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Speaker 1: of today's edition of Bloomberg Daybreak at the very end

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Speaker 1: of this podcast. This is the Bloomberg Surveillance Podcast. I'm

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Speaker 1: Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join

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Speaker 1: We continue with Rochester g ten FX strategists at Namura.

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Speaker 2: Jordan.

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Speaker 1: Let me go and overlay the GDP question on your

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Speaker 1: euro call. Germany is not getting it done right now?

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Speaker 1: How does that change? A euro call from Nomura?

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Speaker 3: Well, right now, Tom, we already knew growth would be weak.

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Speaker 3: We've got that from the PMISER surveys. So I'm not

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Speaker 3: really convinced that the GDP is the way to look

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Speaker 3: at euro right here, right now in the short term.

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Speaker 3: What's more important is what they did to those inflation

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Speaker 3: forecast times. So there's been a bit of a revision

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Speaker 3: down in the front tend for headline, but for core inflation.

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Speaker 3: What's been surprising from this release is that we've got

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Speaker 3: on average now five point one from the ECB for

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Speaker 3: core inflation this year, up from four point six in

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Speaker 3: their forecast previously. I said earlier that it was too low,

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Speaker 3: it was going to be revised up, but I was

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Speaker 3: discussing it with Andre and our economics team. We thought

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Speaker 3: the east B might not pencil in a five handle

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Speaker 3: for their core inflation just because that's a number that

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Speaker 3: will make them very uncomfortable for the average of this year.

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Speaker 4: Five percent.

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Speaker 5: This is none of this.

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Speaker 3: None of these forecasts for inflation have it going back

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Speaker 3: towards two percent and actually going below two percent in

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Speaker 3: the horizon. The twenty twenty five inflation forecast revised up

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Speaker 3: just very slightly. But all of this says the ECB

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Speaker 3: is being hawkish. We'll find out in the pressor how

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Speaker 3: Madame Cguarde will express it. But we've seen the pricing

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Speaker 3: Tom for the ECB for the next meeting jump already

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Speaker 3: to twenty five basis points. The market was actually doubting

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Speaker 3: a little bit if that would happen, and now we're

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Speaker 3: actually now toying with the market thinking maybe this carries on,

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Speaker 3: maybe this goes to September, and Tom the market is

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Speaker 3: very happy pricing many twenty five basis point rate hikes

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Speaker 3: for the Bank of England, and I suggest that maybe

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Speaker 3: that's the case. We need to consider it for the

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Speaker 3: ECB just quickly.

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Speaker 6: Does this make a four percent ECB rate much more likely?

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Speaker 6: And actually the base case in your view, it's.

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Speaker 3: Not the base case, but look, it makes it possible.

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Speaker 3: And the reason why is because we're seeing all this

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Speaker 3: animal spirits inequities picked back up, boosting risk sentiment, boosting

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Speaker 3: the sort of inflation pressures that we could see this summer,

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Speaker 3: and as I mentioned earlier, natural gas going up. That

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Speaker 3: should really worry the ECB. If it's like last year August.

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Speaker 3: Last year we had energy prices at the highs. It's

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Speaker 3: just June. Now, if we get two more months of

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Speaker 3: gas storage demand pushing up inflation again of natural gas.

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Speaker 3: It upsets the apple cart of the big disinflation. All

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Speaker 3: my charts say the Euro Area inflation's going to really

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Speaker 3: slow down, but that will change if natural gas keeps

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Speaker 3: moving the way it is. So if it carries on, Lisa,

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Speaker 3: it's potentially possible.

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Speaker 1: Jordan Rochester, thank you for the effort today with no

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Speaker 1: murder there. Ja Bryson rides heard over a terrific economic

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Speaker 1: team at Wells Fargo. They have a fabulous heritage of

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Speaker 1: measuring this nation from C to Shining Sea, and right

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Speaker 1: now I'd like you to go over the other C.

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Speaker 1: J Bryson too, Maybe summarize here what Wells Fargo sees

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Speaker 1: in manufacturing in America versus a clear slow down in

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Speaker 1: manufacturing in Germany. What is a state of the economy

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Speaker 1: of manufacturing in America as we look at this data

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Speaker 1: this morning?

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Speaker 2: So Tom, I guess i'd roughly say that when I

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Speaker 2: think about the manufacturing sector here in the States right now,

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Speaker 2: I would say it's flat ish, you know, it's you know,

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Speaker 2: if you look at the hard data of manufacturing production

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Speaker 2: over the last year or so, it has been kind

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Speaker 2: of flat, and you know, I think what's going on

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Speaker 2: There is two things. There's a slowdown in the rest

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Speaker 2: of the world, so we're not exporting as much. And

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Speaker 2: then secondly, as there has been as you you know,

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Speaker 2: well know, there's been this rotation over the last year

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Speaker 2: away from spending on goods towards services. Goods obviously are manufactured,

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Speaker 2: and so manufacturing is you know again it's not really contracting,

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Speaker 2: but it's not growing. It's you know, as I said earlier,

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Speaker 2: I think it's kind of flatish right now.

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Speaker 6: Which is the best leading indicator of all of the

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Speaker 6: data that we just got. Is it the retail sales

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Speaker 6: coming in hotter than expected, or is it unemployment rising

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Speaker 6: perhaps at a faster pace at least jobless claims than

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Speaker 6: many people expected.

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Speaker 2: Well, I guess I would say they're both kind of

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Speaker 2: coincidence sort of indicator. Certainly, that's what we think about

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Speaker 2: the labor market as being very very coincident. It gives

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Speaker 2: us an idea where we are right now, you know,

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Speaker 2: in terms of the retail sales sorts of numbers, you know,

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Speaker 2: there's a little choppy in there right now. But I

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Speaker 2: would say what I would say is what it's showing

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Speaker 2: us is the consumer continues to spend at a modest pace.

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Speaker 2: As long as that continues to happen, then the consumer

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Speaker 2: sector isn't going to completely fall apart either. And so

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Speaker 2: I think where we are right now in terms of

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Speaker 2: the economy is if you look at the first quarter,

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Speaker 2: we grew roughly one percent at an annualized rate. I

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Speaker 2: think that's kind of where we are right now in

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Speaker 2: the second quarter as well, somewhere, you know, plus or

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Speaker 2: minus five tens a percentage point off of one percent right.

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Speaker 6: Now if nothing really changes, no sort of big shocks

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Speaker 6: to the system, and we get data like this for

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Speaker 6: the next I guess four weeks, do you expect to

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Speaker 6: fed we'll have to raise by another twenty five basis points.

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Speaker 6: That yesterday's meeting was not the end of the rate

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Speaker 6: hiking cycle.

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Speaker 2: You know, I think that's that's right, Lisa, and I

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Speaker 2: kind of think of it as yesterday was a little

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Speaker 2: bit of a compromise between the you know, the doves

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Speaker 2: on the committee who kind of want to pause right here,

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Speaker 2: and the hawks who kind of want to keep on

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Speaker 2: pressing ahead. And I think it was easy for them,

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Speaker 2: the consensus, I think was easy for yesterday to call

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Speaker 2: us around Okay, we'll keep rates on hold, but we'll

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Speaker 2: send a signal of a hawkish pause if you will.

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Speaker 2: A month from now. If we don't see any major

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Speaker 2: changes to the economy, then I think it's easier to

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Speaker 2: call us around. Okay, let's pump a up another twenty

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Speaker 2: five basis points. But obviously we've got a lot of

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Speaker 2: data between now and then, particularly the labor market report.

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Speaker 2: We get another CPI, you know, sort of a report,

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Speaker 2: so you know, if we come in a status quo

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Speaker 2: where we are right now, then I think they go

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Speaker 2: twenty five. I'm going to.

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Speaker 1: Suggest doctor Bryson that none of this is in Chapel economics,

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Speaker 1: Chepel Hill economic textbooks. I mean, it's absolutely original. Where

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Speaker 1: we are. How much are we beholden to American exceptionalism

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Speaker 1: right now? Europe has so many struggles, is seen with

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Speaker 1: a subpar one percent GDP view forward, and we're different,

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Speaker 1: We're doing better. Does Wells Fargo suggest there is an

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Speaker 1: American difference, an American exceptionalism?

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Speaker 2: Well, you know, Tom, I don't know if I would.

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Speaker 2: So if you step back and you look at the

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Speaker 2: broad sort of stuff, I mean, what we are with

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Speaker 2: the United States is continues to be the technological leader

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Speaker 2: in the world. Right this is where AI is being developed,

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Speaker 2: et cetera, et cetera. I think that will probably continue.

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Speaker 2: But I also think that you know, right now where

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Speaker 2: we are in terms of the cycle. You know, Europe

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Speaker 2: has been hit with a number of shocks that the

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Speaker 2: United States hasn't, you know, particularly the war in Ukraine

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Speaker 2: and the and the spike it the spike in natural

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Speaker 2: gas prices that everybody was talking about just before we

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Speaker 2: came on air here. And so there's there's been a

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Speaker 2: lot more shocks hitting Europe than there has been the

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Speaker 2: United States. So is the United States exceptional from a

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Speaker 2: very very long earned standpoint, yes, But from a cyclical standpoint,

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Speaker 2: I can come up with reasons why, you know, Europe

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Speaker 2: is different. Right now, What did you.

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Speaker 1: Think yesterday when we had esteemed people like you on

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Speaker 1: who said they just should have raised race and stopped

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Speaker 1: with all this mumbo jumbo, skip pause, all this other stuff.

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Speaker 1: Jay Bryson, would green Span or burns of raised rates?

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Speaker 2: You know, I don't think so. I mean green Span

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Speaker 2: was you know, at the end of the day, he

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Speaker 2: was very very cautious as well. You know, you look

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Speaker 2: at his last tightening cycle starting in twenty twenty, two

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Speaker 2: thousand and four. It's twenty five basis points, you know,

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Speaker 2: constant sort of thing. You know, So did they do

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Speaker 2: the right thing yesterday? Obviously? You know people can can

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Speaker 2: disagree on that, but we all know that monetary policy

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Speaker 2: works with long lags. You are seeing signs that the

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Speaker 2: economy is growing at a sub trend pace right now.

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Speaker 2: I mentioned one percent before. Most people believe that's going

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Speaker 2: to be subtrend, and if it continues to grow at subtrend,

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Speaker 2: that will probably that will bring the inflation rate down

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Speaker 2: over time. You know, you really don't want to put

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Speaker 2: the economy into recession right now, if you if you don't,

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Speaker 2: so it's a little bit of hard communication strategy right

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Speaker 2: now on their part. They're walking a very very fine line.

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Speaker 2: But you know, I think at the end of the

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Speaker 2: day a pause was probably the right thing to do.

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Speaker 6: We're about three and a half minutes away from Christineleaguard

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Speaker 6: taking the helmet explaining a pretty hawkish proclamation and rate

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Speaker 6: hike that we just got from the ECB right now,

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Speaker 6: the euro versus the Japanese yen. It was extending the

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Speaker 6: gains up one point one percent to the highest level,

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Speaker 6: the strongest going back to going back to two thousand

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Speaker 6: and eight, as you see that differential and rate policies

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Speaker 6: really start to bleed into the currency, the agony back a.

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Speaker 1: Zillion years and really not comparable. And I defer to

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Speaker 1: Jordan Rochester, Steve England or others, but it's a one

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Speaker 1: sixty maybe a one sixty three. We're distant from OMG,

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Speaker 1: the worst ever. But I think scope and scale back

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Speaker 1: to two thousand and eight really signals how removed Japan

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Speaker 1: is from the other three.

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Speaker 6: Banks, Jay, As we set up for Christine Leguard to

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Speaker 6: give some explanations, some meat behind the statement, what are

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Speaker 6: you expecting to hear? What was the biggest shocker to

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Speaker 6: you at a time when this ECP is forecasting out

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Speaker 6: a three percent core inflation figure next year in a

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Speaker 6: five point one percent inflation this year.

