1
00:00:02,480 --> 00:00:03,000
Speaker 1: Good morning.

2
00:00:03,080 --> 00:00:05,920
Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the

3
00:00:05,960 --> 00:00:07,440
Speaker 2: stories we're following today.

4
00:00:08,000 --> 00:00:10,960
Speaker 3: We begin with major news on the political front. The

5
00:00:11,000 --> 00:00:14,040
Speaker 3: New York Times is reporting former President Donald Trump may

6
00:00:14,040 --> 00:00:19,200
Speaker 3: have shared potentially sensitive information regarding US nuclear submarines. Bloomberg

7
00:00:19,280 --> 00:00:20,680
Speaker 3: Zed Baxter has the story.

8
00:00:21,320 --> 00:00:25,320
Speaker 4: The shared information reportedly included how many nuclear warheads US

9
00:00:25,360 --> 00:00:28,200
Speaker 4: submarines carry and how close they can get to a

10
00:00:28,280 --> 00:00:32,400
Speaker 4: Russian submarine without being detected, part of a conversation after

11
00:00:32,440 --> 00:00:35,520
Speaker 4: Trump left office at mar A Lago with Australian businessman

12
00:00:35,600 --> 00:00:39,720
Speaker 4: Anthony Pratt, who runs one of the world's largest cardboard companies.

13
00:00:40,159 --> 00:00:43,639
Speaker 4: The report says Special counsel Jack Smith has reviewed the claims.

14
00:00:43,960 --> 00:00:47,360
Speaker 4: A Trump spokesperson says the DOJ should be looking into

15
00:00:47,400 --> 00:00:52,760
Speaker 4: criminal leaking instead of perpetrating baseless witch hunts. I'm at

16
00:00:52,800 --> 00:00:54,040
Speaker 4: Baxter Bloomberg Radio.

17
00:00:54,360 --> 00:00:57,360
Speaker 2: All right, ed, thank you. While former President Trump effaces

18
00:00:57,480 --> 00:01:00,160
Speaker 2: this new accusation, he's getting even more involved in the

19
00:01:00,200 --> 00:01:04,160
Speaker 2: speakership fight on Capitol Hill. Trump is endorsing Congressman Jim

20
00:01:04,240 --> 00:01:07,360
Speaker 2: Jordan over Steve Scalise, calling him a star on his

21
00:01:07,520 --> 00:01:12,040
Speaker 2: truth social account. A fellow conservative Republic and Congressman Byron Donald,

22
00:01:12,080 --> 00:01:14,560
Speaker 2: so Florida says he supports Jordan too.

23
00:01:14,880 --> 00:01:18,080
Speaker 5: Jim Jordan can stept right into the top leadership spot,

24
00:01:18,560 --> 00:01:21,520
Speaker 5: lead our conference and get us back focused on not

25
00:01:21,640 --> 00:01:25,600
Speaker 5: just doing the appropriations process, but also the accountability of

26
00:01:25,640 --> 00:01:29,199
Speaker 5: this administration and the Democrats up here on Capitol Hill

27
00:01:29,640 --> 00:01:32,800
Speaker 5: number two. Jim Jordan has been in the center of

28
00:01:32,840 --> 00:01:36,360
Speaker 5: our political battles for quite some times. He knows the pitfalls.

29
00:01:36,560 --> 00:01:39,400
Speaker 2: Congressman Byron Donald spoke with Joe Matthew and Marie hor

30
00:01:39,520 --> 00:01:42,040
Speaker 2: Dern on Balance of Power. Catch the show weekdays at

31
00:01:42,080 --> 00:01:44,360
Speaker 2: five pm Eastern on Bloomberg Television.

32
00:01:44,560 --> 00:01:47,200
Speaker 3: Turning to the White House, Karen, President Biden maybe getting

33
00:01:47,200 --> 00:01:49,520
Speaker 3: closer to firming up a meeting with Chinese President she

34
00:01:49,680 --> 00:01:52,680
Speaker 3: Jen Ping next month, sources tell Bloomberg. Both the US

35
00:01:52,680 --> 00:01:54,840
Speaker 3: and China have been scouting sites where the two leaders

36
00:01:54,880 --> 00:01:58,080
Speaker 3: could get together at next month's APEC summit in San Francisco.

37
00:01:58,360 --> 00:02:01,320
Speaker 3: President She hasn't sat face to face with President Biden

38
00:02:01,360 --> 00:02:04,320
Speaker 3: since the G twenty in Bali, Indonesia, last November.

