1 00:00:02,520 --> 00:00:05,440 Speaker 1: This is Bloomberg Daybreak Weekend, our global look ahead of 2 00:00:05,480 --> 00:00:07,680 Speaker 1: the top stories in the coming week from our Daybreak 3 00:00:07,720 --> 00:00:10,520 Speaker 1: anchors all around the world, and just the hand of 4 00:00:10,520 --> 00:00:13,880 Speaker 1: the program, the job market and the fade in twenty 5 00:00:13,480 --> 00:00:16,520 Speaker 1: twenty three. I'm John Tucker in New York. I'm calling 6 00:00:16,600 --> 00:00:19,639 Speaker 1: Hepe in London, where we're looking at Europe entering a 7 00:00:19,720 --> 00:00:23,239 Speaker 1: new year with an old conflict. I'm Madison Mills with 8 00:00:23,280 --> 00:00:25,959 Speaker 1: a look at how things are already heating up for 9 00:00:26,040 --> 00:00:29,920 Speaker 1: the presidential race. I'm Brian Curtis in Hong Kong. We 10 00:00:30,000 --> 00:00:32,920 Speaker 1: look at the biggest market trends expected in twenty twenty 11 00:00:33,000 --> 00:00:39,120 Speaker 1: three for Asia. That's all straight ahead on Bloomberg Daybreak 12 00:00:39,159 --> 00:00:43,400 Speaker 1: Weekend on Bloomberg Eliven Free on New York, Bloomberg N one, 13 00:00:43,520 --> 00:00:47,120 Speaker 1: Washington d C, Bloomberg one oh six one, Boston, Bloomberg 14 00:00:47,200 --> 00:00:50,840 Speaker 1: nine sixties, San Francisco, d A B Digital Radio, London, 15 00:00:51,000 --> 00:00:54,440 Speaker 1: Sirius XM one nineteen and around the world on Bloomberg 16 00:00:54,520 --> 00:01:00,800 Speaker 1: Radio dot Com and via the Bloomberg Business Act. Everybody. 17 00:01:00,840 --> 00:01:03,160 Speaker 1: I'm John Tucker, and let's start today's program with the 18 00:01:03,240 --> 00:01:07,520 Speaker 1: December jobs report that's going to be released this coming Friday, 19 00:01:07,840 --> 00:01:09,800 Speaker 1: joining me now to the preview that what it means 20 00:01:09,840 --> 00:01:14,040 Speaker 1: for the Federal Reserve Bloomberg's Matt Mosler Matt. Before the 21 00:01:14,240 --> 00:01:16,600 Speaker 1: end of the year, we got a piece of data 22 00:01:16,680 --> 00:01:21,399 Speaker 1: applications for unemployment benefits, the jobless claims. They rose slightly, 23 00:01:21,600 --> 00:01:25,800 Speaker 1: so as this proof positive that FED policy is starting 24 00:01:25,840 --> 00:01:28,520 Speaker 1: to work as far as the the US labor market 25 00:01:28,959 --> 00:01:32,039 Speaker 1: is concerned. You know, it was really only an ever 26 00:01:32,240 --> 00:01:36,399 Speaker 1: so slight uptick, and initial claims for unemployment insurance are 27 00:01:36,400 --> 00:01:39,760 Speaker 1: actually down quite a bit from where they were over 28 00:01:39,800 --> 00:01:43,280 Speaker 1: the summer, and so we actually really aren't seeing yet 29 00:01:43,360 --> 00:01:47,360 Speaker 1: much of an impact from FED policy on the labor market, 30 00:01:47,360 --> 00:01:49,880 Speaker 1: and it continues to be the big vexing question for 31 00:01:49,960 --> 00:01:54,120 Speaker 1: policymakers and a lot of forecasters who are forecasting or 32 00:01:54,120 --> 00:01:57,840 Speaker 1: recession in the coming quarters. Yeah, it's important we have 33 00:01:57,880 --> 00:02:01,840 Speaker 1: to explain to everybody because because of wages in particular, 34 00:02:02,200 --> 00:02:04,800 Speaker 1: that's a big component of inflation, and we know the 35 00:02:04,800 --> 00:02:08,800 Speaker 1: FED is battling to get the rate of inflation down. Um, 36 00:02:08,840 --> 00:02:12,960 Speaker 1: do they really have to target and maybe even the 37 00:02:13,160 --> 00:02:17,120 Speaker 1: torpedo the US jobs market to achieve their goal of 38 00:02:17,200 --> 00:02:21,480 Speaker 1: some price stability. Well, you know, that's a really interesting 39 00:02:21,520 --> 00:02:24,440 Speaker 1: debate right now because what we're seeing in the inflation 40 00:02:24,560 --> 00:02:29,720 Speaker 1: data is services inflation is still running pretty high. And 41 00:02:29,800 --> 00:02:33,480 Speaker 1: the FED kind of used the services sector as the 42 00:02:33,639 --> 00:02:37,919 Speaker 1: sector where wages are going to pass through two prices 43 00:02:38,600 --> 00:02:42,200 Speaker 1: most effectively and efficiently, and so the logic is that, yes, 44 00:02:42,240 --> 00:02:44,960 Speaker 1: they do need to weaken the job market and bring 45 00:02:45,000 --> 00:02:47,800 Speaker 1: that wage growth down in order to filter through to 46 00:02:47,880 --> 00:02:52,640 Speaker 1: the lower services inflation. However, the services inflation story is 47 00:02:52,639 --> 00:02:55,760 Speaker 1: pretty interesting because that's really being driven by um, things 48 00:02:55,840 --> 00:03:00,640 Speaker 1: in healthcare and transportation like think airline tickets, and the 49 00:03:00,800 --> 00:03:04,040 Speaker 1: case that that is really driven by wage growth in 50 00:03:04,080 --> 00:03:06,880 Speaker 1: particular is not super strong when you actually dig into 51 00:03:06,919 --> 00:03:09,760 Speaker 1: the data. So um, this is going to continue to 52 00:03:09,760 --> 00:03:12,680 Speaker 1: be part of the debate. Definitely. The Fed is watching 53 00:03:12,680 --> 00:03:15,320 Speaker 1: that wage growth number very carefully because that's how they 54 00:03:15,360 --> 00:03:18,720 Speaker 1: think of it. But it is still possible that inflation 55 00:03:18,760 --> 00:03:20,720 Speaker 1: could come down a lot in the coming months even 56 00:03:20,760 --> 00:03:24,079 Speaker 1: if wage growth does stay high, and services will remind 57 00:03:24,080 --> 00:03:26,560 Speaker 1: everybody that's the that's the biggest part of the economy 58 00:03:26,639 --> 00:03:30,360 Speaker 1: right now, right that's right, Yeah, it's definitely. Uh, you know, 59 00:03:30,400 --> 00:03:33,960 Speaker 1: the goods producing sector has shrunk and shrunk over the years, 60 00:03:34,080 --> 00:03:37,760 Speaker 1: leaving mostly services behind and so that's where most Americans 61 00:03:37,800 --> 00:03:41,000 Speaker 1: are employed these days. Uh, it makes up the majority 62 00:03:41,120 --> 00:03:43,920 Speaker 1: of consumption patterns, and so that's why you know, there's 63 00:03:43,960 --> 00:03:47,520 Speaker 1: so much attention on it. We've heard a lot about 64 00:03:47,960 --> 00:03:52,680 Speaker 1: some job cuts coming up Wall Street, job cuts in technology. 65 00:03:52,760 --> 00:03:55,520 Speaker 1: Have they shown up anywhere in the data? Are Are 66 00:03:55,600 --> 00:04:00,320 Speaker 1: they big enough to have an impact? Not yet? You know, 67 00:04:00,400 --> 00:04:02,920 Speaker 1: we're seeing we've certainly seen a lot of job cuts, 68 00:04:02,960 --> 00:04:06,160 Speaker 1: and say the mortgage industry, you know, in the housing sector, 69 00:04:06,240 --> 00:04:09,200 Speaker 1: things just aren't really happening because interest rates have shot 70 00:04:09,240 --> 00:04:11,760 Speaker 1: up so quickly. But you know, these big, high profile 71 00:04:11,800 --> 00:04:14,400 Speaker 1: announcements from the big ted companies are the big Wall 72 00:04:14,440 --> 00:04:17,679 Speaker 1: Street firms, They're just not really enough to move the needle. 