April 17, 2024 • 17 mins
On today's podcast:
1) Powell Signals Rate-Cut Delay After Run of Inflation Surprises
2) Trump Hush Money Trial Adjourns Till Thursday
3) Morgan Stanley Is Planning Biggest China Job Cuts in Years
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:11):
Good morning.
Speaker 3 (00:11):
I'm Nathan Hager.
Speaker 1 (00:12):
And I'm Karen Moscow. Here are the stories we're following today.
Speaker 3 (00:16):
Karen, we begin with the latest messaging from the FED.
Chairman J Powell signaled that policymakers will wait longer than
previously anticipated to cut interest rates following a series of
surprisingly high inflation readings.
Speaker 4 (00:29):
So we've said at the FMC that we'll need greater
confidence that inflation is moving sustainably toward two percent before
be appropriate to ease policy. You know, we took that
cautious approach and sought that greater confidence so as not
to overreact to the string of low inflation readings that
we had in the second half of last year.
Speaker 3 (00:49):
Now, policymakers narrowly penciled in three interest rate cuts and
forecasts published last month, but investors are now betting on
just one to two cuts this year. The yield on
the two year no briefly crossed five percent yesterday. This morning,
it's at four point nine four percent.
Speaker 1 (01:06):
Well, Nathan, Some on Wall Street have speculated the Fed
could raise rates, but Bloomberg Opinion columnist Muhammadalarian says there
are real risks. If the FED boost rates from here.
Speaker 5 (01:16):
If inflationing gets much worse, they could hike. But I
think if they do hike, we're going to have a
regional banking crisis. We're going to have all sorts of
damage in the marketplace. And I think that is at
the back of the head. So I think the likelihood
of them hiking is low. Is it zero? No, they
could Bloomberg.
Speaker 1 (01:36):
Opinion columnist Mohammedalarian says another rate high could put the
Fed on a path to a new tightening cycle and
that could derail US growth.
Speaker 3 (01:45):
Well, Karen. Inflation and rates are also in focus in Europe.
UK inflation slowed less than expected last month. This fuel
price is corrept higher. Consumer prices rose three point two
percent in March compared with the year earlier. That's down
from three point four in While that is the lowest
since September twenty twenty one, three point two is above
the three point one percent inflation that the Bank of
(02:07):
England and private sector economists had expected.
Speaker 1 (02:10):
Now, Nathan, we get the latest from the Middle East
and Israeli Foreign Minister Israel Counts is meeting with the
foreign ministers of the UK and Germany. He says Israel
has the right to react to Iran's weekend missile and
drone attack, and he's calling for sanctions on Around's missile program.
The White House says it's preparing a package targeting around's
weapons systems, but Bloomberg's Patrick psychs reports Iran has a
(02:33):
track record of dealing with sanctions.
Speaker 6 (02:35):
The symbolism is much more important in this case. It's
more of a diplomatic signal to israel Is saying, you know,
we your allies, We're all here, We're acting immediately in
the days after that attack, and therefore perhaps you don't
need to go so hard in your planned military response
to that attack. You know, take this as the message
(02:57):
of support and feel reassured a few security.
Speaker 1 (03:02):
Meanwhile, Bloomberg's Patrick seikescherports the leaders of Saudi Arabia and
the United Arab Emirates issued a joint statement calling for
a maximum of self restraint in the Middle East and
warning of the quote dangers of war and its dire consequences.
Speaker 3 (03:16):
Now, let's turn to the latest Karen on the criminal
case against Donald Trump. It took two days to seat
seven jurors, but there is progress in the hush money
trial in Manhattan. Let's get the latest now from Bloomberg's
June Grosso in New York.
Speaker 7 (03:28):
The first seven jurors were sworn in after lawyers grilled
them about their social media posts, political views, and personal lives.
Sitting on the jury will be an information technology worker,
an English teacher and oncology nurse, a sales professional, a
software engineer, and two lawyers. Four more jurors must be
sworn in and six alternates before opening statements can begin,
(03:53):
perhaps as early as next week. June Grosso, Bloomberg Radio,
All Right.
Speaker 1 (03:57):
June, thank you. In company news, job cuts reportedly on
the way at Toshiba, The nie K is reporting the
company plans to eliminate five thousand jobs in Japan. That's
about a tenth of its domestic headcount. The NIKA says
with a cost cutting move, Toshiba is now focusing on
its infrastructure and digital technology operations.
