WEBVTT - Bloomberg Daybreak: July 26, 2022 - Hour 2 (Radio) 0:00:01.520 --> 0:00:04.880 Life from the Bloomberg Interactive Burger Studios. This is is Bloomberg 0:00:04.960 --> 0:00:08.720 Daybreak for Tuesday, July twenty six two. Coming up this hour, 0:00:08.960 --> 0:00:12.000 Former President Trump returns to d C as talks of 0:00:12.039 --> 0:00:14.760 another run for office heat up. The FED prepares another 0:00:14.800 --> 0:00:17.760 rate high as the Central Banks policy meeting gets underway. 0:00:17.840 --> 0:00:21.439 Walmart shares sank after the company lowers its forecast, and 0:00:21.520 --> 0:00:24.919 candidates in the UK make their case to replace Boris Johnson. 0:00:25.000 --> 0:00:27.560 New York's mt A says it may take thirteen years 0:00:27.560 --> 0:00:30.560 to match pre COVID ridership. Let's talk of speaker Belosi 0:00:30.640 --> 0:00:34.160 possibly heading to Taiwan has made China furious. I'm Michael 0:00:34.159 --> 0:00:36.800 barn More, I'm Jim Stagower. In sports, the Mets and 0:00:36.920 --> 0:00:39.520 Yank You both in first place, begin a two game 0:00:39.600 --> 0:00:45.600 Subway series tonight at City Field. That's All's train ahead 0:00:45.680 --> 0:00:49.240 on Bloomberg day Break on Bloomberg eleven three on New York, 0:00:49.440 --> 0:00:54.120 Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:54.400 --> 0:00:58.840 Bloomberg nine sixties and Francisco Sirius XM one nine team 0:00:59.040 --> 0:01:01.960 and around the world long Bloomberg Radio dot Com and 0:01:02.120 --> 0:01:08.640 via the Bloomberg Business app. Good morning. I'm Nathan Hagger 0:01:08.959 --> 0:01:11.720 and I'm Karen Moscow and US DOT index futures are 0:01:11.800 --> 0:01:13.959 lower this morning. We are coming up to a six 0:01:13.959 --> 0:01:15.880 oh one on Wall Street. I'm mean check the markets 0:01:15.920 --> 0:01:18.680 every fifteen minutes throughout the trading day. On Bloomberg, U 0:01:18.720 --> 0:01:20.840 S and P Future is down about ten points down 0:01:20.840 --> 0:01:23.600 Future is down a hundred twenty nine and NASDAG Future 0:01:23.680 --> 0:01:26.000 is down about thirty. The ten year treasury up six 0:01:26.000 --> 0:01:29.160 thirty seconds. He had two points seven seven percent, and 0:01:29.240 --> 0:01:31.720 they yield on the two year at three point one 0:01:31.800 --> 0:01:34.800 percent and the euro one point zero one seven three 0:01:34.840 --> 0:01:37.240 against the dollar. Nathan, Karen, We'll get back to markets 0:01:37.240 --> 0:01:39.520 in a moment, but we begin in the nation's capital, 0:01:39.520 --> 0:01:42.720 where former President Donald Trump returns for the first time 0:01:42.800 --> 0:01:45.840 since leaving office. Amy Morris has details from our Bloomberg 0:01:46.480 --> 0:01:49.600 newsroom in Washington. Donald Trump will be back inside the 0:01:49.600 --> 0:01:53.440 Beltway as Republican rivals maneuver for a possible primary challenge 0:01:53.600 --> 0:01:57.360 and lawmakers probe his culpability for the January six insurrection. 0:01:57.640 --> 0:02:00.360 He'll deliver the keynote address at the America First Agenda 0:02:00.440 --> 0:02:03.639 Summit held by the conservative think tank The America First 0:02:03.680 --> 0:02:07.320 Policy institute launched by some former Trump One House advisers. 0:02:07.680 --> 0:02:09.519 He's not expected to announce a run for the White 0:02:09.560 --> 0:02:12.720 House during today's speech, which will be his highest profile 0:02:12.800 --> 0:02:17.120 speech since leaving office in Washington. I'm anymore as Bloomberg daybreak. 0:02:17.200 --> 0:02:19.240 All right, Amy, thank you, but we stay in Washington, 0:02:19.320 --> 0:02:22.000 where the Federal Reserves two day meeting kicks off today. 0:02:22.040 --> 0:02:24.239 The Central Bank is set to raise rates again. That's 0:02:24.240 --> 0:02:27.239 just by GDP numbers due out Thursday, which could show 0:02:27.280 --> 0:02:31.600 the US contracted and back to back quarters, signaling a recession. However, 0:02:31.639 --> 0:02:35.240 Moody Chief economist Marksandy tells us there are not recession 0:02:35.360 --> 0:02:37.480 signs at the moment. When you have a lot of jobs, 0:02:37.520 --> 0:02:39.680 you have low lay offering, a lot of consumer spending. 