WEBVTT - Rupkey: U.S. wages will pick up

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash and I'm Karen Moscow.

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<v Speaker 1>This updates brought to you by National Realty Returns on

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<v Speaker 1>cash and rented real estate Find them at n r I,

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<v Speaker 1>a dot net. Bank of England officials keeping their key

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<v Speaker 1>interest rated a record low and saying a certainty stemming

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<v Speaker 1>investment decisions and curb growth. Fewer Americans and forecast filing

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<v Speaker 1>applications for unemployment benefits. Last week, initial jobless claims climbed

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<v Speaker 1>by seven thousand. Did you wonder at sixty five thousand?

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<v Speaker 1>And the weekend in March twelve, US dot indise futures

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<v Speaker 1>are falling after a rally yesterday sparked by a devilish

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<v Speaker 1>fedow reserve as caterpillars. Profit warning reminded investors of sluggish

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<v Speaker 1>corporate earnings growth and weakness in the global economy. We

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<v Speaker 1>checked the markets every fifteen minutes throughout the trading day

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<v Speaker 1>on Bloomberg SNP eveny futures down four and a half

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<v Speaker 1>points now even the futures down thirty five nazadac e

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<v Speaker 1>many futures down fifteen a dacks in Germany's down one

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<v Speaker 1>point seven percent. Ten your treasury of five thirty seconds,

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<v Speaker 1>that yield one point eight nine percent yield on the

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<v Speaker 1>two year point eight five percent. No, I'm x screwed.

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<v Speaker 1>Oil up one and a half percent, or fifty eight

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<v Speaker 1>cents to thirty nine O two A barrel comes gold

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<v Speaker 1>up three percent or thirty six dollars fifty cents to

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<v Speaker 1>twelve sixty six thirty in ounce. The euro and dollar

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<v Speaker 1>twelve ninety four. The end one eleven point seven two.

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<v Speaker 1>And that's a Bloomberg business flash, Tom and Mike Cabaska,

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<v Speaker 1>Thank you very much. It is on Wall Street. The

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<v Speaker 1>following is from Bloomberg View. Opinions and commentary from Bloomberg columnists.

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<v Speaker 1>I'm Jonathan Bernstein, a columnist for Bloomberg View. Barack Obama's

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<v Speaker 1>choice for the Supreme Court is a compromise twice over.

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<v Speaker 1>Merrick Garland is a moderate, and he's sixty three years old.

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<v Speaker 1>Republicans will regard him as a radical liberal anyway. Keep

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<v Speaker 1>in mind, however, that they also consider Chief Justice John Roberts,

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<v Speaker 1>a liberal trader. Republicans could face Hillary Clinton victory November

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<v Speaker 1>and a Democratic majority in the next Senate, giving the

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<v Speaker 1>new president a chance to pick a younger and more

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<v Speaker 1>liberal justice. They also correctly believe Donald Trump would be

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<v Speaker 1>entirely unreliable on Supreme Court nominations. But Senate Republicans care

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<v Speaker 1>more about their own electoral consequences in what do they

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<v Speaker 1>fear most The possibility of losing swing voters in November

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<v Speaker 1>or the chance that a more die hard conservative will

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<v Speaker 1>challenge them in their own Republican primaries. If Obama and

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<v Speaker 1>the Democrats want a normal confirmation battle, they'll have to

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<v Speaker 1>convince Republican senators that the unprecedented blockade has real costs

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<v Speaker 1>in November. I'm Jonathan Bernstein. For more of you, please

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<v Speaker 1>go to Bloomberg View dot com or if you go

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<v Speaker 1>on the Bloomberg terminal. This has been Bloomberg View. Bloomberg

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<v Speaker 1>commentaries can be heard hourly weekdays here on Bloomberg Radio.

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<v Speaker 1>Chris Choke can be heard for the next few minutes

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<v Speaker 1>with me here on Bloomberg Radio. He's the chief financial

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<v Speaker 1>ecommist at Bank of Tokyo Mitsubishi. We're talking about the

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<v Speaker 1>FED decision yesterday and the FED to switch in focus

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<v Speaker 1>to what's going on around the world. Would you say, Chris,

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<v Speaker 1>given the fed's forecast at least what they laid out

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<v Speaker 1>in December and barely changed yesterday, that you could, if

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<v Speaker 1>that were your soul criteria, justify a rate move either

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<v Speaker 1>yesterday or within the next couple of meetings. Yeah, that

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<v Speaker 1>was interesting. When they tried at the press conference, they

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<v Speaker 1>tried to nail her down on just you know, why

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<v Speaker 1>are you going just two rate hikes this year now

