WEBVTT - Progress Made to Avoid Government Shutdown; Lagarde Talks ECB Rate Cuts 0:00:02.480 --> 0:00:03.000 Good morning. 0:00:03.080 --> 0:00:05.920 I'm Nathan Hager and I'm Karen Moscow. Here are the 0:00:05.960 --> 0:00:07.440 stories we're following today. 0:00:07.840 --> 0:00:09.639 We begin in Washington. 0:00:09.760 --> 0:00:12.559 That's where a temporary spending bill to avoid a government 0:00:12.600 --> 0:00:15.520 shutdown this weekend has cleared its first hurdle. 0:00:15.680 --> 0:00:18.280 Bloomberg's Amy Morris has more from the nation's capital. 0:00:18.680 --> 0:00:20.919 The Senate voted to advance the measure that will fund 0:00:21.000 --> 0:00:24.480 some federal agencies through March first and others through March eighth. 0:00:24.640 --> 0:00:27.720 The interim funding is the support of congressional leaders, including 0:00:27.720 --> 0:00:30.840 House Speaker Mike Johnson, so the prospects for passage in 0:00:30.920 --> 0:00:34.760 both chambers are good. Does not include several disputed items 0:00:34.840 --> 0:00:37.760 like eight for Ukraine restrictions along the US border or 0:00:37.800 --> 0:00:41.040 an eighty billion dollar business tax package. And there are 0:00:41.200 --> 0:00:44.239 hard right conservatives in the House who oppose funding agencies 0:00:44.240 --> 0:00:47.479 at current levels, but Speaker Johnson can bypass them by 0:00:47.520 --> 0:00:49.519 relying on Democrats for support. 0:00:49.920 --> 0:00:51.920 In Washington. Amy Moore as Bloomberg Radio. 0:00:52.159 --> 0:00:54.080 All right, Amy, thanks well. Now to the latest on 0:00:54.120 --> 0:00:56.200 the race for the White House. It's on to New 0:00:56.200 --> 0:00:59.760 Hampshire for the Republican candidates, and Bloomberg's at Baxter reports 0:01:00.320 --> 0:01:01.920 are really starting to heat up. 0:01:02.440 --> 0:01:05.679 Nicki Haley has been very careful not to directly attack 0:01:05.760 --> 0:01:08.880 Donald Trump, but one day after Iowa as she's calling 0:01:09.000 --> 0:01:12.240 him a bully and a liar. Trump lamb based Haley 0:01:12.280 --> 0:01:15.440 as a disaster. Now this all comes with polling that 0:01:15.560 --> 0:01:18.119 chowse the two very close. In New Hampshire, Real Clear 0:01:18.400 --> 0:01:21.840 Politics has Trump by about fourteen points, but the American 0:01:21.920 --> 0:01:26.280 Research Group even called it dead even at forty four percent, 0:01:26.360 --> 0:01:30.000 with Ron Desatus at only four percent. Tomorrow's schedule debate 0:01:30.000 --> 0:01:33.440 has been canceled because Haley declined if Trump wasn't going 0:01:33.480 --> 0:01:36.199 to be there at Baxter Bloomberg. 0:01:35.840 --> 0:01:38.520 Radio, Okay, and thanks. Now let's turn to the Middle East. 0:01:38.560 --> 0:01:41.120 Israel and Hamas have reached a deal to deliver medicine 0:01:41.160 --> 0:01:43.840 and other aid to Gaza. That's according to the government 0:01:43.880 --> 0:01:46.319 in Kadra, which says this is in exchange for medicine 0:01:46.319 --> 0:01:49.520 reaching the hostages being held by Hamas. White House National 0:01:49.520 --> 0:01:52.160 Security Advisor Jake Sullivan says there is still a risk 0:01:52.240 --> 0:01:54.480 this war widens to a regional conflict. 0:01:54.720 --> 0:01:59.560 We do see a pathway to a shift in the. 0:01:59.520 --> 0:02:04.760 Military campaign in Gaza, a reduction in tensions and the 0:02:04.800 --> 0:02:09.000 exchange of fire along Israel's northern border, a reduction in 0:02:09.080 --> 0:02:11.359 the risk of escalation in other parts of the region, 0:02:11.639 --> 0:02:14.520 and we'll have to continue to deal with the Hoothi threat. 0:02:14.639 --> 0:02:17.679 National Security Advisor Jake Sullivan spoke from the World Economic 0:02:17.720 --> 0:02:21.240 Forum in Davos. Israeli President Isaac Herzog plans to bring 0:02:21.280 --> 0:02:24.400 the families of hostages to the slopes in Switzerland today 0:02:24.720 --> 0:02:26.520 to step up pressure for their release. 