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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.
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Speaker 1: cash and rented real estate Find them at n r I,
Speaker 1: a dot net. Bank of England officials keeping their key
Speaker 1: interest rated a record low and saying a certainty stemming
Speaker 1: from Britain's referendum on its European Union membership may delay
Speaker 1: investment decisions and curb growth. Fewer Americans and forecast filing
Speaker 1: applications for unemployment benefits. Last week, initial jobless claims climbed
Speaker 1: by seven thousand. Did you wonder at sixty five thousand?
Speaker 1: And the weekend in March twelve, US dot indise futures
Speaker 1: are falling after a rally yesterday sparked by a devilish
Speaker 1: fedow reserve as caterpillars. Profit warning reminded investors of sluggish
Speaker 1: corporate earnings growth and weakness in the global economy. We
Speaker 1: checked the markets every fifteen minutes throughout the trading day
Speaker 1: on Bloomberg SNP eveny futures down four and a half
Speaker 1: points now even the futures down thirty five nazadac e
Speaker 1: many futures down fifteen a dacks in Germany's down one
Speaker 1: point seven percent. Ten your treasury of five thirty seconds,
Speaker 1: that yield one point eight nine percent yield on the
Speaker 1: two year point eight five percent. No, I'm x screwed.
Speaker 1: Oil up one and a half percent, or fifty eight
Speaker 1: cents to thirty nine O two A barrel comes gold
Speaker 1: up three percent or thirty six dollars fifty cents to
Speaker 1: twelve sixty six thirty in ounce. The euro and dollar
Speaker 1: twelve ninety four. The end one eleven point seven two.
Speaker 1: And that's a Bloomberg business flash, Tom and Mike Cabaska,
Speaker 1: Thank you very much. It is on Wall Street. The
Speaker 1: following is from Bloomberg View. Opinions and commentary from Bloomberg columnists.
Speaker 1: I'm Jonathan Bernstein, a columnist for Bloomberg View. Barack Obama's
Speaker 1: choice for the Supreme Court is a compromise twice over.
Speaker 1: Merrick Garland is a moderate, and he's sixty three years old.
Speaker 1: Republicans will regard him as a radical liberal anyway. Keep
Speaker 1: in mind, however, that they also consider Chief Justice John Roberts,
Speaker 1: a liberal trader. Republicans could face Hillary Clinton victory November
Speaker 1: and a Democratic majority in the next Senate, giving the
Speaker 1: new president a chance to pick a younger and more
Speaker 1: liberal justice. They also correctly believe Donald Trump would be
Speaker 1: entirely unreliable on Supreme Court nominations. But Senate Republicans care
Speaker 1: more about their own electoral consequences in what do they
Speaker 1: fear most The possibility of losing swing voters in November
Speaker 1: or the chance that a more die hard conservative will
Speaker 1: challenge them in their own Republican primaries. If Obama and
Speaker 1: the Democrats want a normal confirmation battle, they'll have to
Speaker 1: convince Republican senators that the unprecedented blockade has real costs
Speaker 1: in November. I'm Jonathan Bernstein. For more of you, please
Speaker 1: go to Bloomberg View dot com or if you go
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Speaker 1: commentaries can be heard hourly weekdays here on Bloomberg Radio.
