WEBVTT - Bloomberg Daybreak: October 12, 2022 - Hour 1 (Radio) 0:00:03.080 --> 0:00:06.199 Live from the Bloomberg Interactive Berger Studios. This is Bloomberg 0:00:06.280 --> 0:00:09.840 Daybreak for Wednesday, October twelve, two. Coming up the shower, 0:00:09.960 --> 0:00:13.680 President Biden says a slight recession is possible in the US. 0:00:13.800 --> 0:00:15.960 We're a tough talk from the FED on fighting inflation. 0:00:16.079 --> 0:00:19.000 We speak with Cleveland Fed President Lorettamester. The Bank of 0:00:19.000 --> 0:00:22.320 England confirms it will end emergency bond buying on Friday, 0:00:22.480 --> 0:00:26.080 and Intel plans thousands of job cuts. New Jersey says 0:00:26.079 --> 0:00:30.040 New York City's congestion pricing charts threatened, Sport Authority revenue 0:00:30.280 --> 0:00:33.879 plus NASA successfully moves an asteroid off its over. I'm 0:00:33.920 --> 0:00:37.280 Michael barn Moore Ahead. I'm John Stash Howard Sports Game 0:00:37.320 --> 0:00:39.480 one to the Yankees day beat Cleveland at the state 0:00:39.479 --> 0:00:41.720 of the End of the Rangers one there sees it opener. 0:00:44.520 --> 0:00:48.159 That's all stred ahead on Bloomberg Daybreak. On Bloomberg he 0:00:48.240 --> 0:00:51.640 levened three on New York Bloomberg ninety nine one, Washington 0:00:51.760 --> 0:00:55.360 d C Bloomberg one oh six one, Boston Bloomberg nine 0:00:55.400 --> 0:00:59.600 sixties and Francisco Sirius XM one nine team and around 0:00:59.640 --> 0:01:02.400 the World Old on Bloomberg Radio Dot com and via 0:01:02.440 --> 0:01:09.160 the Bloomberg Business App. And good morning. I'm Tar at Moscow. 0:01:09.319 --> 0:01:11.759 I'm Nathan Hagar. Bloomberg Daybreak is brought to you by 0:01:11.920 --> 0:01:15.800 se I. Imagine your asset management firms operational infrastructure as 0:01:15.840 --> 0:01:18.800 a competitive advantage. Let s e I show you how 0:01:19.120 --> 0:01:21.840 at se I C dot com, slash, I M S 0:01:22.160 --> 0:01:24.920 and U S Dock Index futures are higher this morning. 0:01:24.920 --> 0:01:26.960 It's five o one on Wall Street and we checked 0:01:26.959 --> 0:01:30.000 the markets every fifteen minutes throughout the trading day. On Bloomberg, 0:01:30.120 --> 0:01:32.479 s and P Future is up seventeen points down, futures 0:01:32.480 --> 0:01:35.440 of a hundred ten nasdack Future is up sixty eight 0:01:35.440 --> 0:01:37.600 and the ten year treasury of five thirty seconds. You 0:01:37.680 --> 0:01:40.600 have three point nine two per cent at yield on 0:01:40.600 --> 0:01:43.720 the two years at four point to nine percent, and 0:01:43.800 --> 0:01:46.880 I'm ex screwed. Oil is down two tenths of a percent. Nathan. 0:01:46.920 --> 0:01:48.440 All right, Karen, we'll have more on the markets in 0:01:48.520 --> 0:01:50.880 a minute. But first, President Biden is weighing in on 0:01:50.960 --> 0:01:53.800 the economy. As investors, c e O S and economists 0:01:53.800 --> 0:01:57.240 talk about a possible recession, so is the President. I 0:01:57.280 --> 0:01:59.120 don't think there will be your recession if it is 0:01:59.120 --> 0:02:02.080 it will be a very procession, that is will move 0:02:02.160 --> 0:02:07.200 down slightly. Well, look, think about what's happened. We have 0:02:07.280 --> 0:02:10.320 done more with in a better position than any other 0:02:10.800 --> 0:02:13.720 major country in the world. In an interview with CNN 0:02:13.800 --> 0:02:16.639 s Jake Tapper, the President also voiced anger with Saudi 0:02:16.720 --> 0:02:20.520 Arabia and oil production cuts from OPEC. Plus he's accusing 0:02:20.560 --> 0:02:23.040 the Kingdom of aligning itself with Russia and vows to 0:02:23.080 --> 0:02:25.919 engage with lawmakers to punish ri Odd, there's going to 0:02:25.960 --> 0:02:28.960 be some consequences for what they've done with Russia. What 0:02:29.080 --> 0:02:32.280 kind of consequences, Venenda says, suspend all arms sales? Is 0:02:32.280 --> 0:02:35.359 that something you'd consider. I'm not going to get into 0:02:35.440 --> 0:02:38.000 what i'd considering what I'm having mind, but there will 0:02:38.040 --> 0:02:41.080 be There will be consequences, the President invite and suggests 0:02:41.080 --> 0:02:44.480 those