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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Day Bake You At podcast, available every morning on Apple,

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Speaker 1: Spotify or wherever you listen. It's Friday, the twenty sixth

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Speaker 1: of July here in London. I'm Caroline and.

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Speaker 2: I'm Lizzie Burden. Coming up today. Acts of sabotage hit

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Speaker 2: French trains as the Paris Olympics kick off.

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Speaker 3: We'll bring you the latest.

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Speaker 1: Sources tell Bloomberg that the UK Chancellor of Rachel Reeves

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Speaker 1: is leaning towards an institutional rather than a public sale

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Speaker 1: for nat West shares.

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Speaker 2: Plus, don't expect much small talk from your new colleague.

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Speaker 2: JP Morgan introduces staff to its AI powered research analyst Chatbot.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: On the eve of the Olympics, trains across France have

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Speaker 2: been disrupted. The country's transport minister says the coordinated malicious

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Speaker 2: acts targeted several TGV lines. It comes after a number

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Speaker 2: of French websites were shut down last month in an

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Speaker 2: attack believed to be linked to Russian intelligence. Bloomberg's Paris

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Speaker 2: Eurochi Fallen Cautz says the perpetrators are unknown. At the moment.

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Speaker 4: Honestly, we don't know.

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Speaker 5: For the moment, these were physical acts. People have talked

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Speaker 5: about fires on the tracks in local media. The Transport

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Speaker 5: Ministry discussed they talked about your firefighters being on site

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Speaker 5: for these locations. So it appears to be physical.

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Speaker 2: So that was Bloomberg's Alan Katz speaking there. A task

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Speaker 2: force of six hundred and thirty have been assigned to

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Speaker 2: the Games, but authorities were a non traditional targets may

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Speaker 2: also be in hackers sites.

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Speaker 1: Now to earnings, Mercedes Benz earnings plummeted nineteen percent of

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Speaker 1: the second quarter as sales of its passenger electric vehicles

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Speaker 1: drop sharply matters that the carmaker were not held by

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Speaker 1: weakening demand in China. Bloomberg's Oliver Crook says the slowdown

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Speaker 1: is sector wide.

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Speaker 6: So this is really for the auto sector a quarter

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Speaker 6: where it feels like the rubber hits the road. All

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Speaker 6: the themes are still intact, there's nothing particularly new, but

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Speaker 6: it's an auto industry where you have a very crowded market,

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Speaker 6: you do not have the demand, and you have fierce competition.

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Speaker 6: While they're still at the same time, I'm trying to

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Speaker 6: manage this transition to electric vehicles.

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Speaker 1: Oliver Crook, speaking there from Berlin. Only, BMW, Mercedes's biggest

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Speaker 1: premium car rival, has actually bucked the trend in Europe

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Speaker 1: after rolling out several new battery models. The company is

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Speaker 1: cutting back on electrification plans in preparation to spend more

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Speaker 1: on its lineup of combustion engine cars.

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Speaker 2: In other rulings, this morning, that West shares open nine

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Speaker 2: percent higher after the company reported strong results. The bank

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Speaker 2: boosted its full year forecast by one billion pounds as

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Speaker 2: high interest rates provided a tailwind. The UK lender says

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Speaker 2: it now expects its full year income to be roughly

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Speaker 2: fourteen billion pounds, up from thirteen billion. Separately, the company

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Speaker 2: announced that it was buying a two point five billion

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Speaker 2: pound portfolio of prime presidential mortgages from Metro Bank, and

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Speaker 2: currently those shares are higher seven point two percent.

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Speaker 1: And more on that wist because the Chancellor Rachel Reeves

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Speaker 1: is leaning towards selling that West shares to institutional investors

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Speaker 1: rather than to the UK public. Bloomberg has learned that

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Speaker 1: the planned five point six billion pound share sale would

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Speaker 1: come alongside the government's gradual winding down of its stake

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Speaker 1: Bloomberg's James Walcock hasmore.

