35 Burst results for "Michael Mckee"
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Complete focus on the fed? Are we going to be doing this all year? I mean, the fed Derby, the dots Derby, the Michael McKee Derby J Bryson, are we going to be doing this for the rest of the year? You know, I think so, Tom, I think it's going to be a high weight on what the fed is doing. Now, if we get a few months from now and it looks like the economy is really starting to slip, I think what really becomes important there are initial jobless claims and other labor market sort of variables. But for the foreseeable future, I think it's really all about the fed. Can we, I'm looking at this almost as domestic final sales. Can we quote unquote slip or can we just say it's the housing market and other financial distortions slipping and the rest of it does pretty well like durable goods just showed. How does that mix play out? Yeah, so if you think about the consumer right now, the consumer is very, very strong financially. And so you could have a recession this year in, say, manufacturing. Strong dollar, weaker growth in the rest of the world. You could have weakness in the housing market. I mean, that's what we've seen for the last almost year now, but consumer spending could continue to hold in there and given the fact that consumer spending is 70% of the economy, you could have a few sectors in the economy in kind of a recession and the overall economy wouldn't necessarily need to tip into recession. I mean, and it's right where I wanted to go is you got an NBER recession here and I note yields coming in abruptly here two year yield into 4.78% down three basis points, ten year yield migrates away two down two basis points with a little bit just a little bit of curve inversion. I don't want to oversell that. Futures up 30. I look at the stew as Lisa would say that we're in and to me I want to just as you said, partition it. If we slow down, we don't all slow down, do we? No, that's right. I mean, the economy there's lots of different sectors in the economy. You think back about back to 2015, 2016. China was having some real problems. The manufacturing sector back then was in a recession. The overall U.S. economy was not in a recession. So you can have different sectors going down and not the whole ship going down. Now, if some of those sectors go down a lot like manufacturing and housing and then you start to get job losses and there then it does start to bleed into other sorts of sectors in the economy. So it's a really tricky situation that the fed finds itself in right now. Did you break into the global footprint which you commanded for years at Wells Fargo? How urgent is it for IMF right now? You've got the Nigerian elections in that. But how, how have a moment is it right now for the International Monetary Fund? Well, you know, if you look around the world right now, you know, most of the world is slowing down right now. If you look at Europe now, it's not as bad as what it was say. 6 months ago, when energy prices were through the roof over there. Fortunately, when you look around the world, there are not signs of big debt bubbles like we had, say, 20 years ago in Asia, places like that. So obviously the IMF is obviously very, very important institution around the world. But my sense is the overall global economy right now is okay. But it's obviously the fraught geopolitical situation, potential for lots of different sorts of shocks. And so it's good to have that backstop of the IMF there if, in fact, it's needed. Jay Bryson, thank you so much for joining us today with Wells Fargo, their chief economist here. It really can't say enough about what their team has done for us here in the ambiguities of the moment. What we have as a moment of equity markets lifting off some of the very challenging days we've had features up 30 down futures up to 25. NASA, not out of stick, but almost their .9%, even the vix cooperates in 21.4. Zero in the yield space, a yield reversal higher yields really threatening out to record high yields this morning, and we come back down 4.78%, two year 3.92 percent on the ten year yield. Right now, Michael McKee, to give us a clinic here on how we move the fed is, I was thunderstruck by torsten slacks, note today on the Taylor role, as you know, we have a fabulous function in the Bloomberg. I went to it, and I really did not understand Mike, how removed the where we should be is from where the fed is right now. They can't catch up to the where we should be, can they? Well, I know you're been discussing this morning the utility of the Taylor rule these days and there is a lot of discussion about that. It tends to back fit better than it does to predict and John Taylor told me he didn't invent it to make predictions. He didn't invent it to now cast to now cast. Part of the problem is to get ultra wonky. You need to know what our star is or you need to have a number of your plugging in for the output gap. And that is a really hard thing for people to come up with these days. I was talking with a fed officially yesterday. I mean, Friday, rather, who said that the calculations were so thrown off by the pandemic, that it's been hard to come up with even a number that you don't even trust, but just the number. In the discussion, and Mike's on the phone all day, folks. I know you think he comes off and looks at Denver Bronco football looking forward, but he's working nonstop on this. To the point that Jennifer mentioned earlier, there's a group of people who say we're going to get back to some form of the paradigm pre COVID, and there's another group saying we're moving on to something different. Where are the people you talking to on that? Is it two separate camps? Or do they really feel we're just going to get back to some kind of economy we once knew long ago and far away? I think there's two separate camps, but without a huge confidence level in either of their predictions. We don't know exactly how the end of inflation is going to come up about whether demand craters because companies are raising prices or companies feel like they've raised prices enough to cover their expenses. And so it's going to depend on where the fed has to set price interest rates in the next few years. We've got to get inflation back down and then once that happens, what kind of world do we go into? That's the part that everybody's trying to figure out. Can I suggest that when they do the dots march 22nd, they do the dots of everybody in the press conference? I include that. That would be interesting. Economic school taught me predictions. Michael McKee, thank you so much. It'll be a busy week. I'm Mike McKee focused on housing data at 10 o'clock, and then on to very important ISM data. I am thrilled to tell you coming up on radio on
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Of power. The big news today, of course, are those jobs numbers from last month really surprised everybody. Maybe even the president of the United States, this is what President Biden had to say about them a short time ago. It means we created 12 million, 12 million jobs since I took office. That means we have created more jobs in two years than any presidential term. At any time in two years. That's the strongest two years of job growth in history. And now we turn for the president of the United States to the man who gives the president his jobs numbers. It appears at least Michael McKee, his Bloomberg international economics and policy correspondent. So the president did tweet out and what he tweeted out was a link to you, Mike, giving the jobs number. So congratulations. Apparently, he was watching us this morning and we were able to give him some good news. Presidents get to blame for when things go wrong. So Joe Biden, can I guess take the credit when things go right and boy did they go right in January? 517,000 jobs were created far, far more than even the highest estimate in the Bloomberg survey of economists add to that 71,000 jobs additional from December and November. The unemployment rate falls to 3.4%. That ties the May 1969 number when as Muhammad Al Arian points out, that was the last time the New York Jets ever won the Super Bowl. And it also goes back basically ties to the Korean War. So some really historic low numbers in unemployment. Average hourly earnings, the prior months revised up so the drop in average hourly earnings isn't as big as you'd think, but it was just three tenths and we are at 4.4% getting ever closer to what the fed thinks is a sustainable average hourly earnings rate. You take a look at that and they think three to three and a half percent is compatible with a 2% inflation rate, which is what they're trying to get to. And so that's where they have gone lately. Now, in terms of the other news of the day, David, there was one other report that was also extraordinarily strong and that was the ISM services index comes in at 55.2 after 49 to last month we thought that the service industries were rolling over because the numbers were bad, but look what happened and look at new orders. Jumping from 45 to 60 and prices paid continue to go down. So Goldilocks just doesn't even describe this kind of economic data today. It's really good news. The only question is, does it mean the fed has going to have to tighten more if you believe in the Phillips curve? That's what it's telling us. And the bond market seems to be having that notion in its head right at the moment. Thank you so much to Bloomberg's Michael McKee. Well, now we go to the person who's responsible for jobs in the administration. He's the U.S. labor secretary, Marty Walsh. He talked earlier today to Bloomberg reacting to the jobs data. I looked at my economist and I said, you a way off today. You know, it was a great report. I mean, when you look at areas of that I think are really important business group, healthcare group, education group, and we saw strong steady growth and construction. I mean, so those are the areas that obviously you would know better than I would as far as signs for the economy and concerns about the economy. But right now, certainly I'll take this job report any day of the week. And return from the secretary of labor to somebody who used to work for the secretary labor as chief economist, she's Betsy Stevens and she is now Professor of economics and public policy at the University of Michigan. And so thank you so much for being with us. Betsy, we always love to have you on jobs day. I mean, I don't want to be unfair to economists at all and certainly you're an economist, but how do you get it so wrong? Well, today is such a fun day. I don't think we want to think about economists being wrong. We want to think about like, woohoo. What a great report we have. Look, the truth is, I'm going to tell you, now I'm going to give you the downer news. And there's a great number 517,000 jobs. You know, but there's a lot of room for error in this report and if I was betting woman, I would tell you that we'll probably see this corrected down a little bit. So I think instead of focusing on 5 17, which maybe it's really 400, we should be just looking at the overall report, which told us that we've been adding more jobs than we even realized. So we saw upward revisions for November and December. We saw what are called the benchmark revisions. That's where we count all these, we compare all these survey estimates to actual real counts of jobs that come in through employers filing those unemployment insurance taxes. And we found out we had actually more jobs than we thought from the survey and those real counts, those all got added in. And what they tell us is that we have had a very strong labor market recovery, and we've had that recovery even as inflation has started to come down. The recovery has really much continued unabated. So Betsy helping with two numbers as a non economist, maybe they don't swear at all. One of the jolts number. We got the jolts number earlier this week, which I again was not going to record levels at 11 million job openings. How can we be having that many jobs openings at the same time we're filling that many jobs? I don't understand. Oh, well, I mean, that is really because job openings happen at a point in time. If you think about it any job you've ever taken, the job was probably open. I mean, some people are lucky enough that they get a job through a friend where that job was never a job opening, but a job opening happens at a point in time. So it's actually more a measure of the health of the labor market. Do we have a lot of openings? Are we creating a lot of space? Are we allowing people not just to grow, but also to move into jobs where they might be better fit. So some of those job openings just reflect churn in the labor market where companies want to expand in some places. And they want to contract anothers. And so they need to have openings in order to make those adjustments. And people need to be able to move to places where they might be a better fit. So I don't think we want to think about job openings directly related to do we have a need for are we short of jobs or are these are these openings going to go unfilled for a long time? I think we want to think about it as a statement overall of whether there's a lot of opportunities out there. I regard at least every job is benefiting somebody. But what do we know about who's getting benefited? If you go below the top line numbers, what groups are particularly benefiting more than others? Well, one of the things we've seen is that women have responded much more strongly to this tight, strong labor market that men have. And so when we look at women, particularly in ages 35 to 55, that sort of, I'm going to call it the prime life because I'm in that group. That prime of life, what we see is that they're actually working at higher rates than they were prior to the pandemic. So their labor force participation rate exceeds their labor force participation rate prior to the pandemic. We're still seeing men not fully coming back. So that is actually been true in every recession, men are the are much slower than women to rebound in terms of reentering the labor market. We also, this was a complicated jobs report because we got some other revisions to how we should think about labor force participation more generally and unemployment. But across the board, what we saw is those revisions led us to realize that unemployment rates were lower for people of color than we had previously thought. So those revisions pointed to improved measures of how things are looking in the black community in terms of the unemployment rate in terms of labor force participation. And also
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Program with the Thad in the coming ten minutes headed her way, joining me to talk about it. Bloomberg global economics and policy editor, Michael McKee. You know, we had what Bloomberg is calling a deafening chorus of fed hawks speaking this week, including St. Louis fed president, Jim bullard. Here's how he put it. Even under these generous assumptions, the policy rates still isn't at a zone that might be considered sufficiently restrictive. To get to this sufficiently restrictive level of policy we'll need to increase the policy rate further. Bullard presenting those charts at an event in Kentucky hosted by the greater Louisville Inc he showed a restrictive zone of somewhere between 5 and 7%. So how draconian is between 5 and 7%. That's encompasses the range from about as expected to draconian. Okay. We had bullards go on to clarify that he's thinking 5 to 5 and a quarter percent for a terminal rate. That's not outside the road. I gotta back up for people who don't follow this minute by minute like you do. The terminal rate is where the fed is going to stop. Stop. What the rate is going to be when the fed stops raising rates. And he thinks 5 to 5 and a quarter percent. Where is it right now? Right now it's at 4% is the top of the range. It trades a little bit below that. So if you get to 5 and a quarter percent, you'd probably be trading around 5 to 5 .1%, something like that. So that's not outside the range of what other fed officials have been saying. There's sort of a feeling that they got to get to four and three quarters to in the neighborhood of 5, maybe something a little bit over that. 7%, that would indicate that inflation is much stickier than they anticipated and the economy is in need of much more restraint than they had anticipated. What he did was use the Taylor rule, which you've heard of, which is a way of plugging in economic indicators and it spits out what the optimal policy would be. It's really designed to look backward at what had happened, but some people use it looking forward and he wanted to make the case that the fed is not done, no matter what happens, the fed is not done right now, which is the interest rate. You also got to consider the source Jim bullard is a bit of a hawk, right? Well, he's been a hawk. He's been all over the map in his career. But lately been a hawk. The reason people pay attention to him is he's usually the first one to raise an idea that may then get into the mainstream. He was the first one to suggest that the fed might do a 75 basis point move this year. And now they've done four in a row. So when he says 5 to 7%, obviously Wall Street sits up and takes notice. When we get clues that maybe inflation the rate of inflation is peaked, that the rate of inflation might be slowing its off to the races for the equity markets that we've seen with the latest CPI report. That's the CPI. That's inflation, the prices that we pay. But in the employment report, that's still doesn't seem to have been impacted by any fed policy. Am I right in saying that and do they have to torpedo employment? That's a big argument out there. Historically, that's what happens. The fed raises interest rates, and so companies in particular, but people as well with their auto loans and home loans, stop borrowing money, and that means less economic activity. And then companies look at who they have on staff, and they don't need as many people if they're not going to be doing as much work. And so you see the unemployment rate go up. Now, in this case, this is a very unusual situation because everybody lost their jobs at once, and a lot of people didn't come back when the jobs reopened. So during the pandemic, during the pandemic. So you're seeing a slowdown now in the pace of job growth each month. But is that because companies don't need to hire as many people because they finally got people back or is it because they see bad business conditions ahead? We don't know. We're looking at the unemployment rate and it went up from three and a half to 3.7%, but it did that in August as well and went back to 3.5 in September. So the fed officials are saying, as far as employment is concerned, we don't know yet what the actual trend is. They think unemployment has to go up to around four and a half percent or so. But it's not been moving very quickly in that direction. So they're going to want to see more and I'm sure that was a discussion at the meeting that will show up in the minutes. Can I utter the most dangerous words in investing this time things are different? This time things are different. I mean, it was the first thing they taught you in economics graduate school is this time things are never different except that they are because we haven't had a pandemic global pandemic like this since 1918 and we didn't have good economic data at that point. So yeah, this time things are different in the fed and Wall Street and everybody's trying to model what's going to happen. They're doing their best, but there's not a lot of historical data to put into those models. So they can't be sure. All right, Mike, as always, we appreciate it. Michael McKee, at just the Hannah Bloomberg
