WEBVTT - Bloomberg Daybreak: July 14, 2022 - Hour 1 (Radio) 0:00:01.480 --> 0:00:04.960 Live from the Bloomberg Interactive Brooker Studios is Bloomberg day 0:00:04.960 --> 0:00:08.720 Break for Thursday, July fourteen two. Coming up this hour, 0:00:09.039 --> 0:00:12.320 Speculation grows about a one percent rate hike by the Fed. 0:00:12.440 --> 0:00:15.720 This month. Wall Street braces for another record on inflation. 0:00:16.079 --> 0:00:19.400 Bank earnings began with JP Morgan Chase and Morgan Stanley 0:00:19.440 --> 0:00:23.200 recording this morning, and President Biden boost Israel's military as 0:00:23.200 --> 0:00:26.680 his Middle Eastern trip continues. Two more shark attacks took 0:00:26.680 --> 0:00:29.639 place within hours off Long Island. Plus the New York 0:00:29.640 --> 0:00:33.560 City Council demands Mayor Adams restore school budgets. I'm Michael 0:00:33.560 --> 0:00:36.720 barn More Ahead, johns fash Owen Sports, the Yankees care 0:00:36.800 --> 0:00:39.279 for barring to fit the Red the Mets one in Atlanta, 0:00:39.360 --> 0:00:45.000 The Open Championship golf underway in Scotland. That's all s 0:00:45.000 --> 0:00:48.639 Train ahead on Bloomberg day Break on Bloomberg eleven, Free 0:00:48.680 --> 0:00:53.080 on New York, Bloomberg one, Washington, d C, Bloomberg one, 0:00:53.120 --> 0:00:57.639 Those six one, Boston, Bloomberg nine sixties, San Francisco, Syrius 0:00:57.760 --> 0:01:00.880 x M one nineteen and around the world on Bloomberg 0:01:00.920 --> 0:01:08.000 Radio dot Com and via The Bloomberg Business Up. Good morning, 0:01:08.040 --> 0:01:11.360 I'm Nathan Hager and I'm Cameron Moscow. US Dock Index 0:01:11.440 --> 0:01:14.040 futures are following this morning. We're coming up to five 0:01:14.040 --> 0:01:15.880 oh one on Wall Street, and we checked the markets 0:01:15.920 --> 0:01:19.200 every fifteen minutes throughout the trading day on Bloomberg. Right now, 0:01:19.800 --> 0:01:23.160 SNP futures are down forty six points down, futures down 0:01:23.200 --> 0:01:26.880 three hundred thirty five, and NASDAG futures down one thirty one. 0:01:26.959 --> 0:01:30.160 The decks in Germany's down eight tenths of uppercent ten 0:01:30.240 --> 0:01:32.800 year treasury down nine thirty seconds, YELD two point nine 0:01:32.880 --> 0:01:35.399 six percent, and the yield on the two year at 0:01:35.400 --> 0:01:38.959 three point one and nine percent. Nathan Karen reaction is 0:01:38.959 --> 0:01:42.679 still rolling into yesterday's hot rating. On inflation, the dollar 0:01:42.840 --> 0:01:45.640 is trading at a twenty four year high against the end, 0:01:45.840 --> 0:01:49.160 and speculation is growing that the Fed's next move maybe 0:01:49.200 --> 0:01:52.080 a one percent rate hike rather than a seventy five 0:01:52.160 --> 0:01:55.360 basis point increase. We caught up with Cleveland Fed President 0:01:55.440 --> 0:01:59.760 Lauretta Mester. Certainly, the inflation reports suggests that there's no 0:02:00.000 --> 0:02:03.000 reason to say a smaller rate increase than we did 0:02:03.080 --> 0:02:06.120 last time, right because nothing moved in that direction. Cleveland 0:02:06.160 --> 0:02:08.720 Fed President Loretta Mester made those comments in an interview 0:02:08.760 --> 0:02:11.400 with Bloomberg's Kathleen Hayes. Stay tuned for more of that 0:02:11.440 --> 0:02:14.760 conversation coming up shortly here on Bloomberg Daybreak. Well, Nathan 0:02:14.800 --> 0:02:17.520 Mester is not the only FED official hinting of higher 0:02:17.600 --> 0:02:21.200 rates to come. At Lanta. FED President Raphael Bostick says, quote, 0:02:21.280 --> 0:02:24.640 everything is in play for policy action this month. Begin 0:02:24.720 --> 0:02:28.320 more from Bloomberg Shirley Pillett. His comment came after data 0:02:28.360 --> 0:02:32.560 showed that US inflation accelerated again to a fresh four 0:02:32.680 --> 0:02:37.040 decade high last month. Speaking to reporters in St. Petersburg, Florida, 0:02:37.360 --> 0:02:40.680 Bostick said the top line number is a source of 0:02:40.760 --> 0:02:44.440 concern and everything is in play. The comments add fuel 0:02:44.480 --> 0:02:46.440 to bet so the FED is more likely than not 0:02:46.800 --> 0:02:50.679 to raise interest rates by one hundred basis points when 0:02:50.720 --> 0:02:54.280 it meets later this month in New York. Charlie Pellett 0:02:54.280 --> 0:02:57.160 Bloomberg Daybreak. All right, Charlie, thank you. Coming up today, 0:02:57.200 --> 0:02:59.440 we get another reading on inflation with the release of 0:02:59.440 --> 0:03:02.000 the Produce ser Price Index for June. Here with the 0:03:02.040 --> 0:03:05.280 preview is Bloomberg's Michael McKee. Though it would seem logical 0:03:05.360 --> 0:03:08.679 the producer price index actually doesn't really lead moves in 0:03:08.760 --> 0:03:11.560 the consumer price index, and that may be a good thing. 