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Speaker 7: It's a relic of the financial crisis. The UK government

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Speaker 7: remains nawst's biggest investor after bailing it out in two

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Speaker 7: thousand and eight. Former Chancellor Jeremy Hunt had wanted to

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Speaker 7: sell large parts of that twenty percent stake to the

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Speaker 7: public to try and encourage retail investors, but Bloomberger's learned

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Speaker 7: Rachel Reeves is planning on taking some of that sale

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Speaker 7: to institutional investors. The move mayet the government money right

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Speaker 7: as it faces a major shortfall in funds. Reeves is

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Speaker 7: expected to lay out a near twenty billion pound funding

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Speaker 7: shortfall for public services next week in an audit of

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Speaker 7: the previous government's record in London. James Wilcock Bloomberg Radio.

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Speaker 2: Treasuries have hold on to their recent gains as traders

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Speaker 2: wag signs of a resilient US economy against calls for

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Speaker 2: quicker interest rate cuts from the Fed. This ahead of

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Speaker 2: US inflation data today, with core PCE inflation the Fed

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Speaker 2: Preferred price gauge expected to slow to near the FED

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Speaker 2: two percent target on a three month basis. Former New

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Speaker 2: York Fed President Bill Dudley is calling on policymakers to

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Speaker 2: cut rates at their meeting next week.

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Speaker 5: I think ryets are definitely coming. I just think that

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Speaker 5: at this point there's not a really strong case for waiting.

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Speaker 5: The FED doesn't cut in July and waste till September,

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Speaker 5: it's not going to have a huge effect on the

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Speaker 5: comments directory, except the fact that when the unemployment rates

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Speaker 5: starts to deteriorate, it seems to be a reinforcing negative

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Speaker 5: feedback loop. Jobs are lost, people pull back on spending

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Speaker 5: that leads to for their cuts in employment.

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Speaker 2: Dudley's comments were echoed by fellow Bloomberg opinion columnists Mohammed Dealarian,

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Speaker 2: who says too long a delay on cuts could prove

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Speaker 2: a quote policy mistake. However, yesterday is better than expected

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Speaker 2: US growth data two point eight percent on an annualized

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Speaker 2: basis for the second quarter has reinforced bets that policymakers

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Speaker 2: will wait until September to kick off their monetary easing cycle.

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Speaker 1: And just lastly, JP Miilgan Chase has launched a research

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Speaker 1: analyst AI Chatbot. The US banking giant has told its

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Speaker 1: employees to use its own version of chat GPT as

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Speaker 1: a writer, idea generator and problem solver. It comes as

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Speaker 1: many expect the new technology to create major economic gains

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Speaker 1: and replaced workers all around the world. City Group estimates

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Speaker 1: that the technology could add one hundred and seventy billion

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Speaker 1: dollars to the banking industry's coffers by twenty twenty eight.

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Speaker 1: That was cited in a June report. But it could

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Speaker 1: also displace more jobs in that sector than in any other. Okay,

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Speaker 1: so those are top stories and the markets. I want

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Speaker 1: to just think a little bit about what's going on

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Speaker 1: in France. Of course, you've got all the excitement around

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Speaker 1: the Olympic Games happening today, the opening ceremony at five

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Speaker 1: thirty London time. You've got thousands of athletes, you've got

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Speaker 1: more than three hundred gold medals up for grabs. There's

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Speaker 1: going to be this huge flotilla going down the Seine,

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Speaker 1: and you'll get all the sites of kind of Paris

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Speaker 1: around being broadcasts all around the world. But then there

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Speaker 1: are also real worries around security. We've had this spoking

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Speaker 1: news this morning that there's been disruption on trains in France.

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Speaker 1: Just quite worry. Yeah.