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Speaker 2: You know, I think she's going to be very very

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Speaker 2: hawkish as well. I think you know, she's speaking for

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Speaker 2: the entire governing council. We all know that there's a

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Speaker 2: lot of hawks on that on the Governing Council, and

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Speaker 2: I think you know what they want to send as

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Speaker 2: a signal of uh, we need to be hawkish here.

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Speaker 2: You know, their mandate is two percent. We're far away

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Speaker 2: from two percent inflation right now, so I would think

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Speaker 2: she's going to reinforce a very very hawkish sort of view.

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Speaker 2: And if bond yields back up even more on that,

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Speaker 2: I don't think there that's not a bad thing for them.

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Speaker 1: Is your press conference operating doctor Bryson within eurosclerosis.

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Speaker 2: To find that term time, I'm not sure I get

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Speaker 2: to just.

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Speaker 1: The sluggish and as you mentioned, the technological superiority of

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Speaker 1: America they're going after Google again was in the news today.

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Speaker 1: Is there just that weight to the European model that

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Speaker 1: was definitive twenty years ago?

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Speaker 2: You know, they always lag us somewhat in terms of

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Speaker 2: you know, productivity, growth and vibrancy of the of the economy,

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Speaker 2: and I don't think that's going to I don't think

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Speaker 2: that's going to to change anytime soon. Again, you know,

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Speaker 2: when you look at all the AI breakthroughs that are

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Speaker 2: happening here in the United States and they're not happening

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Speaker 2: in Europe.

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Speaker 1: Jay Breston, thank you so much for the brief Here

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Speaker 1: is with Wells Fargo, They've been hugely helpful to us.

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Speaker 1: Here on the economic facts and forth, Amy was Silverman

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Speaker 1: joins us, Now, how to derout a strategy in RBC

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Speaker 1: capital markets? Amy, It's real simple. You say, we've got

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Speaker 1: upside here and we may not get the traditional equity

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Speaker 1: market rotation. This is important to Global Wall Street. Why

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Speaker 1: will we not rotate?

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Speaker 7: Yeah, this is the question, you know, we've been asking

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Speaker 7: the last few weeks. And I thought, yesterday's knee jerk reactions, Tom,

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Speaker 7: we're just really telling So you know, look for the

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Speaker 7: last few weeks, the options market's been chasing upside an IWM,

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Speaker 7: and then you get a little bit of a hawkish

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Speaker 7: tone from the Fed and from Palin.

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Speaker 4: What happens?

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Speaker 7: You have IWM sell off yesterday, you have Ques rally,

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Speaker 7: you have nvideo rally, And I think that just tells you,

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Speaker 7: you know, how the market is thinking about these different sectors.

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Speaker 7: The one question we've been asking ourselves is, you know,

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Speaker 7: if the data continues to come in more economically strong,

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Speaker 7: is it possible essentially to have a narrative where it's

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Speaker 7: not really about value versus growth or small versus large gap.

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Speaker 7: It's simply tech becomes your rallying point because of a

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Speaker 7: secular story. Perhaps and then IWM becomes more of an

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Speaker 7: IWM story on the more defensive and you know that side,

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Speaker 7: but both can rally at the same time.

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Speaker 6: Just it's a developed some of what you were talking about.

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Speaker 6: This idea that big tech has become defensive has become

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Speaker 6: the secular growth story, and really perhaps the fear of

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Speaker 6: recession is playing out in the small caps in a

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Speaker 6: new way and even in some of the non tech names,

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Speaker 6: which really highlights a diversification that is very different than

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Speaker 6: it was six months ago.

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Speaker 7: Yeah, exactly. And one thing I'll say is what has

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Speaker 7: been interesting, especially given yesterday, is we saw IWM sell

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Speaker 7: off sort of in that reaction to the hawkage tone

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Speaker 7: from Powell, but we didn't see any change in the

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Speaker 7: option sentiment. So going into yesterday, Lisa, the option sentiment

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Speaker 7: in IWM was quite full, as you saw almost a

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Speaker 7: skew in version or that call demand is outweighing the

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Speaker 7: poot demand. And that's been true for the last few

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Speaker 7: weeks when people think, you know, that small cap is

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Speaker 7: going to kind of burst out. But that didn't change yesterday,

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Speaker 7: even though we did see continued optimism in the large

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Speaker 7: caps as well. So that's why I've been saying, you know,

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Speaker 7: is it possible the narrative no longer becomes this rotation

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Speaker 7: from small to large or from growth to value, et cetera.

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Speaker 7: It's just simply they can go along two different tracks

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Speaker 7: and two different narratives.

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Speaker 6: So basically, are you saying that people who are talking

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Speaker 6: about bad breath getting into some sort of broadening out

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Speaker 6: not happening, and it's not going to happen even if

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Speaker 6: you continue to get a rally in the equity indexes.

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Speaker 7: Yeah you said bad breath, not me this time, But yeah,

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Speaker 7: I think that is possible. And the one major implication

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Speaker 7: that has for volatility is one reason we've been counting

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Speaker 7: on that breadth of widen is because it's going to

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Speaker 7: change your correlation function, which obviously feeds into your index volatility.

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Speaker 7: But if we don't get that happening, if you continue

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Speaker 7: to have people who've missed out on megacap tech having

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Speaker 7: to realloitate into it even as that small cap story

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Speaker 7: is playing out, I don't think you get much of

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Speaker 7: a change in correlation, which ultimately, you know, dampens volatility

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Speaker 7: on an index level. So it's possible, you know, you

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Speaker 7: have all these events ahead, but there's that suppression of

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Speaker 7: voltility because that correlation component of volatility continues to not

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Speaker 7: move because of the breadth.

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Speaker 1: I mean, if we believe in a bull market and

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Speaker 1: we've had a first leg from October, I've been calling

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Speaker 1: it the income for ardentity bull market after two people

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Speaker 1: that were way out front and identifying it. If that's

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Speaker 1: the first leg, how do you use the cross moments?

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Speaker 1: How do you use derivative mathematics to assist in identifying

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Speaker 1: the second leg of a bull market?

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Speaker 7: Yeah, so I'll give you one Bloomberg function that I

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Speaker 7: like to look at a lot, which is BCA, which

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Speaker 7: gives you the volatility landscape across you know, any constituents

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Speaker 7: like the S and P five hundred and when you

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Speaker 7: organize that tom By Skew level. So again that component

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Speaker 7: of call demand versus put demand, you start to see

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Speaker 7: where the really really bullish parts of the market are.

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Speaker 7: So if you look at that right now, among your

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Speaker 7: top ten names, you know, probably not shocking to you

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Speaker 7: is going to be It's going to be in a video,

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Speaker 7: It's going to be Tesla. And it really tells you

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Speaker 7: not only where the market is out front the most on,

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Speaker 7: but where it's beginning to start to see changes and sentiment,

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Speaker 7: and you are starting to see some of the more

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Speaker 7: IWM type names go in there into those sectors rather

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Speaker 7: than it just being megacat tech.

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Speaker 1: Are the big names out there, whether it's a big

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Speaker 1: name Procter and Gamble, the big name Walmart, Intel is

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Speaker 1: a dog of the moment or as you mentioned AMD,

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Speaker 1: are they under owned by institutions in the traditional sense,

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Speaker 1: not hedge funds, but along only byside.

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Speaker 2: Are they under owned in what's.

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Speaker 4: Worked they are?

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Speaker 7: And that's part of the problem. There's sort of two

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Speaker 7: interesting things. The first is that portion of the asset

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Speaker 7: management community you've been talking about has been under allegated,

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Speaker 7: and the issue is that begets this positive momentum situation

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Speaker 7: where we've talked about in options, where you get that

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Speaker 7: exacerbation of gamma. So essentially buying of calls can lead

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Speaker 7: to more buying stock, which can lead to more buying

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Speaker 7: of calls. This is what you saw during the meme prase.

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Speaker 7: And the other thing is historically that segment of the

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Speaker 7: market has that problem with owning things in such a

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Speaker 7: narrow concentration. So if the breadth of the market starts

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Speaker 7: to expand, that ultimately helps them in participating in the rally.

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Speaker 1: Yeah, the headline there, folks, if you're keeping score at home,

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Speaker 1: is Amy wu Silverman says, Apple is a meme stock.

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Speaker 2: That's what we're going to do. We're going to go there.

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Speaker 1: If I get gamma is an acceleration, you know within

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Speaker 1: the derivative jargon, Are we gamma? Are we gammaing our

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Speaker 1: way to melt up?

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Speaker 4: So you know we already have.

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Speaker 7: That's already been happening, and I think that can continue.

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Speaker 7: So when you look kind of to the weak right

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Speaker 7: post Navidia's earnings, that's what you saw. You saw those

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Speaker 7: skew in versions, you know, on that VCA function, and

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Speaker 7: then you continue to see that now that actually hasn't

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Speaker 7: changed all that much. Even though you know some people

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Speaker 7: are asking it that AI rally is tired, you don't

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Speaker 7: yet see that. In the options, you continue to see

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Speaker 7: that call and bounce pretty heavily, and then each day

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Speaker 7: that goes by, we actually start to see it in

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Speaker 7: different parts of the market, not just megacaptech. And that's

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Speaker 7: why I think it's very telling in terms of the

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Speaker 7: sentiment and options. Those wins have really changed over the

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Speaker 7: last month.

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Speaker 1: And it was silver in terrific opening Briefforce today with

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Speaker 1: RBC Capital Market. Patrick Tumey is one of our more

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Speaker 1: interesting senators. A former senator. He is of Pennsylvania. It's

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Speaker 1: his fault the Phillies lost, and he excided after that

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Speaker 1: and he joins us today. He's on the board of

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Speaker 1: Apollo now, among other good duties here in his former career.

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Speaker 1: What's the biggest difference of moving from the August Senate

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Speaker 1: of Washington into the private space.

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Speaker 8: Well, there are a lot. Having control of your own

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Speaker 8: schedule is one of them. The Majority leader gets to

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Speaker 8: decide when votes will occur, and you have to be

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Speaker 8: on the floor in person to cast a vote. When

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Speaker 8: you're out of the Senate, you have a lot more

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Speaker 8: saying it just a human and.

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Speaker 1: We're huge difference in the House right now where there's

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Speaker 1: one or two people away and that changes it for

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Speaker 1: Speaker McCarthy.

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Speaker 8: And that can happen in the Senate.

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Speaker 6: Also, Yeah, how much do you kind of feel like

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Speaker 6: you wouldn't necessarily run if the dynamics were the same

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Speaker 6: now as they were when you started in politics.

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Speaker 8: Honestly, for me, I was in federal office for eighteen years,

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Speaker 8: twelve consecutive years in the Senate, and prior to that

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Speaker 8: a gap, and then six years in the House.

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Speaker 4: For me, that was enough.

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Speaker 2: I was ready to move on.

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Speaker 8: I have no regrets, and I really enjoyed and appreciated

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Speaker 8: the chance to pursue the policies that I believed in.

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Speaker 8: But I don't like the idea of being there forever

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Speaker 8: for anybody, myself included.

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Speaker 1: You're cut from a different cloth. I mean, there's Morgan

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Speaker 1: Grenfell and then you're in Rookies restaurant in you know, Lehigh.

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Speaker 2: Valley and all that. But what you're really.

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Speaker 1: Acclaimed for is standing up to the former president saying

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Speaker 1: the behavior is not appropriate. We have seen an absolutely

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Speaker 1: historic moment for the nation that will continue right coming weeks.

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Speaker 2: In months.

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Speaker 1: What is the best practice right now of centrist Republicans

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Speaker 1: is they address this indictment in Miami.