consequences likely will not come until after next month's 0:02:44.520 --> 0:02:48.079 mid term elections. Well, tough talk on inflation continues from 0:02:48.080 --> 0:02:50.600 the fat Nathan. The latest waging in is Cleveland Fed 0:02:50.639 --> 0:02:53.200 President Loretta Master, and she tells us the bank is 0:02:53.240 --> 0:02:57.360 definitely not done raising rates. The real issue is we 0:02:57.400 --> 0:03:00.919 need to do more. We have not seen inflation moved 0:03:00.960 --> 0:03:04.160 back down um and we need to see that because 0:03:04.360 --> 0:03:07.679 leaving inflation where it is, if it continues, there's a 0:03:07.760 --> 0:03:10.639 higher chance that it does become embedded in the economy. 0:03:11.000 --> 0:03:13.440 Cleveland Fed, President of the Reddemester, made the comments in 0:03:13.480 --> 0:03:16.200 an interview with Bloomberg's caathling Hey. Stay tuned for more 0:03:16.200 --> 0:03:19.400 of that conversation coming up shortly on Bloomberg Daybreak. The 0:03:19.400 --> 0:03:22.560 FEDS still has its critics out there. Karen including Muhammad 0:03:22.600 --> 0:03:26.639 al Arian, the Alliance chief economic advisor and Bloomberg opinion columnists, 0:03:26.639 --> 0:03:29.399 says aggressive tightening by the Central Bank will not only 0:03:29.480 --> 0:03:32.040 damage the U s economy, but also the rest of 0:03:32.080 --> 0:03:34.519 the world. This is going to be a reminder a 0:03:34.560 --> 0:03:37.400 little bit of October without an an eight, when people 0:03:37.480 --> 0:03:40.440 gather in Washington and realize we have a global problem 0:03:40.560 --> 0:03:43.880 and it needs global global solution. Muhammad al Aria made 0:03:43.880 --> 0:03:47.040 those comments to Jonathan Farow on Bloomberg Surveillance Ketch, the 0:03:47.080 --> 0:03:50.200 program weekdays at seven am Wall Street Time on Bloomberg 0:03:50.280 --> 0:03:52.880 Radio and Television. Coming up to day, Nathan, we get 0:03:52.880 --> 0:03:55.600 the first is several key economic readings this week. Let's 0:03:55.640 --> 0:03:59.240 get the details from Bloomberg Economics. Corresponded Michael McKee. The 0:03:59.240 --> 0:04:02.080 world is watching the US Federal Reserve raising rates to 0:04:02.160 --> 0:04:05.120 fight inflation has an impact on markets everywhere, so this 0:04:05.160 --> 0:04:08.560 week's inflation reports are key for markets. Wednesday, the U 0:04:08.640 --> 0:04:12.560 S reports on producer prices. The bad News Economist forecast 0:04:12.600 --> 0:04:15.880 factory gate prices rose last month. Also Wednesday, the FED 0:04:15.960 --> 0:04:19.279 releases the minutes of its September twenty one meeting. Investors 0:04:19.320 --> 0:04:22.320 will parse those for clues to how fast the central 0:04:22.320 --> 0:04:26.000 Bank thinks inflation will come down, which may influence how 0:04:26.120 --> 0:04:29.040 high rates will go and for how long. Michael McKee 0:04:29.080 --> 0:04:32.440 Bloomberg Daybreak, All right, Mike, thanks staring. Inflation and higher 0:04:32.440 --> 0:04:35.200 interest rates have seen yields rise, and stocks are trading 0:04:35.240 --> 0:04:38.520 at their lowest levels in almost two years. Still, Morgan Stanley, 0:04:38.560 --> 0:04:41.680 chief US equity strategist Mike Wilson says it could be 0:04:41.760 --> 0:04:44.040 too early to call a bottom. I think the bomb 0:04:44.080 --> 0:04:47.320 market is probably there. Uh and but unfortunately, kind of 0:04:47.360 --> 0:04:49.880 like stocks, the bomb market used to be told by 0:04:49.920 --> 0:04:52.440 the Fed that they're done right, And that's just the 0:04:52.520 --> 0:04:54.359 dance we're in right now. It's the hardest part of 0:04:54.360 --> 0:04:57.039 the cycle to trade. We think we know we're going 0:04:57.040 --> 0:04:59.360 in equities. We think deals are probably flows to topping 0:05:00.200 --> 0:05:02.120 We've got to go to the earnings revision still, which 0:05:02.120 --> 0:05:05.960 is why you can't see that that starts about Stanley. 