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Speaker 1: This is the Bloomberg Daybake podcast, available every morning on Apple,

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Speaker 1: Spotify or wherever you listen. It's Wednesday, the first of

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Speaker 1: May in London. I'm Caroline Hipkip.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Expectations grow that

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Speaker 2: the Federal Reserve will today signal a delay to rate cuts.

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Speaker 1: Japan's yen tovention fizzles in the face of dollar strength.

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Speaker 2: Plus Sunak's comeback bid. The Prime Minister does his best

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Speaker 2: to avoid a catastrophic result in tomorrow's local elections.

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

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Speaker 2: The Federal Reserve is expected to hold rates today and

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Speaker 2: signal no plans for cuts in the near future. Bloomberg

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Speaker 2: Economics also believes Charge your Own Pal will adopt a

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Speaker 2: notably more hawkish tone in his comments following the decision.

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Speaker 2: The expected hawkish pivot comes after a series of hotter

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Speaker 2: than expected inflation and economic data led traders to unwind

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Speaker 2: bets on multiple cuts in the coming months. The former

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Speaker 2: Reserve Bank of India governor Ragor and Rajan says FED

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Speaker 2: policymakers got ahead of themselves at recent meetings.

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Speaker 3: The fact that we are in a very uncertain world

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Speaker 3: that we've switched from soft landing to hard landing to

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Speaker 3: no landing and back. I think that would suggest a

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Speaker 3: little bit of caution when the FED tries to predict

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Speaker 3: the future, and it should, I mean, with hindsight, have

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Speaker 3: basically stayed with the We will know when enough is

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Speaker 3: enough and we can start cutting, but right now we're

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Speaker 3: not going to make strong predictions.

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Speaker 2: Ragora Rajan also hinted that the FED may need to

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Speaker 2: raise rates in future if data continues to come in

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Speaker 2: hotter than expected. We'll bring you the right decision live

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Speaker 2: here on Bloomberg at seven pm London time, with chargerown

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Speaker 2: Pals press conference thirty minutes later.

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Speaker 1: Interest rates remaining high in the US will continue to

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Speaker 1: drive strength in the dollar. On Monday, that appears to

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Speaker 1: have forced Japanese authorities to intervene to pop up the

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Speaker 1: yen for the first time since twenty twenty two. Bank

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Speaker 1: of Japan accounts analyzed by Bloomberg suggests intervention did take place.

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Speaker 1: Bloomberg's Garfield Reynolds says failing to step in could have

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Speaker 1: left authorities with a number of problems.

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Speaker 4: With the reverse argument would be what they hadn't intervened,

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Speaker 4: and you were starting from one hundred and sixty or

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Speaker 4: more yen per dollar, then who knows where you could

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Speaker 4: end up. One hundred and seventy would come into play

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Speaker 4: pretty rapidly, and that's the sort of thing that would

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Speaker 4: have a lot of impact on Japan's economy, on the

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Speaker 4: political situation.

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Speaker 1: Garfield Reynolds, speaking there on Bloomberg Television, recent yen swings

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Speaker 1: might be an indicator of worse to come, as the

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Speaker 1: Federal Reserve looks unlikely to cut interest rates during today's

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Speaker 1: policy setting meeting. Pressure on the currency could build even

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Speaker 1: further if fedchaed your own power takes that hawkish tonally

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Speaker 1: mentioned this evening, New.

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Speaker 2: York City police serage down to Columbia University's campus overnight,

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Speaker 2: arresting pro Palestinian demonstrators who'd barrow caided themselves into a building.

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Speaker 2: According to reports, dozens of people were detained and loaded

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Speaker 2: onto busses as chance continued, sir, who do you protect?

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Speaker 5: Sir?

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Speaker 6: Who do you protect? Sir?

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Speaker 2: Those were protesters at the scene, chanting. Their university leaders

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Speaker 2: said in a statement that they were left with no

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Speaker 2: choice but to call authorities. After Columbia's own security personnel

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Speaker 2: were forced out of the building. The police action capped

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Speaker 2: two weeks of rising tention at the university, which some

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Speaker 2: more than one hundred arrests. On April eighteenth.

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Speaker 1: Chancellor Jeremy Hunt has publicly criticized the UK regulators plans

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Speaker 1: to name and shame companies that it's investigating in a

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Speaker 1: rare political intervention. Hunt said that he hopes the Financial

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Speaker 1: Conduct Authority will relook at their decision after an industry backlash.

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Speaker 1: The Financial Watchdog says that firms and consumers would benefit

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Speaker 1: from knowing which issues are in the watchdog's sites, but

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Speaker 1: the FCA says that plans are still at the consultation stage.

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Speaker 2: Amazon's cloud unit posted its strongest sales growth in a year.

