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Speaker 1: Good morning. I'm Brian Curtis and I'm Doug Prisner. Here

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Speaker 1: are the stories we're following today.

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Speaker 2: The United Nations says humanitarian operations in northern Gaza will

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Speaker 2: effectively cease in the next forty eight hours. At Baxter

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Speaker 2: is covering that story and has more from the nine

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Speaker 2: to sixty newsroom in San Francisco.

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Speaker 3: Ed.

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Speaker 4: Yeah, Brian, that is the alarm that's being sounded for sure.

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Speaker 4: The UN says it will run out of fuel to

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Speaker 4: get anything in or out. This will affect the Alshifa Hospital,

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Speaker 4: which remains surrounded by Israeli troops. US President Joe Biden

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Speaker 4: saying today the hospital must be protected.

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Speaker 5: I hope an expectation that there will be less intrusive

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Speaker 5: action relt through the hospital.

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Speaker 4: Yeah, he says, must be protected. Israeli's say Jimas, has

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Speaker 4: extensive tunnels under the hospital, but says it will supply

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Speaker 4: fuel to try and keep civilian operations open if asked. Meanwhile,

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Speaker 4: US State Department spokesman says Hamas says. Matthew Miller says

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Speaker 4: is Hamas's hoarding fuel could be used.

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Speaker 6: If Hamas truly cared for the people in Al Shifa

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Speaker 6: and in other hospitals in the North. It could take

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Speaker 6: the fuel that's using to protect its fighters and send

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Speaker 6: it to the hospitals.

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Speaker 4: Meanwhile, the EU is officially condemned Hamas for using the

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Speaker 4: hospital as a human shield, but also saying Israel needs

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Speaker 4: to use maximum restraint. Meanwhile, more fire between Hamas and

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Speaker 4: Hezbollah militants aimed at US bases in Syria and Iraq,

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Speaker 4: and US Offense Secretary Lloyd Austin says the US is responding.

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Speaker 7: These strikes are intended to disrupt and degrade the freedom

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Speaker 7: of action and capabilities of these groups, which are directly

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Speaker 7: responsible for attacks on US forces in Iraq and Syria.

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Speaker 4: He says the US will do whatever it takes to

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Speaker 4: protect forces in the region. Critical twenty four hours in

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Speaker 4: Congress attempt to keep the government funded going into the weekend.

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Speaker 4: Democrats have responded today sent a Majority Leader Chuck Schumer, well,

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Speaker 4: he's leaving the door open for now.

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Speaker 8: I am pleased that Speaker Johnson seems to be moving

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Speaker 8: in our direction by advancing a cr that does not

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Speaker 8: include the highly partisan cuts the Democrats have warned against.

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Speaker 4: And Bloomberg's Jonathan Tomari says a potential path forward.

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Speaker 9: They're certainly not slamming the door. You saw Senator Schumer

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Speaker 9: say that he's pleased with some aspects of it. We

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Speaker 9: saw President Biden saying he's open to it, which is

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Speaker 9: a big change in tone from what his press secretary

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Speaker 9: said last week. Minority Leader Hakim Jeffries in the House

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Speaker 9: has said that they're evaluating it.

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Speaker 4: The government would shut down, it would occur at midnight

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Speaker 4: on Friday. San Francisco Mayor London Breed is called on

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Speaker 4: President she Shampeng to cooperate to stop the flow of

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Speaker 4: fentanyl into the US. Breed exclusively on Bloomberg, in order.

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Speaker 5: To ensure that this deadly poison that is killing people

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Speaker 5: in San Francisco in significant numbers and all over the country,

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Speaker 5: that we're able to combat this now.

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Speaker 4: This is San Francisco host APEC this week, and US

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Speaker 4: National Security Advisor Jake Sullivan says the issue is on

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Speaker 4: the table.

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Speaker 10: We're hoping to see some progress on that issue this

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Speaker 10: coming week, and that could then open the door to

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Speaker 10: further cooperation on other issues.

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Speaker 4: Yeah, Breed says this is an issue as critical and

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Speaker 4: could lead to further cooperation than down the road between

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Speaker 4: the nations. Global News twenty four hours a day and

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Speaker 4: whenever you need it and want it. With Bloomberg News

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Speaker 4: now in San Francisco, I met Baxter. This is Bloomberg.

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Speaker 2: One of the questions that we'll have for guests all

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Speaker 2: throughout the morning is with the Chinese economy losing steam?

