Speaker 1: Broadcasting live to New York, Bloomberg even to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg twelve hundred, to San Francisco, Bloomberg
Speaker 1: to the countries, US Exam General one nine and around
Speaker 1: the globe the Bloomberg Radio plus ath and Bloomberg got gone.
Speaker 1: This is taking Stock. I'm Kathleen Hayes along with Pam
Speaker 1: Fox Wednesday afternoon. It is a feder Reserve in focus today,
Speaker 1: a look at the Fed and the big banks. A
Speaker 1: lot of regulatory questions hanging over them. Yes, and we'll
Speaker 1: also be speaking with Frank Sarantino. He is the chief
Speaker 1: executive of connect One Bank. They are the fourth largest
Speaker 1: bank in New Jersey. We'll talk about such topics as
Speaker 1: financial technology, interest rates, regulation, and yes, cybersecurity. But right
Speaker 1: now let's go to Charlie Pellet in the Bloomberg news
Speaker 1: room for Bloomberg Business Flat and I thank you him,
Speaker 1: I thank you Kathleen. The DAL the SMP nez DAK
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Speaker 1: Stocks are higher, adding to an advance after their strongest
Speaker 1: one day gain since Marches. Signs of a stronger economy
Speaker 1: spur speculation it can withstand higher interest rates. People familiar
Speaker 1: with the matter say Chinese officials plan to ask their
Speaker 1: American counterparts in annual talks next month about the chance
Speaker 1: of a Federal Reserve interest rate increase in June, and
Speaker 1: people say that Chinese delegation will try to deduce whether
Speaker 1: a June or July rate rises more likely as the
Speaker 1: nations policy makers prepare for the potential impact on financial markets.
Speaker 1: Dan Skelly, as head of the Equity Model port folio
Speaker 1: team at Morgan Stanley Wealth Management, he told bloom Bird Television,
Speaker 1: whenever the Fed does move, China will definitely be watching.
Speaker 1: Our official view of Morgan Stanley is that we actually
Speaker 1: don't get the first rate hike this year till December,
Speaker 1: so really not till the end of the year, so
Speaker 1: we'll see what happens. But obviously the Chinese are very
Speaker 1: concerned about financial conditions. When we had the first rate
Speaker 1: hike back in December with the FED, and then back
Speaker 1: in August when the Chinese were fixing or appreciating their currency,
Speaker 1: financial conditions tightened and markets sold off very, very dramatically.
Speaker 1: So that's why the Chinese are concerned. But again our
Speaker 1: view is that the Fed doesn't hike till later this year.
Speaker 1: In December. Gold down five three a drop of point
Speaker 1: four SMP up sixteen a gain of eight tenths of
Speaker 1: one percent. And now let's take a look at other
Speaker 1: news from around the world. Thank you, Charlie from the
Speaker 1: Boomberg newsroom. I'm Bonny Quen. A State Department audit addresses
Speaker 1: Hillary Clinton's use of a Pivot email accountant server, while
Speaker 1: Secretary of State. Boomberg's Michael Bahr has more. The State
Speaker 1: Department audit claims previous secretaries of State, including Hillary Clinton,
Speaker 1: poorly managed emails and other computer information. The Associated Press
Speaker 1: obtained a copy of the report by the agency's Inspector General.
Speaker 1: According to the report, there were longstanding systemic weaknesses related
Speaker 1: to communications. The report also says the Department and its
Speaker 1: secretaries were slowly recognized and respond to new cyber security risks.
Speaker 1: Michael Barr Bloomberg Radio, how Speaker Paul Ryan has told
Speaker 1: reporters he has not come to a decision yet on
Speaker 1: the endorsement of Donald Trump. Earlier, two people close to
Speaker 1: the lawmaker told Bloomberg News speaker Ryan was ready to
Speaker 1: end the standoff. Those people said Ryan may and doors
Speaker 1: Trump for president this week. The speaker was said to
Speaker 1: be concerned about the split that's developed in the Republican Party.