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Speaker 8: Well, so I'm a conservative Republican and my conservatism sort

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Speaker 8: of requires me to call out the completely unacceptable and

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Speaker 8: egregious behavior of the former president as it manifests itself periodically.

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Speaker 4: Look, I think Republicans should call it for what it is.

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Speaker 8: This is a completely unforced, unnecessary, outrageous abuse of the

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Speaker 8: responsibility that the American people gave this president. He knew

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Speaker 8: those documents didn't belong to him. But it wasn't just

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Speaker 8: a sloppiness. It wasn't just a matter of Okay, a

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Speaker 8: few papers got mixed in with some of my momentos.

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Speaker 8: It was lying about it, It was hiding it. It

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Speaker 8: was suggesting to a lawyers that they make it disappear.

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Speaker 8: It was discussing it in front of of reporters. Someone

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Speaker 8: writing a book and recording this, and apparently, if we

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Speaker 8: can believe the allegations, which I think they're there for

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Speaker 8: a reason, it included very sensitive military secrets of the

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Speaker 8: United States of America. So, as is often the case,

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Speaker 8: Donald Trump is his own worst enemy. He makes a

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Speaker 8: foolish mistake and then compounds it massively, and look, this

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Speaker 8: is indefensible behavior.

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Speaker 1: I went back and looked at a September effort by

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Speaker 1: Philip Bump in the Washington Post working off Pew research,

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Speaker 1: and I was thunderstruck at the accountable research of how

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Speaker 1: small mega is. It's not that great a part of

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Speaker 1: the American pie. How does the broader sense of Republicans

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Speaker 1: in independence not defend themselves but just react, adjust and

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Speaker 1: move forward. If Mega is really not all that big boy,

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Speaker 1: their megaphone's large.

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Speaker 9: Yeah.

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Speaker 8: But the unfortunate reality, in my mind is the president

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Speaker 8: still the former president still does have a large level

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Speaker 8: of support. And that's complicated, right. It's part of it

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Speaker 8: is historical, part of it is a sense of the

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Speaker 8: grievances that he fans. Part of it is the perception

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Speaker 8: that he's being unfairly treated and so even if he

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Speaker 8: did something wrong, it's not a fair treatment. So it's complicated.

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Speaker 8: Here's my theory is the cumulative weight of all of

435
00:22:25,560 --> 00:22:30,560
Speaker 8: the drama, all of the unnecessary misery, all of the lawsuits,

436
00:22:30,640 --> 00:22:34,000
Speaker 8: the allegations, all of this is going to cause increasing

437
00:22:34,080 --> 00:22:36,880
Speaker 8: numbers of Republicans, even if they've been sympathetic to Donald Trump,

438
00:22:36,960 --> 00:22:39,600
Speaker 8: to say, Okay, maybe he did a good job as president.

439
00:22:39,680 --> 00:22:40,680
Speaker 8: We got to move on.

440
00:22:40,680 --> 00:22:42,679
Speaker 6: One of the rare things about you is that you

441
00:22:42,720 --> 00:22:45,440
Speaker 6: can really dovetail from Washington to Wall Street. And that's

442
00:22:45,440 --> 00:22:48,120
Speaker 6: sort of been your background, going back and forth. And

443
00:22:48,160 --> 00:22:50,359
Speaker 6: we're talking about the politics of the moment at a

444
00:22:50,400 --> 00:22:53,320
Speaker 6: time when FED policy is going to dictate a lot

445
00:22:53,600 --> 00:22:56,000
Speaker 6: on Wall Street for the next couple of years.

446
00:22:56,000 --> 00:22:57,440
Speaker 4: How can start are you growing giving.

447
00:22:57,280 --> 00:23:01,800
Speaker 6: The politication politicization of the inflation debate. How concerned are

448
00:23:01,840 --> 00:23:05,840
Speaker 6: you that this FED is not really convicted enough to

449
00:23:05,920 --> 00:23:08,120
Speaker 6: go through with their mandate and get inflation back down

450
00:23:08,320 --> 00:23:09,080
Speaker 6: to where it should be.

451
00:23:09,240 --> 00:23:12,240
Speaker 8: So I lean in the other direction. I think this

452
00:23:12,359 --> 00:23:17,480
Speaker 8: FED is very, very concerned about their legacy, their reputation.

453
00:23:17,760 --> 00:23:20,400
Speaker 8: They know that they got this badly wrong. They kept

454
00:23:20,680 --> 00:23:23,960
Speaker 8: rates way too low, monetary policy way too easy for

455
00:23:24,040 --> 00:23:27,960
Speaker 8: way too long. They established a flawed paradigm for determining

456
00:23:28,040 --> 00:23:29,760
Speaker 8: when they would change.

457
00:23:29,840 --> 00:23:30,960
Speaker 4: They got behind the curve.

458
00:23:31,359 --> 00:23:33,520
Speaker 8: I think the risk is that they overdo it, and

459
00:23:33,600 --> 00:23:36,960
Speaker 8: partly for the same reason that they went too far.

460
00:23:37,160 --> 00:23:40,239
Speaker 8: In my conversations with FED governors and senior staff, I

461
00:23:40,400 --> 00:23:43,720
Speaker 8: was always surprised at how dismissive so many of them

462
00:23:43,720 --> 00:23:47,439
Speaker 8: are about money supply, how dismissive they are about what

463
00:23:47,520 --> 00:23:51,119
Speaker 8: Milton Friedman taught us, and how focused they are on

464
00:23:51,160 --> 00:23:54,320
Speaker 8: things like inflation expectations rather than the forty percent growth

465
00:23:54,280 --> 00:23:57,080
Speaker 8: than M two that they were responsible for in eighteen months.

466
00:23:57,560 --> 00:24:01,960
Speaker 8: So they might miss the collapse of the growth in

467
00:24:02,119 --> 00:24:06,439
Speaker 8: M two, for instance, and misdiagnose what's going on. In

468
00:24:06,440 --> 00:24:08,119
Speaker 8: my view, I think there's a great risk they.

469
00:24:07,960 --> 00:24:08,359
Speaker 4: Go too far.

470
00:24:08,480 --> 00:24:09,840
Speaker 6: Are you agreeing with Elizabeth Warren?

471
00:24:11,080 --> 00:24:13,359
Speaker 8: I don't think so, because I think Elizabeth Warren was

472
00:24:13,359 --> 00:24:15,720
Speaker 8: opposed to any kind of normalizing of interest rates. I

473
00:24:15,760 --> 00:24:19,119
Speaker 8: think maybe a mischaracterization, but I think that's true. We

474
00:24:19,240 --> 00:24:22,399
Speaker 8: now have positive real interest rates. I would argue, you know, certainly,

475
00:24:22,400 --> 00:24:24,520
Speaker 8: if you're looking on a month to month basis, we

476
00:24:24,640 --> 00:24:27,920
Speaker 8: have had money supply growth go to zero. We have

477
00:24:27,960 --> 00:24:30,920
Speaker 8: the Fed shrinking its balance sheet. We have the Treasury's

478
00:24:30,920 --> 00:24:33,200
Speaker 8: going to go out and absorb what a trillion dollar's

479
00:24:33,200 --> 00:24:35,680
Speaker 8: worth of cash from the economy. So you put all

480
00:24:35,680 --> 00:24:37,680
Speaker 8: that together and you look at how inflation is obviously

481
00:24:37,720 --> 00:24:42,760
Speaker 8: rolled over, and I think we're probably on the right trajectory.

482
00:24:42,800 --> 00:24:43,000
Speaker 7: Now.

483
00:24:43,040 --> 00:24:45,040
Speaker 8: I'm not in the camp of easing by any means.

484
00:24:45,040 --> 00:24:47,280
Speaker 8: I think the pause is probably the right thing to do.

485
00:24:47,320 --> 00:24:50,520
Speaker 8: But you look at the dot plot and it looks

486
00:24:50,560 --> 00:24:52,840
Speaker 8: as though they're going higher from here, So maybe that's

487
00:24:52,880 --> 00:24:55,520
Speaker 8: the right call. I'm just I think the era is

488
00:24:55,600 --> 00:24:58,360
Speaker 8: more likely to occur on excessive tightening.

489
00:24:58,560 --> 00:25:03,280
Speaker 1: Bloomberg surveillance of a great affection for politicians who come

490
00:25:03,320 --> 00:25:06,639
Speaker 1: from a different territory than just pure politics as well.

491
00:25:07,080 --> 00:25:08,920
Speaker 1: I was talking to our Greg Gerro and he looks

492
00:25:08,920 --> 00:25:12,560
Speaker 1: at the mess which is known as the coming presidential campaign. Yeah,

493
00:25:12,600 --> 00:25:16,120
Speaker 1: and I would just suggest sir that you consider here

494
00:25:16,240 --> 00:25:20,560
Speaker 1: in your private moments, private citizen moments, that we need

495
00:25:20,600 --> 00:25:22,320
Speaker 1: a Locell Academy ticket.

496
00:25:22,400 --> 00:25:22,560
Speaker 4: Now.

497
00:25:22,600 --> 00:25:25,679
Speaker 1: I think Governor Romando and Pat Toomy could get together

498
00:25:26,080 --> 00:25:28,720
Speaker 1: and bring Rhode Island to the nation. What's in the

499
00:25:28,720 --> 00:25:32,720
Speaker 1: pixie dust at Lacel Academy, robins Rhode Island. That gives

500
00:25:32,800 --> 00:25:35,480
Speaker 1: us the Commerce Secretary and the former Senator.

501
00:25:36,600 --> 00:25:39,960
Speaker 8: I think our Commerce Secretary is a very capable, very

502
00:25:40,000 --> 00:25:43,120
Speaker 8: capable person, one of the more impressive members of the

503
00:25:43,280 --> 00:25:49,960
Speaker 8: entire administration. But our worldviews still differ considerably. And a

504
00:25:49,960 --> 00:25:53,240
Speaker 8: great experience at Lasal Academy. It's a great school. But

505
00:25:53,680 --> 00:25:55,880
Speaker 8: miche and I won't be teaming up anytime soon.

506
00:25:56,080 --> 00:25:56,680
Speaker 2: What's the world?

507
00:25:56,960 --> 00:25:58,000
Speaker 4: What's the worldview?

508
00:25:58,080 --> 00:26:00,520
Speaker 1: You see at the debates of the Republican Party. I

509
00:26:00,560 --> 00:26:01,720
Speaker 1: believe they start in August.

510
00:26:01,920 --> 00:26:02,560
Speaker 2: What is that going to be?

511
00:26:02,640 --> 00:26:05,400
Speaker 8: There's some very big ones, right, and this is really important.

512
00:26:05,480 --> 00:26:07,280
Speaker 8: There's what is our role in the world. I mean,

513
00:26:07,320 --> 00:26:09,879
Speaker 8: you have a wing of the party that thinks we

514
00:26:09,880 --> 00:26:12,480
Speaker 8: shouldn't even be helping Ukrainians. I think that's crazy, but

515
00:26:13,000 --> 00:26:15,560
Speaker 8: there's people who are advocating that you have a wing

516
00:26:15,600 --> 00:26:19,280
Speaker 8: of the party that wants to completely explicitly reject market

517
00:26:19,280 --> 00:26:23,600
Speaker 8: capitalism and have central planning of industrial policy.

518
00:26:23,760 --> 00:26:25,200
Speaker 2: We're have to leave it there.

519
00:26:25,480 --> 00:26:27,919
Speaker 1: After your Apollo Board meeting, please come back and continue,

520
00:26:27,960 --> 00:26:29,320
Speaker 1: and we do want to talk to you about China.

521
00:26:29,320 --> 00:26:31,240
Speaker 1: I think that's really fun center as well.

522
00:26:31,320 --> 00:26:32,040
Speaker 8: Thanks for having me.

523
00:26:32,080 --> 00:26:32,480
Speaker 10: He is with A.

