McDonald's Plummets on Deadly Outbreak; Harris-Trump Ramp Up Campaigns

Bloomberg Audio Studios, Podcasts, radio News. Good morning, I'm Nathan 0:00:10.880 --> 0:00:13.840 Hager and I'm Karen Moscow. Here are the stories we're 0:00:13.880 --> 0:00:14.680 following today. 0:00:14.920 --> 0:00:17.840 Karen, we begin with a health scare at McDonald's and 0:00:17.920 --> 0:00:21.079 a plunge in shares of the fast food giant. For 0:00:21.160 --> 0:00:24.840 the latest, let's bring in Bloomberg's John Tucker, John and Nathan. 0:00:24.880 --> 0:00:28.840 The CDC says forty nine people from ten states have 0:00:28.960 --> 0:00:33.080 contracted E coli traced to ingredients in McDonald's quarter pounders. 0:00:33.560 --> 0:00:37.040 Ten people have been hospitalized. An elderly person in Colorado 0:00:37.080 --> 0:00:40.800 has died. Every patient interviewed by the CDC said they 0:00:40.960 --> 0:00:44.000 ate at McDonald's before falling ill. Most of the eight 0:00:44.080 --> 0:00:49.159 quarter pounder hamburger specifically, McDonald's USA president is Joe Erlinger. 0:00:49.560 --> 0:00:52.800 This is a temporary change as the investigation continues, and 0:00:52.840 --> 0:00:56.080 we are working quickly to return our full menu in 0:00:56.120 --> 0:00:58.000 these states as soon as possible. 0:00:58.040 --> 0:01:00.040 Well, the company thinks it could be the youngions that 0:01:00.200 --> 0:01:02.920 going to quarter pounders. Apparently the quarter pounders are the 0:01:02.960 --> 0:01:07.360 only sandwiches that routinely take these particular onions. The true 0:01:07.440 --> 0:01:10.119 number of people, in fact, it likely much higher than 0:01:10.200 --> 0:01:13.160 is currently known, and may involve additional states. According to 0:01:13.200 --> 0:01:16.679 the CDC, McDonald's is a member of the DELL also 0:01:16.800 --> 0:01:19.039 has the thirty fifth biggest waiting of the S and 0:01:19.040 --> 0:01:21.479 P five hundred. A major outbreak is going to haunt 0:01:21.480 --> 0:01:24.640 restaurant chains for years. You'll recall back in twenty fifteen, 0:01:25.000 --> 0:01:29.400 an E. Colian neurovirus outbreak across Chipotle locations in multiple 0:01:29.440 --> 0:01:33.080 states led to a drastic drop in sales there. McDonald's 0:01:33.080 --> 0:01:35.920 shares down six percent pre market in New York. I'm 0:01:36.000 --> 0:01:37.759 John Tucker, Bloomberg Radio. 0:01:38.160 --> 0:01:40.240 All right, John, thank you. Now we want to turn 0:01:40.280 --> 0:01:43.560 to geopolitics and the latest from the Middle East. Secretary 0:01:43.600 --> 0:01:45.520 of State Anony blenk In is on his way to 0:01:45.560 --> 0:01:48.800 Saudi Arabia after a meeting with Israeli Prime Minister Benjamin 0:01:48.840 --> 0:01:52.120 nettan Yahoo in Jerusalem. He says they both agree that 0:01:52.200 --> 0:01:55.600 the killing of Hamas leader Yaya Sinwar has opened new 0:01:55.680 --> 0:01:57.960 possibilities for ending the war in Gaza. 0:01:58.360 --> 0:02:00.440 You're resolute in our defense of Israel when it comes 0:02:00.440 --> 0:02:04.200 to a tax it's receiving from Iran, from Iran's proxies, 0:02:04.960 --> 0:02:07.360 and we stand with Israel, and we'll always stand with 0:02:07.440 --> 0:02:12.160 Israel in its defense. It's also very important that Israel 0:02:12.240 --> 0:02:17.360 respond in ways that do not create greater escalation and 0:02:17.480 --> 0:02:18.880 do not risk breading the conflict. 0:02:19.400 --> 0:02:21.639 Anthony Blenkin is on his eleventh trip to the Middle 0:02:21.720 --> 0:02:24.520 East since the October seventh Hamas attack that sparked the 0:02:24.680 --> 0:02:28.079 Gaza conflict. Overnight, Israel said it confirm the death of 0:02:28.160 --> 0:02:32.080 cleric Haschem Safadin at an airstrike in Lebanon three weeks ago. 0:02:32.560 --> 0:02:34.760 He was widely expected to become the next leader of 0:02:34.800 --> 0:02:37.200 Hesbola after the killing of Hassan ISRAELA. 