0:02:39.760 --> 0:02:43.320 Income growth is strong. That's not consistent with a recession. 0:02:43.440 --> 0:02:46.800 This is not a recession. Moody Chief Economist Marksany says 0:02:46.840 --> 0:02:49.480 if the economy does contract, it will likely be in 0:02:49.520 --> 0:02:52.160 the next six months. He spoke at our Washington corresponded 0:02:52.240 --> 0:02:55.200 Joe Matthew on Bloomberg's sound on Catch the Program weekdays 0:02:55.200 --> 0:02:58.280 at five pm Eastern on Bloomberg Radio, Karen Futures and 0:02:58.360 --> 0:03:01.079 Laura ahead of the Fed meeting. Lisa Ericson, senior vice 0:03:01.080 --> 0:03:04.440 president with US Bank, is preaching caution. We are modestly 0:03:04.520 --> 0:03:08.920 cautious advising our clients to move all other things being equal, 0:03:08.960 --> 0:03:13.239 away from equity and more to quality fixed income, where 0:03:13.280 --> 0:03:16.240 again historically they've been able to hold up in times 0:03:16.320 --> 0:03:19.440 of market volatility. US Banks Lisa Rickson says the US 0:03:19.480 --> 0:03:22.880 will narrowly avoid a recession as inflation begins to receive well. 0:03:22.960 --> 0:03:25.320 Nathan turning to oil now, crude is advancing for a 0:03:25.400 --> 0:03:28.360 second session. Signs of a tide market are offsetting concerns 0:03:28.360 --> 0:03:31.280 about an economic slowdown. And checking prices now nim Ex 0:03:31.320 --> 0:03:33.720 screwed oil is up two percent of a dollar ninety 0:03:33.720 --> 0:03:36.360 and ninety eight dollars sixty two cents and barrel brent 0:03:36.480 --> 0:03:39.720 at one point seven a hundred six dollars nine six cents. 0:03:39.920 --> 0:03:43.600 We're also seeing volatility and overseas energy markets. Russia plans 0:03:43.600 --> 0:03:46.640 to curb natural gas flows on the Nordstream pipeline, and 0:03:46.640 --> 0:03:49.600 that's joelding energy markets in Europe and the UK. Karen 0:03:49.640 --> 0:03:52.600 candidates her Prime minister, faced off in another primetime debate 0:03:52.720 --> 0:03:55.680 last night. Liz Trust and Rischi soon actrifying to replace 0:03:55.720 --> 0:03:58.560 Boris Johnson. Bloomberg's You and Potts joins us from London 0:03:58.600 --> 0:04:00.600 with more good Morning You and give warning Nathan and 0:04:00.680 --> 0:04:03.520 Karen strong stuff from the final two candidates in the 0:04:03.520 --> 0:04:07.200 Conservative Party leadership race. In a TV debate, Foreign Secretary 0:04:07.280 --> 0:04:09.960 Liz Trust warn that tax rises would send the UK 0:04:10.200 --> 0:04:14.320 into a recession. Everybody thinks the putting up taxes at 0:04:14.360 --> 0:04:17.760 this moment is going to hurt the economy. You can't 0:04:17.760 --> 0:04:22.080 put up taxes and get gross If we follow Riscie's plans, 0:04:22.480 --> 0:04:26.520 we are headed for. That was Foreign Sectuary Liz Trust. There. Meanwhile, 0:04:26.560 --> 0:04:29.799 former Chancellor Riscie Sunac calam that his opponent's tax plans 0:04:29.800 --> 0:04:33.480 would push up inflation and mortgages. The proposals would mean 0:04:33.520 --> 0:04:36.880 that we get the short term sugar rush of unfunded 0:04:36.880 --> 0:04:39.599 borrowed tax cars, but that would be followed by the 0:04:39.720 --> 0:04:42.760 crash of higher prices and higher mortgage rates. That was 0:04:42.800 --> 0:04:45.520 former Chancellor Rishi Sunach. Whoever wins the six week long 0:04:45.560 --> 0:04:48.159 contest will end up as the next British Prime minister. 0:04:48.279 --> 0:04:50.320 But with a tax like these, it's easy to forget 0:04:50.360 --> 0:04:53.239 they're both members of the same political party in London. 0:04:53.279 --> 0:04:55.360 I'm you in parts in both Daybreak You and thank 0:04:55.360 --> 0:04:57.360 you Beck. Here in the US, corporate earnings are in 0:04:57.400 --> 0:05:00.320 focus today and shares of Walmart are down made and 0:05:00.320 --> 0:05:02.880 a half percent in early training after the company lowered 0:05:02.920 --> 0:05:05.440 its forecast for the second quarter. Bloomberg's you need a 0:05:05.440 --> 0:05:07.320 Young joins us Live with the details or we need 0:05:07.360 --> 0:05:10.200 a good morning, Good Morning care in analysts say Walmart's 0:05:10.240 --> 0:05:12.880 warning gives more insight into the health of the U. 0:05:13.000 --> 0:05:16.200 S consumer that's likely to signal more pain ahead for 0:05:16.279 --> 0:05:19.440 retail stocks as they take on food and gas inflation. 