Speaker 1: Chris Choke can be heard for the next few minutes
Speaker 1: with me here on Bloomberg Radio. He's the chief financial
Speaker 1: ecommist at Bank of Tokyo Mitsubishi. We're talking about the
Speaker 1: FED decision yesterday and the FED to switch in focus
Speaker 1: to what's going on around the world. Would you say, Chris,
Speaker 1: given the fed's forecast at least what they laid out
Speaker 1: in December and barely changed yesterday, that you could, if
Speaker 1: that were your soul criteria, justify a rate move either
Speaker 1: yesterday or within the next couple of meetings. Yeah, that
Speaker 1: was interesting. When they tried at the press conference, they
Speaker 1: tried to nail her down on just you know, why
Speaker 1: are you going just two rate hikes this year now
Speaker 1: instead of four back in December? And as you point out,
Speaker 1: she said, one thing was the world economic outlook and
Speaker 1: the other thing was credit market spreads. But you know,
Speaker 1: it wasn't really it wasn't very sad factory her explanation
Speaker 1: of why the change. I mean, if you look at
Speaker 1: the world economic growth outlook, Uh, the i m F
Speaker 1: only lowered GDP for the world in two thousand and
Speaker 1: sixteen by by two tenths. In January right versus October
Speaker 1: last year, it went down from three point six to
Speaker 1: three point four. I mean, that's you know, the wheels
Speaker 1: aren't coming off the bus here. She said. There could
Speaker 1: also even be ironically in the in the questioning, she
Speaker 1: said there could be an upgraded world economic growth given
Speaker 1: the stimulus from China and the Bank of Japan. So
Speaker 1: really really important. There's a distinction between gloom and doom
Speaker 1: and we're going down, And Chris, you have fought that
Speaker 1: mightily throughout the crisis. And a statis Mike of what
Speaker 1: would you say, Mike mcke run rate? Run rate two
Speaker 1: point two runway and Chris, the policy decision that that
Speaker 1: run rate is unacceptable? Is that where we are? Yeah, Well,
Speaker 1: I don't know. I mean, if you know, for the
Speaker 1: longest time, the Fed said they needed to be assured
Speaker 1: in order to be assured that the labor market would improve,
Speaker 1: they wanted three GDP growth. Uh, now they've come down
Speaker 1: to at least she's come down to saying now that
Speaker 1: two GDP is strong enough and the economy is at
Speaker 1: full employment. I don't know. It's it's uh, their caution
Speaker 1: and the uncertainty and the risks they point to. Um,
Speaker 1: it's just well, I don't know. I mean, when you
Speaker 1: look at the other central banks, certainly they all talked
Speaker 1: to one another, I mean, but they also every central bank,
Speaker 1: I guess every central bank many of these countries that
Speaker 1: are still stimulating their economy. Of Japan and the UK,
Speaker 1: the unemployment rate has come down to very low levels.
Speaker 1: All those job losses from the global recession in two
Speaker 1: thousand and nine, they've evaporated, and yet they haven't normalized rates.
Speaker 1: So it's not just US. Japan is still going pushing
Speaker 1: their economy. And so as you what's what's the quality
Speaker 1: of inflation now and does it impute into a higher
Speaker 1: wage growth? Well, that's uh, we can't really answer that.
Speaker 1: I had a couple of stories on on wages. I mean,
Speaker 1: the crazy thing is that wages are going what two
Speaker 1: percent now, They're only gonna go four percent over looking
Speaker 1: over the past five years. I mean, is the public
Speaker 1: going to be satisfied with a four percent wage rate
Speaker 1: if we ever get there? I don't think so. It
Speaker 1: sounds to me is that the electorate's a little bit unhappy,
Speaker 1: uh generally. But I think you can say from this
Speaker 1: point forward, all the economics can tell you is that
Speaker 1: once the unemployment rate dips down below five percent, that
Speaker 1: wages should pick up. Oh, and you have to wait
Speaker 1: for it. You know, it could be eighteen months, two
Speaker 1: years from now. But this is the period over the
Speaker 1: next two years we should be looking for for more wages. Uh.
Speaker 1: Jennet Yellen seemed yesterday to dismiss the idea that the
Speaker 1: inflation we've seen in at least in the CPI yesterday.
Speaker 1: Uh and and for the previous two months, it means anything.
Speaker 1: I was shot that right. I mean they say they're
Speaker 1: data dependent. If you're not, it's one thing to ignore
Speaker 1: CPI inflation because if they want to be lawyers, they
Speaker 1: technically look at PC inflation. Then you get the core
Speaker 1: PC inflation going to one point seven and she's not
Speaker 1: sure it's gonna stick. How this is, Mike, This is
Speaker 1: like Dr Phil, except it's Dr Mike therapy for Chris rupty.
Speaker 1: Chris is so upset. I want to I want to
Speaker 1: talk about I need a comforting voice. I don't understand.