0:02:37.520 --> 0:02:39.440 Now, Karen, let's head back to the US and get 0:02:39.440 --> 0:02:42.400 the latest from the campaign trail. Kamala Harris says she 0:02:42.480 --> 0:02:45.160 would work with Congress to raise the federal minimum wage 0:02:45.160 --> 0:02:47.880 to at least fifteen dollars an hour if elected. The 0:02:47.960 --> 0:02:51.040 Vice president discussed your economic proposals in an interview with 0:02:51.160 --> 0:02:52.000 NBC News. 0:02:52.400 --> 0:02:56.679 My plans are focused on working people, the middle class, 0:02:56.720 --> 0:02:59.640 and what we must do is strengthen hardworking people to 0:02:59.680 --> 0:03:01.760 be able to to do what they dream and aspire 0:03:01.800 --> 0:03:03.919 to be able to do. His plans are about giving 0:03:04.120 --> 0:03:07.959 tax cuts, massive tax cuts to billionaires in big corporations. 0:03:08.280 --> 0:03:11.160 Vice President Harris has called for raising the minimum wage before, 0:03:11.200 --> 0:03:14.799 but hasn't specified a dollar amount. Former President Trump sidestepped 0:03:14.800 --> 0:03:17.120 a question about the issue during a campaign stop at 0:03:17.120 --> 0:03:19.120 a McDonald's in Pennsylvania over the weekend. 0:03:19.520 --> 0:03:22.760 Well Nathan Donald Trump was back in North Carolina last night, 0:03:22.800 --> 0:03:25.360 outing his pledge to make it easier to buy a car. 0:03:25.680 --> 0:03:29.639 I will make interest on car loans fully tax deductible, 0:03:30.080 --> 0:03:34.120 because affording a car is essential to restoring the American. 0:03:34.560 --> 0:03:37.400 At a rally in Greensboro, North Carolina, the former president 0:03:37.440 --> 0:03:40.000 said the tax break would only apply to cars made 0:03:40.080 --> 0:03:42.400 in the US. He did not say whether his plan 0:03:42.400 --> 0:03:46.000 would apply to foreign owned automakers that manufacture in the US, 0:03:46.200 --> 0:03:48.000 like Volkswagen, Toyota, and Hyundai. 0:03:48.240 --> 0:03:51.560 Well Karen Donald Trump's views on monetary policymakers in global 0:03:51.560 --> 0:03:55.280 trade are being challenged by Christine Legard. In an interview 0:03:55.280 --> 0:03:59.040 with Bloomberg, the European Central Bank president invited the Republican 0:03:59.080 --> 0:04:01.400 nominee to ec he's headquarters in Frankfurt. 0:04:01.880 --> 0:04:05.440 He should come and visit us, And you know I 0:04:05.480 --> 0:04:13.280 have I have thousands of hard working people, economists, jurists, 0:04:13.600 --> 0:04:16.560 a computer scientists, and I can assure you that they 0:04:16.600 --> 0:04:20.000 work super hard every day, not just once a month. 0:04:20.200 --> 0:04:23.839 ECB President Christine Legard made the comments to Bloomberg's Francine Lockwa. 0:04:24.000 --> 0:04:26.360 Donald Trump told Bloomberg earlier this month, the FED share 0:04:26.440 --> 0:04:28.760 has the greatest job in government. In his words, you 0:04:28.880 --> 0:04:30.560 show up to the office once a month. 0:04:31.120 --> 0:04:33.920 Well, turning to the markets now, Nathan, bonds are extending 0:04:33.920 --> 0:04:36.960 to clients this morning. They have sold off significantly since 0:04:36.960 --> 0:04:40.159 the Fed started cutting interest rates. Two year treasury yields 0:04:40.160 --> 0:04:42.919 have climbed thirty four basis points in September. That's a 0:04:42.960 --> 0:04:45.840 move not seen since nineteen ninety five. Bank of America 0:04:45.920 --> 0:04:49.560 CEO Brian moyna has has urged Federal Reserve policymakers to 0:04:49.600 --> 0:04:50.159 be measured. 