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Speaker 1: We continue with Rochester g ten FX strategists at Namura.
Speaker 2: Jordan.
Speaker 1: Let me go and overlay the GDP question on your
Speaker 1: euro call. Germany is not getting it done right now?
Speaker 1: How does that change? A euro call from Nomura?
Speaker 3: Well, right now, Tom, we already knew growth would be weak.
Speaker 3: We've got that from the PMISER surveys. So I'm not
Speaker 3: really convinced that the GDP is the way to look
Speaker 3: at euro right here, right now in the short term.
Speaker 3: What's more important is what they did to those inflation
Speaker 3: forecast times. So there's been a bit of a revision
Speaker 3: down in the front tend for headline, but for core inflation.
Speaker 3: What's been surprising from this release is that we've got
Speaker 3: on average now five point one from the ECB for
Speaker 3: core inflation this year, up from four point six in
Speaker 3: their forecast previously. I said earlier that it was too low,
Speaker 3: it was going to be revised up, but I was
Speaker 3: discussing it with Andre and our economics team. We thought
Speaker 3: the east B might not pencil in a five handle
Speaker 3: for their core inflation just because that's a number that
Speaker 3: will make them very uncomfortable for the average of this year.
Speaker 4: Five percent.
Speaker 5: This is none of this.
Speaker 3: None of these forecasts for inflation have it going back
Speaker 3: towards two percent and actually going below two percent in
Speaker 3: the horizon. The twenty twenty five inflation forecast revised up
Speaker 3: just very slightly. But all of this says the ECB
Speaker 3: is being hawkish. We'll find out in the pressor how
Speaker 3: Madame Cguarde will express it. But we've seen the pricing
Speaker 3: Tom for the ECB for the next meeting jump already
Speaker 3: to twenty five basis points. The market was actually doubting
Speaker 3: a little bit if that would happen, and now we're
Speaker 3: actually now toying with the market thinking maybe this carries on,
Speaker 3: maybe this goes to September, and Tom the market is
Speaker 3: very happy pricing many twenty five basis point rate hikes
Speaker 3: for the Bank of England, and I suggest that maybe
Speaker 3: that's the case. We need to consider it for the
Speaker 3: ECB just quickly.
Speaker 6: Does this make a four percent ECB rate much more likely?
Speaker 6: And actually the base case in your view, it's.
Speaker 3: Not the base case, but look, it makes it possible.
Speaker 3: And the reason why is because we're seeing all this
Speaker 3: animal spirits inequities picked back up, boosting risk sentiment, boosting
Speaker 3: the sort of inflation pressures that we could see this summer,
Speaker 3: and as I mentioned earlier, natural gas going up. That
Speaker 3: should really worry the ECB. If it's like last year August.
Speaker 3: Last year we had energy prices at the highs. It's
Speaker 3: just June. Now, if we get two more months of
Speaker 3: gas storage demand pushing up inflation again of natural gas.
Speaker 3: It upsets the apple cart of the big disinflation. All
Speaker 3: my charts say the Euro Area inflation's going to really
Speaker 3: slow down, but that will change if natural gas keeps
Speaker 3: moving the way it is. So if it carries on, Lisa,
Speaker 3: it's potentially possible.
Speaker 1: Jordan Rochester, thank you for the effort today with no
Speaker 1: murder there. Ja Bryson rides heard over a terrific economic
Speaker 1: team at Wells Fargo. They have a fabulous heritage of
Speaker 1: measuring this nation from C to Shining Sea, and right
Speaker 1: now I'd like you to go over the other C.
Speaker 1: J Bryson too, Maybe summarize here what Wells Fargo sees
Speaker 1: in manufacturing in America versus a clear slow down in
Speaker 1: manufacturing in Germany. What is a state of the economy
Speaker 1: of manufacturing in America as we look at this data
Speaker 1: this morning?
Speaker 2: So Tom, I guess i'd roughly say that when I
Speaker 2: think about the manufacturing sector here in the States right now,
Speaker 2: I would say it's flat ish, you know, it's you know,
Speaker 2: if you look at the hard data of manufacturing production
Speaker 2: over the last year or so, it has been kind
Speaker 2: of flat, and you know, I think what's going on
Speaker 2: There is two things. There's a slowdown in the rest
Speaker 2: of the world, so we're not exporting as much. And
Speaker 2: then secondly, as there has been as you you know,
Speaker 2: well know, there's been this rotation over the last year
Speaker 2: away from spending on goods towards services. Goods obviously are manufactured,
Speaker 2: and so manufacturing is you know again it's not really contracting,
Speaker 2: but it's not growing. It's you know, as I said earlier,
Speaker 2: I think it's kind of flatish right now.
Speaker 6: Which is the best leading indicator of all of the
Speaker 6: data that we just got. Is it the retail sales
Speaker 6: coming in hotter than expected, or is it unemployment rising
Speaker 6: perhaps at a faster pace at least jobless claims than
Speaker 6: many people expected.
Speaker 2: Well, I guess I would say they're both kind of
Speaker 2: coincidence sort of indicator. Certainly, that's what we think about
Speaker 2: the labor market as being very very coincident. It gives
Speaker 2: us an idea where we are right now, you know,
Speaker 2: in terms of the retail sales sorts of numbers, you know,
Speaker 2: there's a little choppy in there right now. But I
Speaker 2: would say what I would say is what it's showing
Speaker 2: us is the consumer continues to spend at a modest pace.
Speaker 2: As long as that continues to happen, then the consumer
Speaker 2: sector isn't going to completely fall apart either. And so
Speaker 2: I think where we are right now in terms of
Speaker 2: the economy is if you look at the first quarter,
Speaker 2: we grew roughly one percent at an annualized rate. I
Speaker 2: think that's kind of where we are right now in
Speaker 2: the second quarter as well, somewhere, you know, plus or
Speaker 2: minus five tens a percentage point off of one percent right.
Speaker 6: Now if nothing really changes, no sort of big shocks
Speaker 6: to the system, and we get data like this for
Speaker 6: the next I guess four weeks, do you expect to
Speaker 6: fed we'll have to raise by another twenty five basis points.
Speaker 6: That yesterday's meeting was not the end of the rate
Speaker 6: hiking cycle.
Speaker 2: You know, I think that's that's right, Lisa, and I
Speaker 2: kind of think of it as yesterday was a little
Speaker 2: bit of a compromise between the you know, the doves
Speaker 2: on the committee who kind of want to pause right here,
Speaker 2: and the hawks who kind of want to keep on
Speaker 2: pressing ahead. And I think it was easy for them,
Speaker 2: the consensus, I think was easy for yesterday to call
Speaker 2: us around Okay, we'll keep rates on hold, but we'll
Speaker 2: send a signal of a hawkish pause if you will.
Speaker 2: A month from now. If we don't see any major
Speaker 2: changes to the economy, then I think it's easier to
Speaker 2: call us around. Okay, let's pump a up another twenty
Speaker 2: five basis points. But obviously we've got a lot of
Speaker 2: data between now and then, particularly the labor market report.
Speaker 2: We get another CPI, you know, sort of a report,
Speaker 2: so you know, if we come in a status quo
Speaker 2: where we are right now, then I think they go
Speaker 2: twenty five. I'm going to.
Speaker 1: Suggest doctor Bryson that none of this is in Chapel economics,
Speaker 1: Chepel Hill economic textbooks. I mean, it's absolutely original. Where
Speaker 1: we are. How much are we beholden to American exceptionalism
Speaker 1: right now? Europe has so many struggles, is seen with
Speaker 1: a subpar one percent GDP view forward, and we're different,
Speaker 1: We're doing better. Does Wells Fargo suggest there is an
Speaker 1: American difference, an American exceptionalism?