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Speaker 2: Do Shijin Ping have lested dangle in front of Joe Biden?

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Speaker 2: And we'll beginning to that, But we look first here

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Speaker 2: at the economic backdrop in China. We credit growth and

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Speaker 2: other recent data show the nation's economic recovery is losing momentum.

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Speaker 2: Bloomberg Yvon Men has the story from Hong Kong.

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Speaker 11: The People's Bank of China reported the flow of aggregate

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Speaker 11: financing was two hundred and fifty four billion dollars. That's

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Speaker 11: less than half of September's total, in miss estimates of

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Speaker 11: two hundred and seventy billion. Economists have been looking at

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Speaker 11: loan demand as a barometer for China's economic recovery, but

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Speaker 11: the house market slump and low corporate confidence have led

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Speaker 11: to relatively slow credit expansion this year. Meanwhile, three independent

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Speaker 11: surveys saw consumer demand falling in October, and that's even

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Speaker 11: as Beijing rolls out new fiscal stimulus in Hong Kong.

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Speaker 11: I'm von Mann Bloomberg Radio.

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Speaker 1: We've been talking about the APEX Summit in San Francisco.

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Speaker 1: That's where leaders from nearly two dozen countries are gathered. Today.

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Speaker 1: US Treasury Secretary Janet Yellen address the opening sessions. She

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Speaker 1: said finance ministers will discuss the global and regional economic

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Speaker 1: and financial outlook, and she went on to say APEC

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Speaker 1: members share a big responsibility.

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Speaker 5: APEC members represent some of the fastest growing and most

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Speaker 5: dynamic economies in the world, driving both growth and innovation.

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Speaker 5: So the actions we take matter not only for our

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Speaker 5: own economies and people, but also for addressing the global

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Speaker 5: challenges the world faces.

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Speaker 1: Treasury Secretari Mary Janet Yellen there. She went on to

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Speaker 1: say the APEC countries are refocused on longer term priorities

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Speaker 1: that would include strengthening financial resilience and advancing fiscal reforms

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Speaker 1: to build economies over the long run. Yellen also said

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Speaker 1: finance chiefs will be speaking about the long term role

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Speaker 1: that digital assets and blockchain technologies can play right well.

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Speaker 2: The Dubai Air Show is in full swing now, with

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Speaker 2: a number of deals coming on the event's first day Boeing,

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Speaker 2: for instance, won in order of ninety of its seven

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Speaker 2: to seventy seven exjets from Emirates air Lines. That sale

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Speaker 2: is valued at fifty two billion dollars. Emirates President Tim

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Speaker 2: Clark says, despite geopolitical uncertainty and a slowing global economy,

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Speaker 2: travel demand is strong.

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Speaker 10: I'm a great believer in demand for travel globally being

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Speaker 10: very strong and robust, more so now than of pre COVID.

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Speaker 10: This is the paradox which gets everybody offsided. More people

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Speaker 10: are traveling, more people are traveling more often and paying

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Speaker 10: high affairs, and still they keep coming us.

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Speaker 2: That's Emirates President Tim Clark. Separately, Airbus confirmed that it

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Speaker 2: has reached an agreement in principle on a major order

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Speaker 2: from Turkish Airlines.

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Speaker 1: In Vidia, the most valuable chip maker, is going all

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Speaker 1: in on its artificial intelligence chips. That story from Bloomberg's

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Speaker 1: tom Busby.

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Speaker 12: And Vidia is updating its popular H one hundred AI

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Speaker 12: process or, adding more capabilities to a chip that has

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Speaker 12: fueled its dominance in the artificial intelligence computing market. This

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Speaker 12: new model, to be called AGE two hundred, will have

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Speaker 12: the ability for high bandwidth memory known as HBM three

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Speaker 12: e's we can better handle large data sets, the ones

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Speaker 12: needed for developing and implementing AI. Amazon's Aws, Alphabetz, Google Cloud,

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Speaker 12: and Oracle's cloud infrastructure of all committed to using the

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Speaker 12: new chips starting next year. Tom busby Bloomberg Radio.

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Speaker 2: We're hearing that unionized Starbucks Baristas plan to hold their

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Speaker 2: biggest strike yet this week. Thousands of employees at hundreds

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Speaker 2: of sites will mount one day workstoppages November sixteenth. That's

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Speaker 2: according to the union, Starbucks Workers United. The union says

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Speaker 2: Starbucks has illegally refused to negotiate in good faith over

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Speaker 2: issues such as staffing and scheduling. In an email, Starbucks

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Speaker 2: said it's the union that is refusing to fairly negotiate.