0:02:26.919 --> 0:02:29.280 Well, Nathan, back here in the US, we are waiting 0:02:29.320 --> 0:02:32.520 for a key economic group board as doubt grows on 0:02:32.560 --> 0:02:35.200 whether the FED will start cutting rates as soon as March, 0:02:35.200 --> 0:02:37.680 and we get the very latest with the Bloomberg's John Tucker, 0:02:37.800 --> 0:02:38.959 John and Karen. 0:02:39.000 --> 0:02:43.519 Retail sales probably increased in December. However, the control group sales, 0:02:43.600 --> 0:02:46.760 which strip out volatile items, that likely slowed to a 0:02:46.800 --> 0:02:49.840 more subdue pace. Traders are launching on every piece of 0:02:49.919 --> 0:02:53.720 data as the FAN enters a blackout period next week. Yesterday, 0:02:53.800 --> 0:02:56.840 Federal Reserve Governor Christopher Waller threw a little cold water 0:02:56.880 --> 0:02:59.639 around the idea of FED rate cuts as soon as March. 0:03:00.080 --> 0:03:04.440 With economic activity and labor markets in good shape, and 0:03:04.480 --> 0:03:08.160 inflation coming down gradually to two percent, I see no 0:03:08.280 --> 0:03:11.280 reason to move as quickly or cut as rapidly as 0:03:11.320 --> 0:03:11.920 in the past. 0:03:12.200 --> 0:03:15.600 With Wallner's comments, Transury suffered their biggest one day price 0:03:15.680 --> 0:03:19.560 drop in two months. Yield Seweragetan also drag stocks lower. 0:03:19.840 --> 0:03:21.280 John Tucker Bloomberg. 0:03:20.960 --> 0:03:24.079 Radio, John thanks, rates are very much in focus overseas 0:03:24.120 --> 0:03:27.240 that the World Economic Forum. European Central Bank President Christine 0:03:27.280 --> 0:03:30.519 Legard said the ECB will probably cut rates by the summer. 0:03:30.880 --> 0:03:33.680 I would say it's likely too, but I have to 0:03:33.760 --> 0:03:37.760 be reserved because we're also saying that we are data 0:03:37.800 --> 0:03:40.560 dependent and that there is still a level of uncertainty 0:03:40.640 --> 0:03:44.640 and some indicators that are not anchored at the level 0:03:44.640 --> 0:03:46.040 where we would love to see them. 0:03:46.200 --> 0:03:49.240 ECB President Leaguard made those comments to Francine Lockwha at 0:03:49.280 --> 0:03:52.160 Bloomberg House in Davos. You can hear their full conversation 0:03:52.320 --> 0:03:53.960 on the Bloomberg Talks podcast. 0:03:54.360 --> 0:03:57.560 Well Nathan investors are scaling back their expectations for rake 0:03:57.640 --> 0:04:00.800 cuts from the Bank of England this year. Inflation in 0:04:00.800 --> 0:04:04.680 the UK unexpectedly accelerated for the first time in ten months. 0:04:04.800 --> 0:04:08.160 December's consumer price index was four percent higher than the 0:04:08.240 --> 0:04:09.000 previous year. 0:04:09.360 --> 0:04:13.040 On Wall Street, Karen JP Morgan Chase is bucking a trend, 0:04:13.120 --> 0:04:15.960 the bank plans to hire more workers. We caught up 0:04:16.000 --> 0:04:18.560 with JP Morgan president Daniel Pinto at Davos. 0:04:18.760 --> 0:04:20.800 We are employed at the end of the year around 0:04:20.800 --> 0:04:24.080 three hundred and twenty thousand people. So the number of 0:04:24.120 --> 0:04:26.279 people that employ has been growing. 0:04:26.000 --> 0:04:26.800 And not ranking. 0:04:26.920 --> 0:04:30.719 So I think that where we see opportunities and we 0:04:30.760 --> 0:04:33.359 can have our clients, for sure, we'll focus on that. 0:04:33.720 --> 0:04:36.599 Daniel Pinto's comments come after JP Morgan closed out the 0:04:36.600 --> 0:04:39.440 most profitable year in US banking history. 0:04:39.920 --> 0:04:42.599 Also more banking news this morning, Nathan, the government is 0:04:42.640 --> 0:04:45.839 unveiling a long awaited rule that could slash the biggest 0:04:45.880 --> 0:04:48.840 bank's income from overdraft fees by as much as three 0:04:48.920 --> 0:04:51.839 and a half billion dollars each year. Under the regulation 0:04:51.960 --> 0:04:55.440 from the Consumer Financial Protection Bureau, banks would only be 0:04:55.480 --> 0:04:57.479 able to charge what it costs for them to break 0:04:57.560 --> 0:05:00.400 even for covering an overdraft or a bu by a 0:05:00.440 --> 0:05:04.800 specific cap that would effectively eliminate overdraft charges for customers, 0:05:05.080 --> 0:05:07.120 which right now average about thirty five dollars. 