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Speaker 2: AFP reporting that it's this disruption could affect about eight

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Speaker 2: hundred thousand passengers, which makes me think about the potential

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Speaker 2: economic benefit or cost of these Olympics, Caroline, because you

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Speaker 2: know we've been talking about the Euros and how perhaps

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Speaker 2: Berlin didn't really get the benefit from the Euros. Do

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Speaker 2: you need to think about these sporting events more in

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Speaker 2: terms of the long term. And then there's also of

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Speaker 2: course the cost. You know, Paris desperately trying not to

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Speaker 2: let the Olympics become a white elephant as previous Olympic

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Speaker 2: games have and therefore using and retrofitting existing sports facilities

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Speaker 2: where possible rather than building new ones, but still coming

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Speaker 2: in over budget and still by no means cheap, not

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Speaker 2: least because of those security concerns that we're seeing playing

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Speaker 2: out with the trains today.

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Speaker 3: Yeah.

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Speaker 1: Absolutely, we're going to be discussing that in a bit

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Speaker 1: more detail in a moment. Also, of course, you've got

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Speaker 1: the Gnat West shares increasing this morning, we'll bring in

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Speaker 1: our UK Government reporter Ellen Milligan on that, because this

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Speaker 1: is going to be again a major decision for Rachel Reeves.

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Speaker 1: I mean, on Monday, the UK chance is going to

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Speaker 1: come up with exactly the size of the fiscal hole

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Speaker 1: here in the UK. She ordered a kind of urgent

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Speaker 1: review of the UK's fiscal position. We get the Bank

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Speaker 1: of England raid decision next week too, so there'll be

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Speaker 1: lots to kind of think about that West and the

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Speaker 1: UK financial position, as well as Rake cuts potentially.

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Speaker 2: Yeah, we've been discussing it on the Bloomberg UK Politics podcast,

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Speaker 2: haven't we about how now that there's a new government

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Speaker 2: in place, they're bringing out the dead as it's called

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Speaker 2: from the different departments, kitchen sinking it just trying to

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Speaker 2: spin make sure that the narrative is fixed around these

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Speaker 2: being the problems they've inherited before they start to deal

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Speaker 2: with them, before they start getting the blame for these problems,

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Speaker 2: not least when it comes to the public finances. So

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Speaker 2: then we have Rachel Reeves making this speech on Monday,

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Speaker 2: but also, as you say, as it comes to that West,

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Speaker 2: taking a different approach. It would seem from her predecessor,

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Speaker 2: Jeremy Hunt he wanted to plan to offer these shares

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Speaker 2: to the public, but actually it looks like Rachel read

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Speaker 2: is going to lean towards offloading at least a substantial

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Speaker 2: portion of the government's take in that West to institutional

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Speaker 2: shareholders instead.

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Speaker 3: Yeah.

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Speaker 1: Absolutely, let's then get the latest, shall we on the

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Speaker 1: train services being disrupted across France and also on the Eurostar.

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Speaker 1: The French authorities have talked about it being a coordinated

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Speaker 1: sabotage act. The Transport Minister speaking our EMEA news director

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Speaker 1: Roslyn Matheson joins us now for some further details, was

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Speaker 1: what do we actually know? Paris has also been on

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Speaker 1: high alert for the possibility of any sort of disruption

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Speaker 1: or attack.

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Speaker 8: Well, that's right, and the security in Paris itself has

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Speaker 8: been exceptionally high in the run up to the start

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Speaker 8: of the Olympic Games, the opening ceremony tonight, But these

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Speaker 8: seem to have been carried out outside Paris and a

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Speaker 8: bit of a ring around Paris. We know there's been

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Speaker 8: several fires that have been set in the north to

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Speaker 8: east and the southwest now and apparently was tried in

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Speaker 8: the southwest to put a ring of fires around Paris,

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Speaker 8: also targeting electricity transformers, and that's effected about eight hundred

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Speaker 8: thousand people with delays or cancelations from trains.

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Speaker 3: That's trains within France itself, but also the Eurostar, both.

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Speaker 8: To Paris and some delays on trains to Brussels and

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Speaker 8: we're hearing that's going to last at least through the weekend.

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Speaker 3: So the question is what does that do, aside from.

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Speaker 8: Disrupting services for people who are trying to get about

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Speaker 8: within France. Does that affect the Olympics in some fashion?