73 00:04:17,800 --> 00:04:20,560 Speaker 1: And it seems like there is some anecdotal evidence, at 74 00:04:20,640 --> 00:04:23,719 Speaker 1: least on the tech side, that engineers and the like 75 00:04:23,839 --> 00:04:26,000 Speaker 1: who have been laid off from some of those firms 76 00:04:26,360 --> 00:04:30,200 Speaker 1: are not having too much trouble finding new jobs. So 77 00:04:30,279 --> 00:04:33,719 Speaker 1: it seems like the labor market does remain very fluid, 78 00:04:33,839 --> 00:04:37,080 Speaker 1: very strong. Um, you know, both from a kind of 79 00:04:37,160 --> 00:04:41,599 Speaker 1: economic data perspective and also somewhat from an anecdotal perspective 80 00:04:41,600 --> 00:04:45,440 Speaker 1: as well. Okay, so let's move a hand to Friday 81 00:04:45,480 --> 00:04:49,600 Speaker 1: with the release of the December jobs report. What's the expectation. 82 00:04:50,920 --> 00:04:54,200 Speaker 1: So the expectation is for a further slowdown in job 83 00:04:54,240 --> 00:04:57,880 Speaker 1: growth to something like two hundred thousand jobs created in December, 84 00:04:57,880 --> 00:05:02,240 Speaker 1: which is still quite high, you know, relatives historical standards, 85 00:05:02,839 --> 00:05:07,279 Speaker 1: um a unemployment rate staying unchanged at three point seven percent, 86 00:05:07,400 --> 00:05:10,760 Speaker 1: so still quite low, and wage growth, you know, still 87 00:05:10,760 --> 00:05:13,880 Speaker 1: coming in pretty robustly at at five percent on a 88 00:05:13,960 --> 00:05:16,200 Speaker 1: year or year basement. I think that wage number is 89 00:05:16,240 --> 00:05:18,680 Speaker 1: going to be really key for some of the reasons 90 00:05:18,720 --> 00:05:21,839 Speaker 1: we just discussed. Now. An interesting thing about the last 91 00:05:21,920 --> 00:05:24,640 Speaker 1: jobs report last month is that, you know, everybody was 92 00:05:24,680 --> 00:05:28,039 Speaker 1: forecasting a slowdown in wage growth, continuing the trend of 93 00:05:28,080 --> 00:05:31,320 Speaker 1: the previous several months. We actually got a huge pop 94 00:05:31,400 --> 00:05:33,720 Speaker 1: in wage growth last month. And the reason for that 95 00:05:33,839 --> 00:05:36,880 Speaker 1: was we had a three point eight percent increase in 96 00:05:36,920 --> 00:05:41,320 Speaker 1: wages in the transportation warehousing sector alone. Now, just for perspective, 97 00:05:41,760 --> 00:05:46,400 Speaker 1: that is the biggest increase on record in monthly data 98 00:05:46,440 --> 00:05:49,159 Speaker 1: going back to the early nineteen seventies by by an 99 00:05:49,279 --> 00:05:51,800 Speaker 1: order of magnitude. So the big question is, you know, 100 00:05:52,120 --> 00:05:54,720 Speaker 1: is that kind of wage growth in that one sector, 101 00:05:54,720 --> 00:05:56,520 Speaker 1: which was so big that it was enough to lift 102 00:05:56,560 --> 00:05:58,920 Speaker 1: overall wage growth. Is that something that really is going 103 00:05:58,960 --> 00:06:01,640 Speaker 1: to repeat this month or was that some sort of 104 00:06:01,680 --> 00:06:04,040 Speaker 1: you know aberration one off? And so I think that's 105 00:06:04,040 --> 00:06:07,159 Speaker 1: the big thing to be watching in this report. There's 106 00:06:07,200 --> 00:06:10,720 Speaker 1: the report a little muddy because of the season, because 107 00:06:10,760 --> 00:06:14,520 Speaker 1: of the holidays and hiring associated with that. Yeah, there's 108 00:06:14,560 --> 00:06:16,800 Speaker 1: so many questions around that, and that would be especially 109 00:06:16,839 --> 00:06:20,360 Speaker 1: something that could impact the transportation where housing sector. That's 110 00:06:20,360 --> 00:06:23,440 Speaker 1: a sector where we've seen massive job growth since the 111 00:06:23,440 --> 00:06:26,080 Speaker 1: pandemic began because of all of the ship to you know, 112 00:06:26,240 --> 00:06:29,839 Speaker 1: online purchases and Amazon deliveries and so on and so forth. 113 00:06:30,080 --> 00:06:33,279 Speaker 1: So we've got those normal seasonal holiday patterns. We've got 114 00:06:33,279 --> 00:06:37,160 Speaker 1: other issues like declining response rates to the surveys that 115 00:06:37,279 --> 00:06:39,240 Speaker 1: make up the jobs report. A lot of people are 116 00:06:39,279 --> 00:06:42,520 Speaker 1: asking questions about whether that's having an impact on the data. 117 00:06:42,880 --> 00:06:45,800 Speaker 1: So just tons of moving pieces right now that are 118 00:06:45,839 --> 00:06:49,119 Speaker 1: making this really hard to read, even somewhat harder than usual. 119 00:06:49,160 --> 00:06:51,599 Speaker 1: I mean it's never easy, but lots of cross currents 120 00:06:51,600 --> 00:06:55,080 Speaker 1: at the moment. Now. Is the Federal Reserve still the 121 00:06:55,160 --> 00:06:59,800 Speaker 1: number one story for for markets overall? As we hit 122 00:06:59,839 --> 00:07:04,279 Speaker 1: it into I think so, although you know that if 123 00:07:04,360 --> 00:07:06,640 Speaker 1: we're starting to see signs maybe a little bit that 124 00:07:06,760 --> 00:07:09,560 Speaker 1: that is changing, because a couple of weeks ago, the 125 00:07:09,640 --> 00:07:12,400 Speaker 1: latest Federal Reserve interest rate decision, they came out and 126 00:07:12,400 --> 00:07:16,360 Speaker 1: they were very hawkish um and the markets didn't really 127 00:07:16,600 --> 00:07:18,680 Speaker 1: buy the hawk ish message. And the reason for that 128 00:07:18,800 --> 00:07:21,720 Speaker 1: is because the Feed put out these inflation forecasts that 129 00:07:21,840 --> 00:07:23,800 Speaker 1: really look way too high to the markets. And so 130 00:07:23,840 --> 00:07:26,520 Speaker 1: now investors are kind of saying, well, we think inflation 131 00:07:26,600 --> 00:07:28,600 Speaker 1: is going to be lower than the fat thanks, and 132 00:07:28,640 --> 00:07:31,400 Speaker 1: when the Fed realizes that and sees the lower inflation, 133 00:07:31,440 --> 00:07:33,520 Speaker 1: they're going to kind of back off their hawker is stand. 134 00:07:33,600 --> 00:07:36,520 Speaker 1: So we're starting to see a bit of a divergence 135 00:07:36,600 --> 00:07:39,080 Speaker 1: between what the Fed thinks is going to happen and 136 00:07:39,120 --> 00:07:41,840 Speaker 1: what investors think is going to happen. And that's really 137 00:07:41,840 --> 00:07:44,320 Speaker 1: going to put a premium on what the data actually 138 00:07:44,320 --> 00:07:46,960 Speaker 1: show going forward to dictate the course of markets. The 139 00:07:47,000 --> 00:07:50,720 Speaker 1: investors are fighting the Fed. Did you just say that, Well, 140 00:07:50,920 --> 00:07:53,280 Speaker 1: not quite. The way the Fed says that when they're 141 00:07:53,320 --> 00:07:55,440 Speaker 1: at that question is we just have a difference of 142 00:07:55,480 --> 00:07:58,520 Speaker 1: opinion and we'll see who's right. Yeah, we'll see it's 143 00:07:58,600 --> 00:08:02,080 Speaker 1: usually the Feder reserve. If history is is any guid 144 00:08:02,600 --> 00:08:06,600 Speaker 1: what what factors go into a fit I hate this word, 145 00:08:06,640 --> 00:08:12,360 Speaker 1: but a fit pivot. So definitely, the inflation reports are 146 00:08:12,400 --> 00:08:15,200 Speaker 1: going to be very important. Um, we need to see 147 00:08:15,640 --> 00:08:19,920 Speaker 1: inflation coming down at a rate similar to the last 148 00:08:19,960 --> 00:08:22,560 Speaker 1: few months when when it's really started coming down. You know. 149 00:08:22,600 --> 00:08:25,720 Speaker 1: The wage growth is also going to be a major 150 00:08:25,880 --> 00:08:28,800 Speaker 1: factor in that. Um. You know. The other big question 151 00:08:28,960 --> 00:08:34,160 Speaker 1: is all of these forecasters see