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Speaker 1: Good morning. I'm Doug Chrisner. Here are the stories we're

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Speaker 1: following today. The more Fed officials today are saying, essentially

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Speaker 1: they're not in a rush to cut interest rates next year.

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Speaker 1: We heard from the head of the Atlanta FED, Rafael Bostik.

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Speaker 1: He was stressing patients as officials assess their next policy

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Speaker 1: move in.

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Speaker 2: Terms of getting glimpses of where the future's life that

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Speaker 2: it go. There are really three things I'm looking at,

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Speaker 2: and they really deal with the two sides of our mandate.

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Speaker 2: So inflation is too high. We got to get it

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Speaker 2: down to two percent. I've been paying a lot of

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Speaker 2: attention to what's happening in the three month, what's happening

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Speaker 2: in that six month, because those are the things that

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Speaker 2: are going to ultimately be the true contributors to overall inflation.

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Speaker 2: And what you see with those is that by alis

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Speaker 2: they have been more than where our headline numbers have been.

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Speaker 1: He is Raphael Bostik, the head of the Atlanta FED.

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Speaker 1: He went on to say he is expecting the FED

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Speaker 1: will cut rates twice twice in twenty twenty four, not

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Speaker 1: three times, and that will occur sometime in the second

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Speaker 1: half half of the year. We also heard today from

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Speaker 1: the head of the Richmond Fed, Tom Barkin. He was

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Speaker 1: saying that he's looking for quote consistency and breadth in

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Speaker 1: inflation data over the next several months, and mister Barkin

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Speaker 1: went on to say he is of the view that

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Speaker 1: the Fed would cut rates next year if here's the

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Speaker 1: caveat recent progress on inflation continues well. Deal making here

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Speaker 1: in the US has been somewhat tepid this year, and

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Speaker 1: it will likely eat into those holiday bonuses at the

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Speaker 1: big Wall Street firms Here's Bloomberg's and Kates.

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Speaker 3: The bonus pool at JP Morgan Chase will be close

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Speaker 3: to flat compared to twenty twenty two. At City Group

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Speaker 3: in the midst of its biggest restructuring in decades, the

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Speaker 3: pool will likely be a little changed, if not down slightly,

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Speaker 3: but Goldman Sachs and Bank of America are looking to

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Speaker 3: sweeten payouts by at least a few percentage points for

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Speaker 3: many of their traders this year. Wall Street's year under

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Speaker 3: Wards programs are volatile as the industry cycles through booms

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Speaker 3: and bus in Washington and Kates Bloomberg Radio.

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Speaker 1: Staying with the banks, we heard today from the head

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Speaker 1: of Bank of America Brian moynihan, and he was saying

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Speaker 1: BAVA is continuing to invest in its markets division.

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Speaker 4: We increase the size of the business three or four

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Speaker 4: years ago, and that's born fruit and they are keep

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Speaker 4: gaining market share and they're doing a great job. As

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Speaker 4: long as they can keep deployment, We'll keep pushing capital

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Speaker 4: because it's a great business in great format and we're

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Speaker 4: gaining market share honestly across the world, and it's a

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Speaker 4: global business that can access much deeper client based. Team's

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Speaker 4: done a great job, so they'll keep getting more commitments

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Speaker 4: consistent with them being able to get the returns on them.

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Speaker 1: Brian moynihan there the head of Bank of America. He

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Speaker 1: went on to comment on the health of the American

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Speaker 1: consumer one hand, saying consumers are in good shape with

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Speaker 1: higher savings than before the pandemic, and he said that

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Speaker 1: consumers are still spending between four to five percent more

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Speaker 1: this year than they did last. Apple, meantime racing to

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Speaker 1: tweak at software on those Apple watches ahead of a

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Speaker 1: ban here in the US. Engineers at Apple are trying

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Speaker 1: to make some changes to algorithms allowing the device to

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Speaker 1: measure a user's blood oxygen level. Now, these sensors use

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Speaker 1: a tech achnology from the tech firm Massimo, and that

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Speaker 1: company says that Apple is infringing on its patents. Now,

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Speaker 1: the CEO of Massimo, Joe Keani, told us he's willing

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Speaker 1: to settle with Apple for better men of people and

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Speaker 1: our mister shareholders. I put out the Olive branch on

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Speaker 1: one of these news programs that I would work with

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Speaker 1: them to improve their product or they can even put

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Speaker 1: these chips behind their product. But they haven't called. It

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Speaker 1: takes two to tang them. Joe Keani there, he is

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Speaker 1: the CEO of Massimo. Meantime, the White House is saying

