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

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Speaker 1: Day Bake podcast, available every morning on Apple, Spotify or

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Speaker 1: wherever you listen. It's Thursday, the twelfth of December here

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Speaker 1: in London. I'm Caroline Hepcare.

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Speaker 2: And I'm Stephen Carroll coming up today. Shrinking budgets at

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Speaker 2: US agencies are raising fears over the reliability of economic

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Speaker 2: data that can move global markets by trillions of dollars

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Speaker 2: at a time.

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Speaker 1: The ECB gears up for another interest. Rate Carts's phees

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Speaker 1: over slowing growth, Way on policymakers.

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Speaker 2: Plus sunscreen needed, Why the growth in solar panels could

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Speaker 2: pose a major cyber attack risk.

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

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Speaker 2: US consumer prices rose at a firm pace in November

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Speaker 2: in line with expectations, which has solidified bets on a

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Speaker 2: FED rate cut next week. The core Consumer Price Index,

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Speaker 2: which excludes food and energy costs, increased by zero zero

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Speaker 2: point three percent for a fourth month in a row.

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Speaker 2: Groundwork Collaborative CEO Lindsay Owens says that makes the short

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Speaker 2: term call easy.

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Speaker 3: TPI came in.

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Speaker 4: Right on schedule, right in line with expectations, and as

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Speaker 4: a result, I do anticipate the Fed will move forward

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Speaker 4: with their planned cut next week. Headed into next year

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Speaker 4: is a really interesting question. I do think if what

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Speaker 4: we see in terms of economic policy in Washington is

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Speaker 4: tax cuts for the wealthy and higher prices for everyone else,

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Speaker 4: the inflation outlook will deteriorate considerably.

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Speaker 2: Now owns. Concern about the long term view comes as

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Speaker 2: Bloomberg reports that the agencies that compile key US economic

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Speaker 2: data face a funding crunch. The Bureau of Labor Statistics,

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Speaker 2: Census Bureau, and Bureau of Economic Analysis have been asking

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Speaker 2: for more money, but face a tougher fight with the

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Speaker 2: Trump administration planning to slash bureaucracy. That, coupled with increasing

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Speaker 2: costs and a series of high profile errors, are making

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Speaker 2: some fear crucial public data on unemployment and inflation may

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Speaker 2: become unreliable.

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Speaker 1: Traders are ramping up their bets on interest rate cuts

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Speaker 1: from the European Central Bank ahead of today's expected move.

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Speaker 1: The market now sees one hundred and fifty eight basis

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Speaker 1: points of easing by the end of twenty twenty five.

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Speaker 1: All but one analyst survey by Bloomberg expects a twenty

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Speaker 1: five basis point cut from the ECB today, bringing the

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Speaker 1: deposit rate to three percent. But markets will be listening

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Speaker 1: to ECB President Christine Laguard's press conference to learn how

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Speaker 1: policymakers are considering concerns around slow growth in the euro Area,

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Speaker 1: political uncertainty in France and Germany, and also how Donald

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Speaker 1: Trump's economic agenda could affect Europe.

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Speaker 2: Donald Trump is said to have invited shooting paying to

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Speaker 2: his inauguration on the twentieth of January. According to CBS,

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Speaker 2: The US president elect and vited the Chinese leader in November,

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Speaker 2: though it's unclear if it was accepted. That's despite Trump

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Speaker 2: threatening fresh tariffs against Beijing. In an exclusive interview with Bloomberg,

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Speaker 2: Treasury Secretary Janet Yellen says those levies we'll hit US

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Speaker 2: citizens hardest.

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Speaker 5: Broad based tariffs. Almost all economists agree that what they

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Speaker 5: will do is hurt us by raising prices, possibly substantially,

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Speaker 5: and making it more expensive for firms that need inputs

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Speaker 5: from China to be able to acquire them, in harm

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Speaker 5: more competitiveness.

