1 00:00:02,400 --> 00:00:04,960 Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the 2 00:00:04,960 --> 00:00:07,160 Speaker 1: top stories in the coming week from our day Break 3 00:00:07,160 --> 00:00:09,680 Speaker 1: anchors all around the world, and straight ahead on the program, 4 00:00:09,800 --> 00:00:12,000 Speaker 1: the job market and what it means. 5 00:00:11,800 --> 00:00:14,360 Speaker 2: For all of us. I'm Top Busby in New York. 6 00:00:14,480 --> 00:00:16,520 Speaker 3: I'm Stephen Carolyn London, where we're looking ahead to a 7 00:00:16,600 --> 00:00:19,120 Speaker 3: meeting of some of Europe's top economists and business people 8 00:00:19,160 --> 00:00:22,200 Speaker 3: in France at a time when yours own growth is stuttering. 9 00:00:22,440 --> 00:00:26,880 Speaker 4: I'm Doug Prisner the challenges of developing artificial intelligence in China. 10 00:00:27,240 --> 00:00:29,760 Speaker 5: I'm Joe Matthew in Washington. Next week we get a 11 00:00:29,760 --> 00:00:31,840 Speaker 5: fly on the wall view of the last FED meeting. 12 00:00:31,960 --> 00:00:34,160 Speaker 6: Coming up, we'll look ahead to the release of FED minutes. 13 00:00:35,440 --> 00:00:39,440 Speaker 6: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:39,479 --> 00:00:43,280 Speaker 6: Eleve Them three own New York, Bloomberg ninety nine to one, Washington, DC, 15 00:00:43,600 --> 00:00:47,600 Speaker 6: Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, 16 00:00:47,880 --> 00:00:52,080 Speaker 6: DAB Digital Radio, London, Sirius XM one nineteen and around 17 00:00:52,159 --> 00:00:54,760 Speaker 6: the world on Bloomberg Radio dot com and via the 18 00:00:54,840 --> 00:00:56,040 Speaker 6: Bloomberg Business app. 19 00:01:00,120 --> 00:01:00,160 Speaker 7: You. 20 00:01:00,200 --> 00:01:02,480 Speaker 1: I'm Tom Busby, and we begin today's program with the 21 00:01:02,640 --> 00:01:06,440 Speaker 1: June jobs report coming out this coming Friday. Joining me 22 00:01:06,520 --> 00:01:08,880 Speaker 1: to talk about what's expected and what it all means. 23 00:01:08,959 --> 00:01:12,880 Speaker 1: Bloomberg's Global Economics and Policy editor Michael McKee. Now, before 24 00:01:12,920 --> 00:01:15,959 Speaker 1: we talk about June, let's start by looking back at 25 00:01:16,120 --> 00:01:19,440 Speaker 1: May's data. There was three hundred and thirty nine thousand 26 00:01:19,480 --> 00:01:22,360 Speaker 1: jobs added, way more than forecast, a sign of a 27 00:01:22,400 --> 00:01:26,800 Speaker 1: pretty healthy labor market. Gains some professional business services, government, healthcare, 28 00:01:27,280 --> 00:01:29,639 Speaker 1: and very important to the Fed, we saw wage growth 29 00:01:29,640 --> 00:01:32,559 Speaker 1: slow the same time inflation started to pull back. 30 00:01:33,120 --> 00:01:37,119 Speaker 7: It was a confusing report because the establishment survey, the 31 00:01:37,200 --> 00:01:39,880 Speaker 7: three hundred and thirty nine thousand, was so strong, but 32 00:01:39,959 --> 00:01:43,360 Speaker 7: on the household side, we lost jobs. The household survey 33 00:01:43,440 --> 00:01:46,280 Speaker 7: produces the unemployment rate, and it jumped from three point 34 00:01:46,360 --> 00:01:48,920 Speaker 7: four percent to three point seven percent. So the Fed's 35 00:01:48,960 --> 00:01:51,560 Speaker 7: going to really be watching this coming month to see 36 00:01:51,920 --> 00:01:56,160 Speaker 7: if that same dynamic plays out. Right now, the forecast 37 00:01:56,200 --> 00:02:00,360 Speaker 7: for unemployment is unchanged at three point seven percent, but 38 00:02:00,840 --> 00:02:04,000 Speaker 7: we'll have to see when we get to next Friday 39 00:02:04,640 --> 00:02:07,280 Speaker 7: what the final number is and how it compares with 40 00:02:07,400 --> 00:02:08,400 Speaker 7: job creation. 41 00:02:08,520 --> 00:02:10,960 Speaker 1: And what kind of raw number were you looking at 42 00:02:10,960 --> 00:02:11,760 Speaker 1: in ads. 43 00:02:12,200 --> 00:02:14,680 Speaker 7: Well, here's the funny part. We've had a lot of 44 00:02:14,760 --> 00:02:18,640 Speaker 7: strong economic data over the last week, and people have 45 00:02:18,680 --> 00:02:21,239 Speaker 7: been talking about how the economy is in better shape 46 00:02:21,240 --> 00:02:23,880 Speaker 7: than thought, but you kind of have been marking down 47 00:02:24,160 --> 00:02:28,519 Speaker 7: their forecast for job growth. We're at one ninety five now. 48 00:02:28,600 --> 00:02:32,760 Speaker 7: Earlier in the last week we were at about two twenty. 49 00:02:33,160 --> 00:02:36,440 Speaker 7: So I'm not sure why the pessimism, but people are 50 00:02:36,480 --> 00:02:40,240 Speaker 7: thinking that maybe the trend is finally breaking and then 51 00:02:40,280 --> 00:02:45,200 Speaker 7: we will get lower job creation, although that's still very strong, 52 00:02:45,760 --> 00:02:49,839 Speaker 7: lower job creation and slightly higher unemployment, even if we're 53 00:02:49,880 --> 00:02:53,320 Speaker 7: seeing strength in other areas of the economy. 54 00:02:53,760 --> 00:02:56,680 Speaker 1: But that's something right in the fed's playbook, right, that's 55 00:02:56,720 --> 00:02:57,600 Speaker 1: what they're hoping to see. 56 00:02:57,639 --> 00:02:58,639 Speaker 2: That's what they're hoping to see. 57 00:02:58,680 --> 00:03:00,760 Speaker 7: The Fed's been hoping that we would a slow down 58 00:03:00,800 --> 00:03:05,360 Speaker 7: in consumer spending, a slowdown in therefore business investment, and 59 00:03:05,440 --> 00:03:09,840 Speaker 7: then a slow down in hiring, and the fewer people 60 00:03:09,840 --> 00:03:12,760 Speaker 7: that get jobs, that's less money that goes into spending 61 00:03:12,760 --> 00:03:18,080 Speaker 7: in the overall economy, cools. It's the standard playbook for 62 00:03:18,160 --> 00:03:20,240 Speaker 7: central banks and it just hadn't worked yet. 63 00:03:21,280 --> 00:03:21,560 Speaker 2: Well. 64 00:03:22,080 --> 00:03:24,799 Speaker 1: Speaking of the FED, just this past week we saw 65 00:03:24,919 --> 00:03:28,000 Speaker 1: Chairman Powell was in Madrid at an ECB event, and 66 00:03:28,400 --> 00:03:31,120 Speaker 1: he said some things that really rattled investors. 67 00:03:31,240 --> 00:03:34,519 Speaker 8: A strong majority of committee participants expect that it will 68 00:03:34,520 --> 00:03:37,760 Speaker 8: be appropriate to raise interest rates two or more times 69 00:03:37,840 --> 00:03:40,600 Speaker 8: by the end of this year. Inflation pressures continue to 70 00:03:40,640 --> 00:03:43,600 Speaker 8: run high, in the process of getting inflation back down 71 00:03:43,640 --> 00:03:45,800 Speaker 8: to two percent has a long way to go. 72 00:03:46,120 --> 00:03:47,320 Speaker 2: That is a mouthful. 73 00:03:48,520 --> 00:03:51,480 Speaker 7: Well, the FED had forecast at their last meeting that 74 00:03:51,760 --> 00:03:55,080 Speaker 7: we would see the possibility of two more rate increases, 75 00:03:55,120 --> 00:03:58,360 Speaker 7: and he seems to be underlining that the market had 76 00:03:58,400 --> 00:04:02,080 Speaker 7: only priced in one, so he seems to be interested 77 00:04:02,160 --> 00:04:05,760 Speaker 7: in pushing them to add to that. And we did 78 00:04:05,800 --> 00:04:09,760 Speaker 7: see the swaps market react and at least start to 79 00:04:09,840 --> 00:04:12,880 Speaker 7: price in the idea of two. But remember the FED 80 00:04:12,920 --> 00:04:16,400 Speaker 7: has been saying all along it's very data dependent, and 81 00:04:16,720 --> 00:04:20,000 Speaker 7: we haven't got a lot of employment or inflation data yet. 82 00:04:20,040 --> 00:04:23,120 Speaker 7: We will be getting that, and so for the FED, 83 00:04:24,160 --> 00:04:27,760 Speaker 7: it's a question of do they really have to carry 84 00:04:27,800 --> 00:04:31,160 Speaker 7: through with two rate increases or will the data give 85 00:04:31,200 --> 00:04:35,080 Speaker 7: them an out maybe only do one. And the market 86 00:04:35,120 --> 00:04:36,400 Speaker 7: is kind of thinking the same way. 87 00:04:36,680 --> 00:04:40,000 Speaker 1: And we've still got four weeks before the next meeting 88 00:04:40,040 --> 00:04:42,320 Speaker 1: that they have, and then six weeks after that. 89 00:04:42,400 --> 00:04:43,120 Speaker 2: Right in September. 