Speaker 1: This is Bloomberg Daybreak Weekend, our global look ahead of
Speaker 1: the top stories in the coming week from our Daybreak
Speaker 1: anchors all around the world, and just the hand of
Speaker 1: the program, the job market and the fade in twenty
Speaker 1: twenty three. I'm John Tucker in New York. I'm calling
Speaker 1: Hepe in London, where we're looking at Europe entering a
Speaker 1: new year with an old conflict. I'm Madison Mills with
Speaker 1: a look at how things are already heating up for
Speaker 1: the presidential race. I'm Brian Curtis in Hong Kong. We
Speaker 1: look at the biggest market trends expected in twenty twenty
Speaker 1: three for Asia. That's all straight ahead on Bloomberg Daybreak
Speaker 1: Weekend on Bloomberg Eliven Free on New York, Bloomberg N one,
Speaker 1: Washington d C, Bloomberg one oh six one, Boston, Bloomberg
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Speaker 1: Sirius XM one nineteen and around the world on Bloomberg
Speaker 1: Radio dot Com and via the Bloomberg Business Act. Everybody.
Speaker 1: I'm John Tucker, and let's start today's program with the
Speaker 1: December jobs report that's going to be released this coming Friday,
Speaker 1: joining me now to the preview that what it means
Speaker 1: for the Federal Reserve Bloomberg's Matt Mosler Matt. Before the
Speaker 1: end of the year, we got a piece of data
Speaker 1: applications for unemployment benefits, the jobless claims. They rose slightly,
Speaker 1: so as this proof positive that FED policy is starting
Speaker 1: to work as far as the the US labor market
Speaker 1: is concerned. You know, it was really only an ever
Speaker 1: so slight uptick, and initial claims for unemployment insurance are
Speaker 1: actually down quite a bit from where they were over
Speaker 1: the summer, and so we actually really aren't seeing yet
Speaker 1: much of an impact from FED policy on the labor market,
Speaker 1: and it continues to be the big vexing question for
Speaker 1: policymakers and a lot of forecasters who are forecasting or
Speaker 1: recession in the coming quarters. Yeah, it's important we have
Speaker 1: to explain to everybody because because of wages in particular,
Speaker 1: that's a big component of inflation, and we know the
Speaker 1: FED is battling to get the rate of inflation down. Um,
Speaker 1: do they really have to target and maybe even the
Speaker 1: torpedo the US jobs market to achieve their goal of
Speaker 1: some price stability. Well, you know, that's a really interesting
Speaker 1: debate right now because what we're seeing in the inflation
Speaker 1: data is services inflation is still running pretty high. And
Speaker 1: the FED kind of used the services sector as the
Speaker 1: sector where wages are going to pass through two prices
Speaker 1: most effectively and efficiently, and so the logic is that, yes,
Speaker 1: they do need to weaken the job market and bring
Speaker 1: that wage growth down in order to filter through to
Speaker 1: the lower services inflation. However, the services inflation story is
Speaker 1: pretty interesting because that's really being driven by um, things
Speaker 1: in healthcare and transportation like think airline tickets, and the
Speaker 1: case that that is really driven by wage growth in
Speaker 1: particular is not super strong when you actually dig into
Speaker 1: the data. So um, this is going to continue to
Speaker 1: be part of the debate. Definitely. The Fed is watching
Speaker 1: that wage growth number very carefully because that's how they
Speaker 1: think of it. But it is still possible that inflation
Speaker 1: could come down a lot in the coming months even
Speaker 1: if wage growth does stay high, and services will remind
Speaker 1: everybody that's the that's the biggest part of the economy
Speaker 1: right now, right that's right, Yeah, it's definitely. Uh, you know,
Speaker 1: the goods producing sector has shrunk and shrunk over the years,
Speaker 1: leaving mostly services behind and so that's where most Americans
Speaker 1: are employed these days. Uh, it makes up the majority
Speaker 1: of consumption patterns, and so that's why you know, there's
Speaker 1: so much attention on it. We've heard a lot about
Speaker 1: some job cuts coming up Wall Street, job cuts in technology.
Speaker 1: Have they shown up anywhere in the data? Are Are
Speaker 1: they big enough to have an impact? Not yet? You know,
Speaker 1: we're seeing we've certainly seen a lot of job cuts,
Speaker 1: and say the mortgage industry, you know, in the housing sector,
Speaker 1: things just aren't really happening because interest rates have shot
Speaker 1: up so quickly. But you know, these big, high profile
Speaker 1: announcements from the big ted companies are the big Wall
Speaker 1: Street firms, They're just not really enough to move the needle.
