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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Daybreak You Up podcast, available every morning on Apple, Spotify

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Speaker 1: or wherever you listen. It's Friday, the fifteenth of November

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Speaker 1: in London. I'm Caroline Hepke and.

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Speaker 2: I'm Stephen Carroll. Coming up today. Jerome Powell says the

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Speaker 2: strong US economy means the Federal Reserve can take its

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Speaker 2: time on interest rate cuts.

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Speaker 1: Rachel Reeves says the UK's post financial crisis crackdown on

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Speaker 1: banks has gone too far and plans on reversing course.

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Speaker 2: Plus bankers are dancing in the streets. Jamie Diamond tells

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Speaker 2: Bloomberg the industry is looking forward to the prospect of

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Speaker 2: fewer regulations under Donald Trump.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 1: The Federal Reserve chairg your own. Powell says the remarkably

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Speaker 1: good performance of the US economy means the Central Bank

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Speaker 1: does not need to rush to cut interest rates.

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Speaker 3: The economy is not sending any signals that we need

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Speaker 3: to be in a hurry to lower rate. The strength

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Speaker 3: we're currently seeing in the economy gives us the ability

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Speaker 3: to approach our decisions carefully.

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Speaker 1: After Powell's remarks two year US treasury yield spiked, extending

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Speaker 1: a move that we've seen since last week's election results.

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Speaker 1: His comments last week on the status of his own

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Speaker 1: job under the incoming Trump administration were followed up as

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Speaker 1: Powell also discussed the Fed's independence.

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Speaker 3: I've spent a lot of time on Capitol and I

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Speaker 3: think where it really matters on both sides of Capitol Hill,

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Speaker 3: the Senate and the House, in both political parties, there's

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Speaker 3: a broad understanding that an independent central bank is very

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Speaker 3: important in just serving the public as best we can.

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Speaker 3: We're not perfect. Everyone makes mistakes, but you'll get the

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Speaker 3: best results if you have people who are just focused

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Speaker 3: on that task and separate from politics.

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Speaker 1: Powell made no direct comment on the possibility of a

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Speaker 1: cut at the fed's December meeting, but his wider view

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Speaker 1: on US economic resilience led trade is to pair their

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Speaker 1: bets on whether policymakers will take action. They now see

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Speaker 1: around a sixty percent chance of a cut. That's down

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Speaker 1: from eighty percent yesterday.

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Speaker 2: Just some breaking news this era on the UK economy,

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Speaker 2: which shrank by zero point one percent in September. The

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Speaker 2: estimate had been for growth of zero point two percent

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Speaker 2: in the month, the preliminary third quarter GDP rising then

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Speaker 2: by less than had been expected zero point one percent.

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Speaker 2: Estimates had been for zero point two percent. In a

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Speaker 2: statement accompanying the official data, the monthly real GDP estimation

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Speaker 2: to have fallen in September because of declines and manufacturing

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Speaker 2: output and information and communications services well.

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Speaker 1: Andrew Bailey says that Britain's growth potential has fallen significantly

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Speaker 1: and needs reform. In his speech to the City of

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Speaker 1: London at Mansion House, the Bank of England governor said

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Speaker 1: the country needs to look at how it invests.

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Speaker 4: Potentral supply and growth matter a lot. We don't have

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Speaker 4: a good recent inheritance, so it is a big issue

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Speaker 4: and it needs our attention, investment in capital formation and

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Speaker 4: how to increase it matter.

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Speaker 1: Andrew Bailey then the event at Mansion House or the

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Speaker 1: heads of Britain's monetary and fiscal policy talk about trying

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Speaker 1: to revive growth hopes. Bailey added that he supports free trade.

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Speaker 1: He warned against the UK raising tariffs in retaliation to

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Speaker 1: an expected wave of US led protectionism, and he said

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Speaker 1: that he would welcome opportunities to rebuild ties with the

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Speaker 1: EU Bloomberg analysis separately shows a change of the Central

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Speaker 1: Bank's bond portfolio in recent weeks has actually freed up

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Speaker 1: ten billion pounds for the Treasury to spend.