a recession in I mean, 152 00:08:34,200 --> 00:08:38,360 Speaker 1: it's definitely the majority consensus opinion now, and so does 153 00:08:38,400 --> 00:08:40,800 Speaker 1: that start showing up in the data. We haven't really 154 00:08:40,800 --> 00:08:42,839 Speaker 1: seen it start showing up in the data yet. If 155 00:08:42,840 --> 00:08:45,160 Speaker 1: it does start showing up, then do we kind of 156 00:08:45,200 --> 00:08:48,200 Speaker 1: get a change of tone from the Fed because it's like, Okay, 157 00:08:48,240 --> 00:08:51,360 Speaker 1: this is really happening. Now there's a lot more certainty 158 00:08:51,400 --> 00:08:54,319 Speaker 1: that that's a big possibility. I think that's going to 159 00:08:54,400 --> 00:08:56,640 Speaker 1: be really interesting to see how they respond to the 160 00:08:57,040 --> 00:09:00,240 Speaker 1: changing data. That comes to be the case. Got to 161 00:09:00,360 --> 00:09:03,200 Speaker 1: know a recession when we're in it, or we're going 162 00:09:03,240 --> 00:09:06,560 Speaker 1: to know a recession when you know, some few quarters 163 00:09:06,679 --> 00:09:10,520 Speaker 1: after it happens. Yeah, Typically it's the latter, which is 164 00:09:10,559 --> 00:09:13,160 Speaker 1: the way it normally plays out. But you know, I 165 00:09:13,200 --> 00:09:17,240 Speaker 1: think part of the complication this time around is that 166 00:09:17,280 --> 00:09:20,480 Speaker 1: we've got the pandemic, which has just reordered the economy 167 00:09:20,480 --> 00:09:22,840 Speaker 1: in so many interesting ways that it's making it a 168 00:09:22,840 --> 00:09:26,400 Speaker 1: lot harder to read the early warning signs, those bleeding 169 00:09:26,440 --> 00:09:30,199 Speaker 1: indicators of recession that people usually rely on to kind 170 00:09:30,240 --> 00:09:32,520 Speaker 1: of get a feel for where we're at in the economy, 171 00:09:32,600 --> 00:09:35,640 Speaker 1: even if the actual data aren't going to show it 172 00:09:35,720 --> 00:09:38,520 Speaker 1: until a few quarters later. And so just the way 173 00:09:38,520 --> 00:09:41,800 Speaker 1: the pandemic has scrambled all of those patterns is kind 174 00:09:41,800 --> 00:09:45,720 Speaker 1: of leaving plenty of room for speculation and debate that 175 00:09:45,800 --> 00:09:49,960 Speaker 1: you know, might not even necessarily be present in more 176 00:09:50,040 --> 00:09:54,320 Speaker 1: normal downturns. And there can't be a recession if the 177 00:09:54,400 --> 00:09:59,680 Speaker 1: labor market is still resilient. No, So we're really that 178 00:09:59,800 --> 00:10:03,240 Speaker 1: is either so much focus on that data and so 179 00:10:03,360 --> 00:10:07,199 Speaker 1: much head scratching over why it stayed still strong. I 180 00:10:07,240 --> 00:10:10,000 Speaker 1: mean that is really the you know, what defines the recession. 181 00:10:10,000 --> 00:10:13,480 Speaker 1: Earlier this year, we had two quarters of negative GDP growth, 182 00:10:13,559 --> 00:10:15,320 Speaker 1: and there was a big debate is that a recession 183 00:10:15,400 --> 00:10:18,000 Speaker 1: or is that not a recession? And ultimately I think 184 00:10:18,000 --> 00:10:20,560 Speaker 1: the consensus was, well, it's not because the labor market 185 00:10:20,600 --> 00:10:23,840 Speaker 1: did stay strong, and so if the labor market continues 186 00:10:23,920 --> 00:10:27,199 Speaker 1: chogging along, then maybe we start seeing some of these 187 00:10:27,240 --> 00:10:30,240 Speaker 1: recession calls get pushed back even further. We've already seen 188 00:10:30,240 --> 00:10:32,760 Speaker 1: a little bit of that so far, with people making 189 00:10:32,760 --> 00:10:34,880 Speaker 1: these calls and then saying, you know what, it's gonna 190 00:10:34,920 --> 00:10:36,800 Speaker 1: come a little later than we thought because the data 191 00:10:36,760 --> 00:10:40,000 Speaker 1: are staying so strong in the near term. Matt, always 192 00:10:40,040 --> 00:10:43,480 Speaker 1: a pleasure and happy New Year. Thank you, John, same 193 00:10:43,559 --> 00:10:47,000 Speaker 1: to you. And that's Bloomberg's math Bosler. Just to handle 194 00:10:47,000 --> 00:10:50,319 Speaker 1: Blueberg Daybreak Weekend, I'll look at the devastating impact of 195 00:10:50,440 --> 00:11:05,640 Speaker 1: Russia's warn't Ukraine on John Tucker. This is Bloomberg. This 196 00:11:05,880 --> 00:11:08,520 Speaker 1: is Bloomberg Daybreak Weekend, our global looking ahead of the 197 00:11:08,600 --> 00:11:11,200 Speaker 1: top stories for investors in the coming week. I'm John 198 00:11:11,240 --> 00:11:14,480 Speaker 1: Tucker in New York. Up later in the program shifting 199 00:11:14,559 --> 00:11:18,720 Speaker 1: political winds in Washington. But first, Russia's invasion of Ukraine 200 00:11:18,760 --> 00:11:22,679 Speaker 1: has had a devastating impact on its people, infrastructure, and economy, 201 00:11:23,120 --> 00:11:25,920 Speaker 1: even as it goes into a second year. And for more, 202 00:11:26,040 --> 00:11:30,360 Speaker 1: let's into London, bringing Bloomberg Daybreak Europe anchor Caroline Hepcker. John, 203 00:11:30,400 --> 00:11:32,400 Speaker 1: it's hard to celebrate the new year with the war 204 00:11:32,520 --> 00:11:36,760 Speaker 1: ongoing in Europe, one which has created eight million refugees, 205 00:11:36,960 --> 00:11:40,760 Speaker 1: are rafter sanctions against Russia, and a global energy shock 206 00:11:40,840 --> 00:11:43,719 Speaker 1: that has taken Europe to the brink of recession. We'll 207 00:11:43,800 --> 00:11:46,360 Speaker 1: joining me now to discuss this is Bloomberg Cedia Report 208 00:11:46,480 --> 00:11:50,120 Speaker 1: for International Affairs, Mark Champion and our Power and Gas 209 00:11:50,120 --> 00:11:54,920 Speaker 1: and Renewables editor Rachel Morrison. Mark, Rachel, You're both often 210 00:11:54,960 --> 00:11:57,600 Speaker 1: guests on Bloomberg radios, so I'm really pleased to have 211 00:11:57,760 --> 00:12:01,000 Speaker 1: you with us today. Mark. Let we just start with 212 00:12:01,280 --> 00:12:04,160 Speaker 1: the war in Ukraine. What is the state of play 213 00:12:04,320 --> 00:12:07,240 Speaker 1: as we now look to a new year and months 214 00:12:07,240 --> 00:12:10,760 Speaker 1: of this conflict ongoing. Well, it's a kind of a 215 00:12:10,760 --> 00:12:15,480 Speaker 1: big question. I mean, essentially, we're just moving into a 216 00:12:15,760 --> 00:12:21,400 Speaker 1: season where offensive campaigning becomes quite possible. Again, the winter 217 00:12:21,480 --> 00:12:25,640 Speaker 1: seasons relatively short. It depends on the ground being firm, um, 218 00:12:25,840 --> 00:12:29,880 Speaker 1: And so you now have the Ukrainians in particular, warning 219 00:12:30,440 --> 00:12:34,440 Speaker 1: that the Russians are as unlikely as it seems to 220 00:12:34,520 --> 00:12:37,080 Speaker 1: many military analysts just because of the state of the 221 00:12:37,120 --> 00:12:40,640 Speaker 1: Russian forces, even the new conscripts that they've brought in, 222 00:12:41,400 --> 00:12:45,040 Speaker 1: but nevertheless saying that whether it's in January, February or March, 223 00:12:45,679 --> 00:12:50,200 Speaker 1: the Russians will try again with a major offensive, including 224 00:12:50,240 --> 00:12:53,319 Speaker 1: trying to take Kiev. You know, whether they do that, 225 00:12:53,760 --> 00:12:55,920 Speaker 1: how much is a faint um. You know, how much 226 00:12:55,960 --> 00:12:58,880 Speaker 1: they can do is very unclear. You know, war is 227 00:12:59,000 --> 00:13:03,000 Speaker 1: largely about opportunity as much as it is about strategy, 228 00:13:03,040 --> 00:13:05,840 Speaker 1: and that it will depend on what the Russians can 229 00:13:05,880 --> 00:13:08,160 Speaker 1: do and what they think they can do. You know, 230 00:13:08,640 --> 00:13:10,600 Speaker 1: it's been clear from the start of the war that 231 00:13:10,840 --> 00:13:14,520 Speaker 1: those things are not always aligned, that their idea of 232 00:13:14,559 --> 00:13:18,040 Speaker 1: what they can do isn't necessarily realistic. So it's difficult 233 00:13:18,080 --> 00:13:23,520 Speaker 1: to predict, but it's likely to be quite long and grim. Yeah, 234 00:13:23,600 --> 00:13:26,120 Speaker 1: and perhaps the most important issue is going to be 235 00:13:26,720 --> 00:13:29,480 Speaker 1: access to weaponry. And you have to remember that it 236 00:13:29,600 --> 00:13:34,240 Speaker 1: was February when the war began in two so yeah, 237 00:13:34,280 --> 00:13:37,160 Speaker 1: perhaps coming into a month that could again be quite critical. 