524
00:26:32,560 --> 00:26:44,680
Speaker 1: Paul Patrick Toomey is a former Senator of Pennsylvania.

525
00:26:46,359 --> 00:26:47,600
Speaker 2: I'm not going to mince words.

526
00:26:47,680 --> 00:26:53,520
Speaker 1: Leland Miller is an outlier with this granular analysis of China. Leland,

527
00:26:53,560 --> 00:26:58,760
Speaker 1: you aggressively push against the China economic gloom. What are

528
00:26:58,760 --> 00:27:00,600
Speaker 1: the gloomsters getting wrong?

529
00:27:02,040 --> 00:27:04,000
Speaker 11: Well, I think there's reason to be gloomy, but I

530
00:27:04,040 --> 00:27:06,399
Speaker 11: think everything has to be relative at this point. So

531
00:27:06,960 --> 00:27:09,400
Speaker 11: these are these are probably some of the most difficult

532
00:27:09,520 --> 00:27:13,159
Speaker 11: economic numbers that we've ever had to unravel, you know,

533
00:27:13,359 --> 00:27:15,760
Speaker 11: in over a decade. If you look at what we

534
00:27:15,840 --> 00:27:19,639
Speaker 11: do know, we do know that the early expectations that

535
00:27:19,680 --> 00:27:21,600
Speaker 11: there would be you know, a rallier in the year

536
00:27:21,880 --> 00:27:24,320
Speaker 11: those were those were wrong. If you look at what's

537
00:27:24,320 --> 00:27:26,359
Speaker 11: happening with Q two, the idea that there's going to

538
00:27:26,359 --> 00:27:28,840
Speaker 11: be a boom in Q two. Those certainly look wrong too,

539
00:27:29,000 --> 00:27:31,159
Speaker 11: So the question is is there a recovery or of

540
00:27:31,240 --> 00:27:34,800
Speaker 11: things falling apart. Well, if you look at this sequentially,

541
00:27:35,160 --> 00:27:38,159
Speaker 11: you have been seeing some improvement month a month. You know,

542
00:27:38,240 --> 00:27:41,680
Speaker 11: sis sheen improved five straight months, China basebook data improved

543
00:27:41,920 --> 00:27:44,680
Speaker 11: three straight months. If you look if you go into

544
00:27:44,680 --> 00:27:48,360
Speaker 11: the industrial production data, it looks like there's sequential improvements.

545
00:27:48,440 --> 00:27:51,320
Speaker 11: The retail sales numbers are really hard to decipher because

546
00:27:51,320 --> 00:27:53,440
Speaker 11: they say to me, moving these around from year to year.

547
00:27:53,880 --> 00:27:57,040
Speaker 11: But you do seem to be seeing some elements of improvement.

548
00:27:57,119 --> 00:28:00,199
Speaker 11: You're just not seeing the recovery everybody's expecting, which has

549
00:28:00,200 --> 00:28:04,040
Speaker 11: made everybody very pessimistic. So it's really about framing what

550
00:28:04,080 --> 00:28:06,399
Speaker 11: the expectations were, what they are for the rest of

551
00:28:06,560 --> 00:28:08,960
Speaker 11: the quarter, and then going based on that.

552
00:28:09,480 --> 00:28:14,760
Speaker 6: The PBOC responded after getting these disappointing retail sales figures

553
00:28:14,800 --> 00:28:17,879
Speaker 6: over the past twelve hours. They cut this rate on

554
00:28:18,160 --> 00:28:22,000
Speaker 6: the one year loan aspect of their portfolio by ten

555
00:28:22,040 --> 00:28:25,399
Speaker 6: basis points. And that's not necessarily a significant move. This

556
00:28:25,480 --> 00:28:28,760
Speaker 6: follows another very small move earlier in the week. What

557
00:28:28,800 --> 00:28:31,240
Speaker 6: does this signal about what they are prepared to do

558
00:28:31,520 --> 00:28:32,639
Speaker 6: in terms of stimulus.

559
00:28:34,600 --> 00:28:36,760
Speaker 11: I don't think it signals that much. I think in

560
00:28:37,119 --> 00:28:39,520
Speaker 11: and of itself, it's a signal that they understand the

561
00:28:39,600 --> 00:28:41,280
Speaker 11: data and not where they need to be or not

562
00:28:41,320 --> 00:28:42,640
Speaker 11: where people expected them to be.

563
00:28:43,120 --> 00:28:44,000
Speaker 4: But here's the problem.

564
00:28:44,080 --> 00:28:48,120
Speaker 11: People, every time they see week data, they expect stimulus,

565
00:28:48,120 --> 00:28:50,560
Speaker 11: big stimulus, some other stimulus is coming down the road

566
00:28:50,560 --> 00:28:52,680
Speaker 11: to save them. You know, this is like a time machine.

567
00:28:52,680 --> 00:28:55,000
Speaker 11: You go back to twenty twenty, twenty twenty one, twenty

568
00:28:55,040 --> 00:28:57,720
Speaker 11: twenty two. Now it's twenty twenty three. We're in having

569
00:28:57,720 --> 00:29:00,120
Speaker 11: the same type of conversation we've had for years. The

570
00:29:00,240 --> 00:29:04,160
Speaker 11: Chinese data overall getting weaker. Expectations for stimulus to stay

571
00:29:04,200 --> 00:29:06,480
Speaker 11: the same. Look, they are unlikely to do any type

572
00:29:06,480 --> 00:29:08,880
Speaker 11: of big stimulus. They're cutting baby rates, They're not going

573
00:29:08,920 --> 00:29:10,920
Speaker 11: to have much of an effect because this is a

574
00:29:10,960 --> 00:29:14,160
Speaker 11: demand question. The big question is do they dive back

575
00:29:14,240 --> 00:29:16,880
Speaker 11: down into the old school, Let's build a bunch of bridges,

576
00:29:16,920 --> 00:29:19,320
Speaker 11: let's build a bunch of towns infrastructure investment.

577
00:29:19,520 --> 00:29:21,080
Speaker 4: I think that's still very unlikely.

578
00:29:21,560 --> 00:29:24,200
Speaker 11: Nothing that we're seeing in China suggests that they want

579
00:29:24,240 --> 00:29:26,000
Speaker 11: to go back on that model that they have different

580
00:29:26,040 --> 00:29:28,840
Speaker 11: priorities right now. So I think that these signals are

581
00:29:28,880 --> 00:29:32,040
Speaker 11: sending some centiment boost to market markets because the data

582
00:29:32,040 --> 00:29:35,600
Speaker 11: are relatively weak, But I don't think that they foretel

583
00:29:35,680 --> 00:29:38,040
Speaker 11: a big movement towards bigger stimulus Leland.

584
00:29:38,160 --> 00:29:40,280
Speaker 6: They're sort of a conflicted picture here that on one hand,

585
00:29:40,320 --> 00:29:42,360
Speaker 6: you don't think the data is as dire or some

586
00:29:42,440 --> 00:29:44,880
Speaker 6: of the expectations are as dire as people expected to

587
00:29:44,880 --> 00:29:48,160
Speaker 6: be in terms of the deceleration of the Chinese economy.

588
00:29:48,200 --> 00:29:50,280
Speaker 6: On the other you don't expect stimulus to come and

589
00:29:50,280 --> 00:29:53,800
Speaker 6: save the day and propel growth substantially above five percent.

590
00:29:53,920 --> 00:29:56,480
Speaker 6: What is the new growth Paara time? How much will

591
00:29:56,640 --> 00:30:00,200
Speaker 6: China's GDP expand this year and then going forward than

592
00:30:00,280 --> 00:30:02,560
Speaker 6: your normal Well, look, our.

593
00:30:02,840 --> 00:30:04,880
Speaker 11: June data, which we get in two weeks are probably

594
00:30:05,240 --> 00:30:07,320
Speaker 11: I'm anticipating these these are to be the most interesting

595
00:30:07,360 --> 00:30:10,160
Speaker 11: data we've seen in over a decade because June, whether

596
00:30:10,280 --> 00:30:13,080
Speaker 11: the second quarter growth can be saved, whether they're gettingwhere

597
00:30:13,120 --> 00:30:15,200
Speaker 11: near the five percent number. Keep in mind, they're coming

598
00:30:15,200 --> 00:30:17,560
Speaker 11: off an extremely poor base in twenty twenty two, so

599
00:30:17,880 --> 00:30:20,640
Speaker 11: hitting some of these numbers for the second quarter, for instance,

600
00:30:20,840 --> 00:30:23,720
Speaker 11: are not as hard as people think, but again, what's

601
00:30:23,760 --> 00:30:26,239
Speaker 11: the big lesson here. The lesson is they are just

602
00:30:26,400 --> 00:30:29,440
Speaker 11: not prioritizing hitting the levels of growth that people on

603
00:30:29,480 --> 00:30:31,560
Speaker 11: Wall Street are telling They're telling us that they're going

604
00:30:31,640 --> 00:30:34,320
Speaker 11: to hit. You know, they are trying to you know,

605
00:30:34,360 --> 00:30:39,000
Speaker 11: they're trying to move forward, restrain themselves from from bigger stimulus,

606
00:30:39,240 --> 00:30:41,920
Speaker 11: or they're reprioritizing the economy in terms of you know,

607
00:30:42,040 --> 00:30:44,360
Speaker 11: national security, different different party set.

608
00:30:44,680 --> 00:30:47,560
Speaker 1: Leila Mello, Jonathan Spence one oh one is went in

609
00:30:47,640 --> 00:30:52,240
Speaker 1: doubt as a totalitarian regime employ the masses. I'm looking

610
00:30:52,240 --> 00:30:54,600
Speaker 1: in February and I'm sure you've read this in Chinese

611
00:30:55,120 --> 00:30:59,520
Speaker 1: Measures for the Administration of National Work Relief. Does all

612
00:30:59,560 --> 00:31:04,080
Speaker 1: this come down to the primal scream that the totalitarian

613
00:31:04,280 --> 00:31:10,560
Speaker 1: elites in Beijing have to employ millions of unemployed, millions

614
00:31:10,640 --> 00:31:14,520
Speaker 1: of low wage this immense labor pressure that's been there

615
00:31:14,560 --> 00:31:15,480
Speaker 1: for fifty years.

616
00:31:16,760 --> 00:31:19,400
Speaker 11: Well, labor pressure is at the center of this, because

617
00:31:19,440 --> 00:31:22,440
Speaker 11: you know, the talk for years now has been that

618
00:31:22,600 --> 00:31:27,480
Speaker 11: China needs to restructure the society from investment and investment

619
00:31:27,560 --> 00:31:31,160
Speaker 11: driven to consumption driven, you know, to from all type

620
00:31:31,160 --> 00:31:33,720
Speaker 11: of the economic model to a new type of economic model.

621
00:31:33,880 --> 00:31:36,280
Speaker 11: You know, that's a restructuring of jobs along the way,

622
00:31:36,280 --> 00:31:38,200
Speaker 11: and so you need to make sure you keep people employed.

623
00:31:38,480 --> 00:31:40,400
Speaker 11: So this is an issue you have. You have some

624
00:31:40,400 --> 00:31:42,760
Speaker 11: some some you know, issues of the labor market that

625
00:31:42,800 --> 00:31:45,280
Speaker 11: will be helpful over the years with falling market, you know,

626
00:31:45,360 --> 00:31:47,719
Speaker 11: working population, et cetera. You're going it's gonna be easier

627
00:31:47,760 --> 00:31:50,720
Speaker 11: to do. But this is still a grand transition for them.

628
00:31:50,800 --> 00:31:55,440
Speaker 11: So they've got enormous, enormous challenges going forward trying to

629
00:31:55,440 --> 00:31:56,360
Speaker 11: to make growth work.