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Speaker 2: Speaking at the same event as the Bank of England Governor,

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Speaker 2: the Chancellor of Rachel Reeves said the crackdown on banks

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Speaker 2: after the two thousand and eight financial crisis went too far.

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Speaker 2: She says the UK and now needs to regulate for growth,

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Speaker 2: not for risk.

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Speaker 5: It is important that we learn the lessons of the past.

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Speaker 5: These changes have resulted in a system which sought to

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Speaker 5: eliminate risk taking that has gone too far and in

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Speaker 5: places it has had unintended consequences that we must now address.

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Speaker 2: In her first Mansion House speech, Reeves called financial so

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Speaker 2: as the crown jeal of the British economy. The Chancellor

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Speaker 2: also announced plans to merge small pension funds into megafunds

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Speaker 2: worth eight hundred billion pounds.

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Speaker 1: And the UK Chancellor isn't the only one warning that

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Speaker 1: regulation is hurting growth. The CEO of JP Morgan Chase

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Speaker 1: Jamie Darman has also been weighing in on this issue,

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Speaker 1: saying that many in the industry are likely to appreciate

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Speaker 1: a shift and approach from President Elect Donald Trump's incoming administration.

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Speaker 6: You know a lot of bankers they are like dancing

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Speaker 6: in the street because you know they've had successive years

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Speaker 6: and years of regulations, a lot of which steimi credit.

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Speaker 6: You could have kept the banks equally safe but had

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Speaker 6: them do more credit. Just you've an example the average

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Speaker 6: bank in America. I think the number is used to

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Speaker 6: have one hundred dollars of deposits and hundred dollars loans,

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Speaker 6: and now it's one hundred dollars deposits as sixty five

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Speaker 6: dollars loans.

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Speaker 1: The JP Morgan CEO also shared his thoughts on Trump's

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Speaker 1: threat to impose widespread tariffs on imports.

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Speaker 6: If you read all this stuff that he said as advisors,

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Speaker 6: you know he also says it's going to get get

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Speaker 6: him to the table. You know you have a free

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Speaker 6: trade agree with us. My guess is that's fine. When

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Speaker 6: when I believe I can't put words about me he

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Speaker 6: says free and fair trade, he means equally, means should

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Speaker 6: you're tariffs of twenty percent and our charish of five,

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Speaker 6: He's going to put twenty on you.

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Speaker 1: Twelve minutes before Diamond took to the stage of the

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Speaker 1: APEX CEO's summit to make those comments. Donald Trump released

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Speaker 1: the statement ruling out a nomination for the JP Morgan

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Speaker 1: Coeo himself. Responding at the event, Diamond said quote, I

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Speaker 1: haven't had a boss in twenty five years, and I'm

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Speaker 1: not about ready to start.

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Speaker 2: President elect Trump has nominated vaccine skeptic Robert F. Kennedy

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Speaker 2: Junior to lead the Department of Health and Human Services.

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Speaker 2: Wendy Benjaminson is our deputy managing editor for US Government

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Speaker 2: News in Washington. She says, if he's confirmed, RFK would

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Speaker 2: play a major role in American lives.

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Speaker 7: I mean there was talk that he might get an

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Speaker 7: advisory role, something like Elon Muskin, Vivey Gramaswami God, some

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Speaker 7: sort of off the book, you know, project to work on. Instead,

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Speaker 7: he put him right at the heart of Americans health

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Speaker 7: and diet.

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Speaker 2: Wendy Benjaminson says RFK Junior's views are likely to face scrutiny.

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Speaker 2: During his Senate confirmation hearing during the COVID nineteen pandemic,

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Speaker 2: he called vaccines a crime against humanity, shares and vaccine

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Speaker 2: makers fail on the use of his nomination. With Maderna

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Speaker 2: Pfizer and Novovaks all down.