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Speaker 8: But obviously, you know, someone's using the moment to gain

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Speaker 8: maximum impact with a lot of the world's attention on

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Speaker 8: what's happening in Paris today.

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Speaker 2: Yeah, we were just talking about how the security bill

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Speaker 2: has been inflated because of the uncertainty politically in front.

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Speaker 2: Let's just talk about the cause of this disruption. We

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Speaker 2: do know that there were a number of French websites

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Speaker 2: shut down last month with an attack believed to be

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Speaker 2: linked to Russian intelligence. Is anyone making a connection between

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Speaker 2: that and the train disruption today.

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Speaker 3: At this stage?

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Speaker 8: Note, and there's no clarity about who may have been

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Speaker 8: behind this or why, But there's a lot of There's

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Speaker 8: been a lot of noise in the run up to

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Speaker 8: Olympics about a variety of groups, shall we say, or

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Speaker 8: people who have causes who want to draw attention to

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Speaker 8: those causes. We're expecting progals and protests, for example, climate

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Speaker 8: protests and so on.

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Speaker 3: In Paris.

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Speaker 8: But as you say, we do know there was a

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Speaker 8: cyber attack on a bunch of websites last month. Are

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Speaker 8: the researchers who were looking at that tracked back to

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Speaker 8: activists who affiliated with Russian intelligence, and they're warning that

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Speaker 8: there could be further risk of large scale cyber attacks

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Speaker 8: during the Olympics, again being such a high profile events.

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Speaker 8: They've been identifying all the groups and organizations who are

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Speaker 8: critical to the functioning of the games and getting them

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Speaker 8: to check their cyber their systems, check them for flaws,

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Speaker 8: for any vulnerability.

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Speaker 3: So certainly we've had that.

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Speaker 8: We did have news of a Russian chef in Paris

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Speaker 8: who was arrested, apparently for some sort of plans that

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Speaker 8: he may have been considering related to So there's a

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Speaker 8: lot of moving parts.

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Speaker 3: There's always around these big events.

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Speaker 8: But given just the global climate, then we're in at

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Speaker 8: the moment we've got two big wars still on in

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Speaker 8: Ukraine and in Gaza. We've got concerns about the cost

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Speaker 8: of living everywhere. We've got concerns about climate change everywhere,

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Speaker 8: and so there's lots of groups and parties who perhaps

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Speaker 8: have an interest in drawing attention in some fashion to

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Speaker 8: that during the games.

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Speaker 1: Yeah, and the SNCF, the French rail organization, saying that,

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Speaker 1: pointing to vandalism and to fires being deliberately set that

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Speaker 1: according to their statement, I mean France, so it is

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Speaker 1: how much does it have invested in these games? I mean, obviously,

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Speaker 1: so many people are going to be watching the there's

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Speaker 1: a lot of political uncertainty. Emmanuel Macauls seems to have

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Speaker 1: persuaded politicians to put aside, you know, question marks over

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Speaker 1: who's going to be prime minister and who's going to

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Speaker 1: lead the government at least until after these Olympic Games,

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Speaker 1: which comes at quite an awkward moment politically.

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Speaker 3: Yes, indeed, that's exactly right.

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Speaker 8: What we've got is this kind of backdrop of the

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Speaker 8: political uncertainty in France. And as always with these things,

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Speaker 8: they cost billions and billions of dollars, and then there's

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Speaker 8: always questions about whether it was worth it in the aftermath,

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Speaker 8: in terms of does it leave the host city Paris

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Speaker 8: in this or the country of France out of pocket

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Speaker 8: in the end, is the tourism benefit our way all

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Speaker 8: of that the infrastructure spending, So there's all those questions

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Speaker 8: in the ether already, and then you've got the broader

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Speaker 8: French political climate.

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Speaker 3: Not really.

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Speaker 8: We're waiting for the formation of a government, and those

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Speaker 8: conversations have been going on but not really getting anywhere

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Speaker 8: and have sort of now been put aside till after

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Speaker 8: the Olympics. After that we expect them to pick up

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Speaker 8: and possibly get quite robust, shall we say, those negotiations

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Speaker 8: towards a new government. So for Emanuel Macron, there's a

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Speaker 8: lot at steak here. He needs these games to be successful.