0:05:07.360 --> 0:05:10.159 Let's turn to some corporate news now. Karen Apple has 0:05:10.240 --> 0:05:13.800 reached a milestone. The company's dethroned Samsung to become the 0:05:13.800 --> 0:05:17.760 world's top phone maker in twenty twenty twenty three. IDC 0:05:18.000 --> 0:05:20.320 estimates the iPhone accounted for a fifth of the global 0:05:20.320 --> 0:05:22.480 market last year with close to two hundred thirty five 0:05:22.520 --> 0:05:26.120 million shipments. Apple's dominated recent holiday quarters, but the full 0:05:26.160 --> 0:05:29.400 year surge is unprecedented, and it suggests Apple is weathering 0:05:29.440 --> 0:05:31.599 an industry wide slump better than its rivals. 0:05:31.880 --> 0:05:33.839 And finally, Nathan, it was supposed to be the merger 0:05:33.880 --> 0:05:37.000 from Heaven, or at least from thirty thousand feet, but 0:05:37.120 --> 0:05:39.520 now a federal judges block Jet Blues three point eight 0:05:39.560 --> 0:05:42.680 billion dollar acquisition of Spirit Airlines. The judge says the 0:05:42.680 --> 0:05:46.599 combination with stifle competition and raise fares for consumers. Jet 0:05:46.640 --> 0:05:49.719 Blue and Spirit contended that consolidation is the only way 0:05:49.760 --> 0:05:57.200 smaller airlines can effectively compete with the dominant carriers. Time 0:05:57.200 --> 0:05:58.680 and not for look at some of the other stories 0:05:58.720 --> 0:06:00.560 making news around the world. For that, we're joined by 0:06:00.600 --> 0:06:04.240 Bloomberg's Amy Morris Amy, Good morning, Good morning, Karen. 0:06:04.320 --> 0:06:07.680 President Biden is worried about his supplemental bills stalling out 0:06:07.720 --> 0:06:10.720 in Congress, so he's inviting some of the key players 0:06:10.760 --> 0:06:11.920 to the White House today. 0:06:12.120 --> 0:06:14.120 Bloomberg's Nancy lyons with the latest. 0:06:14.440 --> 0:06:17.880 White House Press Secretary Karine Jean Pierre provided a list 0:06:17.920 --> 0:06:20.120 of those invited to the meeting, and then Biden. 0:06:19.880 --> 0:06:22.719 Will host congressional leaders from the Senate and the House, 0:06:22.760 --> 0:06:25.720 along with key committee leaders and ranking members. 0:06:25.880 --> 0:06:28.120 She says there's a lot to talk about, but President 0:06:28.160 --> 0:06:31.120 Biden has one topic he's especially concerned with. 0:06:31.240 --> 0:06:34.200 This is going to be about discussing critical importance of 0:06:34.600 --> 0:06:36.640 the President's Facial Security supplemental request. 0:06:36.800 --> 0:06:40.440 That's the proposal to further fund Ukraine, Israel, and Taiwan. 0:06:40.800 --> 0:06:43.440 Republicans are refusing to move on that until there's a 0:06:43.480 --> 0:06:47.560 consensus on a new border policy in Washington. Nancy lyons 0:06:47.560 --> 0:06:48.400 Bloomberg Radio. 0:06:48.520 --> 0:06:52.000 Secretary of State Anthony Blincoln says soil should be treated 0:06:52.080 --> 0:06:55.320 as a precious resource, telling the World Economic Forum in 0:06:55.400 --> 0:06:58.960 Davos that lack of food is causing unprecedented global migration 0:06:59.120 --> 0:07:02.040 flows at Russia's war in Ukraine and attacks by who 0:07:02.080 --> 0:07:04.440 they rebels and the Red Sea have made things worse. 