0:04:50.520 --> 0:04:52.960 We've got to get back in line. And so they're 0:04:53.000 --> 0:04:55.480 on that path. They're late to the game. They've got 0:04:55.520 --> 0:04:57.000 to make sure they don't go too hard now. And 0:04:57.000 --> 0:04:59.359 that's what they are all trying to figure out. Watching 0:04:59.360 --> 0:04:59.960 the data. 0:05:00.120 --> 0:05:02.760 Brian moynihan tells Bloomberg he expects the FED to cut 0:05:02.839 --> 0:05:05.279 rates by fifty basis points by the end of the year. 0:05:05.440 --> 0:05:07.880 Well, that differs Karen from the view of Apollo Management 0:05:07.960 --> 0:05:11.440 chief economist Torsten Slock. He says the chances are rising 0:05:11.480 --> 0:05:13.359 the Fed doesn't cut at all next month. 0:05:13.760 --> 0:05:15.440 I mean, you really do begin to ask the question, 0:05:15.480 --> 0:05:16.400 where is the slowdown? 0:05:16.640 --> 0:05:19.520 And as we've been debating before, so it's monetary policy 0:05:19.680 --> 0:05:20.480 really restrictive. 0:05:20.800 --> 0:05:23.360 If it is so restrictive, why is the economy. 0:05:22.960 --> 0:05:23.720 Still doing so well? 0:05:23.839 --> 0:05:27.839 Apollo Management chief economists Torsten Slocks says tailwinds from looser 0:05:27.880 --> 0:05:31.240 financial conditions, higher government spending, and elevated stocks and GDP 0:05:31.400 --> 0:05:33.040 growth are building well. 0:05:33.160 --> 0:05:35.159 Nathan, is a busy day on the earnings front, with 0:05:35.279 --> 0:05:38.640 nearly three dozen companies in the SNP five hundred reporting. 0:05:38.680 --> 0:05:41.760 We'll hear from Coca Cola, IBM, and AT and T today. 0:05:41.839 --> 0:05:44.000 We also have a couple of big reports out of Europe. 0:05:44.080 --> 0:05:46.440 This morning, we go to London and get the latest 0:05:46.480 --> 0:05:49.000 from Bloomberg's Ewen Paus. Good morning, Ewen. 0:05:49.400 --> 0:05:52.599 Karla Nathan Deeutsche Bank kaz apport today. Forty two percent 0:05:52.680 --> 0:05:55.120 increase in profits in the third quarter are help by 0:05:55.160 --> 0:05:58.680 gains at the investment bank, but Germany's biggest lender also 0:05:58.720 --> 0:06:01.559 sounding a note of course and setting aside more money 0:06:01.600 --> 0:06:04.599 to cover bad debt. Over at Heineken, it was bad 0:06:04.680 --> 0:06:07.560 weather in Europe and slow consumer spending in the US 0:06:07.560 --> 0:06:11.080 that saw bier volumes misestimates, but the Dutch brewer says 0:06:11.160 --> 0:06:14.000 higher pricing means it will still hit its profit target 0:06:14.040 --> 0:06:16.960 for the year and over at the world's biggest beauty company. 0:06:17.120 --> 0:06:20.520 Another sales decline in China, the fifth straight quarter of 0:06:20.640 --> 0:06:24.440 lower sales there for Laurel investors today asking if the 0:06:24.480 --> 0:06:27.080 shares are still worth it? In London, I'm you Imports 0:06:27.120 --> 0:06:28.200 Bloomberg Radio. 0:06:28.080 --> 0:06:30.679 Thanks you, and Apple CEO Tim Cook is in China, 0:06:30.760 --> 0:06:33.200 promising to keep investing in the country during a meeting 0:06:33.240 --> 0:06:37.360 with Beijing's top technology official. China is the world's largest 0:06:37.440 --> 0:06:41.360 smartphone market and remains Apple's most important market outside the US. 0:06:41.720 --> 0:06:44.560 This is Tim Cook's second visit to the country this year. 0:06:45.320 --> 0:06:48.200 And finally, Nathan, what would you like to hear about 0:06:48.240 --> 0:06:51.559 on Bloomberg Radio? Help make shures like ours even better 0:06:51.640 --> 0:06:55.800 by taking our Bloomberg Audience survey. Visit YouTube dot com 