Wall Street Awaits Jobs Report; Yellen Blasts China

Bloomberg Audio Studios, Podcasts, Radio News. 0:00:09.640 --> 0:00:10.200 Good morning. 0:00:10.200 --> 0:00:12.720 I'm Nathan Hager and I'm John Tucker. Here are these 0:00:12.760 --> 0:00:14.040 stories we're following today. 0:00:14.200 --> 0:00:16.840 John, the gain in futures and bond yields comes as 0:00:16.840 --> 0:00:20.439 we await this morning's jobs report. The median estimate of 0:00:20.480 --> 0:00:23.040 economists surveyed by Bloomberg is for a gain of two 0:00:23.160 --> 0:00:26.320 hundred and fourteen thousand jobs and month of March. Let's 0:00:26.360 --> 0:00:28.520 get a preview now from Bloomberg's Michael McKee. 0:00:28.800 --> 0:00:32.040 There will be three numbers to watch in today's employment report. First, 0:00:32.280 --> 0:00:35.520 the number of jobs created. Gains have average two hundred 0:00:35.520 --> 0:00:37.720 and thirty seven thousand a month for the past year 0:00:37.960 --> 0:00:40.280 two hundred and forty four thousand a month for the 0:00:40.320 --> 0:00:44.479 past three months. Anything significantly below that may signal the 0:00:44.560 --> 0:00:49.040 labor market is finally weakening. FED officials have forecast unemployment 0:00:49.040 --> 0:00:52.120 would rise over four percent for months now, but so 0:00:52.240 --> 0:00:56.840 far that's not happened, another sign of labor market strength. Finally, 0:00:56.920 --> 0:01:00.080 wage inflation itself matters. FED officials would like to see 0:01:00.160 --> 0:01:03.040 wages increasing no more than three and a half percent 0:01:03.160 --> 0:01:06.399 a month. Michael McKee, Bloomberg Radio. 0:01:06.480 --> 0:01:08.960 All right, thanks Mike, and as we wait the John support. 0:01:09.040 --> 0:01:11.720 One FED official says interest rate cuts may not be 0:01:11.920 --> 0:01:16.520 needed this year, especially if the economy remains robust. Here's 0:01:16.560 --> 0:01:20.080 Minneapolis Fed Reserve President Neil kush Curry. 0:01:20.240 --> 0:01:22.200 Wouldn't say they're off the table, but they're also not 0:01:22.480 --> 0:01:25.319 a likely scenario given what we know right now. If 0:01:25.319 --> 0:01:28.200 we continue to see strong job growth, if we continue 0:01:28.240 --> 0:01:32.280 to see strong consumer spending and strong GDP growth, then 0:01:32.319 --> 0:01:35.480 that raises a question in my mind, well, why would 0:01:35.600 --> 0:01:36.240 we cut rage? 0:01:36.680 --> 0:01:40.720 Minneapolis Federal Reserve President Neil kush Curry does not vote 0:01:40.720 --> 0:01:42.360 on policy this year, and. 0:01:42.400 --> 0:01:45.920 Neither does the chief US economist at Morgan Stanley John 0:01:45.959 --> 0:01:49.880 but she expects multiple cuts this year. We cut up 0:01:49.920 --> 0:01:52.600 with Ellen Zenner at a conference in Italy this morning. 0:01:53.080 --> 0:01:54.279 We expect four cuts. 0:01:54.320 --> 0:01:56.680 We actually expect them to speed up cuts in the 0:01:56.680 --> 0:01:58.720 fourth quarter of the year because we have inflation coming 0:01:58.760 --> 0:02:01.600 down faster at that point and the FED but I 0:02:01.600 --> 0:02:05.360 don't think that the timing of when central banks globally 0:02:05.320 --> 0:02:08.040 are cutting is really going to be an issue. 0:02:08.360 --> 0:02:11.640 Morgan Stanley chief US economist Ellen Zetner says she expects 0:02:11.639 --> 0:02:12.680 the first cut in. 0:02:12.720 --> 0:02:16.079 June and heading to Asia. Janet Yellen has kicked off 0:02:16.080 --> 0:02:19.400 her latest visit to China, calling out the country's government 0:02:19.400 --> 0:02:23.880 for its quote unfair treatment of US firms. However, delivering 0:02:23.880 --> 0:02:26.680 prepared remarks at an event in the southern city of Guangzhou, 0:02:27.240 --> 0:02:29.639 Yellen had this to say on the matter of protectionism. 