90 00:04:43,240 --> 00:04:47,560 Speaker 7: Yes, so we will see one more CPI report before 91 00:04:47,720 --> 00:04:50,479 Speaker 7: the FED meeting, and of course next Friday is the 92 00:04:50,680 --> 00:04:53,360 Speaker 7: Jobs report, and those will give us a pretty good 93 00:04:53,360 --> 00:04:56,279 Speaker 7: idea of where we are at the moment. The question 94 00:04:56,440 --> 00:04:59,200 Speaker 7: is what's the long run view, And since we only 95 00:04:59,200 --> 00:05:01,479 Speaker 7: get one report, it's going to be harder for the 96 00:05:01,520 --> 00:05:06,080 Speaker 7: Fed to make a forecast that works for the month 97 00:05:06,120 --> 00:05:08,440 Speaker 7: of August, taking the month of August off and then 98 00:05:09,600 --> 00:05:12,880 Speaker 7: not until September. Having another meeting, we will have j 99 00:05:13,000 --> 00:05:15,760 Speaker 7: Powell and Jackson Hall, so if he has something to say, 100 00:05:15,800 --> 00:05:18,960 Speaker 7: we'll hear it. But the Fed itself won't be voting again. 101 00:05:19,320 --> 00:05:22,200 Speaker 7: So you're right, it's going to be an interesting vacuum 102 00:05:22,320 --> 00:05:23,359 Speaker 7: for the market to fill. 103 00:05:23,960 --> 00:05:26,640 Speaker 1: But so far, what the Fed has done took a while, 104 00:05:27,080 --> 00:05:29,320 Speaker 1: but it appears to be bearing fruit. 105 00:05:29,960 --> 00:05:34,160 Speaker 7: Well, they have brought down the inflation rate and it's 106 00:05:34,160 --> 00:05:38,120 Speaker 7: about halved, but it's considered the low hanging fruit. I mean, 107 00:05:38,160 --> 00:05:42,000 Speaker 7: we saw energy prices in particular falloff, and gasoline prices. 108 00:05:42,279 --> 00:05:45,159 Speaker 7: Now the question is is they're embedded inflation in the 109 00:05:45,160 --> 00:05:48,880 Speaker 7: core rate of inflation. That's going to be hard to eradicate. 110 00:05:48,880 --> 00:05:52,120 Speaker 7: Our companies raising prices because they still have to pay 111 00:05:52,120 --> 00:05:55,680 Speaker 7: more for their inputs. Are they raising prices because they can? 112 00:05:55,880 --> 00:05:59,240 Speaker 7: People are used to it? Is labor still an issue 113 00:05:59,279 --> 00:06:02,240 Speaker 7: in terms of having to make up the cost of 114 00:06:02,279 --> 00:06:07,040 Speaker 7: additional wages for people. So we're not out of the woods. 115 00:06:07,040 --> 00:06:08,760 Speaker 7: And the FED thinks that it's going to be much 116 00:06:08,760 --> 00:06:11,640 Speaker 7: harder to get that last two percent wrung out of 117 00:06:11,680 --> 00:06:14,160 Speaker 7: inflation than the first six percent. 118 00:06:14,839 --> 00:06:17,800 Speaker 1: Yeah, and Chairman Pal said, it's not this year, it's 119 00:06:17,800 --> 00:06:19,479 Speaker 1: not next year. It looks like it's going to be 120 00:06:19,480 --> 00:06:20,760 Speaker 1: twenty twenty five hopefully. 121 00:06:21,160 --> 00:06:24,560 Speaker 7: Yeah, that's a they're being conservative because they have been 122 00:06:24,560 --> 00:06:28,280 Speaker 7: fooled and it's been much stickier than they thought. The 123 00:06:28,320 --> 00:06:32,039 Speaker 7: Fed is thinking twenty twenty five, we are going to 124 00:06:32,080 --> 00:06:37,200 Speaker 7: see inflation come down because the whole rent question, we've 125 00:06:37,200 --> 00:06:39,159 Speaker 7: talked about a lot that it takes a long time 126 00:06:39,160 --> 00:06:42,600 Speaker 7: for housing costs to get into and out of the 127 00:06:42,640 --> 00:06:47,160 Speaker 7: inflation data. They're going to that's finally going to hit 128 00:06:47,240 --> 00:06:49,719 Speaker 7: and we're going to see some drops in inflation. But 129 00:06:49,800 --> 00:06:52,560 Speaker 7: then does that continue And that's something they don't know 130 00:06:52,560 --> 00:06:55,760 Speaker 7: because we've started to see some home price and rent 131 00:06:56,480 --> 00:06:59,600 Speaker 7: increases and now may take another six months or a 132 00:06:59,680 --> 00:07:02,080 Speaker 7: year to go into the data, but it's going to 133 00:07:02,120 --> 00:07:04,560 Speaker 7: be out there and it'll keep them farther away from 134 00:07:04,560 --> 00:07:06,400 Speaker 7: two percent if that indeed happens. 135 00:07:06,640 --> 00:07:08,960 Speaker 1: Well, Mike, I want to shift gears a little bit 136 00:07:09,000 --> 00:07:12,680 Speaker 1: here and talk about the kinds of jobs that are 137 00:07:12,720 --> 00:07:16,280 Speaker 1: going away, the kind of jobs that are we're seeing 138 00:07:16,320 --> 00:07:20,040 Speaker 1: gains in the last couple of months, we've seen, or 139 00:07:20,160 --> 00:07:23,040 Speaker 1: so far this year, hundreds of thousands of tech jobs 140 00:07:23,280 --> 00:07:25,320 Speaker 1: that have been some of the big techies. Now we 141 00:07:25,360 --> 00:07:28,200 Speaker 1: all know that they overhire during the pandemic when things 142 00:07:29,040 --> 00:07:31,560 Speaker 1: nobody knew which way we're going to go. But as 143 00:07:31,600 --> 00:07:34,440 Speaker 1: you have said before, every company is a tech company, 144 00:07:34,480 --> 00:07:36,680 Speaker 1: so a lot of those people are finding work, you know, 145 00:07:36,720 --> 00:07:39,360 Speaker 1: with AI. It looks like things are shifting that in 146 00:07:39,360 --> 00:07:41,160 Speaker 1: that marketplace for those jobs. 147 00:07:41,160 --> 00:07:41,800 Speaker 2: Tech jobs. 148 00:07:41,960 --> 00:07:44,520 Speaker 7: Yeah, I'm not smart enough to know how easily you 149 00:07:44,560 --> 00:07:47,320 Speaker 7: can transition to an AI job from another kind of 150 00:07:47,400 --> 00:07:49,440 Speaker 7: tech job. And of course when we talk about tech, 151 00:07:49,720 --> 00:07:52,920 Speaker 7: it's a very large category, everything from hardware to software 152 00:07:52,920 --> 00:07:57,080 Speaker 7: and all different kinds of software. But it does look 153 00:07:57,120 --> 00:08:01,720 Speaker 7: like that category has stabilized because people can find more jobs. 154 00:08:02,760 --> 00:08:08,040 Speaker 7: The thing that was slow was temporary hiring because usually 155 00:08:08,080 --> 00:08:12,280 Speaker 7: when you're seeing an economic ramp up. Companies add people 156 00:08:12,320 --> 00:08:15,920 Speaker 7: on a temporary basis because they're worried about whether or 157 00:08:15,960 --> 00:08:19,520 Speaker 7: not they'll have the businesses to sustain hiring them, and 158 00:08:19,560 --> 00:08:21,960 Speaker 7: that turned around last month we saw some gains in 159 00:08:22,120 --> 00:08:27,080 Speaker 7: temporary hiring. Healthcare has always been a last couple of years, 160 00:08:27,160 --> 00:08:30,600 Speaker 7: has been a very strong category, and that saw gains. 161 00:08:30,640 --> 00:08:34,280 Speaker 7: As we get older, we need more healthcare, and so 162 00:08:35,760 --> 00:08:38,640 Speaker 7: we're looking to see where the weakness is going to come. 163 00:08:38,920 --> 00:08:42,720 Speaker 7: It has been in manufacturing. Manufacturing was losing jobs for 164 00:08:42,720 --> 00:08:44,760 Speaker 7: a bit, but now it seems to have added not 165 00:08:44,840 --> 00:08:48,000 Speaker 7: at a huge pace, but we're starting to see more 166 00:08:48,559 --> 00:08:52,600 Speaker 7: production and more hiring there. And construction. I know you've 167 00:08:52,640 --> 00:08:56,400 Speaker 7: been following this. Construction jobs have really surprised. So it's 168 00:08:56,440 --> 00:08:59,520 Speaker 7: the housing market. But builders have been putting up houses 169 00:08:59,559 --> 00:09:04,400 Speaker 7: as fast as they can and they need construction workers. 