0:05:19.880 --> 0:05:23.119 Morgan Stanley cut its price target for Walmart and says 0:05:23.160 --> 0:05:26.159 it challenges the broker's view of the retail giant as 0:05:26.160 --> 0:05:29.880 a safe haven play. City analysts didn't think Walmart would 0:05:29.920 --> 0:05:32.359 be hit as much as others, and say the news 0:05:32.400 --> 0:05:35.880 is as signed that marginally higher income consumers are feeling 0:05:35.920 --> 0:05:39.400 the pitch from inflation, But Piper Sandler says it's too 0:05:39.400 --> 0:05:42.400 early to take a more constructive view on Walmart, so 0:05:42.440 --> 0:05:45.640 analysts there are waiting on a more broad earnings reset 0:05:45.760 --> 0:05:48.800 industry wide Live in New York, I'm really need a 0:05:48.800 --> 0:05:51.680 young Bloomberg, Daybreak need a thanks Back. In Europe, UBS 0:05:51.760 --> 0:05:54.200 reported week er than expected profit for the second quarter. 0:05:54.279 --> 0:05:57.120 The global market sell off kept wealthy clients on the sidelines, 0:05:57.160 --> 0:05:59.920 as the Swiss Bank saw outflows of twelve billion dollars. 0:06:00.200 --> 0:06:03.120 Surging prices and slowing growth also hit the results. We 0:06:03.160 --> 0:06:06.799 spoke with you Ubs CEO Ralph Hammers about his outlook 0:06:06.800 --> 0:06:10.520 for inflation and how it's impacting businesses and some businesses 0:06:10.560 --> 0:06:13.120 there are still quite some tension in the labor markets, 0:06:13.160 --> 0:06:15.720 so that has not gone completely away yet. So it's 0:06:15.760 --> 0:06:19.720 a mix of inflations and the labor market circumstances. If 0:06:19.800 --> 0:06:22.600 inflation continues to be here, of course, it will be 0:06:22.640 --> 0:06:25.719 reflected ultra in thing. Ubs CEO Ralph Hammers called the 0:06:25.720 --> 0:06:27.840 second quarter one of the most challenging periods in the 0:06:27.920 --> 0:06:30.000 last ten years. Shares of the bank are down more 0:06:30.040 --> 0:06:32.480 than six percent. Well, Nathan, you to leave are also 0:06:32.520 --> 0:06:35.080 out with earnings. Results are mostly in line with estimates. 0:06:35.120 --> 0:06:37.840 The company is raising prices to battle inflation. That's helping 0:06:37.839 --> 0:06:40.800 to offset certain costs, and shares her up two percent 0:06:40.920 --> 0:06:43.760 in London. In Asia, overnight, Karen Stock's got a boost 0:06:43.800 --> 0:06:46.160 from China's tech sector. The c s I three and 0:06:46.200 --> 0:06:48.720 the Hang Sang climbed after reports that Ali Bomba will 0:06:48.720 --> 0:06:51.720 seek a primary listing in Hong Kong. The move could 0:06:51.720 --> 0:06:54.760 provide a template for Chinese companies to exit exchanges in 0:06:54.800 --> 0:06:58.559 New York and cryptocurrencies are also under pressure this morning. 0:06:58.640 --> 0:07:01.559 Nathan Nazas sources to ls coin based Global is facing 0:07:01.600 --> 0:07:04.839 an investigation from the Securities and Exchange Commission. We're told 0:07:04.839 --> 0:07:07.520 the SEC is probing weather coin base and properly led 0:07:07.520 --> 0:07:10.880 Americans or let Americans trade digital assets that should have 0:07:10.920 --> 0:07:14.720 been registered as securities. Again, futures are lower this morning. 0:07:14.720 --> 0:07:17.080 Straight ahead of your latest local headlines plus the check 0:07:17.120 --> 0:07:23.840 of sports and this is Bloomberg. Thanks Karen. Six oh 0:07:23.880 --> 0:07:26.760 seven on Wall Street in Central Park, problems on the 0:07:26.760 --> 0:07:30.160 east side, gotta crash southbound FDR Drive at seventy ninth Street. 0:07:30.440 --> 0:07:33.040 More coming up in traffic. First, Michael Bars here with 0:07:33.080 --> 0:07:34.720 more on what else is going on in New York 0:07:34.760 --> 0:07:37.280 and around the world. Michael, thank you very much, Nathan. 