0:02:30.360 --> 0:02:35.160 The President and I really reject the idea that we 0:02:35.200 --> 0:02:40.520 should decouple our economy from China's. Rather, we're seeking a 0:02:40.560 --> 0:02:46.480 healthy economic relationship, but importantly on a level playing field 0:02:46.840 --> 0:02:48.680 that can benefit both sides. 0:02:49.000 --> 0:02:52.560 Yellen's trip comes after President Biden at Chinese leader Shijinping 0:02:52.919 --> 0:02:55.359 held their first call in five months on Tuesday. 0:02:55.520 --> 0:02:59.320 I meanwhile, John Argentina's president Javier Malay, has told Bloomberg 0:02:59.400 --> 0:03:02.880 he won't change existing trade and financial ties his country 0:03:02.880 --> 0:03:05.400 has with China. It is a marked change in tone 0:03:05.480 --> 0:03:08.600 for the libertarian leader, who is previously like in Beijing 0:03:09.080 --> 0:03:12.520 to an assassin. Bloomberg News editor in chief John Micklethwaite 0:03:12.560 --> 0:03:15.360 asked Malay if he still stood by those comments. 0:03:15.320 --> 0:03:19.480 And as for the Chinese government, what we've always said 0:03:19.880 --> 0:03:22.960 is that we are libertarians, and if people want to 0:03:23.000 --> 0:03:26.959 do business with China, they can carry on business as usual. 0:03:27.080 --> 0:03:30.720 What I said was that I wouldn't be aligned with communists. 0:03:30.200 --> 0:03:32.639 And President Willay added he has no intention of touching 0:03:32.639 --> 0:03:36.360 the eighteen billion dollar currency swap between Argentina and China. 0:03:36.480 --> 0:03:38.800 China is the biggest source of foreign reserves for the 0:03:38.800 --> 0:03:40.680 beleaguered Central Bank in Buenos Aires. 0:03:40.840 --> 0:03:43.320 And now to the latest from the Middle East. Israeli 0:03:43.360 --> 0:03:46.600 Prime Minister ben Ubinetanya, whose office is promising to prevent 0:03:46.840 --> 0:03:50.400 a humanitarian crisis in Gaza. That's after a half hour 0:03:50.440 --> 0:03:53.480 phone call with President Biden following the attack that killed 0:03:53.560 --> 0:03:57.000 seven aid workers this week. The White House National Security 0:03:57.000 --> 0:04:00.320 spokesman John Kirby says US support for Israel's or with 0:04:00.360 --> 0:04:05.200 Hamas will depend on Israel taking new steps to protect civilians. 0:04:05.400 --> 0:04:08.240 If we don't see changes from their side, they'll have 0:04:08.280 --> 0:04:10.200 to be changes from our side, but I won't preview 0:04:10.200 --> 0:04:11.080 what that could look like. 0:04:11.440 --> 0:04:14.440 White House spokesman John Kirby says the call between Biden 0:04:14.480 --> 0:04:17.760 and Nathan Yahoo was direct and business like. Nett Yahoo's 0:04:17.760 --> 0:04:22.400 office is Israel will allow temporary aid deliveries through two checkpoints, 0:04:22.400 --> 0:04:26.479 and more Jordanian aid could flow through a third, crossing. 0:04:26.600 --> 0:04:29.640 Well Middle East tensions. John lifted oil above ninety one 0:04:29.680 --> 0:04:32.400 dollars a barrel earlier this morning. In fact, crud's risen 0:04:32.480 --> 0:04:35.200 for four straight days and is trading at its highest 0:04:35.279 --> 0:04:39.520 level since October. Checking Brent right now, it's a little 0:04:39.600 --> 0:04:42.440 change to the upside at ninety dollars seventy one cents 0:04:42.520 --> 0:04:45.359 per barrel. West Texas Intermediate is down a tenth of 0:04:45.400 --> 0:04:48.719 one percent at eighty six dollars forty seven cents. 