170 00:09:04,920 --> 00:09:09,000 Speaker 7: And now we're seeing the impact of some of the 171 00:09:09,080 --> 00:09:11,959 Speaker 7: measures Congress passed in the last year, the Chips Act 172 00:09:12,240 --> 00:09:17,360 Speaker 7: and the Inflation Reduction Act that incentivize constructing, especially for 173 00:09:17,400 --> 00:09:21,640 Speaker 7: green energy new facilities, and we're seeing a huge amount 174 00:09:21,720 --> 00:09:26,560 Speaker 7: of construction spending on business facilities, which means they need 175 00:09:26,600 --> 00:09:30,600 Speaker 7: more people as well. So construction, which is normally very 176 00:09:31,679 --> 00:09:38,680 Speaker 7: affected by interest rates is not confounded and that's another surprise. 177 00:09:38,840 --> 00:09:43,800 Speaker 7: So none of this is working out as the previous 178 00:09:43,840 --> 00:09:45,280 Speaker 7: models would have suggested. 179 00:09:46,440 --> 00:09:49,480 Speaker 1: Another thing you talked about manufacturing, and this is timely 180 00:09:49,520 --> 00:09:53,080 Speaker 1: because the UAW this month in July is talking to 181 00:09:53,160 --> 00:09:56,360 Speaker 1: all of Detroit's Big three about a new contract. And 182 00:09:56,720 --> 00:09:59,360 Speaker 1: boy has that industry changed over the last three or 183 00:09:59,360 --> 00:10:04,200 Speaker 1: four years dramatically Because they know the UAW. Electric cars 184 00:10:04,320 --> 00:10:07,320 Speaker 1: do not have the components that gas engine cars have 185 00:10:07,840 --> 00:10:10,480 Speaker 1: and therefore do not need the same amount of workers 186 00:10:10,520 --> 00:10:13,439 Speaker 1: putting it together to assemble those cars. So they've got 187 00:10:13,440 --> 00:10:14,720 Speaker 1: their work cut out from the UAW. 188 00:10:14,840 --> 00:10:17,800 Speaker 7: It is going to be a very interesting negotiation. Labor 189 00:10:18,040 --> 00:10:21,600 Speaker 7: relations in the auto industry have gotten better, so hopefully 190 00:10:22,160 --> 00:10:26,120 Speaker 7: they will be able to avoid strike. And many years 191 00:10:26,120 --> 00:10:28,920 Speaker 7: ago now doesn't seem like it to us old guys, 192 00:10:29,120 --> 00:10:32,160 Speaker 7: but they went to two tier wages with younger people 193 00:10:32,200 --> 00:10:35,720 Speaker 7: coming in at lower wage levels, and so that has 194 00:10:35,760 --> 00:10:38,880 Speaker 7: helped the automakers a lot. Now, how they handle a 195 00:10:39,000 --> 00:10:43,280 Speaker 7: technological change rather than an age change is going to 196 00:10:43,320 --> 00:10:47,240 Speaker 7: be very interesting. And what kinds of people do you need? 197 00:10:47,280 --> 00:10:49,080 Speaker 7: What kinds of jobs are you going. 198 00:10:49,040 --> 00:10:49,679 Speaker 2: To have to fill? 199 00:10:49,760 --> 00:10:51,679 Speaker 1: Well, Michael, thank you so much for being here. That 200 00:10:51,800 --> 00:10:54,920 Speaker 1: was Michael McKee, our Global Economics and Policy editor, and 201 00:10:55,000 --> 00:10:55,840 Speaker 1: coming up on. 202 00:10:55,720 --> 00:10:57,120 Speaker 2: Bloomberg Daybreak weekend. 203 00:10:57,240 --> 00:11:00,800 Speaker 1: How about a trip to France the Summer Economic Conference 204 00:11:00,960 --> 00:11:04,200 Speaker 1: coming to ex Au Provence. I'm Tom Busby and this 205 00:11:04,360 --> 00:11:17,000 Speaker 1: is Bloomberg. This is Bloomberg day Break weekend, our global 206 00:11:17,000 --> 00:11:19,400 Speaker 1: look ahead at the top stories for investors in. 207 00:11:19,360 --> 00:11:21,800 Speaker 2: The coming week. I'm Tom Busby in New York. 208 00:11:22,240 --> 00:11:26,160 Speaker 1: Up later in our program big global gathering on artificial intelligence. 209 00:11:26,160 --> 00:11:28,680 Speaker 1: It's in the works for next week, but first, After 210 00:11:28,720 --> 00:11:32,679 Speaker 1: scraping through a difficult winter, Europe's major economies are stagnating 211 00:11:32,720 --> 00:11:35,600 Speaker 1: as the impact of higher interest rates now kicking in. 212 00:11:36,000 --> 00:11:38,760 Speaker 1: It's an interesting time for some of the continent's stop economists, 213 00:11:38,760 --> 00:11:41,840 Speaker 1: policymakers and business people to be gathering in the south 214 00:11:41,840 --> 00:11:45,200 Speaker 1: of France for the annual Economic Conference in the city 215 00:11:45,200 --> 00:11:46,240 Speaker 1: of ex A, Provence. 216 00:11:46,640 --> 00:11:48,280 Speaker 2: For more, let's head to London. 217 00:11:48,040 --> 00:11:51,600 Speaker 1: And bring in Bloomberg Daybreak Europe banker Stephen Carroll Tom. 218 00:11:51,600 --> 00:11:54,840 Speaker 3: It's a staple of the European economists calendar. This conference 219 00:11:54,960 --> 00:11:57,520 Speaker 3: organized by the French group Sec de seconist or the 220 00:11:57,559 --> 00:12:00,240 Speaker 3: Circle of Economists. The theme this year is Renewing Hope 221 00:12:00,400 --> 00:12:04,680 Speaker 3: and features politicians, CEOs and some ECP policymakers joining the 222 00:12:04,720 --> 00:12:07,680 Speaker 3: discussions as well. Bloomberg's Power supporter Carolyn Connan will be 223 00:12:07,679 --> 00:12:10,400 Speaker 3: there and she joins us now for more on this Carolyn, 224 00:12:10,600 --> 00:12:13,680 Speaker 3: many of our listeners may not be familiar with excellent Provence. 225 00:12:13,800 --> 00:12:15,720 Speaker 3: Can you tell us a bit about first of all, 226 00:12:15,880 --> 00:12:17,640 Speaker 3: where this event is taking place. 227 00:12:18,000 --> 00:12:19,800 Speaker 9: Even I think you have to close your eyes and 228 00:12:19,920 --> 00:12:23,720 Speaker 9: imagine the village atmosphere of Provence. So it's in southeast 229 00:12:23,720 --> 00:12:26,600 Speaker 9: of France, less than one hour north of Marseille. You 230 00:12:26,640 --> 00:12:29,560 Speaker 9: can hear the sound of the cicadas because it's the 231 00:12:29,600 --> 00:12:33,200 Speaker 9: beginning of summer, and you have some concerts, some opera 232 00:12:33,320 --> 00:12:36,480 Speaker 9: at night. That's where the conference is taking place. Probably 233 00:12:36,520 --> 00:12:39,120 Speaker 9: one of my favorite events of the year, even though 234 00:12:39,160 --> 00:12:42,280 Speaker 9: sometimes the weather might get very hard to occasionally close 235 00:12:42,320 --> 00:12:47,600 Speaker 9: to the forty degrees celsius. So most important, most importantly, 236 00:12:47,679 --> 00:12:49,920 Speaker 9: I would say it's one of the best events to 237 00:12:50,120 --> 00:12:54,000 Speaker 9: mingle with French executives and ministers because they are relaxed, 238 00:12:54,040 --> 00:12:57,800 Speaker 9: they're very open to conversations and sometimes they actually share 239 00:12:57,960 --> 00:13:01,679 Speaker 9: some news with you. Really enjoyed the conference because it's 240 00:13:01,720 --> 00:13:05,000 Speaker 9: also the same weekend as the Opera Festival in Excellent Province, 241 00:13:05,280 --> 00:13:08,360 Speaker 9: and it comes at a quiet period before the first 242 00:13:08,360 --> 00:13:11,960 Speaker 9: half earning season, so not too much pressure. It's kind 243 00:13:11,960 --> 00:13:15,080 Speaker 9: of like DeVos in France. That's why we call it 244 00:13:15,120 --> 00:13:16,920 Speaker 9: here the French divors. 245 00:13:17,240 --> 00:13:19,360 Speaker 3: Ah, well, you're making us all very jealous the prospect 246 00:13:19,400 --> 00:13:22,560 Speaker 3: of that setting. Anyway, for the organization, talk to us 247 00:13:22,559 --> 00:13:24,760 Speaker 3: about the key topics they're going to be up for discussion. 