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Speaker 2: Yellen also urged the next administration to maintain the dialogue

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Speaker 2: channels that she re established with China if at present

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Speaker 2: she were to attend the inauguration in the US, he'd

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Speaker 2: be the first foreign leader to do so in more

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Speaker 2: than one hundred years.

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Speaker 1: The new Police Department is investigating a number of wanted

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Speaker 1: posters naming senior executives in the financial industry that have

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Speaker 1: been put up in Manhattan. Images included the United Healthcare

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Speaker 1: ce Brian Thompson, who was killed last Wednesday, as well

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Speaker 1: as financial executives from American Express, Goldyn Sachs, and JP Morgan.

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Speaker 1: Manhattan District Attorney Alvin Bragg has condemned those celebrating the

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Speaker 1: fatal shooting of Thompson.

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Speaker 6: As other prosecutors do here spend time with families of

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Speaker 6: homicide victims, with survivors of violent crime. That's the centerpiece

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Speaker 6: of our work, and to think that there are others

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Speaker 6: celebrating this conduct is beyond comprehension to me.

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Speaker 1: Bragg's office is prosecuting the murder charge against suspect twenty

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Speaker 1: six year old Luigi Mangioni. Mangioni was arrested with a

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Speaker 1: manifesto condemning high profits in the healthcare industry, and NYPD

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Speaker 1: spokesman said in addition to the posters, the police are

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Speaker 1: aware of a surgeon online threats against executives.

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Speaker 2: In the UK, Meager of house prices has hit its

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Speaker 2: highest level in two years. The index in the Royal

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Speaker 2: Institution of Chartered Surveyors cell gains across almost every region

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Speaker 2: with works. Tea at Abio has the story.

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Speaker 7: A Bank of England interest rate cut and an end

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Speaker 7: to uncertainty over Labour's first budget fueled a UK property

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Speaker 7: price boom last month. The RIX Price indicator jumped to

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Speaker 7: twenty five from sixteen in October, recording gains across almost

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Speaker 7: every region and exceeding economist expectations. Prices hit their highest

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Speaker 7: since just before Liz Truss's mini budget upended the mortgage

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Speaker 7: market in twenty twenty two. But despite current momentum, experts

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Speaker 7: worn that rising interest rates and macroheadwinds could still stunt

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Speaker 7: the market's recovery. Prime Minister Kirstarmer is expected to announce

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Speaker 7: reforms today which will aim to tackle high housing unaffordability,

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Speaker 7: tasking local councils with mandatory building targets in London. Tea

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Speaker 7: at A Baio Bloomberg Radio.

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Speaker 1: And those are stories for you this morning on the

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Speaker 1: markets Today. The Hong Kong Hangs Singing indexes up by

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Speaker 1: one point six percent, China's Central Economic Work Conference concluding

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Speaker 1: today the hope of more of support for the Chinese economy.

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Speaker 1: Japanese stocks are also in the green, the Nicket two

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Speaker 1: five up by one point six percent this as we

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Speaker 1: saw yesterday the Nasdaq surging over on Wall Street to

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Speaker 1: a new record high, jumping one point eight percent. The vix,

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Speaker 1: though has dropped, and so that does indicate maybe that

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Speaker 1: there'll be some calm towards year end, the expectation of

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Speaker 1: another FED rate cut in December and one expected from

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Speaker 1: the ECB today. The other couple of big stories in

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Speaker 1: markets really have been the jump in bitcoin, now trading

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Speaker 1: above one hundred thousand dollars again, although down one percent

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Speaker 1: this morning, and oil prices, which serves two and a

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Speaker 1: half percent yesterday. Breakfread features trading at seventy three dollars

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Speaker 1: eighty this morning, are up another four tenths of one percent.

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Speaker 2: Now in a moment, we'll discuss why there's concern about

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Speaker 2: economic indicators as the agencies in charge of collecting the

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Speaker 2: vital data face shrinking budgets, plus why solar panels could

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Speaker 2: be a cyber attack risk put Another story that caught

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Speaker 2: our eye this morning. Elon Musk just keeps getting richer.