0:05:06.040 --> 0:05:09.599 Chief US secuity strategist Mike Wilson says inventory, labor costs 0:05:09.640 --> 0:05:12.720 and other latent expenses are wreaking havoc on company cash 0:05:12.760 --> 0:05:15.640 flow well in Europe. This morning, Nathan questions continue to 0:05:15.680 --> 0:05:17.800 swirl over whether the Bank of England will and its 0:05:17.800 --> 0:05:20.720 emergency bond buying program on Friday, and we go live 0:05:20.800 --> 0:05:23.480 to Lineing and get the latest with Bloomberg's un parts. 0:05:23.520 --> 0:05:25.960 Good morning, you Win, Good morning Karen and Nathan. It 0:05:26.000 --> 0:05:28.800 has been a rocky few hours of watches of UK 0:05:28.920 --> 0:05:31.360 assets this morning, but by giving them now can firm 0:05:31.520 --> 0:05:35.240 it will end its emergency bond buying program this Friday. 0:05:35.360 --> 0:05:37.680 That was after an earlier Financial Times report that the 0:05:37.680 --> 0:05:41.400 bank had told lenders in private there could be an extension. 0:05:41.920 --> 0:05:45.640 UK GDP meanwhile, unexpectedly shrinking in August for the second 0:05:45.720 --> 0:05:48.640 time in three months, the north point three percent drop 0:05:48.680 --> 0:05:52.240 in output driven by a sharp decline in manufacturing, raising 0:05:52.240 --> 0:05:54.719 the possibility of the country is now in a recession. 0:05:54.920 --> 0:05:56.760 In London, I'm you and part spin Bog day break. 0:05:56.839 --> 0:05:58.360 Thanks you and back here in the U s A. 0:05:58.400 --> 0:06:01.159 Big companies looking at a big red action in head count. 0:06:01.240 --> 0:06:03.960 It looks like Intel could be slashing jobs in an 0:06:03.960 --> 0:06:07.360 effort to cut costs. We get more from Bloomberg's Doug Krisner. 0:06:07.640 --> 0:06:10.039 We're told the job cuts will likely number in the 0:06:10.120 --> 0:06:12.760 thousands and will be announced as early as next month. 0:06:12.960 --> 0:06:16.479 Some divisions, including sales and marketing, could see cuts, affecting 0:06:16.480 --> 0:06:20.000 about twenty percent of staff. As of July, Intel had 0:06:20.040 --> 0:06:23.599 a hundred thirteen thousand, seven hundred employees. The company is 0:06:23.600 --> 0:06:27.240 facing a steep decline in demand for PC processors. Its 0:06:27.240 --> 0:06:30.440 main businesses struggled to win back market share lost to 0:06:30.600 --> 0:06:34.919 rivals like Advanced micro Devices. In July, Intel said two 0:06:34.960 --> 0:06:39.120 sales would be about eleven billion dollars lower than previously forecast. 0:06:39.200 --> 0:06:41.880 In New York, I'm Doug Prisner, Bloomberg Daybreak, All right, Doug, 0:06:41.920 --> 0:06:44.119 thank you. And in Europe this morning, Shares a credit 0:06:44.120 --> 0:06:47.160 sueeze or down three percent. Sources say that Justice Department 0:06:47.200 --> 0:06:50.039 is investigating whether the Swiss Lander continue to help US 0:06:50.120 --> 0:06:55.279 clients hide assets from authorities. The Bank, the Bank pain A. 0:06:55.680 --> 0:06:58.159 The bank paid rather a multibillion dollar fee over a 0:06:58.200 --> 0:07:01.560 similar issue. Eight years ago had pledge to tackle the issue. 0:07:01.760 --> 0:07:04.560 Al Right. Futures right now moving higher. Karin SMP futures 0:07:04.560 --> 0:07:08.000 are up twenty two points, Stown futures up and Nastack 0:07:08.080 --> 0:07:10.840 futures are higher by eighty one points. The tenure treasury 0:07:10.920 --> 0:07:13.920 is up five thirty seconds. The yield on the benchmark 0:07:14.000 --> 0:07:17.880 three point nine. Local headlines and a check of sports 0:07:17.920 --> 0:07:24.440 up next. This is Bloomberg at south five oh seven 0:07:24.440 --> 0:07:26.520 on Wall Street ward fifty eight degrees in Central Park. 0:07:26.600 --> 0:07:29.119 Got an accident on the southbound New Jersey Turnpike truck 0:07:29.200 --> 0:07:32.360 lanes spikes at third team. Details coming up in traffic. 0:07:32.400 --> 0:07:34.520 First Michael Barr with more on what's going on in 0:07:34.560 --> 0:07:37.600 New York and around the world. Good morning, Michael, Good morning, Nathan. 