1 00:00:03,360 --> 00:00:08,640 Speaker 1: Broadcasting live to New York Gloomberg even to Washington, d C. Bloomberg, 2 00:00:09,600 --> 00:00:14,319 Speaker 1: to Boston, Bloomberg twelve honors, to San Francisco, Bloomberg to 3 00:00:14,440 --> 00:00:19,920 Speaker 1: the Country General one and around the globe the Bloomberg Radio, Blust, 4 00:00:20,280 --> 00:00:25,000 Speaker 1: Bloomberg dot Com. This is Blomberg Surveillance. Good morning, I 5 00:00:25,079 --> 00:00:27,400 Speaker 1: say thirty. I'll wall straight at Michael McKee along with 6 00:00:27,680 --> 00:00:30,600 Speaker 1: Tom Keene are economic indicators are brought to you by 7 00:00:30,640 --> 00:00:33,480 Speaker 1: Commonwealth Financial Network. When it's time to change the conversation, 8 00:00:34,080 --> 00:00:36,360 Speaker 1: talk to a broker dealer r I A that's ready 9 00:00:36,400 --> 00:00:39,080 Speaker 1: to listen, call six two three six three eight or 10 00:00:39,120 --> 00:00:42,879 Speaker 1: visit Commonwealth dot com to learn more. Actually, our economic 11 00:00:42,920 --> 00:00:46,519 Speaker 1: indicators would be brought to you by Commonwealth Financial Network 12 00:00:46,560 --> 00:00:48,839 Speaker 1: if there were any indicators today. But it's one of 13 00:00:48,920 --> 00:00:51,240 Speaker 1: those quiet days where there's nothing, but then it gets 14 00:00:51,320 --> 00:00:55,400 Speaker 1: busy before Wednesday. Do not touch that dial tomorrow morning. 15 00:00:56,200 --> 00:00:59,440 Speaker 1: What Jim Vogel at FTN says is the most important 16 00:00:59,480 --> 00:01:02,240 Speaker 1: indicator of what's going on in the economy until we 17 00:01:02,320 --> 00:01:08,399 Speaker 1: get too later. In March, retail sales, the forecast is 18 00:01:08,440 --> 00:01:12,039 Speaker 1: for a one tenth drop in the headline. Nobody's gonna 19 00:01:12,040 --> 00:01:14,319 Speaker 1: pay attention to that because gas prices, but the retail 20 00:01:14,360 --> 00:01:18,959 Speaker 1: sales Control group up zero point two percent. If that happens, 21 00:01:19,360 --> 00:01:22,520 Speaker 1: he says, we could go over on the ten year 22 00:01:22,520 --> 00:01:25,480 Speaker 1: note the CPI the day of the FED meeting. Do 23 00:01:25,600 --> 00:01:28,360 Speaker 1: you suggest on the Tuesday Wednesday meeting they know that 24 00:01:28,480 --> 00:01:31,280 Speaker 1: data when they walk in the door Tuesday morning at 25 00:01:31,280 --> 00:01:33,399 Speaker 1: the eCos building. No, they'll know it at eight dirty. 26 00:01:33,440 --> 00:01:35,520 Speaker 1: They won't know it in advanced, but they won't know 27 00:01:35,720 --> 00:01:39,720 Speaker 1: The governor's presidents won't know it advance. But eight dirty 28 00:01:39,760 --> 00:01:41,640 Speaker 1: in the morning that they will. They will know it, 29 00:01:41,680 --> 00:01:43,360 Speaker 1: and so they'll know it before they make a decision. 30 00:01:44,319 --> 00:01:49,200 Speaker 1: Allen Zentner uh with Morgan Stanley last year shook a 31 00:01:49,320 --> 00:01:53,480 Speaker 1: big house economics to its foundation by delaying a rate right. 32 00:01:53,600 --> 00:01:55,800 Speaker 1: She then retracted on that, came back a little bit, 33 00:01:55,840 --> 00:01:59,280 Speaker 1: but without call, without question, it was the big house 34 00:01:59,360 --> 00:02:03,440 Speaker 1: call the year she redues it. This morning the report 35 00:02:03,560 --> 00:02:06,960 Speaker 1: is out from Morgan Stanley. It is a substantial report. 