WEBVTT - Bloomberg Daybreak: November 30, 2022 - Hour 2 (Radio) 0:00:03.800 --> 0:00:07.080 Live from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:00:07.200 --> 0:00:11.400 Daybreak for Wednesday, November two. Coming up this hour, Wall 0:00:11.440 --> 0:00:15.000 Street awaits a highly anticipated speech from J. Powell. China 0:00:15.040 --> 0:00:18.640 appears to be taking a softer public stance against COVID restrictions. 0:00:18.720 --> 0:00:22.400 Congress was to prevent a possible rail strike, and Disney 0:00:22.400 --> 0:00:25.440 says management and strategy changes could come at a cost 0:00:25.680 --> 0:00:28.960 because suspicious powder was found in the New York Midtown hotel, 0:00:29.280 --> 0:00:31.640 Whilst the same sex marriage bill head to the House 0:00:31.680 --> 0:00:35.680 after Senate passage. I'm Michael barr More ahead, I'm John 0:00:35.680 --> 0:00:38.840 standards fours easy win for the Knicks, Islanders lost, eh, 0:00:38.880 --> 0:00:41.680 John's one in the US advances at the World Cup. 0:00:44.520 --> 0:00:48.120 That's all straded ahead on Bloomberg Daybreak on Bloomberg he 0:00:48.200 --> 0:00:51.960 Live in Free on New York, Bloomberg one, Washington, d C, 0:00:52.440 --> 0:00:56.040 Bloomberg one oh six one, Boston, Bloomberg nine sixties and 0:00:56.120 --> 0:01:00.000 Francisco Sirius x AM one nineteen and around the world 0:01:00.000 --> 0:01:03.680 Old on Bloomberg Radio dot Com and the Bloomberg Business app. 0:01:07.480 --> 0:01:10.480 Good morning, I'm Nathan Hagar and I'm John Tucker. Bloomberg 0:01:10.560 --> 0:01:12.679 Daybreak being brought to you by b n Y Balance. 0:01:12.720 --> 0:01:16.360 Pershing learned why the world's most sophisticated wealth management and 0:01:16.600 --> 0:01:20.880 institutional firms rely on Pershing to help them improve profitability, 0:01:21.240 --> 0:01:25.839 create efficiency, attract talent, and manage risk at pershing dot Com. 0:01:25.880 --> 0:01:28.119 And futures are moving a bit higher this morning. It's 0:01:28.160 --> 0:01:29.880 six oh one on Wall Street, and we checked the 0:01:29.880 --> 0:01:32.679 markets every fifteen minutes during the trading day. On Bloomberg, 0:01:33.000 --> 0:01:35.760 SMP futures are up six points, Staff futures up fifteen, 0:01:35.880 --> 0:01:38.480 NASTAC futures are higher by forty points. The ten Your 0:01:38.520 --> 0:01:40.640 Treasury is up four thirty seconds the old three point 0:01:40.680 --> 0:01:42.880 seven two percent yield on the two year four point 0:01:42.920 --> 0:01:45.440 four seven percent. Nim X screwed is up two point 0:01:45.440 --> 0:01:47.720 four percent at eighty dollars nine cents of barrel, and 0:01:47.760 --> 0:01:51.200 comex golds up a half percent at seventeen seventy ounce. 0:01:51.320 --> 0:01:54.480 John and Nathan, we begin with a highly anticipated speech 0:01:54.520 --> 0:01:57.400 by the FED chair j Pal. It takes place right 0:01:57.440 --> 0:01:59.480 in the middle of today's trading. I just get a 0:01:59.560 --> 0:02:03.520 preview from Bloomberg Economics, corresponded Michael McKee. When the Fed 0:02:03.600 --> 0:02:07.160 Chairman speaks, he usually moves markets, Probably not this time, 0:02:07.200 --> 0:02:10.239 though investors have firmly priced in a half percentage point 0:02:10.280 --> 0:02:12.600 increase in the Fed's target rate, and none of the 0:02:12.639 --> 0:02:15.320 Fed speakers in recent weeks has taken issue with that. 0:02:16.120 --> 0:02:18.240 What j Powell may want to do is set some 0:02:18.280 --> 0:02:22.200 guidelines for the new FED guidance on rates coming December fourteen. 0:02:22.800 --> 0:02:26.280 There's general agreement among policymakers the ultimate level of the 0:02:26.320 --> 0:02:29.239 target rate will be higher than their last forecast of 0:02:29.360 --> 0:02:32.480 four point six percent. Markets now see it at five. 0:02:32.520 --> 0:02:36.720 Pouell could offer guidance on whether that's about right and 0:02:36.760 --> 0:02:39.120 about how long it would take the Fed to get there. 