0:07:37.600 --> 0:07:40.840 New Jersey Governor Phil Murphy has put up another potential 0:07:40.920 --> 0:07:44.960 hurt older Block Manhattan traffic congestion pricing with an inquiry 0:07:45.080 --> 0:07:48.400 into the potential revenue hit to the Port Authority of 0:07:48.400 --> 0:07:51.440 New York and New Jersey. Murphy says the plan would 0:07:51.440 --> 0:07:55.600 cut bridge and tunnel toll collections. Murphy wrote the comment 0:07:55.720 --> 0:07:59.480 to Port Authority Executive Director Richard Cotton, and in October 0:07:59.520 --> 0:08:03.120 eleventh letter obtained by Blueberg News. He says any reduction 0:08:03.160 --> 0:08:06.400 in the Port Authority capital plan because of congestion pricing 0:08:06.680 --> 0:08:10.200 should not come at the expense of any New Jersey projects. 0:08:10.560 --> 0:08:14.200 The letter is Murphy's latest attempt to quash the congestion 0:08:14.240 --> 0:08:17.440 pricing plan to raise about a billion dollars annually for 0:08:17.520 --> 0:08:19.640 the m t A or at least the land On 0:08:19.720 --> 0:08:22.960 the campaign trail, Senate Minority Leader Mitch McConnell says the 0:08:23.000 --> 0:08:26.960 party will stick with Herschel Walker as their GOP candidate 0:08:26.960 --> 0:08:30.560 for Senate in Georgia. Walker told ABC he denies a 0:08:30.600 --> 0:08:33.800 woman's claims that the former NFL star once urged her 0:08:33.840 --> 0:08:36.360 to have an abortion. I know nothing about an abortion. 0:08:36.440 --> 0:08:38.760 I knew us a lie and I said it was 0:08:38.800 --> 0:08:42.120 a lie, and I just move on. Walker's campaign is 0:08:42.200 --> 0:08:45.480 rocked by allegations that he reimbursed an ex girlfriend for 0:08:45.520 --> 0:08:48.640 an abortion. In two thousand nine, New York City Mayor 0:08:48.760 --> 0:08:52.800 Eric Adams signed legislation barring concealed guns both legal and illegal, 0:08:52.880 --> 0:08:56.600 from Times Square. Mayor Eric Adams says it's essential for 0:08:56.640 --> 0:08:59.480 the city to safeguard the rights of the tourists and 0:08:59.679 --> 0:09:03.200 visits who could be coming through the area looking for 0:09:03.520 --> 0:09:06.240 save fund on their trips to the city. We are 0:09:06.360 --> 0:09:11.400 projected to receive fifties six million tourists UH in this city. 0:09:11.640 --> 0:09:14.120 Many of them come through Times Square has become a 0:09:14.160 --> 0:09:17.520 signature of this city, and we want to make sure 0:09:17.559 --> 0:09:21.200 that this saved. The decision comes following the summer's Supreme 0:09:21.240 --> 0:09:24.920 Court decision or to overturn the state's law requiring a 0:09:25.000 --> 0:09:28.600 license to carry concealed weapons in public places. NASA says 0:09:28.640 --> 0:09:31.680 the dark spacecraft that crashed into a small harmless asteroid 0:09:31.679 --> 0:09:34.920 two weeks ago has succeeded in shifting the space rocks orbit. 0:09:35.280 --> 0:09:38.960 NASA Administrator Bill Nelson. Now the team is confirmed that 0:09:39.040 --> 0:09:46.840 the spacecraft's impact altered demorphous orbit around Didimos by thirty 0:09:46.840 --> 0:09:51.319 two minutes. NASA's Bill Nelson. Global News twenty four hours 0:09:51.320 --> 0:09:53.840 a day on air and on Bloomberg quick Take, powered 0:09:53.840 --> 0:09:56.959 by more than twenty seven hundred journalists analysts in more 0:09:56.960 --> 0:09:59.480 than a hundred twenty countries. I'm Michael Barr, and this 0:09:59.559 --> 0:10:07.360 is bloom Burg. Neither all right, Michael, Thank you, Almost 0:10:07.360 --> 0:10:09.840 five ten on Wall Street time for the Bloomberg Sports Update. 0:10:09.880 --> 0:10:12.400 Good morning, John Sten Sharn, Morning eighth in the Yankees 0:10:12.480 --> 0:10:15.040 signed Garrett Cole to win big games in October didn't 0:10:15.080 --> 0:10:16.800 happen last year. He got roughed up in a one 0:10:16.840 --> 0:10:19.360 game playoff in Boston. But Cole pitched like an ace 0:10:19.440 --> 0:10:21.600 last night at the Stadium in six and a third, 0:10:22.040 --> 0:10:24.439 allowed just one run, struck at eighth. The bullpen of 0:10:24.559 --> 0:10:27.600 question mark heading to the postseason. It did its job, 0:10:27.640 --> 0:10:30.240 getting the last eight out. Yankees took Game one from 0:10:30.240 --> 0:10:33.000 Cleveland four to one, home runs for Harrison Bader his 0:10:33.080 --> 0:10:35.800 first ever in Prince Ritz and then Anthony Rizzo along 0:10:35.880 --> 0:10:38.600 to run shot. Game two scheduled for tomorrow night, although 0:10:38.679 --> 0:10:40.840 rain is in