Donald Trump, Ukraine, Antony Blinken discussed on Balance of Power

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Latest news evicting world markets powered by more than 2700 journalists and analysts in over a 120 countries This is Bloomberg radio Now a global news update Secretary of State Antony Blinken and defense secretary Lloyd Austin are set to visit Kyiv Sunday Ukrainian president zelensky revealed the news during a Saturday news conference They'll be the highest ranking U.S. officials to visit Ukraine since the start of Russia's invasion word of the visit comes on the heels of a deadly missile strike on the southwestern seaport of Odessa Ukrainian officials say at least 5 people were killed and 18 others injured in the attack President Biden is talking about his plans to reduce the cost of prescription drugs speaking at green river college in auburn Washington the president announced he once Congress to limit the price of insulin to $35 a month which is three times what it costs to make the drug Former president Trump is holding a rally tonight in Ohio the Delaware county Republican Party will host Trump for a save America rally at the fairgrounds north of Columbus tonight's rally follows a keynote address Trump gave in Florida Thursday where he claimed the Russian invasion of Ukraine wouldn't have happened under his watch That's the latest I'm Julie Ryan You're listening to balance and power with David Westin on Bloomberg radio My conversation with Bank of America's CEO Brian moynihan continues for his view on how the U.S. consumer is holding up despite rising inflation and interest rate hikes We're not seeing people buy less things yet because frankly because of some of the shortage any price is fine So they're willing to pay the price So the transaction volume of our customers activity is going up 78% the dollar volume is going up higher in that That means some of that's just price increases So corporate world is making good profits They're passing through when they can and you're seeing that in some of the corporate earnings it'll be a very interesting earnings season But they're out either handling the shortages and they're paying the inflation It kick on forever that way and that's why the fed has a job to bring the inflation back in line because that kind of spiral is not healthy but it takes rapid movement to get more efficient and rapid movement to move price And with more wages people can pay the prices and do other things So when you're talking about your corporate clients particularly are you seeing much wage pressure and therefore margin compression are they concerned about that They're all concerned about getting workers more than they are about the price because they've all raised wages dramatically Over the last 24 months So to get the workers off the sidelines and you're starting to see that come true you start see just in the last step our economist and Mark was telling me that basically the number of people who quote early retired a large had come back in the system So you're starting to see the people come back to the wage force participation rate has to go back up But it's really kind of get work It's not the price because people feel the shortage of workers is a shorter project a shortage of popular sales and they're out trying to get them And those people are services business It's even more acute Brian you mentioned earlier the anticipation that the fed is going to be raising rates They pretty much said they're going to do that We heard from the Chicago fed president Charles Evans and the economic club of New York And one of the things he talked about was how far he thinks they have to go This is part of what he had to say Probably we are going beyond neutral I mean that's my expectation when I see that taking out special factors I'm still left with three to three and a half percent inflation That's not what we want If we wanted to and a half percent inflation rate I think we have more things to ponder there So Brian he's saying that he expects at least that the fed will go above the neutral rate Does that make sense to you And by the way do we know where the neutral rate is Well I think our economists likewise going back almost two months ago now put a pretty aggressive at the time they said 7 rate increases 7 quarter point rate increases this year and people were like that can't happen And all of a sudden the market moved with them So our people are pretty thinking they got to move pretty hard Quickly And they have the license to do it because they're talking about three 50 basis point hikes at the next three meetings and things like that So Ethan Harrison team better to give you the exact estimates But the reality is if you even listen to your chair pal and others and just like the president there the ideas are going to have to move past because the inflation is much higher than what they were dealing with in 19 where there's barely getting the target level Now it's clearly through it And so the move passed it But they'll bring it back down I mean people forget they'll come up and come down if they have to It's not like they just sit there and wait it out So yes they're going to have to move higher than what people may feel short term rate is what the economists believe And I think the data shows it With the move from the fed obviously we're seeing actually the negative real yield actually flirt with positive believe it or not Back up to positive real yield Assuming that happens which seems to be where the fed is heading what does that do for your business The question is if it's done the right way and it's going up for the right reasons you don't have a deep recession Banking is making more money because the flip of that real yield is we have been effectively subsidizing our customers because of what we call the zero floor So what does your floors real rates go below zero We can't give a consumer less than zero on their accounts We stop at zero That squeezes our margins As the rates go back up we have it Frankly remember I've been CEO of since 2010 And most of my career isn't a zero rate environment It's just a short period of time where it moved and it went right back down with a pandemic but the rallies will make more money and we told people what those estimates were for NII 600 plus $1 million next quarter and then grows from there and we have a 2 trillion of posits and they're very stable and it'll be very good for our bank Given that it's done in a way that doesn't create a deep recession on your side $2 trillion in deposits is really important The last time I checked I think back of America is the largest dollar deposit taker in the world Do you have to pay more for those deposits in a world where you're going to positive real yields in the rates are going up And it's been a long time since we actually bought CDs and we thought we didn't make some money off of them Well that's what happened So the more rate sensitive product goes up But the rowdy is 40% of those 2 trillion are not interest bearing So zero is zero in any environment And the only question is will people pull money out of the accounts that didn't happen last time they actually grew during the repricing cycle we grew all through and even during the fit balance sheet being leveled off and came down a little bit Now this is different There's just a lot more liquidity in the system and we'll see it in money will go into markets if the returns are better and it's short term medium term treasury rates go up and money market funds have become more attractive but we have those products too So we place our customers where they get the best deal But what drives our deposit base is the huge non-interest bearing checking accounts We have 5 million more digital customers than we did in 19 to give.

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