Speaker 3 (04:16):
Meanwhile, Karen Bloomberg News has learned that Morgan Stanley plans
to start cutting about fifty investment banking jobs in the
Asia Pacific region this week. At least eighty percent of
those reductions will be in Hong Kong and China. The
job cuts would be the deepest in years for Morgan
Stanley in China.
Speaker 1 (04:33):
Well Nathan. Jamie Diamond says artificial intelligence will transform banking,
but it will also lead to job losses. The JP
Morgan CEO's comments to Bloomberg come after he devoted a
chunk of his annual shareholder letter to the importance of
artificial intelligence for the Wall Street Giants business. Here's what
Diamond told Emily Chang on the latest episode of The Circuit.
Speaker 8 (04:55):
It's a living breathing thing. So people want to ask
what's going to do. It's a living breathing thing.
Speaker 9 (04:59):
It's going to change.
Speaker 8 (05:00):
They're gonna be all different types of models and different
types of tools and technology. But the way to think
about for us is every single process, so errors, trading, hedging, research,
every app every database. You're going to be applying AI.
So it might be as a copilot, it might be
to replace humans. You know, AI is doing all the
equity hedging for us. For the most part. It's idea
(05:20):
generation as large language models.
Speaker 1 (05:23):
And you can watch the full wide ranging interview with
Jamie Dimond on the latest episode of the Circuit with
Emily Chang tonight at six pm Wall Street Time on
Bloomberg Television. You can also get the circuit in podcast
Forum on Apples, Spotify, or anywhere else you listen to podcasts.
Speaker 3 (05:38):
Let's check some stocks this morning, Karen. We're watching shares
of ASML holding. They're down more than four percent. In Amsterdam,
Europe's most valuable tech firm posted new orders that fell
short of analyst estimate's hurt by a downturn in demand
for its most advanced machines from the chip making industry.
Speaker 1 (05:54):
And shares of United Airlines flying higher by almost five
percent in early trading that carry your forecast better than
a expected profit this quarter. That's tempering concerns that Boeing
aircraft delays and regulatory pressure will put expansion plans at risk.
Speaker 7 (06:08):
Well.
Speaker 3 (06:08):
Boeing safety record will be under pressure today on Capitol Hill, Karen,
the Senate is holding two separate hearings on a whistleblower's
claims of poor assembly processes and shortcomings in the seven
eighty seven Dreamliner program. Senators will hear from a Boeing
engineer who worked on that plane for years, plus safety
experts from NASA and the academic world. Boeing executives will
(06:30):
not be there. CEO Dave Calhoun is expected to testify
at a later date.
Speaker 1 (06:39):
And it's time now for look at some of the
other stories making news in New York and around the world.
For that, we're joined by Bloomberg's John Tucker, John Good Morning.
Speaker 10 (06:46):
Good Morning Karen. President Biden calling for higher tariffs on
Chinese steel and aluminum. Bloomberg Steve Ponas says this is
part of a series of steps to shore up the
American steel sector and win over workers in this year's election.
Speaker 11 (07:00):
In a visit to Pittsburgh today, mister Biden will propose
new twenty five percent tariffs on certain Chinese steel and
aluminum products as part of an ongoing review, while the
US also launches a formal probe into China's shipbuilding industry.
The steps target a relatively small segment of the US market,
with imports of Chinese steel and aluminum totaling roughly one
(07:21):
point seven billion dollars in twenty twenty three, but US
officials said the announcements were designed to head off an
expected surge and safeguard the US market. The President will
also reiterate that United States steel based in Pittsburgh should
remain American owned. Steve Potisk Bloomberg Radio.
Speaker 10 (07:38):
A newly unsealed court document so US Senator Bob Menendez
is prepared to blame his wife at his bribery trial
for withholding information from him. Lawyers for the New Jersey
Democrat asked the judge to try him separately from his wife, Nadine.
They're accused of accepting brimes of cash, gold bars, and
a car in the Bronx. Police is searching for four
(07:59):
sons books who shot four people on a street corner
Tuesday evening, killing one of them. According to NYPD Chief
Benjamin Gurley, the victims were all shot by passengers riding
on two scooters with.
Speaker 3 (08:11):
Two males on each scooter abreast.
Speaker 8 (08:15):
The rear passengers of those scooters pulled off firearms. That's
two firearms, and he fired approximately ten rounds.