the fourthcast. High drama on the other 0:10:40.880 --> 0:10:43.640 American League series. Seattle was coming off a win in 0:10:43.640 --> 0:10:45.760 Toronto where the Mariners came back from an eight to 0:10:45.840 --> 0:10:48.720 one defensit. This time they had the lead they got 0:10:48.760 --> 0:10:51.400 to justin Verlander. In Houston, they led Ford and nothing 0:10:51.480 --> 0:10:54.520 later seven to three. Seattle was one out from victory 0:10:54.760 --> 0:11:07.280 the O one and Alberis built it hold run over 0:11:08.160 --> 0:11:15.680 the Vision series. Baby Amy to call used seven. Dodgers 0:11:15.760 --> 0:11:17.559 beat the Padres in l A five to three. The 0:11:17.600 --> 0:11:20.480 Phillies and the Surprise took Game one in Atlanta seven 0:11:20.520 --> 0:11:23.319 to six. Opendy night for the Rangers. Little payback on 0:11:23.520 --> 0:11:25.800 Tampa Bay, who house to them four months ago in 0:11:25.840 --> 0:11:28.800 the playoffs at to go to Meeking's manage sports shorthanded, 0:11:29.160 --> 0:11:31.320 then on the power play Blue Shirts wants me to walk. 0:11:31.600 --> 0:11:34.000 Giants are back from London, but their punter is not. 0:11:34.240 --> 0:11:36.760 Jamie Gallant is a native of Scotland, came to live 0:11:36.800 --> 0:11:38.480 in the US while in high school. He has stuck 0:11:38.520 --> 0:11:42.000 in England with a visa issue. Giants expect him back 0:11:42.040 --> 0:11:45.160 in time to punt on Sunday against Baldwin. John Stash 0:11:45.360 --> 0:11:48.719 of Bloomberg Sports All right, John, thank USMP futures are 0:11:48.720 --> 0:11:50.880 now at plenty two points down, futures up a hundred 0:11:50.920 --> 0:11:54.080 fifty one, nestack futures up eighty six points ten, Your 0:11:54.120 --> 0:11:57.320 treasuries up four thirty seconds, the yield three point nine 0:11:57.400 --> 0:12:01.240 to per cent. Cleveland fed President low Read Amester next 0:12:01.440 --> 0:12:04.120 on the path ahead for the Central Bank. This is 0:12:04.280 --> 0:12:09.160 Bloomberg Bloomberg eleven three or weather. Morning sun will be 0:12:09.559 --> 0:12:11.960 followed by increasing clouds this afternoon and a high year 0:12:12.000 --> 0:12:14.959 seventy degrees rain Tomorrow breezy as well with the high 0:12:14.960 --> 0:12:17.520 in year seventy back in the sunshine on Friday. Right 0:12:17.520 --> 0:12:24.240 now eight in Central Park markets, headlines and breaking news 0:12:24.360 --> 0:12:26.959 twenty four hours a day at Bloomberg dot Com, the 0:12:27.040 --> 0:12:30.520 Bloomberg Business and at Bloomberg Quick Take. This is a 0:12:30.559 --> 0:12:40.480 Bloomberg Business flash and I'm Karen Moscow. And futures this 0:12:40.640 --> 0:12:43.599 morning are higher. The pound is trimming games after the 0:12:43.640 --> 0:12:46.040 Bank of England confirmed it will end its emergency bond 0:12:46.040 --> 0:12:48.439 buying program on Friday. And we checked the markets every 0:12:48.480 --> 0:12:51.480 fifteen minutes throughout the trading day on Bloomberg Right now, 0:12:51.600 --> 0:12:54.599 SMP futures are up twenty seven points down, futures of 0:12:54.679 --> 0:12:58.400 a D eighty and nasday features up. The decks in 0:12:58.480 --> 0:13:00.679 Germany is at three tenths of a percent, the cap 0:13:00.800 --> 0:13:03.440 in Paris up about half percent, and the foot See 0:13:03.440 --> 0:13:05.360 one hundred up a third of up percent. The n 0:13:05.520 --> 0:13:07.839 K to twenty five in Japan little change today with 0:13:07.920 --> 0:13:10.040 the Hank Sing in Hong Kong fell about eight tenths 0:13:10.080 --> 0:13:13.360 of uppercent. Can your treasury up six thirty seconds, you'll 0:13:13.400 --> 0:13:15.360 three point nine two percent. The yield on the two 0:13:15.440 --> 0:13:18.559 year four point to eight percent. NIMEX screwed oil is 0:13:18.640 --> 0:13:20.600 up tenth of a percent or eleven cents at eighty 0:13:20.679 --> 0:13:23.560 nine dollars forty seven cents of barrel comes goal down 0:13:23.600 --> 0:13:25.920 about six tenths of upper cent or nine dollars forty 0:13:26.000 --> 0:13:29.760 cents at sixteen seventy six seventy announce the euro point 0:13:29.920 --> 0:13:33.040 nine seven against the dollar, the British found one