36 00:02:06,960 --> 00:02:09,200 Speaker 1: We're going to protect the copyright. Call up Ellen to 37 00:02:09,240 --> 00:02:14,160 Speaker 1: get it in the shallow end in MS. Zentner. Basically, 38 00:02:14,240 --> 00:02:17,160 Speaker 1: Morgan Stanley is all alone among the big house when 39 00:02:17,160 --> 00:02:21,040 Speaker 1: you compare your one rate rate increased call to the 40 00:02:21,040 --> 00:02:24,360 Speaker 1: Blue Chip Consensus. I mean, you're awful alone this morning, 41 00:02:24,360 --> 00:02:28,720 Speaker 1: aren't you. Yeah, But I think I've proven in the 42 00:02:28,720 --> 00:02:31,680 Speaker 1: past that I don't mind hanging out there by myself 43 00:02:32,400 --> 00:02:35,480 Speaker 1: if we have a very strong conviction around our call. 44 00:02:35,600 --> 00:02:37,400 Speaker 1: And I will note that if you look at Blue 45 00:02:37,480 --> 00:02:43,720 Speaker 1: Chip Consensus, their forecasts for growth, inflation, said rate hikes, 46 00:02:43,800 --> 00:02:46,360 Speaker 1: that's all been coming down over the past several months, 47 00:02:46,400 --> 00:02:50,000 Speaker 1: and we think that they will eventually come around to 48 00:02:50,120 --> 00:02:53,840 Speaker 1: our view that the Fed hikes once this year in December, 49 00:02:54,360 --> 00:02:58,080 Speaker 1: sort of in an eerily eerie replay of last year 50 00:02:58,120 --> 00:03:00,040 Speaker 1: where the said wants to do more and can it 51 00:03:00,080 --> 00:03:02,920 Speaker 1: needs to communicate they'd like to do more, but ultimately 52 00:03:02,919 --> 00:03:05,320 Speaker 1: are only able to deliver one more rate hike this year. 53 00:03:05,840 --> 00:03:09,480 Speaker 1: Why do they not go more than once? Well, I 54 00:03:09,560 --> 00:03:13,800 Speaker 1: tell you, Mike, they're gonna They're really encouraged by what 55 00:03:13,840 --> 00:03:16,880 Speaker 1: they're seeing in the domestic economy, as are we. I mean, 56 00:03:17,120 --> 00:03:20,160 Speaker 1: there's a lot of domestic strength out there coming from 57 00:03:20,200 --> 00:03:24,800 Speaker 1: consumer muscle and pretty steady contributions to growth from the 58 00:03:24,800 --> 00:03:28,360 Speaker 1: housing market. Um, but it's those external headwinds. Net trade 59 00:03:28,400 --> 00:03:30,520 Speaker 1: is going to continue to be a big drag this year, 60 00:03:31,120 --> 00:03:34,040 Speaker 1: we've had another leg down in in drilling counts, which 61 00:03:34,080 --> 00:03:38,120 Speaker 1: means energy continues to weigh energy investment ways on the economy. 62 00:03:38,120 --> 00:03:40,560 Speaker 1: And we think the FEDS forecasts own forecasts are too 63 00:03:40,600 --> 00:03:43,200 Speaker 1: lofty and their expectation that they want to hike rates 64 00:03:43,880 --> 00:03:46,400 Speaker 1: as a right now four more times this year, that 65 00:03:46,400 --> 00:03:50,160 Speaker 1: that's going to change this week. UM is just is 66 00:03:50,200 --> 00:03:54,920 Speaker 1: going to follow those forecasts lower. UM Also underpinning that 67 00:03:55,200 --> 00:03:58,680 Speaker 1: is Janet Ellen has said that if inflation is moving 68 00:03:58,720 --> 00:04:02,000 Speaker 1: in the wrong direct action, it would defer rate hikes. 