Speaker 1: And it seems like there is some anecdotal evidence, at
Speaker 1: least on the tech side, that engineers and the like
Speaker 1: who have been laid off from some of those firms
Speaker 1: are not having too much trouble finding new jobs. So
Speaker 1: it seems like the labor market does remain very fluid,
Speaker 1: very strong. Um, you know, both from a kind of
Speaker 1: economic data perspective and also somewhat from an anecdotal perspective
Speaker 1: as well. Okay, so let's move a hand to Friday
Speaker 1: with the release of the December jobs report. What's the expectation.
Speaker 1: So the expectation is for a further slowdown in job
Speaker 1: growth to something like two hundred thousand jobs created in December,
Speaker 1: which is still quite high, you know, relatives historical standards,
Speaker 1: um a unemployment rate staying unchanged at three point seven percent,
Speaker 1: so still quite low, and wage growth, you know, still
Speaker 1: coming in pretty robustly at at five percent on a
Speaker 1: year or year basement. I think that wage number is
Speaker 1: going to be really key for some of the reasons
Speaker 1: we just discussed. Now. An interesting thing about the last
Speaker 1: jobs report last month is that, you know, everybody was
Speaker 1: forecasting a slowdown in wage growth, continuing the trend of
Speaker 1: the previous several months. We actually got a huge pop
Speaker 1: in wage growth last month. And the reason for that
Speaker 1: was we had a three point eight percent increase in
Speaker 1: wages in the transportation warehousing sector alone. Now, just for perspective,
Speaker 1: that is the biggest increase on record in monthly data
Speaker 1: going back to the early nineteen seventies by by an
Speaker 1: order of magnitude. So the big question is, you know,
Speaker 1: is that kind of wage growth in that one sector,
Speaker 1: which was so big that it was enough to lift
Speaker 1: overall wage growth. Is that something that really is going
Speaker 1: to repeat this month or was that some sort of
Speaker 1: you know aberration one off? And so I think that's
Speaker 1: the big thing to be watching in this report. There's
Speaker 1: the report a little muddy because of the season, because
Speaker 1: of the holidays and hiring associated with that. Yeah, there's
Speaker 1: so many questions around that, and that would be especially
Speaker 1: something that could impact the transportation where housing sector. That's
Speaker 1: a sector where we've seen massive job growth since the
Speaker 1: pandemic began because of all of the ship to you know,
Speaker 1: online purchases and Amazon deliveries and so on and so forth.
Speaker 1: So we've got those normal seasonal holiday patterns. We've got
Speaker 1: other issues like declining response rates to the surveys that
Speaker 1: make up the jobs report. A lot of people are
Speaker 1: asking questions about whether that's having an impact on the data.
Speaker 1: So just tons of moving pieces right now that are
Speaker 1: making this really hard to read, even somewhat harder than usual.
Speaker 1: I mean it's never easy, but lots of cross currents
Speaker 1: at the moment. Now. Is the Federal Reserve still the
Speaker 1: number one story for for markets overall? As we hit
Speaker 1: it into I think so, although you know that if
Speaker 1: we're starting to see signs maybe a little bit that
Speaker 1: that is changing, because a couple of weeks ago, the
Speaker 1: latest Federal Reserve interest rate decision, they came out and
Speaker 1: they were very hawkish um and the markets didn't really
Speaker 1: buy the hawk ish message. And the reason for that
Speaker 1: is because the Feed put out these inflation forecasts that
Speaker 1: really look way too high to the markets. And so
Speaker 1: now investors are kind of saying, well, we think inflation
Speaker 1: is going to be lower than the fat thanks, and
Speaker 1: when the Fed realizes that and sees the lower inflation,
Speaker 1: they're going to kind of back off their hawker is stand.
Speaker 1: So we're starting to see a bit of a divergence
Speaker 1: between what the Fed thinks is going to happen and
Speaker 1: what investors think is going to happen. And that's really
Speaker 1: going to put a premium on what the data actually
Speaker 1: show going forward to dictate the course of markets. The
Speaker 1: investors are fighting the Fed. Did you just say that, Well,
Speaker 1: not quite. The way the Fed says that when they're
Speaker 1: at that question is we just have a difference of
Speaker 1: opinion and we'll see who's right. Yeah, we'll see it's
Speaker 1: usually the Feder reserve. If history is is any guid
Speaker 1: what what factors go into a fit I hate this word,
Speaker 1: but a fit pivot. So definitely, the inflation reports are
Speaker 1: going to be very important. Um, we need to see
Speaker 1: inflation coming down at a rate similar to the last
Speaker 1: few months when when it's really started coming down. You know.