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Speaker 8: He needs them to go off without a hitch. He

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Speaker 8: needs everything to look good for France, for him as

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Speaker 8: a whole, obviously, for his own reputation, there's a lot

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Speaker 8: at steak here. And when he thinks about his board

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Speaker 8: legacy at the end of his own term as president,

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Speaker 8: he wants this to be a moment.

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Speaker 3: So for him, really there's a lot at stake.

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Speaker 8: But as soon as the games are over, the political

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Speaker 8: games themselves are going to begin again, that's for sure,

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Speaker 8: all right.

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Speaker 2: Rosalind matheson our EMA news director, we thank you as

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Speaker 2: AFP says eight hundred thousand passengers are going to be

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Speaker 2: impacted on the French tein network. But let's turn back

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Speaker 2: to our Nutwest Scoop shares soaring this morning, currently higher

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Speaker 2: seven point five percent after its results, boosting its full

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Speaker 2: air for revenue as the lending giant continues to reap

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Speaker 2: some benefits from stubbornly high interest rates. But also the

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Speaker 2: news from our reporter Ellen Milligan that you K Chancellor

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Speaker 2: Rachel Reeves is leaning towards offloading a substantial portion of

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Speaker 2: the government's stake in the bank to institutional shareholders rather

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Speaker 2: than continuing with her predecessor's plans to offer it up

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Speaker 2: to the UK public. We could speak to our government

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Speaker 2: reporter Ellen Milligan. Now, Ellen, perhaps off for the Scoop.

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Speaker 2: Why would Rachel Reeves want to take this different approach

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Speaker 2: to Jeremy Hunt.

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Speaker 9: Yeah, so, as you say, this was the brainchild of

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Speaker 9: Jeremy Hunt, and it was very much kind of modeled.

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Speaker 9: People would compare it to the Margaret that should tell

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Speaker 9: sid campaign that she used to advertise the sale of

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Speaker 9: British gas shares to the public in the nineteen eighty

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Speaker 9: So it's very much seen as like modeled on a

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Speaker 9: kind of conservative that right basis, which is quite different

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Speaker 9: to you know, the Labor Party standing on these kinds

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Speaker 9: of things. What we understand is that you know, this

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Speaker 9: plan to sell the network steak to the public has

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Speaker 9: been put on hold since the election was called in May,

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Speaker 9: and Rachel Reeves has been considering basically whether she considers

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Speaker 9: it to be value for money for taxpayers. My understanding

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Speaker 9: is that she's leaning towards an institutional sale to institutional

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Speaker 9: investors rather than the wider British public, which she could

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Speaker 9: spend as being better value for money. She's likely to

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Speaker 9: get a better price, for example, and she could show

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Speaker 9: confidence that investors have in UK banks.

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Speaker 1: Yeah, of course. And it also might say in terms

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Speaker 1: of the role out of such huge offering to kind

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Speaker 1: of retail as maybe why do you think the shift

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Speaker 1: has happened? Is she trying to kind of I suppose, yeah,

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Speaker 1: what was she trying to show by this? Why do

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Speaker 1: you think she made this decision now?

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Speaker 9: I think, well, she hasn't made a final decision on it,

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Speaker 9: and I think it may take some time because they

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Speaker 9: have spent all this time on this advertising campaign, spending

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Speaker 9: quite a bit of money on it, and she is

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Speaker 9: likely to maybe announce something soon, maybe wait until the

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Speaker 9: autumn statement, for example, that's where Jeremy Hunt announced this plan.

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Speaker 9: I think you know, as you said, the Netwist had

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Speaker 9: results this morning. Their share price SATs you up quite significantly,

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Speaker 9: and she may argue that you would get a better

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Speaker 9: price selling it to banks, pension funds, etc. Rather than

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Speaker 9: the British public, where a retail offer would probably come

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Speaker 9: in at a slightly lower price. And I also think

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Speaker 9: it comes down to the politics of labor of us

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Speaker 9: the Conservatives, but also I think this is a legacy

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Speaker 9: of the Conservative government and if Rachel Reeves wants to

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Speaker 9: change tact this might be one way of doing that.