238 00:13:37,200 --> 00:13:39,840 Speaker 1: I mean, what's the aim then in the next few 239 00:13:39,880 --> 00:13:44,360 Speaker 1: weeks and months? Is it? Is it all about weapons? Well, 240 00:13:44,400 --> 00:13:48,959 Speaker 1: weapons are obviously essential, um, and if either side you know, 241 00:13:49,160 --> 00:13:55,200 Speaker 1: runs out of the critical communitions artillery shells or on in. 242 00:13:55,480 --> 00:13:57,920 Speaker 1: You know, there's really two parts of the war. One 243 00:13:57,960 --> 00:14:01,480 Speaker 1: on the ground, which is very reliant on artillery UM 244 00:14:01,520 --> 00:14:04,480 Speaker 1: and one in the air where Russia is um you know, 245 00:14:05,160 --> 00:14:09,400 Speaker 1: attacking essential infrastructure with long range missiles that Ukraine is 246 00:14:09,400 --> 00:14:11,319 Speaker 1: trying to shoot them down. So there's sort of two 247 00:14:11,360 --> 00:14:14,839 Speaker 1: separate campaigns, both of which have real issues as to 248 00:14:15,480 --> 00:14:17,480 Speaker 1: how big of a stockpile do they still have of 249 00:14:17,520 --> 00:14:22,440 Speaker 1: cruise missiles for example, or Iranian drones. And then you know, 250 00:14:22,440 --> 00:14:24,520 Speaker 1: the question remains for the Ukrainians on the other side, 251 00:14:24,640 --> 00:14:28,440 Speaker 1: you know, how will they have enough anti missile defenses 252 00:14:28,480 --> 00:14:31,960 Speaker 1: and anti aircraft defenses, enough missiles to take all these 253 00:14:32,000 --> 00:14:35,920 Speaker 1: down um, and you know, will they be overwhelmed? And 254 00:14:35,960 --> 00:14:38,640 Speaker 1: the same as is true with artillery, we just don't know. 255 00:14:39,280 --> 00:14:41,880 Speaker 1: There's quite a lot of dispute about exactly what is 256 00:14:41,920 --> 00:14:45,080 Speaker 1: the state of the Russian artillery stocks and you know, 257 00:14:45,240 --> 00:14:48,880 Speaker 1: will they have enough for a major campaign. Look, we've 258 00:14:48,960 --> 00:14:51,760 Speaker 1: we've covered the war in Ukraine, you know, considered by 259 00:14:51,760 --> 00:14:54,360 Speaker 1: many one of the worst conflicts in World War two 260 00:14:54,400 --> 00:14:57,720 Speaker 1: throughout the last few months. And so I want to 261 00:14:57,720 --> 00:15:01,080 Speaker 1: also get onto the hopes that post ability of ending 262 00:15:01,120 --> 00:15:02,920 Speaker 1: the fighting. But I want to at this point also 263 00:15:02,960 --> 00:15:06,080 Speaker 1: bring in Rachel Morrison when it comes to the other 264 00:15:06,200 --> 00:15:09,680 Speaker 1: issue that has flowed from this conflict on the ground, 265 00:15:09,760 --> 00:15:14,840 Speaker 1: which is Putin's energy pressure on Europe. It's certainly become 266 00:15:14,880 --> 00:15:20,360 Speaker 1: immensely expensive. Rachel, is it working Putin's strategy of sort 267 00:15:20,400 --> 00:15:24,160 Speaker 1: of squeezing Europe? How do you see it now? Yes, 268 00:15:24,200 --> 00:15:27,000 Speaker 1: in some ways, some of the pressure and some of 269 00:15:27,040 --> 00:15:30,920 Speaker 1: the power that Putin has had over Europe has been 270 00:15:31,520 --> 00:15:37,200 Speaker 1: has waned somewhat since the nord Stream pipeline attack left 271 00:15:37,200 --> 00:15:39,680 Speaker 1: it unable to flow any gas to Europe. So the 272 00:15:39,760 --> 00:15:44,000 Speaker 1: remaining gas that Europe is getting from Russia goes via Ukraine, 273 00:15:44,240 --> 00:15:47,360 Speaker 1: which is why a lot of the conflict that Mark 274 00:15:47,520 --> 00:15:51,680 Speaker 1: was just outlining is important because at times it has 275 00:15:51,720 --> 00:15:56,120 Speaker 1: seemed as though Russia is really aiming at energy infrastructure, 276 00:15:56,360 --> 00:16:00,000 Speaker 1: which obviously has a big impact on people in Ukraine itself, 277 00:16:00,360 --> 00:16:03,880 Speaker 1: but also on those transit flows to Europe. I think 278 00:16:03,960 --> 00:16:08,080 Speaker 1: we have seen elevated prices obviously from the cutting supplies, 279 00:16:08,200 --> 00:16:11,720 Speaker 1: and everybody is thinking about what will happen if we 280 00:16:11,760 --> 00:16:15,840 Speaker 1: don't have those Russian supplies next winter, and refilling gas 281 00:16:15,840 --> 00:16:18,720 Speaker 1: storage in Europe is going to be more difficult without 282 00:16:18,800 --> 00:16:22,680 Speaker 1: nord Stream, and many people are assuming that the flows 283 00:16:22,760 --> 00:16:25,880 Speaker 1: via Ukraine will eventually be cut because of the conflict, 284 00:16:25,880 --> 00:16:30,960 Speaker 1: Because things are getting worse, it's getting more intense. That 285 00:16:30,960 --> 00:16:34,640 Speaker 1: that is inevitable. And you know, even if some people 286 00:16:34,680 --> 00:16:36,640 Speaker 1: say it's mostly priced in, there'll still be a bit 287 00:16:36,680 --> 00:16:40,400 Speaker 1: of a shock to Europe and to European gas prices 288 00:16:40,440 --> 00:16:43,280 Speaker 1: if and when that does happen. Do you think that 289 00:16:43,320 --> 00:16:45,960 Speaker 1: there's any hope that the energy crisis could get better 290 00:16:46,000 --> 00:16:49,960 Speaker 1: in three if Europe tries to adapt admittedly to a 291 00:16:50,040 --> 00:16:55,520 Speaker 1: terrible situation. Honestly, what we are hearing is that the 292 00:16:55,520 --> 00:16:58,560 Speaker 1: crisis is at least going to stay as bad as 293 00:16:58,560 --> 00:17:01,080 Speaker 1: it has been this year, if not get worse. And 294 00:17:01,120 --> 00:17:04,280 Speaker 1: that's because this year we were able to fill gas 295 00:17:04,280 --> 00:17:07,560 Speaker 1: storage quite quickly because we still had an order string 296 00:17:07,560 --> 00:17:10,040 Speaker 1: gas flowing from Russia. When we come out of the 297 00:17:10,040 --> 00:17:13,280 Speaker 1: winter season, we'll have to see how low storage levels get. 298 00:17:13,680 --> 00:17:16,280 Speaker 1: If they are quite low, and in fact, the lower 299 00:17:16,320 --> 00:17:18,879 Speaker 1: they are, the more difficult that task will be. And 300 00:17:18,880 --> 00:17:22,040 Speaker 1: the European Union has set all kinds of targets to 301 00:17:22,359 --> 00:17:24,320 Speaker 1: try to make sure that we get those levels back up, 302 00:17:24,520 --> 00:17:26,600 Speaker 1: but