usually
Speaker 9: on balanced bank quality days actually dent the economy because
Speaker 9: the extra spending on pubs is worth less than the
Speaker 9: reduced output in factories, the productive parts of the economy.
Speaker 9: So last year's Platinum Jubilee bank holiday was estimated to
Speaker 9: have hit the economy by two point four billion pounds.
Speaker 9: But it's really really hard to calculate this stuff, and
Speaker 9: often you get a bounce back the following month, so
Speaker 9: you see people catching upon the work they otherwise would
Speaker 9: have done, so you could say that economic activity is
Speaker 9: just displaced and not totally lost. And the good news
Speaker 9: really is that it's not expected to tip us into recession.
Speaker 2: Yes, so Drinker.
Speaker 6: Indeed, thank you to Bloomberg Pursuits reporter Sayah Rappaport and
Speaker 6: to our UK correspondent Lizzie Burden. I'm Stephen carolln London.
Speaker 6: You can catch us every weekday morning here for Bloomberg
Speaker 6: Daybreak Europe, beginning at six am in London and one
Speaker 6: am on Wall Street.
Speaker 1: Amy, Thank you, Steven, and coming up on Bloomberg day Break. Weekend,
Speaker 1: we returned to Washington as the battle lines for the
Speaker 1: twenty twenty four US presidential election are becoming clear. I M.
Speaker 1: Amy Morris. This is Bloomberg.
Speaker 7: Broadcasting live from the Bloomberg It a active Brokers studio
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Speaker 7: Radio Dot com. This is Bloomberg Daybreak Weekend.
Speaker 1: I m Amy Morris in Washington with your global look ahead
Speaker 1: at the top stories for investors in the coming week.
Speaker 1: The battle lines in the twenty twenty four presidential race
Speaker 1: are starting to take shape, and we could see more
Speaker 1: action this coming week. For more, let's head to our
Speaker 1: Bloomberg ninety nine to one newsroom in Washington and sound on.
Speaker 1: Co host Kaylee lines.
Speaker 5: That's right, Amy, It's only April twenty twenty three, but
Speaker 5: the twenty twenty four race is already in full swing.
Speaker 5: We have a number of presidential candidates who have declared
Speaker 5: that they are running, including finally President Biden. We had
Speaker 5: long expected it, but he finally announced he is going
Speaker 5: to seek a second term in a video this past week.
Speaker 2: Let's finished this job. I know we can't because this
Speaker 2: is the United States in area, there's nothing, simply nothing
Speaker 2: we cannot do.
Speaker 5: And as he begins his attempt to try to convince
Speaker 5: voters to let him finish the job, we're already starting
Speaker 5: to see the Biden campaign ads roll out.
Speaker 4: Joe Biden has made defending our basic freedoms the cause
Speaker 4: of his presidency. The freedom for women to make their
Speaker 4: own health care decisions, the freedom for our children to
Speaker 4: be safe from gun violence, the freedom to vote and
Speaker 4: have your vote counted, for seniors to live with dignity,
Speaker 4: and to give every American the freedom that comes with
Speaker 4: a fair shot at building a good life in small
Speaker 4: towns and big cities.
Speaker 5: The drama of that ad and his potential opponents are
Speaker 5: out there buying up ads to including former President Trump,
Speaker 5: who currently is seen as the GOP front runner but
Speaker 5: is trying to fend off other contenders in the Republican
Speaker 5: Party like Florida Governor Ron DeSantis, who hasn't even declared
Speaker 5: that he's running yet. Listen to this Trump ad from
Speaker 5: this past week.
Speaker 8: I thought DeSantis was one of the good ones, but
Speaker 8: he's just another career politician.
Speaker 7: America needs Trump make America great again.
Speaker 2: INK is responsible for the content of this advertising.
Speaker 5: So buckle up, everyone, because the ads have begun and
Speaker 5: they're not going to stop for quite some time. Let's
Speaker 5: get more on this twenty twenty four cycle now with
Speaker 5: Nancy Cook, who covers all things politics for us here
Speaker 5: at Bloomberg. Nancy, thanks so much for being with us.
Speaker 5: I'd like to first start with one of the subjects
Speaker 5: of that ad. We just heard Florida Governor Ron DeSantis,
Speaker 5: as I said, he is not yet technically a contender
Speaker 5: in this race. But the rumor has always been that
Speaker 5: once the Florida legislative session wraps up, that's when we'll
Speaker 5: see him announce. Well, May fifth, I believe, is when
Speaker 5: we see that adjournment. Could we actually see him announcing
Speaker 5: within this coming week, I don't think so.