Speaker 2: Well, you know, Tom, I don't know if I would.
Speaker 2: So if you step back and you look at the
Speaker 2: broad sort of stuff, I mean, what we are with
Speaker 2: the United States is continues to be the technological leader
Speaker 2: in the world. Right this is where AI is being developed,
Speaker 2: et cetera, et cetera. I think that will probably continue.
Speaker 2: But I also think that you know, right now where
Speaker 2: we are in terms of the cycle. You know, Europe
Speaker 2: has been hit with a number of shocks that the
Speaker 2: United States hasn't, you know, particularly the war in Ukraine
Speaker 2: and the and the spike it the spike in natural
Speaker 2: gas prices that everybody was talking about just before we
Speaker 2: came on air here. And so there's there's been a
Speaker 2: lot more shocks hitting Europe than there has been the
Speaker 2: United States. So is the United States exceptional from a
Speaker 2: very very long earned standpoint, yes, But from a cyclical standpoint,
Speaker 2: I can come up with reasons why, you know, Europe
Speaker 2: is different. Right now, What did you.
Speaker 1: Think yesterday when we had esteemed people like you on
Speaker 1: who said they just should have raised race and stopped
Speaker 1: with all this mumbo jumbo, skip pause, all this other stuff.
Speaker 1: Jay Bryson, would green Span or burns of raised rates?
Speaker 2: You know, I don't think so. I mean green Span
Speaker 2: was you know, at the end of the day, he
Speaker 2: was very very cautious as well. You know, you look
Speaker 2: at his last tightening cycle starting in twenty twenty, two
Speaker 2: thousand and four. It's twenty five basis points, you know,
Speaker 2: constant sort of thing. You know, So did they do
Speaker 2: the right thing yesterday? Obviously? You know people can can
Speaker 2: disagree on that, but we all know that monetary policy
Speaker 2: works with long lags. You are seeing signs that the
Speaker 2: economy is growing at a sub trend pace right now.
Speaker 2: I mentioned one percent before. Most people believe that's going
Speaker 2: to be subtrend, and if it continues to grow at subtrend,
Speaker 2: that will probably that will bring the inflation rate down
Speaker 2: over time. You know, you really don't want to put
Speaker 2: the economy into recession right now, if you if you don't,
Speaker 2: so it's a little bit of hard communication strategy right
Speaker 2: now on their part. They're walking a very very fine line.
Speaker 2: But you know, I think at the end of the
Speaker 2: day a pause was probably the right thing to do.
Speaker 6: We're about three and a half minutes away from Christineleaguard
Speaker 6: taking the helmet explaining a pretty hawkish proclamation and rate
Speaker 6: hike that we just got from the ECB right now,
Speaker 6: the euro versus the Japanese yen. It was extending the
Speaker 6: gains up one point one percent to the highest level,
Speaker 6: the strongest going back to going back to two thousand
Speaker 6: and eight, as you see that differential and rate policies
Speaker 6: really start to bleed into the currency, the agony back a.
Speaker 1: Zillion years and really not comparable. And I defer to
Speaker 1: Jordan Rochester, Steve England or others, but it's a one
Speaker 1: sixty maybe a one sixty three. We're distant from OMG,
Speaker 1: the worst ever. But I think scope and scale back
Speaker 1: to two thousand and eight really signals how removed Japan
Speaker 1: is from the other three.
Speaker 6: Banks, Jay, As we set up for Christine Leguard to
Speaker 6: give some explanations, some meat behind the statement, what are
Speaker 6: you expecting to hear? What was the biggest shocker to
Speaker 6: you at a time when this ECP is forecasting out
Speaker 6: a three percent core inflation figure next year in a
Speaker 6: five point one percent inflation this year.
Speaker 2: You know, I think she's going to be very very
Speaker 2: hawkish as well. I think you know, she's speaking for
Speaker 2: the entire governing council. We all know that there's a
Speaker 2: lot of hawks on that on the Governing Council, and
Speaker 2: I think you know what they want to send as
Speaker 2: a signal of uh, we need to be hawkish here.
Speaker 2: You know, their mandate is two percent. We're far away
Speaker 2: from two percent inflation right now, so I would think
Speaker 2: she's going to reinforce a very very hawkish sort of view.
Speaker 2: And if bond yields back up even more on that,
Speaker 2: I don't think there that's not a bad thing for them.
Speaker 1: Is your press conference operating doctor Bryson within eurosclerosis.
Speaker 2: To find that term time, I'm not sure I get
Speaker 2: to just.
Speaker 1: The sluggish and as you mentioned, the technological superiority of
Speaker 1: America they're going after Google again was in the news today.
Speaker 1: Is there just that weight to the European model that
Speaker 1: was definitive twenty years ago?
Speaker 2: You know, they always lag us somewhat in terms of
Speaker 2: you know, productivity, growth and vibrancy of the of the economy,
Speaker 2: and I don't think that's going to I don't think
Speaker 2: that's going to to change anytime soon. Again, you know,
Speaker 2: when you look at all the AI breakthroughs that are
Speaker 2: happening here in the United States and they're not happening
Speaker 2: in Europe.
Speaker 1: Jay Breston, thank you so much for the brief Here
Speaker 1: is with Wells Fargo, They've been hugely helpful to us.
Speaker 1: Here on the economic facts and forth, Amy was Silverman
Speaker 1: joins us, Now, how to derout a strategy in RBC
Speaker 1: capital markets? Amy, It's real simple. You say, we've got
Speaker 1: upside here and we may not get the traditional equity
Speaker 1: market rotation. This is important to Global Wall Street. Why
Speaker 1: will we not rotate?
Speaker 7: Yeah, this is the question, you know, we've been asking
Speaker 7: the last few weeks. And I thought, yesterday's knee jerk reactions, Tom,
Speaker 7: we're just really telling So you know, look for the
Speaker 7: last few weeks, the options market's been chasing upside an IWM,
Speaker 7: and then you get a little bit of a hawkish
Speaker 7: tone from the Fed and from Palin.
Speaker 4: What happens?
Speaker 7: You have IWM sell off yesterday, you have Ques rally,
Speaker 7: you have nvideo rally, And I think that just tells you,
Speaker 7: you know, how the market is thinking about these different sectors.
Speaker 7: The one question we've been asking ourselves is, you know,
Speaker 7: if the data continues to come in more economically strong,
Speaker 7: is it possible essentially to have a narrative where it's
Speaker 7: not really about value versus growth or small versus large gap.
Speaker 7: It's simply tech becomes your rallying point because of a
Speaker 7: secular story. Perhaps and then IWM becomes more of an
Speaker 7: IWM story on the more defensive and you know that side,
Speaker 7: but both can rally at the same time.
Speaker 6: Just it's a developed some of what you were talking about.
Speaker 6: This idea that big tech has become defensive has become
Speaker 6: the secular growth story, and really perhaps the fear of
Speaker 6: recession is playing out in the small caps in a
Speaker 6: new way and even in some of the non tech names,
Speaker 6: which really highlights a diversification that is very different than
Speaker 6: it was six months ago.