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Speaker 2: The first quarter results are assigned. Businesses are starting to

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Speaker 2: spend more on tech projects, partly driven by AI demand.

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Speaker 2: Bloomberg's Ed Ludlow explains.

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Speaker 7: The strategy is basically to be a place where other

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Speaker 7: companies who are interested in AI can build whatever software

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Speaker 7: it is they want on aws's platforms.

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Speaker 2: Ludlow ads are the company's fifteen point three billion dollar

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Speaker 2: operating profit is also down to CEO Andy Jase's cost

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Speaker 2: cutting program. Despite that Amazon's main e commerce business slightly

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Speaker 2: missing analysts estimates as consumers tried to save money.

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Speaker 1: And here in the UK, Isshsunak has urged supporters to

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Speaker 1: take part in the quote greatest comeback in political history,

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Speaker 1: as he trails badly behind in the polls. Bloomberg understands

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Speaker 1: that the Conservative leader attempted a rallying speech. Party campaign

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Speaker 1: is ahead of local elections tomorrow. Bloomberg's James Orcock has.

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Speaker 5: More since the nineteen nineties, if the opposition had been

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Speaker 5: ahead in the polls by more than five percentage points

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Speaker 5: a year out of the general election, they've taken over government.

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Speaker 5: Labor are currently twenty points ahead. So when Rischie Sunak

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Speaker 5: talks about the greatest comeback, that is the political gravity

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Speaker 5: he's trying to overcome. His remarks are also a tacit

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Speaker 5: admission of the electoral clobbering is expected to take in

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Speaker 5: Thursday's local elections, which some Conservatives think may then be

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Speaker 5: used to try and to seat him in London. James

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Speaker 5: Orcock Bloomberg Radio.

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Speaker 1: Well, in the moment, we're going to look ahead to

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Speaker 1: the federal reserve rate decision and also to tomorrow's local elections.

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Speaker 1: In England and Wales that James was discussing. But of

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Speaker 1: course there's always a few stories that have caught Ri

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Speaker 1: on the Bloomberg terminal this morning, and I think this

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Speaker 1: one's quite close to home for you, Stephen.

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Speaker 7: Yeah.

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Speaker 2: As of today, Ireland has no listed companies with the

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Speaker 2: female CEO. That's after the CEO of Irish Residential Properties

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Speaker 2: Reach PLC, margaretsween You retired yesterday, so she's been replaced

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Speaker 2: by a man. There are only thirty one list of

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Speaker 2: companies on your next exchange in Dublin, but now none

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Speaker 2: of them are led by a woman, and that makes

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Speaker 2: Ireland among you member states, only joining Luxembourg as having

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Speaker 2: no female CEOs of public firms. Now, the levels across

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Speaker 2: the EU aren't particularly high, or should we say across

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Speaker 2: the world. Europe is an underperforming in this level either,

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Speaker 2: but the lack of gender equality at the top of

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Speaker 2: companies listed on Ireland Stock Exchange is, according to the

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Speaker 2: thirty Percent Club, exacerbated by the fact that it's dominated

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Speaker 2: by traditionally male heavy industries like construction. Now it's worth

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Speaker 2: saying that representation on boards is improving. At the end

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Speaker 2: of November twenty twenty three. Female board representation was at

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Speaker 2: thirty nine percent in Ireland, which is up from eighteen

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Speaker 2: percent just five years previously. That's after a number of

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Speaker 2: government level steps that have been taken, and there are

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Speaker 2: other areas of the Irish economy that do seeta representation

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Speaker 2: of women, particularly the startup scene in particular. But then

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Speaker 2: Ireland also has the same listings problem that lots of

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Speaker 2: other parts of Europe have as well. Out of these

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Speaker 2: companies aren't choosing to list on the Stock Exchange in

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Speaker 2: Ireland when they are going public, They're choosing to do

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Speaker 2: so in the US, a story that we see in

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Speaker 2: lots of other parts.

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Speaker 1: Yeah, I think it's a very fascinating story and it's

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Speaker 1: a really interesting one also about you know, how much

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Speaker 1: the goals of government actually seep into business or not.

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Speaker 1: So Yeah, a very good story to have a look at.

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Speaker 1: On the Bluebig Tunnel this morning.

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Speaker 2: Well that's turned back to the Federal Reserve decision. Later,

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Speaker 2: officials expected to keep interest rates on hold, but markets

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Speaker 2: will be watching to see how your own paler as

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Speaker 2: colleagues are reacting to the recent higher than expected inflation data.

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Speaker 2: Bloomberg TV anchor Critty Group tos with us to help

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Speaker 2: us look ahead to that morning, Critty, can you remind

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Speaker 2: us first of all of the key data the FED

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Speaker 2: will be considering going into this meeting.