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<v Speaker 1>instead of four back in December? And as you point out,

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<v Speaker 1>she said, one thing was the world economic outlook and

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<v Speaker 1>the other thing was credit market spreads. But you know,

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<v Speaker 1>it wasn't really it wasn't very sad factory her explanation

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<v Speaker 1>of why the change. I mean, if you look at

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<v Speaker 1>the world economic growth outlook, Uh, the i m F

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<v Speaker 1>only lowered GDP for the world in two thousand and

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<v Speaker 1>sixteen by by two tenths. In January right versus October

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<v Speaker 1>last year, it went down from three point six to

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<v Speaker 1>three point four. I mean, that's you know, the wheels

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<v Speaker 1>aren't coming off the bus here. She said. There could

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<v Speaker 1>also even be ironically in the in the questioning, she

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<v Speaker 1>said there could be an upgraded world economic growth given

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<v Speaker 1>the stimulus from China and the Bank of Japan. So

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<v Speaker 1>really really important. There's a distinction between gloom and doom

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<v Speaker 1>and we're going down, And Chris, you have fought that

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<v Speaker 1>mightily throughout the crisis. And a statis Mike of what

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<v Speaker 1>would you say, Mike mcke run rate? Run rate two

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<v Speaker 1>point two runway and Chris, the policy decision that that

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<v Speaker 1>run rate is unacceptable? Is that where we are? Yeah, Well,

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<v Speaker 1>I don't know. I mean, if you know, for the

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<v Speaker 1>longest time, the Fed said they needed to be assured

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<v Speaker 1>in order to be assured that the labor market would improve,

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<v Speaker 1>they wanted three GDP growth. Uh, now they've come down

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<v Speaker 1>to at least she's come down to saying now that

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<v Speaker 1>two GDP is strong enough and the economy is at

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<v Speaker 1>full employment. I don't know. It's it's uh, their caution

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<v Speaker 1>and the uncertainty and the risks they point to. Um,

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<v Speaker 1>it's just well, I don't know. I mean, when you

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<v Speaker 1>look at the other central banks, certainly they all talked

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<v Speaker 1>to one another, I mean, but they also every central bank,

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<v Speaker 1>I guess every central bank many of these countries that

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<v Speaker 1>are still stimulating their economy. Of Japan and the UK,

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<v Speaker 1>the unemployment rate has come down to very low levels.

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<v Speaker 1>All those job losses from the global recession in two

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<v Speaker 1>thousand and nine, they've evaporated, and yet they haven't normalized rates.

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<v Speaker 1>So it's not just US. Japan is still going pushing

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<v Speaker 1>their economy. And so as you what's what's the quality

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<v Speaker 1>of inflation now and does it impute into a higher

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<v Speaker 1>wage growth? Well, that's uh, we can't really answer that.

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<v Speaker 1>I had a couple of stories on on wages. I mean,

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<v Speaker 1>the crazy thing is that wages are going what two

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<v Speaker 1>percent now, They're only gonna go four percent over looking

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<v Speaker 1>over the past five years. I mean, is the public

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<v Speaker 1>going to be satisfied with a four percent wage rate

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<v Speaker 1>if we ever get there? I don't think so. It

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<v Speaker 1>sounds to me is that the electorate's a little bit unhappy,

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<v Speaker 1>uh generally. But I think you can say from this

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<v Speaker 1>point forward, all the economics can tell you is that

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<v Speaker 1>once the unemployment rate dips down below five percent, that

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<v Speaker 1>wages should pick up. Oh, and you have to wait

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<v Speaker 1>for it. You know, it could be eighteen months, two

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<v Speaker 1>years from now. But this is the period over the

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<v Speaker 1>next two years we should be looking for for more wages. Uh.

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<v Speaker 1>Jennet Yellen seemed yesterday to dismiss the idea that the

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<v Speaker 1>inflation we've seen in at least in the CPI yesterday.

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<v Speaker 1>Uh and and for the previous two months, it means anything.

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<v Speaker 1>I was shot that right. I mean they say they're

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<v Speaker 1>data dependent. If you're not, it's one thing to ignore

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<v Speaker 1>CPI inflation because if they want to be lawyers, they

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<v Speaker 1>technically look at PC inflation. Then you get the core

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<v Speaker 1>PC inflation going to one point seven and she's not

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<v Speaker 1>sure it's gonna stick. How this is, Mike, This is

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<v Speaker 1>like Dr Phil, except it's Dr Mike therapy for Chris rupty.

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<v Speaker 1>Chris is so upset. I want to I want to

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<v Speaker 1>talk about I need a comforting voice. I don't understand.