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"But he's getting 5 years a 102 million DS just averaged almost two strikeouts per inning. Our Bloomberg sports, Ethan. All right, John, thank you to 6 37 now on Wall Street and besides the election and earnings, markets will be keeping a very close eye out for the data this week. Of course, a key piece of that comes out Thursday with the release of the October consumer price index. Bloomberg global economics and policy correspondent Michael McKee joins us now for a bit of a preview of October inflation data. Mike, is this going to be the print where we start to see the effects of four straight 75 basis point increases start to have an effect on inflation? It could be. You're going to have to look closely. It's not going to be a major change. And of course, looking back is the only way we get to figure out if we were right or not. So it'll be a little while before we know if we have peaked, but the forecasts are that we are maybe an inch past the peak of inflation. We'll see a rise in the month over month number because energy prices went up. But the core is expected to drop and that will be the sign in the fed is looking for that at least we've started in the right direction. It'll be just one sign of course. A lot of market participants are starting to get into that debate of how much of the data the fed will need to see before it can start to at least slow down on interest rate hikes. Well, I think if you get this number, it comes in a little bit lower. And then the PCE at the end of the month does, we've got another inflation report by the, just before the next fed meeting. And so at that point, I think the fed is going to be able to say we can do 50. The loss to this whole debate is that 50 basis points used to be considered a really that was a jumbo rate hike exactly. And now 75. So stepping back to 50 is still a pretty strong move in monetary policy. So what are we looking for in terms of the core? What's going to be driving core inflation? Potentially lower in this print. Well, we are really watching services prices. Goods prices have started to fall and we saw that in the ISM number this past week fell down to about 46 6, which is roughly according to the ISM folks compatible with 1% inflation. So it looks like supply chains have pretty much normalized. And that's going to bring down goods prices. Services prices are the question. They have had to pay more to find people. They're still doing it. It seems, there's still a lot of job openings in the service sector. And so do we see service prices come down or are they still paying up for workers? Now, we're going to have housing as an issue for a while because it takes a long time for that. You've heard this before to get into and out of the CPI. But we are starting to see prices come down a little. Yeah. The fed like football, game of inches. Thanks, Mike, good having you on with us Bloomberg global economics and policy correspondent Michael McKee ahead of October consumer prices coming out Thursday morning 8 30 Wall Street time. Futures pointed higher this morning ahead of the market open. This is Bloomberg. Hey dad, your prescription will be ready in just a minute. Hey, dad, your laundry will be ready in just a minute. Dad, your lunch will be ready in just a minute. Hey, honey. Why don't you take a minute? When
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"A price. All right guys, thank you so much. Michael McKee, of course, a Bloomberg news following the international economy and policy news. And of course, Bloomberg news senior markets reporter, co host of crypto IRL. She does it all Katie greifeld. Right now that we've got to talk to Charlie. Well, let's get to world of national news. And then we'll get a Charlie update. Nancy lions is in D.C. hey. Thanks, Tim President Biden says he is disappointed at the decision from OPEC plus to slash oil production. But he says he doesn't regret his trip to Saudi Arabia three months ago when he urged leaders to keep crude flowing. The president says he's looking at alternatives, but no decision has been made, we spoke with amis huxton, the president's special coordinator for energy security. We're going to work with our U.S. companies to ensure that they continue to increase production. And make sure that we have the refining capacity. We're down a couple of refineries due to some accidents and maintenance. White House adviser Amish hochstein also says they're some work to do on U.S. strategic oil reserves. We're also learning the Biden administration will not scale down sanctions on Venezuela's authoritarian regime in order to free up oil exports without positive actions from president Nicolas Maduro's government. We get details on that from Bloomberg's Amy Morris. The Wall Street Journal had reported The White House was looking at ways to reopen U.S. and European markets to oil exports from Venezuela, National Security Council spokeswoman Adrienne Watson says the U.S. will continue to implement and enforce Venezuela sanctions, which have been in place since 2019, Watson says they'll review the sanctions policies after they seek constructive steps by the Maduro regime to restore democracy. In Washington, I may be Morris, Bloomberg radio, jury selection is underway today in the sex abuse trial of actor Kevin Spacey. The Oscar winning actor is accused by fellow actor Anthony rapp of sexual abuse at a 1986 party in New York City when rapp was 14. Global news 24 hours a day on air and on Bloomberg quicktake powered by more than 2700 journalists and analysts and more than 120 countries. I'm Nancy Lyons. Thank you so much for that update, Nancy Lyons, Tim stenson, I can Carol master rely in the Bloomberg interactive brokers studio. Right here, buy from Lexington avenue in Manhattan. Let's get over to Charlie pellet who's got an update when it comes to what's going on in the market. Oh, we got a lot going on and Tim familiar theme here, Twitter, and a Tesla back in the news again today talks between Elon Musk and Twitter to reach a resolution on the $44 billion takeover are stuck in part over Musk's statement that his offer is now contingent on receiving $14 billion in debt financing
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"The Bloomberg business app. Hi everybody, I'm ja Tucker, and we're going to start today's program with the Federal Reserve, joining us now to talk about what to expect here's Bloomberg global economics and policy editor Michael McKee. So the Federal Reserve meeting, the expectation from the markets is what? That the fed will do 75 basis points. Raise raids by 75 days. On this program we say three quarters of a three quarters of a percent. And so that is likely. Now last time they told us they were going to go 50 and of course a couple of days beforehand, they dropped the news that they are leaked the news that they might go 75, which is what they ended up doing. And then of course the ECB this past week was going to do 25 and leaked the news that they would maybe go 50 which they did. Yeah. Is that troubling to you? It is. It's a legacy I think of forward guidance and the fact that central bankers have decided that markets should be able to price things in in advance and not be shocked. It used to be doctrine of central banks that markets should be surprised and they have decided over the years that you get a much better economic outcome. If you don't surprise the market. So in both cases, it appears that the data that came in after they went into their quiet period changed their minds about what they needed to do. And we saw the highest inflation ever in the Eurozone, and we saw that really bad CPI report in the United States. So both changed their minds and went bigger. Okay, so we're very data dependent. In fact, I think you told me that every little data point matters. What does all this data in addition to the CPI tell us? Well, you know, it's kind of funny because after the ECB meeting, everybody's initial reaction was forward guidance is dead. And yes, it is. Because the banks don't know. Put another way is sort of like fed officials and European officials. The central bankers guessing. That's kind of where they're at right now. I mean, for two decades, we had the great moderation and we were able to predict what the Central Bank was going to do based on the economic conditions everybody had the same information. But now markets are all over the place because they don't know what's going to happen. And some people take one side of the geopolitical and others take another side and the central banks want to wait and have the maximum flexibility so they don't have to be leaking to banks. If the banks are investors, we'll put it that way. If the investors are not convinced they're going to do one thing or another, they can't overload a trade and won't be shocked when the bank makes a late decision. There's no indication at this point that inflation is moderating or there are some. There are some indication we've seen gasoline prices down for over a month every day getting lower. Oil will be features have declined and we've seen some we've seen some decline in agricultural commodities. Now, those things take a while to feed into the economy. But they are happening. And so that may take the edge off inflation. As you say, people haven't noticed yet, maybe, because it's gas prices are still high. But we have seen the impact in the housing market with existing home sales dropping significantly. The last couple of months. What is all the lag time with this before we actually see this stuff show up in the real economy? That's because companies and people don't make borrowing decisions, big borrowing decisions every day. It takes them a while if your boss the majority owner of Bloomberg LP decided to redo this radio studio. It wouldn't be something that he just walks in and says, I don't like this. Let's change it tomorrow. It would be something that would be planned out and they would look at the costs and they would look at what it would cost us to get the money to do it. And they would have to plan the whole thing. So projects take a long time to get going, especially big projects which would have a major economic effect. And then for consumers, how many times do you buy a car or a house in a year? Not very often. Let's talk about the expectation consumers expectations of inflation. How important is that? It's become orthodoxy among central bankers that those expectations make a difference in inflation because if people expect inflation to happen on a regular basis, then they will go to their bosses and ask for raises to meet the inflation that's coming and then because they gave those people raises the bosses have to turn around and raise prices again and you get into this spiral. So the feeling is that it is better that inflation expectations stay anchored in the fed and most central banks around the world have set that at about 2%. And if people expect inflation to be stable over a relative period, then they're not going to have to demand extra compensation for it. The Federal Reserve pay attention to company earnings reports and the conference calls that these earnings calls that these companies deliver after they report. But for the fed, it's what you'd call anec data. It's anecdotal reports on what's going on. We saw a big decline in tech stocks over the past year at a time when the market was doing fine in the economy, was growing rapidly. So maybe we get a bad report from somebody like Apple, does that mean that the economy is going to fall off a cliff, not necessarily. A
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Mike it's only May 31st Yes but it only what really matters is what the CPI is doing in November Not to be cynical about it But for the folks in Washington I mean we'll see it continue in theory to go down unless there's another round of COVID or something expands We'll see higher gasoline and oil prices from the ban on Russian oil this weekend But that'll work its way through the system And we should start to see things come down How will it work its way through the system just in the last 30 seconds that we have with you Because if we think about it from a transportation context and from a food context these high prices go through all of those things Yeah they do And oil is a primary component in the making of important chemicals And so you will see if prices are sustained and we're at a point where a company can't absorb it in its margins it'll raise prices But now that prices are up will they continue to go up Call the after the OPEC plus meeting this week to see if they had more oil to the market 20 seconds round that you have That's all it's left Jobs report is going to show some weakness or what Not witness but relative weakness It would be weaker in the 300,000s compared to the 400,000s last month It's just been moving down as we sort of run out of people available in the labor force and companies decide whether they really need to keep hiring if the economy is going to slow Oh Mike McKee you're so incredible Michael McKee international economics and policy correspondent after Bloomberg news that's after a long weekend where I'm still like just trying to finish my coffee This is have.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Baseball tickets They've started out one in three a ticket price is declined Everything else is up up up with a report you have been waiting for Michael McKee Michael do we get it right at 8 30 We got it right now yes as a matter of fact And we're getting exactly almost exactly what economists forecast on a month over month basis in March The CPI went up 1.2% That's what was forecast It was up 8 tenths of a percent The month before And on a year over year basis we're up 8.5% So there's a rounding issue in there that people will look for But the forecast was for 8.4% It's still leads us in the same place This is the highest inflation since January of 1982 Mike just so you get the power here Lisa and we can do that three tenths of a percent That comes in lower So there's some good news there 6.5% on a year over year basis A tick lower than anticipated The Economist survey said I'm sorry for interrupting No that's fine Michael You know there's a lot of market on the move you're a green on the screen and the S&P futures up 29 that is a genuine percentage move you're up 6 tenths of a percent NASDAQ up 1.2% yields come in with a vengeance from the two 80 headline level of 12 18 hours ago in 9 basis points 2.71 percent even a fractional dollar weakness as well Lisa But I just wanted to point out the yield move because to me this is fascinating It came in above expectations 8 and a half percent And yet people seem to be pricing in and even higher upbeat to inflation And that is compelling to me The fact that ten year and two year yields both tanked really gives you a sense of where the zeitgeist has shifted and whether people are out hocking each other at a time of such high inflation Mike I want to set up for Seth Carpenter and I want to go to what we're going to hear from Lao brainard and others today which is about the paycheck You can bring the banners up there If you want Qantas the idea of what average hourly wages are doing I've got near the pandemic high 7.4% lift in the real wage And it's an odd number and it doesn't matter But it's supposed to be three or 4% It's negative 3.6% Americans are getting clobbered on wages by this inflation Yeah it's a little complicated because this only takes into account wages It doesn't take into account other ways of earning money And so it doesn't take into account government transfer payments So it's not as bad as it seems when you put it all together but it does show that nobody's gaining on inflation at this point A couple of things that people are going to be shocked to learn food fuel and housing are the main culprits Thank you for that value That's why they pay me the big bucks Food at home 1.5% higher in the month of March that's of course the grocery store stuff Gasoline up 