248 00:13:25,080 --> 00:13:27,960 Speaker 9: As you mentioned this year, the mental topic is renewing hope, 249 00:13:28,000 --> 00:13:32,959 Speaker 9: which couldn't be of course more appropriate given the geopolitical uncertainties, 250 00:13:33,320 --> 00:13:36,960 Speaker 9: the war in Ukraine, the rebellion of Wagner and Russia, 251 00:13:37,000 --> 00:13:40,719 Speaker 9: and the concerns also on the economic front about a 252 00:13:40,840 --> 00:13:44,920 Speaker 9: credit crunch and the danger of possible recession. So we'll 253 00:13:44,960 --> 00:13:47,760 Speaker 9: get some general comments about all that, but the outlook 254 00:13:47,840 --> 00:13:50,600 Speaker 9: for the economy, but also some of the other issues 255 00:13:50,679 --> 00:13:55,200 Speaker 9: supply chain innovation, labor shortages for example. But X, as 256 00:13:55,200 --> 00:13:59,480 Speaker 9: you know, also lacks expanding the topics for discussions. So 257 00:13:59,520 --> 00:14:03,079 Speaker 9: for example, well the ECB president Kittin Lagard is doing 258 00:14:03,160 --> 00:14:07,240 Speaker 9: a panel about gender equality. You've also got the former 259 00:14:07,320 --> 00:14:10,720 Speaker 9: prime minister and presidential hopeful Edward Philip who will talk 260 00:14:10,800 --> 00:14:15,000 Speaker 9: about choices for the future of society. So there will 261 00:14:15,040 --> 00:14:19,400 Speaker 9: be also a lot of discussions about ecological awareness, healthcare, work, 262 00:14:19,440 --> 00:14:21,920 Speaker 9: life balance. There is a one panel for example, which 263 00:14:22,000 --> 00:14:26,440 Speaker 9: is called working to live or living to work. That's 264 00:14:26,480 --> 00:14:31,200 Speaker 9: a interesting choice, and of course education. The younger generations 265 00:14:31,200 --> 00:14:34,360 Speaker 9: will also be discussing. On the other side of the spectrum, 266 00:14:34,440 --> 00:14:37,440 Speaker 9: the retirement because we're just a few months after President 267 00:14:37,560 --> 00:14:40,680 Speaker 9: Macon pass is very controversial pension reform. 268 00:14:41,280 --> 00:14:43,479 Speaker 3: Yeah, I mean, look, it's a fascinating set of discussions. 269 00:14:43,520 --> 00:14:45,320 Speaker 3: I do think it's very interesting, as you say that 270 00:14:45,360 --> 00:14:47,960 Speaker 3: when we have this summer setting and the idea that 271 00:14:48,040 --> 00:14:49,680 Speaker 3: you know, people are perhaps a little bit more relaxed, 272 00:14:49,680 --> 00:14:52,560 Speaker 3: they'll take time to dig into the broader economic issues 273 00:14:53,000 --> 00:14:54,920 Speaker 3: that perhaps you don't get to during the rest of 274 00:14:54,960 --> 00:14:57,000 Speaker 3: the year. But having said that, we have got a 275 00:14:57,000 --> 00:14:59,280 Speaker 3: couple of ECB names are going to be attending as 276 00:14:59,280 --> 00:15:01,520 Speaker 3: well will be expecting to hear from them. 277 00:15:01,800 --> 00:15:05,120 Speaker 9: There are no less than five central bankers attending, including 278 00:15:05,200 --> 00:15:07,960 Speaker 9: four from the ECB President La Gard, also the French 279 00:15:08,000 --> 00:15:11,720 Speaker 9: Villa Gualo, the Portuguese and the Spanish, and also separately 280 00:15:11,720 --> 00:15:13,960 Speaker 9: you got the Bank of England Governor Andrew Bailey, who's 281 00:15:14,000 --> 00:15:16,200 Speaker 9: going to be there on a Sunday. So very interesting 282 00:15:16,200 --> 00:15:19,040 Speaker 9: and it's not usually a place where Christine Lagarde breaks 283 00:15:19,040 --> 00:15:21,520 Speaker 9: a lot of news, but some of the others they 284 00:15:21,640 --> 00:15:24,240 Speaker 9: like talking. They like to be a bit more open 285 00:15:24,280 --> 00:15:26,880 Speaker 9: minded to talking on the sideline. So we'll check if 286 00:15:26,880 --> 00:15:30,720 Speaker 9: they give any signals regarding the next ECB meeting in 287 00:15:30,800 --> 00:15:36,680 Speaker 9: July and also of course the highly expected September meeting. 288 00:15:37,160 --> 00:15:40,120 Speaker 9: What will be the policy after these sellin next meetings? 289 00:15:40,280 --> 00:15:42,480 Speaker 9: How many more rate hikes are we going to see? 290 00:15:42,680 --> 00:15:45,440 Speaker 9: That will be some of the key questions. And who knows, 291 00:15:45,480 --> 00:15:48,720 Speaker 9: if you're lucky, I might actually have an exclusive sit 292 00:15:48,800 --> 00:15:50,800 Speaker 9: down with one of those central bankers. And my good 293 00:15:50,800 --> 00:15:52,440 Speaker 9: feeling this will actually happen. 294 00:15:52,840 --> 00:15:56,080 Speaker 3: Oh, we're all wishing for that as well, Carolyne. Let's 295 00:15:56,120 --> 00:15:58,800 Speaker 3: set ourselves up for that ECB conversation, though, and bring 296 00:15:58,800 --> 00:16:00,560 Speaker 3: you some of the interview that we had with the 297 00:16:00,600 --> 00:16:03,200 Speaker 3: ECB Vice president least again to us. In recent days 298 00:16:03,200 --> 00:16:05,800 Speaker 3: he's been speaking to Bloomberg at the ECB forum in 299 00:16:05,880 --> 00:16:09,600 Speaker 3: CenTra and Portugal and told our editor at large, Francine Laqua, 300 00:16:09,760 --> 00:16:12,080 Speaker 3: that the September rate hike decision was open. 301 00:16:12,440 --> 00:16:16,120 Speaker 10: We are not done. There is more ground to recovered, 302 00:16:17,040 --> 00:16:18,680 Speaker 10: and you know, the key factory is going to be 303 00:16:18,720 --> 00:16:21,280 Speaker 10: the blution of inflation. And so what we want to 304 00:16:21,360 --> 00:16:25,720 Speaker 10: indicate is very clearly our determination to reduce inflation and 305 00:16:25,800 --> 00:16:28,960 Speaker 10: to bring inflation down or definition of press ability. 306 00:16:29,240 --> 00:16:32,720 Speaker 11: So what happens for future interest rate hikes? I know 307 00:16:32,840 --> 00:16:36,280 Speaker 11: your data dependence. I know September is a question mark. 308 00:16:36,360 --> 00:16:38,920 Speaker 11: But given the data points we have, now, are you 309 00:16:39,000 --> 00:16:41,160 Speaker 11: just going to power ahead and hike Well. 310 00:16:41,080 --> 00:16:44,760 Speaker 10: I think that July is afeta complete. It has been indicated, 311 00:16:44,800 --> 00:16:47,960 Speaker 10: and you know, it's quite clear September. September will depend. 312 00:16:48,080 --> 00:16:50,640 Speaker 10: You know, you know, what are the factors that are 313 00:16:50,640 --> 00:16:53,960 Speaker 10: going to determine what happens in September will be our 314 00:16:54,000 --> 00:16:56,280 Speaker 10: bank lending survey that I think that is very important 315 00:16:56,320 --> 00:16:58,880 Speaker 10: because it's going to be an indication of how our 316 00:16:58,920 --> 00:17:02,320 Speaker 10: monetary policies trust to the financial system and from the 317 00:17:02,320 --> 00:17:05,040 Speaker 10: financial system to the rest of the economy. How you know, 318 00:17:05,359 --> 00:17:09,000 Speaker 10: the title in the financing conditions fed through to the 319 00:17:09,040 --> 00:17:11,879 Speaker 10: real economy. The second will be you know, our predictions 320 00:17:12,000 --> 00:17:14,600 Speaker 10: in September we will have a new round projections. And finally, 321 00:17:14,600 --> 00:17:18,200 Speaker 10: the lusion of core inflation underline inflation. That I think 322 00:17:18,240 --> 00:17:21,159 Speaker 10: that is you know, very relevant in the person's scumstances. 323 00:17:21,480 --> 00:17:23,000 Speaker 10: So these are the three elements that we will take 324 00:17:23,000 --> 00:17:26,359 Speaker 10: into consideration. But well, I said that in July it 325 00:17:26,480 --> 00:17:29,480 Speaker 10: was afterta complete or it is after the complete in September. 326 00:17:29,600 --> 00:17:31,040 Speaker 10: I think that is open. 327 00:17:31,440 --> 00:17:33,320 Speaker 11: Do you believe, Vice President, this is a matter of 328 00:17:33,320 --> 00:17:35,719 Speaker 11: credibility for the Central Bank to get to two percent 329 00:17:36,080 --> 00:17:37,120 Speaker 11: no matter what happens. 330 00:17:37,320 --> 00:17:39,240 Speaker 10: Well, I think that is very important. It's our mandate. 331 00:17:39,400 --> 00:17:42,000 Speaker 10: You know, it's not only well, credibility is very relevant, 332 00:17:42,240 --> 00:17:44,080 Speaker 10: but as well you know, we have a definition of 333 00:17:44,080 --> 00:17:48,399 Speaker 10: pressability and our mandate is to to to rich and 334 00:17:48,480 --> 00:17:51,200 Speaker 10: to guarantee that presstability is so for us is key. 335 00:17:51,359 --> 00:17:53,960 Speaker 3: That's the ECP's vice president least to gain us Speaking 336 00:17:54,119 --> 00:17:57,280 Speaker 3: to Bloomberg last week, Carolyne Connor, what are the other 337 00:17:57,359 --> 00:17:58,879 Speaker 3: names that you'll be watching out for an ax On 338 00:17:58,920 --> 00:18:00,640 Speaker 3: province aside from the center bankers. 