Speaker 1: I've lost touch with what this officially state that the
Speaker 1: interdaate chart of the two year old folks is going
Speaker 1: round trip. For those of you who have pulled over
Speaker 1: to the size of the side of the road worldwide
Speaker 1: and nationwide, Mike, please explain why the two year yield
Speaker 1: has gone round trip. We've gone nine basis points lower
Speaker 1: yield and spiked up higher yield. I don't want to
Speaker 1: go out Chris rupty on you, but I don't know.
Speaker 1: I didn't say I didn't know you will. Clearly you're
Speaker 1: making bets on the on where the Fed fund tradings
Speaker 1: or whenever they're using these days is going to end up.
Speaker 1: But high frequency trading, that's what we should blame it on. Well,
Speaker 1: there's a lot of that going around as well. Did
Speaker 1: the do the markets tell you anything about what's going on?
Speaker 1: Or is everything broken there? So that's not a good
Speaker 1: clue either. Yeah, I I really do think again, not
Speaker 1: to beat a dead horse on this, Yeah, I think
Speaker 1: the markets are very dysfunctional here, and it's it's basically
Speaker 1: due to all this enormous corporate bond issues we see,
Speaker 1: you know part of it. You know, we used to think,
Speaker 1: you know, get rates down so companies will borrow more
Speaker 1: and do more capex. Now they're just doing, uh these
Speaker 1: bond issues to buy back shares, do these equity buy backs.
Speaker 1: So uh, yeah, that I think the markets a little
Speaker 1: bit dysfunctional here. But you're right, they'll curve flattening. Why
Speaker 1: would they, you curb, be flattening here unless they're looking
Speaker 1: for fed tightening. We have to leave it there. Thank
Speaker 1: you so much. The Bank of Tokyo mr BC just brilliant. Uh,
Speaker 1: is we provide therapy to all uh this morning. We
Speaker 1: need to do a shout out my greeting good teams
Speaker 1: from HSBC and Scotia Bank this morning as they come
Speaker 1: to visit Bloomberg and visit Bloomberg surveillance particularly shot at
Speaker 1: the HSBC. Steve Major was just brilliant, yes this morning,
Speaker 1: providing forward nuance on a structural almost a Gary Showing
Speaker 1: like call for low rates which was a bombshell eighteen
Speaker 1: months ago, twelve months ago maybe and now really providing
Speaker 1: some new nuance to it is central bankers adapt and adjust.
Speaker 1: Its great to see HSBC and and from Toronto Scotia
Speaker 1: Banking as well. They gave us some brilliant work about
Speaker 1: as Steve Rattner and I were talking about Canada. Of course,
Speaker 1: we've got the interview with Justin Trude coming up in
Speaker 1: yes a few moments here on Bloomberg Radio. But given
Speaker 1: what Caroline Hyde was saying about how worried people are
Speaker 1: in England about Brexit and how worried people are in
Speaker 1: the United States about Trump presidency, chronical get very crowded.
Speaker 1: If all the people who are threatening to move to
Speaker 1: Canada over one thing or another do so, it could
Speaker 1: be hard to find a place to live. We said
Speaker 1: good morning to Dennis Gartman, unsure which golf course he's
Speaker 1: on this morning. Dennis Gartman making news three or four
Speaker 1: weeks ago here on surveillance, Gartman announcing he would not
Speaker 1: move to Canada. That was important news. I have a
Speaker 1: surprise for Dennis. There's a snowstorm coming this weekend on
Speaker 1: the East coast, so really, best go south. I did
Speaker 1: not know that real people do. Tracy Alloway just you know,
Speaker 1: cluing me. I saw this last night and she's all
Speaker 1: over it. She's our our weather geek around here too.
Speaker 1: Very good. Well, if it's a Sunday, it's important get
Speaker 1: in trouble. Well, we'll get coverage for Bloomberg t Boston,
Speaker 1: Rob Carollin giving us weather perspective. Perhaps we'll see that
Speaker 1: Friday and on into Monday. Right now, justin Trudeau next
Speaker 1: Bloomberg surveillance