Speaker 11: So what has to happen is there's a law on
Speaker 11: the Florida books that basically says that if you already
Speaker 11: hold higher office, you have to resign before you can
Speaker 11: actually run for a different office. And so the Florida
Speaker 11: Legislature has to tweak this law and they haven't fully
Speaker 11: finished doing that yet. So they've got to do that
Speaker 11: before he can actually declare. And I think that we
Speaker 11: are likely to see him declare, you know, anytime. I
Speaker 11: would say between like late May and mid June. And
Speaker 11: I was told yesterday they're really eyeing like the first
Speaker 11: two weeks of June, although there is a chance that
Speaker 11: they could you do Presidential Exploratory Committee before that. He's
Speaker 11: really under pressure to get into the race because while
Speaker 11: he hasn't declared, he's been certainly making all the moves
Speaker 11: for a presidential candidate. He's been to South Carolina, Iowa,
Speaker 11: New Hampshire, Nevada. He put out a memoir, He's done
Speaker 11: a book tour right now, he's in Israel, he just
Speaker 11: went to Japan. So he's really been making all the
Speaker 11: moves of a presidential candidate. But because he hasn't declared yet,
Speaker 11: it's really given of the former president Donald Trump a
Speaker 11: lot of time to attack him and try to weaken
Speaker 11: his candidacy before he's even declared. And we've really seen
Speaker 11: a big drop in the polls from DeSantis in the
Speaker 11: last three months.
Speaker 5: Yeah, and we know that former President Trump's polls numbers
Speaker 5: have picked up and were aided in a big way
Speaker 5: by his indictment in the state of New York. And
Speaker 5: on the subject of Trump, it really does seem like
Speaker 5: DeSantis is the only one currently that he feels like
Speaker 5: he's running against in this primary. You don't really see
Speaker 5: him going after the likes of Nicki Haley or Rick
Speaker 5: Scott in the same way.
Speaker 11: Absolutely so the Republican the polling on the Republican primary
Speaker 11: field is basically Trump has been leading everything. DeSantis is
Speaker 11: trailing him. You know, the margins sort of vary and
Speaker 11: then everybody else. So if if Trump is pulling at
Speaker 11: like forty six percent, DeSantis, you know, at this point,
Speaker 11: is pulling at twenty six percent, and then Nicky Haley
Speaker 11: and Mike Pence and all these other people are really
Speaker 11: pulling anywhere from like six percent to two percent. You know,
Speaker 11: it's really really low. And so the Republican field is
Speaker 11: interesting because there's a lot of people who have talked
Speaker 11: about getting in it. You know, New Jersey Governor Chris
Speaker 11: Christy has talked about getting into it at some point,
Speaker 11: but he's not in yet. But these other candidates just
Speaker 11: really haven't gotten traction so far.
Speaker 8: Well.
Speaker 5: And on this point, after we saw this past week
Speaker 5: President Biden formally finally entering the race, there was a
Speaker 5: lot of conversation about how in polls of voters general
Speaker 5: election preference, is Biden in theory leads Trump. Biden doesn't necessarily, though,
Speaker 5: lead other potential Republican candidates in the general should they
Speaker 5: be able to get through the primary.
Speaker 11: That's absolutely right. So in polling that we have so far,
Speaker 11: it shows Biden beating Trump again and again, but DeSantis
Speaker 11: in some of the polls beats Trump. But the thing
Speaker 11: that we've seen with Republican primary voters so far is
Speaker 11: like they're not gauging their desire about who to vote
Speaker 11: for just against who can beat Biden. They're really gauging
Speaker 11: it on like Storff, who they like, whose policies they
Speaker 11: agree with. And I think that what we've seen over
Speaker 11: the last few months is that Trump really has a
Speaker 11: very strong grip on the Republican Party still. You know,
Speaker 11: people some people hate him, but a ton of people
Speaker 11: love him, and he has really managed to hold on
Speaker 11: to this base of roughly thirty percent of Republican primary voters.
Speaker 5: And yet he still is ultimately going to have to
Speaker 5: come out top out on top in the primary race
Speaker 5: if we are to see a twenty twenty rematch between
Speaker 5: Trump and Biden. Biden and theory doesn't have to do that, right,
Speaker 5: He's pretty much guaranteed to be the Democratic nominee. No
Speaker 5: other major contender has emerged to challenge him. So at
Speaker 5: what point does the president actually have to start campaigning?
Speaker 5: What does he do now now that he's announced, What
Speaker 5: does he do next week the weeks that follow.
Speaker 11: So Biden is campaigning so far this week because he's
Speaker 11: meeting with donors this weekend in Washington to sort of
Speaker 11: outline the campaign, and some of his senior staff as too.