Speaker 1: The wage growth is also going to be a major
Speaker 1: factor in that. Um. You know. The other big question
Speaker 1: is all of these forecasters see a recession in I mean,
Speaker 1: it's definitely the majority consensus opinion now, and so does
Speaker 1: that start showing up in the data. We haven't really
Speaker 1: seen it start showing up in the data yet. If
Speaker 1: it does start showing up, then do we kind of
Speaker 1: get a change of tone from the Fed because it's like, Okay,
Speaker 1: this is really happening. Now there's a lot more certainty
Speaker 1: that that's a big possibility. I think that's going to
Speaker 1: be really interesting to see how they respond to the
Speaker 1: changing data. That comes to be the case. Got to
Speaker 1: know a recession when we're in it, or we're going
Speaker 1: to know a recession when you know, some few quarters
Speaker 1: after it happens. Yeah, Typically it's the latter, which is
Speaker 1: the way it normally plays out. But you know, I
Speaker 1: think part of the complication this time around is that
Speaker 1: we've got the pandemic, which has just reordered the economy
Speaker 1: in so many interesting ways that it's making it a
Speaker 1: lot harder to read the early warning signs, those bleeding
Speaker 1: indicators of recession that people usually rely on to kind
Speaker 1: of get a feel for where we're at in the economy,
Speaker 1: even if the actual data aren't going to show it
Speaker 1: until a few quarters later. And so just the way
Speaker 1: the pandemic has scrambled all of those patterns is kind
Speaker 1: of leaving plenty of room for speculation and debate that
Speaker 1: you know, might not even necessarily be present in more
Speaker 1: normal downturns. And there can't be a recession if the
Speaker 1: labor market is still resilient. No, So we're really that
Speaker 1: is either so much focus on that data and so
Speaker 1: much head scratching over why it stayed still strong. I
Speaker 1: mean that is really the you know, what defines the recession.
Speaker 1: Earlier this year, we had two quarters of negative GDP growth,
Speaker 1: and there was a big debate is that a recession
Speaker 1: or is that not a recession? And ultimately I think
Speaker 1: the consensus was, well, it's not because the labor market
Speaker 1: did stay strong, and so if the labor market continues
Speaker 1: chogging along, then maybe we start seeing some of these
Speaker 1: recession calls get pushed back even further. We've already seen
Speaker 1: a little bit of that so far, with people making
Speaker 1: these calls and then saying, you know what, it's gonna
Speaker 1: come a little later than we thought because the data
Speaker 1: are staying so strong in the near term. Matt, always
Speaker 1: a pleasure and happy New Year. Thank you, John, same
Speaker 1: to you. And that's Bloomberg's math Bosler. Just to handle
Speaker 1: Blueberg Daybreak Weekend, I'll look at the devastating impact of
Speaker 1: Russia's warn't Ukraine on John Tucker. This is Bloomberg. This
Speaker 1: is Bloomberg Daybreak Weekend, our global looking ahead of the
Speaker 1: top stories for investors in the coming week. I'm John
Speaker 1: Tucker in New York. Up later in the program shifting
Speaker 1: political winds in Washington. But first, Russia's invasion of Ukraine
Speaker 1: has had a devastating impact on its people, infrastructure, and economy,
Speaker 1: even as it goes into a second year. And for more,
Speaker 1: let's into London, bringing Bloomberg Daybreak Europe anchor Caroline Hepcker. John,
Speaker 1: it's hard to celebrate the new year with the war
Speaker 1: ongoing in Europe, one which has created eight million refugees,
Speaker 1: are rafter sanctions against Russia, and a global energy shock
Speaker 1: that has taken Europe to the brink of recession. We'll
Speaker 1: joining me now to discuss this is Bloomberg Cedia Report
Speaker 1: for International Affairs, Mark Champion and our Power and Gas
Speaker 1: and Renewables editor Rachel Morrison. Mark, Rachel, You're both often
Speaker 1: guests on Bloomberg radios, so I'm really pleased to have
Speaker 1: you with us today. Mark. Let we just start with
Speaker 1: the war in Ukraine. What is the state of play
Speaker 1: as we now look to a new year and months
Speaker 1: of this conflict ongoing. Well, it's a kind of a
Speaker 1: big question. I mean, essentially, we're just moving into a
Speaker 1: season where offensive campaigning becomes quite possible. Again, the winter
Speaker 1: seasons relatively short. It depends on the ground being firm, um,
Speaker 1: And so you now have the Ukrainians in particular, warning
Speaker 1: that the Russians are as unlikely as it seems to
Speaker 1: many military analysts just because of the state of the
Speaker 1: Russian forces, even the new conscripts that they've brought in,
Speaker 1: but nevertheless saying that whether it's in January, February or March,
Speaker 1: the Russians will try again with a major offensive, including
Speaker 1: trying to take Kiev. You know, whether they do that,
Speaker 1: how much is a faint um. You know, how much
Speaker 1: they can do is very unclear. You know, war is
Speaker 1: largely about opportunity as much as it is about strategy,
Speaker 1: and that it will depend on what the Russians can
Speaker 1: do and what they think they can do. You know,
Speaker 1: it's been clear from the start of the war that
Speaker 1: those things are not always aligned, that their idea of
Speaker 1: what they can do isn't necessarily realistic. So it's difficult
Speaker 1: to predict, but it's likely to be quite long and grim. Yeah,
Speaker 1: and perhaps the most important issue is going to be
Speaker 1: access to weaponry. And you have to remember that it
Speaker 1: was February when the war began in two so yeah,
Speaker 1: perhaps coming into a month that could again be quite critical.
