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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Good morning.

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Speaker 3: I'm Nathan Hager.

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Speaker 1: And I'm Karen Moscow. Here are the stories we're following today.

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Speaker 3: Karen, we begin with the latest messaging from the FED.

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Speaker 3: Chairman J Powell signaled that policymakers will wait longer than

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Speaker 3: previously anticipated to cut interest rates following a series of

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Speaker 3: surprisingly high inflation readings.

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Speaker 4: So we've said at the FMC that we'll need greater

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Speaker 4: confidence that inflation is moving sustainably toward two percent before

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Speaker 4: be appropriate to ease policy. You know, we took that

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Speaker 4: cautious approach and sought that greater confidence so as not

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Speaker 4: to overreact to the string of low inflation readings that

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Speaker 4: we had in the second half of last year.

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Speaker 3: Now, policymakers narrowly penciled in three interest rate cuts and

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Speaker 3: forecasts published last month, but investors are now betting on

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Speaker 3: just one to two cuts this year. The yield on

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Speaker 3: the two year no briefly crossed five percent yesterday. This morning,

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Speaker 3: it's at four point nine four percent.

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Speaker 1: Well, Nathan, Some on Wall Street have speculated the Fed

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Speaker 1: could raise rates, but Bloomberg Opinion columnist Muhammadalarian says there

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Speaker 1: are real risks. If the FED boost rates from here.

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Speaker 5: If inflationing gets much worse, they could hike. But I

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Speaker 5: think if they do hike, we're going to have a

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Speaker 5: regional banking crisis. We're going to have all sorts of

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Speaker 5: damage in the marketplace. And I think that is at

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Speaker 5: the back of the head. So I think the likelihood

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Speaker 5: of them hiking is low. Is it zero? No, they

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Speaker 5: could Bloomberg.

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Speaker 1: Opinion columnist Mohammedalarian says another rate high could put the

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Speaker 1: Fed on a path to a new tightening cycle and

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Speaker 1: that could derail US growth.

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Speaker 3: Well, Karen. Inflation and rates are also in focus in Europe.

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Speaker 3: UK inflation slowed less than expected last month. This fuel

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Speaker 3: price is corrept higher. Consumer prices rose three point two

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Speaker 3: percent in March compared with the year earlier. That's down

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Speaker 3: from three point four in While that is the lowest

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Speaker 3: since September twenty twenty one, three point two is above

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Speaker 3: the three point one percent inflation that the Bank of

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Speaker 3: England and private sector economists had expected.

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Speaker 1: Now, Nathan, we get the latest from the Middle East

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Speaker 1: and Israeli Foreign Minister Israel Counts is meeting with the

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Speaker 1: foreign ministers of the UK and Germany. He says Israel

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Speaker 1: has the right to react to Iran's weekend missile and

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Speaker 1: drone attack, and he's calling for sanctions on Around's missile program.

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Speaker 1: The White House says it's preparing a package targeting around's

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Speaker 1: weapons systems, but Bloomberg's Patrick psychs reports Iran has a

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Speaker 1: track record of dealing with sanctions.

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Speaker 6: The symbolism is much more important in this case. It's

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Speaker 6: more of a diplomatic signal to israel Is saying, you know,

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Speaker 6: we your allies, We're all here, We're acting immediately in

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Speaker 6: the days after that attack, and therefore perhaps you don't

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Speaker 6: need to go so hard in your planned military response

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Speaker 6: to that attack. You know, take this as the message

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Speaker 6: of support and feel reassured a few security.

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Speaker 1: Meanwhile, Bloomberg's Patrick seikescherports the leaders of Saudi Arabia and

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Speaker 1: the United Arab Emirates issued a joint statement calling for

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Speaker 1: a maximum of self restraint in the Middle East and

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Speaker 1: warning of the quote dangers of war and its dire consequences.

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Speaker 3: Now, let's turn to the latest Karen on the criminal

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Speaker 3: case against Donald Trump. It took two days to seat

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Speaker 3: seven jurors, but there is progress in the hush money

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Speaker 3: trial in Manhattan. Let's get the latest now from Bloomberg's

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Speaker 3: June Grosso in New York.

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Speaker 7: The first seven jurors were sworn in after lawyers grilled

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Speaker 7: them about their social media posts, political views, and personal lives.