0:06:55.800 --> 0:06:59.359 slash Bloomberg podcast and click the link in our profile 0:06:59.520 --> 0:07:02.359 or community section to take this survey, which is hosted 0:07:02.360 --> 0:07:06.160 by our partner's Material. Fill it out now at YouTube 0:07:06.160 --> 0:07:12.640 dot com slash Bloomberg Podcasts. Time now for look at 0:07:12.680 --> 0:07:14.440 some of the other stories making news in New York 0:07:14.480 --> 0:07:16.120 and around the world, and for that we're joined by 0:07:16.200 --> 0:07:18.840 Bloomberg's Michael Barr. Michael, good morning, Good. 0:07:18.600 --> 0:07:22.280 Morning, Karen. The Georgia Supreme Court rejected a last minute 0:07:22.320 --> 0:07:25.320 push by the Republican Party to reinstate a set of 0:07:25.320 --> 0:07:29.040 new election rules that included, among other things, a requirement 0:07:29.120 --> 0:07:33.640 that ballots be handcounted in the upcoming US presidential vote. 0:07:33.960 --> 0:07:37.960 The Republican National Committee challenged a lower court's decision last 0:07:37.960 --> 0:07:41.600 week to strike down the rules as unlawful. Scott Turner, 0:07:41.680 --> 0:07:44.800 founder of the nonprofit Eternal Vigilance. 0:07:44.360 --> 0:07:47.880 Action, that collective sigh of relief you heard was from 0:07:48.080 --> 0:07:49.800 our election officials around the state. 0:07:50.360 --> 0:07:53.480 The court's decision means the rules will remain blocked at 0:07:53.560 --> 0:07:57.200 least heading into the November fifth election. Two Georgia election 0:07:57.320 --> 0:08:01.000 workers to fame by former Trump attorney rudyja Gi are 0:08:01.080 --> 0:08:04.840 getting some of his prized possessions. The ruling comes from 0:08:04.840 --> 0:08:09.600 a federal judge, as Ruby Freeman and Shay Moss have 0:08:09.720 --> 0:08:12.400 been trying to collect on a one hundred and forty 0:08:12.480 --> 0:08:17.520 six million dollar defamation judgment. The possessions include his nineteen 0:08:17.600 --> 0:08:22.720 eighty Mercedes Benz, signed photos of Yankees' legends, some luxury watches, 0:08:23.000 --> 0:08:26.200 and his New York City apartment. We're learning more about 0:08:26.200 --> 0:08:29.680 the arrest of the former CEO of Abercrombie and Fitch. 0:08:30.120 --> 0:08:33.240 Michael Jeffries, along with two other co defendants, have been 0:08:33.280 --> 0:08:37.920 indicted for allegedly running an international prostitution and sex trafficking 0:08:38.000 --> 0:08:42.000 ring for decades. According to the Eastern District of New York, 0:08:42.240 --> 0:08:46.240 they forced male models into participating in lude acts. US 0:08:46.320 --> 0:08:51.000 Attorney Brion Peace to anyone who thinks they can exploit 0:08:51.040 --> 0:08:55.920 and coerce others by using the so called casting couch system, 0:08:56.280 --> 0:09:00.040 this case is served as a warning Jeffrey's attorney. He 0:09:00.280 --> 0:09:03.160 says that they will respond in court, not in the media. 0:09:03.800 --> 0:09:07.480 Los Angeles County District Attorney George Gasson says that he'll 0:09:07.520 --> 0:09:10.960 have an announcement soon on his decision regarding a possible 0:09:11.000 --> 0:09:13.000 re sentencing of the Menendez brothers. 