Speaker 7: Yeah, exactly. And one thing I'll say is what has
Speaker 7: been interesting, especially given yesterday, is we saw IWM sell
Speaker 7: off sort of in that reaction to the hawkage tone
Speaker 7: from Powell, but we didn't see any change in the
Speaker 7: option sentiment. So going into yesterday, Lisa, the option sentiment
Speaker 7: in IWM was quite full, as you saw almost a
Speaker 7: skew in version or that call demand is outweighing the
Speaker 7: poot demand. And that's been true for the last few
Speaker 7: weeks when people think, you know, that small cap is
Speaker 7: going to kind of burst out. But that didn't change yesterday,
Speaker 7: even though we did see continued optimism in the large
Speaker 7: caps as well. So that's why I've been saying, you know,
Speaker 7: is it possible the narrative no longer becomes this rotation
Speaker 7: from small to large or from growth to value, et cetera.
Speaker 7: It's just simply they can go along two different tracks
Speaker 7: and two different narratives.
Speaker 6: So basically, are you saying that people who are talking
Speaker 6: about bad breath getting into some sort of broadening out
Speaker 6: not happening, and it's not going to happen even if
Speaker 6: you continue to get a rally in the equity indexes.
Speaker 7: Yeah you said bad breath, not me this time, But yeah,
Speaker 7: I think that is possible. And the one major implication
Speaker 7: that has for volatility is one reason we've been counting
Speaker 7: on that breadth of widen is because it's going to
Speaker 7: change your correlation function, which obviously feeds into your index volatility.
Speaker 7: But if we don't get that happening, if you continue
Speaker 7: to have people who've missed out on megacap tech having
Speaker 7: to realloitate into it even as that small cap story
Speaker 7: is playing out, I don't think you get much of
Speaker 7: a change in correlation, which ultimately, you know, dampens volatility
Speaker 7: on an index level. So it's possible, you know, you
Speaker 7: have all these events ahead, but there's that suppression of
Speaker 7: voltility because that correlation component of volatility continues to not
Speaker 7: move because of the breadth.
Speaker 1: I mean, if we believe in a bull market and
Speaker 1: we've had a first leg from October, I've been calling
Speaker 1: it the income for ardentity bull market after two people
Speaker 1: that were way out front and identifying it. If that's
Speaker 1: the first leg, how do you use the cross moments?
Speaker 1: How do you use derivative mathematics to assist in identifying
Speaker 1: the second leg of a bull market?
Speaker 7: Yeah, so I'll give you one Bloomberg function that I
Speaker 7: like to look at a lot, which is BCA, which
Speaker 7: gives you the volatility landscape across you know, any constituents
Speaker 7: like the S and P five hundred and when you
Speaker 7: organize that tom By Skew level. So again that component
Speaker 7: of call demand versus put demand, you start to see
Speaker 7: where the really really bullish parts of the market are.
Speaker 7: So if you look at that right now, among your
Speaker 7: top ten names, you know, probably not shocking to you
Speaker 7: is going to be It's going to be in a video,
Speaker 7: It's going to be Tesla. And it really tells you
Speaker 7: not only where the market is out front the most on,
Speaker 7: but where it's beginning to start to see changes and sentiment,
Speaker 7: and you are starting to see some of the more
Speaker 7: IWM type names go in there into those sectors rather
Speaker 7: than it just being megacat tech.
Speaker 1: Are the big names out there, whether it's a big
Speaker 1: name Procter and Gamble, the big name Walmart, Intel is
Speaker 1: a dog of the moment or as you mentioned AMD,
Speaker 1: are they under owned by institutions in the traditional sense,
Speaker 1: not hedge funds, but along only byside.
Speaker 2: Are they under owned in what's.
Speaker 4: Worked they are?
Speaker 7: And that's part of the problem. There's sort of two
Speaker 7: interesting things. The first is that portion of the asset
Speaker 7: management community you've been talking about has been under allegated,
Speaker 7: and the issue is that begets this positive momentum situation
Speaker 7: where we've talked about in options, where you get that
Speaker 7: exacerbation of gamma. So essentially buying of calls can lead
Speaker 7: to more buying stock, which can lead to more buying
Speaker 7: of calls. This is what you saw during the meme prase.
Speaker 7: And the other thing is historically that segment of the
Speaker 7: market has that problem with owning things in such a
Speaker 7: narrow concentration. So if the breadth of the market starts
Speaker 7: to expand, that ultimately helps them in participating in the rally.
Speaker 1: Yeah, the headline there, folks, if you're keeping score at home,
Speaker 1: is Amy wu Silverman says, Apple is a meme stock.
Speaker 2: That's what we're going to do. We're going to go there.
Speaker 1: If I get gamma is an acceleration, you know within
Speaker 1: the derivative jargon, Are we gamma? Are we gammaing our
Speaker 1: way to melt up?
Speaker 4: So you know we already have.
Speaker 7: That's already been happening, and I think that can continue.
Speaker 7: So when you look kind of to the weak right
Speaker 7: post Navidia's earnings, that's what you saw. You saw those
Speaker 7: skew in versions, you know, on that VCA function, and
Speaker 7: then you continue to see that now that actually hasn't
Speaker 7: changed all that much. Even though you know some people
Speaker 7: are asking it that AI rally is tired, you don't
Speaker 7: yet see that. In the options, you continue to see
Speaker 7: that call and bounce pretty heavily, and then each day
Speaker 7: that goes by, we actually start to see it in
Speaker 7: different parts of the market, not just megacaptech. And that's
Speaker 7: why I think it's very telling in terms of the
Speaker 7: sentiment and options. Those wins have really changed over the
Speaker 7: last month.
Speaker 1: And it was silver in terrific opening Briefforce today with
Speaker 1: RBC Capital Market. Patrick Tumey is one of our more
Speaker 1: interesting senators. A former senator. He is of Pennsylvania. It's
Speaker 1: his fault the Phillies lost, and he excided after that
Speaker 1: and he joins us today. He's on the board of
Speaker 1: Apollo now, among other good duties here in his former career.
Speaker 1: What's the biggest difference of moving from the August Senate
Speaker 1: of Washington into the private space.
Speaker 8: Well, there are a lot. Having control of your own
Speaker 8: schedule is one of them. The Majority leader gets to
Speaker 8: decide when votes will occur, and you have to be
Speaker 8: on the floor in person to cast a vote. When
Speaker 8: you're out of the Senate, you have a lot more
Speaker 8: saying it just a human and.
Speaker 1: We're huge difference in the House right now where there's
Speaker 1: one or two people away and that changes it for
Speaker 1: Speaker McCarthy.
Speaker 8: And that can happen in the Senate.
Speaker 6: Also, Yeah, how much do you kind of feel like
Speaker 6: you wouldn't necessarily run if the dynamics were the same
Speaker 6: now as they were when you started in politics.
Speaker 8: Honestly, for me, I was in federal office for eighteen years,
Speaker 8: twelve consecutive years in the Senate, and prior to that
Speaker 8: a gap, and then six years in the House.
Speaker 4: For me, that was enough.
Speaker 2: I was ready to move on.
Speaker 8: I have no regrets, and I really enjoyed and appreciated
Speaker 8: the chance to pursue the policies that I believed in.
Speaker 8: But I don't like the idea of being there forever
Speaker 8: for anybody, myself included.
Speaker 1: You're cut from a different cloth. I mean, there's Morgan
Speaker 1: Grenfell and then you're in Rookies restaurant in you know, Lehigh.
Speaker 2: Valley and all that. But what you're really.
Speaker 1: Acclaimed for is standing up to the former president saying
Speaker 1: the behavior is not appropriate. We have seen an absolutely
Speaker 1: historic moment for the nation that will continue right coming weeks.
Speaker 2: In months.
Speaker 1: What is the best practice right now of centrist Republicans
Speaker 1: is they address this indictment in Miami.