69 00:04:02,040 --> 00:04:03,920 Speaker 1: And if we look at the path of core PC 70 00:04:04,280 --> 00:04:07,480 Speaker 1: prices this year, they have peaked for the year. And 71 00:04:07,520 --> 00:04:10,760 Speaker 1: I think this is the most important thing to underscore, 72 00:04:10,760 --> 00:04:13,800 Speaker 1: and it's something that buried deep in the footnotes of 73 00:04:13,880 --> 00:04:17,560 Speaker 1: Lal Branderd's speech last week was also that acknowledgement that 74 00:04:17,640 --> 00:04:21,239 Speaker 1: core PC prices that rose to one point seven percent 75 00:04:21,279 --> 00:04:24,920 Speaker 1: in January, that's the peak for the year, and they 76 00:04:24,960 --> 00:04:26,960 Speaker 1: move lower from here. And so it's gonna be awfully 77 00:04:26,960 --> 00:04:31,160 Speaker 1: difficult to convince markets that you should raise rates when 78 00:04:31,200 --> 00:04:34,080 Speaker 1: inflation is moving in the wrong direction. But if they 79 00:04:34,480 --> 00:04:38,960 Speaker 1: don't come out with a Zentener forecast and they continue 80 00:04:39,000 --> 00:04:41,360 Speaker 1: to say their data dependent and the data, as you 81 00:04:41,440 --> 00:04:47,279 Speaker 1: even concede, match up with their forecasts, don't they lose credibility. Well, 82 00:04:47,960 --> 00:04:50,560 Speaker 1: so this is how they get around the credibility issue 83 00:04:50,600 --> 00:04:53,480 Speaker 1: that was an issue last year, where they kept telling markets, 84 00:04:53,880 --> 00:04:56,000 Speaker 1: we're going to raise rates this year. It's going to 85 00:04:56,080 --> 00:04:58,520 Speaker 1: happen in June. Okay, it's gonna happen this summer. Okay, 86 00:04:58,560 --> 00:05:00,200 Speaker 1: it's gonna happen in the fall. Okay, it's going to 87 00:05:00,279 --> 00:05:02,760 Speaker 1: happen before the end of the year. Uh. And what 88 00:05:02,800 --> 00:05:08,600 Speaker 1: they've done is they've they've um uh called together the outliers, 89 00:05:08,640 --> 00:05:12,320 Speaker 1: the people that kept the policymakers that kept saying I 90 00:05:12,360 --> 00:05:14,600 Speaker 1: think four rate hikes are appropriate this year or three 91 00:05:14,640 --> 00:05:18,240 Speaker 1: year appropriate this year. Uh. And you notice that many 92 00:05:18,279 --> 00:05:21,160 Speaker 1: of them have stopped, uh specifically mentioning the number of 93 00:05:21,240 --> 00:05:25,920 Speaker 1: rate hikes they envision this year because that that has 94 00:05:26,000 --> 00:05:28,160 Speaker 1: led to a lot of confusion for markets and led 95 00:05:28,200 --> 00:05:31,080 Speaker 1: to some of that credibility issue. The promise that they've 96 00:05:31,080 --> 00:05:34,240 Speaker 1: made is we will do more if and when we 97 00:05:34,360 --> 00:05:37,440 Speaker 1: can do more. And based on their forecasts, they're gonna 98 00:05:37,480 --> 00:05:40,159 Speaker 1: show us that they would like to do more. But 99 00:05:40,400 --> 00:05:44,480 Speaker 1: what we try to anticipate as economists is not what 100 00:05:44,520 --> 00:05:46,279 Speaker 1: we think they should do or what they would like 101 00:05:46,360 --> 00:05:48,479 Speaker 1: to do, but what ultimately we think they will be 102 00:05:48,640 --> 00:05:54,680 Speaker 1: able to do. Well. If that is the case, then 103 00:05:55,080 --> 00:05:58,760 Speaker 1: what's the obviously must be saying there's no inflation danger 104 00:05:58,800 --> 00:06:03,480 Speaker 1: out there. No, there's not. I mean, the latest employment 105 00:06:03,600 --> 00:06:09,000 Speaker 1: data showed that wage growth has been on a very 106 00:06:09,040 --> 00:06:13,320 Speaker 1: slow blead upward and there's no indication that it's not 107 00:06:13,360 --> 00:06:16,880 Speaker 1: going to continue along that path. We do have tight 108 00:06:16,960 --> 00:06:19,760 Speaker 1: labor markets in certain areas of the economy, but they're 109 00:06:19,760 --> 00:06:22,560 Speaker 1: in the very low wage paying sectors where when you 110 00:06:22,640 --> 00:06:25,719 Speaker 1: get tight labor markets there with wage pressures, it's just 111 00:06:25,880 --> 00:06:28,480 Speaker 1: the wage bill just is not enough to move the 112 00:06:28,480 --> 00:06:31,600 Speaker 1: needle in in the aggregate in a bigger way, so 113 00:06:31,640 --> 00:06:34,159 Speaker 1: they're not to be pressured by the labor markets. Stand 114 00:06:34,200 --> 00:06:38,400 Speaker 1: Fisher just uh last a few weeks ago reminded us, 115 00:06:38,480 --> 00:06:42,440 Speaker 1: or last week reminded us that the Phillips curve is horizontal, 116 00:06:43,000 --> 00:06:46,200 Speaker 1: so it's not the tighter low on acoyment rate is 117 00:06:46,240 --> 00:06:48,000 Speaker 1: not putting up for pressure on wages. And if you 118 00:06:48,040 --> 00:06:50,159 Speaker 1: look at core inflation this year, it's going to be 119 00:06:50,200 --> 00:06:53,240 Speaker 1: moving in the wrong direction. So there's really no compelling 120 00:06:53,279 --> 00:06:55,200 Speaker 1: reason for them to do more. Let's come back and 121 00:06:55,240 --> 00:06:58,160 Speaker 1: dig into the American economy with Ellen Setner. Morgan Stanley 122 00:06:58,200 --> 00:07:01,719 Speaker 1: again to remind for she moved some three to two 123 00:07:01,760 --> 00:07:05,039 Speaker 1: to one rate rise this year with some stunning work 124 00:07:05,600 --> 00:07:09,360 Speaker 1: within her larger research piece. For Morgan Stanley futures negative five, 125 00:07:09,760 --> 00:07:13,400 Speaker 1: town futures of negative thirty the yield one point nine six. 126 00:07:17,440 --> 00:07:18,920 Speaker 1: Have not to check in with Michael bar and get 127 00:07:18,920 --> 00:07:21,720 Speaker 1: the latest world and national headlines. Fine night, tom, Thank 128 00:07:21,760 --> 00:07:25,000 Speaker 1: you very much. Five states holding Republican primaries tomorrow have 129 00:07:25,200 --> 00:07:27,840 Speaker 1: enough delegates up for grabs to equal more than a 130 00:07:27,920 --> 00:07:30,680 Speaker 1: quarter of the one thousand, two hundred thirty seven necessary 131 00:07:30,840 --> 00:07:33,960 Speaker 1: for nomination. That's enough to have the potential to give 132 00:07:34,040 --> 00:07:37,840 Speaker 1: front runner Donald Trump almost an insurmountable lead. But his 133 00:07:38,000 --> 00:07:41,400 Speaker 1: rivals are fighting. Ohio Governor John Kasy is pushing hard 134 00:07:41,400 --> 00:07:44,480 Speaker 1: in his home state. Is the same for Florida Senator 135 00:07:44,640 --> 00:07:47,880 Speaker 1: Marco Rubio, who needs a home state win to keep going. 