0:07:04.560 --> 0:07:06.400 A parent who can't put food on the table for 0:07:06.440 --> 0:07:11.440 their children picks up the family and moves because it's 0:07:11.480 --> 0:07:14.160 the most basic thing, the most important thing that they 0:07:14.200 --> 0:07:14.520 can do. 0:07:15.040 --> 0:07:17.440 Lincoln says, the problem is likely to get worse as 0:07:17.480 --> 0:07:21.160 climate change threatens to reduce crop yields. Now Climate Envoy 0:07:21.280 --> 0:07:24.160 John Kerry, also at the World Economic Forum, says he's 0:07:24.200 --> 0:07:27.640 stepping down from the role within the Biden administration so 0:07:27.680 --> 0:07:30.320 he can take on a more vocal position for the 0:07:30.320 --> 0:07:34.440 Biden campaign. He assured other world climate leaders that yes, 0:07:34.480 --> 0:07:35.400 he'll still be around. 0:07:35.480 --> 0:07:38.240 I'm going to stay at this and there are so 0:07:38.320 --> 0:07:41.400 many different ways to continue to be able to be 0:07:41.480 --> 0:07:42.160 engaged in this. 0:07:42.360 --> 0:07:43.880 So unfortunately you're stock. 0:07:44.000 --> 0:07:45.600 You'll see me at the copy you see. 0:07:47.800 --> 0:07:51.240 Rivia Carrie says regardless of who wins the election, the 0:07:51.280 --> 0:07:54.800 global climate agenda will remain solid, and the World Health 0:07:54.960 --> 0:07:57.880 Organization says the number of adult tobacco users is on 0:07:57.920 --> 0:08:01.520 the decline. The organization says the biggest decrease in tobacco 0:08:01.640 --> 0:08:04.480 use is seen happening in lower to middle income countries. 0:08:04.600 --> 0:08:09.680 We have nineteen million less smokers than we had two 0:08:09.800 --> 0:08:12.800 years ago. That is the first time that we see 0:08:12.920 --> 0:08:13.960 such a decline. 0:08:14.040 --> 0:08:17.920 Doctor Rudiger Kresh is urging countries to continue putting control 0:08:18.000 --> 0:08:21.760 policies in place for tobacco. Global News twenty four hours 0:08:21.800 --> 0:08:24.280 a day and whenever you want it with Bloomberg News Now. 0:08:24.520 --> 0:08:27.559 I'm Amy Morris and this is Bloomberg Karen. All right, Amy, 0:08:27.600 --> 0:08:27.920 thank you. 0:08:27.960 --> 0:08:30.000 We do bring you news throughout the day right here 0:08:30.080 --> 0:08:32.360 on Bloomberg Radio. But now you can get the latest 0:08:32.400 --> 0:08:34.840 news on demand, and that means whenever you want it. 0:08:35.160 --> 0:08:37.960 Subscribe to Bloomberg News Now to get the latest headlines 0:08:38.000 --> 0:08:40.960 of the click of a button. Get informed on your schedule. 0:08:41.160 --> 0:08:43.920 You can listen and subscribe to Bloomberg News Now on 0:08:44.000 --> 0:08:47.679 the Bloomberg Business app, Bloomberg dot com plus apples, Spotify, 0:08:47.840 --> 0:08:55.040 and anywhere else you get your podcasts. Time now for 0:08:55.040 --> 0:08:58.400 the Bloomberg Sports Update. Here's John stash Hour John. 0:08:58.400 --> 0:09:00.959 Charny Atlanta Falcons, one of seven NFL teams looking for 0:09:01.040 --> 0:09:03.800 a head coach at indications that the Falcons are looking 0:09:03.840 --> 0:09:05.880 for a big name to be their new coach. The 0:09:05.920 --> 0:09:09.679 day after they interviewed Bill Belichick, they interviewed Jim Harbaugh, 0:09:09.760 --> 0:09:13.720 who previously had already interviewed with the Los Angeles Chargers. 0:09:13.760 --> 0:09:16.760 So Harbaugh clearly hasn't interest in returning to the NFL 0:09:17.120 --> 0:09:20.200 and leaving Michigan, where he just won a national championship. Reportedly, 0:09:20.559 --> 0:09:24.240 Harbaugh if he stays with Michigan wants it written into 0:09:24.280 --> 0:09:27.960 his contract that he can't be fired due to NCAA violations. 0:09:28.000 --> 0:09:31.280 Mike Tomlin has reportedly told his team in Pittsburgh that 0:09:31.360 --> 0:09:34.079 he'll remain as coach of the Steelers. It's the job 0:09:34.120 --> 0:09:36.520 he's had for seventeen years. The Steelers had only had 0:09:36.559 --> 0:09:40.080 three different head coaches in the last fifty four years. 