630
00:31:56,520 --> 00:31:59,040
Speaker 1: I mean, they got the challenges there that were there

631
00:31:59,040 --> 00:32:01,400
Speaker 1: ten years ago, twenty years ago. I personally observed them

632
00:32:01,400 --> 00:32:04,960
Speaker 1: in Shanghai, and I found it extraordinary to see basically

633
00:32:05,080 --> 00:32:09,400
Speaker 1: served them in modern pseudo capitalism, if you will. What's

634
00:32:09,440 --> 00:32:13,720
Speaker 1: the Leland Miller unemployment rate from Chengdu to Beijing.

635
00:32:14,840 --> 00:32:16,600
Speaker 11: Oh wow, you know a lot of this is the

636
00:32:16,640 --> 00:32:18,479
Speaker 11: methodology how to use it. I mean, people look at

637
00:32:18,480 --> 00:32:22,000
Speaker 11: this youth unemployment rate, which is awful, bad news, and

638
00:32:22,000 --> 00:32:24,880
Speaker 11: it's scary. It's done very differently than the way it's

639
00:32:24,920 --> 00:32:26,800
Speaker 11: done in the United States. For instance, you mean you're unemployed,

640
00:32:26,840 --> 00:32:29,720
Speaker 11: if you're uneployed, you're unemployed. You're not different waiting times

641
00:32:29,720 --> 00:32:32,200
Speaker 11: and other things. For being categorized. It does show there's

642
00:32:32,200 --> 00:32:34,880
Speaker 11: a problem. I don't think it's the key problem that

643
00:32:34,920 --> 00:32:36,880
Speaker 11: they're looking at. I think what they need to do

644
00:32:37,200 --> 00:32:40,440
Speaker 11: is reinstill some level of confidence, not through stimulus, but

645
00:32:40,480 --> 00:32:44,080
Speaker 11: through organic policies, and they need to They needed to

646
00:32:44,120 --> 00:32:45,880
Speaker 11: boost demand because right now there needs to be a

647
00:32:45,960 --> 00:32:49,000
Speaker 11: domestic demand story that's able to spur this recovery.

648
00:32:49,040 --> 00:32:49,800
Speaker 4: So they're in a.

649
00:32:49,720 --> 00:32:52,280
Speaker 11: Weird position where they're not getting the organic recovery so

650
00:32:52,400 --> 00:32:55,160
Speaker 11: far that they were expecting, but they're also a lot

651
00:32:55,280 --> 00:32:58,800
Speaker 11: less likely to be going down the stimulus route, at

652
00:32:58,920 --> 00:33:01,480
Speaker 11: least compared to what most people around the globe think.

653
00:33:01,720 --> 00:33:04,440
Speaker 4: So they're in a position where the pressure is on.

654
00:33:05,000 --> 00:33:07,440
Speaker 6: Meanwhile, we see that Tony Blinken, Secretary of State, is

655
00:33:07,480 --> 00:33:10,800
Speaker 6: heading over to Beijing to get a sense of whether

656
00:33:10,840 --> 00:33:12,560
Speaker 6: they can really ease some of the tensions that have

657
00:33:12,600 --> 00:33:14,680
Speaker 6: been escalating ratcheting up between the US and China. What

658
00:33:14,680 --> 00:33:17,880
Speaker 6: are you looking for in terms of understanding the points

659
00:33:17,880 --> 00:33:21,080
Speaker 6: of leverage and what China wants in terms of international

660
00:33:21,120 --> 00:33:23,000
Speaker 6: participation from these meetings.

661
00:33:24,400 --> 00:33:25,920
Speaker 4: I'm not sure they want much.

662
00:33:26,000 --> 00:33:29,240
Speaker 11: I mean, one of the sources of leverage for the

663
00:33:29,320 --> 00:33:31,400
Speaker 11: Chinese right now is the fact that they don't want

664
00:33:31,440 --> 00:33:33,760
Speaker 11: to interact with their American.

665
00:33:34,880 --> 00:33:37,480
Speaker 4: Opposites. They don't want to answer military hotlines.

666
00:33:37,520 --> 00:33:39,200
Speaker 11: They want to say, look, if you're going to be

667
00:33:39,520 --> 00:33:44,040
Speaker 11: rough on us from an international relations standpoint, then we're

668
00:33:44,120 --> 00:33:45,360
Speaker 11: going to ignore you.

669
00:33:45,480 --> 00:33:46,960
Speaker 4: And that raises the risks.

670
00:33:46,720 --> 00:33:48,920
Speaker 11: For everybody that there could be some sort of misunderstanding

671
00:33:49,000 --> 00:33:52,160
Speaker 11: or confrontation. I think that works for China's favor in

672
00:33:52,200 --> 00:33:54,760
Speaker 11: their minds at least, so I don't think they want.

673
00:33:54,680 --> 00:33:55,200
Speaker 4: Much of it.

674
00:33:55,320 --> 00:33:59,160
Speaker 11: Better communications, more communications is a good thing, but I

675
00:33:59,200 --> 00:34:01,360
Speaker 11: don't think that this is going to solve anything.

676
00:34:02,280 --> 00:34:05,560
Speaker 1: I look, Leland, you know, just just one final quick

677
00:34:05,640 --> 00:34:11,120
Speaker 1: question here on the solidity of the federal administration in Beijing.

678
00:34:11,360 --> 00:34:14,080
Speaker 1: I mean, everybody makes a deal, you know, Premier president

679
00:34:14,160 --> 00:34:17,319
Speaker 1: for life, whatever she is. But how stable are they?

680
00:34:17,520 --> 00:34:20,279
Speaker 1: What support do they have from the city's mayors and

681
00:34:20,320 --> 00:34:24,560
Speaker 1: from the regional organization of the Communist Party.

682
00:34:25,360 --> 00:34:27,880
Speaker 11: Well, China, China is a black box. I mean that's

683
00:34:28,040 --> 00:34:31,240
Speaker 11: that's that's still true. But there's nothing that we're seeing

684
00:34:31,400 --> 00:34:34,880
Speaker 11: that suggests that the Chinese Communist Party, despite all these

685
00:34:35,200 --> 00:34:40,760
Speaker 11: structural headwinds, despite weak economic growth, despite a challenging international environment,

686
00:34:41,239 --> 00:34:43,399
Speaker 11: doesn't have the support of the people, that there's any

687
00:34:43,480 --> 00:34:45,200
Speaker 11: type of pushback against Hijinping.

688
00:34:45,440 --> 00:34:46,640
Speaker 4: We're just not seeing that.

689
00:34:46,800 --> 00:34:50,239
Speaker 11: So obviously, underneath the system there's no pressure valve, like

690
00:34:50,280 --> 00:34:52,640
Speaker 11: there isn't a democracy, you know, to throw the bums out.

691
00:34:52,640 --> 00:34:55,359
Speaker 11: And but look, you know, it's hard to see any

692
00:34:55,400 --> 00:34:58,319
Speaker 11: type of specific political stress in the system, although there's

693
00:34:58,320 --> 00:34:59,720
Speaker 11: certainly lots of economic stress.

694
00:35:00,400 --> 00:35:01,200
Speaker 1: Thank you for the brief.

695
00:35:01,239 --> 00:35:02,880
Speaker 2: He is with China Babek.

696
00:35:03,040 --> 00:35:06,880
Speaker 1: Subscribe to the Bloomberg Surveillance Podcast on Apple, Spotify, and

697
00:35:07,000 --> 00:35:11,200
Speaker 1: anywhere else you get your podcasts. Listen live every weekday

698
00:35:11,480 --> 00:35:14,960
Speaker 1: starting at seven am Eastern on Bloomberg dot Com, the

699
00:35:15,080 --> 00:35:19,600
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

700
00:35:19,640 --> 00:35:23,600
Speaker 1: can watch us live on Bloomberg Television and always on

701
00:35:23,719 --> 00:35:24,800
Speaker 1: the Bloomberg Terminal.

702
00:35:25,200 --> 00:35:26,120
Speaker 2: Thanks for listening.

703
00:35:26,560 --> 00:35:39,560
Speaker 1: I'm Tom Keen, and this is Bloomberg. Thanks for listening

704
00:35:39,600 --> 00:35:43,120
Speaker 1: to the Bloomberg Surveillance Podcast. Now, stay tuned for today's

705
00:35:43,239 --> 00:35:47,280
Speaker 1: edition of Bloomberg Daybreak. It's your daily news podcast, delivering

706
00:35:47,280 --> 00:35:51,320
Speaker 1: today's top stories to your podcast feed by six am Eastern.

707
00:35:51,600 --> 00:35:54,800
Speaker 1: It's all the news you need in just fifteen minutes.

708
00:35:55,160 --> 00:36:02,200
Speaker 1: The Bloomberg Daybreak podcast. It starts right now.

709
00:36:00,960 --> 00:36:04,040
Speaker 12: From the Bloomberg Interactive Broker Studios. This is Bloomberg day

710
00:36:04,040 --> 00:36:06,000
Speaker 12: Break for Thursday, June fifteenth.

711
00:36:06,120 --> 00:36:09,040
Speaker 13: Coming up today, the Fed pauses for the first time

712
00:36:09,080 --> 00:36:11,840
Speaker 13: in fifteen months, but signals more rate hikes ahead.

713
00:36:11,960 --> 00:36:15,000
Speaker 12: Now it's the ECB's turn, with a policy decision coming

714
00:36:15,040 --> 00:36:15,600
Speaker 12: this morning.

715
00:36:15,719 --> 00:36:19,240
Speaker 13: A busy week of economic data continues. US retail sales

716
00:36:19,280 --> 00:36:20,120
Speaker 13: are two out, and.

717
00:36:20,160 --> 00:36:23,120
Speaker 12: Former President Trump holds onto GOP support in the wake

718
00:36:23,200 --> 00:36:24,239
Speaker 12: of his indictments.

719
00:36:24,280 --> 00:36:27,479
Speaker 10: The retired marine charge with putting a Manhattan subway writer

720
00:36:27,600 --> 00:36:30,680
Speaker 10: and a fatal choke hold has been indicted. Plus Texas

721
00:36:30,719 --> 00:36:33,200
Speaker 10: has sent a busload of migrants to Los Angeles.

722
00:36:33,360 --> 00:36:35,520
Speaker 14: I'm Michael barn Ahead, I'm John Stansh.

723
00:36:35,560 --> 00:36:37,759
Speaker 15: Edward's Wards the Mets with a walk off win over

724
00:36:37,800 --> 00:36:40,600
Speaker 15: the Yankees, the US Open golfed He's off today in

725
00:36:40,680 --> 00:36:41,400
Speaker 15: Los Angeles.

726
00:36:43,000 --> 00:36:46,400
Speaker 16: That's all straight Ahead on Bloomberg day Break, the business

727
00:36:46,440 --> 00:36:48,919
Speaker 16: news you need to starn your day in just one

728
00:36:49,000 --> 00:36:53,440
Speaker 16: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg

729
00:36:53,520 --> 00:36:56,200
Speaker 16: Business Appen everywhere you get your podcasts.

730
00:36:59,160 --> 00:37:02,600
Speaker 12: Good morning, I'mthan Hager and I'm Amy Morris. Here are

731
00:37:02,640 --> 00:37:04,360
Speaker 12: the stories we're following today.

732
00:37:05,200 --> 00:37:08,560
Speaker 13: Investors are still digesting yesterday's message from the Federal Reserve.

733
00:37:08,680 --> 00:37:11,600
Speaker 13: The Central Bank did pause rate hikes after fifteen months

734
00:37:11,600 --> 00:37:13,880
Speaker 13: of tightening, but the move is being viewed as a

735
00:37:13,920 --> 00:37:17,400
Speaker 13: hawkish hold. Fed schhair Jaypal says he expects more hikes

736
00:37:17,400 --> 00:37:18,080
Speaker 13: will be needed.

737
00:37:18,840 --> 00:37:21,880
Speaker 5: Today, we decided to leave our policy interest rate unchanged.