0:09:13.320 --> 0:09:15.680 As I said about it ten days ago, I said 0:09:15.679 --> 0:09:17.800 I would make a decision within ten days or so. 0:09:18.000 --> 0:09:19.760 I planned to have a decision by the end of 0:09:19.800 --> 0:09:20.240 this week. 0:09:20.559 --> 0:09:23.480 Lyell and Eric Menendez were sentenced to life in prison 0:09:23.559 --> 0:09:26.960 for the nineteen eighty nine murders of their parents. Their 0:09:27.000 --> 0:09:30.040 defense team says there is new evidence supporting the brothers 0:09:30.120 --> 0:09:33.600 claims of sexual and physical abuse by their parents. New 0:09:33.679 --> 0:09:36.880 York's MTA may face a six hundred and fifty two 0:09:36.880 --> 0:09:40.520 million dollars budget shortfall in twenty twenty eight, as higher 0:09:40.559 --> 0:09:44.360 overtime costs and lower fare box collections threatened to strain 0:09:44.440 --> 0:09:48.760 the transit agency's finances. New York State Comptrollert Thomas Denopoli 0:09:49.120 --> 0:09:52.199 warned in a report that about two hundred million dollars 0:09:52.559 --> 0:09:56.920 larger than the MTA's own production projections for its budget 0:09:56.960 --> 0:09:59.920 gap in twenty twenty eight. Global News twenty four hours 0:10:00.280 --> 0:10:02.640 Day and Whenever you want it with Bloomberg News Now. 0:10:03.120 --> 0:10:05.560 Michael Barbs is Bloomberg hereing. 0:10:05.520 --> 0:10:12.400 Sorry Michael Barr, thank you time now for the Bloomberg 0:10:12.440 --> 0:10:15.080 Sports update. Bron to you by try State Outie. Here's 0:10:15.120 --> 0:10:16.959 John Stashauer, John, good morning. 0:10:16.760 --> 0:10:18.400 Good morning, Karen. The Knicks made a couple of big 0:10:18.440 --> 0:10:21.320 offseason moves in hopes of catching the Celtics to the 0:10:21.320 --> 0:10:24.280 Eastern Conference. They added Karl Anthony Towns and Mchal Bridges 0:10:24.320 --> 0:10:27.760 for one night. Anyway, those moves didn't help open the 0:10:27.840 --> 0:10:30.679 night in Boston, so the Celtics Oyster the championship ender 0:10:30.679 --> 0:10:32.480 and then took a twenty four point lead in the 0:10:32.520 --> 0:10:35.240 first half. Boston won won thirty two to one. 0:10:35.240 --> 0:10:35.520 On nine. 0:10:35.600 --> 0:10:38.320 Jason Tatum scored thirty seven. He made eight of the 0:10:38.360 --> 0:10:42.280 Celtics twenty nine three pointers. Twenty nine threes ties the 0:10:42.360 --> 0:10:45.880 NBA record. Then some NBA history in La Lebron James 0:10:45.920 --> 0:10:48.120 sharing the court with his son Bronni. You only played 0:10:48.160 --> 0:10:51.120 three minutes. The Lakers beat Minnesota. Good start for the Rangers, 0:10:51.120 --> 0:10:52.959 good start to their season. They're five oho to one 0:10:52.960 --> 0:10:55.640 in Montreal, two goals in the first two minutes. Rangers 0:10:55.679 --> 0:10:58.240 won seven to two. Devils lost to Tampa Bay eight 0:10:58.320 --> 0:11:00.360 to five. The Islanders lost to a t That's right, 0:11:00.720 --> 0:11:03.360 one nothing. Capitol's won four one in Philadelphia. The Bruins 0:11:03.400 --> 0:11:06.520 shut out in Nashville for nothing. No lack of star 0:11:06.559 --> 0:11:09.360 power for the World Series against Friday in LA. But 0:11:09.440 --> 0:11:12.440 there's no doubt who the biggest headliners are. And here's 0:11:12.480 --> 0:11:14.400 Aaron Judge on shoe Hey Otani. 0:11:14.880 --> 0:11:17.640 It's for average, it's for power, the speed, you know, 0:11:17.679 --> 0:11:20.080 doing what he did this year with the fifty stolen bases. 0:11:20.160 --> 0:11:23.000 That's it got talked about a lot I don't think 0:11:23.000 --> 0:11:25.240 it got talked about enough. It's just he's an impressive, 0:11:25.960 --> 0:11:28.400 impressive athlete, you know, the best player in the game 0:11:28.480 --> 0:11:31.400 and order to ambassador for the sport. 0:11:31.760 --> 0:11:33.640 Speaking of out Tony, the ball he hit for his 0:11:33.760 --> 0:11:36.240 fiftieth home run was sold a option for four point 0:11:36.320 --> 0:11:39.800 four million. Meanwhile, Dodger legend has passed away. Fernando Alezuela 0:11:39.880 --> 0:11:43.440 was sixty three, had been ill, came from Mexico, burst 0:11:43.440 --> 0:11:45.440 onto the scene as a twenty year old. In nineteen 0:11:45.440 --> 0:11:47.960 eighty one, Fernando Mania was born. He won the Rookie 0:11:47.960 --> 0:11:50.319 of the Year and the say Young John Stashey, We're 0:11:50.320 --> 0:11:51.920 Bloomberg Sports Karen Ethan. 