Speaker 10 (08:23):
So far, had no arrests. Former US Senator and two
termed Florida Governor Bob Graham, who gained national prominence as
Chairman of the Senate Intelligence Committee in the aftermath of
the two thousand and one terror attacks and as an
early critic of the Iraq war, has died. He was
eighty seven years old, Global news twenty four hours a
day and whenever you wanted with Bloomberg News. Now, I'm
(08:44):
John Tucker and this is Bloomberg Nathan and Karen.
Speaker 1 (08:47):
Sorry, John, thank you. It's time now for the Bloombergy
Sports Update with John Stashaur.
Speaker 11 (08:56):
John, Good morning, Good morning, Carry.
Speaker 12 (08:58):
The Yankees had the hot start they off. The Mets
had a brutal start to the season five straight home losses.
They've turned it around moved over five hundred where a
three to one win over the Pirates at Cityfield. Mets
scored all three and the seventh, ending their bullpen to
four Scorelesshitians gave up just one hit. A night after
the Yankees first two game losing straight, the skid reached
three in Toronto. Blue Jays led five to one. Yankee
(09:19):
comeback fell short. They lost five to four. Jose Trasvigno
drove in three runs, but Anthony Bupe went over four
with four strikeouts and Aaron Judge went over four. His
average fell to one eighty two. Orioles beat the Twins.
They are only a half game behind the Yanks. Red
Sox lost to Cleveland. Nationals lost to the Dodgers Hall
of Fame manager Whitey Herzog has died at ninety two.
Managed the Cardinals throughout the nineteen eighties, won the World
(09:41):
Series in eighty two, and also passed either way. One
of the last living Boys of Summer, Carl Erskine was
the main stay on the Brooklyn Dodgers pitching staff. He
was ninety seven. The NBA play in began in New Orleans.
Lakers had a fifteen point lead the Pelicans rallied. Lakers
prevailed down the stretch.
Speaker 13 (09:58):
Here is Breeves dribbling rights all the way to the middle.
T low for three shot it two s three for Russell,
put the Lakers up by four with fifty seconds remaining.
Speaker 12 (10:14):
In the fort on klac and LA fift three four
of the night for D'Angelo Russell and the Lakers won
one ten to one oh six, So they'll be the
seventh seed in the West. They'll face Denver, who swept
the Lakers last year, in the West Finals. New Orleans
will now host Sacramento Friday to see who the eighth
seed will be. The Kings blue out Golden State one
eighteen to ninety four. The Rangers found out their opponent
(10:34):
first round of the Stanley Cup playoffs will be the
Washington Capitals Bruins lost Florida one. The Panthers won the
Atlantic Division. Josh Dashawe, Bloomberg Sports Camp, Nathan.
Speaker 1 (10:44):
All Right, John, thank you. SMP futures up a quarter percent,
or fourteen points down, futures up a third of upper
cent or one hundred and twenty eight points, Nasdaq futures
up a tenth of upper cent or twenty four points,
and the ten year Treasury yield at four point sixty
three percent.
Speaker 9 (11:00):
Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak. Good morning.
Speaker 3 (11:11):
I'm Nathan Hager. Higher for longer. That has been the
message for quite some time from Fed Chairman Jerome Powell
when it comes to interest rates. But after the latest
hot inflation data that has started this year, Powell really
seems to be trying to send that message home to
markets in an even bigger way. And for more. We
are joined by Bloomberg's Kritty Gupta. Critty good morning. Sounds
(11:32):
like the new message from chairman Powell is higher for
even longer.
Speaker 14 (11:37):
It is, and it's kind of this almost admitting that
there is I mean, he said this right, that there's
still more work to do. The last mile is always
going to be the hardest. His wording seems to have
pushed those market expectations of a cut potentially to into
next year, moving it out of twenty twenty four altogether.
So it's more a question of not only higher for longer,
(12:00):
but there's also a question of credibility here that is
this the tool that can actually tack on inflation? And Nathan,
you know, well early on when we had inflation takeups
back in twenty twenty one, the verbiage that Jay Powell
and some of his critics even us is we don't
want a vulgar repeat, We don't want that reacceleration of inflation.
This is kind of his worst nightmare, that's almost coming
(12:21):
to fruition.
Speaker 3 (12:22):
Yeah, he seems to be sort of hoping that this
isn't the reacceleration. But it's raising the question when it
comes to FED credibility about whether that last mile should
be maybe a little bit less than a mile. There's
a growing debate in this market about whether the two
percent inflation targets still makes sense.