738
00:37:22,200 --> 00:37:25,480
Speaker 5: Nearly all committee participants expect that it will be appropriate

739
00:37:25,880 --> 00:37:28,880
Speaker 5: to raise interest rates somewhat further by the end of

740
00:37:28,920 --> 00:37:29,560
Speaker 5: the year.

741
00:37:29,480 --> 00:37:31,719
Speaker 13: And jay Palell declined to say whether another hike could

742
00:37:31,719 --> 00:37:33,719
Speaker 13: come as soon as July, but he did emphasize it

743
00:37:33,760 --> 00:37:35,640
Speaker 13: will be a live meeting next month.

744
00:37:36,239 --> 00:37:40,120
Speaker 12: Pell faced the challenging task of explaining two contradictory policies,

745
00:37:40,160 --> 00:37:43,600
Speaker 12: deciding to leave rates unchanged while also indicating two more

746
00:37:43,640 --> 00:37:47,799
Speaker 12: increases this year. Apollo Management chief economist Torsten slog says

747
00:37:47,800 --> 00:37:50,520
Speaker 12: Powell did a good job walking that fine line.

748
00:37:50,640 --> 00:37:54,640
Speaker 17: They succeeded in what we expected namy delivering a.

749
00:37:54,600 --> 00:37:58,279
Speaker 8: Hawkish skip, because they did signal very stronger than more

750
00:37:58,320 --> 00:37:59,320
Speaker 8: rate hikes are coming.

751
00:38:00,200 --> 00:38:02,719
Speaker 12: Lock at Apollo says traders are now betting on two

752
00:38:02,840 --> 00:38:05,560
Speaker 12: more quarter point increases this year. We also get the

753
00:38:05,640 --> 00:38:09,000
Speaker 12: view from Diane Swank, chief economist at KPMG.

754
00:38:09,040 --> 00:38:11,960
Speaker 17: This is a FED that is committed to additional rate hikes.

755
00:38:12,000 --> 00:38:15,680
Speaker 17: The tricky part of this pause or skip was messaging it,

756
00:38:15,840 --> 00:38:19,399
Speaker 17: and this was a very effective way to message. We're

757
00:38:19,440 --> 00:38:22,520
Speaker 17: going to assess what titaning is out there and how

758
00:38:22,600 --> 00:38:24,320
Speaker 17: much additional titaning is needed.

759
00:38:24,840 --> 00:38:28,120
Speaker 12: KPMG chief economist Diane Swank also expects the Fed to

760
00:38:28,200 --> 00:38:30,279
Speaker 12: raise rates in July and September.

761
00:38:30,360 --> 00:38:32,160
Speaker 13: Well, the Fed appears to have laid out a plan.

762
00:38:32,280 --> 00:38:33,919
Speaker 13: I mean, now we wait to see what the data

763
00:38:33,960 --> 00:38:36,280
Speaker 13: say in the coming month. Today we get the latest

764
00:38:36,280 --> 00:38:39,879
Speaker 13: reading on retail sales. Economists forecast a drop of two

765
00:38:40,000 --> 00:38:42,400
Speaker 13: tenths of one percent in May, and Bloomberg's Vinnie del

766
00:38:42,480 --> 00:38:43,440
Speaker 13: Judice has more.

767
00:38:43,760 --> 00:38:46,879
Speaker 18: The prior report showed April retail sales recovered from back

768
00:38:46,920 --> 00:38:50,680
Speaker 18: to back declines. Even so, Bloomberg economics, as Americans are

769
00:38:50,719 --> 00:38:54,000
Speaker 18: becoming more discerning with their money. Higher interest rates are

770
00:38:54,040 --> 00:38:57,360
Speaker 18: taking a bite out of household finances. Inflation remains an

771
00:38:57,400 --> 00:39:00,360
Speaker 18: issue too, and then to sign us businesses or racing

772
00:39:00,400 --> 00:39:05,000
Speaker 18: for weaker demand, cardboard bakshipments are falling. Also on today's agenda,

773
00:39:05,320 --> 00:39:09,000
Speaker 18: May industrial production economists anticipate moderation.

774
00:39:09,360 --> 00:39:11,560
Speaker 4: Vinnie del Judeis Bloomberg day Break.

775
00:39:11,520 --> 00:39:12,240
Speaker 1: Thank you, Vinnie.

776
00:39:12,239 --> 00:39:15,040
Speaker 12: It's also a busy day for economic news overseas. The

777
00:39:15,080 --> 00:39:18,720
Speaker 12: European Central Bank makes an interest rate policy decision this morning.

778
00:39:18,920 --> 00:39:21,080
Speaker 12: Let's go to London and get details from Bloomberg's U

779
00:39:21,160 --> 00:39:21,640
Speaker 12: and Parts.

780
00:39:21,680 --> 00:39:23,200
Speaker 4: Good Morning New and good.

781
00:39:23,080 --> 00:39:25,480
Speaker 19: Morning Amy and Nathan. The ECB looks set to deliver

782
00:39:25,520 --> 00:39:29,560
Speaker 19: what could be its penultimate rate hike later today. Economists

783
00:39:29,640 --> 00:39:32,720
Speaker 19: overwhelmingly expect the deposit rates shared by the twenty nations

784
00:39:32,719 --> 00:39:35,360
Speaker 19: which use the single currency to be lifted by twenty

785
00:39:35,360 --> 00:39:38,880
Speaker 19: five basis points to three point five percent. The focus

786
00:39:38,880 --> 00:39:41,360
Speaker 19: for investors will be on the ECB's guidance as to

787
00:39:41,400 --> 00:39:43,400
Speaker 19: how much further they have to go in their fights

788
00:39:43,440 --> 00:39:46,600
Speaker 19: against an inflation rate still three times the bank's targets.

789
00:39:46,800 --> 00:39:48,840
Speaker 19: In London, I'm un in Parts, Boomberg day Break.

790
00:39:48,760 --> 00:39:49,279
Speaker 1: Thanks Youan.

791
00:39:49,360 --> 00:39:52,520
Speaker 13: In Asia overnight, China's Central Bank was making moves ramping

792
00:39:52,560 --> 00:39:55,480
Speaker 13: up monetary stimulus to help spur the economy, and Bloomberg

793
00:39:55,560 --> 00:39:58,359
Speaker 13: Daybreak Asia anchor Brian Curtis has more from Hong Kong.

794
00:39:58,680 --> 00:40:01,759
Speaker 20: The action comes on new signs of weakness in May.

795
00:40:02,080 --> 00:40:04,440
Speaker 20: The PBOC cut the interest rate on its one year

796
00:40:04,480 --> 00:40:07,320
Speaker 20: policy loans by ten basis points to two point sixty

797
00:40:07,360 --> 00:40:10,400
Speaker 20: five percent. That's likely to prompt the banks to lower

798
00:40:10,440 --> 00:40:13,960
Speaker 20: their rates as well. On data, industrial output rose three

799
00:40:14,000 --> 00:40:17,200
Speaker 20: point five percent from a year earlier, matching estimates, but

800
00:40:17,360 --> 00:40:21,280
Speaker 20: down from five point six percent. Retail sales gained twelve

801
00:40:21,360 --> 00:40:24,360
Speaker 20: point seven percent, but that missed an estimate as well,

802
00:40:24,760 --> 00:40:27,360
Speaker 20: and fixed asset investments slowing to four percent in the

803
00:40:27,360 --> 00:40:30,759
Speaker 20: first five months of the year also weaker than forecast.

804
00:40:31,160 --> 00:40:33,560
Speaker 20: In Hong Kong Brain Curtis Bloomberg Daybreak.

805
00:40:33,640 --> 00:40:37,040
Speaker 12: Relations between China and US are also in focus. Secretary

806
00:40:37,080 --> 00:40:40,080
Speaker 12: of State Anthony B. Lincoln departs for China tomorrow as

807
00:40:40,120 --> 00:40:42,680
Speaker 12: plans call for a two day trip aimed at stabilizing

808
00:40:42,800 --> 00:40:46,000
Speaker 12: ties between the two countries. Lincoln's last attempt to visit

809
00:40:46,080 --> 00:40:49,160
Speaker 12: China was derailed by that alleged Chinese spy balloon.

810
00:40:49,360 --> 00:40:52,640
Speaker 13: Back here in the US, amy presidential politics remaining focus.

811
00:40:52,719 --> 00:40:56,360
Speaker 13: Former President Donald Trump's legal troubles are dominating headlines, but

812
00:40:56,440 --> 00:40:59,680
Speaker 13: they don't seem to be derailing his support among Republicans.

813
00:41:00,000 --> 00:41:02,879
Speaker 13: Bloomberg Zed Baxter has a look at the latest numbers.

814
00:41:02,719 --> 00:41:06,120
Speaker 14: The Quinnipiac University poll says bottom line, he is still

815
00:41:06,160 --> 00:41:10,200
Speaker 14: the strong front runner for the nomination. The survey, conducted

816
00:41:10,239 --> 00:41:13,839
Speaker 14: mostly after the latest indictment, shows support from fifty three

817
00:41:13,920 --> 00:41:17,960
Speaker 14: percent of Republican and GOP leaning voters Ron DeSantis with

818
00:41:18,320 --> 00:41:21,680
Speaker 14: twenty five percent. Now it should be noted that the

819
00:41:21,719 --> 00:41:25,320
Speaker 14: fifty three is down from fifty six percent last month.

820
00:41:25,760 --> 00:41:29,680
Speaker 14: Fundraising well, his campaign says since the indictment, the tills

821
00:41:29,680 --> 00:41:34,759
Speaker 14: have been fed six point six million dollars. In San Francisco.

822
00:41:34,840 --> 00:41:37,319
Speaker 14: I'm at Baxter Bloomberg Daybreak, Thank you ed.

823
00:41:37,360 --> 00:41:40,360
Speaker 12: As former President Trump continues his campaign, he's accusing the

824
00:41:40,400 --> 00:41:43,680
Speaker 12: Special Counsel of a double standard. Trump points to others

825
00:41:43,719 --> 00:41:47,480
Speaker 12: accused of keeping classified documents who haven't been prosecuted, like

826
00:41:47,520 --> 00:41:51,440
Speaker 12: President Biden and Hillary Clinton, but former resistant Special Watergate

827
00:41:51,480 --> 00:41:54,480
Speaker 12: prosecutor Nick Ackerman says there's really no comparison.

828
00:41:54,840 --> 00:41:57,920
Speaker 21: I mean, the people who are making these arguments, they

829
00:41:58,000 --> 00:42:01,200
Speaker 21: got to be questioned about the specific paragraphs in this

830
00:42:01,320 --> 00:42:05,320
Speaker 21: indictment and ask them if they're fine with somebody doing

831
00:42:05,360 --> 00:42:11,120
Speaker 21: that fine telling their lawyer to move boxes to hide documents,

832
00:42:11,160 --> 00:42:14,360
Speaker 21: if they're fine with telling their lawyer to destroy documents.

833
00:42:14,719 --> 00:42:17,920
Speaker 12: Former Assistant US Attorney Nick Ackerman spoke with Joe Matthew

834
00:42:17,920 --> 00:42:21,040
Speaker 12: on Bloomberg's Sound Catch That show weekdays at one pm

835
00:42:21,040 --> 00:42:24,000
Speaker 12: Eastern on Bloomberg Radio or listen on demand wherever you

836
00:42:24,080 --> 00:42:25,120
Speaker 12: get your podcasts.

837
00:42:28,520 --> 00:42:30,040
Speaker 13: Time now to look at some of the other stories

838
00:42:30,040 --> 00:42:31,960
Speaker 13: making news in New York and around the world with

839
00:42:32,000 --> 00:42:33,000
Speaker 13: Bloomberg's Michael Barr.

840
00:42:33,080 --> 00:42:34,440
Speaker 2: Good Morning, Michael, Good Morning.