0:09:40.160 --> 0:09:43.520 Jason Kelsey told his teammates in Philadelphia just after that 0:09:43.800 --> 0:09:46.000 blowout loss at Tampa Bay at the end of their 0:09:46.000 --> 0:09:48.959 season that he's retiring at age thirty six, thirteen years 0:09:48.960 --> 0:09:51.240 all with the Eagles. He won a Super Bowl, He 0:09:51.280 --> 0:09:54.240 went to the Pro Bowls seven times. Taulliat tadabaloo. That's 0:09:54.240 --> 0:09:56.640 to his younger brother, who's been playing quarterback for Maryland. 0:09:56.960 --> 0:09:59.760 Denied a waiver for another year of eligibility, so he 0:10:00.120 --> 0:10:02.840 journing the Pro Battle. The NBA's top two big man 0:10:02.840 --> 0:10:05.280 and Joe lmb And outplayed the Kola Yokiz. He scored 0:10:05.320 --> 0:10:08.000 forty one points in the second straight game. Philadelphia beat 0:10:08.000 --> 0:10:11.000 Denver one twenty six one twenty one big comeback and Phoenix, 0:10:11.080 --> 0:10:13.040 led by Kevin Durant, they were down twenty two to 0:10:13.120 --> 0:10:16.440 the fourth court of the Sun's rallied top Sacramento by two. 0:10:16.559 --> 0:10:18.920 Hockey of the Capitals are two nothing to win over Anaheim, 0:10:19.200 --> 0:10:21.040 kyl and Shops second right, Purdue. 0:10:20.720 --> 0:10:25.960 An easy win at Indiana. John Skashanwer Bloomberg Sports. 0:10:27.440 --> 0:10:30.440 From coast to coast, from New York to San Francisco, 0:10:30.760 --> 0:10:35.840 Boston to Washington, DC, nationwide on siriusxam, the Bloomberg Business 0:10:35.840 --> 0:10:37.559 app in Bloomberg dot com. 0:10:37.640 --> 0:10:42.120 This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. 0:10:42.200 --> 0:10:46.000 European Central Bank President Christine Legard says aggressive bets on 0:10:46.120 --> 0:10:49.240 interest straight cuts from the financial markets are not helping 0:10:49.280 --> 0:10:53.160 policymakers with their task to bring down inflation, but she 0:10:53.240 --> 0:10:56.440 says it is likely the ECB will cut rates in 0:10:56.520 --> 0:10:59.720 the summer. Madame Lecguard spoke with our editor at large 0:10:59.720 --> 0:11:03.320 France seen Lockwow from the World Economic Forums Bloomberg House 0:11:03.520 --> 0:11:04.920 in Davos, Switzerland. 0:11:05.000 --> 0:11:07.000 Let's listen in to part of that conversation. 0:11:07.200 --> 0:11:10.480 Now, when you look at inflation, when you look at 0:11:10.559 --> 0:11:15.480 monetary policy, what's changed your mind on how quickly we 0:11:15.640 --> 0:11:16.880 get a cut from the ECB? 0:11:18.440 --> 0:11:20.800 You know, when I look at a year ago in 0:11:20.840 --> 0:11:24.800 doubles and when I compare that with where we are today, 0:11:25.400 --> 0:11:31.800 I see a slope downward, but certainly not a slope 0:11:31.880 --> 0:11:34.640 which is at target where we want it. 0:11:34.880 --> 0:11:36.240 So that's what we have achieved. 0:11:36.240 --> 0:11:39.480 I think in a little over a year, bring inflation 0:11:39.679 --> 0:11:41.959 back from where it was in October twenty two at 0:11:42.280 --> 0:11:45.720 ten point two percent down to a two point nine 0:11:45.760 --> 0:11:49.640 percent month and month December, and certainly with the prospect 0:11:49.800 --> 0:11:54.120 of keeping it down and further down because our target 0:11:54.200 --> 0:11:56.680 is two percent and we are you know, I would 0:11:56.679 --> 0:11:58.959 have said a year ago that we are determined we 0:11:59.000 --> 0:12:01.680 want to get it to SI I would say to 0:12:01.720 --> 0:12:04.320 you now that we are confident that we will get 0:12:04.320 --> 0:12:07.160 it to that target two percent medium turn. 0:12:08.120 --> 0:12:12.200 Are market's too optimistic on the industry. I'm not going 0:12:12.240 --> 0:12:13.720 to comment on markets. 