Speaker 14 (12:41):
There is a growing debate, and it's one that's kind
of going global as well, because right here in the
UK as well, we are having the exact same debate.
Of course, setting the precedent by the Federal Reserve. But look,
that's a much longer process that isn't going to be
adjusted anytime soon. It requires even congressional approval to adjust
that target. It Something you are, however, seeing, is what
(13:02):
the inputs into this inflationary process is. So when we're
talking about what's actually driving this inflation uptick, you're starting
to see some of the commodity prices actually take higher.
So oil prices, for example, was one gas prices that
we watch, especially ahead of the election in the States.
Another piece that's especially relevant for the global audience is
simply this idea that you were starting to yield much
(13:22):
much higher. A lot of the work, a lot of
that kind of easing of the Federal Reserve was kind
of pushing off in terms of rate cuts. A lot
of that has actually been done by the markets in
a good chunk a way. When you look at financial conditions,
take a look at the stock market rally, take a
look at the dollar rally, credit spreads have tightened. Those
are all ways to kind of through the markets without
that FED intervention tighten or extracy ease some of the
(13:45):
conditions that allow for things like financing, for example, in
the broader market. So that's going to be one thing
to watch. The bond market is another story here, where
you start to see so many people piled on to
the front end of the curve that their market is
almost partially in control of where rates go. Some would
argue at an even faster pace than where the FED
is expecting. They're higher for longer as well. So you're
(14:07):
seeing yields tick up higher. That makes the FED its
job even more difficult when it comes to working in
the opposite direction.
Speaker 12 (14:14):
So does this.
Speaker 3 (14:15):
Raise the idea once again that we could see no
interest rate cuts this year? Perhaps as a base case?
I mean, does Torsten Slock of Apollo Management sound like
a profit at this point?
Speaker 14 (14:28):
It could be, and then look, it wouldn't be the
first time that he's claimed that profit status, and very
easily could be. He also mentioned that some of these
financial conditions are incentivizing capital markets activity, IPO deals, et cetera.
And he's been right about that, and he's really shown
that kind of pickup as well. I'll answer your question
in terms of market pricing here, because the market's always right,
isn't it, Nathan. And when you look at the market
(14:51):
pricing you can find on the Bloomberg terminal, it basically
is it has pushed out cuts all the way into
twenty twenty five. The most kind of the biggest percentage
you is about a forty seven percent odds of a
cut in September, though the next one coming out forty
eight percent in December. Remember're also dealing with the election story.
How close to the election does the Fed have room
to cut? And how many data points in between do
(15:13):
you get suggesting that inflation is either upticked further, that
there is a reacceleration, or gone in the opposite direction
that we can claim that transitory status. And right now
you've had three hot prints across CPI, PPI, PCE. At
the moment, three data points is starting to feel like
a trend.
Speaker 3 (15:30):
Only about thirty seconds left here, Kritie. But we're in
this situation where inflation is easing just a bit overseas.
Now we got the lower than well, the lower inflation
print out of the UK not lower than expected. But
this idea as well, that the ECB could be cutting
in June. I mean, what about the divergence here?
Speaker 14 (15:48):
Well, the divergence is one of concern, and it's one
that actually kind of makes the trade a little bit
easier when it comes to the bond market and even
the FX market. You're already seeing cracks of that where
the strong dollar story is actually weighing on the year
and the pound because the market is expecting that divergence
to manifest as soon as the summer. Is this an
issue not really seems to be the consensus at the
(16:08):
moment because it'll only last for a couple of months
at most. Does that narrative change Absolutely? But right now
you're one hundred percent right. The ECB is looking like
it's going to be the first to cut rates.
Speaker 2 (16:18):
This is Bloomberg day Break Today, your morning brief on
the stories making news from Wall Street to Washington and beyond.
Speaker 1 (16:25):
Look for us on your podcast feed at six am
Eastern each morning on Apple, Spotify, and anywhere else you
get your podcasts.
Speaker 2 (16:33):
You can also listen live each morning starting at five
am Wall Street time on Bloomberg eleven three to zero
in New York, Bloomberg ninety nine to one in Washington,
Bloomberg one oh six to one in Boston, and Bloomberg
ninety sixty in San Francisco.