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Speaker 1: Yeah, he is amazingly the first person to reach four

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Speaker 1: hundred billion dollars in net worth, this according to the

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Speaker 1: Bloomberg Billionaires Index.

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Speaker 2: Yeah, rich go always a good way to start your day,

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Speaker 2: to see how everyone else is doing, how the other

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Speaker 2: half lives. Now, Elon Musk's wealth has been super charged

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Speaker 2: by Donald Trump's election, but there were two factors that

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Speaker 2: pushed him to this latest milestone. So there was an

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Speaker 2: insider share sale at SpaceX, which earned Elon Musk in

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Speaker 2: terms of net worth, about fifty billion dollars. Tesla shares

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Speaker 2: also hit a record high yesterday we were talking about

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Speaker 2: the nasdak being boosted too. So his one day jump

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Speaker 2: in wealth was almost sixty three billion dollars, the largest

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Speaker 2: on record, and that actually overall helped propel the combined

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Speaker 2: fortunes of the world's richest five hundred people above ten

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Speaker 2: trillion dollars for the first time.

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Speaker 1: Yeah. But if you look at the list of the

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Speaker 1: top wealthiest people in the world, there is a massive

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Speaker 1: gap between Musk and Jeff Bezos. Let's say he's only

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Speaker 1: got Chwildred, only two hundred and forty eight billion dollars,

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Speaker 1: Mark Zuckerberg two hundred and twenty four billion, and if

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Speaker 1: you want a bit of the view of Europe, Bernard

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Speaker 1: Arnault one hundred and eighty one billion dollars.

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Speaker 2: Okay, Well, more to that and more on that, of course,

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Speaker 2: on the terminal and on Bloomberg dot com. Let's focus though,

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Speaker 2: on our top story this morning, and this is to

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Speaker 2: do with US economic indicators. They can move global markets

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Speaker 2: by trillions of dollars at a time, but the agencies

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Speaker 2: that collect and publish them have been pleading for extra funds,

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Speaker 2: the situation that may worsen under the Trump administration. Joining

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Speaker 2: us now with more details as our managing editor for

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Speaker 2: FX and Rates, Rachel Evans. Rachel, good morning. What are

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Speaker 2: the agencies involved and the vulnerable data sets that we're

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Speaker 2: talking about.

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Speaker 8: Yes, I mean this all starts to sound like alphabet

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Speaker 8: suit pretty quickly, but it's hard to kind of over

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Speaker 8: state really how important.

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Speaker 3: These agencies are. Where we're talking about the Bureau of.

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Speaker 8: Labor Statistics, So those are the guys in charge of

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Speaker 8: sort of payrolls and employment data, but also some of

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Speaker 8: the price sort of guides that we really use to

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Speaker 8: get a sense of where inflation is heading. We're talking

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Speaker 8: about the Bureau of Economic Analysis. They also look at prices,

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Speaker 8: but GDP is kind of one of their big releases.

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Speaker 8: And then the Census Bureau, which obviously does the census,

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Speaker 8: but also some of the other data points around durable goods,

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Speaker 8: and these really are incredibly important data sets their market moving,

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Speaker 8: you know, they really set the pulse for what we're

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Speaker 8: thinking about day on day out in news but also

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Speaker 8: within the kind of market space, and it's very much

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Speaker 8: something that kind of the central banks are looking at

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Speaker 8: as they kind of think about their policy. It's really

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Speaker 8: a lens into the economy and how it's functioning at

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Speaker 8: any given time.

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Speaker 1: There have been already a few missteps though for anyone

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Speaker 1: who's been paying attention to this part of economics, how

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Speaker 1: fragile is the system in the US currently.

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Speaker 8: Yeah, there's definitely been some rather embarrassing stafoos over the

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Speaker 8: last year or so.

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Speaker 3: I mean, we saw most recently back.

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Speaker 8: In August around the annual sort of payrolls revision. This

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Speaker 8: is like a once every year thing that happens where

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Speaker 8: we kind of get a sort of reading on how payrolls.