136 00:07:48,160 --> 00:07:50,480 Speaker 1: You have a leading contender for president telling people in 137 00:07:50,520 --> 00:07:52,960 Speaker 1: his audience go ahead and punch someone in the face. 138 00:07:53,000 --> 00:07:56,480 Speaker 1: I'll pay your legal bills. That's not an excuse of latitude, 139 00:07:56,560 --> 00:07:58,160 Speaker 1: because let me tell you, that is wrong. If our 140 00:07:58,240 --> 00:08:01,280 Speaker 1: kids did it, that is asters of a president does 141 00:08:01,280 --> 00:08:04,239 Speaker 1: it too. Journalists face up to eight years in prison 142 00:08:04,280 --> 00:08:07,280 Speaker 1: if convicted in the Vatican's controversial trial over leaks of 143 00:08:07,320 --> 00:08:11,240 Speaker 1: confidential documents. The journalists are accused of putting pressure on 144 00:08:11,280 --> 00:08:15,120 Speaker 1: a Vatican mon signor to obtain the document, which revealed waste, 145 00:08:15,200 --> 00:08:19,120 Speaker 1: mismanagement and greed in the church hierarchy. The monsenor and 146 00:08:19,280 --> 00:08:22,520 Speaker 1: to other people affiliated with the Papal Reform Commission are 147 00:08:22,600 --> 00:08:26,360 Speaker 1: also on trial. Media rights groups have announced the prosecution 148 00:08:26,400 --> 00:08:29,400 Speaker 1: of the journalists. Turkey state run news agency says the 149 00:08:29,440 --> 00:08:32,520 Speaker 1: military has carried out air strikes against Kurdish rebels in 150 00:08:32,679 --> 00:08:36,000 Speaker 1: northern Iraq. It comes hours after yesterday's deadly car bombing 151 00:08:36,000 --> 00:08:38,480 Speaker 1: and anchora. They have killed at least thirty seven people. 152 00:08:38,720 --> 00:08:41,400 Speaker 1: Global News twenty four hours a day, powered by our 153 00:08:41,440 --> 00:08:44,360 Speaker 1: twenty four hundred journalists and more than one hundred fifty 154 00:08:44,360 --> 00:08:48,120 Speaker 1: news bureaus from around the world. I'm Michael, bar Mike Tom, 155 00:08:48,120 --> 00:08:50,160 Speaker 1: Thank you, Michael. Time now for the Ray Katina Auto 156 00:08:50,160 --> 00:08:54,640 Speaker 1: Group Bloomberg NBC Sports Update with Rob Bushman. Good morning, 157 00:08:54,679 --> 00:08:57,040 Speaker 1: Mike and Tom. A half dozen local teams are dancing 158 00:08:57,080 --> 00:08:59,800 Speaker 1: as the n C two a unveiled their annual Tournament 159 00:09:00,160 --> 00:09:03,040 Speaker 1: of sixty eight on Sunday, Big East Turney winners Seaton 160 00:09:03,120 --> 00:09:05,960 Speaker 1: Hall will have their handsful of Gonzaga, making their eighteenth 161 00:09:05,960 --> 00:09:08,480 Speaker 1: consecutive trip to the Big Dance. That's a six verses 162 00:09:08,520 --> 00:09:12,800 Speaker 1: eleven matchup. Fairley, Dickinson, Iona, Stony Brook, Buffalo, and Syracuse 163 00:09:13,080 --> 00:09:15,480 Speaker 1: round out the New York and New Jersey Field Brooklyn. 