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<v Speaker 1>I've lost touch with what this officially state that the

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<v Speaker 1>interdaate chart of the two year old folks is going

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<v Speaker 1>round trip. For those of you who have pulled over

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<v Speaker 1>to the size of the side of the road worldwide

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<v Speaker 1>and nationwide, Mike, please explain why the two year yield

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<v Speaker 1>has gone round trip. We've gone nine basis points lower

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<v Speaker 1>yield and spiked up higher yield. I don't want to

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<v Speaker 1>go out Chris rupty on you, but I don't know.

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<v Speaker 1>I didn't say I didn't know you will. Clearly you're

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<v Speaker 1>making bets on the on where the Fed fund tradings

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<v Speaker 1>or whenever they're using these days is going to end up.

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<v Speaker 1>But high frequency trading, that's what we should blame it on. Well,

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<v Speaker 1>there's a lot of that going around as well. Did

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<v Speaker 1>the do the markets tell you anything about what's going on?

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<v Speaker 1>Or is everything broken there? So that's not a good

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<v Speaker 1>clue either. Yeah, I I really do think again, not

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<v Speaker 1>to beat a dead horse on this, Yeah, I think

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<v Speaker 1>the markets are very dysfunctional here, and it's it's basically

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<v Speaker 1>due to all this enormous corporate bond issues we see,

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<v Speaker 1>you know part of it. You know, we used to think,

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<v Speaker 1>you know, get rates down so companies will borrow more

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<v Speaker 1>and do more capex. Now they're just doing, uh these

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<v Speaker 1>bond issues to buy back shares, do these equity buy backs.

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<v Speaker 1>So uh, yeah, that I think the markets a little

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<v Speaker 1>bit dysfunctional here. But you're right, they'll curve flattening. Why

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<v Speaker 1>would they, you curb, be flattening here unless they're looking

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<v Speaker 1>for fed tightening. We have to leave it there. Thank

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<v Speaker 1>you so much. The Bank of Tokyo mr BC just brilliant. Uh,

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<v Speaker 1>is we provide therapy to all uh this morning. We

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<v Speaker 1>need to do a shout out my greeting good teams

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<v Speaker 1>from HSBC and Scotia Bank this morning as they come

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<v Speaker 1>to visit Bloomberg and visit Bloomberg surveillance particularly shot at

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<v Speaker 1>the HSBC. Steve Major was just brilliant, yes this morning,

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<v Speaker 1>providing forward nuance on a structural almost a Gary Showing

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<v Speaker 1>like call for low rates which was a bombshell eighteen

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<v Speaker 1>months ago, twelve months ago maybe and now really providing

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<v Speaker 1>some new nuance to it is central bankers adapt and adjust.

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<v Speaker 1>Its great to see HSBC and and from Toronto Scotia

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<v Speaker 1>Banking as well. They gave us some brilliant work about

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<v Speaker 1>as Steve Rattner and I were talking about Canada. Of course,

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<v Speaker 1>we've got the interview with Justin Trude coming up in

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<v Speaker 1>yes a few moments here on Bloomberg Radio. But given

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<v Speaker 1>what Caroline Hyde was saying about how worried people are

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<v Speaker 1>in England about Brexit and how worried people are in

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<v Speaker 1>the United States about Trump presidency, chronical get very crowded.

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<v Speaker 1>If all the people who are threatening to move to

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<v Speaker 1>Canada over one thing or another do so, it could

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<v Speaker 1>be hard to find a place to live. We said

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<v Speaker 1>good morning to Dennis Gartman, unsure which golf course he's

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<v Speaker 1>on this morning. Dennis Gartman making news three or four

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<v Speaker 1>weeks ago here on surveillance, Gartman announcing he would not

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<v Speaker 1>move to Canada. That was important news. I have a

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<v Speaker 1>surprise for Dennis. There's a snowstorm coming this weekend on

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<v Speaker 1>the East coast, so really, best go south. I did

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<v Speaker 1>not know that real people do. Tracy Alloway just you know,

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<v Speaker 1>cluing me. I saw this last night and she's all

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<v Speaker 1>over it. She's our our weather geek around here too.

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<v Speaker 1>Very good. Well, if it's a Sunday, it's important get

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<v Speaker 1>in trouble. Well, we'll get coverage for Bloomberg t Boston,

0:11:03.440 --> 0:11:06.800
<v Speaker 1>Rob Carollin giving us weather perspective. Perhaps we'll see that

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<v Speaker 1>Friday and on into Monday. Right now, justin Trudeau next

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<v Speaker 1>Bloomberg surveillance