Speaker 11: But then what we're expecting him to see is really
Speaker 11: just just go back to business as usual at the
Speaker 11: White House for a while. He has the bully pulpit
Speaker 11: of the White House, you know, he can travel, make
Speaker 11: speeches from the Rose Garden. These are huge advantages being
Speaker 11: an incumbent and a reelection campaign, and we're not expecting
Speaker 11: his campaign to really heat up until next year. He's
Speaker 11: just going to continue to govern. He's going to do
Speaker 11: some foreign trips and just really show the American people
Speaker 11: that he's working for them. That's the message that they're
Speaker 11: trying to get out there.
Speaker 5: You mentioned donors. We have seen within major Republican donors
Speaker 5: them start to maybe question who they're going to support,
Speaker 5: or at least not be putting money directly toward any
Speaker 5: one candidate. Right now. Does President Biden face that same
Speaker 5: problem or are all Democratic donors pretty much in line
Speaker 5: with him?
Speaker 11: Well, the Democratic donors that we've talked about Bloomberg are
Speaker 11: planning to support Biden. I would say that they feel
Speaker 11: like they didn't get a ton of love from the
Speaker 11: Biden White House over the past two years, however, and
Speaker 11: many of them have reservations about Biden's age. He's eighty
Speaker 11: right now, and they're worried that he will be too
Speaker 11: old by the end of a second term. However, they're
Speaker 11: very worried about the threat of a second presidential term
Speaker 11: for Trump, and they're going to still support Biden. They're
Speaker 11: going to open up their pocketbooks.
Speaker 4: You know.
Speaker 11: They wish there was a little bit more of a
Speaker 11: charm offensive from the White House, but that's not going
Speaker 11: to stop them from supporting him.
Speaker 5: And as you alluded to, in the meantime, Biden does
Speaker 5: still have to do the business of being president, and
Speaker 5: in part that is includes ongoing debate over whether or
Speaker 5: not he's going to negotiate with Speaker McCarthy at all
Speaker 5: when it comes to the debt ceiling. Which is why
Speaker 5: the timing of his announcement struck me this past week,
Speaker 5: was because you have this ongoing battle that it regards
Speaker 5: the full faith and credit of the United States, and
Speaker 5: you pick this moment to say, Hey, I'm running again.
Speaker 5: How do you think the dead stealing drama colors this
Speaker 5: race at this point? Does it at all.
Speaker 11: Well, I think it colors the race because what posters
Speaker 11: keep hearing from Americans is that they are very worried
Speaker 11: about the economy, and some feel like the economy has
Speaker 11: even dipped into a recession officially, even though it hasn't.
Speaker 11: And so what the dead sealing does is it just
Speaker 11: means that it puts more pressure on President Biden to
Speaker 11: solve this problem and the Democrats as well, are the
Speaker 11: Republicans as well, because if there's a default or even
Speaker 11: a risk of it, it could really hurt the US
Speaker 11: economy and that in turn will hurt President Biden's economic message.
Speaker 5: Yeah, we'll see what happens between the President and how
Speaker 5: Speaker Kevin McCarthy, who, by the way, is we're looking
Speaker 5: ahead to next week, is going to be in Israel
Speaker 5: on Monday, only the second Speaker of the House to
Speaker 5: actually visit Israel and address the Knesset. So that's going
Speaker 5: to be us something interesting to watch in this coming week.
Speaker 5: And Nancy, we trust that you are going to be
Speaker 5: watching this all throughout the next year in change until
Speaker 5: we actually get to November twenty twenty four. Nancy Cook
Speaker 5: covers all things politics and the White House for US
Speaker 5: here at Bloomberg. Thank you so very much, and Amy,
Speaker 5: I'll send it back to you.
Speaker 1: Bloomberg's sound on co host Kaylee Lines, reporting from our
Speaker 1: Bloomberg ninety nine to one newsroom in Washington. Thank you, Kaylee.
Speaker 1: Coming up on Bloomberg day Break weekend, decision day for
Speaker 1: Australia's Central Bank. I'm Amy Morris. This is Bloomberg. This
Speaker 1: is Bloomberg day Break Weekend. Our global look ahead at
Speaker 1: the top stories for investors in the coming week. I'm
Speaker 1: Amy Morris in Washington. The US is not the only
Speaker 1: country with a big, closely watched central bank meeting this
Speaker 1: coming week. For more, we head out to the Pacific
Speaker 1: region and Daybreak Asia hosts Brian Curtis and Doug Prisner.
Speaker 3: Amy, we look full to the Reserve Bank of Australia
Speaker 3: meeting in the coming week. Inflation is slowing faster than
Speaker 3: RBA projections, and what that might mean is that the
Speaker 3: RBA will extend its pause in hiking interest rates.
Speaker 12: Gains in the consumer price index slow to a rate
Speaker 12: of one point four percent in the first quarter of
Speaker 12: this year. That is down from one point nine percent
Speaker 12: in the final quarter of last year, and the decline
Speaker 12: has pushed down the year over year inflation rate to
Speaker 12: seven percent from seven point eight percent in the prior quarter.