39
00:02:04,920 --> 00:02:07,440
Speaker 2: While turning to the economy, now, Nathan wall Street is

40
00:02:07,560 --> 00:02:10,519
Speaker 2: racing for the September jobs are poored economists expect the

41
00:02:10,600 --> 00:02:13,280
Speaker 2: data to show employers added one hundred and seventy thousand

42
00:02:13,280 --> 00:02:15,840
Speaker 2: workers to payrolls last month, and we get a preview

43
00:02:15,880 --> 00:02:17,440
Speaker 2: from Bloomberg's Michael McKee.

44
00:02:17,520 --> 00:02:19,840
Speaker 6: It's not what the Fed does, or, to a lesser extent,

45
00:02:19,919 --> 00:02:22,440
Speaker 6: what it says. It's how the market reacts to the

46
00:02:22,480 --> 00:02:26,000
Speaker 6: September payrolls report that will matter. Bond deals have leaped

47
00:02:26,040 --> 00:02:29,200
Speaker 6: upwards in the past few weeks, tightening financial conditions and

48
00:02:29,320 --> 00:02:34,160
Speaker 6: raising recession worries. The Bloomberg Economists' consensus forecast calls for

49
00:02:34,240 --> 00:02:38,080
Speaker 6: slower job growth, but Wall Street's Whisper Numbers suggests traders

50
00:02:38,080 --> 00:02:41,639
Speaker 6: are positioned for a strong payrolls report. It may be

51
00:02:41,720 --> 00:02:44,200
Speaker 6: a classic case of good news being bad news for

52
00:02:44,240 --> 00:02:47,200
Speaker 6: the markets, and have Fed trying to slow labor demand

53
00:02:47,280 --> 00:02:50,880
Speaker 6: to keep inflation in check. Michael McKee, Bloomberg News.

54
00:02:50,880 --> 00:02:52,840
Speaker 2: Mike, thank you. Be sure to stay with Bloomberg for

55
00:02:52,880 --> 00:02:55,560
Speaker 2: the job's numbers coming at eight thirty Wall Street Time.

56
00:02:55,760 --> 00:02:55,959
Speaker 7: Now.

57
00:02:56,000 --> 00:02:59,079
Speaker 3: If the labor market and inflation continue to cool San

58
00:02:59,120 --> 00:03:02,280
Speaker 3: Francisco Fed as it in, Mary Daily says, policymakers could

59
00:03:02,280 --> 00:03:05,760
Speaker 3: hold interest rates. Daily spoke with Bloomberg's Lisa Abramowitz at

60
00:03:05,760 --> 00:03:07,160
Speaker 3: the Economic Club of New York.

61
00:03:07,400 --> 00:03:10,000
Speaker 8: If we continue to see a cooling labor market and

62
00:03:10,080 --> 00:03:13,600
Speaker 8: inflation heading back to our target, we can hold interest

63
00:03:13,680 --> 00:03:16,919
Speaker 8: rates study and let the effects of policy continue to work.

64
00:03:17,080 --> 00:03:19,920
Speaker 8: Even if we hold rates study exactly where they are today,

65
00:03:20,400 --> 00:03:24,280
Speaker 8: policy is going to grow excreasingly more restrictive as inflation

66
00:03:24,400 --> 00:03:26,400
Speaker 8: and inflation expectations fall.

67
00:03:26,520 --> 00:03:28,920
Speaker 3: And you can hear the full conversation with San Francisco

68
00:03:28,960 --> 00:03:31,760
Speaker 3: Fed President Mary Daily on the Bloomberg Talks podcast.

69
00:03:31,760 --> 00:03:34,560
Speaker 2: Feed Well Nathan as the Fed and investors the way

70
00:03:34,600 --> 00:03:37,200
Speaker 2: that jobs report. Credit markets are on course for the

71
00:03:37,240 --> 00:03:40,240
Speaker 2: worst week since the global banking turmoil in March. A

72
00:03:40,320 --> 00:03:44,000
Speaker 2: selloff and treasuries pushed up risk premiums on concerns interest

73
00:03:44,080 --> 00:03:46,160
Speaker 2: rates may stay higher for longer.

74
00:03:46,920 --> 00:03:49,839
Speaker 3: Oil is also on course for its worst week since March.

75
00:03:49,960 --> 00:03:52,920
Speaker 3: Karen concerns over the global economy clouded the demand outlook.

76
00:03:52,920 --> 00:03:55,040
Speaker 3: Commodities have been rocked by gains in the dollar and

77
00:03:55,120 --> 00:03:58,200
Speaker 3: a surgeon bond yields and checking prices. Now nimexcrued is

78
00:03:58,200 --> 00:04:00,480
Speaker 3: at eighty two twenty four a barrel well, I mean,

79
00:04:00,480 --> 00:04:00,840
Speaker 3: maybe on.