Speaker 8: Well, so I'm a conservative Republican and my conservatism sort
Speaker 8: of requires me to call out the completely unacceptable and
Speaker 8: egregious behavior of the former president as it manifests itself periodically.
Speaker 4: Look, I think Republicans should call it for what it is.
Speaker 8: This is a completely unforced, unnecessary, outrageous abuse of the
Speaker 8: responsibility that the American people gave this president. He knew
Speaker 8: those documents didn't belong to him. But it wasn't just
Speaker 8: a sloppiness. It wasn't just a matter of Okay, a
Speaker 8: few papers got mixed in with some of my momentos.
Speaker 8: It was lying about it, It was hiding it. It
Speaker 8: was suggesting to a lawyers that they make it disappear.
Speaker 8: It was discussing it in front of of reporters. Someone
Speaker 8: writing a book and recording this, and apparently, if we
Speaker 8: can believe the allegations, which I think they're there for
Speaker 8: a reason, it included very sensitive military secrets of the
Speaker 8: United States of America. So, as is often the case,
Speaker 8: Donald Trump is his own worst enemy. He makes a
Speaker 8: foolish mistake and then compounds it massively, and look, this
Speaker 8: is indefensible behavior.
Speaker 1: I went back and looked at a September effort by
Speaker 1: Philip Bump in the Washington Post working off Pew research,
Speaker 1: and I was thunderstruck at the accountable research of how
Speaker 1: small mega is. It's not that great a part of
Speaker 1: the American pie. How does the broader sense of Republicans
Speaker 1: in independence not defend themselves but just react, adjust and
Speaker 1: move forward. If Mega is really not all that big boy,
Speaker 1: their megaphone's large.
Speaker 9: Yeah.
Speaker 8: But the unfortunate reality, in my mind is the president
Speaker 8: still the former president still does have a large level
Speaker 8: of support. And that's complicated, right. It's part of it
Speaker 8: is historical, part of it is a sense of the
Speaker 8: grievances that he fans. Part of it is the perception
Speaker 8: that he's being unfairly treated and so even if he
Speaker 8: did something wrong, it's not a fair treatment. So it's complicated.
Speaker 8: Here's my theory is the cumulative weight of all of
Speaker 8: the drama, all of the unnecessary misery, all of the lawsuits,
Speaker 8: the allegations, all of this is going to cause increasing
Speaker 8: numbers of Republicans, even if they've been sympathetic to Donald Trump,
Speaker 8: to say, Okay, maybe he did a good job as president.
Speaker 8: We got to move on.
Speaker 6: One of the rare things about you is that you
Speaker 6: can really dovetail from Washington to Wall Street. And that's
Speaker 6: sort of been your background, going back and forth. And
Speaker 6: we're talking about the politics of the moment at a
Speaker 6: time when FED policy is going to dictate a lot
Speaker 6: on Wall Street for the next couple of years.
Speaker 4: How can start are you growing giving.
Speaker 6: The politication politicization of the inflation debate. How concerned are
Speaker 6: you that this FED is not really convicted enough to
Speaker 6: go through with their mandate and get inflation back down
Speaker 6: to where it should be.
Speaker 8: So I lean in the other direction. I think this
Speaker 8: FED is very, very concerned about their legacy, their reputation.
Speaker 8: They know that they got this badly wrong. They kept
Speaker 8: rates way too low, monetary policy way too easy for
Speaker 8: way too long. They established a flawed paradigm for determining
Speaker 8: when they would change.
Speaker 4: They got behind the curve.
Speaker 8: I think the risk is that they overdo it, and
Speaker 8: partly for the same reason that they went too far.
Speaker 8: In my conversations with FED governors and senior staff, I
Speaker 8: was always surprised at how dismissive so many of them
Speaker 8: are about money supply, how dismissive they are about what
Speaker 8: Milton Friedman taught us, and how focused they are on
Speaker 8: things like inflation expectations rather than the forty percent growth
Speaker 8: than M two that they were responsible for in eighteen months.
Speaker 8: So they might miss the collapse of the growth in
Speaker 8: M two, for instance, and misdiagnose what's going on. In
Speaker 8: my view, I think there's a great risk they.
Speaker 4: Go too far.
Speaker 6: Are you agreeing with Elizabeth Warren?
Speaker 8: I don't think so, because I think Elizabeth Warren was
Speaker 8: opposed to any kind of normalizing of interest rates. I
Speaker 8: think maybe a mischaracterization, but I think that's true. We
Speaker 8: now have positive real interest rates. I would argue, you know, certainly,
Speaker 8: if you're looking on a month to month basis, we
Speaker 8: have had money supply growth go to zero. We have
Speaker 8: the Fed shrinking its balance sheet. We have the Treasury's
Speaker 8: going to go out and absorb what a trillion dollar's
Speaker 8: worth of cash from the economy. So you put all
Speaker 8: that together and you look at how inflation is obviously
Speaker 8: rolled over, and I think we're probably on the right trajectory.
Speaker 7: Now.
Speaker 8: I'm not in the camp of easing by any means.
Speaker 8: I think the pause is probably the right thing to do.
Speaker 8: But you look at the dot plot and it looks
Speaker 8: as though they're going higher from here, So maybe that's
Speaker 8: the right call. I'm just I think the era is
Speaker 8: more likely to occur on excessive tightening.
Speaker 1: Bloomberg surveillance of a great affection for politicians who come
Speaker 1: from a different territory than just pure politics as well.
Speaker 1: I was talking to our Greg Gerro and he looks
Speaker 1: at the mess which is known as the coming presidential campaign. Yeah,
Speaker 1: and I would just suggest sir that you consider here
Speaker 1: in your private moments, private citizen moments, that we need
Speaker 1: a Locell Academy ticket.
Speaker 4: Now.
Speaker 1: I think Governor Romando and Pat Toomy could get together
Speaker 1: and bring Rhode Island to the nation. What's in the
Speaker 1: pixie dust at Lacel Academy, robins Rhode Island. That gives
Speaker 1: us the Commerce Secretary and the former Senator.
Speaker 8: I think our Commerce Secretary is a very capable, very
Speaker 8: capable person, one of the more impressive members of the
Speaker 8: entire administration. But our worldviews still differ considerably. And a
Speaker 8: great experience at Lasal Academy. It's a great school. But
Speaker 8: miche and I won't be teaming up anytime soon.
Speaker 2: What's the world?
Speaker 4: What's the worldview?
Speaker 1: You see at the debates of the Republican Party. I
Speaker 1: believe they start in August.
Speaker 2: What is that going to be?
Speaker 8: There's some very big ones, right, and this is really important.
Speaker 8: There's what is our role in the world. I mean,
Speaker 8: you have a wing of the party that thinks we
Speaker 8: shouldn't even be helping Ukrainians. I think that's crazy, but
Speaker 8: there's people who are advocating that you have a wing
Speaker 8: of the party that wants to completely explicitly reject market
Speaker 8: capitalism and have central planning of industrial policy.
Speaker 2: We're have to leave it there.
Speaker 1: After your Apollo Board meeting, please come back and continue,
Speaker 1: and we do want to talk to you about China.
Speaker 1: I think that's really fun center as well.
Speaker 8: Thanks for having me.
Speaker 10: He is with A.
Speaker 1: Paul Patrick Toomey is a former Senator of Pennsylvania.
Speaker 2: I'm not going to mince words.
Speaker 1: Leland Miller is an outlier with this granular analysis of China. Leland,
Speaker 1: you aggressively push against the China economic gloom. What are
Speaker 1: the gloomsters getting wrong?