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Speaker 7: Sitting on the jury will be an information technology worker,

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Speaker 7: an English teacher and oncology nurse, a sales professional, a

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Speaker 7: software engineer, and two lawyers. Four more jurors must be

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Speaker 7: sworn in and six alternates before opening statements can begin,

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Speaker 7: perhaps as early as next week. June Grosso, Bloomberg Radio,

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Speaker 7: All Right.

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Speaker 1: June, thank you. In company news, job cuts reportedly on

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Speaker 1: the way at Toshiba, The nie K is reporting the

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Speaker 1: company plans to eliminate five thousand jobs in Japan. That's

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Speaker 1: about a tenth of its domestic headcount. The NIKA says

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Speaker 1: with a cost cutting move, Toshiba is now focusing on

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Speaker 1: its infrastructure and digital technology operations.

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Speaker 3: Meanwhile, Karen Bloomberg News has learned that Morgan Stanley plans

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Speaker 3: to start cutting about fifty investment banking jobs in the

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Speaker 3: Asia Pacific region this week. At least eighty percent of

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Speaker 3: those reductions will be in Hong Kong and China. The

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Speaker 3: job cuts would be the deepest in years for Morgan

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Speaker 3: Stanley in China.

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Speaker 1: Well Nathan. Jamie Diamond says artificial intelligence will transform banking,

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Speaker 1: but it will also lead to job losses. The JP

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Speaker 1: Morgan CEO's comments to Bloomberg come after he devoted a

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Speaker 1: chunk of his annual shareholder letter to the importance of

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Speaker 1: artificial intelligence for the Wall Street Giants business. Here's what

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Speaker 1: Diamond told Emily Chang on the latest episode of The Circuit.

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Speaker 8: It's a living breathing thing. So people want to ask

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Speaker 8: what's going to do. It's a living breathing thing.

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Speaker 9: It's going to change.

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Speaker 8: They're gonna be all different types of models and different

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Speaker 8: types of tools and technology. But the way to think

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Speaker 8: about for us is every single process, so errors, trading, hedging, research,

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Speaker 8: every app every database. You're going to be applying AI.

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Speaker 8: So it might be as a copilot, it might be

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Speaker 8: to replace humans. You know, AI is doing all the

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Speaker 8: equity hedging for us. For the most part. It's idea

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Speaker 8: generation as large language models.

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Speaker 1: And you can watch the full wide ranging interview with

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Speaker 1: Jamie Dimond on the latest episode of the Circuit with

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Speaker 1: Emily Chang tonight at six pm Wall Street Time on

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Speaker 1: Bloomberg Television. You can also get the circuit in podcast

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Speaker 1: Forum on Apples, Spotify, or anywhere else you listen to podcasts.

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Speaker 3: Let's check some stocks this morning, Karen. We're watching shares

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Speaker 3: of ASML holding. They're down more than four percent. In Amsterdam,

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Speaker 3: Europe's most valuable tech firm posted new orders that fell

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Speaker 3: short of analyst estimate's hurt by a downturn in demand

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Speaker 3: for its most advanced machines from the chip making industry.

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Speaker 1: And shares of United Airlines flying higher by almost five

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Speaker 1: percent in early trading that carry your forecast better than

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Speaker 1: a expected profit this quarter. That's tempering concerns that Boeing

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Speaker 1: aircraft delays and regulatory pressure will put expansion plans at risk.

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Speaker 7: Well.

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Speaker 3: Boeing safety record will be under pressure today on Capitol Hill, Karen,

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Speaker 3: the Senate is holding two separate hearings on a whistleblower's

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Speaker 3: claims of poor assembly processes and shortcomings in the seven

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Speaker 3: eighty seven Dreamliner program. Senators will hear from a Boeing

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Speaker 3: engineer who worked on that plane for years, plus safety

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Speaker 3: experts from NASA and the academic world. Boeing executives will

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Speaker 3: not be there. CEO Dave Calhoun is expected to testify

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Speaker 3: at a later date.

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Speaker 1: And it's time now for look at some of the

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Speaker 1: other stories making news in New York and around the world.

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Speaker 1: For that, we're joined by Bloomberg's John Tucker, John Good Morning.