80
00:04:00,840 --> 00:04:02,840
Speaker 2: The verge of a huge deal in the oil industry.

81
00:04:02,840 --> 00:04:06,000
Speaker 2: Bloomberg has learned Exon mobils and talks to acquire pioneer

82
00:04:06,160 --> 00:04:09,760
Speaker 2: natural resources. We get more from Bloomberg Energy reporter Anthony D.

83
00:04:09,920 --> 00:04:13,880
Speaker 2: Paola oil companies like Exon are flushed with cash and

84
00:04:13,920 --> 00:04:15,880
Speaker 2: they're looking for close to use it.

85
00:04:15,920 --> 00:04:17,839
Speaker 4: So they've been doing a lot of things like giving

86
00:04:18,080 --> 00:04:19,280
Speaker 4: cash tractor shareholders.

87
00:04:19,440 --> 00:04:23,000
Speaker 9: Investment is becoming less and less popular because of ESG concerns,

88
00:04:23,279 --> 00:04:25,200
Speaker 9: So this is a good use of cash.

89
00:04:25,279 --> 00:04:28,200
Speaker 2: And that's Bloomberg Energy reporter Anthony Dpaola, who says if

90
00:04:28,200 --> 00:04:30,839
Speaker 2: the deal is completed, it would be Exon Mobile's biggest

91
00:04:30,880 --> 00:04:33,039
Speaker 2: since nineteen ninety nine. The Wall Street Journal says the

92
00:04:33,080 --> 00:04:36,320
Speaker 2: transaction may be worth as much as sixty billion dollars.

93
00:04:36,520 --> 00:04:38,800
Speaker 3: Now to the latest developments in the Sam Bankman Freed

94
00:04:38,839 --> 00:04:41,400
Speaker 3: trialcaren two of the closest friends of the FTX co

95
00:04:41,560 --> 00:04:45,000
Speaker 3: founder took the stand. Bloomberg Legal reporter Ava Benny Morrison

96
00:04:45,040 --> 00:04:48,200
Speaker 3: says one was another FTX founder and Bankman Freed's math

97
00:04:48,240 --> 00:04:49,560
Speaker 3: camp buddy, Gary Wong.

98
00:04:50,000 --> 00:04:52,279
Speaker 10: We walked into the court, he didn't make eye contact

99
00:04:52,320 --> 00:04:55,520
Speaker 10: with Sam. He sat in the witness books and we're

100
00:04:55,560 --> 00:04:58,200
Speaker 10: speaking very quickly. Could tell he was a little bit nervous.

101
00:04:58,640 --> 00:05:01,839
Speaker 10: He said that yes, he committed financial crime with Stateman Freed.

102
00:05:02,240 --> 00:05:05,839
Speaker 10: See also the code that allowed Alameda to borrow billions

103
00:05:05,880 --> 00:05:08,920
Speaker 10: of dollars from FTX and hit it from the public.

104
00:05:08,760 --> 00:05:11,279
Speaker 3: And Bloomberg Save of Benny Morrison says an mit class

105
00:05:11,320 --> 00:05:14,159
Speaker 3: made also testified bankmin Freed confided about a potential eight

106
00:05:14,160 --> 00:05:17,240
Speaker 3: billion dollars shortfall at FTX from loans to Alabeda five

107
00:05:17,279 --> 00:05:19,279
Speaker 3: months before both companies collapsed.

108
00:05:19,680 --> 00:05:23,160
Speaker 2: And breaking news Nathan the Nobel Peace Prize has been

109
00:05:23,200 --> 00:05:27,680
Speaker 2: awarded to imprisoned activists and Nargist Mohammadi for a fighting

110
00:05:27,720 --> 00:05:35,760
Speaker 2: oppression of women in Iran. Time now for a look

111
00:05:35,800 --> 00:05:37,880
Speaker 2: at some of the other stories making news around the world.

112
00:05:37,880 --> 00:05:42,080
Speaker 2: For that, we're joined by Bloomberg's John Tucker. John, Good Morning, Good.