Speaker 1: A Ukrainian pilot is thanking those who fought for her
Speaker 1: release from Russian custody. Nadejda Savchenko was released today and
Speaker 1: swapped for two Russian servicemen who were jailed in Ukraine.
Speaker 1: The pilot had been convicted of involvement in the deaths
Speaker 1: of two Russian journalists and was sentenced to twenty two
Speaker 1: years in prison. She was released after two years. A
Speaker 1: retrial for a New jerseyman accused of the nineteen seventy
Speaker 1: nine murder of six year old Eton Pots will begin
Speaker 1: after Labor Day. Pedro Hernandez Is May two thousand fifteen
Speaker 1: trial ended in a hung jury. The child advantished on
Speaker 1: his way to school and was carried dead. In two
Speaker 1: thousand one, Global News twenty four hours a day, powered
Speaker 1: by our twenty journalists and more than one fifteen news
Speaker 1: bureaus around the world. From the Bloomberg Newsroom, I'm Bonnie Quinn, Charlie,
Speaker 1: and we thank you and again recapping stocks are advancing
Speaker 1: the now up one sixty seven, a gain of one percent,
Speaker 1: Sump up sixteen, a gain of eight tenths of one percent.
Speaker 1: I'm Charlie Palatin. That's a Bloomberg business flash. This is
Speaker 1: taking stock the FED in focus on Bloomberg Radio feed
Speaker 1: a reserve? Will it raise interest rates next month July?
Speaker 1: And what does it mean for big banks? Big banks
Speaker 1: to have a lot of challenges from increased regulation, shin
Speaker 1: to increase, increased cyber security risk. Joining us now to
Speaker 1: discuss all of this. And Morris Frank Sergantino. He is
Speaker 1: chief executive officer at Connect One Bank. He is joining
Speaker 1: us from our New York studio. So, Frank, a lot
Speaker 1: of the markets actually moving a lot on FED rate hike,
Speaker 1: UH expectations right. And one of the ways they're moving
Speaker 1: is bank stocks start going higher when there's more signals
Speaker 1: the Fed's actually going to move. Are you in the
Speaker 1: camp that is hoping to Fed will will make the
Speaker 1: move so you can increase your net interest margins. Hi, Kathleen,
Speaker 1: always get to be with you. Um, you know it's interesting.
Speaker 1: I guess it's from a from a selfish perspective. Sure,
Speaker 1: higher rates will probably translate into higher profit margins, better
Speaker 1: net interest income for most financial institutions. Um, but higher
Speaker 1: interest rates will have, as we saw in December, also
Speaker 1: have the capability of roiling the markets and really creating confusion. Uh.
Speaker 1: It would be my own perspective that the Fed does
Speaker 1: not raise rates in the June time frame. Uh, we
Speaker 1: just don't see, you know, what what would be going
Speaker 1: on in the economy that would that would dictate to
Speaker 1: the Fed that they should raise rates. Frank and when
Speaker 1: if you get off our a little bit of detail
Speaker 1: about the business right now and tell us about things
Speaker 1: such as the real estate the operation. But I also
Speaker 1: know that that for example, you know, you know about
Speaker 1: the rideshare in the in the taxi industry, you're you're
Speaker 1: a lender to a variety of businesses we do. Um.
Speaker 1: So there's lots going on in both the real estate marketplace,
Speaker 1: and interest rates play a really big role in what's
Speaker 1: happening relative to you know, the entire real estate industry.
Speaker 1: Rising rates there is probably not a good thing, um
Speaker 1: and is creating you know, sort of the wall of
Speaker 1: worry for you know, a lot of people in that sector. Uh,
Speaker 1: probably something that the FED appreciate that it's doing right.