0:03:11.760 --> 0:03:15.200 Unlike consumer prices, producer prices have been falling a little 0:03:15.240 --> 0:03:18.280 bit after reaching a peak in March. The economist consensus 0:03:18.320 --> 0:03:21.480 forecast is that continued to come down in June. But 0:03:21.600 --> 0:03:24.280 CPI surprised to the upside last month, and there's a 0:03:24.360 --> 0:03:27.280 risk at least headline PPI could do the same. Oil 0:03:27.320 --> 0:03:30.040 and gas a lead prices rose as did other commodities, 0:03:30.240 --> 0:03:32.960 pushing up the cost of goods. The unanswered question is 0:03:33.080 --> 0:03:36.800 how service prices have behaved. Watched the Trade Services index 0:03:36.840 --> 0:03:39.640 in the pp I. It's something of a proxy for margins. 0:03:39.720 --> 0:03:43.800 As earning season gets underway in the US. Michael McKee, Bloomberg, 0:03:43.880 --> 0:03:46.400 Gabriad All right, Mike Banks and speaking of earning, the 0:03:46.480 --> 0:03:49.200 season gets started this morning in earnest when big banks 0:03:49.200 --> 0:03:51.320 are poor? Do we get the details from Bloomberg? A 0:03:51.320 --> 0:03:55.680 global finance correspondention, Alle Boss, JP Morgan and Morgan Stanley 0:03:55.760 --> 0:03:59.440 kickoff earnings for the biggest US banks and recession fears 0:03:59.440 --> 0:04:02.720 are growing across the economy. The question is our provisions 0:04:02.720 --> 0:04:05.760 for loan losses going to build? Especially at JP Morgan, 0:04:06.000 --> 0:04:08.800 where not interest income is also rising due to higher 0:04:08.800 --> 0:04:11.840 interest rates. The question is how much will that offset 0:04:11.960 --> 0:04:15.840 any future pains from any potential recession ahead. I'm Shanelli 0:04:15.880 --> 0:04:19.200 basic Bloomberg Daybreak, All right, sale, thank you. As recession 0:04:19.279 --> 0:04:22.320 fears grow on Wall Street, one top tech executive says 0:04:22.400 --> 0:04:24.839 the industry will be able to weather the storm. Let's 0:04:24.880 --> 0:04:27.479 get that live from Bloomberg's Grnida Young, Good morning, Granita, 0:04:27.520 --> 0:04:31.240 Good morning Nathan. IBM CEO Arvin Krishna says he believes 0:04:31.360 --> 0:04:35.960 business technology spending will remain robust above DDP growth, even 0:04:36.000 --> 0:04:39.599 including Europe. And this is even after others in the 0:04:39.640 --> 0:04:42.440 industry have been pessimistic in the face of a potential 0:04:42.520 --> 0:04:45.720 US recession and resulting slower growth. When you look at 0:04:45.720 --> 0:04:50.520 supply chain inflation, Liabo demographics, interest rates. Technology offers you 0:04:50.560 --> 0:04:55.000 away to scale without necessarily increasing costs that are linear 0:04:55.320 --> 0:04:59.560 or the linear. IBM CEO Arevn Krishna is less optimistic 0:04:59.600 --> 0:05:03.960 about supply chain problems. He says they are a real, fundamential, 0:05:04.279 --> 0:05:07.599 fundamental issue that's going to be on going on for 0:05:07.680 --> 0:05:10.360 a couple more years. Live in New York. I'm rened 0:05:10.400 --> 0:05:12.360 a Young Bloomberg Daybreak, All right. We need to thank 0:05:12.400 --> 0:05:15.239 you about turning to politics now. President Biden most signal 0:05:15.240 --> 0:05:18.240 like continuing US commitment to Israel's defense. As part of 0:05:18.279 --> 0:05:20.440 his trip through the Middle Age, the President signs a 0:05:20.520 --> 0:05:24.279 joint declaration with Israel's new Prime Minister, extending an agreement 0:05:24.360 --> 0:05:27.640 that provides billions of dollars to the country's military. Tomorrow, 0:05:27.720 --> 0:05:32.440 Biden heads to Saudi Arabia. Democratic Congresswoman Abigail Spenberger