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Speaker 1: And lastly, retail sales in China grew by four point

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Speaker 1: eight percent in October, the strongest paced in eight months.

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Speaker 1: The data is a positive sign for the government in Beijing,

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Speaker 1: which has announced bold stimulus measures to boost the economy.

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Speaker 1: Chinese benchmark CSI three hundred initially paired some losses but

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Speaker 1: is currently down one point seven percent at the moment.

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Speaker 1: We're going to bring you more on the Chancellor's message

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Speaker 1: for the UK financial industry at last night's Mansion House speech,

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Speaker 1: plus some of what JP Morgan's Jamie Diamond has been

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Speaker 1: talking about. But first, there was another story that caught

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Speaker 1: our attention this morning.

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Speaker 2: Yeah, this is you may have seen this headlines floating

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Speaker 2: around the Onion, the sterical news site winning a bid

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Speaker 2: to buy the info Wars site, which was founded by

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Speaker 2: the right wing conspiracy theorist Alex Jones. The deal, though,

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Speaker 2: isn't actually done yet. The site was for sale as

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Speaker 2: part of a bankruptcy auction, so Jones needs to pay

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Speaker 2: down around one and a half billion dollars in defamation

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Speaker 2: payments over judgments. That's over statements that he made calling

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Speaker 2: the twenty twelve Sandy Hook School shooting a hoax. Now,

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Speaker 2: the bid buy the Onion for the website had actually

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Speaker 2: been supported by money from families are the victims of

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Speaker 2: that shootings. The bid had been approved, but the bankruptcy

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Speaker 2: judge has actually put the sale on hold now as

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Speaker 2: he reviews the transparency of the process that was Unfather's

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Speaker 2: going to be hearing next week that takes place on

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Speaker 2: that as well. Lawyers for the Onion believe the deal

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Speaker 2: is secure, but this is, you know, a move that

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Speaker 2: was being made to make a point. Now it's still

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Speaker 2: kind of caught up in legal wranglings.

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Speaker 1: Yeah, and Steven, I think you've done a good job

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Speaker 1: of extracting all of the kind of wild interest that

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Speaker 1: there has been in this story, and you know the

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Speaker 1: way that it's been reported in this huge battle really

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Speaker 1: on this side at the Atlantic. You know, the Info

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Speaker 1: Wars story with the Sandy Hook families has just been

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Speaker 1: seems really immensely destructive. But as you say, the judge

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Speaker 1: in this case is actually doesn't care who buys this asset.

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Speaker 1: It's all about the process, the legal process.

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Speaker 2: Well, that's bringing more now one of our top stories

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Speaker 2: this morning, and Jamie Diamond, the CEO of JP Morgan

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Speaker 2: Chase being optimistic about the potential for growth under the

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Speaker 2: Trump administration, predicting that animal spirits will be unleashed as

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Speaker 2: companies consider acquisitions and investments. We've got Bloomberg's finance editor

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Speaker 2: for the UK and Middle East, Jenny Surrain, with us

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Speaker 2: in studio for more on this, and also the Chancellor's

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Speaker 2: Mansion House speech, Jenny, which you were reporting on yesterday too.

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Speaker 2: I want to start with these comments though, about Jamie

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Speaker 2: Diamond being quite optimistic about the Trump administration and even

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Speaker 2: potentially on the issue of tariffs.

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Speaker 8: Yeah, he has some interesting comments. I think a lot

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Speaker 8: of these banks, they are probably most looking forward to

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Speaker 8: an environment that's more conducive to deal making. That will

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Speaker 8: really help, especially with interest rates coming down, you know,

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Speaker 8: hurting the kind of net interest income revenue that they generate.