0:07:37.320 --> 0:07:40.200 More people are being infected by the monkey pox virus 0:07:40.200 --> 0:07:43.160 in the US. So far, there are almost twenty nine 0:07:43.280 --> 0:07:47.080 hundred known cases and no depths. During an event at 0:07:47.080 --> 0:07:50.520 Harlem Hospital, New York City Mayor Eric Adams notes that 0:07:50.600 --> 0:07:53.680 most of the state's current nine hundred cases come from 0:07:53.720 --> 0:07:56.960 New York City and they need additional resources from the 0:07:56.960 --> 0:08:00.040 federal government to help slow the spread. Almost nine he 0:08:00.120 --> 0:08:03.120 presented the cases in the States in New York City, 0:08:03.480 --> 0:08:07.240 and so this is once the game we would would again. 0:08:07.800 --> 0:08:10.480 Last week, the w h O proclaimed the spread of 0:08:10.560 --> 0:08:14.520 monkey pox a global emergency. Officials say New York's m 0:08:14.560 --> 0:08:18.800 t A may not regain on of pre pandemic writership 0:08:19.200 --> 0:08:24.440 until about twenty thirty five. Writership on New York City subways, buses, 0:08:24.480 --> 0:08:28.920 and commuter rail lines is now projected to reach nineteen 0:08:28.960 --> 0:08:33.120 doubles in late the back and forth on weather House 0:08:33.120 --> 0:08:36.600 speaker Nancy Pelosi is going to visit Taiwan as China angry, 0:08:36.880 --> 0:08:40.800 Bloomberg said. Backster reports Beijingia has issued his strongest statement 0:08:40.880 --> 0:08:43.679 yet regarding the proposed visit, saying the U s should 0:08:43.720 --> 0:08:47.360 be ready to face the consequences. So. Richard Hass of 0:08:47.440 --> 0:08:50.280 the Council on Foreign Relations on Bloomberg says, it is 0:08:50.320 --> 0:08:53.440 time for the globe to figure out plans and responses, 0:08:53.480 --> 0:08:58.120 which means taking military preparations ourselves, strengthen in Taiwan, continuing 0:08:58.160 --> 0:09:02.000 to work more closely with Japan, organizing Europe about what 0:09:02.080 --> 0:09:04.520 sanctions would put you put in place of China ever 0:09:04.600 --> 0:09:07.760 moved against Tailan process. At some point there will be 0:09:07.800 --> 0:09:11.760 a confrontation between China and the US regarding Taiwan. In 0:09:11.840 --> 0:09:15.240 San Francisco, I'm at Baxter Bloomberg Gabrie, New York Republican 0:09:15.280 --> 0:09:18.320 Congressman Lee Zelden is reacting to a man who tried 0:09:18.320 --> 0:09:21.439 to attack him last week. Forty three year old David 0:09:21.520 --> 0:09:25.800 Jacobanus was re arrested and federally charged after he jumped 0:09:25.840 --> 0:09:29.280 on stage during a political rally on Thursday. He tried 0:09:29.320 --> 0:09:32.320 stamming Zelda was not hurt. Zelden is calling on the 0:09:32.320 --> 0:09:35.880 New York State legislature to get rid of cash less bail. 0:09:36.320 --> 0:09:38.880 The good news is the attacker as of Saturday, was 0:09:38.960 --> 0:09:41.680 re arrested, and as far as anything else that the 0:09:41.679 --> 0:09:43.920 federal government wants to charge him with, or anything else 0:09:43.960 --> 0:09:46.400 that the District Attorney's office want to charge him with, 0:09:46.600 --> 0:09:49.200 they have that opportunity working with each other to decide 0:09:49.320 --> 0:09:52.680 what that is. If convicted, Jacobanus could spend up to 0:09:52.679 --> 0:09:55.280 ten years in prison. Global News twenty four hours a 0:09:55.400 --> 0:09:57.800 day on air and on Bloomberg Quick Take Power by 0:09:57.800 --> 0:10:00.480 more than seven hundred journalists and analyst in a hundred 0:10:00.480 --> 0:10:03.880 twenty countries. Michael Barr and this is Bloomberg, Nathan, Michael, 0:10:03.920 --> 0:10:10.160 thank you kind. Up to six ten on Wall Street. 0:10:10.200 --> 0:10:12.920 John Stashower has a Bloombridge Sports update thanks to Nathan. 