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Speaker 8: Well, it's so funny because we should be considering the CPI,

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Speaker 8: that's the no brainer rate, even the PCE which kind

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Speaker 8: of takes out some of those core costs as well.

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Speaker 8: Now they have other pieces of data that they have

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Speaker 8: to take into account. This isn't They can't blame it

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Speaker 8: on just anomalies. And I think the greatest example of

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Speaker 8: this is just within the last twenty four hours, the

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Speaker 8: employment costs index over in the States coming in really

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Speaker 8: really hot. Now, for those of you who aren't familiar

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Speaker 8: with kind of this data set, it's what the name's just.

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Speaker 8: An employment cost index is quite literally the kind of

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Speaker 8: amalgamation of what costs look like from a more wage

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Speaker 8: perspective across the fifty states. Now, this number came in

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Speaker 8: hot because wages are rising in the States, and we

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Speaker 8: know that we kind of knew that was going to

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Speaker 8: happen with a lot of these minimum wage decisions that

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Speaker 8: have been made across I think like twenty five states

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Speaker 8: or so out of fifty, So we knew that there

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Speaker 8: was going to be this push anyway. The problem is

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Speaker 8: the numbers came as significantly hotter than we'd expected just

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Speaker 8: from those minimum wage increases. So that's where you're starting

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Speaker 8: to see a little bit of kind of spooking in

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Speaker 8: the markets. And then you saw a real market reaction

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Speaker 8: off of that data because it suggests that some of

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Speaker 8: the inflationary numbers that we're seeing are not one offs.

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Speaker 8: You are seeing the spread across the economy. You're seeing

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Speaker 8: it spread across regions more importantly, and that's a really

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Speaker 8: important piece of this equation because now the Federal Reserve

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Speaker 8: can look at the state and say, this is not

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Speaker 8: just goods driven inflation, services driven inflation, and this is

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Speaker 8: wage driven inflation, when for years they were really trying

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Speaker 8: to combat the inflationary story because weges weren't keeping up.

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Speaker 1: Okay, So how likely is that then to play into

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Speaker 1: the press conference and into the statement and the decision making.

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Speaker 8: Well, I imagine he'll be asked about that in the

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Speaker 8: press conference, specifically in terms of what the data points

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Speaker 8: he's actually looking at.

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Speaker 6: Caroline.

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Speaker 8: The very ends, even the very first questions that you

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Speaker 8: guys asked me, simply because they are known famously to

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Speaker 8: only kind of really zero in on that PCE deflator number.

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Speaker 8: So now that they're seeing different pieces of it, is

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Speaker 8: this still a commodity driven story? Is this a kind

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Speaker 8: of labor market story still? Or do we need to

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Speaker 8: look at other pieces of the policy tools? So if

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Speaker 8: we're not looking at rate decisions, do we need to

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Speaker 8: look at QT for example? Do we need to look

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Speaker 8: at what's going on with the treasury? Is election risk

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Speaker 8: even relevant to the Fed? They'll say no, but I

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Speaker 8: imagine they'll be pressed on it regardless.

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Speaker 2: Anythink as that markets'll be watching that.

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Speaker 8: For Definitely, the story on the QT is important, but

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Speaker 8: I think the treasury may be more important. And there's

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Speaker 8: a lot of questions about the deficit story. There's a

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Speaker 8: lot of questions, But how that's kind of seeking or

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Speaker 8: I should say creeping up? I think is the worth

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Speaker 8: of looking for creeping up? The coffe hasn't quite hit yet,

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Speaker 8: Bear with me creeping up on a lot of investors

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Speaker 8: simply because it has a lot to do with treasury

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Speaker 8: supply and it has to do with these buyback announcements. Remember,

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Speaker 8: before we get the FED decision, we also get that

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Speaker 8: refunding announcement. From the Treasury literally thirty minutes prior. So

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Speaker 8: you're going to see the markets be very bouncy this

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Speaker 8: morning in terms or this afternoon you say, in terms

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Speaker 8: of how they are reacting to what the government is doing.

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Speaker 8: But we actually had a guest onm Blomber TV said

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Speaker 8: this very eloquently that it might just be Janet Yellen

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Speaker 8: who may be more in charge of policy.

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Speaker 6: Than j Powell.

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Speaker 8: And that seems to be the going concern at least

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Speaker 8: in terms of what investors are really watching.

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Speaker 1: Yeah. Absolutely, and another piece to that, big reaction expected

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Speaker 1: potentially in the s and P at least Film City,

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Speaker 1: biggest FED day move, that's the expectation. So it's really

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Speaker 1: going to be hotly watched. The decision at seven pm

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Speaker 1: London time, the press conference half an hour later, Pritty

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Speaker 1: groups of Bloomberg's TV and can thank you so much

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Speaker 1: for being with us.