says 0:05:32.680 --> 0:05:35.440 he'll need to project American values when he meets with 0:05:35.480 --> 0:05:38.880 Crown Prince Mohammed bin Salman. He must raise the issue 0:05:38.880 --> 0:05:44.000 of Jamal Kashoki's murder. He must continue to ensure that 0:05:44.040 --> 0:05:48.240 we have strong expectations of what our Saudi partners are 0:05:48.480 --> 0:05:50.640 or are not bringing to the table, whether they are 0:05:50.839 --> 0:05:54.719 or are not um meeting the expectations that we have 0:05:54.839 --> 0:06:00.400 in terms of the values that they um are by 0:06:00.640 --> 0:06:04.640 Congresswoman Abigail Spenberger of Virginia spoke of their Washington correspondent 0:06:04.720 --> 0:06:08.080 Joe Matthew on Bloomberg Sound On Catch the program weekdays 0:06:08.120 --> 0:06:11.160 at five pm Eastern on Bloomberg Radio. We have new 0:06:11.200 --> 0:06:13.760 developments in the battle against the pandemic. This morning, Karen 0:06:13.800 --> 0:06:16.240 the nation's top doctor says the O macron b A 0:06:16.400 --> 0:06:20.440 five variant is becoming worrisome. Bloomberg said, Baxter has the story. 0:06:20.760 --> 0:06:24.400 COVID Response Coordinator, doctor Ashe's Jaw says, it's something to 0:06:24.760 --> 0:06:28.120 very carefully watch. It is certainly the most immunovative. What 0:06:28.240 --> 0:06:31.719 we're seeing as people who are previously infected getting reinfections 0:06:31.720 --> 0:06:34.280 at high rates. People who got vaccinated, let's say last year, 0:06:34.640 --> 0:06:37.520 having a ton of breakthrough infections. So something that we're 0:06:37.640 --> 0:06:39.839 you know, obviously paying very close attention to you. Yeah. 0:06:39.960 --> 0:06:43.160 Dr Josh says mitigation tools like smart use of masks 0:06:43.200 --> 0:06:47.160 and of course vaccinations is important. He says everybody over 0:06:47.240 --> 0:06:50.920 fifty needs a second booster in San Francisco, I'm at 0:06:50.960 --> 0:06:53.960 Baxter Bloomberg daybreak, all right, and thank you. And despite 0:06:53.960 --> 0:06:57.599 COVID concerns and current economic conditions, back to school shoppers 0:06:57.800 --> 0:07:00.919 are expected to spend a record amount this year. According 0:07:00.920 --> 0:07:03.280 to a survey by Deloitte, Sales for the season are 0:07:03.320 --> 0:07:06.479 expected at total thirty four point four billion dollars. It 0:07:06.520 --> 0:07:10.320 breaks down to sixty per student, an increase of eight 0:07:10.360 --> 0:07:13.440 percent from a year earlier. Again, future is moving lower. 0:07:13.480 --> 0:07:16.400 This morning, straight ahead, your latest local headlines, plus the 0:07:16.480 --> 0:07:23.800 check of Sports, and this is Bloomberg. Thanks Karen. It's 0:07:23.800 --> 0:07:25.760 five oh seven on Wall Street. Were at seventy three 0:07:25.760 --> 0:07:29.960 degrees in Central Park. Big problems for rail commuters this morning. 0:07:30.040 --> 0:07:32.320 Michael Barr is here with that and more that's going 0:07:32.320 --> 0:07:34.480 on in New York and around the world. Good morning, Michael, 0:07:34.560 --> 0:07:37.640 Good morning Nathan. Commuters are saying, oh great, here we go. 0:07:37.880 --> 0:07:41.320 This justin New Jersey Transit has suspended service in and 0:07:41.360 --> 0:07:45.280 out of New York City. Rail service is suspended into 0:07:45.400 --> 0:07:48.640 and out of Penn Station, New York due to amtrack 0:07:48.880 --> 0:07:53.080 overhead wire issues. New Jersey Transit rail tickets and passes 0:07:53.120 --> 0:07:56.440 will be cross honored by New Jersey Transit, bus and 0:07:56.520 --> 0:08:00.760 private carriers. Path is cross honor ring at newer Penn Station, 0:08:00.920 --> 0:08:04.560 Hobo Conterminal and Penn Station, New York. It is the 0:08:04.640 --> 0:08:07.880 third shark attack in ten days on Long Island. A 0:08:07.960 --> 0:08:10.280 forty nine year old man was attacked by a shark 0:08:10.400 --> 0:08:14.360 yesterday evening, less than twelve hours after a paddle boarder 0:08:14.440 --> 0:08:18.040 was attacked at a nearby beach that morning. According to 0:08:18.080 --> 0:08:21.000 the Suffolk County Police, the man was standing waist deep 0:08:21.200 --> 0:08:24.760 in the water at Seaview Beach on Fire Island when 0:08:24.800 --> 0:08:28.120 he was bitten on his wrist around six pm. Also 0:08:28.240 --> 0:08:31.280 his leg. Earlier that morning, at year old man was 0:08:31.320 --> 0:08:34.920 bitten by a shark while paddle boarding at Smith Point Beach. 