Speaker 1 (16:46):
Our flagship New York station is also available on your
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Speaker 2 (16:55):
Listen coast to coast on the Bloomberg Business app, Serious XM,
the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager.
Speaker 1 (17:02):
And I'm Karen Moscow. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg Daybreak
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:11):
Good morning.
Speaker 3 (00:11):
I'm Nathan Hager.
Speaker 1 (00:12):
And I'm Karen Moscow. Here are the stories we're following today.
Speaker 3 (00:16):
Karen, we begin with the latest messaging from the FED.
Chairman J Powell signaled that policymakers will wait longer than
previously anticipated to cut interest rates following a series of
surprisingly high inflation readings.
Speaker 4 (00:29):
So we've said at the FMC that we'll need greater
confidence that inflation is moving sustainably toward two percent before
be appropriate to ease policy. You know, we took that
cautious approach and sought that greater confidence so as not
to overreact to the string of low inflation readings that
we had in the second half of last year.
Speaker 3 (00:49):
Now, policymakers narrowly penciled in three interest rate cuts and
forecasts published last month, but investors are now betting on
just one to two cuts this year. The yield on
the two year no briefly crossed five percent yesterday. This morning,
it's at four point nine four percent.
Speaker 1 (01:06):
Well, Nathan, Some on Wall Street have speculated the Fed
could raise rates, but Bloomberg Opinion columnist Muhammadalarian says there
are real risks. If the FED boost rates from here.
Speaker 5 (01:16):
If inflationing gets much worse, they could hike. But I
think if they do hike, we're going to have a
regional banking crisis. We're going to have all sorts of
damage in the marketplace. And I think that is at
the back of the head. So I think the likelihood
of them hiking is low. Is it zero? No, they
could Bloomberg.
Speaker 1 (01:36):
Opinion columnist Mohammedalarian says another rate high could put the
Fed on a path to a new tightening cycle and
that could derail US growth.
Speaker 3 (01:45):
Well, Karen. Inflation and rates are also in focus in Europe.
UK inflation slowed less than expected last month. This fuel
price is corrept higher. Consumer prices rose three point two
percent in March compared with the year earlier. That's down
from three point four in While that is the lowest
since September twenty twenty one, three point two is above
the three point one percent inflation that the Bank of
(02:07):
England and private sector economists had expected.
Speaker 1 (02:10):
Now, Nathan, we get the latest from the Middle East
and Israeli Foreign Minister Israel Counts is meeting with the
foreign ministers of the UK and Germany. He says Israel
has the right to react to Iran's weekend missile and
drone attack, and he's calling for sanctions on Around's missile program.
The White House says it's preparing a package targeting around's
weapons systems, but Bloomberg's Patrick psychs reports Iran has a
(02:33):
track record of dealing with sanctions.
Speaker 6 (02:35):
The symbolism is much more important in this case. It's
more of a diplomatic signal to israel Is saying, you know,
we your allies, We're all here, We're acting immediately in
the days after that attack, and therefore perhaps you don't
need to go so hard in your planned military response
to that attack. You know, take this as the message
(02:57):
of support and feel reassured a few security.
Speaker 1 (03:02):
Meanwhile, Bloomberg's Patrick seikescherports the leaders of Saudi Arabia and
the United Arab Emirates issued a joint statement calling for
a maximum of self restraint in the Middle East and
warning of the quote dangers of war and its dire consequences.
Speaker 3 (03:16):
Now, let's turn to the latest Karen on the criminal
case against Donald Trump. It took two days to seat
seven jurors, but there is progress in the hush money
trial in Manhattan. Let's get the latest now from Bloomberg's
June Grosso in New York.
Speaker 7 (03:28):
The first seven jurors were sworn in after lawyers grilled
them about their social media posts, political views, and personal lives.
Sitting on the jury will be an information technology worker,
an English teacher and oncology nurse, a sales professional, a
software engineer, and two lawyers. Four more jurors must be
sworn in and six alternates before opening statements can begin,
(03:53):
perhaps as early as next week. June Grosso, Bloomberg Radio,
All Right.
Speaker 1 (03:57):
June, thank you. In company news, job cuts reportedly on
the way at Toshiba, The nie K is reporting the
company plans to eliminate five thousand jobs in Japan. That's
about a tenth of its domestic headcount. The NIKA says
with a cost cutting move, Toshiba is now focusing on
its infrastructure and digital technology operations.