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Speaker 2: The week's strike will coincide with Starbucks Red Cup Day,

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Speaker 2: a popular promotional event when the company gives out holiday

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Speaker 2: themed reusable cups. Starbucks shares, by the way, closed down

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Speaker 2: zero point eight percent in New York Well.

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Speaker 1: Several Wall Street banks are sharply divided over not only

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Speaker 1: the timing, but the aggressiveness of FED interest rate cuts.

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Speaker 1: We have that story from Bloomberg's and Kates.

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Speaker 13: On one side are Ubs and Morgan Stanley, which are

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Speaker 13: predicting deep reductions and interest rates in twenty twenty four

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Speaker 13: as inflation cools and the economy stalls, but analysts at

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Speaker 13: Goldman Sachs are expecting fewer reductions at a later start.

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Speaker 13: FED Chairman Jerome Palll has already signaled that the tightening

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Speaker 13: cycle may finally be over, ubsa's interest rate trimming beginning

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Speaker 13: as soon as March, but Morgan Stanley PEG's a June start.

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Speaker 13: Goldman Sachs is forecasting cuts to begin in the fourth

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Speaker 13: quarter of next year. In Washington and Kate's Bloomberg.

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Speaker 2: Radio eleven minutes here passed the hour Brian Curtis and

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Speaker 2: Paul Allen, many thanks to Doug Krisner. We'll see him

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Speaker 2: a little bit later. Let's get to our guest right now,

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Speaker 2: with this CPI data coming soon, Michael McKee, Bloomberg International

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Speaker 2: Economics and Policy Correspondent. So we're looking at CPI at

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Speaker 2: least the annual rate to slow to three point three

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Speaker 2: percent in October annualized rate from three point seven percent

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Speaker 2: MIC in the right direction, but no mission accomplished from

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Speaker 2: the Fed.

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Speaker 3: Oh, absolutely not.

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Speaker 14: And the fact that the headline will decline is largely

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Speaker 14: a function of energy prices, so the Fed's are not

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Speaker 14: going to be impressed with that.

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Speaker 3: The core rate is expected.

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Speaker 14: To come in up three tenths for the month the

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Speaker 14: same as the month of September, and the year or

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Speaker 14: a year for the core or isn't going to be

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Speaker 14: falling very much, coming in exactly the same as September

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Speaker 14: four point one percent. So the message, at least according

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Speaker 14: to the consensus forecast, is more work to be done,

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Speaker 14: mission not accomplished yet.

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Speaker 15: Yeah, and Mike, another phrase we're getting used to hearing

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Speaker 15: is a long way to go. That's Jpal's words. Let's

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Speaker 15: have fun trying to define long.

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Speaker 14: Yeah, that is something that he's been asked quite a

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Speaker 14: bit and doesn't he doesn't bite on that. They want

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Speaker 14: to see inflation, at least as measured by the other

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Speaker 14: major indicator in the US, the PCE fall into the

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Speaker 14: twos and be moving that direction for a couple of months.

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Speaker 14: CPI generally runs two three, four tenths hotter than PCE,

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Speaker 14: so we can extrapolate out if you get a four

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Speaker 14: point one percent on the core rate, you'd be somewhere

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Speaker 14: in the high threes on the PCE.

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Speaker 3: And that's not good enough yet for the PED So

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Speaker 3: how long does that take?

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Speaker 14: Well, I've asked them to have they modeled this out.

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Speaker 14: The only one who's given a sort of direct answer

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Speaker 14: is Ralphae Albostik from the Atlanta FED, who says he

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Speaker 14: thinks second half of next year.

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Speaker 2: Yeah, And it really does show with a lot of

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Speaker 2: big investment banks and how diverse their views are about

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Speaker 2: when the FED will start cutting and by how much

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Speaker 2: and how long. It looks like you've got some incredible

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Speaker 2: estimates from camps like UBS and Morgan Stanley, and then

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Speaker 2: others are looking at way out until twenty twenty five.

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Speaker 2: I wanted to ask you about this poll that was

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Speaker 2: done in terms of the investor response twenty two v

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Speaker 2: research showing that thirty six are percenting that the market

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Speaker 2: reaction will be risk off, thirty one percent see risk on,

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Speaker 2: but generally speaking that investors don't feel the inflation measures

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Speaker 2: on a FED friendly path.

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Speaker 3: What are you sensing it is? It's the consensus out

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Speaker 3: of kind of a neutral path.