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Speaker 8: You know, we should have shifted over the past year,

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Speaker 8: they kind of come back and had give us this

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Speaker 8: big number, and that didn't go live as expected, and

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Speaker 8: everybody in the markets was kind of watching their page

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Speaker 8: hitting refresh manically, and we didn't get the data out,

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Speaker 8: but certain banks were able to call into the Bureau

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Speaker 8: of Labor Statistics and get that data before it actually

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Speaker 8: was published, So that was very embarrassing. We saw a

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Speaker 8: lot of anger in the markets amongst traders who felt

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Speaker 8: that certain banks who'd called up and got through to

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Speaker 8: them had managed to get kind of a head start

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Speaker 8: before that data came through, and that was kind of

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Speaker 8: building on, you know, other issues. Earlier this year, there

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Speaker 8: was an email exchange between an economist at BLS and

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Speaker 8: some of sort of the big names in the market,

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Speaker 8: who this guy referred to as super users, suggesting that

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Speaker 8: perhaps there was kind of a differentiation between how the

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Speaker 8: BLS views different players within the market. And then there

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Speaker 8: was actually even the early publication of certain pieces of

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Speaker 8: the CPI data back in earlier this year May April

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Speaker 8: or May, I believe, and that you didn't seem to

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Speaker 8: be traded on at the time, but again, very embarrassing

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Speaker 8: that you're sort of releasing kind of some of the

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Speaker 8: subsets of the CPI data ahead of time, just given

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Speaker 8: how market moving this is.

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Speaker 2: Yeah, indeed, no, the problems in these releases have been

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Speaker 2: happening in the US, but there's also the whole question

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Speaker 2: about how difficult or the changing ways the data's being

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Speaker 2: collected as well, and that's an issue that's also been

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Speaker 2: highlighted here in the UK as well. It's getting trickier

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Speaker 2: to get some of the data, particularly around labor markets.

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Speaker 3: Yeah, I mean the UK.

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Speaker 8: I mean, we saw the sort of labor market survey

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Speaker 8: kind of suspended in the UK back in sort of

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Speaker 8: October twenty twenty three, I think it was, and that's

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Speaker 8: kind of now resumed.

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Speaker 3: But the issue there was really kind of this lack.

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Speaker 8: Of responses, and I think, you know, this sort of

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Speaker 8: speaks to kind of the challenge of of doing surveys

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Speaker 8: of any sort in today's age. You know, we see

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Speaker 8: it in political polls as well, that it's very hard

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Speaker 8: to get people to actually respond to surveys and respond

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Speaker 8: truthfully in the case of political polls. So we're sort

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Speaker 8: of seeing kind of the shift to using more online surveys,

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Speaker 8: ramping up the way in which people actually conduct these surveys,

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Speaker 8: you have more interviewers, for example. But of course all

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Speaker 8: of that costs money. It requires an investment, and data

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Speaker 8: is a difficult thing to sell to people as worthy

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Speaker 8: of investment because people often see it as being kind

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Speaker 8: of a little bit staid and fuddy duddy.

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Speaker 3: But it's one of these things that's so important.

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Speaker 8: So I think, you know, that's kind of why we're

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Speaker 8: seeing such a lot of attention from the various authorities

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Speaker 8: on how to actually try and make these surveys more

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Speaker 8: substantive because they.

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Speaker 3: Are relied upon by everybody in the market so much.

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Speaker 1: Yeah. Absolutely, and also that has added to the cost

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Speaker 1: of actually collecting all of this data in the worry

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Speaker 1: that with the Trump administration wanting to slash the federal bureaucracy,

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Speaker 1: which is which President Electron has been clear about, is

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Speaker 1: whether or not those statistics agencies are going to get

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Speaker 1: squeezed further. And Rachel, thank you so much for being

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Speaker 1: with us. That has been a big managing editor for

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Speaker 1: FX and rates, Rachel Evans.