0:02:39.520 --> 0:02:42.799 Michael McKee, Bloomberg Daybreak. All right, thanks Michael, and Bloomberg 0:02:42.880 --> 0:02:45.200 Radio and Television will bring you live coverage of Pound 0:02:45.200 --> 0:02:48.200 speech this afternoon. You can catch that around one thirty 0:02:48.240 --> 0:02:50.600 pm All Street Time. Go ahead of the speech, John, 0:02:50.639 --> 0:02:52.799 we continue to hear tough talk on interest rates from 0:02:52.800 --> 0:02:55.560 Fed speakers. Let's get the latest live with Bloomberg. Steve 0:02:55.639 --> 0:02:59.359 Rappaport to morning Steve, Good morning, John, and Nathan St. Louis. 0:02:59.360 --> 0:03:02.120 FED President Jim Bullard estimates an interest rate of at 0:03:02.160 --> 0:03:04.519 least four point nine percent would be needed to bring 0:03:04.520 --> 0:03:07.520 inflation down next year, but former New York Fed president 0:03:07.560 --> 0:03:10.640 and Bloomberg opinion columnist Bill Dudley predicts an even higher 0:03:10.720 --> 0:03:12.480 rate in the short term. But I think once we 0:03:12.520 --> 0:03:14.399 get you know, five and a quarter, five and a half, 0:03:14.400 --> 0:03:17.280 and they felt the relent, they'll just stid sit there 0:03:17.560 --> 0:03:20.720 and wait for that restrict of Montreal policy to slow 0:03:20.800 --> 0:03:24.000 the coming down generate more slack in the layer market. 0:03:24.160 --> 0:03:26.960 The FETE is expected to announce another rate hike next month. 0:03:27.000 --> 0:03:29.639 Live in New York, I'm Steve Rappaport Bloomberg day Break. 0:03:29.639 --> 0:03:31.880 All right, thanks Steven, and let's turn to ecoic news. 0:03:31.880 --> 0:03:35.600 Out of Asia. Data show COVID restrictions are continuing to 0:03:35.720 --> 0:03:39.440 hamper growth for the Chinese economy. At Bloomberg Daybreak, Asia 0:03:39.520 --> 0:03:42.640 anchor Brian Curtis has more from Hong Kong tough COVID 0:03:42.720 --> 0:03:46.800 restrictions on consumers and businesses. Weight on activity. The official 0:03:46.840 --> 0:03:49.160 p m I fell to forty eight this month. That's 0:03:49.200 --> 0:03:51.960 the lowest reading sents April, and worst than the estimate 0:03:52.000 --> 0:03:55.160 of forty nine in the Bloomberg survey. The non manufacturing 0:03:55.200 --> 0:03:58.440 index declined to forty six point seven from forty eight 0:03:58.440 --> 0:04:02.400 point seven. You know over that was also lower than estimated. 0:04:02.640 --> 0:04:05.440 About a quarter of China's total GDP is said to 0:04:05.480 --> 0:04:09.320 be affected by COVID lockdowns. Brian Curtis, Bloomberg day Break 0:04:09.480 --> 0:04:11.720 and Brian, thank you. In China maybe starting to adact 0:04:11.720 --> 0:04:14.800 a softer stance on COVID restrictions. Stories of people who 0:04:14.960 --> 0:04:18.240 survived infections are popping up in state run media. That's 0:04:18.240 --> 0:04:21.200 something that hadn't been published previously. And local governments are 0:04:21.240 --> 0:04:24.760 now vowing to prioritize the public over COVID control. And 0:04:24.800 --> 0:04:27.320 The People's Daily, a mouthpiece for the Communist Party, is 0:04:27.400 --> 0:04:30.480 urging citizens to take responsibility for their own health. And 0:04:30.480 --> 0:04:32.720 it's the last trading day of the month. And November 0:04:32.800 --> 0:04:35.359 was pretty good for Chinese stocks listed in the US 0:04:35.680 --> 0:04:39.359 the rough. If that level holds today, it would be 0:04:39.400 --> 0:04:42.200 the best month ever. It's also been a good run 0:04:42.240 --> 0:04:45.000 for global bonds. They added a record two point eight 0:04:45.040 --> 0:04:48.240 trillion dollars in market value in November. All right, let's 0:04:48.240 --> 0:04:51.000 turn to politics now. John Congress is moving quickly to 0:04:51.080 --> 0:04:54.360 prevent a possible rail workers strike. We get the details 0:04:54.360 --> 0:04:58.400 from Amy Morris in our Bloomberg Washington newsroom. There will 0:04:58.400 --> 0:05:00.839 be two votes in the House today. The first vote 0:05:00.880 --> 0:05:03.120 is on a bill to avert the strike by passing 0:05:03.200 --> 0:05:05.680 the tentative agreement. The second would be an up or 0:05:05.720 --> 0:05:08.039 down vote on whether to add seven days of paid 0:05:08.080 --> 0:05:12.400 sickly for railroaders. Lawmakers are reluctantly intervening to avoid what 0:05:12.440 --> 0:05:15.240 would be a devastating blow to the nation's economy if 0:05:15.279 --> 0:05:18.320 the supply chain of fuel, food, and other critical goods 0:05:18.320 --> 0:05:21.280 were disrupted. Once it passes the House, the bill heads 0:05:21.279 --> 0:05:24.560 to the Senate for consideration. The deadline foreign agreement is 0:05:24.600 --> 0:05:28.919 December nine. In Washington, I'm Amy Morris, Bloomberg Daybreak. All right, Amy, Thanks. 