0:08:35.160 --> 0:08:39.000 Both suffered non life threatening injuries. Suffolk County Executive Steve 0:08:39.040 --> 0:08:44.880 Alone I think it is an indication, however, that what 0:08:44.920 --> 0:08:48.240 we're looking at is uh something of a new normal. 0:08:48.800 --> 0:08:52.040 Suffolk County Executive Steve Bloone says the tigers sharks are 0:08:52.080 --> 0:08:55.960 closer to the shore than they've been In New York City. 0:08:56.280 --> 0:08:59.080 The council members are calling on Mayor Eric Adams and 0:08:59.200 --> 0:09:02.760 the Department of Education not to exercise budget cuts, and 0:09:02.800 --> 0:09:05.280 a joint letter council members saying it will result in 0:09:05.320 --> 0:09:08.840 the city spending less on each child. Last month, the 0:09:08.840 --> 0:09:11.679 city Council signed off on a two fifty million dollar 0:09:11.720 --> 0:09:15.560 budget cut and Adams three city budget. Now, council members 0:09:15.600 --> 0:09:18.440 say the Atoms administration has led them by saying the 0:09:18.480 --> 0:09:22.600 cuts would be fully accounted for by declining enrollment. A 0:09:22.600 --> 0:09:25.000 new mental health clinic and the Bronx just opened its 0:09:25.000 --> 0:09:28.040 diverse Mayor Eric Adams as the short term treatment center 0:09:28.200 --> 0:09:31.240 will provide new Yorkers with mental health and substance of 0:09:31.360 --> 0:09:37.400 use issues, immediate access to services. We unfairly treated the 0:09:37.440 --> 0:09:39.840 New York City Police Department in this city in so 0:09:39.920 --> 0:09:44.240 many ways. We called on them to do everything. We 0:09:44.320 --> 0:09:47.320 called on them when someone had a gun. We called 0:09:47.400 --> 0:09:50.720 on them when someone had a cat up the tree, 0:09:50.880 --> 0:09:52.800 We called on them when someone was going through a 0:09:52.800 --> 0:09:56.559 mental health crisis. We called on them for everything and 0:09:56.559 --> 0:09:59.480 didn't realize that we had other agencies that we should have. 0:09:59.600 --> 0:10:03.080 Cord Ate it with Mayor Adams again. New Jersey Transit 0:10:03.120 --> 0:10:06.119 suspended service in and out of New York City overhead 0:10:06.160 --> 0:10:09.959 wire issues. I'm Michael barn and this is Bloomberg Nathan. 0:10:10.040 --> 0:10:16.839 Thank you, Michael. Five ten on Wall Street time for 0:10:16.840 --> 0:10:19.439 the Bloomberg Sports Update with John Sesshire Banks Nathan. The 0:10:19.520 --> 0:10:21.640 Yankees and Reds at the stadium, the Yanks trying to 0:10:21.679 --> 0:10:24.520 avoid their first four game losing to taking the season. 0:10:24.520 --> 0:10:26.599 The night did not begin well at last seven No 0:10:27.040 --> 0:10:29.679 injured most of the last three seasons, He's been so 0:10:29.760 --> 0:10:31.839 good this year, but he served up three home runs 0:10:31.840 --> 0:10:34.200 in the second inning while taking his warm up to 0:10:34.280 --> 0:10:36.640 us as in the third, he left the game headed 0:10:36.679 --> 0:10:38.160 for an m R. I on his shoulder. Yanks called 0:10:38.160 --> 0:10:41.480 behind four nothing, came back Isaiah Kiner Falapa pree run 0:10:41.520 --> 0:10:43.800 double and led five to four, trailed six five. John 0:10:43.880 --> 0:10:46.839 Carlos Stanton a game tying home run. Eighth inning. Yanks 0:10:46.800 --> 0:10:49.480 stared in the tent for get another walk off. Wins 0:10:49.559 --> 0:10:52.520 seven to six. Mets used the long ball in Atlanta, 0:10:52.880 --> 0:10:56.120 delivers and Lindoor rips it deep in the air right field. 