841
00:42:34,520 --> 00:42:37,040
Speaker 10: Nathan. A man charge with a manslaughter for putting an

842
00:42:37,040 --> 00:42:40,200
Speaker 10: agitated New York City subway writer in a fatal chokehold,

843
00:42:40,719 --> 00:42:44,480
Speaker 10: has been indicted by a grand jury. Daniel Penny was

844
00:42:44,600 --> 00:42:47,879
Speaker 10: charged by Manhattan prosecutors last month in the May first

845
00:42:48,000 --> 00:42:51,120
Speaker 10: death of Jordan Neely, who struggled in recent years with

846
00:42:51,160 --> 00:42:55,160
Speaker 10: homelessness and mental illness. Penny earlier this week talked about

847
00:42:55,160 --> 00:42:57,560
Speaker 10: the incident in a video released by his attorneys.

848
00:42:57,840 --> 00:42:59,759
Speaker 5: The three main threats that he repeated over and over

849
00:43:00,480 --> 00:43:02,799
Speaker 5: I'm going to kill you, I'm prepared to go to

850
00:43:02,840 --> 00:43:04,800
Speaker 5: jail for life, and I'm willing to die.

851
00:43:04,960 --> 00:43:08,920
Speaker 10: New York City trial attorney Brian Buckmeyer spoke to ABC.

852
00:43:09,440 --> 00:43:12,120
Speaker 22: It's the idea of being safe in the subway, the

853
00:43:12,200 --> 00:43:16,320
Speaker 22: ideas of mental health, and potentially substance abuse in the subway,

854
00:43:16,640 --> 00:43:21,399
Speaker 22: and how these two ideas and these these themes kind

855
00:43:21,400 --> 00:43:24,480
Speaker 22: of intersect and asking the question where is the line.

856
00:43:24,719 --> 00:43:27,880
Speaker 10: Penny faces up to fifteen years in prison if convicted.

857
00:43:28,320 --> 00:43:31,520
Speaker 10: And there's another incident of a subway writer facing charges

858
00:43:31,560 --> 00:43:34,360
Speaker 10: after the death of another man said to be harassing

859
00:43:34,360 --> 00:43:38,120
Speaker 10: other passengers. Twenty year old Jordan Williams is facing manslaughter

860
00:43:38,280 --> 00:43:41,200
Speaker 10: charges and the fatal stabbing on board of Brooklyn bound

861
00:43:41,320 --> 00:43:44,720
Speaker 10: Jay train Tuesday night. The NYPD says a fight began

862
00:43:44,880 --> 00:43:48,680
Speaker 10: aboard the train in Manhattan. Police are reviewing cell phone

863
00:43:48,760 --> 00:43:51,279
Speaker 10: videos of a thirty six year old man who was

864
00:43:51,320 --> 00:43:55,200
Speaker 10: allegedly harassing subway riders as the train traveled to Brooklyn.

865
00:43:55,560 --> 00:43:58,680
Speaker 10: A group of migrants who arrived by bus and downtown

866
00:43:58,760 --> 00:44:03,120
Speaker 10: Los Angeles were sent from Texas. La Mayor Karen Bass

867
00:44:03,200 --> 00:44:07,200
Speaker 10: called the move a despicable stunt. Republican Governor Greg Abbott

868
00:44:07,280 --> 00:44:10,800
Speaker 10: has also been chartering buses to New York City, Washington,

869
00:44:10,880 --> 00:44:14,840
Speaker 10: d C, Chicago, and Denver. A New Jersey man is

870
00:44:15,040 --> 00:44:17,560
Speaker 10: lucky to be alive after he was struck by lightning,

871
00:44:17,920 --> 00:44:21,160
Speaker 10: official say thirty nine year old to Eric Bombgardner, a

872
00:44:21,239 --> 00:44:25,560
Speaker 10: Woodbridge Township public works employee was painting lines on a

873
00:44:25,560 --> 00:44:28,840
Speaker 10: middle school soccer field when he was struck. His life

874
00:44:28,920 --> 00:44:32,640
Speaker 10: was saved by Woodbridge police officer Robert R. J. McPartland,

875
00:44:33,000 --> 00:44:35,239
Speaker 10: who was assigned to the high school right next door

876
00:44:35,280 --> 00:44:36,799
Speaker 10: and arrived within seconds.

877
00:44:37,320 --> 00:44:40,160
Speaker 23: Some burnmarks appeared on his hands, realized he didn't have

878
00:44:40,160 --> 00:44:43,000
Speaker 23: a pulse and began CPR. He was a parent that

879
00:44:43,040 --> 00:44:45,719
Speaker 23: he was struck by lightning. He was still holding one

880
00:44:45,760 --> 00:44:47,359
Speaker 23: of the machines. We were able to get that away

881
00:44:47,360 --> 00:44:49,840
Speaker 23: from him. When more units arrived, we were able to

882
00:44:49,880 --> 00:44:52,280
Speaker 23: get the AD hooked up to him and start breathing

883
00:44:52,280 --> 00:44:52,680
Speaker 23: for him.

884
00:44:52,800 --> 00:44:56,840
Speaker 10: Officer McPartland says. Bombgardner was rushed to Robert Wood Johnson

885
00:44:56,880 --> 00:44:59,759
Speaker 10: Medical Center in New Brunswick for treatment. Global News twenty

886
00:44:59,800 --> 00:45:02,200
Speaker 10: four hours a day, powered by more than twenty seven

887
00:45:02,280 --> 00:45:05,440
Speaker 10: hundred journalists nantilists in over one hundred and twenty countries.

888
00:45:05,440 --> 00:45:06,120
Speaker 10: I'm Michael Barr.

889
00:45:06,239 --> 00:45:08,400
Speaker 2: This is Bloomberg Neither Thanks Michael.

890
00:45:12,600 --> 00:45:14,520
Speaker 13: Ten half of the Bloomberg Sports Update, brought to you

891
00:45:14,560 --> 00:45:15,600
Speaker 13: by Trice State out Eat.

892
00:45:15,600 --> 00:45:17,279
Speaker 2: Good morning, John Stanshout.

893
00:45:16,840 --> 00:45:17,560
Speaker 4: Good morning Nathan.

894
00:45:17,640 --> 00:45:20,200
Speaker 15: The Mets, losers of nine of their last ten games,

895
00:45:20,200 --> 00:45:22,600
Speaker 15: did a lot of things wrong at Citi Field. Jeff

896
00:45:22,640 --> 00:45:25,279
Speaker 15: McNeil's throwing air allowed the Yankees to take the lead

897
00:45:25,440 --> 00:45:29,520
Speaker 15: seventh inning, and later in that inning they ignored Isaiah

898
00:45:29,600 --> 00:45:31,880
Speaker 15: Connor pileeff and when he was at third base, they

899
00:45:31,960 --> 00:45:34,480
Speaker 15: let him steal home. Then a base running blundered by

900
00:45:34,520 --> 00:45:37,480
Speaker 15: Brandon Nimmo ended the chance to retake the lead in

901
00:45:37,520 --> 00:45:39,880
Speaker 15: the bottom of the seventh, so the Subway series was

902
00:45:39,920 --> 00:45:41,200
Speaker 15: still tied in the tenth.

903
00:45:41,200 --> 00:45:45,280
Speaker 24: The one swinging a high drive hit Teep right field

904
00:45:45,440 --> 00:45:47,840
Speaker 24: hours back to the track at the wall.

905
00:45:47,960 --> 00:45:51,160
Speaker 2: It is off the wall. Escobar racing a round third,

906
00:45:51,440 --> 00:45:54,879
Speaker 2: take you the turn. The cutoff throw from right center field.

907
00:45:54,719 --> 00:45:55,800
Speaker 10: Is out of time.

908
00:45:56,680 --> 00:45:58,560
Speaker 2: Escovar slides it safely.

909
00:45:59,200 --> 00:46:03,160
Speaker 13: Nimmo faced with it game winning RBI.

910
00:46:02,880 --> 00:46:05,879
Speaker 15: Trip on WCBS, Mets beat the Yankees four to three.

911
00:46:05,920 --> 00:46:08,399
Speaker 15: Mets were without reliever Drew Smith, they with a ten

912
00:46:08,440 --> 00:46:11,239
Speaker 15: game suspension. Smith had been tossed out a Tuesday's game

913
00:46:11,280 --> 00:46:14,840
Speaker 15: before he threw a pitch as umpires found the sticky stuff,

914
00:46:14,920 --> 00:46:17,400
Speaker 15: just like what happened to his teammate Max Scherzer and

915
00:46:17,560 --> 00:46:20,360
Speaker 15: of the Yankees, Domingo Herman. The Oakland A's stunning seven

916
00:46:20,400 --> 00:46:20,880
Speaker 15: game win.

917
00:46:20,760 --> 00:46:21,399
Speaker 10: Streak is over.

918
00:46:21,480 --> 00:46:24,400
Speaker 15: They were twelve and fifty before the streak, and the

919
00:46:24,440 --> 00:46:27,840
Speaker 15: A's moved closer to Las Vegas with final approval by

920
00:46:27,880 --> 00:46:30,560
Speaker 15: the Nevada Legislator and public funding for a new stadium

921
00:46:30,560 --> 00:46:33,400
Speaker 15: on the Strip. US Open Golf Tee's off today on

922
00:46:33,480 --> 00:46:35,760
Speaker 15: of course, it has not hosted any of the previous

923
00:46:35,800 --> 00:46:37,840
Speaker 15: one hundred and twenty two opens, so most of the

924
00:46:37,880 --> 00:46:41,120
Speaker 15: field unfamiliar with the La Country Club. The two betting

925
00:46:41,160 --> 00:46:43,920
Speaker 15: favorite for Scottie Scheffler and John Rahm, both with morning

926
00:46:44,080 --> 00:46:47,759
Speaker 15: Tea times Finny Chiv. Matt Fitzpatrick plays this afternoon. He'll

927
00:46:47,800 --> 00:46:50,439
Speaker 15: be with Dustin Johnson and just after that a group

928
00:46:50,480 --> 00:46:53,760
Speaker 15: that includes Brooks Kepta and Rory Mclelord Johns, stash Ellend

929
00:46:53,760 --> 00:46:55,600
Speaker 15: Bloomberg Sports.

930
00:46:57,520 --> 00:47:00,560
Speaker 25: From coast to coast, from New York to Sen Francisco,

931
00:47:00,840 --> 00:47:05,520
Speaker 25: Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg

932
00:47:05,560 --> 00:47:07,560
Speaker 25: Business Appen Bloomberg dot Com.

933
00:47:07,760 --> 00:47:11,320
Speaker 2: This is Bloomberg Daybreak. Good morning.

934
00:47:11,320 --> 00:47:14,240
Speaker 13: I'm Nathan Hager. The Federal Reserve has hit the pause

935
00:47:14,239 --> 00:47:17,560
Speaker 13: button on its aggressive run of interestrate hikes, keeping policy

936
00:47:17,560 --> 00:47:19,960
Speaker 13: on hold for the first time since March of last year,

937
00:47:20,000 --> 00:47:22,719
Speaker 13: but Chairman J. Powell is sending a message to markets

938
00:47:23,040 --> 00:47:26,520
Speaker 13: the central banks fight against inflation is far from over.

939
00:47:27,040 --> 00:47:31,520
Speaker 5: Inflation has moderated somewhat since the middle of last year. Nonetheless,

940
00:47:31,560 --> 00:47:34,480
Speaker 5: inflation pressures continue to run high, and the process of

941
00:47:34,480 --> 00:47:37,480
Speaker 5: getting inflation back down to two percent has a long

942
00:47:37,520 --> 00:47:37,960
Speaker 5: way to go.