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Speaker 8: Knowing that there's an administration on the way that might

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Speaker 8: support some of their investment banking fees and markets trading revenue,

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Speaker 8: I think is certainly welcome news for these guys. And

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Speaker 8: then on the tariffs front, I actually think he wouldn't

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Speaker 8: be supportive at all. Most of these banks talk about,

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Speaker 8: you know, the need for globalization and how important that

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Speaker 8: is to conducting their daily business. But what he said

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Speaker 8: was if you actually read his books, which we think

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Speaker 8: he was referring to the Art of the Deal and

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Speaker 8: some of the other books that Trump put out obviously

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Speaker 8: many decades ago now, was that he thinks this is

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Speaker 8: really more of a negotiating tactic and something to kind

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Speaker 8: of bring other countries to the table. But it sounds

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Speaker 8: like he's sort of pouring cold water on the idea

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Speaker 8: that the tariffs will actually happen.

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Speaker 1: Yes, thought in of itself is quite interesting, isn't this.

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Speaker 8: Yeah, it's definitely interesting. I mean it's hard because obviously,

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Speaker 8: you know, I think these guys are probably still back

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Speaker 8: at their offices game planning for any eventualities. So on

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Speaker 8: the on their surface, it seems like, you know, j

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Speaker 8: Diamond is kind of putting cold water, as I said,

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Speaker 8: But I'm sure back at the office everybody's kind of

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Speaker 8: patiently working out what would actually happen in a world

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Speaker 8: like that.

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Speaker 2: There is a link here, though, in a conversation around deregulation,

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Speaker 2: between what we heard from Jamie Diamond speaking in Peru

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Speaker 2: what we heard from the UK Chancellor Rachel Reeves when

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Speaker 2: she was speaking at Mansion House last night, this big

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Speaker 2: set piece event where the Chancellor gets to speak to

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Speaker 2: the finance industry, so much anticipation around it because it's

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Speaker 2: the first one of these from Rachel Reeves and from

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Speaker 2: this new government as a result. I mean, talk to

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Speaker 2: us around that. I suppose what Rachel Reeves had to

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Speaker 2: say on this issue, and she's saying that banking regulation

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Speaker 2: has gone potentially too far.

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Speaker 8: Yeah, I think it's really interesting because so yes, so

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Speaker 8: Rachel Reeves last night, she talked at length about how

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Speaker 8: she's worried that for the past really ever since the

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Speaker 8: global financial crisis in two thousand and eight, that regulators

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Speaker 8: were regulating to eliminate risk entirely, and then that is

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Speaker 8: really is what has hindered growth in the UK, and

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Speaker 8: she wants to kind of unleash growth and so she's

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Speaker 8: going to, you know, order the regulators to kind of

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Speaker 8: have growth in mind whenever they take any steps against

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Speaker 8: the financial services firms and the industry. It's sort of

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Speaker 8: interesting because we do see a lot of analyst speculating,

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Speaker 8: you know, now that you know President elect Trump is

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Speaker 8: set to come to power in January, what will he

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Speaker 8: do on the financial services side. He hasn't given us

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Speaker 8: that many signals. Like obviously his broader message is one

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Speaker 8: of deregulation, but you know, what exactly will that mean

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Speaker 8: for banks and financial services firms more specifically, It's yet

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Speaker 8: to be known, but certainly it feels like right now

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Speaker 8: there's a little bit of a race to the bottom

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Speaker 8: on the regulation front, and it creates a competitive dynamic

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Speaker 8: between UK banks, US banks, European banks and really puts

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Speaker 8: pressure on these regulators to kind of pay attention to

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Speaker 8: what one or the other are doing. And certainly it's

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Speaker 8: something that you know, we hear a lot of people

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Speaker 8: who focus a lot on financial stability. They're really worried about.

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Speaker 1: Yes, And I think it also makes for quite a

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Speaker 1: strange bag of policies from this labor administration, right that

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Speaker 1: came in the first thing they did basically an office

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Speaker 1: was to raise pay for public sector work is without

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Speaker 1: really attaching kind of productivity targets to those pay rises.