0:10:13.000 --> 0:10:15.760 The Subway series always about bragging rights, but the one 0:10:15.800 --> 0:10:19.000 that starts tonight at City Field as another billing possible 0:10:19.120 --> 0:10:21.880 World Series preview. Both teams have been in first place 0:10:22.160 --> 0:10:24.880 basically all season. All of the Mets lead once ten 0:10:24.920 --> 0:10:27.000 and a half games is down to two. The Mets 0:10:27.000 --> 0:10:29.840 did get some help last night from the Phillies. Bryson 0:10:30.040 --> 0:10:33.040 stopped in particular, three run homer eighth inning gave the 0:10:33.080 --> 0:10:35.480 Fields a six four win over Atlanta. Yankees lee the 0:10:35.480 --> 0:10:38.000 Al East by twelve and a half games. They're concerned 0:10:38.440 --> 0:10:41.400 is finishing ahead of Euston for best overall record the Astros, 0:10:41.440 --> 0:10:43.240 so their five game win Street come to an end 0:10:43.320 --> 0:10:46.440 in Oakland, so the Yanks two games ahead. Starting pitchers 0:10:46.480 --> 0:10:49.480 tonight Jordan Montgomery for the Yanks, Taiwan Walker for the Mats, 0:10:49.480 --> 0:10:54.200 and Aaron Judge is excited. The fans getting into it. 0:10:54.200 --> 0:10:58.600 It's always the packs playoff atmosphere um always back and forth. 0:10:58.679 --> 0:11:01.640 You never know what's gonna happen. Um, and that's a 0:11:01.679 --> 0:11:03.839 competition here. They got a great pitching, seve, great offense 0:11:03.920 --> 0:11:07.440 over there. You know, we so looking forward to let's 0:11:07.520 --> 0:11:10.600 see what happens. Just thirty seven home runs, seven more 0:11:10.640 --> 0:11:12.719 than anyone in baseball. He has eighty one r V 0:11:12.880 --> 0:11:15.480 I is the only player with more Pete Alonso, he 0:11:15.559 --> 0:11:19.000 has eighty two. Details emerging about trade talks between the 0:11:19.080 --> 0:11:22.800 Nets and Celtics involving Kevin Durant. Reportedly, the Celts offered 0:11:22.800 --> 0:11:25.480 to Brooklyn, Jalen Brown Derek White in the first round 0:11:25.480 --> 0:11:28.240 pick and the Nets wanted Brown and Marcus Smart and 0:11:28.360 --> 0:11:31.320 multiple picks, and the Celtics said no, no secret. Nick's 0:11:31.320 --> 0:11:33.760 trying to acquire Donovan Mitchell from Utah. Now there's where 0:11:33.760 --> 0:11:36.959 they're Washington's, Charlotte and Sacramento are all talking to the 0:11:37.000 --> 0:11:39.280 Jazz as well. Nix also said to be one of 0:11:39.280 --> 0:11:41.360 a few teams that I've spoken with the Lakers about 0:11:41.360 --> 0:11:45.960 acquiring Russell Westbrook. John stash Award, Bloombrook Sports Nathan, thank you, Johns. 0:11:45.960 --> 0:11:48.400 Some red headlines across the Bloomberg terminal ups out with 0:11:48.480 --> 0:11:52.240 second quarter earnings a beat analyst estimates. GM's results missed, 0:11:52.320 --> 0:11:55.040 the carmaker reaffirmed its view for the year, and European 0:11:55.160 --> 0:11:58.320 Union countries reach a deal to cut gas use for 0:11:58.440 --> 0:12:02.200 next winter. A few chers moving lower this morning. This 0:12:03.400 --> 0:12:09.640 is Bloomberg Bloomberg eleven three. Weather partly sunny, less humid today, 0:12:09.640 --> 0:12:11.920 mid eighties for highs. We'll bring back chances crafting in 0:12:11.960 --> 0:12:15.840 showers and thunderstorms tomorrow and Thursday, both days near ninety 0:12:16.040 --> 0:12:23.800 degrees right now in Central Park Markets. Headlines and breaking 0:12:23.840 --> 0:12:26.720 news twenty four hours a day at Bloomberg dot Com, 0:12:26.840 --> 0:12:30.360 the Bloomberg Business At and at Bloomberg Quicktap. This is 0:12:30.400 --> 0:12:39.439 a Bloomberg Business Flash, and I'm Karen Moscow, and we've 0:12:39.480 --> 0:12:42.280 been watching earnings cross the Bloomberg this morning, with the 0:12:42.400 --> 0:12:46.400 UPS reporting second quarter profit at beat analysts estimates and 0:12:46.440 --> 0:12:49.480 no share higher in early trading, up one point nine percent. 