339 00:18:00,840 --> 00:18:02,600 Speaker 9: So in between you're going to have a multitude of 340 00:18:02,640 --> 00:18:07,840 Speaker 9: French executives including carfour, Sanofi, LG mh Elberts, Total NGI 341 00:18:08,280 --> 00:18:11,439 Speaker 9: and also all the banks BNP sociitation in Hall. And 342 00:18:11,480 --> 00:18:13,520 Speaker 9: then you've got a lot of member of the French government, 343 00:18:13,640 --> 00:18:17,880 Speaker 9: including the Finance minister Brinolomer, the European Minister Lawrences Boon, 344 00:18:17,960 --> 00:18:20,639 Speaker 9: that we're going to talk to on Friday, and I 345 00:18:20,720 --> 00:18:23,240 Speaker 9: was mentioning earlier the presidential hopefully war Philip. That will 346 00:18:23,280 --> 00:18:24,800 Speaker 9: be also interesting to see him there. 347 00:18:24,840 --> 00:18:27,520 Speaker 3: I'm gonna bringing those entews on Bloomberg Radio and television 348 00:18:27,560 --> 00:18:29,320 Speaker 3: as well. Lawrence Spoon always a very interesting name to 349 00:18:29,359 --> 00:18:31,199 Speaker 3: lest Night for of course she's former chief economist at 350 00:18:31,200 --> 00:18:34,240 Speaker 3: the OECD as well, so somebody well known to the 351 00:18:34,280 --> 00:18:37,239 Speaker 3: listeners and viewers at Bloomberg. Talk to us a bit 352 00:18:37,240 --> 00:18:40,560 Speaker 3: about the economic context for this event, Caroline, because it's 353 00:18:40,600 --> 00:18:43,000 Speaker 3: happening at a time in France where the recent economic 354 00:18:43,080 --> 00:18:44,760 Speaker 3: data has been quite mixed. 355 00:18:45,200 --> 00:18:48,160 Speaker 9: Yeah, well, you've got the economy context and the political context. 356 00:18:48,160 --> 00:18:52,880 Speaker 9: Of course, inflation in France remains above five percent, so 357 00:18:53,080 --> 00:18:55,040 Speaker 9: it's actually slightly lower than the average in the US 358 00:18:55,080 --> 00:18:59,159 Speaker 9: on which is closer to six percent. But clearly the 359 00:18:59,160 --> 00:19:03,400 Speaker 9: French growth is expected to remain subdued about plus zero 360 00:19:03,400 --> 00:19:05,680 Speaker 9: point six percent this year after two point five percent 361 00:19:05,760 --> 00:19:08,760 Speaker 9: last year, so that would be below the one percent 362 00:19:08,800 --> 00:19:12,560 Speaker 9: growth target that Macron's government was counting on to cut 363 00:19:12,680 --> 00:19:15,639 Speaker 9: the budget deficit, and that will be another key discussion 364 00:19:15,800 --> 00:19:18,800 Speaker 9: in x is whether Emaniel Macon will be able to 365 00:19:18,840 --> 00:19:22,600 Speaker 9: pass more reforms after the very controversial pension reform, whether 366 00:19:22,680 --> 00:19:26,680 Speaker 9: he'll be able to cut this budget deficit and a 367 00:19:26,760 --> 00:19:30,080 Speaker 9: very high French debt. We've also seen business and consumer 368 00:19:30,160 --> 00:19:34,320 Speaker 9: confidence also deterior rating because of high rates, of course, 369 00:19:34,320 --> 00:19:37,879 Speaker 9: but also because of high food inflation. And in spring, 370 00:19:37,920 --> 00:19:41,440 Speaker 9: remember you had even a Feitch cutting Frances credit rating. 371 00:19:41,560 --> 00:19:44,520 Speaker 9: So very interesting economic discussions ahead. 372 00:19:44,240 --> 00:19:46,359 Speaker 3: Plenty to watch out for them. Thank you to Bloomberg's 373 00:19:46,359 --> 00:19:48,880 Speaker 3: Carolyn Connor in Paris, and we will bring you coverage 374 00:19:48,880 --> 00:19:52,879 Speaker 3: of the excellent Province Economic conference on Bloomberg Radio and 375 00:19:52,960 --> 00:19:55,840 Speaker 3: television as well. I'm Stephen Carroll in London. You can 376 00:19:55,880 --> 00:19:58,439 Speaker 3: catch us every weekday morning here for Bloomberg Daybreak here 377 00:19:58,520 --> 00:20:01,160 Speaker 3: but getting at six am in London and one am 378 00:20:01,240 --> 00:20:02,080 Speaker 3: on Wall Streets. 379 00:20:02,240 --> 00:20:05,520 Speaker 1: Tom bel c Stephen and coming up on Bloomberg day 380 00:20:05,520 --> 00:20:10,480 Speaker 1: Break weekend, here comes the World Artificial Intelligence Conference in Shanghai. 381 00:20:11,280 --> 00:20:12,880 Speaker 2: I'm Tom Busby and this is. 382 00:20:12,800 --> 00:20:27,200 Speaker 6: Bloomberg broadcasting live from the Bloomberg it a Active Brokers 383 00:20:27,240 --> 00:20:30,640 Speaker 6: studio in New York. Bloomberg Elemon three oh to Washington, 384 00:20:30,720 --> 00:20:34,040 Speaker 6: d C, Bloomberg ninety nine one to Boston, Bloomberg one 385 00:20:34,080 --> 00:20:37,320 Speaker 6: oh six one to San Francisco, Bloomberg nine sixteen to 386 00:20:37,400 --> 00:20:41,160 Speaker 6: the country, Syrius XM Channel one nineteen to London DAB 387 00:20:41,440 --> 00:20:44,760 Speaker 6: Digital Radio, and around the globe the Bloomberg Business app 388 00:20:44,840 --> 00:20:49,040 Speaker 6: in Bloomberg Radio dot com. This is Bloomberg Daybreak Weekend. 389 00:20:55,040 --> 00:20:57,120 Speaker 1: I'm Tom Busby in New York with your global look 390 00:20:57,119 --> 00:20:59,560 Speaker 1: ahead at the top stories for investors in the coming week. 391 00:21:00,119 --> 00:21:04,560 Speaker 1: Investors tracking the coming World Artificial Intelligence Conference in Shanghai 392 00:21:04,680 --> 00:21:07,639 Speaker 1: very closely. For more on the conference and what to expect, 393 00:21:07,760 --> 00:21:10,880 Speaker 1: let's go to our Bloomberg Daybreak Asia host Doug Krisner. 394 00:21:11,240 --> 00:21:11,520 Speaker 2: Tom. 395 00:21:11,560 --> 00:21:16,240 Speaker 4: We know chatchipt and other generative AI applications have sparked 396 00:21:16,280 --> 00:21:19,960 Speaker 4: intense interest in the promise of artificial intelligence, and for 397 00:21:20,119 --> 00:21:23,840 Speaker 4: China it sparked a new obsession competing with US titans 398 00:21:24,000 --> 00:21:27,440 Speaker 4: names like Alphabet and Microsoft in the race for revolutionary 399 00:21:27,480 --> 00:21:31,199 Speaker 4: apps for both business and consumers. Joining me now is 400 00:21:31,280 --> 00:21:34,480 Speaker 4: Alan Jan He is Bloomberg Senior editor and our Shenzen 401 00:21:34,600 --> 00:21:38,680 Speaker 4: bureau chief, joining us from our studios in Shenzen. Alan, 402 00:21:38,720 --> 00:21:41,880 Speaker 4: thanks for being with us. This is being branded as 403 00:21:41,960 --> 00:21:44,119 Speaker 4: a world conference. Now, I know you're going to be 404 00:21:44,160 --> 00:21:47,720 Speaker 4: there covering World AI. It's happening in China, obviously, and 405 00:21:47,760 --> 00:21:51,159 Speaker 4: I'm wondering whether the story here is really about Chinese 406 00:21:51,200 --> 00:21:55,000 Speaker 4: firms using this as a platform to showcase their potential 407 00:21:55,080 --> 00:21:58,280 Speaker 4: and determination to compete with companies in the US. Do 408 00:21:58,320 --> 00:21:59,240 Speaker 4: you think that's likely? 409 00:21:59,400 --> 00:22:01,159 Speaker 12: Oh, for sure. I mean all the big names are 410 00:22:01,200 --> 00:22:04,040 Speaker 12: going to be there since time, and those are the 411 00:22:04,480 --> 00:22:09,440 Speaker 12: two main Chinese companies that rolled OUTQPT services. So we're 412 00:22:09,440 --> 00:22:11,040 Speaker 12: going to see a lot more. I'll see a lot 413 00:22:11,040 --> 00:22:13,680 Speaker 12: of stops to see what they're working on. This is 414 00:22:13,720 --> 00:22:17,399 Speaker 12: grapportunity to see how far along China is in terms 415 00:22:17,440 --> 00:22:19,680 Speaker 12: of catching up to US in terms of AI. 416 00:22:20,040 --> 00:22:21,919 Speaker 4: Now, there are two important issues that I think we 417 00:22:22,040 --> 00:22:25,119 Speaker 4: have to address. One is the government, which we can 418 00:22:25,160 --> 00:22:27,960 Speaker 4: talk more about in a moment. The other is the 419 00:22:28,000 --> 00:22:31,560 Speaker 4: semiconductor issue that AI is reliant upon. So we are 420 00:22:31,600 --> 00:22:35,359 Speaker 4: told the Biden administration is planning to tighten export controls 421 00:22:35,400 --> 00:22:39,480 Speaker 4: on sales of some artificial intelligence chips to China. That 422 00:22:39,520 --> 00:22:42,639 Speaker 4: proposal is expected we are hearing in July, and it 423 00:22:42,680 --> 00:22:47,040 Speaker 4: would revise current US export controls aimed at making it 424 00:22:47,160 --> 00:22:50,040 Speaker 4: more difficult to sell some chips to China without a license. 