0:10:56.440 --> 0:11:00.120 Kunia turns around, watches it fly. That was way out 0:11:00.120 --> 0:11:05.240 of here. We three run blast for Francisco Windoor. He 0:11:05.480 --> 0:11:07.840 comes through in the top of the third inning and 0:11:07.920 --> 0:11:11.360 he extends the Mets lead to four nothing. CDs had 0:11:11.360 --> 0:11:13.880 a solo shots from Marc Canada warda Eskibar. Mets be 0:11:14.040 --> 0:11:16.960 the Braves seven three. Chris Bassett got the win. Mets 0:11:16.960 --> 0:11:19.079 take the series, lead Atlanta by two and a half. 0:11:19.120 --> 0:11:22.520 They visit the Cubs tonight. Two American late teams stretched 0:11:22.520 --> 0:11:25.360 their winning streaks to at ten. The Seattle Mariners, who 0:11:25.360 --> 0:11:27.800 have gone longer than any team in all of sports 0:11:27.840 --> 0:11:31.640 without making the postseason, and the Baltimore Orioles, baseball's worst 0:11:31.679 --> 0:11:34.320 team over the last several years. The Mariners now tied 0:11:34.360 --> 0:11:36.520 for the playoffs spot the Orioles only two games behind 0:11:36.600 --> 0:11:40.439 Toronto fired manager Charlie Montoyo. The Rangers have signed free 0:11:40.440 --> 0:11:44.120 agent Vincent tro Check away from Carolina Open Championship. Golf 0:11:44.200 --> 0:11:46.960 hundred and fifty edition underway a historic st Andrew's min 0:11:47.000 --> 0:11:49.839 wou Ye stand eagle on the fourteen poll, got the 0:11:49.880 --> 0:11:52.439 four under He's got a one shot lead. John stash 0:11:52.480 --> 0:11:56.040 Award Bloomberg Sports Naphen John Thanks. SESP futures down forty 0:11:56.040 --> 0:11:59.320 two points, Sound futures down three twenty five Nassect futures 0:11:59.320 --> 0:12:03.040 lower by a hunt thirteen points. You're listening to Bloomberg 0:12:03.120 --> 0:12:09.480 Daybreak Bloomberg eleven three oh weather. Mix of sun and 0:12:09.480 --> 0:12:11.719 clouds and showers and storms developing through the day with 0:12:11.760 --> 0:12:15.120 a high near ninety degrees, sunshine near ninety tomorrow, mix 0:12:15.160 --> 0:12:17.880 of sun and clouds upright ease Saturday, right now seventy 0:12:17.880 --> 0:12:24.600 three in Central Park Markets. Headlines and breaking news twenty 0:12:24.600 --> 0:12:27.479 four hours a day at Bloomberg dot Com, the Bloomberg 0:12:27.480 --> 0:12:37.319 Business Outland at Bloomberg Quick Jade's a Bloomberg Business Flash 0:12:37.720 --> 0:12:41.320 and I'm Karin moscow Ustack Index futures are falling this morning, 0:12:41.320 --> 0:12:44.480 along with European shares and the dollar resumed its advance 0:12:44.520 --> 0:12:48.199 after high US inflation hardened expectations for more aggressive Federal 0:12:48.240 --> 0:12:51.680 Reserve monetary tightening that could trigger our recession. We checked 0:12:51.720 --> 0:12:54.160 the markets every fifteen minutes throughout the trading day on 0:12:54.160 --> 0:12:57.680 Bloomberg Guess and P futures down four points down, futures 0:12:57.720 --> 0:13:01.440 down three twenty nine and Nastack futures down on the 0:13:01.520 --> 0:13:04.480 decks in Germany's down seven tenths of upper set ten. 0:13:04.559 --> 0:13:07.199 Your treasury down six thirties seconds, held two point nine 0:13:07.240 --> 0:13:09.480 five percent. They yield on the two year three point 0:13:09.480 --> 0:13:12.720 one nine percent. NIMEX scrude oil is down two point 0:13:12.800 --> 0:13:15.240 seven percent, down two dollars sixty cents and ninety three 0:13:15.280 --> 0:13:18.240 dollars seventy two cents a barrel. And comic School there's 0:13:18.280 --> 0:13:21.720 down one point three percent. It's at seventeen thirteen fifty announced. 0:13:22.000 --> 0:13:24.520 That's a Bloomberg business flash. Now here's Michael Barrow with 0:13:24.559 --> 0:13:27.200 Moore on what's going on around the world. Michael, thank 0:13:27.240 --> 0:13:29.520 you very much, Cameron. President Joe Biden will seek to 0:13:29.520 --> 0:13:33.120 bolster co operation between the US, Israel, and other countries. 0:13:33.400 --> 0:13:36.040 During his first full day in the Middle East, his 0:13:36.160 --> 0:13:40.920 schedule today involves meetings with Israeli Priminister Here LaPete. The 0:13:41.080 --> 0:13:45.400 FDA authorized the Novovaks COVID nineteen vaccination for emergency use 0:13:45.400 --> 0:13:48.520 and adults in baseball, the Yankees beat the Reds, The 0:13:48.559 --> 0:13:51.400 Mets beat the Braves. The Nationals lost both games of 0:13:51.480 --> 0:13:54.440 a double header to the Mariners. The Orioles beat the Cobs, 0:13:54.480 --> 0:13:57.880 the Giants top the Diamondbacks. The A's lost to the Rangers. 