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Speaker 2: Yeah, well, speaking of that legacy, of course, we're going

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Speaker 2: to have a speech from Rachel Reeves announcing this Order

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Speaker 2: of the Public Finances expected to be pretty bleak.

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Speaker 4: Do you expect there.

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Speaker 2: To be anything in there that we don't already know?

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Speaker 2: It seems quite the pr job and also a tactic

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Speaker 2: that we've seen from previous chancellors trying to blame current

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Speaker 2: problems on the previous government, to just get that out

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Speaker 2: of the way up front.

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Speaker 9: So, Cynic or Lizzie, but I actually completely agree with you.

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Speaker 9: She's expected to detail a near twenty billion funding shortfall

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Speaker 9: for public services. But you know, readers of Bloomberg or No,

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Speaker 9: that's nothing new that ifs spawned. I think as early

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Speaker 9: as March that there was an eighteen billion hole in

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Speaker 9: the public finances. This conspiracy of silence among Labor and

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Speaker 9: the Conservatives over the election campaign over that. So I'm

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Speaker 9: not sure that the number is going to be new.

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Speaker 9: But this is all about laying the groundwork for possible

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Speaker 9: tax rises in the autumn statement and pinning that on

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Speaker 9: the fiscal situation that labor has inherited. Ie it's out

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Speaker 9: of the hands, it's the conservatives thought that your taxes

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Speaker 9: might go up. Interesting that my colleague Jo Mays has

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Speaker 9: been in Brazil at the G twenty Finance Minister meeting

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Speaker 9: with her and she didn't reiterate her commitment that she

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Speaker 9: had no plans to raise taxes on wealth, property or

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Speaker 9: inheritance in Britain like she was saying over the Action campaign.

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Speaker 9: So she hasn't said that she might raise taxes, but

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Speaker 9: she's not denying it in the same way she was

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Speaker 9: a couple of months ago.

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Speaker 1: Yeah, the thirty billion pound hole and whether it's really

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Speaker 1: investment and growth that can fill that or whether we

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Speaker 1: do potentially see tax rates in the UK. I mean

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Speaker 1: in terms of what the timing of that might be.

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Speaker 1: I mean again, there's been quite a big debate about

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Speaker 1: how quickly that that might happen, whether it would come

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Speaker 1: as soon as autumn, or whether there would maybe be

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Speaker 1: a chance to see whether Labour's policies actually do create

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Speaker 1: more economic growth. And economic growth does look to be

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Speaker 1: quite strong actually by UK standards for this year and

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Speaker 1: next year. Zero point seven percent.

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Speaker 9: Yeah, I mean UK standards is one way of putting

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Speaker 9: it quite low standards on economic growth. We've had a

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Speaker 9: stagnant economy for many years now, so yeah, zero point

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Speaker 9: one nineteen seven percent would be strong compared to other

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Speaker 9: care but yeah, I think.

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Speaker 3: You know.

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Speaker 9: And we've had this internal labor row for example on

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Speaker 9: the two child benefit cap, which is putting more and

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Speaker 9: more children into poverty, and a lot of labor MPs

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Speaker 9: want to see that lifted and this budget or future budgets.

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Speaker 9: So it's not just about public services that Rachel Rees

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Speaker 9: is having to grapple, which she's having to grapple with

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Speaker 9: the funding needed for GB energy that they that they

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Speaker 9: laid the legislation for yesterday for example, and also these

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Speaker 9: kinds of decisions if they want to make, for example,

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Speaker 9: about the two child benefit cap. So she's trying to

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Speaker 9: show that I think that she might not be able

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Speaker 9: to do all these things because of the fiscal situation

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Speaker 9: that they've inherited.