18.3% Nobody's going to be surprised with that However gasoline prices have come down in recent weeks So look for a little bit less inflation in April And then in terms of housing we see red prices were up by four tenths of a percent And owners equivalent rent also four tenths of a percent That's continuing a streak of four tenths rises for the proxy for home prices Airline fares If you've been on vacation lately Thomas you know that they've been up they are up 10.7% Unbelievable Everybody's flying Big story I saw this morning on the Bloomberg about how the lines wrap around the airport for security these days Well in Paul Donovan of UBS so that important comment on demand destruction will tilt there now Michael McKee will dive into this data with much better in sight here in the 9 o'clock in 10 o'clock hours as well We will summarize with Seth Carpenter's chief global economist At Morgan Stanley Seth I want to go to WTO global markdown on GDP but we must speak of what Ellen zenner will parse of this inflation report Is there any site out there professor Carpenter doctor Carpenter of demand destruction So demand destruction is a tricky phrase right It says that prices have gone up because there was so much demand that demand goes away which presumably then brings prices back down I do think it's clearly a hit to the consumer from the surge in oil prices Tom mentioned just how much gasoline prices were up you were both talking about where real wages are going I think it's unquestionable that when some of the categories energy food that especially the lower end of the income distribution can't just substitute away from that's got to be a hit overall to consumption spending What I think is more important with this report though is the fact that core underperformed and we saw the rally in rates I think if you look at used car prices they were down sharply Even the rent and owners equivalent rent which stayed solid it was actually off just a little bit So instead of a continuing upward trend to those key drivers of inflation we're actually seeing a little bit of a softening So in our numbers at least and it's always hard to make a forecast But in our numbers we've got to the peak of inflation and we're likely to start to see things come off I'll be a gradually from here Seth I got to say the number the absolute number came in above expectations the knee jerk response is almost as though this is a downside surprise What do you make of that I think it really is the difference between core and headline I think everyone knew that oil prices had gone up and that that was going to show through to this month's print I think everyone knew that commodity prices for agriculture had gone up and that that was going to share through to this month's print And so for the durable underlying trend of inflation that's going to be with us not just this year but next year that the fed may have to respond to again not just this year but next year that I think is what the rates market is reacting to Seth how much can you really project out from this one report We've been talking about how it's not just necessarily the peak But how quickly it comes down on the margins how much does your forecast change after today's number Well on the bright side our forecast doesn't have to change all that much The core was a little bit softer but for me what's really important here is the pattern that we are starting to see some of that softer reading in some of the goods we are starting to see for instance used car prices start to come down I think in that sense it's very much the pattern of the trend as opposed to the specific number Does that pattern change anything for the fed stuff At the margin it probably takes off just a little bit of the fire on the burner at this stage but I don't think it changes things dramatically There's no two ways about it Inflation is high inflation is too high for the fed's comfort level All of the members of the fed even the historically dovish ones that said exactly the same thing So in that regard I don't think this actually changes things much In fact one of the points I've been making to clients is one month CPI here and there is not going to be the positive for the fed We're going to matter at least as much is how strong is the real economy How much can they lean in to the strength of the economy to slow things down to get inflation under control that I think is going to be the key Well and that comes down to the tolerance of consumers for higher prices their propensity to continue spending even in the face of them Seth what is your expectation around the demand picture and whether or not destruction is going to start to take form in the face of the higher prices really across the board Yeah so Ellen zedner our chief U.S. economist in her team put out a bit of a forecast revision on Friday and we took down the consumption path for the second quarter largely because we did see this big.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"The last year was pretty low So I do think that we will have inflation probably a little bit sub 4% but that's still well above the fed's target So the fed will still remain hawkish at least for the first portion of 2023 Ira Jersey thank you so much greatly greatly appreciate that brief and of course his writings for Bloomberg intelligence must read here off of the 8 30 report We now wander to Michael McKee We believe he's with us right now He had some technical difficulties there And I want to go to the core of the moment All the focus is on the media number 8.4% I am appalled by the core estimate of 6.6% which gets us back to I know your favorite song I of the Tiger in the late summer of 1982 Wow Well I mean both numbers are going to if we hit the forecast we're going to get to 1982 for both the headline and the core And you and I remember and the ladies don't So I mean of course Well that's what's telling you that this is broad based It's more than just food and energy Americans notice food and energy when they go to the gas station or the grocery store But we're seeing a lot of different categories contribute and there's some expectations that even today we're going to see some of the transitory numbers the reopening numbers like airfares and hotels and carbons go up Well housing has been going up on a regular basis And that's going to keep going up That's going to keep adding to inflation pressures The first time I heard eye of the Tiger I was like you got to be kidding me It played like every 15 minutes Are you saying you know where that comes from What's going on Was the rocky movie It was a few bars It was like yeah kuroki burst thank you Michael McKee will surveillance karaoke Neither maki I will sing higher the Tiger But truly it is an historic moment at least I think you nailed it and Kayleigh nailed it as well This is absolutely original for huge body of Americans We're going to get through this strong Michael McKee will give us the data that we'll see in four minutes and then we are honored to bring yourself Carpenter.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Catch the program weekdays at 5 p.m. eastern on Bloomberg radio When we turn to the markets now Nathan the selloff and bonds continues this morning In fact the ten year treasury yield is trading at its highest level since 2018 Right now it's at 2.81% Bloomberg cross asset editor Joanna Austin says analysts expect yields to keep rising 2.83% on the ten year treasury that's about where it peaked out today That's where the yield would breach a long-term trendline that started in the early 1980s But a lot of people do expect it to happen right You have JPMorgan asset management MUFG security seeing a move past 3% And GS FM expects it to test 3.5% So we are seeing most people kind of expecting it to continue Bloomberg's Joe went out and reports a Bloomberg gauge measuring total returns and treasuries have slumped almost 8% this year That's on track for its worst annual decline since at least 1973 When consumer price data do later this morning may push shields even higher Karen economists are forecasting an 8.4% annual gain in marches index We get a preview from Bloomberg's Michael McKee It's a week of economic data focused on inflation with today's consumer price index report Well it's hard to call it a highlight The forecast headline would be a scary one indeed the highest inflation since 1982 when the nation's benchmark interest rate was 15% Energy food and housing costs are putting continued pressure on prices while oil prices have fallen a bit in recent days That will show up in the march CPI What higher prices may mean is lower consumer spending on things outside of those three categories will get retail sales figures for march on Thursday Michael McKee Bloomberg daybreak All right Mike thank you as investors brace for the CPI report more predictions of a recession this morning that Peterson institute for international economics says the global economy is set for a step back by the end of the year and recession risks are elevated against the backdrop of Russia's invasion of Ukraine and COVID shutdowns in China The Peterson institute predicts global growth was slow to 3.3% this year and next compared with 5.8% in 2021 Well the recent surge in treasury yields has taken a toll on tech stocks We get that story from Bloomberg's Charlie pellet The NASDAQ 100 stock index dropped 2.4% adding colossus sustained last week that have erased over $1 trillion in market value from the tech heavy benchmark in the past 5 sessions Microsoft was down 3.9% Its worst decline in more than a month chip maker Nvidia sank 5.2% extending losses sustained over the past 5 sessions to 20% the stock has not had a 5 day run this bad since March of 2020 In New York Charlie pallett Bloomberg daybreak Thank you One of the tech stocks not involved in the sell off was Twitter speculation still swirling on the impact Elon Musk may have at the social media company and we get the latest live from Bloomberg's raida young good morning Renee Good morning Karen Now that Elon Musk is no longer accepting a position on Twitter sport he may acquire additional shares of the company Wedbush securities analyst Dan Ives says it's highly likely that Musk takes a more hostile stance toward Twitter and further builds his active stake in the company Musk currently owns 9.2% of Twitter and is its largest individual shareholder And since he's not on the board he's not required to keep his stake below 15% Life in New York I'm renita young Bloomberg daybreak All right we need to thank you It's now 5 O 7 on Wall Street We are at 50° with rain in Central Park and we have an accident under The Bronx band edge of the RFK triborough bridge details coming up in traffic first Michael Barr with more on what's going on in New York and around the world Good morning Michael Good morning Nathan New Jersey regulators approved 7 facilities that already saw medical marijuana to also sell recreational cannabis The specific date wasn't set at the New Jersey cannabis regulatory commission's vote during a remotely L meeting the facilities must still pass a regulatory inspection of their operations and be issued new licenses Retail sales for the general public would start in 13 dispensary's operated by the 7 treatment centers across the state Officials in Philadelphia reinstated the city's indoor mask mandate It takes effect next Monday amid rising COVID infections Philadelphia's health commissioner Cheryl better go I'm announcing that we have reached the threshold for moving out of the all clear COVID response level And into the mask precautions level Simply put that means that we're reintroducing the mask mandate in Philadelphia Commissioner Bengal says the city is averaging a 142 new COVID-19 infections a day The U.S. government ordered all non emergency staff at its Shanghai consulate and their families to leave the Chinese city due to a surge in COVID cases Most of Shanghai's 25 million residents are subject to tight movement restrictions that keep them in their homes making an unable to obtain food or necessities A 23 year old man who falsely accused a black teen of a woman who I should say who falsely accused black teen of stealing her cell phone at a New York City hotel avoids jail after pleading guilty to a hate crime May upon settle then attack the teen at the Arlo Soho hotel in December of 2020 after the hearing defense attorney Paul D'amelio spoke for his client.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Via the Bloomberg business app Hi everybody I'm John Tucker and let's start today's program with a preview of the U.S. jobs report coming out to this coming Friday and joining us for some insight Bloomberg global economics and policy editor Michael McKee So where are we with the jobs market in the United States It's a pretty tight market It is a pretty tight market We haven't seen a lot of change in the market and it has finally occurred to economists that maybe we aren't going to Until they have a better idea of where we're going with this Forecast for what we're going to see is pretty much the same every month in the 405 100,000 range And that's what we have for the march number 450,000 is what's expected which would put us in line with where we've been for the last couple of months We've pierced 600 in four of the last 6 months So the surprise could be to the upside The trend continues higher Are we back to where we were before the pandemic struck Not quite We're still about 4 million jobs short of that but we're getting there and we're getting there at a faster pace than people anticipated We're looking at unemployment falling to 3.7% which would take us very close to the three 5 three 6 We were at before the pandemic began And as far as the weekly jobless claims how does that stack up Well it's interesting because we saw this last week the lowest jobless claims number since 1969 Dallas claims came in last week for the week before at 187,000 which is a crazy number when you think that this is not population adjusted and there's a far more people in the labor force than there were back in 1969 It just shows you companies are not getting rid of people And if you want a job you can probably find one right now You can fog a mirror you can get a job That's the sign will put up in the storefront Hey a lot of people have been complaining about the economy the expansion isn't what they thought it was going to be Just remind us this economy is still on fire isn't it Well it has seen growth slow a little bit but the question is is that a trend or is it a kind of a one off Because we saw inventories rise as long delayed shipments came into the United States in the fourth quarter which just reminded us that that's approximately for what Well it's a basically tells you that when inventories count as production in the U.S. but if they've already gotten here then imported inventories aren't going to add anything for this quarter So we've seen a bit of a slowdown there It looks like consumer spending is stronger than expected though and so that tells you that we're still in pretty good shape But everybody's miserable And I guess I'm going to chalk that up to the rate of inflation Well that's the big question ahead is how soon well even can the fed bring down the rate of inflation We'll be watching in the jobs report The average hourly earnings numbers which don't tell you exactly where we're going but it would give you some idea of whether things are slow That's an important point So let's divvy this up for a moment Inflation we attribute this to there's gasoline prices of course because of the war in Ukraine other supply chain issues et cetera because of that But how big of a component to the overall inflation number is wages What you're getting paid what the employees are forcing it to pay you to attract workers Well it would depend but what matters is the stomach of economists On one hand on the other hand what matters is the growth of average hourly earnings now they've been distorted for a couple of years by the pandemic We are seeing people get bigger raises though now as companies try to attract people back to work The question is are they paying them once saying we'll raise the pay in this job or do they come back and have to keep raising pay because people are saying hey inflation what you're giving me isn't keeping up That's what the fed fears that wage price spiral as they call it We are looking for a significant increase in average hourly earnings on a year over year basis to 5 and a half percent in the month of March as the labor market continues to be strong and as you noted from the jobless claims figures there aren't many people out there The higher wages are employers passing that on to their customers in the form of higher prices for the products that they produce We assume they are We don't have complete proof of that You get anecdotal reports when companies report their earnings But one would assume that they are passing along as much as they can so that they don't have to take a hit to margins Again the question becomes do companies keep raising prices and then employees have to come back to the company and try to get more money Indications are so far that hasn't taken hold but again it's something the fed worries about and that's one of the motivating factors for them to move even more quickly than they had planned Mike McKee thanks very much we appreciate it Our global economics and policy editor And.