we are going to struggle to do that. We 303 00:17:26,640 --> 00:17:30,119 Speaker 1: also have the French nuclear fleet, which has sort of 304 00:17:30,160 --> 00:17:33,840 Speaker 1: problems and extended artages, So that's going to mean that 305 00:17:33,880 --> 00:17:36,280 Speaker 1: we need more gas for electricity production, which means there's 306 00:17:36,359 --> 00:17:39,719 Speaker 1: less spare to put into storage. So even European leaders 307 00:17:39,720 --> 00:17:43,439 Speaker 1: are talking about getting ready for next winter, and it 308 00:17:43,520 --> 00:17:46,360 Speaker 1: doesn't seem like the crisis is over yet or anywhere 309 00:17:46,359 --> 00:17:51,960 Speaker 1: near Mark champion Vladimir Putin? Is he bogged down in 310 00:17:52,080 --> 00:17:56,480 Speaker 1: something protracted? Does this become a forever war, perennial conflict, 311 00:17:57,080 --> 00:18:00,840 Speaker 1: or does Ukraine have to accept a deal in order 312 00:18:00,840 --> 00:18:03,879 Speaker 1: to get a cease far to lose some territory. What 313 00:18:03,960 --> 00:18:06,879 Speaker 1: are the various scenarios now that people are thinking about. 314 00:18:07,160 --> 00:18:09,160 Speaker 1: You know, if if we try to think about an 315 00:18:09,280 --> 00:18:14,399 Speaker 1: end to the conflict, well, what seems to be clear 316 00:18:14,600 --> 00:18:18,359 Speaker 1: at this point is that you know, puting would like 317 00:18:18,720 --> 00:18:21,879 Speaker 1: this to be seen as a forever war and that 318 00:18:21,960 --> 00:18:26,560 Speaker 1: he sees stretching it out. Time being on his side. 319 00:18:27,080 --> 00:18:30,040 Speaker 1: So although when they invaded in February it seems so 320 00:18:30,080 --> 00:18:34,560 Speaker 1: long ago now, the Russian command clearly expected this to 321 00:18:34,600 --> 00:18:36,919 Speaker 1: be a very short campaign, only a few days. They 322 00:18:36,920 --> 00:18:40,320 Speaker 1: weren't prepared. But a lot of water has passed under 323 00:18:40,359 --> 00:18:44,400 Speaker 1: the bridge since then, and at this point the Russian 324 00:18:44,440 --> 00:18:48,920 Speaker 1: strategy is clearly to grind down the will to resist 325 00:18:49,000 --> 00:18:52,720 Speaker 1: in Ukraine and more critically in the West. You know, 326 00:18:52,840 --> 00:18:55,960 Speaker 1: it's clear to the Russians also by now that the 327 00:18:56,040 --> 00:19:00,080 Speaker 1: Russian Ukrainians have a formidable fighting force and all so 328 00:19:00,680 --> 00:19:04,040 Speaker 1: that the Western weapons that are being supplied are critical. 329 00:19:04,600 --> 00:19:07,240 Speaker 1: But it's clear also that as soon as that supply 330 00:19:07,320 --> 00:19:10,119 Speaker 1: of weapon drives up, it will be very difficult for 331 00:19:10,119 --> 00:19:13,600 Speaker 1: the Ukrainians to continue. And that is the situation. You know, 332 00:19:13,680 --> 00:19:17,880 Speaker 1: He's trying to press both in Keep and in Western 333 00:19:17,920 --> 00:19:21,760 Speaker 1: capitals for leaders to decide. Look, there isn't going to 334 00:19:21,880 --> 00:19:25,680 Speaker 1: be a Ukrainian victory. So the sooner that we end 335 00:19:25,800 --> 00:19:28,880 Speaker 1: is the sooner the pain will start, both for Ukraine 336 00:19:29,400 --> 00:19:33,200 Speaker 1: and for Western governments with it, in particular the energy 337 00:19:33,240 --> 00:19:36,080 Speaker 1: issues that you know we're just being described. Mark, thank 338 00:19:36,119 --> 00:19:38,240 Speaker 1: you so much for being with me. Bloomberg Senior reporter 339 00:19:38,320 --> 00:19:41,240 Speaker 1: for International Affairs, Mark Champion and our Power and Gas 340 00:19:41,440 --> 00:19:45,439 Speaker 1: and Renewables editor Rachel Morrison on the difficulties as we 341 00:19:45,480 --> 00:19:50,159 Speaker 1: go into three with Russia's war in Ukraine ongoing. My 342 00:19:50,240 --> 00:19:52,240 Speaker 1: thanks to both of you for joining us. I'm Caroline 343 00:19:52,240 --> 00:19:55,280 Speaker 1: Heppgary in London. You can catch us every weekday morning 344 00:19:55,280 --> 00:19:58,639 Speaker 1: for Bloomberg Daybreak Europe, beginning at six am in London. 345 00:19:58,840 --> 00:20:01,920 Speaker 1: That's one am on Warster, John Caroline, thanks a lot. 346 00:20:02,040 --> 00:20:05,680 Speaker 1: Just ahead on Bloomberg day Break. Weekend twenty three could 347 00:20:05,680 --> 00:20:09,000 Speaker 1: be another wild year politically as we head into the 348 00:20:10,040 --> 00:20:25,919 Speaker 1: presidential election. I'm John Tucker, and this is Bloomberg broadcasting 349 00:20:26,040 --> 00:20:29,760 Speaker 1: live from the Bloomberg Interactive Broker Studio in New York. 350 00:20:29,840 --> 00:20:34,520 Speaker 1: Bloomberg eleven three oh to Washington, d C, Bloomberg to Boston, 351 00:20:34,600 --> 00:20:38,000 Speaker 1: Bloomberg one oh six one to San Francisco, Bloomberg nine 352 00:20:38,600 --> 00:20:42,359 Speaker 1: to the Country, Serius xm Channe to London d A 353 00:20:42,480 --> 00:20:45,840 Speaker 1: B Digital Radio, and around the globe the Bloomberg Business 354 00:20:45,840 --> 00:20:49,560 Speaker 1: app and Bloomberg Radio dot Com. This is Bloomberg day 355 00:20:49,600 --> 00:20:57,720 Speaker 1: Break Weekend. I'm John Tucker in New York with your 356 00:20:57,760 --> 00:21:00,199 Speaker 1: global look ahead of the top stories for investor ers 357 00:21:00,240 --> 00:21:02,840 Speaker 1: in the coming week and the new year. While to 358 00:21:02,880 --> 00:21:05,280 Speaker 1: watch when it comes to politics, as the battle lines 359 00:21:05,320 --> 00:21:09,320 Speaker 1: are drawn for the presidential race and for world Let's 360 00:21:09,320 --> 00:21:12,639 Speaker 1: go to Bloomberg quick takes Madison Mills. Thank you, John, 361 00:21:12,680 --> 00:21:16,800 Speaker 1: And it's still almost two years away from the presidential election, 362 00:21:16,880 --> 00:21:20,520 Speaker 1: but things are already heating up on the Democratic side. 363 00:21:20,720 --> 00:21:24,359 Speaker 1: We're seeing people like the newly elected incoming House Democratic 364 00:21:24,440 --> 00:21:29,040 Speaker 1: Leader Hakeem Jeffries. He's saying that he's all four run 365 00:21:29,119 --> 00:21:32,119 Speaker 1: for President Biden. I know he'll have a vision for 366 00:21:32,160 --> 00:21:35,879 Speaker 1: the future. I look forward to strongly supporting President Biden's 367 00:21:35,920 --> 00:21:40,359 Speaker 1: re election. Incoming House Democratic Leader Hakeem Jeffreys there on 368 00:21:40,440 --> 00:21:43,960 Speaker 1: ABC's This Week, heard here on Bloomberg Radio and joining 369 00:21:44,000 --> 00:21:46,440 Speaker 1: me now to talk about how things might unfold in 370 00:21:46,480 --> 00:21:51,879 Speaker 1: the coming year. Bloomberg's deputy managing editor in Washington, Wendy Benjaminson. Wendy, 371 00:21:51,960 --> 00:21:54,439 Speaker 1: always a joy to speak with you, and thanks for 372 00:21:54,520 --> 00:21:58,720 Speaker 1: joining us. Let's start with what's happening for the Democrats here. 373 00:21:59,080 --> 00:22:02,080 Speaker 1: What would you say is the single biggest way that 374 00:22:02,119 --> 00:22:08,080 Speaker 1: we're already seeing Democrats prepare for battle heading into well. 375 00:22:08,119 --> 00:22:11,840 Speaker 1: I think one thing they're doing Madison, and we just 376 00:22:11,960 --> 00:22:14,879 Speaker 1: heard the Democratic leader how King Jefferies