0:05:29.000 --> 0:05:32.279 Also in Washington today, lawmakers are getting a visit from 0:05:32.320 --> 0:05:35.640 Apple's CEO Tim Cook, where it's only plans to meet 0:05:35.640 --> 0:05:39.760 with top Republican lawmakers, and Bloomberg's Ed Baxter has the story. 0:05:40.000 --> 0:05:43.320 The aim, according to Bloomberg sources, is to forge ties 0:05:43.360 --> 0:05:46.479 with GOP leadership ahead of the party's take over the 0:05:46.520 --> 0:05:50.120 House next year. He has scheduled sessions with Republican representatives 0:05:50.160 --> 0:05:54.000 Jim Jordan, darryl Issa and Kathy McMorris. Rogers, Jordan and 0:05:54.120 --> 0:05:57.320 McMorris Rodgers are likely to share top committees overseeing the 0:05:57.360 --> 0:06:00.320 tech industry. When the GOP does take over. The meetings 0:06:00.320 --> 0:06:03.480 were likely scheduled before the exchange of messages between Cook 0:06:03.680 --> 0:06:07.880 and elon Muska Twitter. Several conservative Republicans, including Jordan's, have 0:06:08.040 --> 0:06:11.080 been very critical of Apple, and Jordan has become a 0:06:11.160 --> 0:06:15.200 Musk supporter in San Francisco. I'm at Baxter, Bloomberg Daybreak alright, 0:06:15.240 --> 0:06:17.960 and thanks in The shakeup continues at Disney after Bob 0:06:18.000 --> 0:06:21.400 Iger's reinstatement of CEL, the company now says changes to 0:06:21.480 --> 0:06:24.479 its management and strategy could come at a cost more 0:06:24.520 --> 0:06:28.359 from Bloomberg stud Prisner. Returning CEO, Bob Iger recently told 0:06:28.360 --> 0:06:31.880 staff he's considering changes to the company's management structure, and 0:06:31.920 --> 0:06:35.680 a regulatory filing shows plans may include modifying the way 0:06:35.720 --> 0:06:39.720 Disney releases and exhibits movies and TV shows, including the 0:06:39.760 --> 0:06:43.599 platforms for initial distribution. As a result, Disney says once 0:06:43.640 --> 0:06:47.520 determined that changes could result in imparament charges. Changes in 0:06:47.600 --> 0:06:52.279 consumer behavior favor online platforms. However, streaming services are struggling 0:06:52.320 --> 0:06:55.200 to turn a profit. Last year, Disney lost four billion 0:06:55.240 --> 0:06:58.240 dollars on its online TV businesses. In New York, I'm 0:06:58.279 --> 0:07:01.320 do Prisoner, Bloomberg Daybreak Alright, Thanks a lot, and ahead 0:07:01.320 --> 0:07:03.559 of the cashop and on Wall Street, futures for now 0:07:03.640 --> 0:07:07.400 in the green, the down futures up nine points SMP 0:07:07.560 --> 0:07:10.360 in many futures six points higher. That's of about two 0:07:10.360 --> 0:07:12.680 tents of a percent right now. And then as they 0:07:12.760 --> 0:07:16.280 emnid futures up thirty seven points, a rise of three 0:07:16.280 --> 0:07:23.800 tents of percent. You're listening to Bloomberg Daybreak and it's 0:07:23.840 --> 0:07:26.000 now six or seven on Wall Street. Let's bring in 0:07:26.040 --> 0:07:28.080 Michael barn now to find out what else is going 0:07:28.120 --> 0:07:30.760 on to New York and around the world, John, thank 0:07:30.760 --> 0:07:33.400 you very much. New York City Mayor Eric Adams is 0:07:33.480 --> 0:07:37.120 directing police and city medics to be more aggressive about 0:07:37.160 --> 0:07:40.760 getting severely mentally ill people off the streets and subways 0:07:40.920 --> 0:07:44.720 into treatment. Adams says, that's the case, even if it 0:07:44.760 --> 0:07:48.880 means involuntarily hospitalizing some people who refuse care. We can 0:07:48.920 --> 0:07:54.640 no longer deny the reality that untreated psychosis can be 0:07:54.680 --> 0:08:01.920 a cruel, in all consuming condition that often requires involuntary intervention. 