0:12:13.800 --> 0:12:17.240 Markets do their job, they have their numbers, they have 0:12:17.400 --> 0:12:22.520 their objectives. What we do at the CB, and what 0:12:22.640 --> 0:12:25.679 I think most central banks would do, is work as 0:12:25.679 --> 0:12:29.800 hard as we can collecting data using artificial intelligence by 0:12:29.840 --> 0:12:36.959 the way for that, analyzing data, confronting viewpoints, checking models 0:12:37.040 --> 0:12:43.120 against empirical data, doing scenario analysis, and being as as 0:12:43.120 --> 0:12:48.400 comprehensive as we can to anticipate what's coming. And it's 0:12:48.480 --> 0:12:52.440 hard because what many people don't understand is that monetary 0:12:52.480 --> 0:12:55.640 policy works with a lag. So whatever we do now 0:12:55.720 --> 0:12:58.400 is going to have an impact in a few months 0:12:58.400 --> 0:13:01.760 and sometimes a year or two, and we have to 0:13:01.920 --> 0:13:07.679 take that in account to decide what we do, how 0:13:07.720 --> 0:13:11.559 long we hold, and what decision we make in due course. 0:13:12.160 --> 0:13:14.800 When you say that you gather data also with AI, 0:13:15.040 --> 0:13:17.920 it does AI also analyze because again you're looking at 0:13:17.920 --> 0:13:20.440 the current data. You're trying to forecast what your monetary 0:13:20.440 --> 0:13:21.880 policy is doing in the future. 0:13:22.360 --> 0:13:24.720 So is it algorithms? Like, how does that work? 0:13:25.520 --> 0:13:30.480 We do data collection a lot, we don't We don't 0:13:30.520 --> 0:13:34.680 determine monetary policy using algorithm and artificial intelligence. And I 0:13:34.679 --> 0:13:37.960 think that time we can check with the AI experts, 0:13:38.120 --> 0:13:40.960 of course, but I don't think that that time has 0:13:41.000 --> 0:13:41.559 come yet. 0:13:42.760 --> 0:13:45.360 When you look at again the forecast, and I understand 0:13:45.360 --> 0:13:48.760 you're not focused on the market, but if the markets prices. 0:13:48.559 --> 0:13:50.760 That are not focused, we look at them, we look 0:13:50.800 --> 0:13:54.240 at what they say. We are attentive, but everyone has 0:13:54.280 --> 0:13:58.280 their job and we cannot, you know, sort of second 0:13:58.360 --> 0:14:01.640 guess what they will think that we are thinking that 0:14:01.679 --> 0:14:04.000 they are second guessing. I mean, it's it's a catch 0:14:04.040 --> 0:14:06.160 twenty two job, right, But. 0:14:06.160 --> 0:14:09.000 If the market is too optimistic about cuts, does it 0:14:09.040 --> 0:14:09.920 actually hurt and not. 0:14:09.960 --> 0:14:12.840 Help the fight against inflation by doing that? 0:14:13.120 --> 0:14:14.560 I was going to ask you that, So it makes 0:14:14.559 --> 0:14:18.840 sure your job harder if if they're actually mispricing what 0:14:18.880 --> 0:14:24.560 you're trying to tell them. 0:14:22.160 --> 0:14:25.840 It is not helping a fight against inflation. If if 0:14:25.880 --> 0:14:29.120 the anticipation is such that you know, they are way 0:14:29.160 --> 0:14:31.040 too high compared with what's likely to happen. 0:14:31.640 --> 0:14:34.760 Is it too early to cry victory against inflation? How 0:14:34.800 --> 0:14:35.760 do you see it behaving? 0:14:36.200 --> 0:14:38.440 We are on the on the right path, We are 0:14:38.720 --> 0:14:43.920 directionally towards the two percent. But unless and until we 0:14:44.040 --> 0:14:48.640 are confident that it is sustainably at two percent medium 0:14:48.720 --> 0:14:52.920 term and we have the data to you know, support. 0:14:52.480 --> 0:14:55.840 It, I'm not going to shout victory. No, not yet. 0:14:56.280 --> 0:14:59.760 How much is the inflation reduction thanks to your monetary 0:14:59.800 --> 0:15:00.800 power and how. 0:15:00.760 --> 0:15:04.040 Much of it is like, No, I wouldn't call it luck. 0:15:06.120 --> 0:15:09.080 I think two factors have played a critical role, and 0:15:09.120 --> 0:15:12.400 it's the decline in energy prices that we have observed. 0:15:12.480 --> 0:15:16.920 You know, energy prices pushed prices up massively, and energy 0:15:16.960 --> 0:15:20.000 prices decline of course has a similar impact. 0:15:20.040 --> 0:15:21.680 So that's number one. 0:15:22.040 --> 0:15:26.360 Number two the bottlenecks that we have observed as a 0:15:26.400 --> 0:15:29.720 result of COVID in particular, and which lasted quite a 0:15:29.800 --> 0:15:33.120 lot of quite a long time, has gradually faded out, 0:15:33.200 --> 0:15:35.880 and that also had an impact, you know, more supply, 0:15:36.400 --> 0:15:39.440 more availability of goods. 