Speaker 11: Well, I think there's reason to be gloomy, but I
Speaker 11: think everything has to be relative at this point. So
Speaker 11: these are these are probably some of the most difficult
Speaker 11: economic numbers that we've ever had to unravel, you know,
Speaker 11: in over a decade. If you look at what we
Speaker 11: do know, we do know that the early expectations that
Speaker 11: there would be you know, a rallier in the year
Speaker 11: those were those were wrong. If you look at what's
Speaker 11: happening with Q two, the idea that there's going to
Speaker 11: be a boom in Q two. Those certainly look wrong too,
Speaker 11: So the question is is there a recovery or of
Speaker 11: things falling apart. Well, if you look at this sequentially,
Speaker 11: you have been seeing some improvement month a month. You know,
Speaker 11: sis sheen improved five straight months, China basebook data improved
Speaker 11: three straight months. If you look if you go into
Speaker 11: the industrial production data, it looks like there's sequential improvements.
Speaker 11: The retail sales numbers are really hard to decipher because
Speaker 11: they say to me, moving these around from year to year.
Speaker 11: But you do seem to be seeing some elements of improvement.
Speaker 11: You're just not seeing the recovery everybody's expecting, which has
Speaker 11: made everybody very pessimistic. So it's really about framing what
Speaker 11: the expectations were, what they are for the rest of
Speaker 11: the quarter, and then going based on that.
Speaker 6: The PBOC responded after getting these disappointing retail sales figures
Speaker 6: over the past twelve hours. They cut this rate on
Speaker 6: the one year loan aspect of their portfolio by ten
Speaker 6: basis points. And that's not necessarily a significant move. This
Speaker 6: follows another very small move earlier in the week. What
Speaker 6: does this signal about what they are prepared to do
Speaker 6: in terms of stimulus.
Speaker 11: I don't think it signals that much. I think in
Speaker 11: and of itself, it's a signal that they understand the
Speaker 11: data and not where they need to be or not
Speaker 11: where people expected them to be.
Speaker 4: But here's the problem.
Speaker 11: People, every time they see week data, they expect stimulus,
Speaker 11: big stimulus, some other stimulus is coming down the road
Speaker 11: to save them. You know, this is like a time machine.
Speaker 11: You go back to twenty twenty, twenty twenty one, twenty
Speaker 11: twenty two. Now it's twenty twenty three. We're in having
Speaker 11: the same type of conversation we've had for years. The
Speaker 11: Chinese data overall getting weaker. Expectations for stimulus to stay
Speaker 11: the same. Look, they are unlikely to do any type
Speaker 11: of big stimulus. They're cutting baby rates, They're not going
Speaker 11: to have much of an effect because this is a
Speaker 11: demand question. The big question is do they dive back
Speaker 11: down into the old school, Let's build a bunch of bridges,
Speaker 11: let's build a bunch of towns infrastructure investment.
Speaker 4: I think that's still very unlikely.
Speaker 11: Nothing that we're seeing in China suggests that they want
Speaker 11: to go back on that model that they have different
Speaker 11: priorities right now. So I think that these signals are
Speaker 11: sending some centiment boost to market markets because the data
Speaker 11: are relatively weak, But I don't think that they foretel
Speaker 11: a big movement towards bigger stimulus Leland.
Speaker 6: They're sort of a conflicted picture here that on one hand,
Speaker 6: you don't think the data is as dire or some
Speaker 6: of the expectations are as dire as people expected to
Speaker 6: be in terms of the deceleration of the Chinese economy.
Speaker 6: On the other you don't expect stimulus to come and
Speaker 6: save the day and propel growth substantially above five percent.
Speaker 6: What is the new growth Paara time? How much will
Speaker 6: China's GDP expand this year and then going forward than
Speaker 6: your normal Well, look, our.
Speaker 11: June data, which we get in two weeks are probably
Speaker 11: I'm anticipating these these are to be the most interesting
Speaker 11: data we've seen in over a decade because June, whether
Speaker 11: the second quarter growth can be saved, whether they're gettingwhere
Speaker 11: near the five percent number. Keep in mind, they're coming
Speaker 11: off an extremely poor base in twenty twenty two, so
Speaker 11: hitting some of these numbers for the second quarter, for instance,
Speaker 11: are not as hard as people think, but again, what's
Speaker 11: the big lesson here. The lesson is they are just
Speaker 11: not prioritizing hitting the levels of growth that people on
Speaker 11: Wall Street are telling They're telling us that they're going
Speaker 11: to hit. You know, they are trying to you know,
Speaker 11: they're trying to move forward, restrain themselves from from bigger stimulus,
Speaker 11: or they're reprioritizing the economy in terms of you know,
Speaker 11: national security, different different party set.
Speaker 1: Leila Mello, Jonathan Spence one oh one is went in
Speaker 1: doubt as a totalitarian regime employ the masses. I'm looking
Speaker 1: in February and I'm sure you've read this in Chinese
Speaker 1: Measures for the Administration of National Work Relief. Does all
Speaker 1: this come down to the primal scream that the totalitarian
Speaker 1: elites in Beijing have to employ millions of unemployed, millions
Speaker 1: of low wage this immense labor pressure that's been there
Speaker 1: for fifty years.
Speaker 11: Well, labor pressure is at the center of this, because
Speaker 11: you know, the talk for years now has been that
Speaker 11: China needs to restructure the society from investment and investment
Speaker 11: driven to consumption driven, you know, to from all type
Speaker 11: of the economic model to a new type of economic model.
Speaker 11: You know, that's a restructuring of jobs along the way,
Speaker 11: and so you need to make sure you keep people employed.
Speaker 11: So this is an issue you have. You have some
Speaker 11: some some you know, issues of the labor market that
Speaker 11: will be helpful over the years with falling market, you know,
Speaker 11: working population, et cetera. You're going it's gonna be easier
Speaker 11: to do. But this is still a grand transition for them.
Speaker 11: So they've got enormous, enormous challenges going forward trying to
Speaker 11: to make growth work.
Speaker 1: I mean, they got the challenges there that were there
Speaker 1: ten years ago, twenty years ago. I personally observed them
Speaker 1: in Shanghai, and I found it extraordinary to see basically
Speaker 1: served them in modern pseudo capitalism, if you will. What's
Speaker 1: the Leland Miller unemployment rate from Chengdu to Beijing.
Speaker 11: Oh wow, you know a lot of this is the
Speaker 11: methodology how to use it. I mean, people look at
Speaker 11: this youth unemployment rate, which is awful, bad news, and
Speaker 11: it's scary. It's done very differently than the way it's
Speaker 11: done in the United States. For instance, you mean you're unemployed,
Speaker 11: if you're uneployed, you're unemployed. You're not different waiting times
Speaker 11: and other things. For being categorized. It does show there's
Speaker 11: a problem. I don't think it's the key problem that
Speaker 11: they're looking at. I think what they need to do
Speaker 11: is reinstill some level of confidence, not through stimulus, but
Speaker 11: through organic policies, and they need to They needed to
Speaker 11: boost demand because right now there needs to be a
Speaker 11: domestic demand story that's able to spur this recovery.
Speaker 4: So they're in a.
Speaker 11: Weird position where they're not getting the organic recovery so
Speaker 11: far that they were expecting, but they're also a lot
Speaker 11: less likely to be going down the stimulus route, at
Speaker 11: least compared to what most people around the globe think.
Speaker 4: So they're in a position where the pressure is on.