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Speaker 2: All Right, Alan Milligan, our government reporter in the UK,

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Speaker 2: we thank you very much for that scoop and the

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Speaker 2: analysis of it. Let's get back to the US macro story.

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Speaker 2: PC data do later the FED preferred inflation gauge of course,

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Speaker 2: and meanwhile, Asian stocked and US futures have been rising

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Speaker 2: as swaps price in a FED cut in September. Will

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Speaker 2: to digest it all and look ahead. We've got our

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Speaker 2: managing editor for Global effects and rates coverage at Bloomberg News,

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Speaker 2: Rachel Evans, with us in the studio, Rachel. On top

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Speaker 2: of the data, we've also had voices like Muhammadalarian and

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Speaker 2: Bill Dudley weighing in on when the cuts should come.

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Speaker 2: How does the growth and data and inflation data fit

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Speaker 2: into that.

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Speaker 4: Yeah, well this is going to be the really the

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Speaker 4: last read that the FED gets on the economy before

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Speaker 4: they meet next week. So in that respect it takes

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Speaker 4: on kind of a greater importance than perhaps some of

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Speaker 4: the data points to date. As he pointed out, this

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Speaker 4: is that the Fed's kind of preferred gauge of prices,

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Speaker 4: and they've you know, obviously had some issues with sticky

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Speaker 4: inflation over recent months. They do seem to be trending

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Speaker 4: in the right direction now, so they're going to be

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Speaker 4: very keen to see that that is kind of going

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Speaker 4: to be actually confirmed and continue to kind of go

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Speaker 4: in that direction. And I think, you know, that's really

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Speaker 4: where the market has been at this week, debating whether

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Speaker 4: we're going to see that data come out and give

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Speaker 4: the enough reason to cut. Obviously, you've had, as you mentioned,

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Speaker 4: Dudley and el Arian basically suggesting that now's the time

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Speaker 4: to go, and that if they don't, maybe there could

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Speaker 4: be a policy ra there. But obviously the FED isn't

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Speaker 4: necessarily going to listen to those guys. They're going to

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Speaker 4: be looking at their own metrics and they've made that

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Speaker 4: very clear that that is the data.

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Speaker 3: Yeah.

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Speaker 1: So how relevant is the politics then when it comes

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Speaker 1: to September, obviously with the US presidential election in November.

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Speaker 4: Yeah, I think, you know, September is a little bit

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Speaker 4: in that sort of intermediate zone. It's approaching the elections,

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Speaker 4: but we're not right into the elections. Getting into a

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Speaker 4: kind of a November sort of interestrate move right after

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Speaker 4: the election could in fact be a little bit more

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Speaker 4: difficult because if you wait till November, then it looks

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Speaker 4: kind of political, like you're giving you know, whoever wins

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Speaker 4: a leg up. September does become a little tricky because

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Speaker 4: you could, you know, I think Trump has come out

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Speaker 4: and said that he sees kind of the FED cutting

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Speaker 4: rates before the election is being sort of positive to

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Speaker 4: the Democrats. So clearly it can be politicized, and we

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Speaker 4: know that sort of the Trump campaign has indeed politicized

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Speaker 4: sort of interest rates in the federal Reserve in the past.

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Speaker 4: But I mean, the Fed is going to stick to

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Speaker 4: its mandate, which is stabilizing prices full employment. There's no

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Speaker 4: political part of that mandate. There's no requirement to kind

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Speaker 4: of stay on hold while we're getting close to an

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Speaker 4: election campaign. So it'll be something that's kind of at

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Speaker 4: the back of their minds, but there's no real kind

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Speaker 4: of reason that they can't go in July, September or November.

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Speaker 2: I mean also politicizing the dollar. In our interview with

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Speaker 2: him on Bloombog BusinessWeek, you know, lamenting the strength of

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Speaker 2: the dollar against the yen. I do you just wonder

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Speaker 2: when he says he wants to be a week dollar present,

441
00:22:34,119 --> 00:22:36,760
Speaker 2: but then he's running on this strong dollar platform, what

442
00:22:36,920 --> 00:22:39,240
Speaker 2: he you think he's actually going to do to the currency.