say it is 377 00:22:14,880 --> 00:22:19,040 Speaker 1: they're lining up behind Biden. There was some talk earlier, 378 00:22:20,520 --> 00:22:25,440 Speaker 1: earlier this year and last year that you know, maybe 379 00:22:25,520 --> 00:22:28,040 Speaker 1: we should have somebody else. He's eighty, He's going to 380 00:22:28,080 --> 00:22:31,320 Speaker 1: be eighty two in the campaign starts, um, he would 381 00:22:31,359 --> 00:22:33,760 Speaker 1: be the oldest president of American history and there was 382 00:22:33,840 --> 00:22:36,440 Speaker 1: some sense, and you know, his public approval ratings were 383 00:22:36,520 --> 00:22:39,479 Speaker 1: really low, so there was some sense that maybe somebody 384 00:22:39,520 --> 00:22:41,920 Speaker 1: else ought to step in. And then I think they 385 00:22:41,920 --> 00:22:44,960 Speaker 1: looked around and saw who else could step in. The 386 00:22:45,040 --> 00:22:49,480 Speaker 1: bench is not great for people who could beat one 387 00:22:49,520 --> 00:22:55,000 Speaker 1: of the probable Republican nominees. And then Biden did spectacularly 388 00:22:55,040 --> 00:22:57,000 Speaker 1: well in the mid terms. I mean, we knew he 389 00:22:57,040 --> 00:22:59,679 Speaker 1: was going to lose the House of Representatives, but he 390 00:23:00,000 --> 00:23:03,000 Speaker 1: aust them by only I think five seats, a very 391 00:23:03,000 --> 00:23:06,640 Speaker 1: small handful of seats. I think it's eight actually, um, 392 00:23:06,720 --> 00:23:09,080 Speaker 1: but a very small handful of seats. They kept. The 393 00:23:09,119 --> 00:23:14,040 Speaker 1: Senate voters did not seem to despise him as much 394 00:23:14,080 --> 00:23:16,080 Speaker 1: as they thought, and now they are lining up behind 395 00:23:16,160 --> 00:23:19,760 Speaker 1: Joe Biden for a second term. Right voters didn't, And 396 00:23:19,800 --> 00:23:22,360 Speaker 1: now we're seeing lawmakers sort of feeling the same as 397 00:23:22,400 --> 00:23:25,359 Speaker 1: you said, Wendy, just really putting their support behind a 398 00:23:25,400 --> 00:23:28,600 Speaker 1: Biden run after that red wave became more like a 399 00:23:28,720 --> 00:23:32,280 Speaker 1: very very light red trickle. Let's hear what Senate Majority 400 00:23:32,359 --> 00:23:36,560 Speaker 1: Leader Chuck Schumer had to say about race. I think 401 00:23:36,840 --> 00:23:40,280 Speaker 1: President Biden being on the ticket if if he runs, 402 00:23:40,280 --> 00:23:42,840 Speaker 1: and if he runs, I'll support him. Um, it would 403 00:23:42,840 --> 00:23:46,400 Speaker 1: be very very helpful, So Schumer saying that it would 404 00:23:46,440 --> 00:23:48,840 Speaker 1: be helpful, but I do want to look at Republicans 405 00:23:48,880 --> 00:23:51,080 Speaker 1: here because they will hold the majority in the House 406 00:23:51,480 --> 00:23:53,919 Speaker 1: next term, and said they planned to hold hearings on 407 00:23:54,000 --> 00:23:57,960 Speaker 1: Hunter Biden and the origins of COVID nineteen. How much 408 00:23:57,960 --> 00:23:59,919 Speaker 1: of a liability is that going to be for the 409 00:24:00,040 --> 00:24:05,240 Speaker 1: Biden camp. You're absolutely right. They are going to investigate 410 00:24:05,280 --> 00:24:09,280 Speaker 1: Hunter Biden, COVID nineteen, and just about everything else they 411 00:24:09,280 --> 00:24:13,560 Speaker 1: could possibly think of. There's there's talk of impeaching the 412 00:24:13,640 --> 00:24:18,520 Speaker 1: Department of Homeland Security secretariale Hundre Mayorkas for the fact 413 00:24:18,560 --> 00:24:23,480 Speaker 1: that the border is practically uncontrolled at this point. Um, 414 00:24:23,520 --> 00:24:25,440 Speaker 1: you know, a lot of migrants coming across the border. 415 00:24:25,480 --> 00:24:28,320 Speaker 1: They want to impeach him for that. They want to 416 00:24:28,359 --> 00:24:31,760 Speaker 1: look at the withdrawal from Afghanistan, and so all of 417 00:24:31,800 --> 00:24:37,159 Speaker 1: this is because of this is an attempt to weaken 418 00:24:37,200 --> 00:24:42,000 Speaker 1: the president and the Democratic Party heading into just strengthen 419 00:24:42,040 --> 00:24:46,159 Speaker 1: their hand. You mentioned impeachments. Is there much of a 420 00:24:46,200 --> 00:24:50,359 Speaker 1: possibility of of a strong push for a Biden impeachment? 421 00:24:50,400 --> 00:24:52,520 Speaker 1: We were talking about that a little bit heading into 422 00:24:52,560 --> 00:24:56,240 Speaker 1: the midterms. What's the political will towards that. I think 423 00:24:56,320 --> 00:25:00,119 Speaker 1: that political will which probably exists in some of the 424 00:25:00,320 --> 00:25:04,000 Speaker 1: more fringe quarters of the Republican party, UM, is pretty 425 00:25:04,040 --> 00:25:07,040 Speaker 1: much stomped out. Kevin McCarthy, who is most likely going 426 00:25:07,080 --> 00:25:10,520 Speaker 1: to be the speaker. He will have his election for 427 00:25:10,560 --> 00:25:14,760 Speaker 1: that on Tuesday. UM, but he has already come out 428 00:25:14,800 --> 00:25:18,560 Speaker 1: and said he sees no reason to impeach Biden. And 429 00:25:19,160 --> 00:25:21,439 Speaker 1: you know, again, there has to be a reason to 430 00:25:21,480 --> 00:25:23,520 Speaker 1: impeach the one. There has to be some evidence of 431 00:25:23,520 --> 00:25:27,240 Speaker 1: the crime committed hi inestiator, and so he doesn't see 432 00:25:27,240 --> 00:25:32,280 Speaker 1: any reason to rip the country apart and do that. Um, 433 00:25:32,520 --> 00:25:34,720 Speaker 1: you know, and go through all of that again. Well, 434 00:25:34,720 --> 00:25:38,040 Speaker 1: speaking of fringe members of each party, Wendy, one thing 435 00:25:38,040 --> 00:25:40,280 Speaker 1: that we're seen of more lately is the Biden camp 436 00:25:40,320 --> 00:25:44,320 Speaker 1: pushing back on Republican behavior. One example that comes to 437 00:25:44,359 --> 00:25:47,959 Speaker 1: mind is when Marjorie Taylor Green, the Republican from Georgia, 438 00:25:48,040 --> 00:25:50,480 Speaker 1: said that the January six writers would have been both 439 00:25:50,600 --> 00:25:55,400 Speaker 1: armed and successful if she'd been leading during that insurrection. 440 00:25:55,720 --> 00:25:58,920 Speaker 1: Biden's press secretary immediately pushing back on that without even 441 00:25:58,920 --> 00:26:03,320 Speaker 1: waiting for question from reporters on it. Is this kind 442 00:26:03,359 --> 00:26:07,040 Speaker 1: of pushback more of what we can be expecting as 443 00:26:07,040 --> 00:26:12,800 Speaker 1: we get closer to election. Yes, I absolutely, I think 444 00:26:12,880 --> 00:26:21,119 Speaker 1: that you're responding to That particular statement was probably almost performa. 