0:04:48.360 --> 0:04:51.600 And in Europe, the oil giant Shell predicting weaker first 0:04:51.680 --> 0:04:54.040 quarter results. Let's go to London now and get the 0:04:54.080 --> 0:04:55.520 latest with Tiwa out of Bayou. 0:04:55.560 --> 0:04:58.520 Good morning, Tiwa, Good morning. Join Nathan so Yes. 0:04:58.560 --> 0:05:01.400 The London based Anti Giants show did provide an update 0:05:01.440 --> 0:05:03.760 to the market this morning, and the big story was 0:05:03.960 --> 0:05:06.760 what's happened to their earnings from gas trading. So they 0:05:06.800 --> 0:05:09.799 did admit that those earnings for the first quarter have dropped, 0:05:10.000 --> 0:05:12.200 but shall are also keen to point out that they 0:05:12.200 --> 0:05:16.200 are still high by historical standards. So the Shell division 0:05:16.240 --> 0:05:19.080 that does buy and sell natural gas has proved to 0:05:19.120 --> 0:05:22.240 be quite a major money maker since the Russian invasion 0:05:22.279 --> 0:05:25.960 of Ukraine increased volatility, and that profitability dropped in the 0:05:26.000 --> 0:05:28.120 first three months of the year, but that's after what 0:05:28.160 --> 0:05:31.239 Shell is describing as an exceptional fourth quarter of twenty 0:05:31.320 --> 0:05:35.239 twenty three. SHALL will publish its full first quarter earnings 0:05:35.240 --> 0:05:37.520 on May the second in London, to what ated BYO 0:05:37.600 --> 0:05:38.440 Bloomberg Radio. 0:05:38.480 --> 0:05:41.119 All right, thanks too and checking sharers of SHALL Little 0:05:41.200 --> 0:05:47.520 Change this morning and time out for a look at 0:05:47.520 --> 0:05:49.440 some of the other stories making news in New York 0:05:49.600 --> 0:05:53.200 and around the world. We're joined by Bloombergs and Michael Barr. 0:05:53.400 --> 0:05:56.240 Thank you very much. John Donald Trump suffered two legal 0:05:56.320 --> 0:06:00.480 setbacks yesterday. Bloomberg's Amy Morris begins with a ling from 0:06:00.520 --> 0:06:04.320 a Georgia judge on the former president's election interference case. 0:06:04.600 --> 0:06:08.520 Folding County Superior Court Judge Scott McAfee denied Donald Trump's 0:06:08.520 --> 0:06:10.839 request to dismiss his case on the grounds that it 0:06:10.960 --> 0:06:14.839 violated his free speech rights. Judge McAfee says alleged comments 0:06:14.839 --> 0:06:18.240 by former President Trump are not protected by the First Amendment, 0:06:18.520 --> 0:06:21.720 saying that they were made quote in furtherance of criminal activity. 0:06:22.120 --> 0:06:24.480 And just a couple of hours later, in Florida, Federal 0:06:24.480 --> 0:06:28.000 Court Judge Isiland Cannon rejected Donald Trump's bid to drop 0:06:28.080 --> 0:06:32.360 charges related to his alleged mishandling of classified documents after 0:06:32.360 --> 0:06:35.280 he left the White House. Both court cases will proceed 0:06:35.320 --> 0:06:38.560 on schedule in Washington. Amy Morris Bloomberg Radio. 0:06:38.440 --> 0:06:42.040 We've learned Wednesdays nor'easter turned deadly in New York. More 0:06:42.080 --> 0:06:45.960 than seven one hundred thousand homes and businesses lost power 0:06:46.000 --> 0:06:49.560 across nearly a dozen states. In the Bronx, crews were 0:06:49.680 --> 0:06:53.400 clearing hundreds of trees and limbs that came down around 0:06:53.400 --> 0:06:56.880 New York City. North of the city, in armank the 0:06:56.920 --> 0:07:00.760 wife of a Yankees executive was killed when her was 0:07:00.800 --> 0:07:04.080 crushed by a falling tree. The Yankees released a statement 