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"With the Federal Reserve and what to expect from the coming weeks meeting It will be much watched with inflation at historic highs Joining me now on what to expect is Bloomberg economics correspondent Michael McKee who follows the fed as closely as anybody Mike good to have you with us I guess probably the biggest surprise to come out of this meeting would be if it doesn't deliver something other than a 25 basis point hike I mean that's what everybody seems to be talking about right now Well the market is pretty much baked in a 25 basis point hike and the fed chairman Jay Powell has said he wants a 25 basis point hike and it's sort of like whatever the chairman wants The chairman's going to get And they don't surprise the market So there's been no opportunity for them to speak after the CPI report came out So at this point I think 25 is what you're going to get What Wall Street is really going to want to look at is oddly enough The dot plot that much hated non forecast of what the fed is going to do because there's been a lot of anticipation about how many rate moves we're going to see this year some houses think we'll get 7 one at every meeting the rest of the year And so they'll be looking to see what members of the fed think and whether they will be more conservative in terms of how many times they think they need to raise rates this year To really interesting thing to think about how much does the dot plot matter at this point given all the uncertainty around geopolitics the war in Ukraine and its potential impact on the inflation picture Well that's one of those how you think about it depends on where you sit kind of comments to the fed doesn't matter at all They're going to look at the data as it's coming in and make their decisions when they need to One of the problems we have of course with the dot plot in there economic forecasts is they make them once a quarter Wall Street makes them every day And so there's always a feeling that the fed is behind the curve But on the other hand if you're predicting 7 rate moves you're telling me what's going to be happening in December And we certainly didn't even know that there would be a big war in Ukraine back in January So at this point kind of hard to say that the fed would be wrong in not making an accurate forecast How much pressure is the fed feeling right now given where inflation is as you mentioned we got that CPI print last week 7.9% year over year inflation a historic high do they need to show that they're trying at least to get ahead of the curve on inflation Oh definitely And that's going to be one of the key things that Jay Powell is going to be talking about after they raise rates when he comes in his news conference He will make it clear that the fed is well aware of the fact that inflation is an issue and a growing issue and particularly that the most notable aspects of things that people have to buy like gasoline and groceries are going up They want to maintain their credibility with the American people and with the markets and prevent sort of a wage price spiral from developing where people think that prices are always going to be rising and they need to continually get raises to get ahead of it which then companies pass into costs So that's key for the fed So far it hasn't been an issue because the latest University of Michigan survey just out last week showed that while Americans think we're going to have very high inflation over a year they do think over three to 5 years it's going to come back down And it's going to be really interesting as well I think to see what the fed puts out there in terms of inflation expectations over the next several months It's got to be really difficult to forecast that given the geopolitics right now Oh it is The thing about the fed though is longer term they have always stuck to 2% their target and forecast that's where they're going to end up The question is can they there's a longer term here in terms of the forecast horizon for the fed is about three to four years Can they honestly say 2% by then If they get down to 3% that would probably be considered good progress especially if we don't have a recession because of it So can they raise that long-term inflation expectation There's no doubt they're going to have to raise their short terms for 2022 and 2023 But how far can they go when they look out and think about where prices are going to be I know you're going to be following this fed meeting very closely taking part in the news conference with chairman Powell on Wednesday What's the question that you want to hear answered from chairman Powell if you were to ask the question to him what do you want to ask him Well I think everybody wants to know how far and how fast do we need to go in terms of raising interest rates to get inflation down because a lot of this inflation is supply side and the fed works on the demand side So how much success can they really have And also do they honestly feel they can be successful I know the field give the answer yes But can they honestly say they will not cause a recession in trying to bring inflation down Looking forward to that fed decision for the March meeting coming out Wednesday 2 p.m. Wall Street time we will have full coverage for you here on Bloomberg radio Mike McKee our economics correspondent thank you as always And coming up on Bloomberg daybreak weekend the Bank of England also meets on interest rates this coming week I'm Nathan Hager and this is I was in the middle of you could save big when you bundle your.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"This week about inflation Yeah for sure big including one with Ira Jersey right strategist at Bloomberg intelligence and Bloomberg's Michael McKee And Bloomberg's Alex Steele and guy Johnson kicked things off here asking Ira and then Mike if inflation is already priced in So yeah I think it mostly is If you look at what the what the inflation swaps market is pricing So this is where the market thinks that CPI will be over the core over the tenor of this particular instrument If you look at that we're thinking four ish percent inflation this year and then slowing inflation in 23 and 24 So the market I think is certainly pricing for deceleration of inflation growth but 4% inflation is still relatively high to what we've gotten used to over the past two decades So I do think that at least in the rate side of things the rates market is kind of there already thinking that we're going to have continued inflation well above 3% which of course is well above the fed's target Next question do you same thing Is hide inflation fully priced Well I defer to Ira on a fully priced idea but I would say that the fed probably thinks it is at this point because we've not had any secret about the fact that fed is going to be raising rates They've talked more and more about it as the weeks go on It's more a question of what is the price What is the appropriate price for each of the different tenors And that's what the market is trying to figure out Jay Powell noted that he talked about how the markets tend to overreact and be somewhat volatile as they try to piece together Where they should be on these things because they haven't had it's been two years two and a half years since this round began to two years And then we went for 7 or 8 years before that at zero rates So what is the actual price What is a 5 year note actually worth Mike let's just talk about what the fed's job is going to be going forward We heard it articulated by the fed chair Jay Powell Up for renomination He talked about the idea of being able to bring inflation down without sort of damaging the U.S. economy That is a very tough needle to thread In terms of the pricing on inflation there is this kind of expectation as I talked about of inflation coming down My question is can it be brought down without damaging the economy And if that is something that we now need to think about is that the focus for markets going forward from here rather than worrying about where inflation is and the fed reaction it's what action we get from the feds feds moves in terms of the real economy Well I think you'll see the fed move very cautiously Their track record in this area not very good over the history of U.S. recession So a lot of them have come about because the fed over tightened But it reminds me of the old saying it's better to be lucky than good The fed could do it this time without doing a whole lot If the reasons they think we are seeing this inflation are correct and they start to go away if supply chains start to rationalize at the same time that consumers start to spend a little bit less particularly on goods rather than services because the government support they were getting has slowed down Then inflation could come back down and could come back down and noticeably not necessarily to their 2% target without them having to tighten too far That's going to be the question is is the fed going to have to do this Or is it going to be things that happen sort of organically Right And in some ways rents for example immune in some ways to both of those things If the scenario that we're talking around to your works out that has inflation will peak and then slowly move lower and that the fed's not going to make an enormous policy mistake Where do you think we need to see the biggest rereading in assets Yeah well I think for the rates market I think that probably means we get a little bit of a steepening of the yield curve if the fed does it correctly right So the risk here is that the Federal Reserve hikes too much and too fast and that goes to guys question from before is if the fed gets it wrong like my notice they often do and go too fast too quickly that's when you can get a significant flattening of the yield curve That's probably when you see risk assets do pretty poorly and then kind of forcing the fed maybe to slow down their interest rate hikes So I think there is a tough balancing act here And as far as market repricing there's not a lot of markets right now that we see there are very out of whack in the fixed income space except maybe the tips market a little bit There's been a lot of people putting in tens of billions of dollars into tips products like ETFs and mutual funds in a market that's relatively illiquid compared to say the regular US Treasury market So you see real yields at negative 80 basis points for ten year tips That's way too low And over time I think that's where you can see a significant repricing as the fed hikes and starts to run off their balance sheet which seems like it's all done deal that the fed is going to start doing that very soon after they initially hike Bloomberg's Alex Steele and guy Johnson with Bloomberg intelligence rate strategist Ira Jersey and Bloomberg's Michael McKee And coming up does.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Well fortunately we can kind of take a step back tomorrow and hear from the fed chair and hear from the journalists who including like our own Michael McKee international economics and policy correspondent Matt bosler as well Who will be asking questions during the press conference What's your question for power Well I think it was interesting with Steve Stankey had to say specifically about how do you make sense of this labor market And do we need to kind of reassess what is full employment what is the really right market participant labor market participation rate and so I do wonder things have changed Who on the sidelines does not plan on coming back Where are you on the sidelines is not coming back because of child care issues or because of concerns about the virus invariance In life Those people who want to come back but are choosing not to right now for those factors and others what's the starring that happens as a result of them being on the sidelines and how the labor force for a significant period of time What does it look like when they try to get back in Right what does it do to future growth rates potentially What if people say you know what We're going to live on one salary And we're going to just cut back on our spending Maybe we'll buy a smaller house But maybe we'll go out in the country so the kids have more space to play outside or something I do wonder about these changing dynamics And who knows you know I love the arguments during the pandemic where it's like all right the big city era it's over We all kind of laugh at that because we've heard that before and people have come back to the cities But I do think people have taken a really hard look at their life and said okay how do I have more balance or let me rethink what really matters especially when for many of us we were looking at life and death matters during the pandemic Yeah I think one thing that we need to keep in mind and it didn't come up in our discussion No it's true But Steve skanky did say from kill point he did say that that is sort of the one element that could derail any sort of recovery here right The idea that potentially there's another I don't want to say another pandemic but a variant We're not out of this pandemic Exactly And that's going to come up a lot tomorrow I imagine And look at how quickly the UK said okay we think we're working home So.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Hi everybody I'm John Tucker let's start today's program with the coming jobs report and joining us to preview this Bloomberg economics and policy correspondent Michael McKee Where are we in terms of the jobs market in the U.S. Pre-pandemic and post pandemic We still about 6 million short 6 to 8 million depending on how you look at it if you want to consider how many jobs would have been created had there not been a pandemic new jobs as opposed to the jobs that are being restored We're still quite short and that's one reason the fed thinks that the job market isn't all that tight The problem we've had is not enough people coming into the labor force looking for jobs or a lot of job openings and so one of the numbers that we'll be focused on and Wall Street will be focused on Friday is the labor force participation rate came in at 61.6% in October and the forecast is for only a slight tick up to 61.7% This is a really weird jobs market One of the big mysteries is why aren't people showing up or what's the problem Well there seem to be a couple of things going on One is that awful lot of people retired We knew the baby boomers were retiring in the participation rate has been declining for more than a decade The retired early but a lot of people who might have kept working even though they were eligible to retire just said the heck with it I'm going to you know collect my social security now And leave the labor force The last time we saw something like that happened was in the 1990s and remember the economy got so strong that a lot of retirees came out of retirement and came into the labor force to help pull down the unemployment rate to about 3.8% So that could happen again The other issue is are people fed up with the kind of work they were doing or afraid to do the kind of work they were doing because of COVID and I'm speaking of people who have a lot of customer facing jobs like waiters and waitresses bartenders like that who still may fear a COVID outbreak Okay but we would get an indication of that from if we looked deeper into these reports and say services where you do have that face to face customers stuff We haven't seen as many jobs come back in those areas as we lost Certainly That's been a big problem I would add that it's not just maybe people who don't want to go to those jobs but as you know from traveling around restaurants everywhere closed and did not reopen So a lot of jobs went away And it'll take time to get those back That's one of the federal reserves mandates Do they have the policy tools to comply with that mandate of full employment They have a very blunt tool and that's the benchmark interest rate for the United States And at this point demand is very strong The numbers we saw during the last week where people were pending money Still spending money and so were companies And so that's caused some of the supply chain problems that we've had that are pushing up inflation There's nothing that them buying QE can do to solve a supply problem in terms of goods or people working So the question is will they at their December 15th meeting Start tapering faster so they can have the option of raising rates sooner That's what they're going to be looking at because the inflation part of the mandate is starting to become more important How does that improve the employment situation by using that blunt tool or can it It doesn't help it to raise rates The idea would be that you would cool growth of maybe cool job growth So that's what the fed is reluctant to do at this point And that's the reason there's such a debate over what they should do because do you prioritize inflation or do you prioritize trying to get more people back to work The feds been doing the latter And they have believed that inflation would fall back on its own That's still the general view of economists on Wall Street But people are beginning to get a little more nervous because it's lasting longer than anticipated Is there evidence out there that businesses can't expand Because they don't have a good pool of workers from which to choose That is a problem particularly for smaller companies Small businesses report great difficulty about half of them say that they have openings that they can't fill because they can't find people to take the jobs and a smaller business would probably have more trouble raising its what it charges in order to pay its employees more And so that's something that is going to take a while to work out That's the job front what other data are we waiting for Manufacturing data from the institute for supply management the ISM number comes out on the first of the month And so everybody's going to be watching to see if manufacturing is still strong which is anticipated given the forecast by economists But underneath that the question is are we still seeing supply chain problems Supplier deliveries unfilled orders What's going to happen with those indexes Are they going to suggest that we're starting to see a little bit of easing in the supply chain That would be very helpful for the fed because then they would have more confidence inflation's going down And if you can buy what you want to buy.