point 0:13:33.080 --> 0:13:35.520 one zero to eight and the end one forty six 0:13:35.600 --> 0:13:37.800 point four zero. And looking at a bitcoin, it's up 0:13:37.800 --> 0:13:40.720 about three quarters of a percent and nineteen thousand, one 0:13:40.800 --> 0:13:43.400 hundred sixty dollars today. We do have a reading on 0:13:43.520 --> 0:13:46.800 inflation to lookout for the Producer Price Index thirty Wall 0:13:46.920 --> 0:13:49.559 Street Time. Then at two is the minutes from the 0:13:49.600 --> 0:13:53.120 FEDS the latest meeting. That's a Bloomberg business flash. Now 0:13:53.160 --> 0:13:55.640 here's Michael Barr with Moore on what's going on around 0:13:55.640 --> 0:13:58.400 the world. Michael, good morning, Good morning, Karen. President Joe 0:13:58.440 --> 0:14:02.160 Biden voiced his fury with Audi Arabia over OPEC oil 0:14:02.200 --> 0:14:06.199 production cuts Tuesday, accusing the kingdom of allying itself with 0:14:06.400 --> 0:14:09.679 Russia and vowing to engage with US lawmakers clamoring to 0:14:09.760 --> 0:14:14.040 punish Riad. Biden, speaking to CNN, says there's going to 0:14:14.120 --> 0:14:17.520 be some consequences for what they've done with Russia. The 0:14:17.600 --> 0:14:21.200 Supreme Court will not consider restricting abortion further after its 0:14:21.280 --> 0:14:23.840 June ruling that overturned Roe v. Wade, at least for now. 0:14:24.360 --> 0:14:27.200 The conservative leaning Court decline yesterday to hear a case 0:14:27.280 --> 0:14:30.760 they would have granted constitutional rights to embryos and fetuses. 0:14:31.200 --> 0:14:33.960 In baseball, the Yankees one game one of their ads 0:14:34.000 --> 0:14:36.760 against the Guardians for one. In hockey, the Rangers won 0:14:36.800 --> 0:14:39.800 their season opener. Global News twenty four hours a day 0:14:40.000 --> 0:14:43.000 on air and on Bloomberg quick Take, powered by more 0:14:43.080 --> 0:14:45.800 than twenty seven d journalists and analysts in more than 0:14:45.840 --> 0:14:48.280 one hundred twenty countries. How Michael Barr And this is 0:14:48.360 --> 0:14:51.360 Bloomberg NACOLN. Thanks Michael. It's almost five twenty on Wall 0:14:51.400 --> 0:14:54.720 Street Live from the Bloomberg Interactive Broker Studios. This is 0:14:54.800 --> 0:14:58.440 Bloomberg Daybreak. Chatter from the Fed continues to suggest the 0:14:58.520 --> 0:15:02.680 central Bank will continue viking rates aggressively. Cleveland Fed President 0:15:02.760 --> 0:15:05.400 Loretta Mester says more work needs to be done to 0:15:05.480 --> 0:15:08.800 slow inflation. It's an indication she thinks interest rates need 0:15:08.880 --> 0:15:12.240 to be in restrictive territory. Mester sat down for an 0:15:12.280 --> 0:15:16.120 interview with Bloomberg's Kathleen Hayes. They also discussed shrinking the 0:15:16.200 --> 0:15:18.760 FEDS massive balance sheet. Let's take a list of to 0:15:18.840 --> 0:15:21.280 that conversation. Now, you haven't made up your mind yet 0:15:21.280 --> 0:15:23.920 about fifty verse seventy five. Whereas a lot of economists 0:15:23.960 --> 0:15:26.520 and market participants are sure that the strong labor market 0:15:26.640 --> 0:15:30.400 not cooling down means seventy five. You also said that 0:15:30.560 --> 0:15:33.000 you can't let inflation remain so high, you need to 0:15:33.080 --> 0:15:36.080 bring it down quickly. So why would you even doubt 0:15:36.200 --> 0:15:39.280 the seventy five basis point move that seems to consistent. Now, 0:15:39.400 --> 0:15:40.960 I just want to make sure that we have all 0:15:41.000 --> 0:15:43.320 the data before I go into that meeting and hear 0:15:43.560 --> 0:15:46.480 what my colleagues are staying around the table. I think 0:15:46.520 --> 0:15:49.640 the real issue is we need to do more. We 0:15:49.760 --> 0:15:53.200 have not seen inflation move back down um, and we 0:15:53.320 --> 0:15:56.440 need to see that because leaving inflation where it is, 0:15:56.560 --> 0:15:59.400 if it continues, there's a higher chance that it does 0:15:59.520 --> 0:16:04.280 become embedded in the economy and affecting pricing decisions of 0:16:04.880 --> 0:16:08.880 firms and also getting into the psyche of households and 0:16:08.960 --> 0:16:12.520 