0:07:04.160 --> 0:07:06.800 sending their condolences to the family of fifty year old 0:07:07.080 --> 0:07:11.440 Catherine Tucciani. Rescued teams are searching for a family of 0:07:11.480 --> 0:07:15.400 five feared trapped in a rockslide following Taiwan's biggest earthquake 0:07:15.680 --> 0:07:18.920 in twenty five years. The quake Wednesday left at least 0:07:19.000 --> 0:07:22.200 now twelve dead. In the city of Hulane, cruise were 0:07:22.200 --> 0:07:25.760 working to demolish a five story building that was left 0:07:25.840 --> 0:07:28.920 leaning at a severe angle. The quake damaged scores of 0:07:28.960 --> 0:07:31.880 buildings around the island and left more than a thousand 0:07:31.920 --> 0:07:35.320 people injured. President Biden heads to Baltimore today to view 0:07:35.360 --> 0:07:38.160 the site of the March twenty six bridge collapse that 0:07:38.280 --> 0:07:41.760 killed six construction workers and shut down the Port of Baltimore. 0:07:42.040 --> 0:07:45.640 White House Press Secretary Karine Jean Vierre says Biden will 0:07:45.720 --> 0:07:49.160 be briefed about efforts to remove the wreckage, reopen the channel, 0:07:49.320 --> 0:07:50.680 and Baltimore's recovery. 0:07:51.120 --> 0:07:54.240 As the President said within hours of the collapse, this 0:07:54.320 --> 0:07:56.000 administration will be with. 0:07:56.000 --> 0:07:58.960 The people of Baltimore every step of the way. 0:07:59.280 --> 0:08:02.239 White House spoke person Green Jean Pierre says the President 0:08:02.360 --> 0:08:05.280 also will meet with the families of the construction workers 0:08:05.280 --> 0:08:08.840 who were fixing potholes on the Francis Scott Key Bridge 0:08:09.120 --> 0:08:12.120 when the cargo vessel lost power and slammed into it. 0:08:12.680 --> 0:08:15.480 Global News twenty four hours a day and whenever you 0:08:15.560 --> 0:08:18.520 want it with Bloomberg News Now. Hi, Michael Barrn, This 0:08:18.560 --> 0:08:20.480 is Bloomberg John, Michael, thank you. 0:08:24.520 --> 0:08:26.640 It's coming up on five ten of Wall Street Time 0:08:26.680 --> 0:08:29.840 down for the Bloomberg Sports update. For that, we bring 0:08:29.880 --> 0:08:31.720 it in John Steshower. 0:08:31.680 --> 0:08:32.240 Thanks John. 0:08:32.280 --> 0:08:34.240 To day began for the Knicks with an update on 0:08:34.280 --> 0:08:36.560 the Julius Randall shoulder injury. Not good news, but not 0:08:36.640 --> 0:08:39.520 unexpected the way things had been trending. Randall's season is 0:08:39.559 --> 0:08:42.280 over neath surgery. The injury took place back on January 0:08:42.280 --> 0:08:44.280 twenty seventh. Of the hope was that he would return, 0:08:44.640 --> 0:08:47.040 but his doctors have recently warned him a further damage 0:08:47.040 --> 0:08:49.840 if he did that. Nick then hosted the Kings, trailed 0:08:49.840 --> 0:08:52.400 by fifteen after the first quarter. Dominated after that, they 0:08:52.400 --> 0:08:54.840 beat Sacramento one twenty to one oh nine to end 0:08:54.840 --> 0:08:57.319 the three game, losing three Jalens runs and scored thirty 0:08:57.360 --> 0:08:59.440 five on the ice. Islanders continue their push to make 0:08:59.440 --> 0:09:02.199 the playoffs or two win of Columbus Bruins won four 0:09:02.240 --> 0:09:05.000 to one at Carolina Capitol's lost four to one to 0:09:05.080 --> 0:09:09.240 Pittsburgh College Basketball. Seaton Hall won the NIT in dramatic fashion, 0:09:09.280 --> 0:09:11.480 finished the game on a nine to nothing run to 0:09:11.600 --> 0:09:14.600 top Indiana State seventy nine seventy seven, first time the 0:09:14.679 --> 0:09:18.199 Pirates have won the NIT