Speaker 6: Meanwhile, we see that Tony Blinken, Secretary of State, is
Speaker 6: heading over to Beijing to get a sense of whether
Speaker 6: they can really ease some of the tensions that have
Speaker 6: been escalating ratcheting up between the US and China. What
Speaker 6: are you looking for in terms of understanding the points
Speaker 6: of leverage and what China wants in terms of international
Speaker 6: participation from these meetings.
Speaker 4: I'm not sure they want much.
Speaker 11: I mean, one of the sources of leverage for the
Speaker 11: Chinese right now is the fact that they don't want
Speaker 11: to interact with their American.
Speaker 4: Opposites. They don't want to answer military hotlines.
Speaker 11: They want to say, look, if you're going to be
Speaker 11: rough on us from an international relations standpoint, then we're
Speaker 11: going to ignore you.
Speaker 4: And that raises the risks.
Speaker 11: For everybody that there could be some sort of misunderstanding
Speaker 11: or confrontation. I think that works for China's favor in
Speaker 11: their minds at least, so I don't think they want.
Speaker 4: Much of it.
Speaker 11: Better communications, more communications is a good thing, but I
Speaker 11: don't think that this is going to solve anything.
Speaker 1: I look, Leland, you know, just just one final quick
Speaker 1: question here on the solidity of the federal administration in Beijing.
Speaker 1: I mean, everybody makes a deal, you know, Premier president
Speaker 1: for life, whatever she is. But how stable are they?
Speaker 1: What support do they have from the city's mayors and
Speaker 1: from the regional organization of the Communist Party.
Speaker 11: Well, China, China is a black box. I mean that's
Speaker 11: that's that's still true. But there's nothing that we're seeing
Speaker 11: that suggests that the Chinese Communist Party, despite all these
Speaker 11: structural headwinds, despite weak economic growth, despite a challenging international environment,
Speaker 11: doesn't have the support of the people, that there's any
Speaker 11: type of pushback against Hijinping.
Speaker 4: We're just not seeing that.
Speaker 11: So obviously, underneath the system there's no pressure valve, like
Speaker 11: there isn't a democracy, you know, to throw the bums out.
Speaker 11: And but look, you know, it's hard to see any
Speaker 11: type of specific political stress in the system, although there's
Speaker 11: certainly lots of economic stress.
Speaker 1: Thank you for the brief.
Speaker 2: He is with China Babek.
Speaker 1: Subscribe to the Bloomberg Surveillance Podcast on Apple, Spotify, and
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Speaker 1: to the Bloomberg Surveillance Podcast. Now, stay tuned for today's
Speaker 1: edition of Bloomberg Daybreak. It's your daily news podcast, delivering
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Speaker 1: The Bloomberg Daybreak podcast. It starts right now.
Speaker 12: From the Bloomberg Interactive Broker Studios. This is Bloomberg day
Speaker 12: Break for Thursday, June fifteenth.
Speaker 13: Coming up today, the Fed pauses for the first time
Speaker 13: in fifteen months, but signals more rate hikes ahead.
Speaker 12: Now it's the ECB's turn, with a policy decision coming
Speaker 12: this morning.
Speaker 13: A busy week of economic data continues. US retail sales
Speaker 13: are two out, and.
Speaker 12: Former President Trump holds onto GOP support in the wake
Speaker 12: of his indictments.
Speaker 10: The retired marine charge with putting a Manhattan subway writer
Speaker 10: and a fatal choke hold has been indicted. Plus Texas
Speaker 10: has sent a busload of migrants to Los Angeles.
Speaker 14: I'm Michael barn Ahead, I'm John Stansh.
Speaker 15: Edward's Wards the Mets with a walk off win over
Speaker 15: the Yankees, the US Open golfed He's off today in
Speaker 15: Los Angeles.
Speaker 16: That's all straight Ahead on Bloomberg day Break, the business
Speaker 16: news you need to starn your day in just one
Speaker 16: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg
Speaker 16: Business Appen everywhere you get your podcasts.
Speaker 12: Good morning, I'mthan Hager and I'm Amy Morris. Here are
Speaker 12: the stories we're following today.
Speaker 13: Investors are still digesting yesterday's message from the Federal Reserve.
Speaker 13: The Central Bank did pause rate hikes after fifteen months
Speaker 13: of tightening, but the move is being viewed as a
Speaker 13: hawkish hold. Fed schhair Jaypal says he expects more hikes
Speaker 13: will be needed.
Speaker 5: Today, we decided to leave our policy interest rate unchanged.
Speaker 5: Nearly all committee participants expect that it will be appropriate
Speaker 5: to raise interest rates somewhat further by the end of
Speaker 5: the year.
Speaker 13: And jay Palell declined to say whether another hike could
Speaker 13: come as soon as July, but he did emphasize it
Speaker 13: will be a live meeting next month.
Speaker 12: Pell faced the challenging task of explaining two contradictory policies,
Speaker 12: deciding to leave rates unchanged while also indicating two more
Speaker 12: increases this year. Apollo Management chief economist Torsten slog says
Speaker 12: Powell did a good job walking that fine line.
Speaker 17: They succeeded in what we expected namy delivering a.
Speaker 8: Hawkish skip, because they did signal very stronger than more
Speaker 8: rate hikes are coming.
Speaker 12: Lock at Apollo says traders are now betting on two
Speaker 12: more quarter point increases this year. We also get the
Speaker 12: view from Diane Swank, chief economist at KPMG.
Speaker 17: This is a FED that is committed to additional rate hikes.
Speaker 17: The tricky part of this pause or skip was messaging it,
Speaker 17: and this was a very effective way to message. We're
Speaker 17: going to assess what titaning is out there and how
Speaker 17: much additional titaning is needed.
Speaker 12: KPMG chief economist Diane Swank also expects the Fed to
Speaker 12: raise rates in July and September.
Speaker 13: Well, the Fed appears to have laid out a plan.
Speaker 13: I mean, now we wait to see what the data
Speaker 13: say in the coming month. Today we get the latest
Speaker 13: reading on retail sales. Economists forecast a drop of two
Speaker 13: tenths of one percent in May, and Bloomberg's Vinnie del
Speaker 13: Judice has more.
Speaker 18: The prior report showed April retail sales recovered from back
Speaker 18: to back declines. Even so, Bloomberg economics, as Americans are
Speaker 18: becoming more discerning with their money. Higher interest rates are
Speaker 18: taking a bite out of household finances. Inflation remains an
Speaker 18: issue too, and then to sign us businesses or racing
Speaker 18: for weaker demand, cardboard bakshipments are falling. Also on today's agenda,
Speaker 18: May industrial production economists anticipate moderation.
Speaker 4: Vinnie del Judeis Bloomberg day Break.
Speaker 1: Thank you, Vinnie.
Speaker 12: It's also a busy day for economic news overseas. The
Speaker 12: European Central Bank makes an interest rate policy decision this morning.
Speaker 12: Let's go to London and get details from Bloomberg's U
Speaker 12: and Parts.
Speaker 4: Good Morning New and good.
Speaker 19: Morning Amy and Nathan. The ECB looks set to deliver
Speaker 19: what could be its penultimate rate hike later today. Economists
Speaker 19: overwhelmingly expect the deposit rates shared by the twenty nations
Speaker 19: which use the single currency to be lifted by twenty
Speaker 19: five basis points to three point five percent. The focus
Speaker 19: for investors will be on the ECB's guidance as to
Speaker 19: how much further they have to go in their fights
Speaker 19: against an inflation rate still three times the bank's targets.
Speaker 19: In London, I'm un in Parts, Boomberg day Break.
Speaker 1: Thanks Youan.