Speaker 1: I mean, what's the aim then in the next few
Speaker 1: weeks and months? Is it? Is it all about weapons? Well,
Speaker 1: weapons are obviously essential, um, and if either side you know,
Speaker 1: runs out of the critical communitions artillery shells or on in.
Speaker 1: You know, there's really two parts of the war. One
Speaker 1: on the ground, which is very reliant on artillery UM
Speaker 1: and one in the air where Russia is um you know,
Speaker 1: attacking essential infrastructure with long range missiles that Ukraine is
Speaker 1: trying to shoot them down. So there's sort of two
Speaker 1: separate campaigns, both of which have real issues as to
Speaker 1: how big of a stockpile do they still have of
Speaker 1: cruise missiles for example, or Iranian drones. And then you know,
Speaker 1: the question remains for the Ukrainians on the other side,
Speaker 1: you know, how will they have enough anti missile defenses
Speaker 1: and anti aircraft defenses, enough missiles to take all these
Speaker 1: down um, and you know, will they be overwhelmed? And
Speaker 1: the same as is true with artillery, we just don't know.
Speaker 1: There's quite a lot of dispute about exactly what is
Speaker 1: the state of the Russian artillery stocks and you know,
Speaker 1: will they have enough for a major campaign. Look, we've
Speaker 1: we've covered the war in Ukraine, you know, considered by
Speaker 1: many one of the worst conflicts in World War two
Speaker 1: throughout the last few months. And so I want to
Speaker 1: also get onto the hopes that post ability of ending
Speaker 1: the fighting. But I want to at this point also
Speaker 1: bring in Rachel Morrison when it comes to the other
Speaker 1: issue that has flowed from this conflict on the ground,
Speaker 1: which is Putin's energy pressure on Europe. It's certainly become
Speaker 1: immensely expensive. Rachel, is it working Putin's strategy of sort
Speaker 1: of squeezing Europe? How do you see it now? Yes,
Speaker 1: in some ways, some of the pressure and some of
Speaker 1: the power that Putin has had over Europe has been
Speaker 1: has waned somewhat since the nord Stream pipeline attack left
Speaker 1: it unable to flow any gas to Europe. So the
Speaker 1: remaining gas that Europe is getting from Russia goes via Ukraine,
Speaker 1: which is why a lot of the conflict that Mark
Speaker 1: was just outlining is important because at times it has
Speaker 1: seemed as though Russia is really aiming at energy infrastructure,
Speaker 1: which obviously has a big impact on people in Ukraine itself,
Speaker 1: but also on those transit flows to Europe. I think
Speaker 1: we have seen elevated prices obviously from the cutting supplies,
Speaker 1: and everybody is thinking about what will happen if we
Speaker 1: don't have those Russian supplies next winter, and refilling gas
Speaker 1: storage in Europe is going to be more difficult without
Speaker 1: nord Stream, and many people are assuming that the flows
Speaker 1: via Ukraine will eventually be cut because of the conflict,
Speaker 1: Because things are getting worse, it's getting more intense. That
Speaker 1: that is inevitable. And you know, even if some people
Speaker 1: say it's mostly priced in, there'll still be a bit
Speaker 1: of a shock to Europe and to European gas prices
Speaker 1: if and when that does happen. Do you think that
Speaker 1: there's any hope that the energy crisis could get better
Speaker 1: in three if Europe tries to adapt admittedly to a
Speaker 1: terrible situation. Honestly, what we are hearing is that the
Speaker 1: crisis is at least going to stay as bad as
Speaker 1: it has been this year, if not get worse. And
Speaker 1: that's because this year we were able to fill gas
Speaker 1: storage quite quickly because we still had an order string
Speaker 1: gas flowing from Russia. When we come out of the
Speaker 1: winter season, we'll have to see how low storage levels get.