then has long term negative connotations for the economy. So 0:16:12.960 --> 0:16:16.160 again this is a question. We know that it's time 0:16:16.240 --> 0:16:20.520 to continue on and persevere and bringing the funds right up. 0:16:21.320 --> 0:16:23.040 We know that we're going to have to keep it 0:16:23.160 --> 0:16:26.520 there for a time until we see inflation beginning to 0:16:26.600 --> 0:16:28.600 come back down, because we really want to make sure 0:16:28.640 --> 0:16:31.720 it's on the sustainable downward paths of two. So if 0:16:31.760 --> 0:16:34.560 you remember the dot plot in the median path from 0:16:34.600 --> 0:16:38.280 the last sep in September, we're very much aligned in 0:16:38.480 --> 0:16:41.200 terms of where we think policy needs to get today. Okay, Well, 0:16:41.240 --> 0:16:45.280 in fact, after three d basis points of rate hikes. Um, 0:16:46.040 --> 0:16:50.320 you know, it seems that the terminal rate want I 0:16:50.360 --> 0:16:53.000 ask you, does it look like maybe it's going to 0:16:53.200 --> 0:16:56.560 end up having to be higher than you thought? Uh? 0:16:57.160 --> 0:16:59.520 You have any confidence now? And even knowing what the 0:16:59.600 --> 0:17:02.200 terminal it's going to be, people many people have talked 0:17:02.240 --> 0:17:05.040 about something as high as five percent. Well, we have 0:17:05.200 --> 0:17:08.080 to wait until we see how the economy evolves. This 0:17:08.240 --> 0:17:11.480 is the assessment process that we're going to be going through, 0:17:12.040 --> 0:17:14.120 you know the end of this year and into next year, 0:17:14.280 --> 0:17:18.000 is we want to basically get inflation on this downward path. Right. 0:17:18.200 --> 0:17:21.080 Labor markets continue to be very strong. We have seen 0:17:21.200 --> 0:17:24.840 some moderation there, We have seen some moderation on the 0:17:24.880 --> 0:17:27.480 product side of the economy, and it really is now 0:17:27.640 --> 0:17:30.639 we're going to calibrate going forward. But right now the 0:17:30.760 --> 0:17:35.640 funds rate is just approaching a neutral of funds rate, 0:17:35.840 --> 0:17:38.159 and we really need to get it above neutral for 0:17:38.240 --> 0:17:39.800 a time if we want to put inflation on the 0:17:39.840 --> 0:17:42.480 doward path. And we do so again, we're you know, 0:17:42.840 --> 0:17:45.080 we put out the dot pots, which give our best 0:17:46.200 --> 0:17:49.360 estimate at the moment of what's appropriate policy. But we're 0:17:49.400 --> 0:17:51.879 going to be doing this assessment of how fast is 0:17:51.920 --> 0:17:55.520 deman moderating, how quickly is you know, supply maybe picking 0:17:55.600 --> 0:17:57.800 up and our price pressure is coming down, and that 0:17:57.840 --> 0:18:00.399 will be the job as we go forward in this 0:18:00.640 --> 0:18:02.719 challenging time. Well, you know, the message from the Fed 0:18:02.800 --> 0:18:05.479 seems to be all the comments lately that the idea 0:18:05.600 --> 0:18:07.280 is to move quickly, you know front we of the 0:18:07.400 --> 0:18:09.600 rate hikes, uh, you know, get to four and a 0:18:09.680 --> 0:18:11.959 half to four and three quarters and then see how 0:18:12.000 --> 0:18:16.240 that's affecting inflation. But to clarify, does this mean that 0:18:16.359 --> 0:18:19.000 once you get to that point when you think you're 0:18:19.000 --> 0:18:20.840 at neutral, when it's four and a half to four 0:18:20.840 --> 0:18:24.159 and three quarters, that you're going to pause even with 0:18:24.280 --> 0:18:26.560 the funds rate well below the rate of inflation, because 0:18:26.600 --> 0:18:28.760 that's where it's likely going to be right, Well, I 0:18:28.880 --> 0:18:31.200 think we're going to see inflation come down next year. 0:18:31.320 --> 0:18:33.919 So when I'm thinking about, you know, how far above 0:18:34.000 --> 0:18:35.680 a neutral rate do we have to go, and I 0:18:35.760 --> 0:18:39.520 do think we're going to have to be in restricted territory. Right. Remember, 0:18:39.800 --> 0:18:44.159 as inflation comes down, right, we're becoming more restrictive. So again, 0:18:44.320 --> 0:18:46.760 this is the assessment we have to do. So the 0:18:47.280 --> 0:18:50.000 I think the