0:15:40.600 --> 0:15:41.360 Second factor. 0:15:41.760 --> 0:15:47.960 The third factor is monetary policy, and it's undoubtedly been effective, 0:15:48.360 --> 0:15:52.280 if only to anchor inflation expectations, which we know is 0:15:52.480 --> 0:15:57.760 really important. So it has had an impact on inflation itself, 0:15:57.840 --> 0:16:01.400 but it has definitely had an impact on inflation expectations, 0:16:01.720 --> 0:16:04.600 which by all accounts and all surveys and all measurements 0:16:04.960 --> 0:16:08.520 have come down and are really now broadly onto that 0:16:08.600 --> 0:16:11.120 two percent medium term target that we have. I know 0:16:11.160 --> 0:16:13.640 it's obsessive two percent medium term targets, but yeah. 0:16:13.440 --> 0:16:14.040 That's what it is. 0:16:14.240 --> 0:16:16.640 Yeah, but at least it's auld guide the markets, right, 0:16:16.680 --> 0:16:17.600 I mean, it's. 0:16:17.400 --> 0:16:18.160 Good to be upsetsed. 0:16:18.200 --> 0:16:20.840 Well, if they don't know that that's what we are 0:16:20.880 --> 0:16:23.520 aiming for, then they need to have the head examined, 0:16:23.840 --> 0:16:24.480 that's for sure. 0:16:25.560 --> 0:16:27.200 And then again talk to me a little bit about 0:16:27.200 --> 0:16:30.000 wage bargaining. So again is that going to be on 0:16:30.040 --> 0:16:33.720 the upside and could that change you know, the timing 0:16:33.840 --> 0:16:34.640 of a possible work. 0:16:34.680 --> 0:16:37.640 Well, I'm glad you mentioned wages in general, wage bargaining 0:16:37.680 --> 0:16:40.440 in particular, and I'll go to that, but I want 0:16:40.480 --> 0:16:42.160 to tell you that there are three things that I'm 0:16:42.200 --> 0:16:50.320 watching carefully. Wage bargainings, profit margins, energy prices, and hopefully 0:16:50.320 --> 0:16:56.200 not but the coming back of supply bottom Miex. Those 0:16:56.280 --> 0:17:00.440 are four key components which could have a serious impact 0:17:00.440 --> 0:17:02.160 on the work that we're doing against inflation. 0:17:02.600 --> 0:17:04.639 But back to your wage question. 0:17:05.400 --> 0:17:11.080 Wages have gone up, but relatively slowly, so in prices 0:17:11.560 --> 0:17:15.479 have gone up earlier and faster than wages, so we 0:17:15.520 --> 0:17:19.639 are now facing a moment of not only some degree 0:17:19.640 --> 0:17:24.439 of alignment, but catch up as well. So employees have 0:17:24.560 --> 0:17:28.159 lost purchasing power in the course of twenty one twenty two, 0:17:28.640 --> 0:17:32.199 and there is now a catch up effect in the 0:17:32.240 --> 0:17:36.679 bargaining discussions that are taking place. We will know a 0:17:36.720 --> 0:17:43.240 lot more, probably in April May, because the numbers the 0:17:43.280 --> 0:17:46.840 bargaining agreements are being negotiated in the first quarter of 0:17:46.880 --> 0:17:50.760 every year, and the results come in after the agreements 0:17:50.760 --> 0:17:54.000 have been closed, so that gives us indication that we 0:17:54.080 --> 0:17:59.200 can corroborate and verify in the late spring, I would 0:17:59.240 --> 0:18:02.119 say of of twenty four, that will be a strong 0:18:02.119 --> 0:18:07.600 indication our wages slowly catching up, and that catch up 0:18:07.720 --> 0:18:09.679 process will take place over the course of two or 0:18:09.680 --> 0:18:12.640 three years possibly, or is there a very strong catch 0:18:12.720 --> 0:18:18.280 up coupled with an alignment with inflation, which would give 0:18:18.359 --> 0:18:21.800 me concern because while we're not seeing today's second round effect, 0:18:22.640 --> 0:18:26.960 that could be the result of this sort of twofold process. 0:18:27.280 --> 0:18:29.840 Are you confident there will be a cut this year 0:18:30.000 --> 0:18:32.320 in interest rates? 