0:08:02.520 --> 0:08:06.559 The mayor's announcement was condemned as wrongheaded by some civil 0:08:06.680 --> 0:08:09.880 rights groups and advocates for the homeless. The NYPD is 0:08:09.880 --> 0:08:12.360 searching for a man who got into the park Hyeh 0:08:12.360 --> 0:08:16.360 at hotel in Manhattan and left behind a suspicious white 0:08:16.400 --> 0:08:20.840 powdery substance. Police say departing guests dropped a hotel room 0:08:20.960 --> 0:08:24.280 key on the street, and someone snuck into the unoccupied 0:08:24.320 --> 0:08:27.760 hotel room and spent the night. A cleaning worker reported 0:08:27.760 --> 0:08:30.440 being sickened by the substance left behind in the room. 0:08:30.920 --> 0:08:35.120 Assistant Chief James McCarthy of the NYPD fight uproble and 0:08:35.160 --> 0:08:38.840 swapped various surfaces of the room, which initially indicated that 0:08:38.960 --> 0:08:41.480 it was there was a possible trace of amount of 0:08:41.760 --> 0:08:46.640 explosive substance. Assistant Chief McCarthy says the powder tested negative. 0:08:47.080 --> 0:08:50.960 The Senator has passed landmarked bipartisan legislation to protect same 0:08:51.040 --> 0:08:54.960 sex and interracial marriages. Senate Majority Leader Chuck Schumer. What 0:08:55.080 --> 0:08:58.839 a great day, What a great day. The bill now 0:08:58.920 --> 0:09:02.520 goes to the House where it's expected to pass. Demonstrations 0:09:02.520 --> 0:09:05.640 took place in New York City to support protesters in 0:09:05.720 --> 0:09:10.760 China against rigid zero COVID policies. I am seeing Chinese 0:09:10.760 --> 0:09:13.800 people stand up for themselves. How I wish them the 0:09:13.840 --> 0:09:18.040 best in their fight for freedom and democracy. Demonstrations took 0:09:18.040 --> 0:09:21.320 place near New York City's Chinese consulate and also at 0:09:21.360 --> 0:09:25.840 Harvard University. Closing arguments are slated for tomorrow involving former 0:09:25.840 --> 0:09:29.679 President Trump and his company's criminal fraud in the tax case. 0:09:30.520 --> 0:09:34.640 Long time Trump Organization finance chief Alan Weislberg testified in 0:09:34.679 --> 0:09:38.360 the case that prosecutors say involved avoiding taxes on company 0:09:38.400 --> 0:09:42.240 pay perks, including an apartment and luxury cars. The Christmas 0:09:42.280 --> 0:09:45.720 Tree lighting is tonight in Rockefeller Center. Last night, members 0:09:45.760 --> 0:09:49.360 of Congress gathered to light the Capitol Christmas Tree. Global 0:09:49.360 --> 0:09:51.680 News twenty four hours a day on air and on 0:09:51.760 --> 0:09:55.720 Bloomberg quick Take, powered by more than journalists and antalyists 0:09:55.720 --> 0:09:58.720 more than a hundred twenty countries. Michael bar this is Bloomberg, 0:09:58.800 --> 0:10:03.480 John Michael, thank you, and he's six till Street. It's 0:10:03.480 --> 0:10:05.600 signed out for the Sports report being brought you by 0:10:05.600 --> 0:10:08.560 a Trice State out of good Morning, John stanns morning, 0:10:08.640 --> 0:10:11.360 John rayre laughter for the next. In Detroit, forty point 0:10:11.440 --> 0:10:13.520 first quarter, they scored at least thirty and other three. 0:10:13.559 --> 0:10:16.160 They won by thirty one forty one ten. Julius Randa 0:10:16.240 --> 0:10:18.760 led the way thirties six points and they played thirty 0:10:18.760 --> 0:10:21.520 one minutes and Dallas Luke Dons at forty one points 0:10:21.520 --> 0:10:23.559 a triple double. The man has been Golden State. They 0:10:23.640 --> 0:10:25.760 defending NBA Champs just to and ten on the road. 0:10:25.800 --> 0:10:29.240 Islanders lost in Philadelphia three to one. St. John's easy 0:10:29.280 --> 0:10:30.960 window er l i U in the Red Storm now 0:10:30.960 --> 0:10:33.280 eight No, it looks like a long season. At Syracuse, 0:10:33.360 --> 0:10:35.920 the Orange is three and four. They lost by twenty 0:10:36.000 --> 0:10:38.320 nine in Illinois. It's the last weekend of the college 0:10:38.320 --> 0:10:42.920 football regular season. Georgia, Michigan, tc U, and USC are 0:10:42.920 --> 0:10:45.800 all playing conference championship games and if they win, they'll 0:10:45.840 --> 0:10:48.280 be the four teams in the playoff. The committee has 0:10:48.360 --> 0:10:50.880 them as the top four. Ohio State after the lost 0:10:50.880 --> 0:10:53.880 in Michigan drop from second to fifth. Giants getting healthy 0:10:53.880 --> 0:10:55.800 at the right time, big games if they want to 0:10:55.840 --> 0:10:58.360 make the playoffs. Starting Sunday against red hot Washington, and 0:10:58.360 --> 0:11:01.079 the Giants could be getting several starters back from injury, 0:11:01.080 --> 0:11:04.760 including rookie tackle Evan Neil and rookie tight end Daniel Bellinger. 