0:12:49.920 --> 0:12:53.960 GM second quarter profit missed analysts estimates, and shares her 0:12:53.960 --> 0:12:56.760 down about a third of percent this morning. Futures are 0:12:56.800 --> 0:12:59.600 also lower. S and P futures down thirteen points down, 0:12:59.600 --> 0:13:02.040 futures in A hundred fifty two and NASTAG futures down 0:13:02.080 --> 0:13:05.120 forty three. The decks in Germany is down half per cent. 0:13:05.160 --> 0:13:07.520 The ten year treasury of eleven thirty seconds yield two 0:13:07.520 --> 0:13:10.960 point seven five percent, yield on the two year three 0:13:11.240 --> 0:13:14.240 point zero zero two percent. No make screwed oil is 0:13:14.280 --> 0:13:16.240 at one point seven percent of a dollar sixty and 0:13:16.320 --> 0:13:18.600 ninety eight dollars twenty seven cents a barrel. Co make 0:13:18.640 --> 0:13:21.080 school at a quarter percent or four dollars at seventeen 0:13:21.120 --> 0:13:24.040 thirty three ten announced the euro one point one four 0:13:24.160 --> 0:13:27.000 two against the dollar, British found one point one eight 0:13:27.280 --> 0:13:29.440 and the En one thirties six point eight zero and 0:13:29.480 --> 0:13:32.200 bitcoin this morning down four point nine percent at twenty 0:13:32.280 --> 0:13:35.400 one thousand, ninety dollars. Sets up a Lottomberg business flash. 0:13:35.400 --> 0:13:37.760 Now here's Michael Barr with more on what's going on 0:13:37.800 --> 0:13:40.679 around the world. Michael Karen, thank you very much. Former 0:13:40.720 --> 0:13:43.680 President Donald Trump will return to Washington today for the 0:13:43.679 --> 0:13:47.760 first time since leaving office. Trump will address the America 0:13:47.840 --> 0:13:51.760 First Policy Institutes Today summit. Sometime in the future, Trump 0:13:51.800 --> 0:13:56.080 could announce it two White House campaign. How Speaker Nancy Pelosi, 0:13:56.200 --> 0:13:59.679 staff and security officials aren't ruling out plans for her 0:13:59.720 --> 0:14:02.679 to to time on in early August. The possible trip 0:14:02.679 --> 0:14:06.200 has already stoked more US China tensions. In baseball, the 0:14:06.200 --> 0:14:09.640 Red Sox beat the Guardians three one, the Orioles down 0:14:09.679 --> 0:14:13.320 the Raise five one, The Nationals beat the Dodgers for one, 0:14:13.679 --> 0:14:17.520 the A's beat the Astros seven five, and the Diamondbacks 0:14:17.679 --> 0:14:21.280 blank the Giants seven zip. Global News twenty four hours 0:14:21.280 --> 0:14:24.480 a day on air and on Bloomberg Quicktech, powered by 0:14:24.520 --> 0:14:27.160 more than twenty seven hundred journalists and analysts more than 0:14:27.200 --> 0:14:32.120 a hundred twenty countries. Michael Barr and this is Bloomberg. Nathan, Okay, Michael, 0:14:32.160 --> 0:14:34.400 thank you. It is six nineteen on Wall Street Live 0:14:34.480 --> 0:14:38.120 from the Bloomberg Interactive Brokers studios. This is Bloomberg Daybreak. 0:14:38.200 --> 0:14:40.760 And Pria Misras with us now global head of rate 0:14:40.840 --> 0:14:44.080 Strategy at t D Securities, as the Federal Reserve and 0:14:44.640 --> 0:14:46.760 really all the rest of us get ready for the 0:14:46.800 --> 0:14:50.280 two day July policy meeting in that hotly anticipated decision 0:14:50.360 --> 0:14:52.640 coming up tomorrow. Priya, it's great to speak with you 0:14:52.720 --> 0:14:56.200 this morning. The markets have pretty much priced in seventy 0:14:56.200 --> 0:14:59.560 five basis points. What are the chances we get something else? 0:14:59.600 --> 0:15:04.160 Maybe an upside surprise from the Fed tomorrow? Moring uh 0:15:04.360 --> 0:15:06.320 and thanks for having me, Um, you know, I think 0:15:06.360 --> 0:15:08.760 the market was pricing in a decent chance of a 0:15:08.800 --> 0:15:13.360 hundred basis points after the very high CPR report. But 0:15:13.400 --> 0:15:15.920 then since then, you know, I think growth is slowing. 0:15:16.080 --> 0:15:18.720 The Fed may want to start to slow down. That 0:15:18.720 --> 0:15:21.480 that base of rate hikes we heard from a bunch 0:15:21.520 --> 0:15:24.480 of Fed officials talking about seventy five is still very large. 