Speaker 3 (04:16):
Meanwhile, Karen Bloomberg News has learned that Morgan Stanley plans
to start cutting about fifty investment banking jobs in the
Asia Pacific region this week. At least eighty percent of
those reductions will be in Hong Kong and China. The
job cuts would be the deepest in years for Morgan
Stanley in China.
Speaker 1 (04:33):
Well Nathan. Jamie Diamond says artificial intelligence will transform banking,
but it will also lead to job losses. The JP
Morgan CEO's comments to Bloomberg come after he devoted a
chunk of his annual shareholder letter to the importance of
artificial intelligence for the Wall Street Giants business. Here's what
Diamond told Emily Chang on the latest episode of The Circuit.
Speaker 8 (04:55):
It's a living breathing thing. So people want to ask
what's going to do. It's a living breathing thing.
Speaker 9 (04:59):
It's going to change.
Speaker 8 (05:00):
They're gonna be all different types of models and different
types of tools and technology. But the way to think
about for us is every single process, so errors, trading, hedging, research,
every app every database. You're going to be applying AI.
So it might be as a copilot, it might be
to replace humans. You know, AI is doing all the
equity hedging for us. For the most part. It's idea
(05:20):
generation as large language models.
Speaker 1 (05:23):
And you can watch the full wide ranging interview with
Jamie Dimond on the latest episode of the Circuit with
Emily Chang tonight at six pm Wall Street Time on
Bloomberg Television. You can also get the circuit in podcast
Forum on Apples, Spotify, or anywhere else you listen to podcasts.
Speaker 3 (05:38):
Let's check some stocks this morning, Karen. We're watching shares
of ASML holding. They're down more than four percent. In Amsterdam,
Europe's most valuable tech firm posted new orders that fell
short of analyst estimate's hurt by a downturn in demand
for its most advanced machines from the chip making industry.
Speaker 1 (05:54):
And shares of United Airlines flying higher by almost five
percent in early trading that carry your forecast better than
a expected profit this quarter. That's tempering concerns that Boeing
aircraft delays and regulatory pressure will put expansion plans at risk.
Speaker 7 (06:08):
Well.
Speaker 3 (06:08):
Boeing safety record will be under pressure today on Capitol Hill, Karen,
the Senate is holding two separate hearings on a whistleblower's
claims of poor assembly processes and shortcomings in the seven
eighty seven Dreamliner program. Senators will hear from a Boeing
engineer who worked on that plane for years, plus safety
experts from NASA and the academic world. Boeing executives will
(06:30):
not be there. CEO Dave Calhoun is expected to testify
at a later date.
Speaker 1 (06:39):
And it's time now for look at some of the
other stories making news in New York and around the world.
For that, we're joined by Bloomberg's John Tucker, John Good Morning.
Speaker 10 (06:46):
Good Morning Karen. President Biden calling for higher tariffs on
Chinese steel and aluminum. Bloomberg Steve Ponas says this is
part of a series of steps to shore up the
American steel sector and win over workers in this year's election.
Speaker 11 (07:00):
In a visit to Pittsburgh today, mister Biden will propose
new twenty five percent tariffs on certain Chinese steel and
aluminum products as part of an ongoing review, while the
US also launches a formal probe into China's shipbuilding industry.
The steps target a relatively small segment of the US market,
with imports of Chinese steel and aluminum totaling roughly one
(07:21):
point seven billion dollars in twenty twenty three, but US
officials said the announcements were designed to head off an
expected surge and safeguard the US market. The President will
also reiterate that United States steel based in Pittsburgh should
remain American owned. Steve Potisk Bloomberg Radio.
Speaker 10 (07:38):
A newly unsealed court document so US Senator Bob Menendez
is prepared to blame his wife at his bribery trial
for withholding information from him. Lawyers for the New Jersey
Democrat asked the judge to try him separately from his wife, Nadine.
They're accused of accepting brimes of cash, gold bars, and
a car in the Bronx. Police is searching for four
(07:59):
sons books who shot four people on a street corner
Tuesday evening, killing one of them. According to NYPD Chief
Benjamin Gurley, the victims were all shot by passengers riding
on two scooters with.
Speaker 3 (08:11):
Two males on each scooter abreast.
Speaker 8 (08:15):
The rear passengers of those scooters pulled off firearms. That's
two firearms, and he fired approximately ten rounds.