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"Are providing powerful supported the economy and will continue to do so. That was Federal Reserve chair Jay Powell yesterday at his news conference following the FOMC decision. Welcome now, Bloomberg International Economics policy correspondent Michael McKee. So, Mike, thanks very much for being with us. Give us the interpretation put together if you can, What J. Palestine like yesterday with what we saw, for example of the GDP numbers today. You know David the feds in a tough spot right now, because the economy is rather slow, rather weak, And yet they're being blamed for putting a lot of liquidity in the markets that's causing things like Gamestop. Take a look at what we got in today's data dump. You look at the Jobless claims numbers 847,000 and at this point that is 67,000 lower than last week, which sounds great. Except you could see how for years we were just way down here below 200,000. And now we're way up here and just not moving. We flattened out. GDP came out today for the fourth quarter. It was expected to be Well, in the markets parlance bad it was 4% now before 2020. We would've called that great but context. It's really not that good. The forecast was for 4.2%. And of course of the third quarter it was 33.4% because we were seeing a big rebound in terms of the GDP numbers, So that is a problem. It definitely slowed down and he could see that mostly in the consumer spending numbers. Consumer spending just a 2.5% in that quarter and in the quarter when people supposed to spend a lot of money on things because it's the holiday season, and here's the other problem that Jay Powell is really worried about is this is the total number of dollars in consumer spending and you could see it remains well below the peak back at the early part of last year. And until that gets filled in, we won't be an official recovery. We're just rebounding and allow that isn't going to get filled in because a lot of that is spending on services that won't be recouped. Yes, you might buy a new refrigerator. Will you keep your job? And yes, you might buy a new car, but you're not going to get a haircut that you skipped back in October again. Those sorts of things are gone forever. So the economy's got a ways to go before it can recover this chart coming up a little late, But this is what I was talking about. You could see GDP. How it wrote mean It sells so much during the third quarter second quarter, then it rose a lot in the third quarter and then way back down here in the fourth quarter, So we're still not getting the kind of growth that we need to get back. Where we were, and that's where their head's goal is. There you go. Okay. Thank you. So much to bloom Works, Michael McKee. We're gonna welcome now Julia Coronado and where she could give us a sense of really where the economy is. Today. She is the former Fed economist as well as founder of Macro policy perspective. So, Julia, thank you so much for being with us. Let's pick up on where Mike was right there. The economy has come back. Some it appears to the curve is flattening out a bit, but give us a sense about the gap between where we were and where we are now. Yeah. No, I mean, I think Michael did a great job of laying that out. I mean, we wait are far from where we were creak open, both in terms of consumer spending and, more importantly in terms of jobs on so that this slowing and the jobs recovery the the level of jobless claims, which is still just mind boggling, Lee. Hi. Says. We're a long way from where we want to be on, you know, and then live with losing momentum, and it's all tied to the pandemic, so we need to stay focused. And Biden administration seems very focused on Vaccines and distribution and take up and because we can't we just simply can't get there until we solve this problem and manage it. Drew take me through one thing that you pointed out, and that's the between services and goods. I mean, oftentimes. In a recession. When you come back at its services, rue that bring you back out right now. Services are lagging behind because his Mike said, We can't go out to restaurants. We can't go to movie theaters. We can't make use of those services. Is that good news or bad news? I mean, I guess I'm saying Is there structural damage where the restaurant may not be there or is a good news in that boy? Once we do get the vaccine? We could all come back out again. I mean, I think it's a little bit of both. And the worry is that the longer this drags on the more those permanent scars are likely to be there. So as a you know, a restaurant is a perfect example. How long and they hold on is the physical support enough and then not just the physical support. Even when we can reopen how quickly our firms that they occupied office space in center cities. Are they going to come rushing back? Are they going to bring all their people back? Is it going to be the same demand structure to support the restaurants and those areas or we're gonna have to restructure the geographic. Distribution of small businesses. Another activity that supports people that are working if we end up with more work from home, so there's a lot of unanswered questions and again, the longer Stay hunker down and dealing with the pandemic. The look the more lasting the stars and the bigger the fictions are in the recovery. There's always frictions and restructuring in a recovery. Right. There's always winners and losers and businesses that have to restructure business models, and that is one of the things that slows down the labor market recovery. There's no reason to think that this is going to be any different. Yes, it was an external shock. It's nobody's fault, but it's a real shock and it's gonna change the way we do things, some of which will be for the better over the medium term horizon like Telehealth and some work from home, but it requires an adjustment and a restructuring. And some businesses won't make it and others will have to start up. They're going to need capital to do so, and clarity in the outlook to do so. So it's not just a matter of flipping a switch. So we all agree that we need the vaccine that that's ultimately the answer to the problems we have. But there's a limit to what most of us can do about affecting that. There seems to be a consensus, maybe by the summer, maybe July August time. If you take that as a given what else could be done? Do we have a mismatch here going back to J pal yesterday. They certainly have very loose monetary policy. At the same time. There's concerns, as you know about bubbles and asset bubbles and things. Is that really helping the problem any any at all? Is what helping the problem. The monetary Yes, yes, extremely loose monetary policy. Sure, I mean, look, it's it's asymmetric. Okay, So what the feds aggressive actions did in the crisis phase was short circuit a real crisis from becoming a financial crisis. Undoubtedly, that cuts off the tale of how bad it could have been because businesses don't have toe Hunker down even more or pull back even more because they don't have access to capital or because their share prices being pummeled so and consumers can feel like a least their savings are are okay, so so there's a lot of benefit from stabilizing and providing that liquidity now some of the things that we're seeing in terms of market structure and volatility. You know, I don't think we can draw a line directly. I mean, just the liquidity that the Fed provides is one of the factors that is a necessary condition for that kind of speculative volatility to emerge..
Bloomberg Radio New York
"michael mckee" Discussed on Bloomberg Radio New York
"In Hong Kong and here in Singapore on Juliette's Ali and I'm Doug prisoner at the Bloomberg Interactive Brokers Studio in New York, a record setting session in the U. S kind of sets the stage for what we're seeing Right now in Asia. We've got a rally in the market in Seoul market in Tokyo, advancing quite handsomely and positivity and Sydney as well, details coming up when we check all the price action with Brian Curtis Right now, A few of this hour's top business stories well, President Trump is losing his social media megaphone. We get more from Bloomberg's Curt Wag now that banned by Facebook for two weeks. Certainly that's A step far beyond what they've ever done, I think in Twitter's case is actually pretty significant as well. They only temporarily suspended President Trump. But they said at your next violation, we're going to kick you off entirely. So imagine a world in which No real Donald Trump doesn't exist at all. And so I think they have taken a pretty dramatic step. But of course, everything that he's done on those services up until now has really kind of Ah, led to the events that we saw yesterday. Sanctions against the president is spreading beyond social Media. The e commerce platform. Shopify is pulling all digital stores affiliated with the president. When Mr Trump becomes a private citizen, he'll be more vulnerable to permanent bands. If he breaks social Media rules here in the U. S tomorrow. 8 30 Wall Street time the December employment report. We have a preview now from Bloomberg's Michael McKee. Job creation has been falling off since the big rebound in June. The latest labor market data lend credence to the forecasts of some economists that we actually lost jobs. In December, ADP reported. Private payrolls fell by 123,000 and service industries lost jobs for the first time in four months, according to IAS. Um, given the surging virus, it will be hard to disappoint markets or the Fed who expect bad news. Employment data won't offer much information about where the economy is going. Just how big the hole is right now. Michael McKee Bloomberg Daybreak Asia China son Novak vaccine has proved 78% effective against covert 19 in Brazil. This, according to Sao Paulo state officials, This is the most definitive results so far. It came up. Two previous doctor sparked confusion and doubt over the shots. If a Cassim Son of ex parte They institution in Brazil Plans to request emergency use authorization from regulators started back on the supply side can make more than 600 million doses a year in China and group is planning to restructure its consumer credit business. We have more from Bloomberg's Tom Mackenzie. The change would involve placing ants to Main micro lending units, which had more than $260 billion of outstanding loans as of June into a consumer finance unit that would, in theory, allow the lending business to operate nationwide without new licenses. Aunt in its investors are still wrestling with the uncertainty around Beijing's new regulatory crack down. The central bank has stopped short of calling for a break up of the business, but has said it wants to see a timetable for ants over Whole a soon as possible. In Beijing. Tom Mackenzie Bloomberg, Daybreak Asia, Let's Get to Hong Kong Now with Brian Curtis for markets. Yeah, Julia, we've had the removal of some uncertainty in the markets with Georgia and now with transition, and so And also with the investors looking for a lot more stimulus coming with the Democratic controlled Congress. You do see gains in markets, the Nikkei's up 320 points. The ASX 200 is up about 2/10 of 1% of cost be with gains of 1.9% Samsung it's profit for the fourth quarter, missed analyst estimates. Due to weaker smartphone sales up. The stock is traded higher for much of the morning. Currently up about 1.7% Micron had some earnings. It's up 1.3% in the after hours session. Micron, giving a bullish forecast for the current period. That pretty much indicates that demand this is strengthening for its products used in phones and computers. So interesting to put those two together Samsung on Micron Technology. Beijing has ordered Chinese media sense of the coverage of Ali Baba will see how Ali Baba trades later today, it traded down 3/10 of a percent of the U. S session. One of these stories is well Young Day Stock up. 15%, the cable TV unit of the Korea Economic Daily says that Apple is in talks with young day to develop self driving electric cars. Report says that Apple has offered this cooperation. Jandi has considered it and is just awaiting the chairman's approval. Some of the numbers for you, the Cosby is now up 1.8%. Dollar is starting to weaken little after a very strong session in the U. S. Dolly in one of 3 79. The yield on the 10 year treasury now 1.8% Juliette back to you. Thanks Primal President Trump has for all intents and purposes, conceded the election. Let's get to Ed Baxter and San Francisco. He's covering all the latest it. Yeah, exactly. Julie. I did not hear him use those words. But we're gonna listen here hey, has used his Twitter account, which is still active to address the country. It covers the siege yesterday and the transition going forward. On also handed his future. This is the video tweet in full. I would like to begin by addressing the heinous attack on the United States Capitol. Like all Americans, I am outraged by the violence, lawlessness and mayhem. I immediately deployed the National Guard. And federal law enforcement to secure the building and expel the intruders. America is and must always be a nation of law and order. The demonstrators who infiltrated the capital have defiled the seat of American democracy to those who engaged in the acts of violence and destruction. You do not represent our country And to those who broke the law you will pay. We have just been through an intense election and emotions are high..
Bloomberg Daybreak
Elevated Jobless Claims Reflect Cooling Labor Market
"We get the latest reading on the pandemics economic impact, economists predict Initial jobless claims remained elevated at 870,000. We get more from Bloomberg economics correspondent Michael McKee. It's hard to give a lot of credence to the level of US jobless claims these days as states but Really California work to root out fraud and eliminate backlogs. But the direction is meaningful, and it's not good claims unexpectedly increased last week and now analystsforecast. They'll stay up the bad news for the labor market outlook underscored yesterday by Fed governor label Brainerd, who noted the pace of improvement is decelerating. And now we have more business closures as the coded pandemic surges again.
P&L With Pimm Fox and Lisa Abramowicz
The Verdict on Trump's Economic Stewardship
"President Trump speaking to the economic of New York and various economic clubs across the country and we had questioning from Senate O'CONNELL of the Economic Club of Florida David Rudenstine of DC and Mike. O'Neill. The New York we have Michael McKee with us now our chief. Correspondent for all things economic both and. and Michael a very serious conversation here the president's putting out some ideas couple of inflammatory statements like how Joe Biden Presidency would be a socialist dream in American nightmare. But at the end, he was asked about things like infrastructure stimulus national debt did we hear anything new from the President? No, but we haven't been hearing much new from him throughout this campaign. It's he mostly talks about what happened in the previous three or four years and he talks a lot about, of course what happened to the Obama Administration? The questions he was asked about infrastructure spending he didn't answer. He said what he always says about many different things that he has a plan, but there's never any plan they were coming close to a deal on infrastructure at least Democrats in the House and the president when the President got upset with Nancy Pelosi and broke off the talks and that was two years ago and nothing's been done on infrastructure since. The House and Senate have a very big differences about how you would pay for infrastructure and how you'd structure the program. He said today the walls one of the biggest infrastructure projects ever. That's not true. He did shut down the border under the guise pandemic protection. So that part of what he said about the wall was correct he was asked about the deficit. and. Has Somebody. Else says quite often about this. This is one of those. Up his down down his up trump statements, he said the deficit was falling and we were GONNA pay off interest costs and start paying down principal on the deficit before the pandemic hit. That's one hundred percent one, hundred, eighty degrees opposite from what was happening deficit was rising significantly before the pandemic because of the tax cuts so. It's hard to know exactly what he was trying to do other than insult. Joe Biden and and stir up his base. Yes. Absolutely I think that's probably what we can expect from him. As we approach the elections three weeks left and we're going to get viewers questions. You know at some point tomorrow night's tonight and facts as we will be hearing a lot more from the president on economic matters and so on. But really nothing moves the needle. Until we get some more idea of what happens with stimulus and Ardley Nancy Pelosi doesn't look like. She's about to give in to to to president trump's requests or whatever republicans are requesting not that that's now well, even here's the thing we have to remember that even if the speaker of the House and the Secretary of the Treasury agree on some kind of deal, it would have to pass the Senate as well as the house. A number of house members have already suggested Dowse House Democrats have suggested they would vote against it because. They don't think it's big enough and. The question then becomes how many Republicans would vote for it if it's not considered big enough then in the Senate, you don't have fifty senators who approve of it. The Democrats are pretty united against it and half of the Republican senators say they don't want to spend anything. So at this point, there's a lot of focus on wall, street about the talks talks. In quotation marks between Nancy Pelosi and Steven Mnuchin. But the odds of something actually happening particularly before election day very, very small. Yes and for some reason and she wasn't quite care about yesterday when she was speaking with Wolf Blitzer Nancy Pelosi is not willing to even consider this one point eight, trillion dollar stimulus. What is it in their Michael? Can you decipher? that. She's so against she was actually quite angry with the to Democrats that said that they should be accepting this. The part of the play. A part of it is the way the money is distributed. Part of it is the amount of money for states and localities is not enough they believe and part of it obviously is politics. They don't WanNa give, Donald Trump. He kind of victory before the election you remember the last time when the cares act was passed in the twelve hundred dollars was going out for those who got it in check form trump held up distribution of the checks until he could have his name printed on it and last thing Nancy Pelosi wants is for voters to be opening their mail the day before the election and seeing Donald Trump giving them twelve hundred dollars. Yes that is to I'm sure and also presumably that machine is up and running now. So there may not be so much of a delay this time around but there is an argument to suggest that people need cash. Now, no matter how it comes in a matter who gets the credit right Michael Danny lower on earlier saying this country is in trouble there is particularly because more people are losing their jobs. Now, as we're finding more companies go out of business and. The airlines are a perfect example not going out of business, but laying off tens of thousands of people because they don't have any business to do at this point, and that was one of the hopes of the stimulus bills that they could get aid to the airlines in the short-term But nother interesting statistic came out from the New York Fed yesterday of the people who got the stimulus checks the first time around average of about twenty four, hundred dollars each seventy one percent either save the money or paid down debt. They have money in the bank and so if this. Rebound continued to go faster than expected. We might have a tailwind and we might need less of the stimulus checks I think the biggest difference now is that there are going to be people who. Didn't save. Don't have the money who are losing jobs permanently who may need something yeah. I found that phenomenal as well when you consider just how many people are at food banks in food lines as well who were once you know happily employed or all of the people around Orlando that are living motels because they'll also job at. Disney. For example. have to move every two weeks. Otherwise they risk you know Being, a problem for the Ho- The motel owner because after two weeks you can't you know get victim normally you have to go through the court process i. mean there are an array of stories out there about people suffering, Michael. What should we be concentrating on over the next couple of days? It's feels like Joe Biden needs to get more of an economic message out there. Actually, Biden probably needs to publicize it Joe Biden. If you look on their website has a very extensive economic plan that. Involves taxes infrastructure Various Pandemic Recovery ideas and Donald Trump and I'm not saying this to be part of Donald Trump has nothing. If you go to his website, there are literally no proposals for a second term and so it's kind of hard to know. what he would do and Biden perhaps wants to make that case a little bit more Donald Trump talked today about. Biden plans but if you notice it in his speech, he didn't say what he would do. He talked a lot about how bad the Biden and the Democrat tar and that's one of the problems people have suggested that we're seeing with trump's poll numbers is that at this point he is. Talking, about the previous four years and a lot of people didn't like what happened in the previous four years outside of the tax cut. and. He's not talking about what happens in the next four years or even in the next year and that makes it hard to make a case for your election. Yeah, it's a it's a phenomenal time and a lot of people pointing out now that if we don't get something before the election, it's going to be January. Before we're able to do more stimulus Michael thank you really appreciate your input and listening to that for us with Michael McKee. International airports, and policy. Correspondent.