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Speaker 10: Good Morning Karen. President Biden calling for higher tariffs on

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Speaker 10: Chinese steel and aluminum. Bloomberg Steve Ponas says this is

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Speaker 10: part of a series of steps to shore up the

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Speaker 10: American steel sector and win over workers in this year's election.

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Speaker 11: In a visit to Pittsburgh today, mister Biden will propose

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Speaker 11: new twenty five percent tariffs on certain Chinese steel and

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Speaker 11: aluminum products as part of an ongoing review, while the

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Speaker 11: US also launches a formal probe into China's shipbuilding industry.

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Speaker 11: The steps target a relatively small segment of the US market,

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Speaker 11: with imports of Chinese steel and aluminum totaling roughly one

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Speaker 11: point seven billion dollars in twenty twenty three, but US

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Speaker 11: officials said the announcements were designed to head off an

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Speaker 11: expected surge and safeguard the US market. The President will

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Speaker 11: also reiterate that United States steel based in Pittsburgh should

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Speaker 11: remain American owned. Steve Potisk Bloomberg Radio.

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Speaker 10: A newly unsealed court document so US Senator Bob Menendez

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Speaker 10: is prepared to blame his wife at his bribery trial

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Speaker 10: for withholding information from him. Lawyers for the New Jersey

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Speaker 10: Democrat asked the judge to try him separately from his wife, Nadine.

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Speaker 10: They're accused of accepting brimes of cash, gold bars, and

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Speaker 10: a car in the Bronx. Police is searching for four

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Speaker 10: sons books who shot four people on a street corner

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Speaker 10: Tuesday evening, killing one of them. According to NYPD Chief

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Speaker 10: Benjamin Gurley, the victims were all shot by passengers riding

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Speaker 10: on two scooters with.

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Speaker 3: Two males on each scooter abreast.

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Speaker 8: The rear passengers of those scooters pulled off firearms. That's

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Speaker 8: two firearms, and he fired approximately ten rounds.

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Speaker 10: So far, had no arrests. Former US Senator and two

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Speaker 10: termed Florida Governor Bob Graham, who gained national prominence as

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Speaker 10: Chairman of the Senate Intelligence Committee in the aftermath of

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Speaker 10: the two thousand and one terror attacks and as an

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Speaker 10: early critic of the Iraq war, has died. He was

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Speaker 10: eighty seven years old, Global news twenty four hours a

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Speaker 10: day and whenever you wanted with Bloomberg News. Now, I'm

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Speaker 10: John Tucker and this is Bloomberg Nathan and Karen.

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Speaker 1: Sorry, John, thank you. It's time now for the Bloombergy

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Speaker 1: Sports Update with John Stashaur.

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Speaker 11: John, Good morning, Good morning, Carry.

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Speaker 12: The Yankees had the hot start they off. The Mets

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Speaker 12: had a brutal start to the season five straight home losses.

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Speaker 12: They've turned it around moved over five hundred where a

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Speaker 12: three to one win over the Pirates at Cityfield. Mets

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Speaker 12: scored all three and the seventh, ending their bullpen to

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Speaker 12: four Scorelesshitians gave up just one hit. A night after

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Speaker 12: the Yankees first two game losing straight, the skid reached

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Speaker 12: three in Toronto. Blue Jays led five to one. Yankee

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Speaker 12: comeback fell short. They lost five to four. Jose Trasvigno

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Speaker 12: drove in three runs, but Anthony Bupe went over four

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Speaker 12: with four strikeouts and Aaron Judge went over four. His

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Speaker 12: average fell to one eighty two. Orioles beat the Twins.

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Speaker 12: They are only a half game behind the Yanks. Red

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Speaker 12: Sox lost to Cleveland. Nationals lost to the Dodgers Hall

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Speaker 12: of Fame manager Whitey Herzog has died at ninety two.

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Speaker 12: Managed the Cardinals throughout the nineteen eighties, won the World

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Speaker 12: Series in eighty two, and also passed either way. One

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Speaker 12: of the last living Boys of Summer, Carl Erskine was

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Speaker 12: the main stay on the Brooklyn Dodgers pitching staff. He

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Speaker 12: was ninety seven. The NBA play in began in New Orleans.