113
00:05:41,880 --> 00:05:44,599
Speaker 11: Morning, Karen. Among some of the other stories were following

114
00:05:44,640 --> 00:05:47,600
Speaker 11: former President Trump dropping a five hundred million dollar a

115
00:05:47,680 --> 00:05:52,239
Speaker 11: lawsuit against his ex lawyer Michael Cohen, a spokesperson for Trump,

116
00:05:52,360 --> 00:05:55,680
Speaker 11: stated that the former president intends to revisit the lawsuit

117
00:05:55,720 --> 00:05:58,200
Speaker 11: after dealing with what he said were the witch hunts

118
00:05:58,279 --> 00:06:01,200
Speaker 11: against him. Trump was scheduled sit for a deposition of

119
00:06:01,240 --> 00:06:03,840
Speaker 11: the Coen case on Monday, the same day as a

120
00:06:03,839 --> 00:06:07,040
Speaker 11: campaign event in New Hampshire. We're learning more about the

121
00:06:07,080 --> 00:06:11,400
Speaker 11: cost of that casino hack at MGM Resorts International. That

122
00:06:11,520 --> 00:06:14,280
Speaker 11: story in this report this morning from Bloomberg's Charlie Pellnett

123
00:06:14,560 --> 00:06:18,160
Speaker 11: one hundred million dollars. The hack shut down many services

124
00:06:18,200 --> 00:06:22,000
Speaker 11: at its casino hotels. The company also said it incurred

125
00:06:22,120 --> 00:06:26,000
Speaker 11: less than ten million dollars in expenses related to technology,

126
00:06:26,080 --> 00:06:31,279
Speaker 11: consulting services and legal fees. MGM is the largest casino

127
00:06:31,360 --> 00:06:34,239
Speaker 11: operator on the Las Vegas Strip. It said the impact

128
00:06:34,320 --> 00:06:37,480
Speaker 11: of the hack is contained at this point. In New

129
00:06:37,560 --> 00:06:41,040
Speaker 11: York Charlie Pellett, Bloomberg Daybreak, Tens of thousands of healthcare

130
00:06:41,040 --> 00:06:44,279
Speaker 11: workers at Kaiser Permanente are walking the picket lines on

131
00:06:44,320 --> 00:06:46,880
Speaker 11: the final day of their three day strike, seventy five

132
00:06:46,920 --> 00:06:50,000
Speaker 11: thousand workers with one of the largest US medical employers

133
00:06:50,160 --> 00:06:54,360
Speaker 11: for demanding higher wages and better working conditions. Caroline Lucas

134
00:06:54,440 --> 00:06:58,279
Speaker 11: is executive director of the coalition of Kaiser Permanente unions.

135
00:06:58,400 --> 00:07:02,560
Speaker 12: We are having overwhelming from existing Kaiser patients who have

136
00:07:02,680 --> 00:07:05,080
Speaker 12: called email to showed up to our strike clients to

137
00:07:05,120 --> 00:07:08,680
Speaker 12: tell us that they are overwhelmed and tired by the

138
00:07:08,800 --> 00:07:11,600
Speaker 12: Kaiserweight to get appointments today.

139
00:07:12,080 --> 00:07:15,560
Speaker 11: Both the union and Kaiser say the strike is affecting services.

140
00:07:15,600 --> 00:07:18,880
Speaker 11: More than fifty dead after a Russian missile strike against

141
00:07:18,880 --> 00:07:22,080
Speaker 11: a village in northeast Ukraine, one of the deadliest missile

142
00:07:22,120 --> 00:07:26,280
Speaker 11: strikes since the beginning of the war. And Elon boss

143
00:07:26,280 --> 00:07:29,560
Speaker 11: Ex Corporation formerly known as Twitter, testing three tiers of

144
00:07:29,600 --> 00:07:32,520
Speaker 11: premium service, which would allow the commody to charge customers

145
00:07:32,600 --> 00:07:35,720
Speaker 11: different amounts depending on how many ads are shown. The

146
00:07:35,800 --> 00:07:38,920
Speaker 11: premium plan, which currently cost seven ninety nine a month,

147
00:07:38,920 --> 00:07:43,239
Speaker 11: would be split into Basic, Standard, and Plus variations. Global

148
00:07:43,280 --> 00:07:46,040
Speaker 11: News twenty four hours a day. We're powerpying more than

149
00:07:46,040 --> 00:07:48,240
Speaker 11: twenty seven hundred journalist and analysts and more than one

150
00:07:48,320 --> 00:07:51,240
Speaker 11: hundred and twenty countries. I'm John Tucker, and this is

151
00:07:51,240 --> 00:07:52,640
Speaker 11: Bloomberg Karen, all.

152
00:07:52,560 --> 00:07:54,520
Speaker 2: Right, John, thank you well. We bring you news throughout

153
00:07:54,560 --> 00:07:57,560
Speaker 2: the day here on Bloomberg Radio. But now you can

154
00:07:57,560 --> 00:08:00,680
Speaker 2: get the latest news on demand whenever you want it.

155
00:08:01,040 --> 00:08:04,080
Speaker 2: Subscribe to Bloomberg News Now to get the latest headlines

156
00:08:04,120 --> 00:08:07,280
Speaker 2: at the click of a button. Get informed on your schedule.