164 00:09:15,720 --> 00:09:18,839 Speaker 1: They play hosts two first round matchups. This weekend. The 165 00:09:18,920 --> 00:09:21,079 Speaker 1: Knicks road trip continues out West, where they beat the 166 00:09:21,160 --> 00:09:24,839 Speaker 1: Lakers seven Carmelo Anthony twenty six points. He reflects on 167 00:09:24,880 --> 00:09:29,160 Speaker 1: the final matchup versus Lakers star Kobe Bryant in motion situation, 168 00:09:29,320 --> 00:09:33,439 Speaker 1: just as from the standpoint of competing, you know, it 169 00:09:33,640 --> 00:09:37,760 Speaker 1: was one of the great uh brother one last time, 170 00:09:38,160 --> 00:09:40,640 Speaker 1: you know, the way that this game, you know, played 171 00:09:40,679 --> 00:09:44,199 Speaker 1: itself out. Bryant is, of course, retiring at the end 172 00:09:44,200 --> 00:09:47,080 Speaker 1: of the season. Bucks took down the Nets one on nine. 173 00:09:47,920 --> 00:09:50,280 Speaker 1: It's not often the Rangers play back to back and 174 00:09:50,320 --> 00:09:53,160 Speaker 1: lose both at home. After an overtime loss on Saturday 175 00:09:53,200 --> 00:09:55,040 Speaker 1: in New York, fell five to three at the Garden 176 00:09:55,040 --> 00:09:58,600 Speaker 1: to the Penguins, Rangers Dan Girardi felt that attrition didn't 177 00:09:58,600 --> 00:10:00,920 Speaker 1: play a role the first period in ninety shots. You know, 178 00:10:01,400 --> 00:10:03,240 Speaker 1: you know, if anything, that's gonna be the weakest period. 179 00:10:03,280 --> 00:10:04,960 Speaker 1: I'm coming out from back to back game and it 180 00:10:05,040 --> 00:10:06,880 Speaker 1: was our strongest tonight. So yeah, I don't think that 181 00:10:06,960 --> 00:10:09,160 Speaker 1: was a factor. I just don't. We have some good, 182 00:10:09,200 --> 00:10:10,880 Speaker 1: good minutes there, a good plays and it's just gonna 183 00:10:10,880 --> 00:10:13,000 Speaker 1: get it done things. The Rangers, however, are still in 184 00:10:13,040 --> 00:10:14,960 Speaker 1: a three way tie in the East with the Lightning 185 00:10:15,200 --> 00:10:18,000 Speaker 1: and Panthers and spring training news guys. Yankees shout out 186 00:10:18,000 --> 00:10:20,880 Speaker 1: by the Phillies while the Mets blank the Miami Marlins. 187 00:10:20,880 --> 00:10:23,560 Speaker 1: And that is your NBC Bloomberg Sports Update, Mike don 188 00:10:23,920 --> 00:10:26,240 Speaker 1: m thanks so much. Ellen Zetner with us, and we 189 00:10:26,280 --> 00:10:30,160 Speaker 1: will continue whether or she migrates her forecast to a 190 00:10:30,240 --> 00:10:33,680 Speaker 1: low inflation and a FED that will do little, not nothing, 191 00:10:33,720 --> 00:10:38,080 Speaker 1: but do little. Her colleague in crime, Adam Parker, brings 192 00:10:38,120 --> 00:10:44,480 Speaker 1: down his equity growth view. He eliminates his positive tactical stance. 193 00:10:45,040 --> 00:10:48,120 Speaker 1: We had to cash U S treasuries and j g 194 00:10:48,320 --> 00:10:53,280 Speaker 1: b's Adam Parker. This is no words about Zentner and 195 00:10:53,400 --> 00:10:57,280 Speaker 1: Parker adjustin more with Ellen Zentner. This is Bloomberg surveillance. 196 00:11:01,200 --> 00:11:03,240 Speaker 1: The Sports report was brought to by Rakotina Auto Group. 197 00:11:03,320 --> 00:11:05,800 Speaker 1: Let Rakatina show you the way to affordable luxury driving. 198 00:11:05,880 --> 00:11:08,040 Speaker 1: Visit any one of their sixteen beautiful showrooms in New 199 00:11:08,120 --> 00:11:11,400 Speaker 1: York or New Jersey. Call N E W A U 200 00:11:11,520 --> 00:11:13,920 Speaker 1: T O, or go to rakatina dot com for special 201 00:11:13,920 --> 00:11:14,240 Speaker 1: offers