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Speaker 2: Now, the growth in rooftop solar systems means millions more

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Speaker 2: connections to the electricity grid, creating a massive vulnerability that

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Speaker 2: hackers could exploit. The threat is serious enough that NATO

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Speaker 2: ran a security drill in Sweden to find and fix

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Speaker 2: vulnerabilities in solar, wind and hydroelectric systems. We've got our

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Speaker 2: European power and a Nubles reporter, Aim and fire Hat

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Speaker 2: with us for more This morning, Aim and good morning.

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Speaker 2: So what does a single hacker? How could they potentially

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Speaker 2: take down the grid in Europe?

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Speaker 9: Thanks Steven. Yeah, Well, this story focuses on hackers who

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Speaker 9: take advantage of rooftop solar panels, and in particular its inverted.

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Speaker 9: It's like brains of the panels that you might have

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Speaker 9: on your house. These hackers found ways of controlling those panels,

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Speaker 9: different models of panels, and if you could control enough panels,

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Speaker 9: you could take down let's Germany's grid because you basically

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Speaker 9: shut down enough generation all at once. The grid has

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Speaker 9: some mechanisms in place and it just kind of shuts

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Speaker 9: down around itself if you shut down.

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Speaker 3: All of these solar panels.

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Speaker 9: So it's all about kind of you're taking over water,

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Speaker 9: you take over many and you can make a huge

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Speaker 9: impact on a country's grid.

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Speaker 1: Is that a new problem?

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Speaker 9: I mean being able to hack a solar panel or

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Speaker 9: hack anything isn't particularly new. I mean, you know in

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Speaker 9: the past that that happened. The thing that's new here

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Speaker 9: is that we have so many more of these kind

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Speaker 9: of small devices that are part of the grid that

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Speaker 9: can be vulnerable. You know, in the past you might

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Speaker 9: have a big gas station or nuclear station that was

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Speaker 9: one entry point. Now you have millions. I mean, jermmy

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Speaker 9: last year we put about a million rooftops solar panels

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Speaker 9: on people's homes, So we have just more and more

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Speaker 9: entry points. So although it's not new, the fact that

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Speaker 9: we have so much more renewable energy means that it

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Speaker 9: is a new kind of vulnerability that we have to

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Speaker 9: deal with.

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Speaker 2: What are governments doing about there?

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Speaker 9: Saman So the EU is implemented like a hand of

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Speaker 9: laws in recent years for both the cybersecurity. Now that's

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Speaker 9: kind of really important, but it is a little bit moving.

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Speaker 9: And the thing is we are rolling out renewables so

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Speaker 9: quickly and the laws that kind of deal with this

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Speaker 9: are taking a lot of time. Example, this law right

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Speaker 9: now which is kind of working about solid devices, there

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Speaker 9: is like an eighteen month period where companies have to

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Speaker 9: comply with different regulations. But in eighteen months a lot

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Speaker 9: can happen and in eighteen months, you know, we're seeing

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Speaker 9: millions and millions of solar panels being installed before the

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Speaker 9: laws actually come into place. So it is happening within

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Speaker 9: the U, the UK, the US, but it is a

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Speaker 9: bit slow going to the people that I've spoken.

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Speaker 1: To, Yeah, that is interesting. Who needs to take action then,

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Speaker 1: any of you?

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Speaker 9: I mean, yeah, so there are obviously energy regulators across

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Speaker 9: different countries, there are governments. There's also the companies. You know,

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Speaker 9: the hackers I spoke to, most of them are kind

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Speaker 9: of white collar hackers. They work with companies to try

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Speaker 9: and find where the problems are, get companies to fix

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Speaker 9: these problems, and that is really where a lot of

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Speaker 9: the responsibility lies. You know, some of these hackers would

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Speaker 9: you go out there and find flaws in different company

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Speaker 9: systems and then go to the companies and some companies

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Speaker 9: would come back with fixes, some wouldn't. So it also

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Speaker 9: lies on the company's side as well. But I guess

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Speaker 9: governments have to enforce that, you know, at the end

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Speaker 9: of the day, it's just that we have to fix

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Speaker 9: these as soon as possible.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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