Speaker 10 (08:23):
So far, had no arrests. Former US Senator and two
termed Florida Governor Bob Graham, who gained national prominence as
Chairman of the Senate Intelligence Committee in the aftermath of
the two thousand and one terror attacks and as an
early critic of the Iraq war, has died. He was
eighty seven years old, Global news twenty four hours a
day and whenever you wanted with Bloomberg News. Now, I'm
(08:44):
John Tucker and this is Bloomberg Nathan and Karen.
Speaker 1 (08:47):
Sorry, John, thank you. It's time now for the Bloombergy
Sports Update with John Stashaur.
Speaker 11 (08:56):
John, Good morning, Good morning, Carry.
Speaker 12 (08:58):
The Yankees had the hot start they off. The Mets
had a brutal start to the season five straight home losses.
They've turned it around moved over five hundred where a
three to one win over the Pirates at Cityfield. Mets
scored all three and the seventh, ending their bullpen to
four Scorelesshitians gave up just one hit. A night after
the Yankees first two game losing straight, the skid reached
three in Toronto. Blue Jays led five to one. Yankee
(09:19):
comeback fell short. They lost five to four. Jose Trasvigno
drove in three runs, but Anthony Bupe went over four
with four strikeouts and Aaron Judge went over four. His
average fell to one eighty two. Orioles beat the Twins.
They are only a half game behind the Yanks. Red
Sox lost to Cleveland. Nationals lost to the Dodgers Hall
of Fame manager Whitey Herzog has died at ninety two.
Managed the Cardinals throughout the nineteen eighties, won the World
(09:41):
Series in eighty two, and also passed either way. One
of the last living Boys of Summer, Carl Erskine was
the main stay on the Brooklyn Dodgers pitching staff. He
was ninety seven. The NBA play in began in New Orleans.
Lakers had a fifteen point lead the Pelicans rallied. Lakers
prevailed down the stretch.
Speaker 13 (09:58):
Here is Breeves dribbling rights all the way to the middle.
T low for three shot it two s three for Russell,
put the Lakers up by four with fifty seconds remaining.
Speaker 12 (10:14):
In the fort on klac and LA fift three four
of the night for D'Angelo Russell and the Lakers won
one ten to one oh six, So they'll be the
seventh seed in the West. They'll face Denver, who swept
the Lakers last year, in the West Finals. New Orleans
will now host Sacramento Friday to see who the eighth
seed will be. The Kings blue out Golden State one
eighteen to ninety four. The Rangers found out their opponent
(10:34):
first round of the Stanley Cup playoffs will be the
Washington Capitals Bruins lost Florida one. The Panthers won the
Atlantic Division. Josh Dashawe, Bloomberg Sports Camp, Nathan.
Speaker 1 (10:44):
All Right, John, thank you. SMP futures up a quarter percent,
or fourteen points down, futures up a third of upper
cent or one hundred and twenty eight points, Nasdaq futures
up a tenth of upper cent or twenty four points,
and the ten year Treasury yield at four point sixty
three percent.
Speaker 9 (11:00):
Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak. Good morning.
Speaker 3 (11:11):
I'm Nathan Hager. Higher for longer. That has been the
message for quite some time from Fed Chairman Jerome Powell
when it comes to interest rates. But after the latest
hot inflation data that has started this year, Powell really
seems to be trying to send that message home to
markets in an even bigger way. And for more. We
are joined by Bloomberg's Kritty Gupta. Critty good morning. Sounds
(11:32):
like the new message from chairman Powell is higher for
even longer.
Speaker 14 (11:37):
It is, and it's kind of this almost admitting that
there is I mean, he said this right, that there's
still more work to do. The last mile is always
going to be the hardest. His wording seems to have
pushed those market expectations of a cut potentially to into
next year, moving it out of twenty twenty four altogether.
So it's more a question of not only higher for longer,
(12:00):
but there's also a question of credibility here that is
this the tool that can actually tack on inflation? And Nathan,
you know, well early on when we had inflation takeups
back in twenty twenty one, the verbiage that Jay Powell
and some of his critics even us is we don't
want a vulgar repeat, We don't want that reacceleration of inflation.
This is kind of his worst nightmare, that's almost coming
(12:21):
to fruition.
Speaker 3 (12:22):
Yeah, he seems to be sort of hoping that this
isn't the reacceleration. But it's raising the question when it
comes to FED credibility about whether that last mile should
be maybe a little bit less than a mile. There's
a growing debate in this market about whether the two
percent inflation targets still makes sense.