0:11:53.920 --> 0:11:58.040 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, 0:11:58.160 --> 0:12:02.360 and around the world on Bloomberg and the Bloomberg Business app. 0:12:02.520 --> 0:12:04.440 This is Bloomberg Daybreak. 0:12:04.520 --> 0:12:07.559 Good morning. I'm Nathan Hager bringing you an exclusive conversation 0:12:07.640 --> 0:12:10.880 with Bank of America's CEO Brian moynihan. Speaking with Bloomberg's 0:12:10.880 --> 0:12:14.240 Heidi Stroud Watts in Sydney. They talked about interest rates, 0:12:14.280 --> 0:12:16.600 his warning for the FED, and what the election could 0:12:16.640 --> 0:12:18.840 mean for America's fiscal situation. Let's listen. 0:12:18.880 --> 0:12:20.920 In you think about the US economy, you have great 0:12:20.920 --> 0:12:22.679 insight on what's going on. If you look at that 0:12:22.720 --> 0:12:26.199 consumer spending this year, the month of October so far 0:12:26.320 --> 0:12:29.440 versus last year, or third quarter versus last year's third quarter, 0:12:29.840 --> 0:12:31.959 it's up in a four to five percent range, which 0:12:32.000 --> 0:12:35.559 is consistent with a low inflation, low growth economy. That's 0:12:35.559 --> 0:12:38.800 across about a trillion and a quarter dollars to twenty 0:12:38.800 --> 0:12:40.839 and a half dollars spent in a quarter, so it's 0:12:40.840 --> 0:12:43.000 a big sample and the people moving around they spend 0:12:43.000 --> 0:12:45.319 it each quarter on all different things, but generally growing 0:12:45.400 --> 0:12:48.680 consistent where we were pre pandemic, when you had fed 0:12:48.679 --> 0:12:50.559 funds rate at the two percent level, two and a 0:12:50.600 --> 0:12:52.760 half percent level, you had inflation and control, and you 0:12:52.760 --> 0:12:55.320 had growth in the two percent level. So that gives 0:12:55.400 --> 0:12:58.439 us confidence that our experts to do all analysis are 0:12:58.480 --> 0:13:00.880 backed up by the data we see our client, and 0:13:00.920 --> 0:13:02.880 that's what we see for the consumer. 0:13:03.440 --> 0:13:07.079 Is there of a degree of bifurcation the demographically. 0:13:06.840 --> 0:13:09.440 It's less about bifurcation because I'd assume that the sort 0:13:09.440 --> 0:13:13.440 of too it's look inflation hits people in the lower 0:13:13.800 --> 0:13:16.680 brackets more than it does others. Because but the good 0:13:16.679 --> 0:13:19.320 news is gas prices come down, food prices are tipped 0:13:19.360 --> 0:13:22.320 over inflations, and controls down in the three percent range 0:13:22.360 --> 0:13:25.120 as opposed it was running pretty hot, and so that helps. 0:13:25.360 --> 0:13:28.720 But if you have auto debt, that debt and you 0:13:28.720 --> 0:13:30.280 want to get a new car, that debt is higher. 0:13:30.320 --> 0:13:32.319 If you have mortgage debt and you already had a 0:13:32.360 --> 0:13:34.720 mortgage loan, it's very low. And so it really depends 0:13:34.760 --> 0:13:37.000 on the consumer and really where they are. But the 0:13:37.040 --> 0:13:39.840 average American consumer has more money than they did before 0:13:39.840 --> 0:13:42.360 the pandemic, is in better credit quality before the pandemic, 0:13:42.440 --> 0:13:44.240 still has the money and accounts from some of this 0:13:44.920 --> 0:13:48.400 stimulus in the pandemic and is spending money. And that's 0:13:48.440 --> 0:13:50.240 all good stuff for the US economy because we're such 0:13:50.240 --> 0:13:52.360 a consumer. That's the unique thing about it's a consumer 0:13:52.400 --> 0:13:54.160 driven economy. It's a consumer lot economy. 