0:11:05.040 --> 0:11:07.240 Has the US World Cup team gets ready for its 0:11:07.280 --> 0:11:11.119 games Saturday morning against the Netherlands. All eyes on Christian Polistics. 0:11:11.280 --> 0:11:14.840 Pelvis suffered a contusion in the collision with the Iranian 0:11:14.840 --> 0:11:16.800 goalie as he scored the only goal in that window. 0:11:16.840 --> 0:11:19.720 We're on ballistic post and don't worry. I'll be ready. 0:11:19.800 --> 0:11:22.319 As US teammate is Eunice Musa and brings a lot 0:11:22.360 --> 0:11:24.800 to the team. Great guy off the field, very good, 0:11:24.840 --> 0:11:27.560 nice guy. And then on the field everyone everyone sees 0:11:27.559 --> 0:11:30.880 his brilliance. Um, he's the right time, in the right space. 0:11:31.559 --> 0:11:35.480 So I mean, um no, very very happy that he's 0:11:35.520 --> 0:11:37.959 my teammate. It's a young US team and Musa is 0:11:38.000 --> 0:11:40.120 the youngest. He was born in the Bronx and yesterday 0:11:40.160 --> 0:11:43.800 he played on his twentieth birthday. John Stashar, Bloomberg Sports. 0:11:43.840 --> 0:11:46.520 John John, thanks very much and handed the open on 0:11:46.600 --> 0:11:50.040 Wall Street. Dal futures they just turned red down. Free 0:11:50.120 --> 0:11:53.120 points has to be e many futures four points higher 0:11:53.160 --> 0:11:57.040 and the instant futures are up thirty points. You are 0:11:57.120 --> 0:12:08.240 listening the Bloomberg Game three and the Bloomberg Sports Report, 0:12:08.240 --> 0:12:10.719 brought you by Audie. Don't let somebody else drive off 0:12:10.720 --> 0:12:12.840 of the Audie model. You've always wanted to visit your 0:12:12.880 --> 0:12:15.840 local trust Audie dealer to get behind the wheel of 0:12:15.840 --> 0:12:22.560 yours today, or visit Audie Offers dot com for more information, markets, 0:12:22.640 --> 0:12:25.720 headlines and breaking news. Twenty four hours a day at 0:12:25.760 --> 0:12:29.160 Bloomberg dot Com, the Bloomberg Business apt and at Bloomberg 0:12:29.200 --> 0:12:38.480 Quick Tape. This is a Bloomberg Business flash. Nathan Hagar 0:12:38.559 --> 0:12:41.040 futures are edging just a bit higher this morning. The 0:12:41.080 --> 0:12:45.280 dollar is slipping ahead of Fed Chair Powell's speech this afternoon. 0:12:45.280 --> 0:12:47.880 We checked the markets every fifteen minutes during the trading day. 0:12:47.880 --> 0:12:50.680 On Bloomberg SMP futures right now are up five point, 0:12:50.760 --> 0:12:54.440 Staff futures up ten, Nasdaq futures higher by twenty nine points. 0:12:54.440 --> 0:12:56.679 The tenure Treasury is up four thirty seconds the old 0:12:56.679 --> 0:12:59.719 three point field on the two year four point four 0:12:59.760 --> 0:13:02.920 seven percent. Nimex scruge moving higher, up two point six percent, 0:13:03.000 --> 0:13:06.240 or two dollars five cents, eighty dollars cents of baril 0:13:06.280 --> 0:13:08.880 for West Texas Intermedia now comex stoled up a half 0:13:08.880 --> 0:13:12.120 per center, nine dollars twenty cents at seventy nine announced. 0:13:12.240 --> 0:13:14.600 The euro one point zero three five zero against the dollar. 0:13:14.720 --> 0:13:16.840 The yen is at one thirty eight point nine three. 0:13:17.120 --> 0:13:20.079 Bitcoins up two point six percent at sixteen thousand, almost 0:13:20.080 --> 0:13:22.720 sixteen thousand, nine hundred dollars. That's a Bloomberg Business flash. 0:13:22.760 --> 0:13:25.160 And now here's Michael Barr with more on what's going 0:13:25.160 --> 0:13:27.960 on around the world. Michael, thank you very much. Nathan 0:13:28.040 --> 0:13:31.679 China's ruling Communist party has vowed to resolutely crack down 0:13:31.720 --> 0:13:36.120 on infiltration and sabotage activities by hostile forces. The statement 0:13:36.240 --> 0:13:40.120 follows the largest street demonstrations in decades over strict anti 0:13:40.240 --> 0:13:43.160 virus restrictions. The House will vote next week on the 0:13:43.200 --> 0:13:47.480 same sex marriage bill the Senate passed yesterday with bipartisan support. 