Speaker 1: If they are quite low, and in fact, the lower
Speaker 1: they are, the more difficult that task will be. And
Speaker 1: the European Union has set all kinds of targets to
Speaker 1: try to make sure that we get those levels back up,
Speaker 1: but we are going to struggle to do that. We
Speaker 1: also have the French nuclear fleet, which has sort of
Speaker 1: problems and extended artages, So that's going to mean that
Speaker 1: we need more gas for electricity production, which means there's
Speaker 1: less spare to put into storage. So even European leaders
Speaker 1: are talking about getting ready for next winter, and it
Speaker 1: doesn't seem like the crisis is over yet or anywhere
Speaker 1: near Mark champion Vladimir Putin? Is he bogged down in
Speaker 1: something protracted? Does this become a forever war, perennial conflict,
Speaker 1: or does Ukraine have to accept a deal in order
Speaker 1: to get a cease far to lose some territory. What
Speaker 1: are the various scenarios now that people are thinking about.
Speaker 1: You know, if if we try to think about an
Speaker 1: end to the conflict, well, what seems to be clear
Speaker 1: at this point is that you know, puting would like
Speaker 1: this to be seen as a forever war and that
Speaker 1: he sees stretching it out. Time being on his side.
Speaker 1: So although when they invaded in February it seems so
Speaker 1: long ago now, the Russian command clearly expected this to
Speaker 1: be a very short campaign, only a few days. They
Speaker 1: weren't prepared. But a lot of water has passed under
Speaker 1: the bridge since then, and at this point the Russian
Speaker 1: strategy is clearly to grind down the will to resist
Speaker 1: in Ukraine and more critically in the West. You know,
Speaker 1: it's clear to the Russians also by now that the
Speaker 1: Russian Ukrainians have a formidable fighting force and all so
Speaker 1: that the Western weapons that are being supplied are critical.
Speaker 1: But it's clear also that as soon as that supply
Speaker 1: of weapon drives up, it will be very difficult for
Speaker 1: the Ukrainians to continue. And that is the situation. You know,
Speaker 1: He's trying to press both in Keep and in Western
Speaker 1: capitals for leaders to decide. Look, there isn't going to
Speaker 1: be a Ukrainian victory. So the sooner that we end
Speaker 1: is the sooner the pain will start, both for Ukraine
Speaker 1: and for Western governments with it, in particular the energy
Speaker 1: issues that you know we're just being described. Mark, thank
Speaker 1: you so much for being with me. Bloomberg Senior reporter
Speaker 1: for International Affairs, Mark Champion and our Power and Gas
Speaker 1: and Renewables editor Rachel Morrison on the difficulties as we
Speaker 1: go into three with Russia's war in Ukraine ongoing. My
Speaker 1: thanks to both of you for joining us. I'm Caroline
Speaker 1: Heppgary in London. You can catch us every weekday morning
Speaker 1: for Bloomberg Daybreak Europe, beginning at six am in London.
Speaker 1: That's one am on Warster, John Caroline, thanks a lot.
Speaker 1: Just ahead on Bloomberg day Break. Weekend twenty three could
Speaker 1: be another wild year politically as we head into the
Speaker 1: presidential election. I'm John Tucker, and this is Bloomberg broadcasting
Speaker 1: live from the Bloomberg Interactive Broker Studio in New York.
Speaker 1: Bloomberg eleven three oh to Washington, d C, Bloomberg to Boston,
Speaker 1: Bloomberg one oh six one to San Francisco, Bloomberg nine
Speaker 1: to the Country, Serius xm Channe to London d A
Speaker 1: B Digital Radio, and around the globe the Bloomberg Business
Speaker 1: app and Bloomberg Radio dot Com. This is Bloomberg day
Speaker 1: Break Weekend. I'm John Tucker in New York with your
Speaker 1: global look ahead of the top stories for investor ers
Speaker 1: in the coming week and the new year. While to
Speaker 1: watch when it comes to politics, as the battle lines
Speaker 1: are drawn for the presidential race and for world Let's
Speaker 1: go to Bloomberg quick takes Madison Mills. Thank you, John,
Speaker 1: And it's still almost two years away from the presidential election,
Speaker 1: but things are already heating up on the Democratic side.
Speaker 1: We're seeing people like the newly elected incoming House Democratic
Speaker 1: Leader Hakeem Jeffries. He's saying that he's all four run
Speaker 1: for President Biden. I know he'll have a vision for
Speaker 1: the future. I look forward to strongly supporting President Biden's
Speaker 1: re election. Incoming House Democratic Leader Hakeem Jeffreys there on
Speaker 1: ABC's This Week, heard here on Bloomberg Radio and joining
Speaker 1: me now to talk about how things might unfold in
Speaker 1: the coming year. Bloomberg's deputy managing editor in Washington, Wendy Benjaminson. Wendy,
Speaker 1: always a joy to speak with you, and thanks for
Speaker 1: joining us. Let's start with what's happening for the Democrats here.
Speaker 1: What would you say is the single biggest way that
Speaker 1: we're already seeing Democrats prepare for battle heading into well.