157
00:08:07,360 --> 00:08:10,080
Speaker 2: You can listen and subscribe to Bloomberg News Now on

158
00:08:10,080 --> 00:08:13,840
Speaker 2: the Bloomberg Business app Bloomberg dot Com plus Apples, Spotify,

159
00:08:14,160 --> 00:08:20,680
Speaker 2: and anywhere else you get your podcasts. But it is

160
00:08:20,760 --> 00:08:24,000
Speaker 2: time now for the Bloomberg Sports Update. Here's John stash

161
00:08:24,000 --> 00:08:25,360
Speaker 2: Hour John Karen.

162
00:08:25,440 --> 00:08:28,200
Speaker 9: Before the Bears took the field at Washington, they learned

163
00:08:28,200 --> 00:08:30,480
Speaker 9: of the passing of Dick Buses. At the age of

164
00:08:30,560 --> 00:08:33,160
Speaker 9: eighty A Chicago went through and through, grew up on

165
00:08:33,160 --> 00:08:35,120
Speaker 9: the South Side, went to the University of Illinois. The

166
00:08:35,160 --> 00:08:36,960
Speaker 9: Bears took him as the third pick of the nineteen

167
00:08:37,000 --> 00:08:40,360
Speaker 9: sixty five draft. Spent his entire nine year career in Chicago,

168
00:08:40,360 --> 00:08:41,960
Speaker 9: and he was an All Pro in each of the

169
00:08:41,960 --> 00:08:45,160
Speaker 9: first eight seasons. A first ballot Hall of Famer, known

170
00:08:45,200 --> 00:08:48,600
Speaker 9: for the ferocity for which he played with. The Bears

171
00:08:48,640 --> 00:08:51,440
Speaker 9: hadn't won a game in almost a calendar year, and

172
00:08:51,600 --> 00:08:55,160
Speaker 9: yet they won at Washington forty to twenty. It was

173
00:08:55,200 --> 00:08:58,760
Speaker 9: a huge game from Chicago receiver DJ Moore. He was

174
00:08:58,800 --> 00:09:01,880
Speaker 9: asked later if he realized just how many yards he had.

175
00:09:02,000 --> 00:09:04,040
Speaker 13: I felt like it was people was like, do you

176
00:09:04,080 --> 00:09:05,920
Speaker 13: know how many yards you got? I'm like, please don't

177
00:09:05,960 --> 00:09:08,760
Speaker 13: tell me. That's not thanks tonight, and let's just focus

178
00:09:08,800 --> 00:09:10,800
Speaker 13: on his win. But when we got when we got

179
00:09:10,840 --> 00:09:13,520
Speaker 13: off the field. It was all everybody telling me what

180
00:09:13,559 --> 00:09:15,400
Speaker 13: I did, and it was good.

181
00:09:15,679 --> 00:09:18,080
Speaker 9: Moore had two hundred and thirty yards in receptions. He

182
00:09:18,120 --> 00:09:22,000
Speaker 9: scored three touchdowns the Bears and a fourteen game losing

183
00:09:22,040 --> 00:09:25,480
Speaker 9: Street Baseball postseason continues tomorrow at the start of the

184
00:09:25,480 --> 00:09:27,480
Speaker 9: Division Series, and a couple of future Hall of Famers

185
00:09:27,520 --> 00:09:30,360
Speaker 9: will be on the mound. Justin berlind Are in Houston

186
00:09:30,400 --> 00:09:34,520
Speaker 9: against Minnesota Clayton Kershaw in LA as the Dodgers take

187
00:09:34,559 --> 00:09:38,319
Speaker 9: on Arizona. WNBA is expanding. San Francisco will join the

188
00:09:38,400 --> 00:09:41,680
Speaker 9: league in twenty twenty five. Joe l Embiid latest to

189
00:09:41,720 --> 00:09:45,760
Speaker 9: commit to playing the Olympics fourth USA in Paris next summer.

190
00:09:45,800 --> 00:09:49,280
Speaker 9: He could have played for France or Cameroon. Lebron, James

191
00:09:49,320 --> 00:09:52,600
Speaker 9: dep Curry, Kevin Durant all expected to play as well.

192
00:09:52,679 --> 00:09:54,920
Speaker 9: John Stanshiedward Bloomberg Sports.

193
00:09:56,760 --> 00:09:59,760
Speaker 7: From coast to coast, from New York to San Francisco,

194
00:10:00,120 --> 00:10:04,760
Speaker 7: Boston to Washington, DC, nationwide on Sirius Exam, the Bloomberg

195
00:10:04,800 --> 00:10:09,000
Speaker 7: Business app in Bloomberg dot Com. This is Bloomberg Daybreak.