0:18:33.160 --> 0:18:33.640 Confident? 0:18:33.880 --> 0:18:39.480 I'm confident that short off another major shock, we have 0:18:39.680 --> 0:18:44.720 reach reached a peak. Okay, Now we have to stay 0:18:44.760 --> 0:18:47.240 restrictive for as long as necessary to make sure that 0:18:47.320 --> 0:18:50.320 we get to that state where we're all saying, okay, 0:18:50.359 --> 0:18:53.199 confident that it is at two percent medium term. I 0:18:53.240 --> 0:18:56.080 know some people argue that maybe we are overshooting, maybe 0:18:56.080 --> 0:18:59.840 we're taking risks. I think the risk would be worse 0:19:00.119 --> 0:19:03.160 if we went too fast and had. 0:19:03.000 --> 0:19:05.680 To come back to more tightening, because we would. 0:19:05.440 --> 0:19:08.680 Have wasted all the efforts that everybody has put in 0:19:08.680 --> 0:19:12.080 the last fifteen months. The US election, Yeah, let me 0:19:12.160 --> 0:19:16.240 have some coffee. 0:19:17.520 --> 0:19:19.000 How arid are you about the US election? 0:19:19.400 --> 0:19:21.639 It's for the American people to decide what they want 0:19:23.000 --> 0:19:25.160 with their politics, with their government. 0:19:25.240 --> 0:19:25.879 With their future. 0:19:26.440 --> 0:19:29.399 But obviously we are all concerned about it because the 0:19:29.520 --> 0:19:34.359 United States is the largest economy, the largest defense country 0:19:34.400 --> 0:19:38.720 in the world, and has been a beacon of democracy 0:19:38.760 --> 0:19:42.360 with all its upside and downside. But this is what 0:19:42.880 --> 0:19:46.400 they should be considering, and of course we cannot interfere 0:19:46.400 --> 0:19:49.200 with their choice. It's their choice and that's the beauty 0:19:49.240 --> 0:19:52.920 of democracy. But we have to be extremely attentive and anticipate, 0:19:53.440 --> 0:19:55.960 just as we do with inflation. You know, we do scenarios. 0:19:56.440 --> 0:19:59.600 What if, what if? Then what do we do? Because 0:20:00.000 --> 0:20:03.560 that's the real question. And you know where I sit 0:20:03.640 --> 0:20:06.479 now in Frankfurt, head of the ECB, I think that 0:20:06.520 --> 0:20:11.040 we have to be strong as Europeans and not assume 0:20:11.119 --> 0:20:15.399 that we can rely on whoever our friends are around 0:20:15.400 --> 0:20:18.400 the world, because these things change over the course of time, 0:20:18.480 --> 0:20:19.280 as we have seen. 0:20:19.960 --> 0:20:21.680 So what if Donald Trump gets into the White House, 0:20:21.720 --> 0:20:24.119 what are some of the policies that europe could be 0:20:24.160 --> 0:20:26.600 put in place to not be cut also between China 0:20:26.640 --> 0:20:29.720 and the US with Donald Trump and the White House. 0:20:30.640 --> 0:20:32.720 Well, for one, it has to be strong of its 0:20:32.720 --> 0:20:36.840 own and if I look at my own shop, because 0:20:36.840 --> 0:20:40.119 it matters to monetary policy transmission, I think that and 0:20:40.160 --> 0:20:42.760 you will hear that from others. We have to accelerate 0:20:42.880 --> 0:20:46.679 capital market union. We need financing in Europe. There is 0:20:46.720 --> 0:20:48.879 a lot of saving in Europe, and we have to 0:20:48.920 --> 0:20:52.480 make sure that those savings actually stay here to finance 0:20:52.480 --> 0:20:56.800 what needs to be financed, which is predominantly the climate transition, 0:20:57.200 --> 0:21:02.399 which is digitalization, which is enough industrialization conducted with a 0:21:02.520 --> 0:21:06.560 targeted approach so that we can on the key in 0:21:06.640 --> 0:21:09.440 the key areas be self sufficient. 0:21:10.240 --> 0:21:12.520 Are there policies that you would put in place now 0:21:12.640 --> 0:21:16.960 for Europe to I guess counter the US exceptionalism, which 0:21:17.320 --> 0:21:19.240 you know could be questioned going forward. 0:21:20.160 --> 0:21:23.000 I think I would accelerate many of the initiatives that 0:21:23.040 --> 0:21:29.120