Speaker 1: I think one thing they're doing Madison, and we just
Speaker 1: heard the Democratic leader how King Jefferies say it is
Speaker 1: they're lining up behind Biden. There was some talk earlier,
Speaker 1: earlier this year and last year that you know, maybe
Speaker 1: we should have somebody else. He's eighty, He's going to
Speaker 1: be eighty two in the campaign starts, um, he would
Speaker 1: be the oldest president of American history and there was
Speaker 1: some sense, and you know, his public approval ratings were
Speaker 1: really low, so there was some sense that maybe somebody
Speaker 1: else ought to step in. And then I think they
Speaker 1: looked around and saw who else could step in. The
Speaker 1: bench is not great for people who could beat one
Speaker 1: of the probable Republican nominees. And then Biden did spectacularly
Speaker 1: well in the mid terms. I mean, we knew he
Speaker 1: was going to lose the House of Representatives, but he
Speaker 1: aust them by only I think five seats, a very
Speaker 1: small handful of seats. I think it's eight actually, um,
Speaker 1: but a very small handful of seats. They kept. The
Speaker 1: Senate voters did not seem to despise him as much
Speaker 1: as they thought, and now they are lining up behind
Speaker 1: Joe Biden for a second term. Right voters didn't, And
Speaker 1: now we're seeing lawmakers sort of feeling the same as
Speaker 1: you said, Wendy, just really putting their support behind a
Speaker 1: Biden run after that red wave became more like a
Speaker 1: very very light red trickle. Let's hear what Senate Majority
Speaker 1: Leader Chuck Schumer had to say about race. I think
Speaker 1: President Biden being on the ticket if if he runs,
Speaker 1: and if he runs, I'll support him. Um, it would
Speaker 1: be very very helpful, So Schumer saying that it would
Speaker 1: be helpful, but I do want to look at Republicans
Speaker 1: here because they will hold the majority in the House
Speaker 1: next term, and said they planned to hold hearings on
Speaker 1: Hunter Biden and the origins of COVID nineteen. How much
Speaker 1: of a liability is that going to be for the
Speaker 1: Biden camp. You're absolutely right. They are going to investigate
Speaker 1: Hunter Biden, COVID nineteen, and just about everything else they
Speaker 1: could possibly think of. There's there's talk of impeaching the
Speaker 1: Department of Homeland Security secretariale Hundre Mayorkas for the fact
Speaker 1: that the border is practically uncontrolled at this point. Um,
Speaker 1: you know, a lot of migrants coming across the border.
Speaker 1: They want to impeach him for that. They want to
Speaker 1: look at the withdrawal from Afghanistan, and so all of
Speaker 1: this is because of this is an attempt to weaken
Speaker 1: the president and the Democratic Party heading into just strengthen
Speaker 1: their hand. You mentioned impeachments. Is there much of a
Speaker 1: possibility of of a strong push for a Biden impeachment?
Speaker 1: We were talking about that a little bit heading into
Speaker 1: the midterms. What's the political will towards that. I think
Speaker 1: that political will which probably exists in some of the
Speaker 1: more fringe quarters of the Republican party, UM, is pretty
Speaker 1: much stomped out. Kevin McCarthy, who is most likely going
Speaker 1: to be the speaker. He will have his election for
Speaker 1: that on Tuesday. UM, but he has already come out
Speaker 1: and said he sees no reason to impeach Biden. And
Speaker 1: you know, again, there has to be a reason to
Speaker 1: impeach the one. There has to be some evidence of
Speaker 1: the crime committed hi inestiator, and so he doesn't see
Speaker 1: any reason to rip the country apart and do that. Um,
Speaker 1: you know, and go through all of that again. Well,
Speaker 1: speaking of fringe members of each party, Wendy, one thing
Speaker 1: that we're seen of more lately is the Biden camp
Speaker 1: pushing back on Republican behavior. One example that comes to
Speaker 1: mind is when Marjorie Taylor Green, the Republican from Georgia,
Speaker 1: said that the January six writers would have been both
Speaker 1: armed and successful if she'd been leading during that insurrection.
Speaker 1: Biden's press secretary immediately pushing back on that without even
Speaker 1: waiting for question from reporters on it. Is this kind
Speaker 1: of pushback more of what we can be expecting as
Speaker 1: we get closer to election. Yes, I absolutely, I think
Speaker 1: that you're responding to That particular statement was probably almost performa.