0:13:47.760 --> 0:13:50.520 In the NBA, the next one, the Warriors lost in 0:13:50.520 --> 0:13:54.000 the NHL, The Islanders lost the Bruins and Capitals one 0:13:54.320 --> 0:13:57.920 at the World Cup. The US now faces the Netherlands Saturday. 0:13:58.120 --> 0:14:01.600 After beating around one nil global news twenty four hours 0:14:01.600 --> 0:14:04.160 a day on air and on Bloomberg Quick Take, powered 0:14:04.160 --> 0:14:07.320 by more than twenty seven hundred journalists and analysts more 0:14:07.320 --> 0:14:10.040 than a hundred twenty countries. I'm Michael Barr, and this 0:14:10.200 --> 0:14:13.480 is Bloomberg, John, Michael, thank you, six nineteen on Little Street. 0:14:13.520 --> 0:14:16.360 We are lying from the Bloomberg Interactor Broker's studios. This 0:14:16.640 --> 0:14:21.040 is Bloomberg Daybreak fed Share Jerome Powell discusses the economy 0:14:21.080 --> 0:14:23.840 and labor market during an event hosted by the Brookings 0:14:23.920 --> 0:14:27.600 Institution in Washington, and investors are looking for any hint 0:14:27.640 --> 0:14:31.160 of a moderation in interest rates. Let's find out more 0:14:31.200 --> 0:14:34.440 from Bloomberg's Mike McKee. He joins us this morning from 0:14:34.840 --> 0:14:39.000 the Nation's capital. UM. FED members haven't speaking lately. I'm 0:14:39.040 --> 0:14:41.680 not sure Mr Market has been listening, Mike. When it 0:14:41.680 --> 0:14:45.360 comes to the fedch here, Jerome Powell, they kind of 0:14:45.400 --> 0:14:49.360 have to listen, kind of sit up and take notice. Yeah, 0:14:49.400 --> 0:14:52.400 it's like you're all box your ears. UM. I don't 0:14:52.440 --> 0:14:54.400 think Jay Pal is gonna box anyone's ears today, but 0:14:54.440 --> 0:14:56.840 he would like to sort of stop a slide in 0:14:57.360 --> 0:15:01.520 financial conditions that has gotten underway in recent weeks as 0:15:01.560 --> 0:15:05.960 markets have improved a lot. The interesting question is why 0:15:06.240 --> 0:15:08.520 markets have improved a lot. Do they think it's because 0:15:08.600 --> 0:15:11.440 the FED is going to suddenly start cutting rates because 0:15:11.440 --> 0:15:13.680 we're going into recession, or do they think that inflation 0:15:13.720 --> 0:15:16.640 is going to come down faster? Uh. Fan can't do 0:15:16.680 --> 0:15:19.880 anything about what Mr Market thinks, but they can give 0:15:20.320 --> 0:15:23.840 some guidance as to what they think. And I think 0:15:24.480 --> 0:15:27.720 I think that what will probably see today is Poul 0:15:27.800 --> 0:15:30.480 reiterating as you mentioned, what a lot of other FED 0:15:30.560 --> 0:15:33.600 officials have been saying lately, we may do a fifty 0:15:33.600 --> 0:15:36.440 basis point move, which is slightly lower than the seventy 0:15:36.880 --> 0:15:40.520 we did the last four meetings. But we're not stopping yet. 0:15:40.520 --> 0:15:43.760 We're gonna keep raising rates. So, uh, keep your sheet 0:15:43.760 --> 0:15:48.040 belts buckled. What's your definition of a pivot? I think 0:15:48.080 --> 0:15:49.880 if I were defining it, it would be the FED 0:15:50.280 --> 0:15:54.520 would stop raising rates. We'd be into a different regime 0:15:54.720 --> 0:16:00.000 a hold hold rates for ex period of time around 0:16:00.160 --> 0:16:04.720 than just slowing the pace of increase to fifty basis points, 0:16:04.760 --> 0:16:08.520 because that's still that's still a lot. I mean Historically, uh, 0:16:08.600 --> 0:16:11.680 those a fifty basis point move was considered rare. Now 0:16:12.120 --> 0:16:14.880 for some people in the markets, that's considered the Fed 0:16:15.480 --> 0:16:20.240 turning dove. Yeah, slowish, slowing the pace is a doubbish tone. 0:16:20.440 --> 0:16:23.200 That's kind of a that's a new take on things. Um, 0:16:23.280 --> 0:16:27.800 does Jerome Pale have to torpedo the labor market? This 0:16:27.880 --> 0:16:30.400 is a speech that is also going to take up 0:16:30.440 --> 0:16:34.160 the the the labor market as well. Right, Yes, he's 0:16:34.160 --> 0:16:37.320 say speaking on the labor market very timely, since the 0:16:37.400 --> 0:16:40.440 jobs report is on Friday, we get the Jolts report 0:16:40.560 --> 0:16:44.800 later this morning, which he'll have in hand when he speaks, 0:16:44.800 --> 0:16:47.080 And that's been the fed's fundamental argument that the labor 0:16:47.120 --> 0:16:50.160 market is so tight because there are so many jobs open, 0:16:50.680 --> 0:16:53.560 that they don't have to torpedo the labor market to 0:16:53.600 --> 0:16:56.440 get where they need to go. They need to unemployment 0:16:56.480 --> 0:17:00.280 a little bit higher as demands slows, but they don't 0:17:00.280 --> 0:17:02.960 think they need to go anywhere near recession levels. Now 0:17:03.080 --> 0:17:05.520 the jury is out on that. History says they can't 0:17:05.560 --> 0:17:08.439 do it. But history has been no good guide to 0:17:08.600 --> 0:17:11.560 where we are coming out of this pandemic. So educated, 0:17:11.800 --> 0:17:15.480 where is the inflation coming from? What's the source? Well, 0:17:15.480 --> 0:17:18.600 it's widespread, and that's the fans problem. Now. Originally it 0:17:18.680 --> 0:17:22.520 was in the so called transitory areas UH used cars, 0:17:23.240 --> 0:17:27.240 airline fares, things that had been repressed during the UM pandemic, 0:17:27.280 --> 0:17:30.200 and we're in short supply and therefore the price went up. 0:17:30.520 --> 0:17:32.320 But then it started to broaden out. We got the 0:17:32.400 --> 0:17:37.240 energy shock from the Russian invasion, we got UH. Basically 0:17:37.240 --> 0:17:40.960 the service industries for the most part, everybody but particularly 0:17:40.960 --> 0:17:44.399 shervis industries had trouble hiring workers, so they had to 0:17:44.520 --> 0:17:47.679 raise pay or offer bonuses, and they raised prices to 0:17:48.359 --> 0:17:51.680 accommodate that, and so it's been a broad base change 0:17:51.680 --> 0:17:55.480 and that's that's the feds frustration is the some of 0:17:55.520 --> 0:17:57.800 the tools that well, they have only really the one 0:17:57.840 --> 0:18:01.679 tool of raising industrates don effects of that doesn't affect energy. 0:18:01.920 --> 0:18:06.200 Isn't going to significantly slow hiring UH in the case 0:18:06.800 --> 0:18:09.200 that we're seeing now where it's a shortage of workers 0:18:09.320 --> 0:18:13.320 as opposed to UH slowing of demand. What's the market 0:18:13.320 --> 0:18:15.800 betting on the terminal rate? Where when they're going to 0:18:15.920 --> 0:18:19.679 stop raising rates? And does J Powell today have to 0:18:20.200 --> 0:18:22.960 adjust that view for the markets? But I think he'd 0:18:22.960 --> 0:18:25.040 like to adjust the view. He's been saying it since 0:18:25.119 --> 0:18:28.399 the last press conference on November two, that the terminal 0:18:28.480 --> 0:18:30.120 rate is going to go higher, and the market has 0:18:30.119 --> 0:18:33.680 pushed it up to roughly five percent right now. Some 0:18:33.800 --> 0:18:36.119 members of the Fed thing that need to go a 0:18:36.119 --> 0:18:39.199 little farther than that five and a quarter percent to 0:18:39.240 --> 0:18:42.760 five and a half percent. But I don't think anybody 0:18:42.800 --> 0:18:45.080 at the FED is locked in on that yet. I 0:18:45.119 --> 0:18:47.680 think five percent they would tell you they're pretty much 0:18:47.880 --> 0:18:50.400 locked in on, and they'll get closer to it at 0:18:50.440 --> 0:18:54.040 the next meeting. But beyond that, it will depend on 0:18:54.080 --> 0:18:56.440 the evolution of the economy. And I think Powell will 0:18:56.480 --> 0:18:58.760 make the case that we're not where we need to be. 0:18:58.880 --> 0:19:01.240 We will be going higher, but we can't put a 0:19:01.320 --> 0:19:04.560 number on it yet remind everybody where we are. Since 0:19:04.560 --> 0:19:07.760 we're so data dependent, what is the data telling us? Lightly? 0:19:08.680 --> 0:19:11.080 Data telling us lately that the economy is still in 0:19:11.080 --> 0:19:12.920 pretty good shape. I mean, we do get a new 0:19:13.000 --> 0:19:17.000 jobs report this week. Indications are it will still reflect 0:19:17.080 --> 0:19:21.040 strength in the labor market and that has contributed to 0:19:21.280 --> 0:19:24.840 strength over all. That and the cash cushion people built 0:19:24.920 --> 0:19:28.199 up during the pandemic have provided a cushion to demand. 