0:15:24.880 --> 0:15:27.240 So you know, our view is that they go seventy five. 0:15:27.280 --> 0:15:31.000 I would say the chance of a higher amount is 0:15:31.000 --> 0:15:33.640 is low. I mean the markets pricing in ten percent chance, 0:15:34.000 --> 0:15:36.400 I would say that's fair. I think the big question 0:15:36.560 --> 0:15:39.360 is what is the downship? Does chep? I'll commit to 0:15:39.400 --> 0:15:43.960 that downship going forward. It's all about that that terminal rate, 0:15:44.000 --> 0:15:46.720 which has actually gone down significantly. I think the market 0:15:46.800 --> 0:15:49.320 is a little bit too pessimistic on growth here and 0:15:49.600 --> 0:15:52.560 optimistic on inflation because the market has taken the end 0:15:52.560 --> 0:15:55.560 point of the hiking cycle from four percent two now 0:15:55.640 --> 0:15:58.120 as low as three point three. I think the Fed 0:15:58.240 --> 0:16:01.000 may be forced to keep going here. His inflation is 0:16:01.040 --> 0:16:03.720 still very high and the unemployment rate is still low. 0:16:03.800 --> 0:16:06.400 So I don't think they're going to signal that they're 0:16:06.480 --> 0:16:08.800 very close to being done with the hiking cycle. I 0:16:08.880 --> 0:16:12.840 think that's the that's it's really the forward guidance or 0:16:12.880 --> 0:16:16.200 the messaging about future hikes that will be focused on. 0:16:16.320 --> 0:16:20.280 I think this seventy, as you said, is essentially all priceton. Well, 0:16:20.280 --> 0:16:22.920 where do you see the terminal rate going? And how 0:16:22.920 --> 0:16:27.440 do you see the FED potentially moving into this hiking cycle? Here? 0:16:27.440 --> 0:16:30.000 Are are Are you forecasting a slow down from the Fed? 0:16:31.440 --> 0:16:33.640 We are so, you know, our view is that they 0:16:33.760 --> 0:16:36.040 really wanted to front load to get to neutral with 0:16:36.160 --> 0:16:38.680 this one seventy five basis points. They'll get to neutral 0:16:39.120 --> 0:16:42.120 at this point. They can then start to go a 0:16:42.160 --> 0:16:45.080 little bit slower, you know, but it's still fifty basis points. 0:16:45.080 --> 0:16:49.320 So we've got fifty basis point hikes really September, November, December, 0:16:49.560 --> 0:16:52.000 and that's when the hiking cycle ends. You know. I 0:16:52.040 --> 0:16:55.120 think they have to go into restrictive territory. They really 0:16:55.120 --> 0:16:58.240 have to control the inflation narrative and and and inflation 0:16:58.320 --> 0:17:01.360 expectations and so, you know, I don't think they can 0:17:01.520 --> 0:17:04.600 sound too concerned about growth. The problem is growth is 0:17:04.640 --> 0:17:07.080 also slowing, So we think, you know, when you get 0:17:07.080 --> 0:17:09.800 close to that three seventy So our view and terminalists 0:17:09.840 --> 0:17:13.080 three seventy five maybe as high as four if inflation 0:17:13.119 --> 0:17:16.000 doesn't really slow down core inflation. I think headline is 0:17:16.040 --> 0:17:18.280 likely to slow down, but they're going to also look 0:17:18.280 --> 0:17:21.439 at core. That shelter number is very high, and that 0:17:21.520 --> 0:17:24.560 tends to be very trending. So if that doesn't slow down, 0:17:24.600 --> 0:17:26.320 I think they can go as high as four percent 0:17:26.920 --> 0:17:29.480 and then slow down. And I think what I struggled 0:17:29.520 --> 0:17:32.440 with is the markets pricing and cuts right away, and 0:17:32.680 --> 0:17:34.879 you know, I really I think there's a different threshold 0:17:34.960 --> 0:17:37.639 for the FED to stop hiking. I think slowing in inflation, 0:17:38.040 --> 0:17:40.840 slowing in growth. Once they get to three seventy five 0:17:40.920 --> 0:17:43.840 or four, they stop the market saying, oh, next meeting, 0:17:43.880 --> 0:17:46.480 they start to cut, and I think that's where we're 0:17:46.480 --> 0:17:49.040 going to struggle. I think we'll all look at slowing 0:17:49.080 --> 0:17:52.520 growth and wait for the FED to to start to ease. 0:17:52.920 --> 0:17:55.040 I don't think they'll be able to ease with inflation, 0:17:55.600 --> 0:17:58.320 you know, at five percent or six percent early next year. 0:17:58.480 --> 0:18:01.480 I think that's the surprise of negative surprise for for 0:18:01.600 --> 0:18:03.919 risk assets that could be ahead. Do you think this 0:18:03.960 --> 0:18:06.240 economy is slowing into a recession. We've heard from the 0:18:06.280 --> 0:18:09.600 White House saying that the technical recession too straight quarters 