196
00:10:10,080 --> 00:10:10,559
Speaker 4: Good morning.

197
00:10:10,559 --> 00:10:13,720
Speaker 3: I'm Nathan Hager. If the labor market and inflation continue

198
00:10:13,760 --> 00:10:17,480
Speaker 3: to cool and financial conditions remain tight, Federal Reserve could

199
00:10:17,559 --> 00:10:20,040
Speaker 3: keep interest rates on hold. It's a lot of ifs.

200
00:10:20,520 --> 00:10:23,080
Speaker 3: That is what we're hearing from San Francisco FED President

201
00:10:23,559 --> 00:10:26,960
Speaker 3: Mary Daily. Bloomberg's Lisa Bromwoitz spoke with Daily at the

202
00:10:27,000 --> 00:10:28,200
Speaker 3: Economic Club of New York.

203
00:10:28,600 --> 00:10:32,320
Speaker 8: Let's go back to the June SEP where if you remember,

204
00:10:32,559 --> 00:10:35,680
Speaker 8: or maybe you don't, I'll remind, in the June Summari

205
00:10:35,720 --> 00:10:38,400
Speaker 8: of economic projections there were two more rate hikes projected

206
00:10:38,480 --> 00:10:41,280
Speaker 8: for this year. Then in July we took one of

207
00:10:41,280 --> 00:10:44,920
Speaker 8: those rate hikes and another one in the September SEP

208
00:10:45,280 --> 00:10:49,400
Speaker 8: was the median outlook. But the bond market has tightened

209
00:10:49,480 --> 00:10:52,200
Speaker 8: quite considerably over about thirty six basis points since we

210
00:10:52,280 --> 00:10:55,000
Speaker 8: met in September. Well, that is equivalent to about a

211
00:10:55,080 --> 00:10:57,680
Speaker 8: rate hike, right, and so then the need to do

212
00:10:57,920 --> 00:11:02,160
Speaker 8: tightening additionally is not there. So from my own perspective,

213
00:11:02,160 --> 00:11:04,760
Speaker 8: that's what I look at. My job as I see it.

214
00:11:05,080 --> 00:11:08,360
Speaker 8: Our job, as I see it, is not to tighten,

215
00:11:09,120 --> 00:11:12,400
Speaker 8: just do our part. It's to watch financial conditions. Because

216
00:11:12,440 --> 00:11:16,360
Speaker 8: monetary policy works, We raise the funds rate and it

217
00:11:16,400 --> 00:11:19,160
Speaker 8: moves through all the other interest rates. If financial conditions

218
00:11:19,200 --> 00:11:22,599
Speaker 8: are sufficiently tight, our work is not necessary because we

219
00:11:22,600 --> 00:11:25,199
Speaker 8: don't need to boost them more. Yeah, does that makes sense?

220
00:11:25,280 --> 00:11:27,680
Speaker 14: Absolutely? And reach clared I said, the rise and yields

221
00:11:27,679 --> 00:11:31,199
Speaker 14: actually does the Fed's job for it. Would you sympathize

222
00:11:31,200 --> 00:11:32,079
Speaker 14: with that kind of sentiment?

223
00:11:32,200 --> 00:11:34,920
Speaker 8: That is actually how it works, right if financial conditions tighten.

224
00:11:35,000 --> 00:11:36,439
Speaker 8: I mean, one of the things that's happened in the

225
00:11:36,520 --> 00:11:39,920
Speaker 8: last ninety days and certainly in the last few weeks,

226
00:11:40,240 --> 00:11:44,160
Speaker 8: is that financial markets have collectively seem to take on

227
00:11:44,240 --> 00:11:46,640
Speaker 8: board a variety of things. But one of the things

228
00:11:46,679 --> 00:11:49,120
Speaker 8: that I heard from many commentators and many of the

229
00:11:49,240 --> 00:11:52,200
Speaker 8: market outreach I do is that they have a general

230
00:11:52,280 --> 00:11:56,720
Speaker 8: understanding now that we are committed at the FOMC to

231
00:11:56,880 --> 00:11:59,920
Speaker 8: keeping rates higher for longer in an effort to bring

232
00:12:00,160 --> 00:12:04,040
Speaker 8: inflation fully back down to two percent. And that recognition,

233
00:12:04,120 --> 00:12:06,120
Speaker 8: along with all the other factors we could put in

234
00:12:06,160 --> 00:12:09,400
Speaker 8: a list about why bond yields have risen, are affecting

235
00:12:09,480 --> 00:12:12,040
Speaker 8: certainly the financial conditions and the tightening. And I see

236
00:12:12,040 --> 00:12:15,360
Speaker 8: that as a positive outcome that we would have tighter

237
00:12:15,400 --> 00:12:18,280
Speaker 8: financial conditions, because then we can really get the job

238
00:12:18,360 --> 00:12:19,839
Speaker 8: done of putting inflation.