445 00:26:21,280 --> 00:26:24,440 Speaker 1: It was such an out there statement to suggest that, 446 00:26:24,800 --> 00:26:26,640 Speaker 1: you know, not let's do it again and this time 447 00:26:26,720 --> 00:26:30,280 Speaker 1: let's be armed. Um. That was so outrageous that I 448 00:26:30,280 --> 00:26:32,199 Speaker 1: think the White House heels that had no choice but 449 00:26:32,320 --> 00:26:35,520 Speaker 1: to respond to that. But in terms of a rapid 450 00:26:35,560 --> 00:26:39,440 Speaker 1: response team, in terms of reacting to everything, getting in 451 00:26:39,520 --> 00:26:42,520 Speaker 1: a wartime footing, if you will, a campaign footing, I 452 00:26:42,560 --> 00:26:44,919 Speaker 1: think is something you'll start seeing. They may try to 453 00:26:45,000 --> 00:26:48,600 Speaker 1: govern for a couple of months here in the early winter, um, 454 00:26:48,640 --> 00:26:53,080 Speaker 1: but by springs of presidential campaign for the following fall 455 00:26:53,600 --> 00:26:56,640 Speaker 1: a year and a half later, will be full on. Well, 456 00:26:56,640 --> 00:26:58,800 Speaker 1: I want to pick up on that because you mentioned 457 00:26:58,800 --> 00:27:00,879 Speaker 1: that we're going to have, you know, I'm legislating for 458 00:27:00,920 --> 00:27:02,399 Speaker 1: a couple of months and then it's going to be 459 00:27:02,480 --> 00:27:06,680 Speaker 1: all campaign. Can you talk to me about what presidential 460 00:27:06,720 --> 00:27:10,159 Speaker 1: campaigns due to Congress in terms of legislation and the 461 00:27:10,200 --> 00:27:14,480 Speaker 1: actual policy. Do we see issues like immigration, for example, 462 00:27:14,560 --> 00:27:17,639 Speaker 1: becoming more of a political football than you know, a 463 00:27:17,720 --> 00:27:21,800 Speaker 1: policy issue, and how does that play into you know 464 00:27:21,880 --> 00:27:25,959 Speaker 1: not just what Congress is focusing on, but also the election. 465 00:27:27,520 --> 00:27:30,040 Speaker 1: Right well, I think I have a feeling there will 466 00:27:30,080 --> 00:27:34,800 Speaker 1: be very little legislation past um in the next Congress, 467 00:27:35,200 --> 00:27:39,520 Speaker 1: mostly because of the breakdown that occurred after the partisan 468 00:27:39,560 --> 00:27:42,680 Speaker 1: breakdown that occurred after the midterm election. You have Republicans 469 00:27:42,720 --> 00:27:47,920 Speaker 1: controlling the House, the Democrats controlling the Senate without a 470 00:27:47,960 --> 00:27:51,879 Speaker 1: need for a tiebreaker, and then um, you know, the 471 00:27:51,920 --> 00:27:55,919 Speaker 1: White House is obviously still Democratic. So anything that the 472 00:27:55,960 --> 00:27:59,800 Speaker 1: Republican Party wants to push as a piece of legislation, 473 00:28:00,000 --> 00:28:03,919 Speaker 1: it's really a campaign tactic, is going to die in 474 00:28:03,960 --> 00:28:06,000 Speaker 1: the Senate, is going to die at the White House, 475 00:28:06,000 --> 00:28:07,840 Speaker 1: even if it were to pass the Senate. I do 476 00:28:07,920 --> 00:28:10,280 Speaker 1: want to talk about the Republican side here because of 477 00:28:10,280 --> 00:28:13,639 Speaker 1: course we have the big question of who Canada is 478 00:28:13,640 --> 00:28:16,600 Speaker 1: going to be. Obviously former President Trump announcing plans to 479 00:28:16,720 --> 00:28:19,080 Speaker 1: run but slipping in the polls, and then we've got 480 00:28:19,080 --> 00:28:22,679 Speaker 1: Florida Governor Ron De Santis positioning himself. Wendy, I have 481 00:28:22,760 --> 00:28:25,359 Speaker 1: to say I was in Florida covering the midterms, and 482 00:28:25,359 --> 00:28:28,800 Speaker 1: what struck me about De Santis was that his rallies 483 00:28:28,960 --> 00:28:32,600 Speaker 1: were really light on attendance, particularly in comparison to some 484 00:28:32,680 --> 00:28:36,040 Speaker 1: of the Trump rallies I've been to previously. What does 485 00:28:36,080 --> 00:28:38,560 Speaker 1: that mean for De Santas come and what do you 486 00:28:38,600 --> 00:28:42,360 Speaker 1: expect to see from him? Well, I think you know, 487 00:28:42,600 --> 00:28:46,320 Speaker 1: some of his rallies were around the election, his election 488 00:28:46,360 --> 00:28:49,920 Speaker 1: for governor. He is not the personality that draws the 489 00:28:49,920 --> 00:28:54,960 Speaker 1: crowds like Trump did. I do think Trump's rally attendance 490 00:28:55,080 --> 00:28:59,480 Speaker 1: is way down from the peak in um Ron to 491 00:28:59,600 --> 00:29:04,920 Speaker 1: Santa is a definite contender for the nomination. If you 492 00:29:05,000 --> 00:29:08,320 Speaker 1: look at polling right now, De Santis is in the lead, 493 00:29:08,880 --> 00:29:12,560 Speaker 1: with Trump trailing and then everyone else about a block 494 00:29:12,640 --> 00:29:16,560 Speaker 1: behind them. Um, you know, there's so it's really RHN. 495 00:29:16,640 --> 00:29:19,480 Speaker 1: De Santis is to lose at this point. He has 496 00:29:19,520 --> 00:29:24,040 Speaker 1: never faced national scrutiny. He is just starting to now 497 00:29:24,200 --> 00:29:28,240 Speaker 1: because he is a likely Republican nominee. He also hasn't 498 00:29:28,280 --> 00:29:31,880 Speaker 1: announced yet, but there's there's no indication that he is 499 00:29:31,920 --> 00:29:34,720 Speaker 1: not going to run. He could keep Trump, and then 500 00:29:34,720 --> 00:29:39,040 Speaker 1: the question is can Biden defeat De Santis. De Santis 501 00:29:39,280 --> 00:29:44,040 Speaker 1: is very popular among Republicans. He's very careful, he's very smart, 502 00:29:44,520 --> 00:29:47,920 Speaker 1: he is very very conservative. Thank you Wendy so much 503 00:29:47,960 --> 00:29:51,280 Speaker 1: for joining us. We really appreciate your insights always. That 504 00:29:51,400 --> 00:29:55,360 Speaker 1: was Wendy Benjamin Sen, Bloomberg's deputy managing editor in Washington. 505 00:29:55,560 --> 00:29:58,280 Speaker 1: For more of our political news coverage, tune in to 506 00:29:58,320 --> 00:30:01,160 Speaker 1: Bloomberg's Sound On, which you can hear weekday afternoons at 507 00:30:01,240 --> 00:30:05,160 Speaker 1: five Wall Street Time, and Balance of Power with David Weston. 508 00:30:05,240 --> 00:30:08,680 Speaker 1: That's weekdays at noon Wall Street Time. All right here 509 00:30:08,720 --> 00:30:12,000 Speaker 1: on Bloomberg Radio. I'm Madison Mills, and this is Bloomberg. 510 00:30:12,160 --> 00:30:15,000 Speaker 1: John Madison, thanks a lot, just taking on Bloomberg day 511 00:30:15,000 --> 00:30:18,840 Speaker 1: Break Weekend. Investing in Asia in the coming year. I'm 512 00:30:18,920 --> 00:30:34,120 Speaker 1: John Tucker and this is Bloomberg. This is Bloomberg Daybreak Weekend, 513 00:30:34,120 --> 00:30:36,400 Speaker 1: our global local ahead of the top stories for investors 514 00:30:36,440 --> 00:30:38,880 Speaker 1: in the coming week. I'm John Tucker in New York. 515 00:30:39,400 --> 00:30:43,200 Speaker 1: Big COVID policy changes in China causing challenges for the 516 00:30:43,320 --> 00:30:47,040 Speaker 1: nation's health system and also eventually it could cause more 517 00:30:47,080 --> 00:30:50,000 Speaker 1: headaches for global central banks. For more, let's head to 518 00:30:50,000 --> 00:30:53,880 Speaker 1: our Bloomberg Daybreak Asia host Brian Curtis. John. Asia is 519 00:30:53,920 --> 00:30:56,680 Speaker 1: getting back on his feet, China is reopening, and the 520 00:30:56,680 --> 00:30:58,680 Speaker 1: rest of the world is trying to figure out what 521 00:30:58,720 --> 00:31:02,120 Speaker 1: it means for growth and inflation and to take a 522 00:31:02,160 --> 00:31:04,240 Speaker 1: closer look at what it means for markets. Were joined 523 00:31:04,280 --> 00:31:08,800 Speaker 1: by Bloomberg m Live strategist Mark Cranfield. The China reopening 524 00:31:08,800 --> 00:31:11,800 Speaker 1: a net positive or net negative mark. I guess it 525 00:31:11,840 --> 00:31:13,840 Speaker 1: depends on which part of the world do you happen 526 00:31:13,880 --> 00:31:17,200 Speaker 1: to be sitting in. I think in general, for Asia, 527 00:31:17,320 --> 00:31:20,280 Speaker 1: they're probably going to be quite pleased to see that happening. 