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Speaker 2: Well here in the UK, voters will be going to

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Speaker 2: the polls tomorrow in England and Wales in local mayoral

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Speaker 2: and police and Crime commissioner elections tomorrow, some of which

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Speaker 2: are seen as a bellwether for the Conservative Party's prospects

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Speaker 2: at a general election. We're expecting later this year with

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Speaker 2: the details, We've got Bloomberg's UK correspondent Lizzie Burden with

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Speaker 2: us in studio Morning Lizzie. So for the Conservative Party, then,

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Speaker 2: what are the key goals that they'll be hoping for.

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Speaker 2: What are they going to be looking out for when

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Speaker 2: it comes to what could inter be interpreted as a

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Speaker 2: win or a big last for them?

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Speaker 9: Will you talk about these local elections as a barometer

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Speaker 9: for the general There are two elements that define the

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Speaker 9: point at which Sunak's team around him and the wider

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Speaker 9: party will lose hope of staying in power beyond the general.

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Speaker 6: First of all, do the Conservatives.

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Speaker 9: Lose half of the just under a one thousand seats

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Speaker 9: that they won in twenty twenty one across local councils?

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Speaker 9: And secondly, do they hold on to Andy Street, the

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Speaker 9: Tory mayor in the West Midlands and Ben Houchin, the

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Speaker 9: Tory mayor in Tees Valley, because those two mayors really

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Speaker 9: represent the party's ability to compete in labor facing areas. Now,

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Speaker 9: the latest yug of polling actually suggests that bit Street

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Speaker 9: and Houchin are going to cling on and that would

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Speaker 9: be a major victory for Rishi Sunak because it would

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Speaker 9: calm the nerves about the general election being some sort

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Speaker 9: of extinction event.

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Speaker 6: But on point one, this could still be a bloodbath

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Speaker 6: for the Conservatives. M okay.

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Speaker 1: Will the local election result then put Labor on course

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Speaker 1: to win the general election? How much of a kind

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Speaker 1: of wind in the sales of what is already a

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Speaker 1: pretty speedy Labor boat.

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Speaker 6: Yeah, very much on that course already, aren't they.

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Speaker 9: Sunak's really failed to put a dent in Labour's twenty

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Speaker 9: point pole league, despite the fall in inflation and the

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Speaker 9: turnaround in growth.

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Speaker 6: His advisors say.

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Speaker 9: That last week was his best in off, But the

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Speaker 9: problem is he hasn't been able to sustain a positive

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Speaker 9: news cycle since getting the keys to number ten, and

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Speaker 9: therefore he's failed to placate the right wing of his party.

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Speaker 9: Even when he's been preaching to the choir, you know,

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Speaker 9: with policies like deporting asylum seekers to Rwanda, he still

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Speaker 9: hasn't managed to keep the likes of Penny Mordant happy.

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Speaker 9: And while he's had this ongoing failure to launch, at

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Speaker 9: the same time, the opposition Labor leader Kirs Starmer, has

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Speaker 9: just had another boost because Scotland's first Minister Humsa Yusuf

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Speaker 9: has resigned. Now north of the border, Labour's only managed

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Speaker 9: to get one seat in the.

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Speaker 6: Twenty fifteen and twenty nineteen general.

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Speaker 9: Elections, but now with the SMP pretty much rudderless, things

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Speaker 9: are looking up for Labor in Scotland and it means

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Speaker 9: that the path to Downing Street for kir Starmer looks

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Speaker 9: even clearer, and it seems it's going to run through Scotland.

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Speaker 2: Could these local election results be a cat lists though

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Speaker 2: for the Tory Party actually ousting Richie Sunak as their leader.

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Speaker 9: Well, Sunak's critics on the Tory right are really going

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Speaker 9: to use any bad result in these local elections as

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Speaker 9: evidence to argue the only way to win the general

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Speaker 9: is to change leader, because otherwise they'll have a total wipeout.

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Speaker 9: But even if he does get hammered in these local elections,

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Speaker 9: he could actually stay in number ten because remember, there's

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Speaker 9: no obvious candidate to replace him and the Conservatives are

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Speaker 9: already on their third prime minister since Boris Johnson won

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Speaker 9: the twenty.

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Speaker 6: Nineteen general election.

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Speaker 9: The thing is, Conservative party rules mean that the rebels

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Speaker 9: only need just over fifty letters from Tory MPs to

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Speaker 9: trigger a no confidence vote in the party leader, so

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Speaker 9: Richie Sunac cannot take his place for granted.

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Speaker 6: This is Bloomberg Daybreak Europe.

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Speaker 2: You're morning brief on the stories making news from London

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