appropriate path is we continue to raise 0:18:50.119 --> 0:18:51.800 rates a bit more, so we get it up to 0:18:51.880 --> 0:18:55.320 that level where we're positive in terms of the real 0:18:55.440 --> 0:18:59.680 funds rate based on expectant inflation over the next year. 0:19:00.320 --> 0:19:03.840 Then we waited assess data coming in, but not only 0:19:03.920 --> 0:19:06.359 the backward looking data right in the LAG data, but 0:19:06.440 --> 0:19:09.639 also the information we're getting from the street in terms 0:19:09.760 --> 0:19:14.520 of main street right, real consumers, real households, real businesses 0:19:14.640 --> 0:19:17.560 telling us how they're thinking about the economy. And that 0:19:17.680 --> 0:19:21.919 was Cleveland FED President Laurentamester speaking with Bloomberg's Kathleen Hayes. 0:19:22.160 --> 0:19:25.560 And the FED gets more data to digest this week, 0:19:25.720 --> 0:19:29.760 starting today with inflation data that's actually today and tomorrow. 0:19:30.200 --> 0:19:33.680 We get ratings on producer prices today than the key 0:19:33.800 --> 0:19:37.600 data on consumer prices Thursday, then the week wraps up 0:19:37.720 --> 0:19:41.560 with retail sales and the University of Michigan Sentiment Index. 0:19:41.640 --> 0:19:44.720 Those both come out on Friday. Looking ahead to the 0:19:44.800 --> 0:19:48.000 market open this morning, futures are moving higher. We have 0:19:48.160 --> 0:19:52.399 SMP futures up twenty nine points, staff futures up and 0:19:52.720 --> 0:19:55.560 NASDAC futures are higher by a hundred nine points. The 0:19:55.640 --> 0:19:58.920 tenure treasury is up six thirty seconds, the yield three 0:19:59.000 --> 0:20:03.320 point nine to p sent You're listening to Bloomberg Daybreak 0:20:07.320 --> 0:20:09.920 Bloomberg eleven three oh weather. Morning sun will be followed 0:20:09.960 --> 0:20:13.119 by increasing afternoon clowns behind your seventy degrees rain and 0:20:13.240 --> 0:20:16.440 a breeze tomorrow with the high near seventy upper sixties 0:20:16.480 --> 0:20:19.600 Friday with a mostly sunny sky fifty eight degrees. Right now, 0:20:22.320 --> 0:20:26.840 broadcasting live from the Bloomberg Interactive Broker Studio in New York, 0:20:26.960 --> 0:20:30.200 Bloomberg E loving freed to Washington, d C, Bloomberg N 0:20:30.760 --> 0:20:34.240 one to Boston, Bloomberg one O six one to San Francisco, 0:20:34.359 --> 0:20:37.760 Bloomberg N sixty to the country, Sirius XM H one 0:20:37.880 --> 0:20:40.960 nine team and around the globe the Bloomberg Business in 0:20:41.080 --> 0:20:51.000 Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's five 0:20:51.080 --> 0:20:53.639 thirty on Wall Straight. Good morning. I'm Nathan Hager and 0:20:53.680 --> 0:20:56.520 I'm Karen Moscow or just about four hours away from 0:20:56.560 --> 0:20:58.399 the open of US trading. Let's get you up to 0:20:58.440 --> 0:20:59.760 date of the news. You need to know what this 0:21:00.000 --> 0:21:02.840 our first up. President Biden weighs in on the economy 0:21:02.920 --> 0:21:05.920 and an interview with CNN. The President faced questions about 0:21:05.960 --> 0:21:08.840 a possible contraction and growth. I don't think there will 0:21:08.920 --> 0:21:10.399 be a recession. If it is, it will be a 0:21:10.480 --> 0:21:14.840 very slight recession, that is, will move down slightly. President 0:21:14.880 --> 0:21:17.720 Biden said the US economy is resilient enough to write 0:21:17.720 --> 0:21:20.920 out any economic turbulence. He also says the American people 0:21:21.000 --> 0:21:24.000 do not need to prepare for a recession. We'll talk 0:21:24.119 --> 0:21:26.919 talk on inflation. Continues from the FED care and Cleveland. 0:21:26.960 --> 0:21:29.440 FED President Loretta Mester says the Central Bank is not 0:21:29.640 --> 0:21:31.960 done raising rates and that she sees no reason to 0:21:32.040 --> 0:21:35.080 alter the central banks balance sheet runoff plan. I think 0:21:35.119 --> 0:21:37.840 we want to stick to that plan because the markets 0:21:37.880 --> 0:21:40.800 have understood the plan. They see it, they understand it. 0:21:41.160 --> 0:21:44.359 We did very well. I think broadcasts what we're planning 0:21:44.400 --> 0:21:47.479