0:19:28.240 --> 0:19:31.280 People have been spending down what they have and they 0:19:31.320 --> 0:19:35.359 also been spending their newly higher paychecks, and that's keeping 0:19:35.400 --> 0:19:40.679 things going. We're seeing reasonable retail sales, they haven't significantly 0:19:40.760 --> 0:19:44.560 dropped off a cliff, and we're seeing companies continue to spend. 0:19:45.359 --> 0:19:49.440 Michael Supplies appreciated. Bloomberg's Mike McKee joining us line from 0:19:49.480 --> 0:19:52.840 Washington this morning and Bloomberg Radio and TV. We'll carry 0:19:53.400 --> 0:19:56.200 Jerome pal speech live that starts to right around one 0:19:56.280 --> 0:19:59.920 three walls free time. You're listening to Bloomberg day Break 0:20:06.119 --> 0:20:08.480 and day Break brought you by the Jewish Communal Fund 0:20:08.560 --> 0:20:11.040 j C f's Doughtter Advice Fund is the smart at 0:20:11.040 --> 0:20:14.000 tax efficient way to manage your philanthropy. Open to j 0:20:14.119 --> 0:20:17.360 c F now to lock in a two tax deduction. 0:20:17.680 --> 0:20:23.280 Visit j c F n Y dot org. Broadcasting live 0:20:23.440 --> 0:20:27.399 from the Bloomberg Interactive Brokery Studio in New York, Bloomberg 0:20:27.400 --> 0:20:31.480 E Living Freedom to Washington, d C, Bloomberg to Boston, 0:20:31.600 --> 0:20:34.840 Bloomberg one O six one to San Francisco, Bloomberg No. 0:20:35.080 --> 0:20:37.960 Sixty to the Country, Sirius XM to the one ninet 0:20:38.280 --> 0:20:41.440 and around the globe the Bloomberg Business at and Bloomberg 0:20:41.520 --> 0:20:49.840 Radio dot com. This is Bloomberg day Break and A 0:20:49.920 --> 0:20:52.439 six thirty on Wall Street. Good morning, I'm John Tucker. 0:20:52.520 --> 0:20:54.760 I'm Nathan Hager. We're about three hours from the open 0:20:54.760 --> 0:20:56.879 of US training. Time for the five things you need 0:20:56.920 --> 0:20:58.560 to know to start your day. Brought to you by 0:20:58.640 --> 0:21:01.160 I b k R Investment in Eiser switched to Interactive 0:21:01.160 --> 0:21:04.720 Brokers for lowest cost global trading and turnkey custody solutions, 0:21:04.720 --> 0:21:07.560 no ticket charges and no conflicts of your interests at 0:21:07.600 --> 0:21:11.080 ib KR dot com slash r I A we await 0:21:11.119 --> 0:21:13.360 remarks from FED chair J Pal Right in the middle 0:21:13.400 --> 0:21:16.280 of the trading day. Bloomberg's Michael McKee has more on 0:21:16.320 --> 0:21:19.560 what to expect which j Powell. Do the markets get. 0:21:19.600 --> 0:21:21.760 Do they get the one who came out on November 0:21:21.800 --> 0:21:23.680 two at the end of the last FED meeting and 0:21:23.840 --> 0:21:26.679 was hawkish at least that's how his remarks were interpreted. 0:21:26.880 --> 0:21:29.280 Or do we get kind of the Fed speak that 0:21:29.320 --> 0:21:31.840 we got out of the minutes last week. Probably he's 0:21:31.840 --> 0:21:34.240 going to lay the predictor for a fifty basis point move. 0:21:34.440 --> 0:21:37.200 Bloomberg's Mike McKee says. Powe will also discuss the labor 0:21:37.240 --> 0:21:40.440 market ahead of Friday's jobs report. Bloomberg Radio and Television 0:21:40.440 --> 0:21:43.080 will bring you j Pal's full speech live around one 0:21:43.119 --> 0:21:45.639 thirty pm today, will Street Time and Nathan. At the 0:21:45.640 --> 0:21:48.720 same time, we continue to hear hawkish remarks coming out 0:21:48.800 --> 0:21:51.720 of the Fed, and Bloomberg Steve Rappaport joins us live 0:21:51.760 --> 0:21:54.600 with the tails on that. Steve, Good morning, Good morning, John, 0:21:54.600 --> 0:21:57.800 and Nathan St. Louis. FED President Jim Bullard says even 0:21:57.920 --> 0:22:01.320 higher rates are vital to further combatant inflation. He estimates 0:22:01.320 --> 0:22:03.359 a rate of at least four point nine percent in 0:22:03.400 --> 0:22:06.040 the short term, but a former FED colleague thinks that's 0:22:06.080 --> 0:22:09.240 not enough. Former New York Bed President, then Bloomberg opinion 0:22:09.280 --> 0:22:11.879 columnist Bill Dudley predicts the Central Bank will pause to 0:22:11.920 --> 0:22:14.919 assess the situation once interest rates reads five and a 0:22:15.000 --> 0:22:17.520 quarter to five and a half percent. Live in New York, 0:22:17.560 --> 0:22:20.359 I'm Steve Rappaport, Bloomberg Daybreak. All right, Steve, thank you. 0:22:20.400 --> 0:22:22.520