Speaker 3: So we have the next meeting to think about and
Speaker 3: we also hope to get some clarity on some of
Speaker 3: these recommendations made by the recent independent review of the
Speaker 3: Central Bank. And joining us now is James McIntyre, Bloomberg
Speaker 3: Asia Economist. So, James, you've written that it's not just
Speaker 3: the speed that we're seeing with disinflation, but it's some
Speaker 3: of the details.
Speaker 13: What are some of those details the speed? So you
Speaker 13: mentioned that seven percent year on year. The IRBI was
Speaker 13: looking for a seven point four so there's a low
Speaker 13: starting point for them. But the type of inflation that
Speaker 13: we're getting now is switching in Australia, so goods inflation
Speaker 13: has very much fallen away and this is what we
Speaker 13: were expecting to be happening, that transitory inflation is transiting out.
Speaker 13: There was still you know, we've still got seven percent
Speaker 13: so far, So what's in there. In the quarter that
Speaker 13: we just had, we had some pretty sizable impacts coming
Speaker 13: through some numbers in the health side of things. On education,
Speaker 13: so especially university fees was a big factor there. We're
Speaker 13: still getting some domestic and international travel and airfares and
Speaker 13: accommodation inflation pressures air but all of those things are
Speaker 13: sort of not the type of inflation that's going to
Speaker 13: have a central bank wanting to hit the brakes to
Speaker 13: crimp on demand and to kind of you be concerned
Speaker 13: about that wages and that cost pressure and that demand
Speaker 13: full type of inflation. Those factors I mentioned health education,
Speaker 13: some of those seasonal or police driven things. So there
Speaker 13: was a decision some time ago that is now flowing
Speaker 13: through the inflation data to increase the charges on university
Speaker 13: students and that's really hit those tertiary fees. Every year,
Speaker 13: some rebate programs for health expenditures wind off, and that
Speaker 13: gives you the inflation bump this time around. So those
Speaker 13: things are things that you sort of expected but were
Speaker 13: a little bit higher than normal, and they're baked into
Speaker 13: that services side of the economy or the services inflation measures.
Speaker 13: And when we think globally, that is where we're still
Speaker 13: seeing these lingering inflation pressures and so sort of thinking
Speaker 13: and picking up that global inflation zeitgeist, it looks like
Speaker 13: the Australian inflat services inflation is still a bit high,
Speaker 13: but a lot of that is administrative or policy driven things,
Speaker 13: not necessarily something that's a concern for a central bank.
Speaker 12: Why do you think it's been the case for the
Speaker 12: RBA that they were able to pause ahead of some
Speaker 12: of the other leading central banks what you saw.
Speaker 13: With the Central Bank here. We have a monthly meeting
Speaker 13: schedule at current and let's talk about that might change
Speaker 13: if the reviews wreck mendations come through from the middle
Speaker 13: of next year. But they meet monthly. They've been delivering
Speaker 13: back to back monthly increases. But one thing that's very
Speaker 13: interesting about the transmission of monetary policy in Australia, so
Speaker 13: where the actual policy rate, where the rubber meets the
Speaker 13: road and where it begins to hit main street on
Speaker 13: the economy, is that it's much much more effective here
Speaker 13: in Australia than across a range of other economies. We
Speaker 13: predominantly have variable rate mortgages, so those floating rates, none
Speaker 13: of these fifteen or thirty year fixed loans. Australian mortgages
Speaker 13: are generally on a floating rate that gets indexed. The
Speaker 13: changes every month based on changes in the cash rate.
Speaker 13: And so what we've seen there is we've seen those
Speaker 13: cash rate moves from the RBA have been linked to
Speaker 13: a rapid tightening that is vastly far ahead of a
Speaker 13: range of other central banks when you look at what
Speaker 13: has actually been hitting consumers and hitting households through that
Speaker 13: debt servicing cost channel of military policy.
Speaker 3: James, thanks so much for your insights. James McIntyre, Bloomberg
Speaker 3: Asia Economist. I'm Brian Curtis with Doug Christner. You can
Speaker 3: catch us every weekday here for Bloomberg Daybreak Asia, beginning
Speaker 3: at six am in Hong Kong and six pm on
Speaker 3: Wall Street.
Speaker 1: Amy all right, thank you Brian and Doug. That does
Speaker 1: it for this edition of Bloomberg day Break Weekend. Join
Speaker 1: us again Monday morning, five am Wall Street Time for
Speaker 1: the latest on markets overseas and the news you need
Speaker 1: to start your day. I'm Amy Morris. Stay with us.
Speaker 1: Top stories and global business headlines are coming up right now.