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Speaker 12: Lakers had a fifteen point lead the Pelicans rallied. Lakers

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Speaker 12: prevailed down the stretch.

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Speaker 13: Here is Breeves dribbling rights all the way to the middle.

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Speaker 13: T low for three shot it two s three for Russell,

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Speaker 13: put the Lakers up by four with fifty seconds remaining.

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Speaker 12: In the fort on klac and LA fift three four

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Speaker 12: of the night for D'Angelo Russell and the Lakers won

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Speaker 12: one ten to one oh six, So they'll be the

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Speaker 12: seventh seed in the West. They'll face Denver, who swept

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Speaker 12: the Lakers last year, in the West Finals. New Orleans

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Speaker 12: will now host Sacramento Friday to see who the eighth

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Speaker 12: seed will be. The Kings blue out Golden State one

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Speaker 12: eighteen to ninety four. The Rangers found out their opponent

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Speaker 12: first round of the Stanley Cup playoffs will be the

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Speaker 12: Washington Capitals Bruins lost Florida one. The Panthers won the

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Speaker 12: Atlantic Division. Josh Dashawe, Bloomberg Sports Camp, Nathan.

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Speaker 1: All Right, John, thank you. SMP futures up a quarter percent,

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Speaker 1: or fourteen points down, futures up a third of upper

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Speaker 1: cent or one hundred and twenty eight points, Nasdaq futures

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Speaker 1: up a tenth of upper cent or twenty four points,

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Speaker 1: and the ten year Treasury yield at four point sixty

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Speaker 1: three percent.

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Speaker 9: Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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Speaker 9: and around the world on Bloomberg dot Com and the

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Speaker 9: Bloomberg Business app. This is Bloomberg Daybreak. Good morning.

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Speaker 3: I'm Nathan Hager. Higher for longer. That has been the

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Speaker 3: message for quite some time from Fed Chairman Jerome Powell

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Speaker 3: when it comes to interest rates. But after the latest

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Speaker 3: hot inflation data that has started this year, Powell really

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Speaker 3: seems to be trying to send that message home to

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Speaker 3: markets in an even bigger way. And for more. We

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Speaker 3: are joined by Bloomberg's Kritty Gupta. Critty good morning. Sounds

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Speaker 3: like the new message from chairman Powell is higher for

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Speaker 3: even longer.

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Speaker 14: It is, and it's kind of this almost admitting that

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Speaker 14: there is I mean, he said this right, that there's

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Speaker 14: still more work to do. The last mile is always

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Speaker 14: going to be the hardest. His wording seems to have

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Speaker 14: pushed those market expectations of a cut potentially to into

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Speaker 14: next year, moving it out of twenty twenty four altogether.

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Speaker 14: So it's more a question of not only higher for longer,

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Speaker 14: but there's also a question of credibility here that is

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Speaker 14: this the tool that can actually tack on inflation? And Nathan,

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Speaker 14: you know, well early on when we had inflation takeups

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Speaker 14: back in twenty twenty one, the verbiage that Jay Powell

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Speaker 14: and some of his critics even us is we don't

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Speaker 14: want a vulgar repeat, We don't want that reacceleration of inflation.

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Speaker 14: This is kind of his worst nightmare, that's almost coming

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Speaker 14: to fruition.

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Speaker 3: Yeah, he seems to be sort of hoping that this

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Speaker 3: isn't the reacceleration. But it's raising the question when it

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Speaker 3: comes to FED credibility about whether that last mile should

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Speaker 3: be maybe a little bit less than a mile. There's

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Speaker 3: a growing debate in this market about whether the two

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Speaker 3: percent inflation targets still makes sense.

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Speaker 14: There is a growing debate, and it's one that's kind

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Speaker 14: of going global as well, because right here in the

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Speaker 14: UK as well, we are having the exact same debate.

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Speaker 14: Of course, setting the precedent by the Federal Reserve. But look,

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Speaker 14: that's a much longer process that isn't going to be

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Speaker 14: adjusted anytime soon. It requires even congressional approval to adjust

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Speaker 14: that target. It Something you are, however, seeing, is what

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Speaker 14: the inputs into this inflationary process is. So when we're

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Speaker 14: talking about what's actually driving this inflation uptick, you're starting

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Speaker 14: to see some of the commodity prices actually take higher.