0:13:58.240 --> 0:14:01.120 Global News twenty four hours a day on air and 0:14:01.320 --> 0:14:04.880 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:14:04.920 --> 0:14:08.760 journalists and analysts in more than one twenty countries. Michael 0:14:08.760 --> 0:14:12.240 Barr and this is Bloomberg. Thanks Michael. It's five nineteen 0:14:12.240 --> 0:14:15.240 on Wall Street Live from the Bloomberg Interactive Brokers Studios. 0:14:15.320 --> 0:14:18.800 This is Bloomberg Daybreak. The Federal Reserve has its work 0:14:18.840 --> 0:14:21.200 cut out for it when it comes to inflation. That's 0:14:21.200 --> 0:14:25.240 according to Cleveland Fed President Loretta Mester. Her comments follow 0:14:25.360 --> 0:14:29.600 yesterday's hot reading on consumer prices. Mester spoke with Bloomberg's 0:14:29.680 --> 0:14:32.680 Kathleen Hayes late yesterday about the latest CPI report and 0:14:32.720 --> 0:14:35.320 where the Fed goes from here. Let's go to part 0:14:35.320 --> 0:14:38.160 of that interview now about a week at half ago, 0:14:38.560 --> 0:14:41.400 you said that if conditions were pretty much the same 0:14:41.440 --> 0:14:44.800 as they were, then you would be on board. You 0:14:44.840 --> 0:14:48.680 would probably be supporting a seventy five basis point rate high. 0:14:49.040 --> 0:14:51.920 NAT only saw on the inflation report even higher than expected, 0:14:52.080 --> 0:14:55.640 few signs that inflation is easing up. Uh, would you 0:14:55.840 --> 0:14:59.120 be on board potentially with a one hundred basis point 0:14:59.200 --> 0:15:03.400 high July meeting? Well, Kathleen, we don't have to make 0:15:03.440 --> 0:15:06.280 that decision today, and there's more data coming out than 0:15:06.320 --> 0:15:08.480 I'm going to be very attuned to. We have retail 0:15:08.520 --> 0:15:10.800 sales coming out on Friday, and we have a very 0:15:10.800 --> 0:15:15.080 important University of Michigan report, and of course that's important 0:15:15.080 --> 0:15:18.920 because it has the in Placed Expectations Measure UM, a 0:15:18.960 --> 0:15:21.600 consumer measure in there. So you know, we have data 0:15:21.640 --> 0:15:24.360 coming out. What what I take from the report and 0:15:24.400 --> 0:15:26.880 it was uniformly bad. There was no good news in 0:15:26.920 --> 0:15:31.120 that report at all, was that inflation remains at a 0:15:31.440 --> 0:15:34.880 unacceptably high level. We at the Fed have to be 0:15:35.040 --> 0:15:38.800 very deliberate and intentional about continuing on this path of 0:15:38.920 --> 0:15:43.200 raising our interest rate until we get and see convincing 0:15:43.280 --> 0:15:47.320 evidence that inflation is turned the corner is on a 0:15:47.440 --> 0:15:51.040 downward path, and it's sustainably on a downward path, and 0:15:51.040 --> 0:15:54.000 that we just have more work to do. So you know, 0:15:54.200 --> 0:15:58.040 I will make that decision about you know, what the 0:15:58.160 --> 0:16:00.560 right number is in terms of the rate increases. But 0:16:00.600 --> 0:16:03.720 we're gonna have to continue on this path because we 0:16:03.800 --> 0:16:08.200 haven't seen UM monthly numbers coming down. You know, even 0:16:08.280 --> 0:16:12.680 the monthly numbers, UM, they are moving in the wrong directions. 0:16:12.720 --> 0:16:15.920 So we just have to be very intentional here. UM. 0:16:15.960 --> 0:16:18.320 The Beige Book came out today as well, and as 0:16:18.360 --> 0:16:22.080 you saw in that report, UM, and that's a nice 0:16:22.080 --> 0:16:25.360 report because it really shows you across the country, our 0:16:25.560 --> 0:16:32.920 business contacts and consumer contacts. There's concern about UM recessionary 0:16:33.040 --> 0:16:36.440 risk going up, But the same point in that report 0:16:36.480 --> 0:16:41.000 that I took was there's continuing to be price pressures, 0:16:41.120 --> 0:16:45.600 no alleviation there, and that some of the moderation and 0:16:45.640 --> 0:16:49.880 demand is really being driven by the fact that consumers 0:16:49.920 --> 0:16:52.720 have to pull back some of the discretionary spending because 0:16:52.840 --> 0:16:55.400 the prices of food and energy and other essentials are 0:16:55.440 --> 0:16:58.640 so hot. So let me ask you, this is a 0:16:58.720 --> 0:17:00.880 hundred basis points. If if we had asked you about 0:17:00.880 --> 0:17:03.120 a hundred basis points a couple of weeks ago, two 0:17:03.200 --> 0:17:05.159 or three months ago. I don't even