425 00:22:50,200 --> 00:22:54,399 Speaker 4: This move may be aimed in part at Nvidia's A 426 00:22:54,600 --> 00:22:57,919 Speaker 4: eight hundred chip. Last week on Bloomberg Daybreak Asia, we 427 00:22:58,000 --> 00:23:00,880 Speaker 4: spoke with Vlad Savov our tech at during Hong Kong 428 00:23:00,920 --> 00:23:02,280 Speaker 4: and he offered some insight. 429 00:23:02,600 --> 00:23:05,240 Speaker 13: And Vidia had the restrictions in O sober from the 430 00:23:05,359 --> 00:23:09,119 Speaker 13: US government, and it developed China specific chips which were 431 00:23:09,160 --> 00:23:11,760 Speaker 13: less powerful. And now it seems like the government is 432 00:23:11,760 --> 00:23:15,440 Speaker 13: going to increase its sanctions, get even further into it, 433 00:23:15,480 --> 00:23:19,320 Speaker 13: and without those chips, like you say, it's very questionable 434 00:23:19,400 --> 00:23:21,479 Speaker 13: that Chinese companies will be able to compete. 435 00:23:21,520 --> 00:23:25,679 Speaker 4: That is Bloomberg's Glad savof Alan. It seems like without 436 00:23:25,720 --> 00:23:28,880 Speaker 4: access to the type of computing power that's necessary these 437 00:23:28,920 --> 00:23:34,159 Speaker 4: graphics processors that basically are being used by companies that 438 00:23:34,280 --> 00:23:38,240 Speaker 4: are playing in AI, without access to that technology, it's 439 00:23:38,280 --> 00:23:40,840 Speaker 4: a very very high hurdle to try to advance the 440 00:23:40,880 --> 00:23:42,000 Speaker 4: technology going forward. 441 00:23:42,000 --> 00:23:42,879 Speaker 2: Wouldn't you agree with that? 442 00:23:43,200 --> 00:23:45,760 Speaker 12: I think it's a challenge for sure. But this has 443 00:23:45,800 --> 00:23:48,520 Speaker 12: been going for a while, right, I mean, China has 444 00:23:48,520 --> 00:23:53,040 Speaker 12: been pose all kinds of sanctions in preventing a lot 445 00:23:53,080 --> 00:23:55,760 Speaker 12: of these US tech companies from exploiting to the US 446 00:23:55,960 --> 00:23:58,600 Speaker 12: and the video of course is the I mean, they 447 00:23:58,640 --> 00:24:00,439 Speaker 12: have to kill a chip so to speak, right, the 448 00:24:00,440 --> 00:24:03,480 Speaker 12: accelerate chip that a lot of these open AI services 449 00:24:03,520 --> 00:24:07,119 Speaker 12: rely on. But I always I would argue that China's 450 00:24:07,160 --> 00:24:08,720 Speaker 12: gonna be able to find a work around. I mean 451 00:24:09,880 --> 00:24:13,440 Speaker 12: they have so far in many different areas. I think 452 00:24:13,480 --> 00:24:16,240 Speaker 12: they're gonna be able to try to outsource it from 453 00:24:16,320 --> 00:24:20,119 Speaker 12: other you know, other countries. And I think that domestically, 454 00:24:20,240 --> 00:24:24,800 Speaker 12: there are companies that are producing you know, similar chips. 455 00:24:24,800 --> 00:24:27,399 Speaker 12: Maybe not as robust as the video, but but I 456 00:24:27,440 --> 00:24:29,600 Speaker 12: think there's definitely a challenge. And then now you've also 457 00:24:29,680 --> 00:24:33,199 Speaker 12: got a lot of venture capital invested, uh, you know 458 00:24:33,280 --> 00:24:35,280 Speaker 12: in this area as well, I mean, to catch up 459 00:24:35,280 --> 00:24:37,080 Speaker 12: to the US. So I think, you know, you've got 460 00:24:37,080 --> 00:24:39,679 Speaker 12: that going on. You've got the government as well, the 461 00:24:39,680 --> 00:24:44,000 Speaker 12: Big fund investing in developing similar type chips. Right, So 462 00:24:44,480 --> 00:24:46,679 Speaker 12: I think that you have a lot of other vendors. 463 00:24:46,720 --> 00:24:48,800 Speaker 12: I think I think the short term, yes, it's gonna 464 00:24:48,800 --> 00:24:52,160 Speaker 12: be an obstacle, but I think that China will figure 465 00:24:52,200 --> 00:24:53,000 Speaker 12: figure a way out. 466 00:24:53,320 --> 00:24:55,199 Speaker 4: Let's talk about the role of the government. You just 467 00:24:55,320 --> 00:24:57,879 Speaker 4: mentioned it there in one case, we know China is 468 00:24:57,880 --> 00:25:01,439 Speaker 4: a vastly different landscape from what we're what we have 469 00:25:01,560 --> 00:25:05,600 Speaker 4: here in the US, and obviously the American companies that 470 00:25:05,640 --> 00:25:08,760 Speaker 4: have been playing in artificial intelligence in many respects are 471 00:25:09,240 --> 00:25:12,680 Speaker 4: as much as three years ahead. And I'm wondering now 472 00:25:12,960 --> 00:25:15,720 Speaker 4: because a lot of the AI in terms of these 473 00:25:15,840 --> 00:25:20,560 Speaker 4: large language models that are required to train AI programs, 474 00:25:20,600 --> 00:25:23,480 Speaker 4: we know the data situation in China is very very 475 00:25:23,480 --> 00:25:26,040 Speaker 4: different visa viv the Internet than it is in the West, 476 00:25:26,440 --> 00:25:28,439 Speaker 4: and I'm wondering whether this is going to make it 477 00:25:28,520 --> 00:25:31,600 Speaker 4: increasingly difficult for China to play catch up as well. 478 00:25:31,720 --> 00:25:34,320 Speaker 12: Oh for sure, I think you know you've got the 479 00:25:34,400 --> 00:25:37,480 Speaker 12: data issue. There's two problems right. First is that you know, 480 00:25:37,520 --> 00:25:40,399 Speaker 12: there's a lot of data regulation in China and Governor 481 00:25:40,400 --> 00:25:42,400 Speaker 12: has already said that it would have to approve any 482 00:25:42,520 --> 00:25:46,360 Speaker 12: kind of rollout of any kind of genitor AI services. 483 00:25:46,840 --> 00:25:50,800 Speaker 12: That problem and then the problem of scraping the data. Right, 484 00:25:51,080 --> 00:25:54,600 Speaker 12: a lot of the you know, data in China, you know, 485 00:25:54,880 --> 00:25:58,200 Speaker 12: comes from the Chinese Internet, and it's censored, so it's 486 00:25:58,240 --> 00:25:59,960 Speaker 12: not not gonna be as robust as what you said 487 00:26:00,119 --> 00:26:02,720 Speaker 12: the WES. But that's said you know, in the US 488 00:26:02,760 --> 00:26:05,639 Speaker 12: you have problems with you know a lot of you know, 489 00:26:05,720 --> 00:26:09,760 Speaker 12: fake news and this information as well. In China, one 490 00:26:09,800 --> 00:26:12,320 Speaker 12: issue I think is that you know, a lot of 491 00:26:12,400 --> 00:26:15,760 Speaker 12: Chinese they get the information from the super app right, 492 00:26:16,040 --> 00:26:18,439 Speaker 12: we chat right, So it's a bit different from the 493 00:26:18,560 --> 00:26:21,440 Speaker 12: US where you have the Yeah, everyone used the Internet. 494 00:26:22,119 --> 00:26:25,359 Speaker 12: I think that there are limitations to that, the fact 495 00:26:25,400 --> 00:26:28,159 Speaker 12: that you know, you can't you know, scrape the the 496 00:26:28,240 --> 00:26:32,080 Speaker 12: Chinese Internet for lots different reasons. They're also privacy issues 497 00:26:32,080 --> 00:26:36,520 Speaker 12: as well. But it is it is a challenge. But 498 00:26:36,720 --> 00:26:39,439 Speaker 12: I think that in some ways it creates opportunity for 499 00:26:39,480 --> 00:26:42,440 Speaker 12: some of these companies like bay Do and Sense Sense Time, 500 00:26:42,920 --> 00:26:44,800 Speaker 12: just because they know what the ground rules are. 501 00:26:45,320 --> 00:26:45,480 Speaker 2: Uh. 502 00:26:45,520 --> 00:26:48,320 Speaker 12: They know that, you know, certain things are going to 503 00:26:48,400 --> 00:26:51,760 Speaker 12: be prohibited and it's gonna be up to the all 504 00:26:51,840 --> 00:26:55,560 Speaker 12: these what do you call Internet platforms to the censor 505 00:26:55,560 --> 00:26:57,840 Speaker 12: all this stuff. So there's a But it's not something 506 00:26:57,880 --> 00:27:00,680 Speaker 12: that's new, is it. I mean, you've got China, You've 507 00:27:00,680 --> 00:27:02,919 Speaker 12: got to Chinese intinet right people right use by doing 508 00:27:02,960 --> 00:27:06,000 Speaker 12: all that, so it still works, you know, saying. 