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Speaker 1: And now a real focus on generating economic growth out

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Speaker 1: of the fundamental financial services sector. It's a strange mix.

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Speaker 8: It is really strange. I think. You know, they've faced

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Speaker 8: a lot of criticism from the business community, especially after

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Speaker 8: the budget and the investment summit that we had last

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Speaker 8: month where people felt like the message was growth, but

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Speaker 8: the actual you know, actions to back up that message

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Speaker 8: weren't really there. And and so I think they're trying

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Speaker 8: to kind of take that feedback on board. And you

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Speaker 8: see that with last night's speech, where a lot of

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Speaker 8: it really felt like a tailored kind of you know,

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Speaker 8: siren call almost to these financial services firms, these big bankers.

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Speaker 8: You know, hey, come on board, come along with us.

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Speaker 8: We really want to see growth come back. We will

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Speaker 8: do whatever we can to make that happen, and really

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Speaker 8: trying to kind of open up the open of the circle,

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Speaker 8: as it were.

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Speaker 1: What was she specifically offering to think that the bankers

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Speaker 1: in the city might have picked up on.

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Speaker 8: I think so there are a lot of this stuff.

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Speaker 8: I think the general message of you know, telling regulators,

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Speaker 8: we want you to focus more on growth, not than

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Speaker 8: anything else, but we want you to focus more on

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Speaker 8: growth at least. I think that's one that especially when

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Speaker 8: you have things like you know, the FCA is currently

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Speaker 8: inquiring about motor finance across the industry, and that's really

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Speaker 8: weighed on a lot of these bank stocks. It's you know,

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Speaker 8: something that investors are really closely paying attention to. So

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Speaker 8: if you have this this new not a new mandate,

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Speaker 8: but the secondary mandate of focusing on growth and sharing

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Speaker 8: that the UK remains competitive, I think these banks are

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Speaker 8: happy to hear that this government is at least trying

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Speaker 8: to make strides towards eliminating some of those regulatory risks

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Speaker 8: that they've been facing and feel are far too onerous

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Speaker 8: and more costly than what their US peers have to

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Speaker 8: deal with.

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Speaker 2: There will be those out there, though, who will also

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Speaker 2: be wondering whether it's responsible to send signals like that

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Speaker 2: to a financial industry. These regulations didn't come out of

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Speaker 2: thin air, or they were put in place because of

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Speaker 2: failings in the industry which led to some of the

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Speaker 2: problems in two thousand and eight. I mean, how much

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Speaker 2: I suppose how much can we think about that question

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Speaker 2: of whether you know this is this is something that

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Speaker 2: is a good idea?

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Speaker 8: Frankly, yeah, no, I absolutely think they run the risk

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Speaker 8: of playing with fire here. So like one of the

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Speaker 8: ones that we really focused on last night actually was

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Speaker 8: she announced that they're looking at part of the senior

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Speaker 8: managers and certification regime here in the UK and this

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Speaker 8: is a rule that was implemented in the aftermath of

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Speaker 8: two thousand and eight to really hold executives at banks

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Speaker 8: accountable if you know, misconduct happens on their watch, and

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Speaker 8: she was saying that, you know, no, the industry has

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Speaker 8: really found that, especially for the folks below the senior

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Speaker 8: manager level, banks have found this too costly to owners,

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Speaker 8: to administratively time consuming, and so we're going to look

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Speaker 8: at that and potentially just roll it entirely back. And

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Speaker 8: so this rule, to your point, was created with you know,

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Speaker 8: really clear cause and affected mind. And so I do

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Speaker 8: think we'll hear a lot more, you know, now that

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Speaker 8: people have kind of had time to digest everything that

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Speaker 8: she announced. It was a very jam pack speech, but

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Speaker 8: certainly it will be a question on people's mind in

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Speaker 8: the coming weeks.

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