443
00:22:39,440 --> 00:22:41,479
Speaker 4: Yeah, this is a topic of a huge debate, as

444
00:22:41,480 --> 00:22:44,280
Speaker 4: you'd imagine it in currency markets. The general consensus at

445
00:22:44,280 --> 00:22:46,280
Speaker 4: the moment is that kind of heading into the election,

446
00:22:46,400 --> 00:22:49,160
Speaker 4: we're likely to see a stronger dollar. You know, obviously

447
00:22:49,440 --> 00:22:52,640
Speaker 4: there is more uncertainty. When there is uncertainty, people tend

448
00:22:52,720 --> 00:22:55,239
Speaker 4: to flock to to haven currencies, and the dollar has

449
00:22:55,280 --> 00:22:57,439
Speaker 4: really kind of shown itself over recent years to be

450
00:22:57,480 --> 00:22:59,879
Speaker 4: the ultimate in haven's, particularly when you see some of

451
00:22:59,880 --> 00:23:02,720
Speaker 4: the cross currents buffetting the yen. But when we actually

452
00:23:02,720 --> 00:23:05,920
Speaker 4: get into the presidency, it becomes a little bit more doubtful.

453
00:23:06,640 --> 00:23:10,000
Speaker 4: Tariffs would speak to a stronger dollar, some of the

454
00:23:10,040 --> 00:23:14,800
Speaker 4: more inflationary stimulus programs would speak to a stronger dollar.

455
00:23:15,040 --> 00:23:18,440
Speaker 4: But obviously Trump himself has suggested that he sees the

456
00:23:18,880 --> 00:23:21,840
Speaker 4: currencies of other countries as being too weak, and therefore,

457
00:23:21,960 --> 00:23:25,680
Speaker 4: you know, America is being not sort of sufficiently competitive.

458
00:23:26,119 --> 00:23:28,040
Speaker 4: So the question is really sort of how that kind

459
00:23:28,080 --> 00:23:32,080
Speaker 4: of translates to policy, and do they sort of pursue intervention,

460
00:23:32,359 --> 00:23:35,359
Speaker 4: you know, unilateral or multilateral. Do they come through with

461
00:23:35,440 --> 00:23:38,719
Speaker 4: some policies that actually do weaken the dollar if they

462
00:23:38,760 --> 00:23:40,359
Speaker 4: were to get into power, And that's still obviously a

463
00:23:40,359 --> 00:23:40,720
Speaker 4: big if.

464
00:23:41,000 --> 00:23:44,480
Speaker 1: Yeah, which of the other central bank rate decisions is

465
00:23:44,480 --> 00:23:46,359
Speaker 1: going to be most interesting next week?

466
00:23:46,720 --> 00:23:49,240
Speaker 4: Well you make me choo, Yeah, I mean I think

467
00:23:49,240 --> 00:23:51,760
Speaker 4: the Bank of Japan stands out, you know, just given

468
00:23:51,800 --> 00:23:54,880
Speaker 4: we've seen kind of the the yen rallying hugely over

469
00:23:54,880 --> 00:23:58,240
Speaker 4: the past couple of weeks. I think everyone's watching to

470
00:23:58,280 --> 00:24:01,040
Speaker 4: see if the Bank of Japan delivers and actually hikes

471
00:24:01,080 --> 00:24:04,080
Speaker 4: interest rates. That's kind of been the premise for some

472
00:24:04,119 --> 00:24:06,760
Speaker 4: of this huge unwind of yen shorts and this big

473
00:24:06,840 --> 00:24:09,320
Speaker 4: rally in the yen, So they kind of need to

474
00:24:09,880 --> 00:24:11,960
Speaker 4: stand and deliver otherwise, you know, a lot of that

475
00:24:12,080 --> 00:24:14,640
Speaker 4: rally is going to unwind just as rapidly as it emerged.

476
00:24:16,600 --> 00:24:19,359
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477
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484
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