think we have 0:17:05.200 --> 0:17:08.720 got to ask you, but is that something though you 0:17:08.760 --> 0:17:11.240 could see being discussed. Would you discuss it? Is it 0:17:11.359 --> 0:17:13.800 something given what we see in inflation now that is 0:17:13.880 --> 0:17:16.960 quote unquote on the table that maybe has to be 0:17:17.119 --> 0:17:20.080 under consideration because the FED has to figure out just 0:17:20.119 --> 0:17:23.520 how aggressive you have to be. Well, we're gonna have 0:17:23.640 --> 0:17:26.520 a meeting and we're gonna talk about what the appropriate 0:17:26.560 --> 0:17:30.600 path of policy is. And again, you know, we don't 0:17:30.600 --> 0:17:32.800 have to make a decision today. We're gonna take them 0:17:32.800 --> 0:17:35.399 to account all the data. But you know, we're having 0:17:35.400 --> 0:17:39.119 this conversation. The markets are having a conversation and putting 0:17:39.119 --> 0:17:41.840 their money where their mouth is in terms of where 0:17:41.880 --> 0:17:44.960 market expectations are. So we're gonna be talking about the 0:17:44.960 --> 0:17:49.600 appropriate path of policy. And I have not seen any 0:17:49.840 --> 0:17:52.960 convincing evidence that inflation is termed the corner, right. We 0:17:53.040 --> 0:17:56.879 haven't seen anything that in that new CPI report that 0:17:57.000 --> 0:17:59.840 suggest inflations turning out. And now we do know that 0:18:00.119 --> 0:18:04.640 energy prices right are have fallen compared to the prior month, 0:18:04.720 --> 0:18:07.840 So you know, there's some expectation that the next report 0:18:07.880 --> 0:18:10.439 on inflation. We might see that part going down, but 0:18:10.480 --> 0:18:13.080 on the other hand, we have shelter prices going out, 0:18:13.160 --> 0:18:17.080 so again, you know, I think it's much more The focus, 0:18:17.160 --> 0:18:18.760 I think is on the fact that we're going to 0:18:18.840 --> 0:18:21.920 have to keep moving into st rates up being very 0:18:21.960 --> 0:18:25.560 deliberate and intentional about it, right, you know, we if 0:18:26.080 --> 0:18:28.440 you know, we're moving towards a two and a half 0:18:28.440 --> 0:18:32.479 percent what with the long run neutral rate is my 0:18:32.520 --> 0:18:34.359 own belief is that we're going to need to go 0:18:34.480 --> 0:18:38.600 beyond that and will beyond that because right inflation and 0:18:38.760 --> 0:18:42.159 inflation expectations are higher than two percent now, So we're 0:18:42.160 --> 0:18:45.399 gonna have to keep moving and the pace of which 0:18:45.400 --> 0:18:48.000 we do that at and you know what any particular 0:18:48.080 --> 0:18:50.920 meaning is really going to be driven by. Are we 0:18:50.960 --> 0:18:55.600 seeing demand get into better balance with constraints supply which 0:18:55.600 --> 0:19:00.439 remains constrained in order to see that inflation it on 0:19:00.760 --> 0:19:05.280 that a sustainable downward. We have not seen that. And 0:19:05.359 --> 0:19:08.840 that was Cleveland FED President Loretta Mester speaking with Bloomberg's 0:19:08.880 --> 0:19:12.639 Kathleen Hayes on the heels of yesterday's hot Inflation reading. 0:19:12.680 --> 0:19:14.919 You can catch the full interview we have it up 0:19:14.960 --> 0:19:18.479 for you on Bloomberg dot com or on the Bloomberg terminal. 0:19:18.920 --> 0:19:23.560 Futures continue to point lower following yesterday's hot cp I 0:19:23.600 --> 0:19:26.160 print and as we look ahead to producer prices later 0:19:26.200 --> 0:19:30.040 this morning. Right now, SMP futures are down forty nine points, 0:19:30.080 --> 0:19:32.439 that's a drop of one point three percent. Down futures 0:19:32.480 --> 0:19:36.080 are lower by three fifty nine points, and NASDAC futures 0:19:36.119 --> 0:19:39.200 lower by one hundred forty three points a ten. Your 0:19:39.200 --> 0:19:42.560 treasury is down seven thirty seconds, the yield two point 0:19:42.680 --> 0:19:45.040 nine six percent, The yield on the two year three 0:19:45.600 --> 0:19:49.000 point one nine niam X screwed is down two point 0:19:49.080 --> 0:19:52.200 six percent, and ninety three dollar seventy five cents a barrel. 