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Speaker 14: But I think what will happen is if we get

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Speaker 14: moved up stronger than expected CPI, then you do have

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Speaker 14: definitely a risk off situation because then the betting is

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Speaker 14: going to be that the December rate increase comes back

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Speaker 14: on the table. If it goes down a little more,

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Speaker 14: you probably don't get as much of a risk on

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Speaker 14: reaction because that's sort of already priced in, and risk

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Speaker 14: on in this case means the Fed stays on hold.

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Speaker 14: It doesn't mean they're going to be cutting.

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Speaker 8: Yeah.

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Speaker 15: I seem to remember having this conversation before, maybe towards

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Speaker 15: the end of last year, that we were going to

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Speaker 15: see the FED cutting. This year, we had the same

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Speaker 15: conversation in Australia about the IBA stopping cutting and starting easing.

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Speaker 15: It just hasn't happened. Do you detect a whiff of

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Speaker 15: wishful thinking and all of this?

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Speaker 3: Oh?

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Speaker 14: Absolutely. Most of the people who are on trading guests

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Speaker 14: grew up during the age of zero interest rates. So

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Speaker 14: the fact that to this high and it's a different

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Speaker 14: kind of investing and they may not come back down

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Speaker 14: is not something that they are enjoying at all. So

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Speaker 14: they would prefer to have the old days of free

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Speaker 14: money come back.

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Speaker 3: But when you look at.

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Speaker 14: The surveys that are taken and I did a couple

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Speaker 14: of those today.

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Speaker 3: Last year at this time, the.

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Speaker 14: Forecasts for the US economy were vastly different than they

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Speaker 14: are this year.

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Speaker 3: Things changed so much within a year, and.

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Speaker 14: Of course, Paul, you saw in Australia how the RBA decided, well,

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Speaker 14: maybe we can be done, and then inflation jumped again.

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Speaker 14: FED does not want to see that happen.

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Speaker 2: It seems like consensus has been wrong a lot over

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Speaker 2: the past eighteen months or so in looking at the

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Speaker 2: US economy. Why is it so difficult to forecast?

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Speaker 14: Well, it's always difficult to forecast that far out. You're

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Speaker 14: assuming an awful lot. And just think about all the

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Speaker 14: geopolitical things that have happened in the world in the

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Speaker 14: last year, very hard to figure out what they're going

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Speaker 14: to be and what their impact is going to be.

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Speaker 14: And then we've had such an unusual period after the

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Speaker 14: COVID virus that the economy has not behaved in ways

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Speaker 14: that the models had said they would. And so economists,

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Speaker 14: and that goes for the FED and other central bankers,

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Speaker 14: are still trying to figure out.

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Speaker 3: What's likely to happen.

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Speaker 14: And as somebody said, stuff keeps happenings.

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Speaker 15: Funny, that's almost like you know, we live on planet Earth.

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Speaker 15: Just before we let you go get some thoughts on

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Speaker 15: wage pressures as well, because we're just hearing that stab

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Speaker 15: Exporista's maybe the next group to go out on strike.

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Speaker 15: We've had the UAW and the Hollywood ride does settle

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Speaker 15: their disputes. What a whyge pressure is looking like right now?

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Speaker 14: They're actually better, they've been coming down. They're not quite

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Speaker 14: where the FED thinks they are sustainable about three and

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Speaker 14: a half percent annual games.

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Speaker 3: We're in the forest now.

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Speaker 14: The thing to keep in mind is that while all

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Speaker 14: these union settlements get a lot of publicity, unionization in

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Speaker 14: the US workforce is very small compared to what it

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Speaker 14: used to be, so it doesn't have the same effect.

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Speaker 14: So it is possible that the baristas could get more

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Speaker 14: money and it's not going to have a major impact

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Speaker 14: on overall inflation.

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Speaker 2: Mike, just real quick on the way that rents are

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Speaker 2: read by the Fed's data seems to fall a foul

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Speaker 2: with a lot of economists. Can you explain that in

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Speaker 2: thirty seconds?

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Speaker 14: In thirty seconds, well, basically they used to just measure

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Speaker 14: house prices. But the problem with that economists found is

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Speaker 14: that it doesn't take into account all the other costs

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Speaker 14: you pay when you own a house. The upkeep and maintenance,

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Speaker 14: the interest payments that you make on your mortgage. So

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Speaker 14: what they try to do is incorporate all of that

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Speaker 14: into a different kind of metric.

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