Speaker 13: In Asia overnight, China's Central Bank was making moves ramping
Speaker 13: up monetary stimulus to help spur the economy, and Bloomberg
Speaker 13: Daybreak Asia anchor Brian Curtis has more from Hong Kong.
Speaker 20: The action comes on new signs of weakness in May.
Speaker 20: The PBOC cut the interest rate on its one year
Speaker 20: policy loans by ten basis points to two point sixty
Speaker 20: five percent. That's likely to prompt the banks to lower
Speaker 20: their rates as well. On data, industrial output rose three
Speaker 20: point five percent from a year earlier, matching estimates, but
Speaker 20: down from five point six percent. Retail sales gained twelve
Speaker 20: point seven percent, but that missed an estimate as well,
Speaker 20: and fixed asset investments slowing to four percent in the
Speaker 20: first five months of the year also weaker than forecast.
Speaker 20: In Hong Kong Brain Curtis Bloomberg Daybreak.
Speaker 12: Relations between China and US are also in focus. Secretary
Speaker 12: of State Anthony B. Lincoln departs for China tomorrow as
Speaker 12: plans call for a two day trip aimed at stabilizing
Speaker 12: ties between the two countries. Lincoln's last attempt to visit
Speaker 12: China was derailed by that alleged Chinese spy balloon.
Speaker 13: Back here in the US, amy presidential politics remaining focus.
Speaker 13: Former President Donald Trump's legal troubles are dominating headlines, but
Speaker 13: they don't seem to be derailing his support among Republicans.
Speaker 13: Bloomberg Zed Baxter has a look at the latest numbers.
Speaker 14: The Quinnipiac University poll says bottom line, he is still
Speaker 14: the strong front runner for the nomination. The survey, conducted
Speaker 14: mostly after the latest indictment, shows support from fifty three
Speaker 14: percent of Republican and GOP leaning voters Ron DeSantis with
Speaker 14: twenty five percent. Now it should be noted that the
Speaker 14: fifty three is down from fifty six percent last month.
Speaker 14: Fundraising well, his campaign says since the indictment, the tills
Speaker 14: have been fed six point six million dollars. In San Francisco.
Speaker 14: I'm at Baxter Bloomberg Daybreak, Thank you ed.
Speaker 12: As former President Trump continues his campaign, he's accusing the
Speaker 12: Special Counsel of a double standard. Trump points to others
Speaker 12: accused of keeping classified documents who haven't been prosecuted, like
Speaker 12: President Biden and Hillary Clinton, but former resistant Special Watergate
Speaker 12: prosecutor Nick Ackerman says there's really no comparison.
Speaker 21: I mean, the people who are making these arguments, they
Speaker 21: got to be questioned about the specific paragraphs in this
Speaker 21: indictment and ask them if they're fine with somebody doing
Speaker 21: that fine telling their lawyer to move boxes to hide documents,
Speaker 21: if they're fine with telling their lawyer to destroy documents.
Speaker 12: Former Assistant US Attorney Nick Ackerman spoke with Joe Matthew
Speaker 12: on Bloomberg's Sound Catch That show weekdays at one pm
Speaker 12: Eastern on Bloomberg Radio or listen on demand wherever you
Speaker 12: get your podcasts.
Speaker 13: Time now to look at some of the other stories
Speaker 13: making news in New York and around the world with
Speaker 13: Bloomberg's Michael Barr.
Speaker 2: Good Morning, Michael, Good Morning.
Speaker 10: Nathan. A man charge with a manslaughter for putting an
Speaker 10: agitated New York City subway writer in a fatal chokehold,
Speaker 10: has been indicted by a grand jury. Daniel Penny was
Speaker 10: charged by Manhattan prosecutors last month in the May first
Speaker 10: death of Jordan Neely, who struggled in recent years with
Speaker 10: homelessness and mental illness. Penny earlier this week talked about
Speaker 10: the incident in a video released by his attorneys.
Speaker 5: The three main threats that he repeated over and over
Speaker 5: I'm going to kill you, I'm prepared to go to
Speaker 5: jail for life, and I'm willing to die.
Speaker 10: New York City trial attorney Brian Buckmeyer spoke to ABC.
Speaker 22: It's the idea of being safe in the subway, the
Speaker 22: ideas of mental health, and potentially substance abuse in the subway,
Speaker 22: and how these two ideas and these these themes kind
Speaker 22: of intersect and asking the question where is the line.
Speaker 10: Penny faces up to fifteen years in prison if convicted.
Speaker 10: And there's another incident of a subway writer facing charges
Speaker 10: after the death of another man said to be harassing
Speaker 10: other passengers. Twenty year old Jordan Williams is facing manslaughter
Speaker 10: charges and the fatal stabbing on board of Brooklyn bound
Speaker 10: Jay train Tuesday night. The NYPD says a fight began
Speaker 10: aboard the train in Manhattan. Police are reviewing cell phone
Speaker 10: videos of a thirty six year old man who was
Speaker 10: allegedly harassing subway riders as the train traveled to Brooklyn.
Speaker 10: A group of migrants who arrived by bus and downtown
Speaker 10: Los Angeles were sent from Texas. La Mayor Karen Bass
Speaker 10: called the move a despicable stunt. Republican Governor Greg Abbott
Speaker 10: has also been chartering buses to New York City, Washington,
Speaker 10: d C, Chicago, and Denver. A New Jersey man is
Speaker 10: lucky to be alive after he was struck by lightning,
Speaker 10: official say thirty nine year old to Eric Bombgardner, a
Speaker 10: Woodbridge Township public works employee was painting lines on a
Speaker 10: middle school soccer field when he was struck. His life
Speaker 10: was saved by Woodbridge police officer Robert R. J. McPartland,
Speaker 10: who was assigned to the high school right next door
Speaker 10: and arrived within seconds.
Speaker 23: Some burnmarks appeared on his hands, realized he didn't have
Speaker 23: a pulse and began CPR. He was a parent that
Speaker 23: he was struck by lightning. He was still holding one
Speaker 23: of the machines. We were able to get that away
Speaker 23: from him. When more units arrived, we were able to
Speaker 23: get the AD hooked up to him and start breathing
Speaker 23: for him.
Speaker 10: Officer McPartland says. Bombgardner was rushed to Robert Wood Johnson
Speaker 10: Medical Center in New Brunswick for treatment. Global News twenty
Speaker 10: four hours a day, powered by more than twenty seven
Speaker 10: hundred journalists nantilists in over one hundred and twenty countries.
Speaker 10: I'm Michael Barr.
Speaker 2: This is Bloomberg Neither Thanks Michael.
Speaker 13: Ten half of the Bloomberg Sports Update, brought to you
Speaker 13: by Trice State out Eat.
Speaker 2: Good morning, John Stanshout.
Speaker 4: Good morning Nathan.
Speaker 15: The Mets, losers of nine of their last ten games,
Speaker 15: did a lot of things wrong at Citi Field. Jeff
Speaker 15: McNeil's throwing air allowed the Yankees to take the lead
Speaker 15: seventh inning, and later in that inning they ignored Isaiah
Speaker 15: Connor pileeff and when he was at third base, they
Speaker 15: let him steal home. Then a base running blundered by
Speaker 15: Brandon Nimmo ended the chance to retake the lead in
Speaker 15: the bottom of the seventh, so the Subway series was
Speaker 15: still tied in the tenth.
Speaker 24: The one swinging a high drive hit Teep right field
Speaker 24: hours back to the track at the wall.
Speaker 2: It is off the wall. Escobar racing a round third,
Speaker 2: take you the turn. The cutoff throw from right center field.