Bloomberg Daybreak
Persistently High Unemployment Claims Point to Slowing Jobs Market
"And we get another reading on the economic fallout from the virus today, with a government releases data on weekly jobless claims. Hey, with Morris Bloomberg Economics correspondent Michael McKee. Jobless claims rose at the end of July, the first increase in 14 weeks. The surgeon covert cases during the months leading many businesses that had reopened to close again. And so while Economistsforecasts, a downward trend will resume, they still see claims in the same range well over a 1,000,000 Google search data for unemployment benefits, which provide a rough proxy showed searches increasing this week. Continuing claims, which have reported with a one week lag, also posted their first increased since late May. Both factors point to a weakening recovery in the labor market that may be reflected in Friday's July jobs. Report.
Bloomberg Daybreak
Fed Chairman Says Economy Faces 'New Challenges' from Virus
"Washington Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin weigh in on the economic toll from the pandemic when they deliver remarks to the House Financial Services Committee today. Bloomberg Economics correspondent Michael McKee reports. The Fed chairman will stress the importance of keeping the Corona virus contained as the U. S economy comes back. The rebound came perhaps sooner than expected, Paul says in his prepared remarks released last night by the Fed. While this bounce back in economic activity is welcome. It also presents new challenges, notably the need to keep the virus in check, he says. Howl and Treasury Secretary Mnuchin will face questions from members of Congress on the disposition of the $2.7 trillion they've already appropriated. Has it saved jobs. How much has been lost to the Washington boogeyman of waste, fraud and abuse? Both are expected to argue the urgency of getting money out the door outweighs errors made And both are expected to tell Congress much more needs to be done to keep the
Bloomberg Daybreak: Europe
Futures extend declines after January jobs data
"And of course it is jobs day in the United States with non farm payrolls due out later in banks international economics and policy correspondent Michael McKee says that the jobs report will be seen in the context of US politics mother than the fed this time that puts an emphasis on earnings growth which slowed last month and hasn't shown the kind of strength a tight labor market should produce headline job growth will still matter and while gains overall have been slowing as workers become scarce this week's blowout eighty P. number two hundred ninety one thousand jobs created raises the possibility of a big number to start the year that would start a debate about how strong the economy can be through
Bloomberg Surveillance
Starbucks Shuts Stores, Apple Sees Disruptions: Virus Impact
"It is all Stephen will this morning in Hong Kong soon as the staff out to get him vegetables in the morning and he failed yeah you couldn't get vegetables in Hong Kong he just won the anecdotal things you see your family said in a monotone I've got members of the family over in China at the moment how they going day today what they do and their large their fancy there up a skyscraper and they're protected they live work from home and is it is a hormone my son's name is hormone over there is that what we on an afterthought progeny he said there's a lot of other people here that don't get to work on the cushion apartment you know thirty four floors although the sort of lack of foot traffic is heavy says you're in trouble business of fact and I'm really struck by the fact that Starbucks is closed more than two thousand outlets in China have you do that visitor arrivals mainly to have plunged seventy nine percent during this key holidays John I want to go to your observation on United Airlines what really struck me was British air taken what time line out to March in all this morning what's different is are now beginning to see timelines involved and United it just looking at the traffic looking of the bookings incitement to scale back a fast take bookings on that you've got the lights United B. I scanned them back to Lisa's point you've got stop us closing stores you've got Toyota holding production and operations in China until February ninth these are becoming much to output damage the consumption and then also the disruption to supply chains as well apple came out with the radio and the forecast for the coming quarter a white band because when the I'm not they do not know what things look like in China and I don't think anyone does yes CEO Tim cook saying that they're working on alternative sources for the components working a mitigation plans to make up for any expected production loss as they do expect this a coronavirus fought to continue features of twelve we welcome all the global wall street's two things you need to know guess what is John you mentioned it bonds and equities to couple this morning big difference you'll to lower down by two three by several and yet to one sixty three and let's be clear the moving bombs pre dates the corona virus scare the last couple of weeks this is been going since the start of the year you'll to lower your blood when your Slocum's flatter your distance between cities intends right now is just eighteen nineteen basis points and we just take the ten year a one sixty three that's below the fed funds right I guess one but that's on the right out of the federal reserve in the meeting today that's a great point I also want to say that we're seeing is bond you'll never say I agree I say it all the time Tom Kean this you have a great point you just made a great point data could today all right well I will just say this is that the air positive under the couch got that right all right well is that I'm looking right now oil prices actually up which is also non correlated to the bond yields going lower and I think one question is if the fed cuts rate will rates will that be enough given what it would take for them to make that move would that be enough to stay in the rally in and risk assets that we're seeing is Alan Ruskin was saying or not you two are going to be leaving the good life I'll be was scarlet fu doing the fed be it is not that good it's a snooze fest the fed meeting today is a snooze fest with with no hopes of success that's a success with this new system seriously what the new ones for Michael McKee in the press conference look I think the most powerful thing the fed is done in the last twelve months is not even the cuts is the shift to the reaction function effectively telling everyone that if things get worse will be there for you and if things get better we won't cap the upside and stuff hi can again the shift in the reaction function has been really really powerful point one point two there's gonna be a lot of attention on what happens with the bam she we're gonna catch up with the Dudley formally at the New York fed a little bit later on this program in the nine o'clock cat don't miss the conversation because there is a lot of confusion over the balance sheet operation at the fed and there are a lot of people in this market the fed would say mistakenly connecting the balance sheet operation to what was saying in risk assets there's also a feeling as Muhammad Ilarion was saying yesterday that the fed is running out of ammunition that they're sort of ability to continue to boost up both asset prices as well as fat I financial conditions is losing steam at this point and I know that in Davos there are a lot of discussions about potential coordination between fiscal policy makers and politicians which really enter some harassed her just a big distinction their ability to stimulate markets I think at the moment some question given what we've seen in the last twelve months their ability to stimulate economies I think that's why this might get
Bloomberg Daybreak
Investors Wait To Hear Federal Reserve decision On Interest Rate Cuts
"Nathan markets are quite this morning Karen as investors await word from the federal reserve the latest policy decision comes out at two PM Wall Street time and Michael McKee has a preview from a Bloomberg ninety nine one newsroom in Washington the fed is forecast to deliver a third straight rate cut the question is whether that's the end of the easing cycle the fed's decision will come just hours after the latest GDP data are expected to show another slow down in the third quarter and just days before what's forecast to be a week payrolls report watch for a carefully crafted statement from German J. polities colleagues suggesting while policy is now accommodative they remain on guard against additional weakness and will act as appropriate to sustain the expansion in Washington Michael McKee
Bloomberg Daybreak: Europe
Fed Jumps Into Market to Push Down Rates, a First Since the Financial Crisis
"Story dealers all bracing for another blast of cash from the fed today off it jumped into money market for the first time in over a decade more from Bloomberg start Christmas. early Tuesday morning a stunning jump in short term rates pointed to a scarcity of cash in the financial system the knock on effects at the fed's key fed funds rate to the operative it's targeted range a two and a quarter percent a move if unchecked could push a range of borrowing costs higher so the New York fed added liquidity by buying more than fifty three billion in securities and then like Tuesday the fed said it will do it again and conduct a second repo operation with as much as seventy five billion available I'm dead prisoner Bloomberg daybreak Europe now traders scrambled for clues as to what she calls the unexpected spike in the repo market but a senior Blackstone group executive says it's not a sign of a systemic problem that will affect the economy Tony James hopefully by that he believes the fed has the tools to solve these short term problems he doesn't see a ripple through to the economy the rates by close very scary but it's only overnight so that the actual cost of the system is not high as more of a concern to dealers is our technical it's a technical problem very short term that the defense addressing no tidy James added that he wasn't surprised that the fed stepped in to ensure stability will be well double line CEO Jeffrey complex as the spike in the repair rate may prompt the feds to expand its balance sheet he cools is a way of baby stepping to more clearly on the fed's repo operations come of course is policy makers meet to consider another cut to the fed funds rate Rubik's Michael McKee has that preview it's not so much what they do as what they plan to do next a twenty five basis point rate cut is baked into the decision but is that the last of eight mid cycle correction as chairman Jay Powell put it in July or do trade in geo political uncertainty mean more cuts are likely it's a communication challenge for Powell get it wrong and yields and the dollar may rise offsetting the fed's easy one more issue does the fed need to change its balance sheet strategy given the backup in repo rates this week. in Washington Michael McKee Bloomberg
Bloomberg Daybreak: Asia
Federal Reserve chair Jerome Powell to give keynote speech
"All right after those minutes today showing the fed was prepared to act if the economy weakens the next week had like from the fed could come Friday that's when fed chair G. Powell delivers the keynote speech at a big fed symposium there and Bloomberg's international economics and policy correspondent Michael McKee is there already and he joins us now live so Mike how dovish was the fed news really I mean we had hints of big ready on Q. we and also the whole thing about being willing to overshoot the two percent inflation mandate well some people actually interpreted the minute the guessing that that might have been a little bit more hawkish than Wall Street had originally this decision because it does show there was a quite a bit of discussion about whether they should be cutting rates at all and some people didn't want to do that it could be people who hadn't voted so their opinions worked recorded by name the conditions though that that that used to justify it decision to cut rates in July are still in place we saw from the minute that they were talking about the trade war uncertainty about slowing growth overseas and about the the impact of the trade war with China all that is still happening so if they wanted to cut rates again in September presumably this is a road map for how they might do but it absolutely but I will give the market reaction Mike you seem to rather strange in fact it because it was almost as though they were looking for a reason today to find a book to find a reason to hold on to stocks and Babs Babs said by more you know there is the market reaction has been sort of unusual or disconnected from the data for some time now and it does seem that we get some immediate over reaction what direction or the other based on news these days and then we settle back into a pattern of markets hoping that we're going to see central bank actions not just from the U. S. that but from others and there then they rise again and that is probably what we're going to see in this case the initial headline attention with that you go on from there and the data company all right people get optimistic to get what other options do you think are all on the table does it seem like they're keeping you know mark Russell bond buying as potential next step it depends on which the debate you're talking about this is going to stick with cutting rates they basically said that that's their main policy instrument they don't want to go back Q. re unless they absolutely have to we're not anywhere close to recession right now so they don't have to look at the European central bank and there you have negative interest rates now that's hurting their financial system they could cut rates more probably will a little bit with their real tool is going to be quantitative easing more bond by and how they do that they have to figure out of the people who really can cut rates are the Chinese that they need to they have a lot of scope for movement so it's really kind of a question of where you are used to this point at Mike it come be easy for J. proud of being on the pressure all the time on a daily basis almost from your boss well technically he saw his boss so in that sense I suppose read a little bit easier but no it isn't fun to be a whipping boy for the president of the United States policy is very calm reason person and I think he knows that this is not personal and not really directed at him more of a straw man for the president to excuse the weakness in the economy how does he also has the support of all of the members of the open market committee everybody we speak to here is very strong it saying that they support a German style and they've got his back and like really quick about twenty seconds what do you think is the possibilities for the PPO see I mean they're going through this huge revamp of its benchmark interest rate but haven't seen a lot of stimulus aside from that well they wanted to try to do it through additional fiscal spending it doesn't appear to be working as well as they had hoped so it does bring the rate cut the plate because they're working with this great if they do reserve ratio cuts first before they move on to the main right and coming up here on bluebird daybreak Asia thank you so much Michael McKee for bringing best that from Jackson Hole will be covering more on trade in South Korea this is Bloomberg
