Brendan Moy, FED, U.S. discussed on Bloomberg Daybreak Europe


Okay, maver cousin Bloomberg Euro area economist on the downgrades to growth projections and the upgrades to the expectations around inflation from the European Commission. Thank you very much, indeed. Okay, well let's take a broader look then at the inflation and rate hiking cycle central banks around the world are speeding up interest rate hikes trying to crush an inflation surge that's partly of their own making South Korea, New Zealand have raised by half a percent Canada's gone with a full percentage point. You've also got Singapore and the Philippines tightening at on scheduled meetings, now with the U.S. CPI coming in a higher than expected market C 1% fed rate hike at the end of the month as 50 50. Let's bring in blue both trades are Brendan moy, the man who really knows all about the global drivers of inflation, Brent, good morning, good to have you back with us. We had thought that there might be a peak in inflation in the U.S., but from these latest figures that really doesn't seem the case. It's your cousin. The CPI yesterday was quite a surprise. It came in, like you said, well above expectations. And we started yesterday with folks expecting a 75 basis point fed rate hike at the next meeting in two weeks. And we ended it with a hundred with the expectations toward a full percentage point. So it's definitely the debate about whether inflation has peaked continues and heats up. There are still signs that there are supply pressures in the economy. Demand seems to be weakening. So that argues for the folks who say we've already peaked on inflation, but it's definitely going to be an interesting couple of weeks here as more economic data come in. And try to turn the turn the tide for the fed, whether it's going to go 75 or a hundred basis points. Yeah, and to that point, just to extrapolate or excellent at least expand on that. There was some concern with the CPI print around what looks like increasingly sticky inflation. And yet the beige book of the fed points to price pressures easing, at least in some parts of the U.S.. So how do you pull all that together to kind of get a clearer gauge of whether or not indeed this is the peak? Well, the beige book is probably a better cross section of what's really going on with the economy and companies in particular. The base book is a survey of regional survey that breaks it down by the fed's districts and it really gets into a detail of the anecdotes that companies are relaying back to the Central Bank. And so it's probably more current than the CPI numbers are. More forward looking. You get a company saying, we feel that demand is slowing. And that means more to the fed than last month's consumer price data. So the base book will be a key part of what the fed factors into going into this next meeting, but it's going to be a close call. It seems how aggressively they go or not. Absolutely. Brandon, thank you so much for being with us. Thank you for your time, brilliant based trades are Brendan Murray, giving us a perspective on the global drivers of inflation and the fed path ahead. This is Bloomberg. Markets, headlines and breaking news 24 hours a day at Bloomberg dot com to Bloomberg business out and putting both quick take. This is a Bloomberg business flash. It is 9 17 in the City of London, this Thursday morning. You're seeing losses of four tenths of a percent across European equities, the selling most pronounced in Italy the FTSE mid down 1.6% political risk back in focus for that country as Mario Draghi threatens to step down as prime minister amidst splits within his coalition. There is essentially an expected to be a vote of confidence, essentially a vote of confidence in his government

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