509 00:27:05,800 --> 00:27:08,160 Speaker 4: Well you mentioned by Do and I saw a piece 510 00:27:08,160 --> 00:27:10,680 Speaker 4: on the Bloomberg terminal over the past week, they were 511 00:27:10,680 --> 00:27:14,399 Speaker 4: comparing the by do ernie bot to chat GPT and 512 00:27:14,440 --> 00:27:16,919 Speaker 4: by a couple of measures, by Do at least is 513 00:27:16,960 --> 00:27:20,879 Speaker 4: claiming that the early Bought now beats Chat GPT. So 514 00:27:21,160 --> 00:27:23,800 Speaker 4: to your point, there are companies in China that are 515 00:27:23,840 --> 00:27:26,360 Speaker 4: pushing the envelope, so to speak, and trying to develop 516 00:27:26,400 --> 00:27:30,440 Speaker 4: certain types of AI technology more on the consumer side. 517 00:27:30,640 --> 00:27:33,640 Speaker 4: But I'm also curious is what's happening on the business side. 518 00:27:33,760 --> 00:27:37,439 Speaker 4: Is there a conversation happening that has to do with 519 00:27:37,560 --> 00:27:41,640 Speaker 4: how AI might be useful for manufacturing or even healthcare 520 00:27:41,640 --> 00:27:42,119 Speaker 4: in China? 521 00:27:42,200 --> 00:27:45,560 Speaker 12: Oh, for sure. I mean what they're planing and what 522 00:27:45,600 --> 00:27:49,080 Speaker 12: to hear anyway, is they're planning to create these chatbots 523 00:27:49,080 --> 00:27:54,000 Speaker 12: to help manufacturers, you know, analyze consumption trends. You know, 524 00:27:54,040 --> 00:27:56,359 Speaker 12: there are a lot of business applications. I mean, for 525 00:27:57,160 --> 00:28:00,320 Speaker 12: by do they plan to incorporate their erni body into 526 00:28:00,440 --> 00:28:04,240 Speaker 12: everything that they're doing cloud computing, uh, in their evs. 527 00:28:04,720 --> 00:28:08,080 Speaker 12: So I think that yeah, I mean they're they're actually 528 00:28:08,800 --> 00:28:13,880 Speaker 12: large uh not just consumption but uh, you know business 529 00:28:14,040 --> 00:28:17,640 Speaker 12: software type applications, uh that can really use this kind 530 00:28:17,640 --> 00:28:21,000 Speaker 12: of AI technology. And that's that's the area where trying 531 00:28:21,040 --> 00:28:23,480 Speaker 12: to lacks relative to US. Right in business software. 532 00:28:23,840 --> 00:28:27,320 Speaker 4: We were mentioning the funding issue a moment ago, and 533 00:28:27,359 --> 00:28:30,480 Speaker 4: I'm curious in terms of trying to find capital to 534 00:28:30,520 --> 00:28:33,000 Speaker 4: support this type of growth in China. Where is it 535 00:28:33,040 --> 00:28:34,640 Speaker 4: coming from? Where will it come from? 536 00:28:35,560 --> 00:28:37,879 Speaker 12: Yeah, That's the thing about it is that if you 537 00:28:37,920 --> 00:28:40,160 Speaker 12: look at what's been happening last couple of years, right, 538 00:28:40,600 --> 00:28:43,720 Speaker 12: this has this big tech crackdown and a lot of 539 00:28:44,360 --> 00:28:48,480 Speaker 12: you know, Vegria capital into Chinas sort of plunge. Right. 540 00:28:48,560 --> 00:28:52,600 Speaker 12: But then over the last you know, several months, we're 541 00:28:52,640 --> 00:28:57,160 Speaker 12: seeing the value of deals UH in this area surging, 542 00:28:58,920 --> 00:29:01,000 Speaker 12: saying like from a lack of years half of US 543 00:29:01,120 --> 00:29:03,240 Speaker 12: levels and now they're you know, the two thirds of 544 00:29:03,280 --> 00:29:05,440 Speaker 12: where the US is. So a lot of money is 545 00:29:05,440 --> 00:29:08,320 Speaker 12: coming from these venture capitalists and also from the government 546 00:29:08,360 --> 00:29:10,960 Speaker 12: as well. I mean earlier this year, the government UH 547 00:29:11,120 --> 00:29:15,040 Speaker 12: said that it was trying to get private capital to 548 00:29:15,200 --> 00:29:19,080 Speaker 12: work with the government in order to uh, you know, 549 00:29:19,560 --> 00:29:25,479 Speaker 12: sort of develop these technologies, especially high tech chips, UH, 550 00:29:25,600 --> 00:29:28,600 Speaker 12: in order to compete with the WES. So you've seen 551 00:29:28,600 --> 00:29:31,000 Speaker 12: a sea change in the way the government has approached 552 00:29:32,600 --> 00:29:35,000 Speaker 12: big tech. And when I said big tech, I'm seeing 553 00:29:35,120 --> 00:29:39,320 Speaker 12: I'm saying basically, in some ways outside of Alibaba ten 554 00:29:39,440 --> 00:29:42,760 Speaker 12: sent the fact that now there're you know, a lot 555 00:29:42,800 --> 00:29:46,320 Speaker 12: of money is going into any companies that are working 556 00:29:46,400 --> 00:29:50,240 Speaker 12: on you know, like these kind of chips that are 557 00:29:50,400 --> 00:29:51,120 Speaker 12: being used for AI. 558 00:29:51,440 --> 00:29:53,400 Speaker 4: Alan, thank you so much. I look forward to your 559 00:29:53,400 --> 00:29:55,960 Speaker 4: coverage in the week ahead from the World Ai Conference 560 00:29:56,000 --> 00:29:59,520 Speaker 4: in Shanghai. Alan one is a Bloomberg senior editor, also 561 00:29:59,680 --> 00:30:03,480 Speaker 4: our Shenzen bureau chief. I'm Doug Prisner. You can join 562 00:30:03,680 --> 00:30:07,280 Speaker 4: Brian Curtison myself weekdays here for Bloomberg Daybreak Asia beginning 563 00:30:07,320 --> 00:30:11,320 Speaker 4: at six am in Hong Kong six pm on Wall Street. 564 00:30:11,520 --> 00:30:12,760 Speaker 2: Tom, thank you, Doug. 565 00:30:12,800 --> 00:30:15,080 Speaker 1: And coming up here on Bloomberg day Break Weekend, We're 566 00:30:15,080 --> 00:30:17,840 Speaker 1: about to get more insight from the Fed, because here 567 00:30:17,920 --> 00:30:20,320 Speaker 1: come those Fed minutes, and they come at a very 568 00:30:20,480 --> 00:30:34,320 Speaker 1: important time. I'm Tom Busby, and this is Bloomberg. This 569 00:30:34,360 --> 00:30:36,680 Speaker 1: is Bloomberg day Break Weekend, our global look ahead at 570 00:30:36,680 --> 00:30:39,160 Speaker 1: the top stories for investors in the coming week. I'm 571 00:30:39,160 --> 00:30:42,080 Speaker 1: Tom Busby in New York. As we've been reporting, the 572 00:30:42,120 --> 00:30:44,640 Speaker 1: FED is watching the jobs report heading our way this 573 00:30:44,720 --> 00:30:47,360 Speaker 1: coming Friday. Also this coming week, we'll get to be 574 00:30:47,400 --> 00:30:49,240 Speaker 1: a fly on the wall when the FED releases the 575 00:30:49,320 --> 00:30:52,200 Speaker 1: minutes from its latest policy meeting, and for more on 576 00:30:52,240 --> 00:30:54,520 Speaker 1: that part of the story, that's heed to our Bloomberg 577 00:30:54,600 --> 00:30:57,480 Speaker 1: ninety nine to one newsroom in Washington and Bloomberg Sound 578 00:30:57,560 --> 00:30:59,080 Speaker 1: On host Joe Matthew. 579 00:30:59,400 --> 00:30:59,640 Speaker 2: Thanks. 580 00:31:00,000 --> 00:31:01,800 Speaker 5: We're going to look ahead now to the release of 581 00:31:01,960 --> 00:31:05,040 Speaker 5: FED minutes next week as investors try to get inside 582 00:31:05,080 --> 00:31:09,480 Speaker 5: the minds of policymakers, not that Chair j. Powell has 583 00:31:09,520 --> 00:31:10,920 Speaker 5: been vague on this lately. 