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Speaker 1: it is tracking the ban imposed by the US International

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Speaker 1: Trade Commission on nearly all Apple Watch sales. This will

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Speaker 1: take effect on December twenty fifth. Now, retailers like Walmart

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Speaker 1: and best Buy can continue to sell the devices after

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Speaker 1: that date. However, Apple has told its staff it can't

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Speaker 1: let people know that fact. FedEx reported quarterly profit after

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Speaker 1: the bell. The numbers were a little below estimates. FedEx

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Speaker 1: went on to lower its forecast for the fiscal year

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Speaker 1: ending May thirty first, the company's saying that cost cuts

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Speaker 1: weren't enough to make up for volume declines in both

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Speaker 1: air freight and its trucking units as well. This comes

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Speaker 1: as consumer's return to stores and contend with not only

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Speaker 1: higher inflation, but higher interest rates. Here's Bloomberg's leak class cow.

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Speaker 5: I mean, listen, at the end of the day, parcel

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Speaker 5: carriers like FedEx or UPS or DHL, they're still going

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Speaker 5: through a process of normal normalization, and that normalization is

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Speaker 5: not the demand side. We're not there yet. Destocking in

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Speaker 5: the US seems to have run its course, which is

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Speaker 5: in that positive.

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Speaker 1: That is a Bloomberg's leak class cow. By the way,

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Speaker 1: shares and FedEx and lay trading down by more than

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Speaker 1: nine percent at the moment. And from the Bloomberg terminal,

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Speaker 1: former President Trump has been disqualified from the twenty twenty

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Speaker 1: four ballot in Colorado. That according to a court decision

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Speaker 1: in the state. And we'll have more coming up here

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Speaker 1: on daybreak Asia. In the meantime, let's get you Ca

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Speaker 1: up on Global News next. US Congress has given up

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Speaker 1: on a deal to get funding for Ukraine at least

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Speaker 1: this year. Ed Baxter has more from the Bloomberg News

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Speaker 1: re Madi.

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Speaker 6: Yeah, you're right, Doug. They haven't given up. They've just

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Speaker 6: this year they've they've kicked the can again down the road.

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Speaker 6: The Senate, he's been trying to work on breaking the

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Speaker 6: log jam to get more than sixty billion dollars to

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Speaker 6: Ukraine by year's end, but majority of Leader Chuck Schumer

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Speaker 6: has finally admitted now that more time is needed.

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Speaker 7: The bottom line, both Democrats and Republicans understand that there's

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Speaker 7: more work to do to pass legislation protecting America's security

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Speaker 7: and the security of the Western world.

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Speaker 6: So the sticking point is still the issue of the

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Speaker 6: US southern border, as he eludes a Senate Minority Leader

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Speaker 6: Mitch McConnell.

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Speaker 8: No question this package is extremely important. The most complicated

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Speaker 8: part of it actually is the border.

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Speaker 6: But Schumer did say that Vladimir Putin is already gloating

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Speaker 6: me while hearing all the talk over the last several

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Speaker 6: days about how much troubled Ukraine's war effort may be,

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Speaker 6: and President Volatimer Lenski today says is military isn't at

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Speaker 6: risk of losing the war and will continue to work

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Speaker 6: with the United States. He says, we are working very

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Speaker 6: hard on this, and I'm certain the United States of

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Speaker 6: America will not betray us, and that on which we

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Speaker 6: agreed in the United States will be fulfilled completely, so

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Speaker 6: that part of the story. Now, the US is now

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Speaker 6: saying that it's considering possible military strikes against Houthi rebels

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Speaker 6: in Yemen. Sources say planning is underway for actions intending

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Speaker 6: to cripple the Houthi's ability to target commercial ships by

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Speaker 6: hitting at the source. Now, this may be at least

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Speaker 6: a partial recognition that the new alliance announced yesterday may

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Speaker 6: not be enough to totally stop it, especially with the Huthi's

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Speaker 6: saying that they will continue the attacks. Defense Secretary here

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Speaker 6: Lloyd Austin.

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Speaker 8: These reckless, hooty attacks are a serious international problem and

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Speaker 8: they demand international response.

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Speaker 6: And the White House is expanding today on the so

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Speaker 6: called Operation Prosperity Guardian agreement that is meant to protect

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Speaker 6: commerce of the Red Sea, and a C spokesman John

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Speaker 6: Kirby's saying the US is reaching out across the globe

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Speaker 6: for helping stopping those houthy attacks.

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Speaker 9: I think where China could be helpful, quite frankly, is.

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Speaker 3: More with the influence that we know they have in.