528 00:31:20,320 --> 00:31:23,560 Speaker 1: They would expect some sort of boost to growth. Numbers 529 00:31:23,760 --> 00:31:26,760 Speaker 1: in most parts of Asia and Korea Taiwan especially have 530 00:31:26,880 --> 00:31:28,840 Speaker 1: been down because of that, and obviously Hong Kong is 531 00:31:28,840 --> 00:31:31,280 Speaker 1: a very special case, but they certainly need to see 532 00:31:31,320 --> 00:31:34,280 Speaker 1: more tourists from China and more free flow of business 533 00:31:34,280 --> 00:31:36,960 Speaker 1: between the two places. So in general, from a growth 534 00:31:36,960 --> 00:31:39,960 Speaker 1: point of view, Asia will be happy. That should translate 535 00:31:40,280 --> 00:31:43,320 Speaker 1: into some better consumer spending and some other parts of 536 00:31:43,360 --> 00:31:46,320 Speaker 1: the economy that do well. Of course, the rest of 537 00:31:46,320 --> 00:31:48,200 Speaker 1: the world will be a little bit nervous about the 538 00:31:48,240 --> 00:31:51,840 Speaker 1: potential bump that we might see in global inflation as 539 00:31:52,040 --> 00:31:54,880 Speaker 1: China starts to do more and as trade is more 540 00:31:54,920 --> 00:31:58,080 Speaker 1: freely flowing around the world. They if there's increased demand 541 00:31:58,600 --> 00:32:01,320 Speaker 1: or resources out of China, then of course that could 542 00:32:01,600 --> 00:32:04,320 Speaker 1: mean that the slight downshift you've seen in inflation in 543 00:32:04,360 --> 00:32:07,080 Speaker 1: the US and some other parts will start to stop, 544 00:32:07,080 --> 00:32:09,520 Speaker 1: and that that could be a worry to Central brancas there. 545 00:32:09,800 --> 00:32:12,080 Speaker 1: You mentioned some of the countries in North Asia. I'm 546 00:32:12,120 --> 00:32:17,480 Speaker 1: curious about the transmission mechanism for say Southeast Asia that 547 00:32:17,600 --> 00:32:20,440 Speaker 1: they would benefit from the China reopening. Would it be 548 00:32:20,720 --> 00:32:24,040 Speaker 1: mostly through tourism or could it be trade as well? Yeah, both, 549 00:32:24,080 --> 00:32:26,440 Speaker 1: I think is certainly up for grabs. And if you 550 00:32:26,440 --> 00:32:29,120 Speaker 1: look at a country like Thailand, they've made it very 551 00:32:29,160 --> 00:32:32,720 Speaker 1: clear they're they're heavily dependent on tourism flows for a 552 00:32:32,720 --> 00:32:36,920 Speaker 1: big part of their economy. They've been underperforming substantially because 553 00:32:36,960 --> 00:32:39,240 Speaker 1: of the lack of Chinese tourists for the last couple 554 00:32:39,280 --> 00:32:43,400 Speaker 1: of years. They've projection for twenty three they made assumptions 555 00:32:43,760 --> 00:32:46,080 Speaker 1: that large numbers of Chinese would come back, and they're 556 00:32:46,120 --> 00:32:49,600 Speaker 1: not going to meet those tourism numbers unless there is 557 00:32:49,600 --> 00:32:52,480 Speaker 1: a steady flow of tourists coming from China. So certainly 558 00:32:52,800 --> 00:32:56,680 Speaker 1: Thailand is a very clear case where the economy it's 559 00:32:56,680 --> 00:32:59,320 Speaker 1: going to do pretty well if if those China numbers 560 00:32:59,360 --> 00:33:03,480 Speaker 1: return um then if you look at the effect as 561 00:33:03,840 --> 00:33:06,320 Speaker 1: people get more confident that the China growth is going 562 00:33:06,360 --> 00:33:08,640 Speaker 1: to be sustainable. That will probably help to support the 563 00:33:08,720 --> 00:33:12,600 Speaker 1: Chinese currency, which in turn will probably help to stabilize 564 00:33:12,600 --> 00:33:15,280 Speaker 1: some of the South Asian currencies which have been generally 565 00:33:15,280 --> 00:33:18,840 Speaker 1: a bit weak this year. We're seeing the Indonesian roup, Heir, 566 00:33:18,920 --> 00:33:22,800 Speaker 1: the tie Abart, Malaysian ring have all been relatively soft 567 00:33:22,840 --> 00:33:25,440 Speaker 1: this year, but a stronger yuan would certainly help their 568 00:33:25,480 --> 00:33:28,600 Speaker 1: case as well. They seem to move in a similar orbit. 569 00:33:29,160 --> 00:33:31,920 Speaker 1: The other big issue affecting growth, perhaps in the first 570 00:33:31,960 --> 00:33:34,840 Speaker 1: half of the year will be the US dollar and 571 00:33:34,880 --> 00:33:39,240 Speaker 1: the FED. Is the US dollar tied to win inflation 572 00:33:39,360 --> 00:33:41,800 Speaker 1: peaks in the United States and and thus what we 573 00:33:41,880 --> 00:33:44,880 Speaker 1: might expect from the FED to an extent is um. 574 00:33:44,960 --> 00:33:48,520 Speaker 1: I think the biggest question for investors in relation to 575 00:33:48,600 --> 00:33:52,600 Speaker 1: the FED is I think it's widely assumed that the 576 00:33:52,640 --> 00:33:54,520 Speaker 1: Fed are going to take interest rates up to about 577 00:33:54,520 --> 00:33:57,760 Speaker 1: five short term rates, maybe a fraction higher. But then 578 00:33:57,800 --> 00:34:00,600 Speaker 1: the big question for everybody is how are they going 579 00:34:00,600 --> 00:34:03,920 Speaker 1: to be able to hold rates at that level unchanged? 580 00:34:04,160 --> 00:34:06,520 Speaker 1: And I mean, if we take your own Power and 581 00:34:06,520 --> 00:34:09,640 Speaker 1: his colleagues at face value, they seem very determined that 582 00:34:09,680 --> 00:34:12,399 Speaker 1: once they reach a highest short term rate that they're 583 00:34:12,400 --> 00:34:14,640 Speaker 1: going to keep the rate there for quite a long time, 584 00:34:14,719 --> 00:34:18,920 Speaker 1: possibly through the whole three. But of course in the background, 585 00:34:19,040 --> 00:34:21,560 Speaker 1: what they're going to start to see, most likely is 586 00:34:21,560 --> 00:34:23,840 Speaker 1: that US unemployment numbers will start to creep up, and 587 00:34:23,880 --> 00:34:26,440 Speaker 1: there's going to become some stage pressure for them if 588 00:34:26,440 --> 00:34:29,359 Speaker 1: they see those numbers increasing too quickly. Obviously there will 589 00:34:29,360 --> 00:34:31,879 Speaker 1: be assigned to them that the economy is slowing down 590 00:34:31,960 --> 00:34:35,560 Speaker 1: faster than maybe they thought, and then people will start 591 00:34:35,600 --> 00:34:37,600 Speaker 1: calling for them, Hey, it's time for you guys to 592 00:34:37,600 --> 00:34:40,919 Speaker 1: start responding with an easier monetary policy. Mark all the best, 593 00:34:40,960 --> 00:34:44,560 Speaker 1: happy holidays and very good twenty three and thanks very 594 00:34:44,640 --> 00:34:47,640 Speaker 1: much for joining us. That is Bloomberg m Live strategist 595 00:34:47,719 --> 00:34:50,719 Speaker 1: Mark Cranfield and Brian Curtis along with Doug Prisner. You 596 00:34:50,760 --> 00:34:54,080 Speaker 1: can catch us every weekday here for Bloomberg Daybreak Asia, 597 00:34:54,160 --> 00:34:57,200 Speaker 1: beginning at seven am in Hong Kong and six pm 598 00:34:57,320 --> 00:35:00,399 Speaker 1: on Wall Street. John Bryan, Thanks alive, and that does 599 00:35:00,400 --> 00:35:03,560 Speaker 1: it for this edition of Bloomberg Daybreak Weekend. Join us 600 00:35:03,560 --> 00:35:06,560 Speaker 1: again Monday morning at five am All Street Time, where 601 00:35:06,560 --> 00:35:10,160 Speaker 1: the latest markets overseas and the news you need to 602 00:35:10,200 --> 00:35:13,719 Speaker 1: start your day. I'm John Tucker and this is Bloomberg,