Bloomberg Surveillance
Rising dollar knocks pound and euro
"Can use a single sentence you need to know I continue to think that cutting is not necessary in may prove to be a mistake as time goes by will speak to that strategist here in a moment Mr just a vote of alliance burns dean opposed to what we saw yesterday I love it the economist Francine request said she said it was a bizarre meeting and that really captured what John and I observed as Michael McKee was in the press conference yesterday the bazaar move John is dollars strange this morning is a key story yeah that is the continuation of the thing from yesterday the shock absorber in G. ten right now is the US dollar euro dollar breaking down to one ten one ten thirty three cable very briefly with one twenty handle one twenty one fifteen and there are now many watching your away from the brick city cable dynamic governor currently speaking now of the bank of England meeting Bloomberg surveillance this morning brunch but cone Resnick checkout business of baseball and original MLB video series exploring the business side of America's pastime visit Cohn Resnick dot com slash MLB corner as a kid visor re assurance tax and we think charisma is well Germany you bring in Gershon here with that fiery first sentence in his research we love having guests on the show let's bring in Goshen distance out alone spends thing co head of fixed income question just what me through your initial reaction to the last twenty four hours your morning jog your morning Tom that was a bizarre bizarre press conference I think I was on your show a couple weeks ago we talked about how you know maybe Alison how higher drugi to do his his press conferences because that guy's a maestro in terms of how we present thing so let it again in the house is not a very polished speaker he was he struggled big time yesterday that the government's messy speak to his intelligence but that he got to consideration but the thing the other two things are the fed is confused here it's just not clear why they're doing what they're doing and the the do you look at that against the backdrop of the longer term issues in the fed there's a lot of debate in the fed now about what is monetary policy supposed to be right does the Phillips curve even work anymore it certainly doesn't appear to work at least in the U. S. right how much are they willing to move in terms of overshooting in either direction how much they care about asset prices these are fundamental questions that haven't been answered so they're trying to make like a cyclical move within a secular confusion as to what they're really trying to accomplish over the long run thank goodness in a mid cycle adjustment what is a mid cycle adjustment made to you with the team at alliance burns thing right now well I had I we get you to think you know it when you look back at the school if all the noise in the market place you look back years from now and of those twenty five basis point either caught or hike really mean much in the real economy it's kind of around the area so it's more psychology than anything and you know it's it's we could see the think if they were going to call it it's going to end up being seventy five a hundred basis points something meaningful obviously not all at once but you know this this twenty five basis points were not for we're going to go I think it what's interesting is that everyone talk about now you know what's the data going to be starting of course with with payrolls tomorrow it's not just the data I think they're looking at it's also the flow of information and and the political scene what's going to happen on trade in the next couple of months what's gonna happen more globally globally political gonna happen the M. countries to go to insulation is one of the great doctrines it we've got the idea of goods disinflation maybe all right goods deflation and we've got service sectors the ability of a higher inflation are you in any kind of a camp that service sector inflation begins to diminish and come down towards the lower goods inflation well I think we're in we've been in a kind of secular change for for how the economy works for a long time that room because inflation and one could argue has been coming down for a very long time pending how you measure it and it's going into into service inflation I think inflation is a very hard thing to measure certainly the by the measures the fed is using it's not high enough and that could be a possible reason why they're trying to do this but again you know it if we don't expect to see major this of this this card is not going to change you know main street economy such that we're gonna see a big change in inflation why they do it is I'm struggling you know I think the best the best reason you can look at is if you look at kind of where the tips market has has really that were break even have gone there gone way down and check it yesterday but no one for the ritual of one point five on the ten year to pick back up to one point six one point seven break even rate and you know that's just that's below what they think the normal level is at a time when the economy is strong so if you think about it that way real rates were let's call it sixty seventy basis points and given how worried they are maybe they thought that was too high that's the best that desperation I can have the other the more cynical explanation as they're responding to the political winds and so you know they don't want to be seen as it I think the the I want to say that the fed ex central banks in general worldwide I think they have a lot more control over cycles but we actually do suggestion what does that mean for the yield curve right now because yesterday we saw some significant planning on Tuesday tens little bit of state Miceli this morning just how you guys position Goshen with that in mind at the moment yeah I think if you look at the you look at the totality of what happened yesterday equities lower the Kerr flatter as you site and the dollar much stronger that's exactly the opposite of what you want to cut rates actually tightening financial conditions so yeah what does it mean I I I I think it's a very hard to predict this in the short term I think investors continued the theme we've been talking about for awhile have to continue to expect lower returns across most asset classes going forward and the other I don't think this in itself changes much within the key is going to be not so much with a cut in September which I think clearly from the press coverage yesterday you have to conclude it's a coin flip because I'm not sure they know what they're going to do but or is this just a mid cycle kind of whatever that means of twenty five basis points or they're going to continue to cut we're gonna go closer to the old town of one to one and a half percent level wondering down Kirsten to a new terminal value a new terminal value for GDP for interest rates maybe the glide path of what the fed does where they have to bring it under two percent inflation target I mean is that really what all this job openings about well okay it's hard to say right consensus has been that rates are too low for a long time and it seems see begin now are saying yeah we're going to be in this apartment able to use one of our competitors for either the new normal wear just you gonna have loads ever heard that phrase me either I don't know that it I don't know how smart those people were but good morning but look at I think you know the we we're we're always so confident in in where we think markets are going to go now we think things in the low forever we really just don't know in the long term and you know it the it was it was less than a year ago less than a year ago we're sitting here how many times the figure the height the ten years on a four percent and now where the other way we should be a little bit humble yet activists the hunch your TV show just the other week it is the only industry where people can be wrong again and again and again and people still want to hear what they have to I remember some big name saying that once we cross three to sixty to sixty five on the ten year treasury that was it for the secular bull market guessing just a final question for you I hear on the grapevine the U. like loans at the moment can you just give me some clarity on that well hi I think that you know people investors bought loans for all the wrong reasons well they thought the yields are going to go up and we are we to bond how long do honestly outperform other forms of credit when when when rates go up and now that rates of man and no one expects rates to go up to a one to one point I mean floating rate debt anymore and that's also wrong in fact there's been some like thirty five straight weeks without flows from that the class that actually has on the way underperformed other parts of credit and there's some more value opportunities there so you know we're yeah we have more loan exposure in our broad funds and we've had in probably a decade this is an excellent person to say so thank you with this you can see him on the real yield it's important property of Bloomberg very soon afternoon maybe even called the real dollar maybe we need a foreign exchange program this week the way things are going good for the strength is well I want to go back to your one ten thirty eight it is really remote and we we've talked enough about it because of the brexit focus and sterling but nobody euro all one nine and your would be extraordinary just allows the last twelve months in the broken at this really tight trading range of in stock in it around one twelve between one twelve one of fourteen I would say for the most of this year Tom and now starting to break out and not with all the weakness with breaking out with all the strength and I don't know how many people were looking for that a month ago got into what they thought would pay anything cycle from the federal reserve shot of the David bloom he just we see in others that have talked of dollar stability in even a dollar strength I'm looking at the first strategist he hasn't tweeted on dollar yet this morning the wealth in Chile well he's he's open about his goods are doing something to Kentucky Senate comes today but we know the press got is still some foreign exchange I I can't imagine again when I look at their the simple D. X. Y. the mathematics of the Bloomberg D. X. Y. is excellent but the it's one ninety eight point eight four is a stronger U. S. dollar this is
Financial Issues
How the Federal Reserve's interest rate cut will affect Americans
"On the federal reserve a first rate cut in a decade bugs Michael McKee has the details a divided fed cut its benchmark rate by a quarter percentage point and ended the reduction of its balance sheet now two months earlier than planned the rate cut to a range of two to two and a quarter percent comes the fed statement says in light of the implications of global developments for the economic outlook as well as muted inflation pressures as they did in June fed officials promised to continue monitoring economic developments and act as appropriate to sustain the expansion investors have taken that as a pledge to cut again and Powell didn't disabuse them he says however the fed isn't locked into a long rate cut cycle instead it's a mid cycle adjustment he says there's no prominent threat to the US
Bloomberg Markets
Fed Chair Powell Signals Rate Cut as Economic Risks Loom
"Good morning to everybody on Bloomberg television and radio worldwide I. Michael McKee bloomers international economics and policy correspondent in Victor at all at the rocky mountain economic summit with a very special guest Tom bark and he's the president of the Federal Reserve Bank of Richmond thank you for joining us today getting up early out here and joining us to be here you and I are kind of the warm up act for chairman Powell second day of testimony today so let's talk a little bit about that yesterday he went before the house of representatives and the markets took his comments as saying we are going to cut rates in July do the markets get the right impression well they're much more expert than I am on that I think he said the same thing yesterday that he's been saying for the last month and that we said in our last memo which is we don't have forward guidance anymore in the memo we're watching very carefully what's happening and data and we're looking very much on upside rescind downside risks and you know at this point they're a little more tilted to the downside which is why we're looking at well the market's basically priced in a hundred percent chance of a rate cut now can you go against the markets we have a lot of time left before the meeting we'll see what happens will have a lot of data that comes and CP I came in this morning and we'll get PC inflation we have retail sales will get consumer spending and markets are smart so if the data ends up with a different kind of outcome the market's sole I'm sure
0 Show
How will the Fed respond to the May jobs report?