Speaker 10: Is out of time.
Speaker 2: Escovar slides it safely.
Speaker 13: Nimmo faced with it game winning RBI.
Speaker 15: Trip on WCBS, Mets beat the Yankees four to three.
Speaker 15: Mets were without reliever Drew Smith, they with a ten
Speaker 15: game suspension. Smith had been tossed out a Tuesday's game
Speaker 15: before he threw a pitch as umpires found the sticky stuff,
Speaker 15: just like what happened to his teammate Max Scherzer and
Speaker 15: of the Yankees, Domingo Herman. The Oakland A's stunning seven
Speaker 15: game win.
Speaker 10: Streak is over.
Speaker 15: They were twelve and fifty before the streak, and the
Speaker 15: A's moved closer to Las Vegas with final approval by
Speaker 15: the Nevada Legislator and public funding for a new stadium
Speaker 15: on the Strip. US Open Golf Tee's off today on
Speaker 15: of course, it has not hosted any of the previous
Speaker 15: one hundred and twenty two opens, so most of the
Speaker 15: field unfamiliar with the La Country Club. The two betting
Speaker 15: favorite for Scottie Scheffler and John Rahm, both with morning
Speaker 15: Tea times Finny Chiv. Matt Fitzpatrick plays this afternoon. He'll
Speaker 15: be with Dustin Johnson and just after that a group
Speaker 15: that includes Brooks Kepta and Rory Mclelord Johns, stash Ellend
Speaker 15: Bloomberg Sports.
Speaker 25: From coast to coast, from New York to Sen Francisco,
Speaker 25: Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg
Speaker 25: Business Appen Bloomberg dot Com.
Speaker 2: This is Bloomberg Daybreak. Good morning.
Speaker 13: I'm Nathan Hager. The Federal Reserve has hit the pause
Speaker 13: button on its aggressive run of interestrate hikes, keeping policy
Speaker 13: on hold for the first time since March of last year,
Speaker 13: but Chairman J. Powell is sending a message to markets
Speaker 13: the central banks fight against inflation is far from over.
Speaker 5: Inflation has moderated somewhat since the middle of last year. Nonetheless,
Speaker 5: inflation pressures continue to run high, and the process of
Speaker 5: getting inflation back down to two percent has a long
Speaker 5: way to go.
Speaker 13: That was Chairman Palell at the news conference you heard
Speaker 13: yesterday here on Bloomberg Radio following that decision to keep
Speaker 13: rates on hold and for more. We were joined by
Speaker 13: Bloomberg opinion columnist Marcus Ashworth. Marcus, what did you make
Speaker 13: of the messaging from the chairman and the big shift
Speaker 13: that we saw on the dot plot.
Speaker 9: Well, let's start the last thing first. I don't believe
Speaker 9: particularly in the dot plot. It's more of a horoscope
Speaker 9: and it changes around as the wind. As the wind blows.
Speaker 9: I don't think Pow thinks much of it either. So
Speaker 9: I just think the Feller done a great job in
Speaker 9: talking out prospective rate cuts for this year. They've somehow
Speaker 9: managed to do a pause and make it incredibly hawkish.
Speaker 9: I don't really believe that. I don't think the market
Speaker 9: on reflection really believes it either. Nonetheless, they've given themselves
Speaker 9: what the precious thing they want, which is the optionality
Speaker 9: going into the July meeting. You know, they can pause
Speaker 9: again or they can hike, and that's at their sort
Speaker 9: of blessing. So that's I think all they want. They'll
Speaker 9: see a bit more data. There are a lot more data.
Speaker 9: Actually there's probably less data of importance coming up, but yeah,
Speaker 9: and get another CPIET, another payroll number. I think the
Speaker 9: interesting thing, most interesting by quite some way, is how
Speaker 9: power has shifted on what the effects of wage rises
Speaker 9: are to inflation. He's essentially said, from being the bad thing,
Speaker 9: the baddest thing out there, it's now a good thing
Speaker 9: for the economy, as in supporting the almost like a
Speaker 9: flaw for a soft landing. Now, if we do get
Speaker 9: what's known as immaculate disinflation, perhaps there is a soft
Speaker 9: landing there, and it means they're less focused on wage
Speaker 9: rises as being pushing forward for second round effects of
Speaker 9: inflation and keeping inflation high. There it's still a concern
Speaker 9: for them, but nowhere near I think as much a
Speaker 9: prime concern. So that sense, I think there's a subtle
Speaker 9: shift on what they're looking at. They're not going to
Speaker 9: be so fixated on backward looking labor data, and that
Speaker 9: is good news.
Speaker 16: Now.
Speaker 13: That is really interesting because there has been so much
Speaker 13: of a focus over the last several months on the
Speaker 13: concern that wage pressures could be what's leading to the
Speaker 13: stickiness that we're seeing in inflation. What do you think
Speaker 13: the FED is seeing in the data now that could
Speaker 13: be justifying that shift.
Speaker 9: Well, it's almost is that the causality is is potentially reversed.
Speaker 9: And I don't want to get too technical here, but
Speaker 9: in essence, everyone's saying high wage rises leads to future inflation.
Speaker 9: If inflation is coming down as it is now quite
Speaker 9: sharply and across a range of everything, but use to
Speaker 9: flies as one percent, you know, CPI, I know is
Speaker 9: a little stick in the month a month, but it's
Speaker 9: heading downwards, and the headline certainly is then those drop
Speaker 9: off of inflation expectations may in turn actually feedback the
Speaker 9: other way and people demanding less of a wage rise,
Speaker 9: and that in turn will actually see wage rises full off.
Speaker 9: So it's sort of looking at backwards. Perhaps, I think
Speaker 9: they're realizing that short term inflation expectations are driven by
Speaker 9: headline inflation as much as indeed the second round effects
Speaker 9: feeding through of oh I've missed out, and I'm poor.
Speaker 9: I was, and I demand at least an inflationary rhizome.
Speaker 9: More so, I think they're hoping that consumer expectations and
Speaker 9: some sense work for them rather than work against them.
Speaker 13: In the minute we have left here, Marcus, you've got
Speaker 13: to look forward to the European Central Bank decision. I
Speaker 13: think I saw on the Markets Live survey yesterday. Will
Speaker 13: Madame Legarde be listening to Chairman Powell? What's your answer
Speaker 13: to that.
Speaker 9: I think she is very much listening. Whether she'll admit
Speaker 9: to it, it's another thing altogether. I do think that
Speaker 9: the FED mothership is by skillfully you make might not
Speaker 9: think it's skillful, but compeditor what we have over here,
Speaker 9: the Fed's played this pretty well. I think they've got
Speaker 9: themselves a pause. They've got themselves the optionality the next
Speaker 9: time around. She's not able to do that, yet, I'm hoping,
Speaker 9: against hope that she hints that maybe in July again,
Speaker 9: a day after the FED, the FED pauses for a
Speaker 9: second time. That enables the easy bea to relax a
Speaker 9: bit and not be hiking adnauseum every single meeting, because
Speaker 9: you know, maybe they can go to once a quarter.
Speaker 9: This time around, it's a quarterly economic review, and the
Speaker 9: next one will be September. Maybe they can skip July.
Speaker 9: It's probably hoping it gets hope. I think that certainly
Speaker 9: a signal they will intend to hike in July.
Speaker 4: Whether they do or.
Speaker 9: Not, I'm hopeful that they may see. Economy in Europe
Speaker 9: is already in recession. The start of second quart of
Speaker 9: Jemmy isn't great. This is not a time to be
Speaker 9: hiking rights.
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