584 00:31:10,960 --> 00:31:14,360 Speaker 8: At our last meeting, the Federal Open Market Committee decided 585 00:31:14,400 --> 00:31:16,720 Speaker 8: to maintain the target range for the Federal funds rate 586 00:31:16,760 --> 00:31:19,720 Speaker 8: at five to five and a quarter percent, while continuing 587 00:31:19,720 --> 00:31:24,120 Speaker 8: the process of significantly reducing our securities holdings. We made 588 00:31:24,160 --> 00:31:26,240 Speaker 8: this decision in light of the distance we've come in 589 00:31:26,280 --> 00:31:30,720 Speaker 8: tightening policy, the uncertain lags in monetary policy, and the 590 00:31:30,760 --> 00:31:35,160 Speaker 8: potential headwinds from credit tightening. As noted in the fmc's 591 00:31:35,200 --> 00:31:38,959 Speaker 8: Summary of Economic projections, a strong majority of Committee participants 592 00:31:39,000 --> 00:31:41,920 Speaker 8: expect that it will be appropriate to raise interest rates 593 00:31:42,120 --> 00:31:44,440 Speaker 8: two or more times by the end of this year. 594 00:31:44,560 --> 00:31:46,600 Speaker 5: Two or more times by the end of this year. 595 00:31:46,640 --> 00:31:49,360 Speaker 5: That's Powell from recent testimony on Capitol Hills just a 596 00:31:49,400 --> 00:31:52,760 Speaker 5: little over a week ago, and he's reiterated that line 597 00:31:52,920 --> 00:31:56,680 Speaker 5: several times. Joining us here in Washington, Bloomberg's Kate Davidson 598 00:31:56,760 --> 00:31:59,720 Speaker 5: and Eric Wasson with the view on the FED and 599 00:31:59,800 --> 00:32:02,440 Speaker 5: on Congress as the FED also deals with a response 600 00:32:02,480 --> 00:32:05,400 Speaker 5: to the bank failures earlier this year. Kate, let's start 601 00:32:05,400 --> 00:32:07,240 Speaker 5: with you here in the release of minutes. 602 00:32:07,320 --> 00:32:09,480 Speaker 14: What are you looking for already? It's crazy? 603 00:32:09,920 --> 00:32:10,560 Speaker 5: Is that possible? 604 00:32:10,680 --> 00:32:12,360 Speaker 14: I know? No, Well, just because we've bits been the 605 00:32:12,400 --> 00:32:15,120 Speaker 14: NonStop Jay Powell Show, so we forgot. It's been almost 606 00:32:15,160 --> 00:32:19,120 Speaker 14: three weeks since the meeting. Yeah, so I think, you know, 607 00:32:19,200 --> 00:32:21,240 Speaker 14: we we kind of know a lot from the projections 608 00:32:21,280 --> 00:32:23,000 Speaker 14: that we got. You know, normally we'd be looking for 609 00:32:23,040 --> 00:32:25,880 Speaker 14: those minutes to just glean more insight from how big 610 00:32:25,920 --> 00:32:28,560 Speaker 14: is the group of officials that want to go further 611 00:32:28,600 --> 00:32:30,960 Speaker 14: and thinks the Fed keeps need to keeps, needs to 612 00:32:31,040 --> 00:32:33,560 Speaker 14: keep raising rates. But we know from the dot plot 613 00:32:33,560 --> 00:32:35,360 Speaker 14: that we just got that there are a lot of them. 614 00:32:35,800 --> 00:32:38,800 Speaker 14: So I think that we'll, you know, we'll be looking 615 00:32:38,840 --> 00:32:42,520 Speaker 14: to see how you know, is that likely to happen 616 00:32:42,560 --> 00:32:46,640 Speaker 14: in July and September? Our officials thinking they want to 617 00:32:46,680 --> 00:32:49,120 Speaker 14: shift to in every other meeting stands I mean, we 618 00:32:49,200 --> 00:32:51,680 Speaker 14: heard a little bit from Powell talking about that idea, saying, 619 00:32:51,720 --> 00:32:54,560 Speaker 14: you know, consecutive rate hikes aren't off the table, which 620 00:32:54,600 --> 00:32:56,680 Speaker 14: is a little puzzling because he kind of framed this 621 00:32:56,720 --> 00:32:59,960 Speaker 14: as well, it's a moderating the pace. We're gonna pop 622 00:33:00,040 --> 00:33:02,080 Speaker 14: as a meeting and then go. But now he's saying 623 00:33:02,080 --> 00:33:04,880 Speaker 14: they could go back to back again. So I think 624 00:33:04,920 --> 00:33:08,240 Speaker 14: there that you know, anything we can learn about about 625 00:33:08,240 --> 00:33:10,640 Speaker 14: that and the pace, But just it really, it really 626 00:33:10,720 --> 00:33:14,000 Speaker 14: just seems like the group of hawks is surprisingly big 627 00:33:14,120 --> 00:33:17,040 Speaker 14: right now, like all these worries about the banking crisis 628 00:33:17,080 --> 00:33:18,360 Speaker 14: seem to really have faded. 629 00:33:18,560 --> 00:33:20,880 Speaker 5: Eric, what does Congress think of the FED at this point? 630 00:33:20,920 --> 00:33:22,880 Speaker 5: Does it really fall along party lines? 631 00:33:23,080 --> 00:33:25,880 Speaker 15: I do see a real difference between the way Republicans 632 00:33:25,920 --> 00:33:28,480 Speaker 15: are approaching Pal versus Michael Barr. You know, they seem 633 00:33:28,520 --> 00:33:31,520 Speaker 15: to be very concerned about what Barr could be up to, 634 00:33:31,640 --> 00:33:34,520 Speaker 15: could be proposing, you know, flagging the idea that this 635 00:33:34,600 --> 00:33:37,760 Speaker 15: could actually have an impingement on bank risk taking in 636 00:33:37,800 --> 00:33:40,920 Speaker 15: the economy versus I you know, when we asked a 637 00:33:40,920 --> 00:33:44,080 Speaker 15: couple of weeks ago, it's pretty wide survey of members 638 00:33:44,080 --> 00:33:46,200 Speaker 15: talking about Pal. There seems to be general praise is 639 00:33:46,240 --> 00:33:49,080 Speaker 15: that he's humble, he acknowledges mistakes, so I think they're 640 00:33:49,120 --> 00:33:51,320 Speaker 15: trying to to sort of play good cup back up 641 00:33:51,440 --> 00:33:52,320 Speaker 15: there a little bit. 642 00:33:52,240 --> 00:33:54,400 Speaker 5: Moving beyond transitory finally. 643 00:33:54,200 --> 00:33:56,200 Speaker 15: Right, So I know, you know, they do feel that 644 00:33:56,240 --> 00:33:58,400 Speaker 15: he does bear shoulder some of the blame for acting, 645 00:33:58,760 --> 00:34:01,240 Speaker 15: you know, too late to strain of inflation. But they 646 00:34:01,240 --> 00:34:03,560 Speaker 15: send to focus the fire on Biden, someone they can 647 00:34:03,600 --> 00:34:05,000 Speaker 15: actually unsee. 648 00:34:05,280 --> 00:34:07,720 Speaker 5: We're still looking for two more as the consensus. 649 00:34:07,800 --> 00:34:10,480 Speaker 14: Yeah, I mean to at least two, right, And it's 650 00:34:10,560 --> 00:34:12,600 Speaker 14: kind of interesting. That's how Powell has been wording it. 651 00:34:12,600 --> 00:34:15,480 Speaker 14: It's not entirely different from what he's said, but he's 652 00:34:16,040 --> 00:34:18,200 Speaker 14: you know, we've all taken note it's been two or more, 653 00:34:18,640 --> 00:34:20,560 Speaker 14: which again he points to the dot plot. You look 654 00:34:20,600 --> 00:34:22,440 Speaker 14: at the projections, and that is what it says. But 655 00:34:22,560 --> 00:34:25,879 Speaker 14: he's not not trying to shy away from that. He's 656 00:34:25,880 --> 00:34:30,000 Speaker 14: not playing that down. Two or more is the expectation. 657 00:34:29,880 --> 00:34:32,839 Speaker 5: To be confounded by a market that's still betting on 658 00:34:33,080 --> 00:34:34,000 Speaker 5: rate cuts. 659 00:34:34,480 --> 00:34:34,839 Speaker 3: It is. 660 00:34:35,080 --> 00:34:37,279 Speaker 14: It is pretty interesting, although I think every time he 661 00:34:37,320 --> 00:34:39,400 Speaker 14: gets out there, you know, they inch up and inchub 662 00:34:39,440 --> 00:34:41,279 Speaker 14: and you get data like you saw, it's all very 663 00:34:41,320 --> 00:34:42,360 Speaker 14: strong still. 664 00:34:42,200 --> 00:34:45,319 Speaker 5: Great conversation and many thanks to Bloomberg's Kate Davidson on 665 00:34:45,360 --> 00:34:49,480 Speaker 5: the FED and Bloomberg's Eric Watson on Congress. I'm Joe 666 00:34:49,480 --> 00:34:52,480 Speaker 5: Matthew in Washington. I hope you have a happy fourth 667 00:34:52,920 --> 00:34:54,080 Speaker 5: Tom back to you in New York. 668 00:34:54,480 --> 00:34:55,120 Speaker 2: Thank you, Joe. 669 00:34:55,200 --> 00:34:58,280 Speaker 1: And that was Bloomberg's sound on co host Joe Matthew 670 00:34:58,360 --> 00:35:01,280 Speaker 1: reporting from our Bloomberg ninety nine one newsroom in Washington. 671 00:35:01,600 --> 00:35:03,759 Speaker 1: And you can hear sound on weekdays one to three 672 00:35:03,800 --> 00:35:06,279 Speaker 1: pm on Bloomberg Radio. And that does it for this 673 00:35:06,440 --> 00:35:09,520 Speaker 1: edition of Bloomberg Daybreak Weekend. Join us again Monday morning 674 00:35:09,560 --> 00:35:11,400 Speaker 1: at five am Wall Street Time for the latest on 675 00:35:11,520 --> 00:35:14,439 Speaker 1: markets overseas and the news you need to start your day. 676 00:35:14,920 --> 00:35:16,520 Speaker 2: I'm Tom Busby. Stay with us. 677 00:35:16,600 --> 00:35:20,520 Speaker 1: Top stories and global business headlines are coming up right now.