"Maze. Jobs report is due out this week and fed officials will be watching closely amid low inflation and political pressure to cut rates to discuss. This is Michael Mckee. Bloomberg international economics and policy, correspondent jobs have been looking too bad Montel now jobs have been part of a really healthy economy, so far. Two hundred sixty three thousand jobs created last month. Now, the forecast is for a significant decline to one hundred ninety thousand one hundred ninety thousand would have been considered a great report a few months ago. So at this point, it's still looks pretty good and the unemployment rate expected to stay at three point six percent. What about wage growth, though? Well wage growth was disappointing last month. If you consider a tenth of a percent, lower than forecast, disappointing, and we're expecting to make that up in the month of may. When we get the the report, but the year-over-year numbers. Is not going to change much three point. Two percent at still considered within the range of what the fed would like to see an expects to see when you have this low unemployment. It's just that it's not exceleron reading any faster. And that's kind of the confusion at the pet is why not we've been seeing more and more concern about the tariff wars, particularly with China. Is that going to affect things will show up in the judge of what we've already started to see it? We've started to see yield jobs go away. The steel industry has expanded in the United States, but largely through the use of automation. So while there was a ramp up in jobs in the beginning, it hasn't continued. And so we'll watch to see if that's the case we've seen jobs in appliance manufacturing drop the washing machine care that we saw last year this nonfarm payroll. So we won't get a real read on what's happened down on the farm because of the agriculture tears, but one can assume from some of the numbers we've seen arm bankrupt. That there may be fewer farmers out there as well. Yeah, we've heard lots of reports of distressing culture business. What about the fed? What are they going to be watching for all of these numbers in the jobs numbers? They keep an eye on the average hourly earnings. Because their main goal at this point is to keep track of inflation, and the theory is and low unemployment rate will raise wages and that will eventually feed through to higher prices companies make up for the loss margin when they have to pay workers more, but so far they've been able to absorb the pay increases and there hasn't been an uptick in inflation. Question is will there ever, be or has inflation dynamics change? Or is it just a late? And at some point we'll hit. That's what they're watching for. So what is it gonna take to get asking this question for years to get inflation burning? You know, before we get the jobs report, there's a big thank coverage in Chicago. Coming. Will be asking that question. What about the Fed's policies needs to change? Because the two percent inflation target hasn't been hit and over the last twenty years. A lot of people don't realize this, the inflation index that the fed falls has ever GE one point eight percent. And since they adopted the target in two thousand twelve it's average one point four percent. So is that still a realistic goal or can we live with lower inflation, that's going to be the question out there, because nobody really knows how to generate is that an an I think I can I think I can number or are we ever going to get to two percent? Well, it's one of those numbers that works in theory is we'll see higher inflation, and the fed will react once it gets above two percent for a little while. But the idea is that you create inflation expectations in the market, and that helps drive up inflation, and it hasn't happened and nobody quite knows why I asked you about terrorist earlier. How concerned is the fed about that. Well, they're keeping an eye on the Fed's last meeting was in March, and Donald Trump ratcheted up the trade war at the beginning of may. And so they haven't had a real chance to consider what will happen. There's always been a feeling out there in the market, certainly that a G. They this is just posturing. We will get an agreement in all. We'll be right with the world. And we've seen in the last week that maybe the markets are beginning to price in the possibility that all will not be right with the world. Trouble for the fed is, it's hard to measure what the impact is. Because you, you can guess it, how many jobs might be lost or how much GDP might be lost. But what's the impact of falling markets on spending, and on confidence? If the markets get scared that the China trade war is going to be damaging, so it's, it's, it's something they're keeping a close eye on. But they don't really know yet. The irony here is because of the tariffs, the president might get what he wants in. That is a rate cut. Well, it would take some. Some time for that to happen. The fed is content to sit on the sidelines. They're not going to be bullied by the markets. They sort of went on hold after the December ructions in the markets. But their view is the data would have told us to do that anyway. And so at this point, they're going to stay on hold as long as they can. Unless we see a significant dive in inflation that sustained over a couple of months they're going to stay on hold a nut cut rates because there's still the possibility that trade war ends. And there is the possibility that we see inflation at least maintained if not rise. So they don't see an urgency
Bloomberg Daybreak: Europe
Pressure On China To Agree To Trade Deal
"Radio. Even though we have a lot of liquidity offline from may happy made if you are taking today off there still some selected assets that are trading and some important events to look ahead to US equity futures advancing then he had apples upbeat forecasts. Traders expecting lower volumes throughout the day. Then bit of movement coming through in terms of US equity futures higher. You've got a bit of movement on the ASX two hundred straight up about eight tenths of one percent. Other than that. It's pretty quiet on the equity side in terms of the handover overnight. We did have course, they Tekere innings more generally with apple but also a little bit of a well, it was a weight on the shoulders from Google corporate earnings and develop the trade conflict between the US and China remain front and center, that's for sure I mean, running through some of the currency pairs here. You're looking here the Bloomberg dollar index. That's just barely about the flat line here quiet on the Major's front. So I mean, pretty much all of these pairs unchanged. Eurodollar one twelve twenty Donnie in one hundred and eleven fifty and cable is up less than a tenth of one percent. Short of one thirty fifty five commodities are on the pressure a little bit. Brent crude Coney down six tenths of one percent. We have higher inventories out of the US and the initial data overnight. Gold is lower by three tenths of one percent. So the metals on the pressure let me run through some of the news as well. In terms of the corporate earnings because we are getting of course, quite a few fast and furious start off with Sainsbury's fiscal year revenue at twenty nine point zero one billion pounds. You're looking here at fiscal year sales of thirty two point four one billion pounds to final dividend. Shares going to be seven point nine Pence. Few notes on guidance year Sainsbury saying the consumer outlook continues to be uncertain and that they are well-placed to navigate the external environment. So that's on the Sainsbury's front more retail input from next currently first quarter retail sales coming through a negative three point six percent. The market was looking for actually more of a contraction here down six point two one percents of slightly better than some of the analysts had pencilled in. I go to online sales eleven point eight percents the estimate heroes for twelve point eight percent. And so a little bit of a little bit better on the retail sales. But a little bit short of estimates on the online sales on guidance. They're still seeing fiscal year pre-tax at seven hundred and fifty million pounds and still see full price sales at up one point seven percent. And then also on the economic front. We've got some UK April house prices. They're up zero point four percent on the month. That's the nationwide. Up zero point nine percent on the years that is some economic input as well. So that's a bit of a flavor then on what's happening with these corporate earnings. Let's get now to some of the stories we're watching very carefully starting off with what's happening with the United States and China. The White House is ramping up pressure on China to reach a trade deal in the next two weeks. Bloomberg daybreak Asia anchor Bryan Curtis has more from Hong Kong, the US said once again, he would walk away from the talks if no deal, Mick Mulvaney, President Trump's acting chief of staff said negotiations would not go on forever. So the administration is making its impatience known a slight shift from the earlier more optimistic messaging still going into talks today. Treasury Secretary Steven Mnuchin said the US side had a nice working dinner last night with vice-president Leo hub, two of the quick notes. The F T says the US is likely to accept a watered-down commitment from China on security that to speed up a deal and. And Chinese regulators said today, both Chinese and foreign banks will no longer be subject to ownership caps on local banks Kong, Bryan Curtis. Bloomberg daybreak Europe. That means on world financial markets away. Today's Federal Reserve announcement on the US interest rates. Bloomberg's Michael Mckee has a preview. This fed meeting is widely expected to be a nun event except for that little possibility of a rate cut. No, not a policy cut to the fence target. But an adjustment to the rate of interest. The central Bank pays banks on excess reserves the effective federal funds rate traded a record five basis points above the excess reserves rate Tuesday most traders blamed technical rather than policy issues such as a rise in repo rates on other securities that suggests the fed doesn't need to do anything others note, though, it's been an ongoing problem and forecast a slight cut in the rake in Washington, Michael Mckee, Bloomberg daybreak Europe. And as the central Bank meant to weigh monetary policy. Donald Trump sought to pressure the fed to make drastic moves to boost and already healthy US economy in a pair of tweets Tuesday. Trump criticized the fed for having incessantly lifted interest rates and wonderfully low inflation Colfer steep interest rate cut and the resumption of bond purchases as well. The thing with the theme. The president's comments came as another political drama swirled around the central Bank on Capitol Hill Trump's plan nomination. He recalls Stephen Moore to the fed sports looks increasingly uncertain as a third Republican Senator voices downs. The story from Bloomberg's Charlie Pellett. Senator Lindsey Graham of South Carolina. A key ally of the president told reporters that Moore would be quote, a very problematic nomination, though, he has not made up his mind. Senator Joni Ernst of Iowa and Senator Richard Shelby of Alabama on Monday voice. Their own concerns about more a Heritage Foundation fellow and a former Trump campaign adviser Ernst the senate's fourth ranking Republican told reporters, quote, I am not enthused about what he has said in various articles later, Monday Shelby. The former chairman of the banking committee said he thought the proposed nomination, quote has some problems Charlie Pellett. Bloomberg daybreak Europe. That's something singing. Singapore where Mark Cranfield and markets live team joins us, Mark. Let's start off with the mlive question of the day. The fed odds in terms of the likelihood of a move very contradictory and not really in line with what we're seeing the job market. Yes. Good morning, certainly the market by some as strong as it's been since the nineteen sixties in the United States pretty healthy condition. We've also saying some pretty good wage growth as well. Even though it hasn't really fit injuring flation too much. So Fava certainly in the GDP data from Las week, as well already know the picture is pretty healthy economy. We go to started go to the payrolls not becoming up on Friday, and the fed will certainly be thinking about this as well because it probably reinforce this very strong picture of job market. So when you have that in the background certainly makes a bit curious as to why the mock is getting so excited about the polls. Not of the fed may take the opportunity to to try and rain the market back in a little bit and try and get them back more to a neutral territory because of that. Let's talk about the greenback. It's climbed against all but three of its group ten currency peers and twenty nineteen to folks at TD North America point out that any further strengthening any wheat test of some of those twenty eighteen is could mean trouble for stocks can be trouble for high your credit and currencies as well. More. Generally. You're seeing that dollar bears can return to hibernation after the FOMC run me through your thinking. Yeah. So we had a little bit of softness in the dollar towards the individual pro, and that's not unusual this month and maneuvering which goes on. And it's quite often the case where people are just have to tidy things up in the came off a little, but the fundamental case for is is pretty hard to ignore right now, particularly against the emerging market currencies. You've got short term rates in America, which are very high in comparison to other g ten currencies relatively high compared to the emerging market world. Plus as we were saying this pretty strong background of data from the United States. And they made it very. Clear it's on a long-term polls here. So he's not really going to be going anywhere. We've monetary policy at the same time. There's other countries that want to lower interest rates in in Asia. We've had India of moved already we've got to Malaysia looking at it, South Korea looking at it Philippines, Indonesia, they're all heading towards lower rates environment. So that certainly from an investor's point to you. They're probably thinking that the fed is beginning to look like a high yield currency here. So we could save it. If a rebound once the fed is out the way people start looking ahead to Friday's jobs report. It's always a pleasure catching up. Thank you for stopping buying. It's Mark Cranfield. Remember the for real time market commentary and analysis to markets. Lifelock. That's the only Bloomberg terminal. Let's get into some of the corporate news because apple their their numbers of projected quarterly sales top analysts estimates more from Bloomberg's Charlie Pellett. The reports suggest demand for iphones stabilized after a disappointing holiday period. The company also reported solid revenue. Growth from its services business as consumer sign up for a growing Schwartz board of digital subscriptions. Apple shares have surged more than forty percent from twenty one month low in early January after lacklustre iphone sales prompted the company to cut its holiday revenue forecast. So far this year. Apple is up twenty seven point two percent in New York. Charlie Pellett, Bloomberg daybreak Europe and do better as demand for all. The shares offered in its IPO just one day after kicked off throat show in London. That's according to people familiar with the matter, the ride hailing company will continue meeting potential buyers in New York and San Francisco as it seeks to raise as much as nine billion dollars right time now for the latest elsewhere in the world with Bloomberg's leeann guarantee, man. Good morning Yussef Kwun guidos gamble to take control. Venezuela appears to have flops the position need publicly called on the armed forces toback his attempts to oust nNcholas Maduro, but the military command. And state loyal to the president the US reiterated its support for quite, but it seems to have little effect. Japan has seen the first voluntary handy of the chrysanthemum throne in more than two hundred gays. Bloomberg's Crisan STI has this report from Tokyo Japan. Welcome to new emperor on Wednesday with hito acceding to the throne in a ceremony attended only by males symbolic, Hugh leader ushers in a new era Ray, or beautiful harmony, one of the emperor's first major tasks will be to entertain US President Donald Trump who arrives later this month for state visit interfere Chris Asti, Bloomberg daybreak. You're in the UK. There's around with a neighbor vets policy on another e referendum some of the party's MP's won't want an Olsen Kim stances, while others would prefer a better Brexit deal general election yesterday, the ponies governing buddy agreed to stick to its policy of simply keeping the option of another poll on the table it disappointed labor backbencher Mary Cray danger. We're trying to ride. To wholesalers on nicest. Theresa May has demonstrated over the last two years is that you end up leasing date. The country is looking to the labor party for leadership. They're looking to labour leader for leadership, and this may French police carrying out full, potentially violent protests across the country. Bloomberg's Caroline Conan reports for the first time the universe will join climate activists any traditional union marches, but as many as fifteen hundred black blocks anarchists are also expected in Paris. French president mccone came up with a new wave of reforms last tweak. The two-thirds of the French said they were not convinced in Paris, counting Kernen, Bloomberg daybreak Europe. Cable news twenty four hours a day on air take takes on Twitter,.
Bloomberg Daybreak: Europe
Steady Fed sees no more hikes in 2019
"So lot of central Bank news coming through today. Of course, the fed front and center and fed chairman Jerome Powell said interest rates could be on hold for some time. That's after officials slash their projected interest rate increases this year two zero from two with more. Bloomberg's Mike Mckee reports from Washington the pause continues with no change in the feds target rate. But if you believe the dot plot policymakers think they're done for the year. The median dot now calls for no rate hikes this year, just one next year. The fed will also begin tapering its balance sheet runoff in may reducing the cap on monthly redemptions. Fifteen billion dollars. They'll stop altogether at the end of September with about three and a half trillion on the books in Washington. Michael Mckee, Bloomberg daybreak Europe. It was taken really dovish Lee. Certainly by the bond market. Interestingly we saw Kerr flattening on the twos. Tens was steeply up a little bit today and the chances in the market of a rate cut this year have increased as well off the back of that meeting. So really to me all the fed did was actually bring the dot plot to where the markets were already pricing. But then immediately the bond market starts asking for more on the flip side. We didn't quite get the rally inequities, you might have expected from a dovish no perhaps some concerns regarding growth going forward as the Federal Reserve also downgraded its growth forecasts for two thousand nine hundred ninety two point one percent is what it's now predicting for
Bloomberg Daybreak
Report: Global trade war would hurt US the most
"Com. Bob. The Federal Reserve is set to boost interest rates for the third time. This year, the central Bank releases its decision policy statement and projections at two PM Wall Street time Michael Mckee has details from our Bloomberg ninety nine one newsroom in Washington. The Fed's policy decision is assumed and priced in a twenty five basis point increase to a range of two to two and a quarter percent. So for investors. The question is what does the central bankers? Tell us about their next move. Richard Clarita joins the vote as vice-chairman will his forecast move the dot plot. Suggesting more support for a fourth rate move in December or by lower terminal rate. Do fed officials think they're close enough to stopping to drop their
Bloomberg Daybreak: Europe
U.S. job growth seen picking up, unemployment rate falling
"Candidate needs to reach a deal with the US by October first in order to join an agreement the US has already signed with Mexico. Now, let's talk more about the markets and cross over to Singapore. Where Mark cut more from the markets live team joins us. Mark great to have you with us a good day to you. So let's start with the prospect of a ramping up in the trade war weighing over markets. I'm wondering how much of that ease actually playing into the Asian equities session. Because one thing we should note is that when you look at the emerging markets index three quarters of that is Asian benchmark. So if anything it could be the Asian equities are just being swept up in the EM equity selloff.
Bloomberg Surveillance
U.S. second-quarter GDP growth revised up to 4.2 percent
"Good morning yes revised GDP data, from Washington, topping forecast second quarter now four point two percent annual growth rate. The, prior estimate four point one percent this four point two, percent more than forecast personal consumption consumer spending. Up, three point eight percent inflation. Gauge is little changed from the. Prior reading, three, percent two percent on the. GDP price index and core quarter over quarter, again GDP revised figures from the. Government topping forecast four point two percent edit Annual rate and higher than the. Initial estimate footnote from the Bloomberg based on the ten year moving average though GDP shows the economy has net, fully, bounced back from the financial, crisis the average still below two. Percent and before. You break up the, grape me hi. This, lags, the past.