943
00:47:38,600 --> 00:47:40,759
Speaker 13: That was Chairman Palell at the news conference you heard

944
00:47:40,800 --> 00:47:43,319
Speaker 13: yesterday here on Bloomberg Radio following that decision to keep

945
00:47:43,400 --> 00:47:45,160
Speaker 13: rates on hold and for more. We were joined by

946
00:47:45,200 --> 00:47:48,600
Speaker 13: Bloomberg opinion columnist Marcus Ashworth. Marcus, what did you make

947
00:47:48,600 --> 00:47:51,520
Speaker 13: of the messaging from the chairman and the big shift

948
00:47:51,680 --> 00:47:52,840
Speaker 13: that we saw on the dot plot.

949
00:47:54,280 --> 00:47:57,320
Speaker 9: Well, let's start the last thing first. I don't believe

950
00:47:57,680 --> 00:48:00,880
Speaker 9: particularly in the dot plot. It's more of a horoscope

951
00:48:01,640 --> 00:48:04,080
Speaker 9: and it changes around as the wind. As the wind blows.

952
00:48:04,560 --> 00:48:07,359
Speaker 9: I don't think Pow thinks much of it either. So

953
00:48:08,920 --> 00:48:11,040
Speaker 9: I just think the Feller done a great job in

954
00:48:11,200 --> 00:48:16,040
Speaker 9: talking out prospective rate cuts for this year. They've somehow

955
00:48:16,120 --> 00:48:19,719
Speaker 9: managed to do a pause and make it incredibly hawkish.

956
00:48:19,840 --> 00:48:22,080
Speaker 9: I don't really believe that. I don't think the market

957
00:48:22,080 --> 00:48:26,160
Speaker 9: on reflection really believes it either. Nonetheless, they've given themselves

958
00:48:26,200 --> 00:48:28,239
Speaker 9: what the precious thing they want, which is the optionality

959
00:48:28,360 --> 00:48:31,480
Speaker 9: going into the July meeting. You know, they can pause

960
00:48:31,560 --> 00:48:35,960
Speaker 9: again or they can hike, and that's at their sort

961
00:48:36,000 --> 00:48:39,560
Speaker 9: of blessing. So that's I think all they want. They'll

962
00:48:39,560 --> 00:48:41,279
Speaker 9: see a bit more data. There are a lot more data.

963
00:48:41,280 --> 00:48:45,560
Speaker 9: Actually there's probably less data of importance coming up, but yeah,

964
00:48:45,600 --> 00:48:49,400
Speaker 9: and get another CPIET, another payroll number. I think the

965
00:48:49,520 --> 00:48:52,520
Speaker 9: interesting thing, most interesting by quite some way, is how

966
00:48:52,680 --> 00:48:56,920
Speaker 9: power has shifted on what the effects of wage rises

967
00:48:57,000 --> 00:49:01,399
Speaker 9: are to inflation. He's essentially said, from being the bad thing,

968
00:49:01,480 --> 00:49:04,439
Speaker 9: the baddest thing out there, it's now a good thing

969
00:49:04,600 --> 00:49:07,640
Speaker 9: for the economy, as in supporting the almost like a

970
00:49:07,680 --> 00:49:13,000
Speaker 9: flaw for a soft landing. Now, if we do get

971
00:49:13,160 --> 00:49:17,040
Speaker 9: what's known as immaculate disinflation, perhaps there is a soft

972
00:49:17,120 --> 00:49:20,720
Speaker 9: landing there, and it means they're less focused on wage

973
00:49:20,840 --> 00:49:26,640
Speaker 9: rises as being pushing forward for second round effects of

974
00:49:26,640 --> 00:49:29,680
Speaker 9: inflation and keeping inflation high. There it's still a concern

975
00:49:29,719 --> 00:49:31,759
Speaker 9: for them, but nowhere near I think as much a

976
00:49:31,800 --> 00:49:34,480
Speaker 9: prime concern. So that sense, I think there's a subtle

977
00:49:34,480 --> 00:49:36,600
Speaker 9: shift on what they're looking at. They're not going to

978
00:49:36,640 --> 00:49:40,160
Speaker 9: be so fixated on backward looking labor data, and that

979
00:49:40,320 --> 00:49:40,920
Speaker 9: is good news.

980
00:49:41,200 --> 00:49:41,359
Speaker 16: Now.

981
00:49:41,400 --> 00:49:43,680
Speaker 13: That is really interesting because there has been so much

982
00:49:43,760 --> 00:49:46,480
Speaker 13: of a focus over the last several months on the

983
00:49:46,520 --> 00:49:50,319
Speaker 13: concern that wage pressures could be what's leading to the

984
00:49:50,320 --> 00:49:52,799
Speaker 13: stickiness that we're seeing in inflation. What do you think

985
00:49:52,840 --> 00:49:55,600
Speaker 13: the FED is seeing in the data now that could

986
00:49:55,600 --> 00:49:57,520
Speaker 13: be justifying that shift.

987
00:49:57,680 --> 00:50:01,760
Speaker 9: Well, it's almost is that the causality is is potentially reversed.

988
00:50:01,719 --> 00:50:03,160
Speaker 9: And I don't want to get too technical here, but

989
00:50:03,239 --> 00:50:06,640
Speaker 9: in essence, everyone's saying high wage rises leads to future inflation.

990
00:50:07,200 --> 00:50:10,279
Speaker 9: If inflation is coming down as it is now quite

991
00:50:10,320 --> 00:50:13,320
Speaker 9: sharply and across a range of everything, but use to

992
00:50:13,360 --> 00:50:16,200
Speaker 9: flies as one percent, you know, CPI, I know is

993
00:50:16,239 --> 00:50:18,439
Speaker 9: a little stick in the month a month, but it's

994
00:50:18,480 --> 00:50:21,680
Speaker 9: heading downwards, and the headline certainly is then those drop

995
00:50:21,719 --> 00:50:25,319
Speaker 9: off of inflation expectations may in turn actually feedback the

996
00:50:25,320 --> 00:50:28,759
Speaker 9: other way and people demanding less of a wage rise,

997
00:50:29,040 --> 00:50:33,200
Speaker 9: and that in turn will actually see wage rises full off.

998
00:50:33,239 --> 00:50:36,359
Speaker 9: So it's sort of looking at backwards. Perhaps, I think

999
00:50:36,400 --> 00:50:40,440
Speaker 9: they're realizing that short term inflation expectations are driven by

1000
00:50:40,480 --> 00:50:44,200
Speaker 9: headline inflation as much as indeed the second round effects

1001
00:50:44,239 --> 00:50:46,879
Speaker 9: feeding through of oh I've missed out, and I'm poor.

1002
00:50:46,960 --> 00:50:49,680
Speaker 9: I was, and I demand at least an inflationary rhizome.

1003
00:50:49,760 --> 00:50:53,000
Speaker 9: More so, I think they're hoping that consumer expectations and

1004
00:50:53,480 --> 00:50:55,960
Speaker 9: some sense work for them rather than work against them.

1005
00:50:56,200 --> 00:50:58,000
Speaker 13: In the minute we have left here, Marcus, you've got

1006
00:50:58,040 --> 00:51:01,120
Speaker 13: to look forward to the European Central Bank decision. I

1007
00:51:01,120 --> 00:51:04,520
Speaker 13: think I saw on the Markets Live survey yesterday. Will

1008
00:51:04,520 --> 00:51:08,399
Speaker 13: Madame Legarde be listening to Chairman Powell? What's your answer

1009
00:51:08,480 --> 00:51:08,680
Speaker 13: to that.

1010
00:51:09,560 --> 00:51:12,799
Speaker 9: I think she is very much listening. Whether she'll admit

1011
00:51:12,840 --> 00:51:15,240
Speaker 9: to it, it's another thing altogether. I do think that

1012
00:51:15,080 --> 00:51:19,840
Speaker 9: the FED mothership is by skillfully you make might not

1013
00:51:19,840 --> 00:51:21,640
Speaker 9: think it's skillful, but compeditor what we have over here,

1014
00:51:21,800 --> 00:51:24,040
Speaker 9: the Fed's played this pretty well. I think they've got

1015
00:51:24,040 --> 00:51:26,319
Speaker 9: themselves a pause. They've got themselves the optionality the next

1016
00:51:26,320 --> 00:51:29,480
Speaker 9: time around. She's not able to do that, yet, I'm hoping,

1017
00:51:29,520 --> 00:51:32,200
Speaker 9: against hope that she hints that maybe in July again,

1018
00:51:32,280 --> 00:51:35,319
Speaker 9: a day after the FED, the FED pauses for a

1019
00:51:35,400 --> 00:51:39,040
Speaker 9: second time. That enables the easy bea to relax a

1020
00:51:39,080 --> 00:51:44,160
Speaker 9: bit and not be hiking adnauseum every single meeting, because

1021
00:51:44,440 --> 00:51:46,160
Speaker 9: you know, maybe they can go to once a quarter.

1022
00:51:46,440 --> 00:51:50,480
Speaker 9: This time around, it's a quarterly economic review, and the

1023
00:51:50,480 --> 00:51:52,520
Speaker 9: next one will be September. Maybe they can skip July.

1024
00:51:52,600 --> 00:51:54,640
Speaker 9: It's probably hoping it gets hope. I think that certainly

1025
00:51:54,719 --> 00:51:56,400
Speaker 9: a signal they will intend to hike in July.

1026
00:51:56,760 --> 00:51:57,440
Speaker 4: Whether they do or.

1027
00:51:57,480 --> 00:52:01,400
Speaker 9: Not, I'm hopeful that they may see. Economy in Europe

1028
00:52:01,520 --> 00:52:04,040
Speaker 9: is already in recession. The start of second quart of

1029
00:52:04,080 --> 00:52:07,200
Speaker 9: Jemmy isn't great. This is not a time to be

1030
00:52:07,320 --> 00:52:07,959
Speaker 9: hiking rights.

1031
00:52:10,080 --> 00:52:13,160
Speaker 24: This is Bloomberg Daybreak Today, your morning brief on the

1032
00:52:13,200 --> 00:52:16,640
Speaker 24: stories making news from Wall Street to Washington and beyond.

1033
00:52:16,880 --> 00:52:19,920
Speaker 12: Look for us on your podcast feed by six am

1034
00:52:20,040 --> 00:52:24,200
Speaker 12: Eastern each morning, on Apple, Spotify, and anywhere else you

1035
00:52:24,280 --> 00:52:25,399
Speaker 12: get your podcasts.

1036
00:52:25,960 --> 00:52:28,680
Speaker 24: You can also listen live each morning starting at five

1037
00:52:28,719 --> 00:52:31,279
Speaker 24: am Wall Street time on Bloomberg eleven three to zero

1038
00:52:31,360 --> 00:52:34,160
Speaker 24: in New York, Bloomberg ninety nine to one in Washington,

1039
00:52:34,320 --> 00:52:37,160
Speaker 24: Bloomberg one oh six to one in Boston, and Bloomberg

1040
00:52:37,239 --> 00:52:38,880
Speaker 24: ninety sixty in San Francisco.

1041
00:52:39,239 --> 00:52:42,799
Speaker 12: Our flagship New York station is also available on your

1042
00:52:42,920 --> 00:52:48,359
Speaker 12: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

1043
00:52:48,400 --> 00:52:51,320
Speaker 24: Plus listen coast to coast on the Bloomberg Business App,

1044
00:52:51,400 --> 00:52:55,239
Speaker 24: serious XM Channel one nineteen, the iHeartRadio app, and on

1045
00:52:55,320 --> 00:52:57,799
Speaker 24: Bloomberg dot Com. I'm Nathan Hager.

1046
00:52:58,080 --> 00:53:01,640
Speaker 12: And I'm Amy Morris. Up us again tomorrow morning for

1047
00:53:01,840 --> 00:53:04,759
Speaker 12: all the news you need to start your day right dear,

1048
00:53:04,880 --> 00:53:06,160
Speaker 12: on Bloomberg day Break