Speaker 1: It was such an out there statement to suggest that,
Speaker 1: you know, not let's do it again and this time
Speaker 1: let's be armed. Um. That was so outrageous that I
Speaker 1: think the White House heels that had no choice but
Speaker 1: to respond to that. But in terms of a rapid
Speaker 1: response team, in terms of reacting to everything, getting in
Speaker 1: a wartime footing, if you will, a campaign footing, I
Speaker 1: think is something you'll start seeing. They may try to
Speaker 1: govern for a couple of months here in the early winter, um,
Speaker 1: but by springs of presidential campaign for the following fall
Speaker 1: a year and a half later, will be full on. Well,
Speaker 1: I want to pick up on that because you mentioned
Speaker 1: that we're going to have, you know, I'm legislating for
Speaker 1: a couple of months and then it's going to be
Speaker 1: all campaign. Can you talk to me about what presidential
Speaker 1: campaigns due to Congress in terms of legislation and the
Speaker 1: actual policy. Do we see issues like immigration, for example,
Speaker 1: becoming more of a political football than you know, a
Speaker 1: policy issue, and how does that play into you know
Speaker 1: not just what Congress is focusing on, but also the election.
Speaker 1: Right well, I think I have a feeling there will
Speaker 1: be very little legislation past um in the next Congress,
Speaker 1: mostly because of the breakdown that occurred after the partisan
Speaker 1: breakdown that occurred after the midterm election. You have Republicans
Speaker 1: controlling the House, the Democrats controlling the Senate without a
Speaker 1: need for a tiebreaker, and then um, you know, the
Speaker 1: White House is obviously still Democratic. So anything that the
Speaker 1: Republican Party wants to push as a piece of legislation,
Speaker 1: it's really a campaign tactic, is going to die in
Speaker 1: the Senate, is going to die at the White House,
Speaker 1: even if it were to pass the Senate. I do
Speaker 1: want to talk about the Republican side here because of
Speaker 1: course we have the big question of who Canada is
Speaker 1: going to be. Obviously former President Trump announcing plans to
Speaker 1: run but slipping in the polls, and then we've got
Speaker 1: Florida Governor Ron De Santis positioning himself. Wendy, I have
Speaker 1: to say I was in Florida covering the midterms, and
Speaker 1: what struck me about De Santis was that his rallies
Speaker 1: were really light on attendance, particularly in comparison to some
Speaker 1: of the Trump rallies I've been to previously. What does
Speaker 1: that mean for De Santas come and what do you
Speaker 1: expect to see from him? Well, I think you know,
Speaker 1: some of his rallies were around the election, his election
Speaker 1: for governor. He is not the personality that draws the
Speaker 1: crowds like Trump did. I do think Trump's rally attendance
Speaker 1: is way down from the peak in um Ron to
Speaker 1: Santa is a definite contender for the nomination. If you
Speaker 1: look at polling right now, De Santis is in the lead,
Speaker 1: with Trump trailing and then everyone else about a block
Speaker 1: behind them. Um, you know, there's so it's really RHN.
Speaker 1: De Santis is to lose at this point. He has
Speaker 1: never faced national scrutiny. He is just starting to now
Speaker 1: because he is a likely Republican nominee. He also hasn't
Speaker 1: announced yet, but there's there's no indication that he is
Speaker 1: not going to run. He could keep Trump, and then
Speaker 1: the question is can Biden defeat De Santis. De Santis
Speaker 1: is very popular among Republicans. He's very careful, he's very smart,
Speaker 1: he is very very conservative. Thank you Wendy so much
Speaker 1: for joining us. We really appreciate your insights always. That
Speaker 1: was Wendy Benjamin Sen, Bloomberg's deputy managing editor in Washington.
Speaker 1: For more of our political news coverage, tune in to
Speaker 1: Bloomberg's Sound On, which you can hear weekday afternoons at
Speaker 1: five Wall Street Time, and Balance of Power with David Weston.
Speaker 1: That's weekdays at noon Wall Street Time. All right here
Speaker 1: on Bloomberg Radio. I'm Madison Mills, and this is Bloomberg.
Speaker 1: John Madison, thanks a lot, just taking on Bloomberg day
Speaker 1: Break Weekend. Investing in Asia in the coming year. I'm
Speaker 1: John Tucker and this is Bloomberg. This is Bloomberg Daybreak Weekend,
Speaker 1: our global local ahead of the top stories for investors
Speaker 1: in the coming week. I'm John Tucker in New York.
Speaker 1: Big COVID policy changes in China causing challenges for the
Speaker 1: nation's health system and also eventually it could cause more
Speaker 1: headaches for global central banks. For more, let's head to
Speaker 1: our Bloomberg Daybreak Asia host Brian Curtis. John. Asia is
Speaker 1: getting back on his feet, China is reopening, and the
Speaker 1: rest of the world is trying to figure out what
Speaker 1: it means for growth and inflation and to take a
Speaker 1: closer look at what it means for markets. Were joined
Speaker 1: by Bloomberg m Live strategist Mark Cranfield. The China reopening
Speaker 1: a net positive or net negative mark. I guess it
Speaker 1: depends on which part of the world do you happen
Speaker 1: to be sitting in. I think in general, for Asia,
Speaker 1: they're probably going to be quite pleased to see that happening.