Speaker 14 (12:41):
There is a growing debate, and it's one that's kind
of going global as well, because right here in the
UK as well, we are having the exact same debate.
Of course, setting the precedent by the Federal Reserve. But look,
that's a much longer process that isn't going to be
adjusted anytime soon. It requires even congressional approval to adjust
that target. It Something you are, however, seeing, is what
(13:02):
the inputs into this inflationary process is. So when we're
talking about what's actually driving this inflation uptick, you're starting
to see some of the commodity prices actually take higher.
So oil prices, for example, was one gas prices that
we watch, especially ahead of the election in the States.
Another piece that's especially relevant for the global audience is
simply this idea that you were starting to yield much
(13:22):
much higher. A lot of the work, a lot of
that kind of easing of the Federal Reserve was kind
of pushing off in terms of rate cuts. A lot
of that has actually been done by the markets in
a good chunk a way. When you look at financial conditions,
take a look at the stock market rally, take a
look at the dollar rally, credit spreads have tightened. Those
are all ways to kind of through the markets without
that FED intervention tighten or extracy ease some of the
(13:45):
conditions that allow for things like financing, for example, in
the broader market. So that's going to be one thing
to watch. The bond market is another story here, where
you start to see so many people piled on to
the front end of the curve that their market is
almost partially in control of where rates go. Some would
argue at an even faster pace than where the FED
is expecting. They're higher for longer as well. So you're
(14:07):
seeing yields tick up higher. That makes the FED its
job even more difficult when it comes to working in
the opposite direction.
Speaker 12 (14:14):
So does this.
Speaker 3 (14:15):
Raise the idea once again that we could see no
interest rate cuts this year? Perhaps as a base case?
I mean, does Torsten Slock of Apollo Management sound like
a profit at this point?
Speaker 14 (14:28):
It could be, and then look, it wouldn't be the
first time that he's claimed that profit status, and very
easily could be. He also mentioned that some of these
financial conditions are incentivizing capital markets activity, IPO deals, et cetera.
And he's been right about that, and he's really shown
that kind of pickup as well. I'll answer your question
in terms of market pricing here, because the market's always right,
isn't it, Nathan. And when you look at the market
(14:51):
pricing you can find on the Bloomberg terminal, it basically
is it has pushed out cuts all the way into
twenty twenty five. The most kind of the biggest percentage
you is about a forty seven percent odds of a
cut in September, though the next one coming out forty
eight percent in December. Remember're also dealing with the election story.
How close to the election does the Fed have room
to cut? And how many data points in between do
(15:13):
you get suggesting that inflation is either upticked further, that
there is a reacceleration, or gone in the opposite direction
that we can claim that transitory status. And right now
you've had three hot prints across CPI, PPI, PCE. At
the moment, three data points is starting to feel like
a trend.
Speaker 3 (15:30):
Only about thirty seconds left here, Kritie. But we're in
this situation where inflation is easing just a bit overseas.
Now we got the lower than well, the lower inflation
print out of the UK not lower than expected. But
this idea as well, that the ECB could be cutting
in June. I mean, what about the divergence here?
Speaker 14 (15:48):
Well, the divergence is one of concern, and it's one
that actually kind of makes the trade a little bit
easier when it comes to the bond market and even
the FX market. You're already seeing cracks of that where
the strong dollar story is actually weighing on the year
and the pound because the market is expecting that divergence
to manifest as soon as the summer. Is this an
issue not really seems to be the consensus at the
(16:08):
moment because it'll only last for a couple of months
at most. Does that narrative change Absolutely? But right now
you're one hundred percent right. The ECB is looking like
it's going to be the first to cut rates.
Speaker 2 (16:18):
This is Bloomberg day Break Today, your morning brief on
the stories making news from Wall Street to Washington and beyond.
Speaker 1 (16:25):
Look for us on your podcast feed at six am
Eastern each morning on Apple, Spotify, and anywhere else you
get your podcasts.
Speaker 2 (16:33):
You can also listen live each morning starting at five
am Wall Street time on Bloomberg eleven three to zero
in New York, Bloomberg ninety nine to one in Washington,
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Speaker 1 (16:46):
Our flagship New York station is also available on your
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Speaker 2 (16:55):
Listen coast to coast on the Bloomberg Business app, Serious XM,
the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager.
Speaker 1 (17:02):
And I'm Karen Moscow. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg Daybreak
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