0:13:54.240 --> 0:13:57.040 Are you thinking about making allocations or allowances with stress 0:13:57.080 --> 0:13:57.680 at this point? 0:13:57.880 --> 0:13:59.960 We always do that. So every quarter we run stressed 0:14:00.080 --> 0:14:02.280 has thousands of them. Every day we run them into 0:14:02.280 --> 0:14:04.600 market's business stuff. We always look at it and so 0:14:04.600 --> 0:14:06.720 what's the case if it turns out the wrong way. 0:14:06.760 --> 0:14:09.320 So even how we set our reserves. We have a 0:14:09.400 --> 0:14:12.200 modeled series of cases we put in, so it's not 0:14:12.240 --> 0:14:14.440 all base case based cases about half and the rest 0:14:14.480 --> 0:14:17.320 are stress cases and the atom all together. We're actually 0:14:17.760 --> 0:14:19.640 set our reserves as if unemployment was going to be 0:14:19.640 --> 0:14:21.520 a five percent at the end of next year, not 0:14:21.720 --> 0:14:23.720 what the market predicts at four point three. So there's 0:14:23.720 --> 0:14:26.040 a conservatism built in to that, and then we look 0:14:26.120 --> 0:14:26.480 beyond that. 0:14:26.680 --> 0:14:29.800 Those those are some potential complications for the FED depending 0:14:29.800 --> 0:14:31.760 on what happens in just under two weeks time. Right 0:14:31.880 --> 0:14:35.680 does the fiscal scenario, particularly under another Trump administration, but 0:14:35.720 --> 0:14:37.560 also certainly there are risks when it comes to the 0:14:37.600 --> 0:14:40.480 Harris camp as well. Is that something that you're thinking about. 0:14:40.600 --> 0:14:42.560 I would separate a very near term question of the 0:14:42.560 --> 0:14:46.560 FED getting the trajectory. Our experts have them cutting again 0:14:46.600 --> 0:14:49.720 a couple more times this year, one hundred basis points 0:14:49.720 --> 0:14:52.160 this year, and another one hundred basis points more evenly 0:14:52.200 --> 0:14:55.280 spread a quarter each quarter next year. It gets to 0:14:55.320 --> 0:14:57.400 three to three point twenty five as a terminal rate, 0:14:57.560 --> 0:15:00.280 and an inflation comes down to the two two point 0:15:00.320 --> 0:15:02.040 three percent is a move in the twenty five and 0:15:02.080 --> 0:15:05.520 the twenty six, and so that is a well engineered 0:15:06.080 --> 0:15:09.600 fed change, and so the dangers that data or they 0:15:09.680 --> 0:15:11.560 go too fast or too slow, and that risk is 0:15:11.640 --> 0:15:13.800 higher now than it was six months ago. And so 0:15:14.240 --> 0:15:16.560 as they move, everybody's going to watch them. And you 0:15:16.600 --> 0:15:18.240 see the self in territories one day and you see 0:15:18.240 --> 0:15:21.040 the rally the other day. Everybody's going to watch all that. 0:15:21.040 --> 0:15:22.960 That is completely different from and I don't think that 0:15:23.000 --> 0:15:25.360 will be impacted by the elections. All the fiscal problem 0:15:25.400 --> 0:15:27.280 in the United States, And to give you the sound bite, 0:15:27.760 --> 0:15:30.880 the US just finished the fiscal year. The budget deficit 0:15:30.920 --> 0:15:33.680 for that year was equal to the entire economy of 0:15:33.720 --> 0:15:36.080 the country of Australia one point eight trillion dollars. So 0:15:36.400 --> 0:15:38.080 think about the size of that, and we've got to 0:15:38.080 --> 0:15:40.160 get back in line. These are good times and we 0:15:40.200 --> 0:15:43.800 should be managing more carefully. And frankly, we need to 0:15:43.840 --> 0:15:48.480 have the politicians too, set those budgets, fund those budgets, 0:15:48.480 --> 0:15:51.960 and run tax policy against those budgets to figure out 0:15:52.000 --> 0:15:53.640 how to make this work. It's probably gonna be raising 0:15:53.680 --> 0:15:56.320 revenue and cutting expense or some combination. It's not a 0:15:56.360 --> 0:15:58.360 new problem. That's one we got to start to wrestle with. 0:15:58.480 --> 0:16:00.640 Not that it's critical tomorrow morning, that it'll be critical 0:16:00.680 --> 0:16:01.440 over the next few years. 