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Speaker 6: Tehran, the conversations that they can have with the Supreme Leader,

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Speaker 6: and speaking of China, the US is saying that China

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Speaker 6: has stopped dangerous military acts and the air and sea.

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Speaker 6: In the week since Presidents She and Biden met, the

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Speaker 6: air and CEA challenges in close calls have ceased, it says.

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Speaker 6: China's military meanwhile, says it is stepping up military right

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Speaker 6: it iss as it's criticized a recent US arm sale

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Speaker 6: to Taiwan. The PLA says it is committed to firmly

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Speaker 6: maintaining peace and stability. Civil rights organizations have filed suit

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Speaker 6: today challenging the new Texas law that would allow police

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Speaker 6: to arrest migrants who across the border illegally and to

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Speaker 6: permit local judges to order them to leave the country.

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Speaker 6: That says the bill overrides bedrock constitutional principles and public

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Speaker 6: funeral services for Sandra Day O'Connor today, the first woman

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Speaker 6: to serve on the Supreme Court, Chief Justice John roberts

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Speaker 6: with glowing praise.

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Speaker 9: I've spoken with many women judges and lawyers who were

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Speaker 9: young adults when Justice O'Connor became the first They say

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Speaker 9: the same thing. Younger people today cannot understand what it

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Speaker 9: was like before Justice O'Connor in what now seems a

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Speaker 9: distant past.

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Speaker 6: She calls her strong and influential and iconic jurist Global

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Speaker 6: news twenty four hours a day and whatever you want

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Speaker 6: it with Bloomberg News now in San Francisco. I'm at

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Speaker 6: Baxter and this is Bloomberg.

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Speaker 1: Let's get to Steve Matthews, Bloomberg's economics reporter, helping us

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Speaker 1: understand the latest Fed speak. Steve always a pleasure. Are

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Speaker 1: we getting conflicting messages from the Fed?

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Speaker 8: I guess a little bit in that it seems like

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Speaker 8: Powell last week Chair Powell was very much, you know,

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Speaker 8: kind of hinting at rate cuts and said nothing really

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Speaker 8: about the timing, and the FMC was predicting in the

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Speaker 8: dot plot that there would be three cuts in twenty

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Speaker 8: twenty four. And you know, in the last couple of

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Speaker 8: days we've had just a huge group of FED presidents

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Speaker 8: and governors come out and say, hey, wait a minute.

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Speaker 8: You know, we're not promising anything. You know, it's still

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Speaker 8: possible we could go higher. You know, there's nothing in

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Speaker 8: the near term. So there is a sense that maybe

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Speaker 8: markets went too far in the view of the Fed,

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Speaker 8: and they're trying to correct the impression that you know

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Speaker 8: that there could be rate cuts as soon as March.

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Speaker 1: You know, a couple of weeks back, former Treasury Secretary

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Speaker 1: Larry Summers was saying, when the FED decides to pivot,

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Speaker 1: that's going to be a seismic moment. And I think

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Speaker 1: that's occurred now. We've heard a fair amount of criticism too.

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Speaker 1: To be fair, today, Mohammad Larian, who is of course

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Speaker 1: Ay Bloomberg opinion columnist, was saying the Fed's communication is

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Speaker 1: confusing people, and he went on to say it's really

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Speaker 1: fueling a moral hazard. Is there a problem developing that

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Speaker 1: is a serious nature? Do you think, Steed?

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Speaker 8: You know, in some ways this is just the way

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Speaker 8: the FED is. I mean, the FED, by definition is

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Speaker 8: the Federal Open Market Committee is nineteen people. I mean,

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Speaker 8: there's seven governors, there are twelve presidents, and they're all speaking,

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Speaker 8: not all the time, but many of them seem like

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Speaker 8: they're speaking, you know, repeatedly during the week, I mean,

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Speaker 8: and some days they're half a dozen or more speaking,

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Speaker 8: and you're going to get a cacophony of noise, and

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Speaker 8: you know, people with different opinions and different spins on

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Speaker 8: where things are, and so you know, to a certain extent,

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Speaker 8: the markets have to decide who is important, who do

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Speaker 8: you want to listen to? You know, how do you

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Speaker 8: put it all together and not kind of overreact to

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Speaker 8: every single every single speech.

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Speaker 1: So today the head of the Atlanta Fed, Raphael Bastic,

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Speaker 1: was saying that he doesn't really see an urgency to

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Speaker 1: cut rates next year, and I think he's only looking

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Speaker 1: at two not three. Would you put Bostic in the

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Speaker 1: more hawkish camp.