Speaker 1: It's forcing people to think through the risk of of
Speaker 1: higher rates in the future. So you know, a lot
Speaker 1: of disruption uh could potentially start to move into the
Speaker 1: marketplace relative to the thought process behind the FED raising
Speaker 1: rates on a consistent basis. So in terms of my
Speaker 1: glad you raised that question, they'll him about business because
Speaker 1: as a banker, particularly of a community banker, you see,
Speaker 1: you get it. You have your finger on the pulse
Speaker 1: in a way sometimes I think a lot of big
Speaker 1: banks don't. What is your sense of the health of
Speaker 1: this region and the economy more broadly right now from
Speaker 1: a banking perspective, you know, I think the New York
Speaker 1: metro region is probably, if not one of the strongest
Speaker 1: thus strongest part of the economy here in the US.
Speaker 1: Right it represents about ten percent of the U S economy,
Speaker 1: about one point six trillion dollars of GDP, and it's
Speaker 1: an incredibly diversified portfolio of businesses and you know, different
Speaker 1: types of operations you know right here within let's say
Speaker 1: a fifty mile radius of New York, say, uh, the
Speaker 1: the average business owner that we deal with here, it
Speaker 1: connect One bank certainly feels all the pressures, but at
Speaker 1: the same time sees a pretty good economic environment in
Speaker 1: front of them. Very low interest rates, pretty stable prices,
Speaker 1: stable material prices, stable labor prices, all boats very very well.
Speaker 1: Yet that's all painted on the backdrop of a very
Speaker 1: tumultuous global economy. Right We're hearing things about negative interest
Speaker 1: rates and problems around the globe, and and and I
Speaker 1: think that's what's going to ultimately weigh on the FED, right,
Speaker 1: the stronger dollar and and lots of other factors as
Speaker 1: to whether or not they need to raise rates. But
Speaker 1: at the same time, that jaw boning about rates, I
Speaker 1: believe is keeping is keeping things sort of in check,
Speaker 1: and we don't have runaway optimism in the marketplace, Frank,
Speaker 1: I want to keep things local for just a moment,
Speaker 1: if you can be sure, I think it has larger implications.
Speaker 1: Tell me about the taxi medallion, the loans secured by
Speaker 1: taxi medallions, and what you've seen there. Because we're living
Speaker 1: in an uber well at least an uber economy. It's
Speaker 1: a certain extent. So, you know, the taxi business specifically
Speaker 1: in New York City. Um, while the headlines would have
Speaker 1: you believe it's going out of business tomorrow, is actually
Speaker 1: quite robust. The battle for the business there is really
Speaker 1: more related to the drivers who drive for whether it's
Speaker 1: yellow or uh, you know, any of the transportation network companies.
Speaker 1: But but the business of taxi, they're still doing about
Speaker 1: the same number of rides per day, and they're still
Speaker 1: making about the same dollars per trip. Uh. And I
Speaker 1: don't know, I know, I think you guys live in
Speaker 1: the city as well as I do. It's uh, it's
Speaker 1: difficult that most times of the day to get a taxicab.
Speaker 1: And you've got more more more than a million, right,
Speaker 1: you've got more allion, we have a we have about
Speaker 1: that many. But like all other businesses, uh, there's a
Speaker 1: lot of change, right. So there's disruption in the transportation space.
Speaker 1: There's disruption in the hotel space. Uh and and in
Speaker 1: some in some areas, there's even you know, disruption in
Speaker 1: the multi family space right where buildings that were originally
Speaker 1: designed to the apartments and homes are now being used
Speaker 1: as CLOSEI hotels. There's tremendous disruption coming into financial space, right,
Speaker 1: Look what's going on with fintech and and and all
Speaker 1: the other types of businesses. So this is not something
Speaker 1: that's just relegated to transportation. The entire economy is being
Speaker 1: disrupted by technology plays and in some cases, you know,
Speaker 1: similar to the financial industry. Some of this disruption is good, right,
Speaker 1: it's forcing change, it's forcing forcing efficiencies within the system. Um,
Speaker 1: it's forcing business owners to think differently about their business.
Speaker 1: It doesn't necessarily mean those businesses are going to go away.
Speaker 1: Frank Sorrentino, thank you for spending time with this, Chief
Speaker 1: executive officer of Connect One Bank. They're based in Englewood Cliffs,
Speaker 1: New Jersey. You're listening to taking Stock on Bloomberg Radio.
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