239
00:12:19,760 --> 00:12:20,720
Speaker 2: Back to rest.

240
00:12:21,120 --> 00:12:24,520
Speaker 14: One is a sell off, something that's welcome from a

241
00:12:24,559 --> 00:12:27,240
Speaker 14: perspective of finding the market is coming to terms with

242
00:12:27,320 --> 00:12:29,520
Speaker 14: what the FED has been saying, and when is it

243
00:12:29,600 --> 00:12:33,240
Speaker 14: disorderly disruptive on a level that causes concern.

244
00:12:33,480 --> 00:12:36,800
Speaker 8: You always want an orderly repricing over a disorderly repricing.

245
00:12:36,840 --> 00:12:39,640
Speaker 8: And so far, what I see is this, you know,

246
00:12:39,679 --> 00:12:41,240
Speaker 8: and this is why we watch it so carefully. But

247
00:12:41,280 --> 00:12:44,280
Speaker 8: here's how I'm seeing it is that what we're having,

248
00:12:44,320 --> 00:12:46,560
Speaker 8: what is happening is financial markets are actually trying to

249
00:12:46,600 --> 00:12:49,760
Speaker 8: find their footing in the right price for things, and

250
00:12:49,760 --> 00:12:52,160
Speaker 8: they've got to digest a lot of information. One is

251
00:12:52,200 --> 00:12:55,640
Speaker 8: the supply and demand changes in the treasury space, right,

252
00:12:55,720 --> 00:12:59,560
Speaker 8: so supplies going up and demand is going down, especially

253
00:12:59,600 --> 00:13:02,600
Speaker 8: from foreign buyers. So that is a one factor to digest.

254
00:13:02,640 --> 00:13:06,520
Speaker 8: Another factor to just is FED policy and for guidance

255
00:13:06,559 --> 00:13:09,240
Speaker 8: in the SEP. A third factor to digest is this

256
00:13:09,320 --> 00:13:12,600
Speaker 8: increasing conversation people are having about whether the real neutral

257
00:13:12,679 --> 00:13:16,000
Speaker 8: rate of interest is actually risen. So we came into

258
00:13:16,040 --> 00:13:19,360
Speaker 8: the pandemic or with it at about point five, which

259
00:13:19,360 --> 00:13:22,840
Speaker 8: means nominal neutral about two point five. And when people say, oh,

260
00:13:22,880 --> 00:13:25,120
Speaker 8: the neutral rate might have risen for variety of factors.

261
00:13:26,000 --> 00:13:29,520
Speaker 8: I'm hearing everything from maybe it's five to something that

262
00:13:29,559 --> 00:13:32,040
Speaker 8: I would seem more likely, which is between two five

263
00:13:32,360 --> 00:13:35,040
Speaker 8: and three for the nominal neutral. You know, probably there is.

264
00:13:35,280 --> 00:13:37,240
Speaker 8: We don't know if it's risen. Frankly, I don't think

265
00:13:37,280 --> 00:13:40,320
Speaker 8: anybody really knows, but certainly we should have those conversations.

266
00:13:40,440 --> 00:13:43,440
Speaker 14: Back in March when there was this concern about the

267
00:13:43,440 --> 00:13:47,559
Speaker 14: banking situation, yields were at the low of March. We're

268
00:13:47,559 --> 00:13:50,320
Speaker 14: about one hundred and fifty bass points lower than where

269
00:13:50,320 --> 00:13:53,360
Speaker 14: they are now. Are you seeing the same type of

270
00:13:53,440 --> 00:13:57,400
Speaker 14: financial distress today that you did back then, even on

271
00:13:57,480 --> 00:13:58,160
Speaker 14: the peripheries?

272
00:13:58,280 --> 00:13:58,719
Speaker 13: How do you.

273
00:13:59,280 --> 00:14:02,840
Speaker 14: Rationalize why it hasn't materialized in the same kind of way.