0:18:09.640 --> 0:18:12.840 of negative growth isn't necessarily a broad based recession. What's 0:18:12.840 --> 0:18:16.440 your view on that? Sure, So, I think what we've 0:18:16.480 --> 0:18:18.639 seen in the first quarter in the second quarter is 0:18:18.680 --> 0:18:22.639 sort of negative for you know, technical reasons, meaning that 0:18:23.119 --> 0:18:25.320 it's not a broad based slowdown. I would agree with 0:18:25.359 --> 0:18:28.240 the White House there. NBR is the one that actually 0:18:28.280 --> 0:18:30.760 announces whether we're in a recession. I don't think we're 0:18:30.760 --> 0:18:33.480 in a recession right now, despite the negative GDP. It 0:18:33.600 --> 0:18:36.720 was net expots related and and and it's an inventory 0:18:36.800 --> 0:18:39.960 drag in the second quarter. But we do think we're slowing. 0:18:40.359 --> 0:18:44.120 We're slowing from very strong levels. The labor market's very hot. 0:18:44.160 --> 0:18:47.680 I mean we're well through what the fact believes the 0:18:47.760 --> 0:18:50.800 natural rate of unemployment is. So I think the unemployment 0:18:50.880 --> 0:18:52.840 rate is going to go up. The economy is going 0:18:52.920 --> 0:18:55.399 to slow. It is odd that the FED is hiking 0:18:55.440 --> 0:18:57.399 into a slow down, but I think we've got an 0:18:57.440 --> 0:19:00.760 inflation problem. Um. So you know where I'm more concerned 0:19:00.760 --> 0:19:04.200 about a recession. I delete this year, fourth quarter, early 0:19:04.320 --> 0:19:06.760 next year. That's where I think there is so much 0:19:06.800 --> 0:19:09.720 child that would be a more broad based slowdown because 0:19:09.720 --> 0:19:12.359 the labor market by that point starts to you know, 0:19:12.400 --> 0:19:15.720 the unemployment rate starts to rise, and then it's hard 0:19:15.760 --> 0:19:18.280 to see how the ft can finesse it perfectly. Where 0:19:18.520 --> 0:19:21.879 the unemployment rate only increases by a couple of you know, 0:19:21.880 --> 0:19:24.640 a couple of tenths of a percentage point, that's where 0:19:24.640 --> 0:19:26.600 I think there is a higher But I think right 0:19:26.640 --> 0:19:30.040 now we're slowing from strong levels, so I don't think 0:19:30.040 --> 0:19:32.399 we're in a recession right now. Great to have you 0:19:32.400 --> 0:19:34.680 on with us. Thanks for these insights this morning, Prea 0:19:34.760 --> 0:19:37.760 really appreciate it. Prea Misra, Global head of Rates Strategy 0:19:38.200 --> 0:19:41.680 at t D Securities with us this morning. Getting more 0:19:41.720 --> 0:19:45.240 earnings crossing the Bloomberg terminal this morning, ge with a 0:19:45.280 --> 0:19:49.919 big earning speed seventy eight cents adjusted EPs. The estimate 0:19:50.000 --> 0:19:53.760 was thirty seven cents, so earnings coming in more than 0:19:53.840 --> 0:19:58.120 double analyst estimates. Right now. SMP futures down seventeen points down, 0:19:58.200 --> 0:20:02.119 Futures down A five, NaSTA features down sixty. You're listening 0:20:02.119 --> 0:20:09.159 to Bloomberg Daybreak, Bloomberg eleven three oh weather partly sunny, 0:20:09.200 --> 0:20:11.800 less humid today, mid eighties for highs. We'll bring back 0:20:11.840 --> 0:20:14.520 the humidity tomorrow and Thursday, both days with that afternoon 0:20:14.680 --> 0:20:17.080 chance for it showers and thunderstorms on a high near 0:20:17.160 --> 0:20:22.879 ninety degrees right now seventy one in Central Park, broadcasting 0:20:22.960 --> 0:20:26.680 live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.760 --> 0:20:30.240 Bloomberg E Living free to Washington, d C, Bloomberg ninety 0:20:30.320 --> 0:20:33.240 nine one to Boston, Bloomberg one O six one to 0:20:33.320 --> 0:20:37.080 San Francisco, Bloomberg nine sixty to the country, Sirius XM 0:20:37.119 --> 0:20:39.320 to the one nine team, and around the globe the 0:20:39.400 --> 0:20:43.320 Bloomberg Business at and Bloomberg Radio dot com. This is 0:20:43.320 --> 0:20:51.439 Bloomberg Daybreak six thirty on Wall Street. Good morning, I'm 0:20:51.520 --> 0:20:54.320 Nathan Hagar and I'm Karen Moscow. 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