0:19:52.480 --> 0:19:55.240 The euro right now one point zero zero two two 0:19:55.280 --> 0:20:08.399 against the dollar. You're listening to Bloomberg Daybreak Bloomberg eleven 0:20:08.400 --> 0:20:10.639 three oh weather showers and storms developing through the day 0:20:10.680 --> 0:20:13.240 as we had near ninety degrees. Will be sunny tomorrow 0:20:13.240 --> 0:20:15.840 with a high near ninety mix of sun and clouds 0:20:15.840 --> 0:20:18.760 to start the weekend. Right now, seventy two in Central Park, 0:20:25.000 --> 0:20:29.560 broadcasting live from the Bloomberg Interactive Broker's studio in New York. 0:20:29.640 --> 0:20:34.320 Bloomberg eloving freon to Washington d C, Bloomberg to Boston, 0:20:34.440 --> 0:20:37.840 Bloomberg one O six one to San Francisco, Bloomberg nine 0:20:37.920 --> 0:20:41.159 sixty to the country Sirius XM Channel one nine and 0:20:41.240 --> 0:20:44.639 around the Blob, the Bloomberg Business app and Bloomberg Radio 0:20:44.720 --> 0:20:53.600 dot Com. This is Bloomberg Daybreak. It's five thirty on 0:20:53.640 --> 0:20:56.959 Wall Street. Good morning. I'm Nathan Hagar and I'm Karen Moscower. 0:20:57.119 --> 0:20:59.800 Just about four hours away from the open of US trading. 0:20:59.840 --> 0:21:01.280 The sketch you up to date on the news you 0:21:01.359 --> 0:21:04.080 need to know at this hour, Reactions still rolling into 0:21:04.200 --> 0:21:07.560 yesterday's hot reading on inflation. The dollar is trading at 0:21:07.600 --> 0:21:10.320 a twenty four year high against the end, and speculation 0:21:10.440 --> 0:21:13.520 is growing that the Fed's next move maybe a one 0:21:13.640 --> 0:21:17.400 percent rate hike. Cleveland FED President the Rettamester says there's 0:21:17.440 --> 0:21:19.679 a lot of work left to do to cut inflation. 0:21:20.320 --> 0:21:23.600 Job one for us is to get inflation under control. 0:21:23.680 --> 0:21:27.119 And I say that knowing that the risk of recession 0:21:27.200 --> 0:21:30.320 have on but that's part of what we're trying to do, 0:21:30.560 --> 0:21:34.719 is normalize or or moderate the man because if we 0:21:34.800 --> 0:21:37.800 don't do this, we're gonna have many more problems in 0:21:37.880 --> 0:21:41.440 the economy going forward. Cleveland FED president the Reddemester made 0:21:41.440 --> 0:21:44.479 the comments to Bloomberg's Kathleen Hayes. Catch the full interview 0:21:44.520 --> 0:21:47.480 on Bloomberg dot Com and on the Bloomberg terminal. Wellmester 0:21:47.640 --> 0:21:50.240 isn't the only one hinting at higher rate increases, Karen. 0:21:50.280 --> 0:21:54.040 Atlanta FED President Raphael Bostick says, quote everything is in 0:21:54.119 --> 0:21:57.560 play end quote for policy action. He calls yesterday's top 0:21:57.600 --> 0:22:00.520 line CPI number a source of concern. We get another 0:22:00.560 --> 0:22:02.679 reading on inflation in just a few hours with the 0:22:02.720 --> 0:22:06.000 release of the Producer Price Index. Nathan. There's also more 0:22:06.080 --> 0:22:09.240 data to digest this morning. Earning season gets underway as 0:22:09.280 --> 0:22:12.160 big banks open their books for the second quarter. Coming 0:22:12.200 --> 0:22:15.640 up today to get results from JP Morgan and Morgan Stanley, 0:22:15.840 --> 0:22:18.440 and as recessions fears grow on Wall Street. Karen, one 0:22:18.480 --> 0:22:21.399 top tech executive, says his industry will be able to 0:22:21.400 --> 0:22:24.080 weather the storm. Bloomberg. Trinity Young joins US Live with 0:22:24.119 --> 0:22:28.160 more Ranita, Good morning. Nathan, IBM CEO Arvid Krishna says 0:22:28.240 --> 0:22:33.320 he believes business technology spending will remain robust above GDP growth, 0:22:33.400 --> 0:22:36.520 including in Europe, and this is even after others in 0:22:36.520 --> 0:22:39.280 the industry. You have been pessimistic in the face of 0:22:39.280 --> 0:22:43.320 a potential US recession at resulting slower growth. When you 0:22:43.359 --> 0:22:47.959 look at supply chain inflation, liberal demographics, interest rates. Technology 0:22:48.000 --> 0:22:51.719 offers you away to scale without necessarily increasing costs that 0:22:51.800 --> 0:22:56.639 are linear or the linear. IBM CEO Arvin Krishna is 0:22:56.760 --> 0:23:00.639 less optimistic about supply chain problems. He's is they'll go 0:23:00.720 --> 0:23:03.640 on for a couple more years. Live in New York. 0:23:03.680 --> 0:23:06.040