0:16:01.440 --> 0:16:03.000 But given that risk, do you think the FED went 0:16:03.040 --> 0:16:03.840 too big too soon. 0:16:04.600 --> 0:16:06.920 No, they were late to the game and they admit that. 0:16:06.960 --> 0:16:09.600 So it's nothing that we're saying. It's they were late 0:16:09.640 --> 0:16:11.840 and they had to move fast because inflation got ahead 0:16:11.840 --> 0:16:13.440 of them and they and they've done a good job 0:16:13.440 --> 0:16:15.560 of bringing it back down from probably a double digit 0:16:15.680 --> 0:16:17.800 rate down to about three percent last quarter three and 0:16:17.840 --> 0:16:20.000 a quarters. They're getting close to it. And it's never 0:16:20.680 --> 0:16:23.920 the inflation average from if one of my teammates tolling 0:16:23.960 --> 0:16:26.280 from nineteen ninety to twenty twenty four was two and 0:16:26.320 --> 0:16:29.160 a half percent, the inflation average from nineteen from two 0:16:29.200 --> 0:16:31.400 thousand twenty two and a half percent. It's four and 0:16:31.400 --> 0:16:34.240 a half percent just in the last twenty twenty to 0:16:34.280 --> 0:16:36.920 twenty four, and so we've got to get back in line. 0:16:37.040 --> 0:16:39.800 And so they're on that path. They were late to 0:16:39.840 --> 0:16:41.440 the game. They got to make sure they don't go 0:16:41.480 --> 0:16:43.680 too hard now, and that's what they are all trying 0:16:43.680 --> 0:16:46.560 to figure out watching the data. But whether it's it's 0:16:46.560 --> 0:16:48.520 a terminal rate that's the key, and that we think 0:16:48.560 --> 0:16:50.480 is around three percent, that's a whole different indust rate 0:16:50.560 --> 0:16:53.160 environment in the US and other markets than it's been 0:16:53.200 --> 0:16:54.400 in the last fifteen years or so. 0:16:54.720 --> 0:16:58.160 This is Bloomberg Daybreak, your morning podcast on the stories 0:16:58.200 --> 0:17:01.240 making news from Wall Street to Washington and beyond. 0:17:01.480 --> 0:17:03.880 Look for us on your podcast feed by six am 0:17:03.920 --> 0:17:07.320 Eastern each morning, on Apple, Spotify, or anywhere else you listen. 0:17:07.520 --> 0:17:10.400 You can also listen live each morning starting at five 0:17:10.440 --> 0:17:13.040 am Wall Street Time on Bloomberg eleven three to zero 0:17:13.160 --> 0:17:16.040 in New York, Bloomberg in ninety nine to one in Washington, 0:17:16.119 --> 0:17:20.040 Bloomberg ninety two nine in Boston, and nationwide on serious 0:17:20.240 --> 0:17:21.800 XM Channel one twenty one. 0:17:22.200 --> 0:17:24.960 Plus listen coast to coast on the Bloomberg Business app 0:17:25.000 --> 0:17:27.800 now with Apple CarPlay and Android Atto interfaces. 0:17:28.000 --> 0:17:31.040 And don't forget to subscribe to Bloomberg News Now. It's 0:17:31.040 --> 0:17:33.800 the latest news whenever you want it in five minutes 0:17:33.880 --> 0:17:37.000 or less. Search Bloomberg News Now on your favorite podcast 0:17:37.040 --> 0:17:41.200 platform to stay informed all day long. I'm Karen Moscow. 0:17:41.000 --> 0:17:43.520 And I'm Nathan Hager. Join us again tomorrow morning for 0:17:43.560 --> 0:17:45.480 all the news you need to start your day right 0:17:45.520 --> 0:17:46.560 here on Bloomberg. 0:17:46.640 --> 0:17:47.000 Dabray