Speaker 1: They would expect some sort of boost to growth. Numbers
Speaker 1: in most parts of Asia and Korea Taiwan especially have
Speaker 1: been down because of that, and obviously Hong Kong is
Speaker 1: a very special case, but they certainly need to see
Speaker 1: more tourists from China and more free flow of business
Speaker 1: between the two places. So in general, from a growth
Speaker 1: point of view, Asia will be happy. That should translate
Speaker 1: into some better consumer spending and some other parts of
Speaker 1: the economy that do well. Of course, the rest of
Speaker 1: the world will be a little bit nervous about the
Speaker 1: potential bump that we might see in global inflation as
Speaker 1: China starts to do more and as trade is more
Speaker 1: freely flowing around the world. They if there's increased demand
Speaker 1: or resources out of China, then of course that could
Speaker 1: mean that the slight downshift you've seen in inflation in
Speaker 1: the US and some other parts will start to stop,
Speaker 1: and that that could be a worry to Central brancas there.
Speaker 1: You mentioned some of the countries in North Asia. I'm
Speaker 1: curious about the transmission mechanism for say Southeast Asia that
Speaker 1: they would benefit from the China reopening. Would it be
Speaker 1: mostly through tourism or could it be trade as well? Yeah, both,
Speaker 1: I think is certainly up for grabs. And if you
Speaker 1: look at a country like Thailand, they've made it very
Speaker 1: clear they're they're heavily dependent on tourism flows for a
Speaker 1: big part of their economy. They've been underperforming substantially because
Speaker 1: of the lack of Chinese tourists for the last couple
Speaker 1: of years. They've projection for twenty three they made assumptions
Speaker 1: that large numbers of Chinese would come back, and they're
Speaker 1: not going to meet those tourism numbers unless there is
Speaker 1: a steady flow of tourists coming from China. So certainly
Speaker 1: Thailand is a very clear case where the economy it's
Speaker 1: going to do pretty well if if those China numbers
Speaker 1: return um then if you look at the effect as
Speaker 1: people get more confident that the China growth is going
Speaker 1: to be sustainable. That will probably help to support the
Speaker 1: Chinese currency, which in turn will probably help to stabilize
Speaker 1: some of the South Asian currencies which have been generally
Speaker 1: a bit weak this year. We're seeing the Indonesian roup, Heir,
Speaker 1: the tie Abart, Malaysian ring have all been relatively soft
Speaker 1: this year, but a stronger yuan would certainly help their
Speaker 1: case as well. They seem to move in a similar orbit.
Speaker 1: The other big issue affecting growth, perhaps in the first
Speaker 1: half of the year will be the US dollar and
Speaker 1: the FED. Is the US dollar tied to win inflation
Speaker 1: peaks in the United States and and thus what we
Speaker 1: might expect from the FED to an extent is um.
Speaker 1: I think the biggest question for investors in relation to
Speaker 1: the FED is I think it's widely assumed that the
Speaker 1: Fed are going to take interest rates up to about
Speaker 1: five short term rates, maybe a fraction higher. But then
Speaker 1: the big question for everybody is how are they going
Speaker 1: to be able to hold rates at that level unchanged?
Speaker 1: And I mean, if we take your own Power and
Speaker 1: his colleagues at face value, they seem very determined that
Speaker 1: once they reach a highest short term rate that they're
Speaker 1: going to keep the rate there for quite a long time,
Speaker 1: possibly through the whole three. But of course in the background,
Speaker 1: what they're going to start to see, most likely is
Speaker 1: that US unemployment numbers will start to creep up, and
Speaker 1: there's going to become some stage pressure for them if
Speaker 1: they see those numbers increasing too quickly. Obviously there will
Speaker 1: be assigned to them that the economy is slowing down
Speaker 1: faster than maybe they thought, and then people will start
Speaker 1: calling for them, Hey, it's time for you guys to
Speaker 1: start responding with an easier monetary policy. Mark all the best,
Speaker 1: happy holidays and very good twenty three and thanks very
Speaker 1: much for joining us. That is Bloomberg m Live strategist
Speaker 1: Mark Cranfield and Brian Curtis along with Doug Prisner. You
Speaker 1: can catch us every weekday here for Bloomberg Daybreak Asia,
Speaker 1: beginning at seven am in Hong Kong and six pm
Speaker 1: on Wall Street. John Bryan, Thanks alive, and that does
Speaker 1: it for this edition of Bloomberg Daybreak Weekend. Join us
Speaker 1: again Monday morning at five am All Street Time, where
Speaker 1: the latest markets overseas and the news you need to
Speaker 1: start your day. I'm John Tucker and this is Bloomberg,