274
00:14:03,120 --> 00:14:05,679
Speaker 8: So March was a unique situation, and we want to

275
00:14:05,760 --> 00:14:08,079
Speaker 8: learn from that unique situation. But it was an unique

276
00:14:08,120 --> 00:14:10,720
Speaker 8: situation in this way. We had a bank run, an old,

277
00:14:11,040 --> 00:14:15,400
Speaker 8: very old fashioned but true bank run, where the bank's

278
00:14:15,400 --> 00:14:18,400
Speaker 8: liquidity was completely squeezed and it went, you know, it

279
00:14:18,480 --> 00:14:22,080
Speaker 8: dissolved in a period that was it was short, rapid

280
00:14:22,080 --> 00:14:24,640
Speaker 8: period of dissolution, and then that's billed over to two

281
00:14:24,680 --> 00:14:28,480
Speaker 8: other banks and that was the extent. Now, one of

282
00:14:28,480 --> 00:14:30,560
Speaker 8: the things I always remind people of is we have

283
00:14:30,600 --> 00:14:33,720
Speaker 8: over four thousand banks in the country and three failed

284
00:14:34,400 --> 00:14:36,720
Speaker 8: and all other banks that even felt the stresses, and

285
00:14:36,720 --> 00:14:39,000
Speaker 8: there were a large number that felt stresses because they

286
00:14:39,000 --> 00:14:42,760
Speaker 8: were near neighbors in sort of size and balance sheet

287
00:14:43,400 --> 00:14:47,840
Speaker 8: distribution composition. They felt stresses, but they managed those stresses

288
00:14:47,920 --> 00:14:49,920
Speaker 8: because in part they had been a little more effective

289
00:14:49,920 --> 00:14:52,040
Speaker 8: at edging their risks. And then the FED and the

290
00:14:52,080 --> 00:14:54,479
Speaker 8: Treasure with the Treasury support came in with the BTFP,

291
00:14:55,040 --> 00:14:57,800
Speaker 8: and that produced a lot of calmness in the water.

292
00:14:57,920 --> 00:15:01,240
Speaker 8: So since that time, banking stress have really not been

293
00:15:01,320 --> 00:15:04,160
Speaker 8: something that when you ask people in the community or

294
00:15:04,400 --> 00:15:07,040
Speaker 8: business leaders, when you just top of your worries, that

295
00:15:07,160 --> 00:15:11,440
Speaker 8: is not something they list. They list inflation, uncertainty, et cetera.

296
00:15:11,600 --> 00:15:14,120
Speaker 8: So I think one of the reasons that we are

297
00:15:14,200 --> 00:15:18,880
Speaker 8: seeing this yield rising knot spilling back over is that

298
00:15:19,240 --> 00:15:21,440
Speaker 8: essentially we know what's going on in the banking sector.

299
00:15:21,480 --> 00:15:24,760
Speaker 8: Investor letters have been published for months saying here's what

300
00:15:24,800 --> 00:15:26,720
Speaker 8: this balance sheet looks like. Here's what this balance sheet

301
00:15:26,760 --> 00:15:28,120
Speaker 8: looks like. So there's not a surprise.

302
00:15:30,920 --> 00:15:33,840
Speaker 1: This is Bloomberg day Break today, your morning brief on

303
00:15:33,920 --> 00:15:37,560
Speaker 1: the stories making news from Wall Street to Washington and beyond.

304
00:15:37,720 --> 00:15:40,480
Speaker 2: Look for us on your podcast feed at six am

305
00:15:40,560 --> 00:15:44,240
Speaker 2: Eastern each morning, on Apple, Spotify, and anywhere else you

306
00:15:44,280 --> 00:15:45,440
Speaker 2: get your podcasts.

307
00:15:45,600 --> 00:15:48,280
Speaker 1: You can also listen live each morning, starting at five

308
00:15:48,320 --> 00:15:50,920
Speaker 1: am Wall Street time on Bloomberg eleven three to zero

309
00:15:50,960 --> 00:15:53,800
Speaker 1: in New York, Bloomberg ninety nine to one in Washington,

310
00:15:53,920 --> 00:15:57,120
Speaker 1: Bloomberg one O six one in Boston, and Bloomberg ninety

311
00:15:57,160 --> 00:15:58,560
Speaker 1: sixty in San Francisco.

312
00:15:58,920 --> 00:16:02,080
Speaker 2: Our flagship New York station is also available on your

313
00:16:02,120 --> 00:16:07,200
Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

314
00:16:07,240 --> 00:16:10,160
Speaker 1: Plus listen coast to coast on the Bloomberg Business app,

315
00:16:10,240 --> 00:16:14,040
Speaker 1: serious XM Channel one nineteen, the iHeartRadio app, and on

316
00:16:14,160 --> 00:16:16,600
Speaker 1: Bloomberg dot com. I'm Nathan Hager and.

317
00:16:16,600 --> 00:16:19,920
Speaker 2: I'm Karen Moscow. Join us again tomorrow morning for all

318
00:16:19,960 --> 00:16:22,480
Speaker 2: the news you need to start your day right here

319
00:16:22,640 --> 00:16:23,920
Speaker 2: on Bloomberg Daybreak