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Speaker 14: So oil prices, for example, was one gas prices that

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Speaker 14: we watch, especially ahead of the election in the States.

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Speaker 14: Another piece that's especially relevant for the global audience is

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Speaker 14: simply this idea that you were starting to yield much

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Speaker 14: much higher. A lot of the work, a lot of

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Speaker 14: that kind of easing of the Federal Reserve was kind

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Speaker 14: of pushing off in terms of rate cuts. A lot

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Speaker 14: of that has actually been done by the markets in

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Speaker 14: a good chunk a way. When you look at financial conditions,

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Speaker 14: take a look at the stock market rally, take a

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Speaker 14: look at the dollar rally, credit spreads have tightened. Those

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Speaker 14: are all ways to kind of through the markets without

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Speaker 14: that FED intervention tighten or extracy ease some of the

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Speaker 14: conditions that allow for things like financing, for example, in

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Speaker 14: the broader market. So that's going to be one thing

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Speaker 14: to watch. The bond market is another story here, where

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Speaker 14: you start to see so many people piled on to

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Speaker 14: the front end of the curve that their market is

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Speaker 14: almost partially in control of where rates go. Some would

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Speaker 14: argue at an even faster pace than where the FED

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Speaker 14: is expecting. They're higher for longer as well. So you're

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Speaker 14: seeing yields tick up higher. That makes the FED its

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Speaker 14: job even more difficult when it comes to working in

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Speaker 14: the opposite direction.

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Speaker 12: So does this.

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Speaker 3: Raise the idea once again that we could see no

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Speaker 3: interest rate cuts this year? Perhaps as a base case?

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Speaker 3: I mean, does Torsten Slock of Apollo Management sound like

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Speaker 3: a profit at this point?

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Speaker 14: It could be, and then look, it wouldn't be the

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Speaker 14: first time that he's claimed that profit status, and very

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Speaker 14: easily could be. He also mentioned that some of these

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Speaker 14: financial conditions are incentivizing capital markets activity, IPO deals, et cetera.

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Speaker 14: And he's been right about that, and he's really shown

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Speaker 14: that kind of pickup as well. I'll answer your question

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Speaker 14: in terms of market pricing here, because the market's always right,

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Speaker 14: isn't it, Nathan. And when you look at the market

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Speaker 14: pricing you can find on the Bloomberg terminal, it basically

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Speaker 14: is it has pushed out cuts all the way into

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Speaker 14: twenty twenty five. The most kind of the biggest percentage

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Speaker 14: you is about a forty seven percent odds of a

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Speaker 14: cut in September, though the next one coming out forty

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Speaker 14: eight percent in December. Remember're also dealing with the election story.

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Speaker 14: How close to the election does the Fed have room

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Speaker 14: to cut? And how many data points in between do

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Speaker 14: you get suggesting that inflation is either upticked further, that

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Speaker 14: there is a reacceleration, or gone in the opposite direction

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Speaker 14: that we can claim that transitory status. And right now

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Speaker 14: you've had three hot prints across CPI, PPI, PCE. At

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Speaker 14: the moment, three data points is starting to feel like

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Speaker 14: a trend.

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Speaker 3: Only about thirty seconds left here, Kritie. But we're in

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Speaker 3: this situation where inflation is easing just a bit overseas.

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Speaker 3: Now we got the lower than well, the lower inflation

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Speaker 3: print out of the UK not lower than expected. But

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Speaker 3: this idea as well, that the ECB could be cutting

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Speaker 3: in June. I mean, what about the divergence here?

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Speaker 14: Well, the divergence is one of concern, and it's one

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Speaker 14: that actually kind of makes the trade a little bit

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Speaker 14: easier when it comes to the bond market and even

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Speaker 14: the FX market. You're already seeing cracks of that where

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Speaker 14: the strong dollar story is actually weighing on the year

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Speaker 14: and the pound because the market is expecting that divergence

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Speaker 14: to manifest as soon as the summer. Is this an

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Speaker 14: issue not really seems to be the consensus at the

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Speaker 14: moment because it'll only last for a couple of months

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Speaker 14: at most. Does that narrative change Absolutely? But right now

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Speaker 14: you're one hundred percent right. The ECB is looking like

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Speaker 14: it's going to be the first to cut rates.

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