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Speaker 8: It's funny because all last year, you know, we referred

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Speaker 8: to Bostick as a leading dove, and now he's seen

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Speaker 8: is a little bit leaning hawkishly, and you know, in

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Speaker 8: a way, he really hasn't changed his view at all.

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Speaker 8: A year ago, he was saying, we need to get

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Speaker 8: rates up to about five percent and then stop and

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Speaker 8: then hold it there for a long time, because that

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Speaker 8: would be enough to be restrictive and enough to kind

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Speaker 8: of depress economic activity and keep inflation lower over time.

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Speaker 8: And that's where he's still is. I mean, they got up,

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Speaker 8: they got rights to five percent and a little bit higher,

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Speaker 8: and he's been saying, you know, we need to hold

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Speaker 8: it there for a long time. But for a while,

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Speaker 8: that put him on the Duvish side of the FMC.

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Speaker 8: Now he's a hawk, although his basic view hasn't really

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Speaker 8: changed much at all.

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Speaker 1: You know, the FED has said repeatedly that it is

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Speaker 1: data depended. Now this week we're going to get some

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Speaker 1: very key numbers. We have a print, i think on

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Speaker 1: durable goods orders along with the final estimate on third

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Speaker 1: quarter growth and perhaps more importantly, the personal consumption expenditures data,

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Speaker 1: and we know that that's the Fed's preferred measure of inflation.

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Speaker 1: Do you have a sense of what to expect here?

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Speaker 8: The PCE inflation data is going to be really key,

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Speaker 8: and the Wall Street estimates are that it's going to

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Speaker 8: be really good news that as opposed to the CPI,

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Speaker 8: which was a little bit disappointing. That the PCE data

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Speaker 8: includes some of the the producer Price index data as well,

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Speaker 8: and in combining that that you're going to get a

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Speaker 8: really low number. And if that turns out to be

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Speaker 8: the case, that is going to lead you know, Wall

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Speaker 8: Street understandably so to believe that. You know, rate cuts

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Speaker 8: may be in the offing as early as March.

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Speaker 1: So you look at today's data, new home construction in

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Speaker 1: a month of November surging by nearly fifteen percent. And

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Speaker 1: we also had a conversation with Brian moynihan at the

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Speaker 1: head of Bank of America, and he was saying, the

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Speaker 1: American consumer is in very good shape. So I think

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Speaker 1: more and more this idea of soft landing is not

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Speaker 1: just theoretical. It's almost coming into view, isn't it.

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Speaker 8: Absolutely? And in fact, you know, I think the big

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Speaker 8: picture is for most of a year, the Fed, including

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Speaker 8: Chair Powell, was saying, we need to see pain. We

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Speaker 8: need to see pain in the economy because it's going

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Speaker 8: to take higher unemployment to get things to cool off

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Speaker 8: and to get inflation to come down. And therefore, you know,

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Speaker 8: we're going to have some higher unemployment to cool things off.

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Speaker 8: And now it looks like a lot of the inflation,

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Speaker 8: most of the inflation was caused by supply disruptions associated

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Speaker 8: with COVID and the following follow up from all of that.

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Speaker 8: So that now that that is correcting, and you had

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Speaker 8: the also the war in Ukraine and what that energy prices.

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Speaker 8: Now that that is all kind of correcting, it seems

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Speaker 8: like there won't be the need for pain, and there's

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Speaker 8: kind of become much more of a consensus on Wall

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Speaker 8: Street and at the FED that they can get the

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Speaker 8: soft landing, and so the outlook for twenty twenty four

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Speaker 8: is looking a lot better.

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Speaker 1: It's going to be very interesting tomorrow. I think we

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Speaker 1: get tomorrow morning the conference boards reading on consumer confidence,

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Speaker 1: and I guess you could pretty easily make the case

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Speaker 1: that these numbers may be a little elevated. Couple of

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Speaker 1: factors to consider here, higher stocks that's clearly the case,

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Speaker 1: a lower mortgage rates, and cooling inflation.

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Speaker 8: Right, Yeah, absolutely, I mean there's every reasona believe that

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Speaker 8: confidence is going to begin to recover and continue to recover.

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Speaker 8: It's funny, Danny blanche Flower a couple of years ago

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Speaker 8: was predicting a recession because we're having just awful confidence data,

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Speaker 8: and the data has stayed pretty much awful for most

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Speaker 8: of the past year and a half. And now things

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Speaker 8: are getting better and maybe you'll start to see a

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Speaker 8: little bit better confidence data.

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Speaker 1: Steve, thanks for joining us. Always a pleasure. Steve Matthews,

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Speaker 1: a Bloomberg Economics reporter, joining us from our studios in Atlanta.

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