since nineteen fifty three. Now 0:09:18.200 --> 0:09:20.640 it's the NCAA Final Four, with the women playing to 0:09:20.679 --> 0:09:23.480 that in Cleveland. Unbeaten South Carolina takes it on NC State, 0:09:23.480 --> 0:09:27.320 followed by Caitlin Clark and Iowa against perennial power Yukon 0:09:27.400 --> 0:09:30.200 one way or the other. Clark's brilliant career is about 0:09:30.200 --> 0:09:32.640 to end. She was asked what she should be remembered for. 0:09:33.400 --> 0:09:35.240 Remember, you know how we made them feel, how we 0:09:35.720 --> 0:09:38.000 broad joyed their lives, how we gave their family something 0:09:38.040 --> 0:09:40.440 to scream about on the TV on the weekends. You know, 0:09:40.480 --> 0:09:41.960 I think, I hope those are the biggest things that 0:09:41.960 --> 0:09:44.360 people remember. I hope, you know, all the young boys 0:09:44.400 --> 0:09:47.319 and girls remember the joy that we played with and 0:09:47.360 --> 0:09:49.200 how we took ten seconds of our time to sign 0:09:49.200 --> 0:09:49.800 their autograph. 0:09:49.960 --> 0:09:52.760 Met Men's final four beginning tomorrow night in Phoenix in 0:09:52.800 --> 0:09:54.839 the Bronx Today the Yankee home opener. They came off 0:09:54.840 --> 0:09:57.040 a six and one season opening road tip. They'll start 0:09:57.040 --> 0:10:00.360 Marcus Strouman against the Blue Jays Cityfield. Yes. Today, the 0:10:00.360 --> 0:10:02.160 Mets finally at their first win. It came in the 0:10:02.240 --> 0:10:04.680 nightcap to the doubleheader with Detroit. They lost the opener 0:10:04.720 --> 0:10:07.080 six to three, but then one two to one with 0:10:07.120 --> 0:10:09.040 two runs in the bottom of the night. This will 0:10:09.080 --> 0:10:11.480 be the A's last season in Oakland, then moving to 0:10:11.520 --> 0:10:14.040 Las Vegas in twenty twenty eight, and it was announced 0:10:14.040 --> 0:10:17.600 that the next three seasons they'll play in Sacramento. Josh 0:10:17.640 --> 0:10:20.160 Dash that wear Bloomberg Sports John Nathan All right. 0:10:20.080 --> 0:10:22.360 Thanks a lot, John, And ahead of the jobs report 0:10:22.440 --> 0:10:24.440 this morning is and B Futures. They are up three 0:10:24.559 --> 0:10:26.000 tenths of a percent. 0:10:28.480 --> 0:10:32.600 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, 0:10:32.720 --> 0:10:35.600 and around the world on Bloomberg dot Com and the 0:10:35.640 --> 0:10:40.959 Bloomberg Business app. This is Bloomberg Daybreak. Good morning. 0:10:41.040 --> 0:10:43.600 I'm Nathan Hagar, and as we await that March jobs report, 0:10:43.640 --> 0:10:46.439 we want to bring you an important conversation with Ellen Zenner, 0:10:46.480 --> 0:10:50.000 the chief US economist at Morgan Stanley. She thinks the 0:10:50.000 --> 0:10:53.520 Federal Reserve is on track to cut interest rights starting 0:10:53.640 --> 0:10:57.679 in June. Speaking with Bloomberg's Lizzie Burden, ellen Zenner says 0:10:57.679 --> 0:11:00.439 she believes the markets expectation of about three he cuts 0:11:00.480 --> 0:11:02.920 this year is in line with the Fed's views. 0:11:03.480 --> 0:11:06.160 So I think it's going to be more about inflation. 0:11:06.320 --> 0:11:08.760 If the Fed were to cut as early as May, 0:11:08.840 --> 0:11:10.880 I think the bar is very high for them to 0:11:10.920 --> 0:11:13.959 go that soon, though, But I do still expect them 0:11:13.960 --> 0:11:15.520 to be ready by June. 0:11:15.760 --> 0:11:16.880 For the employment report. 0:11:17.000 --> 0:11:19.920 You know, we're expecting another big number around two hundred 0:11:19.920 --> 0:11:22.440 and forty five thousand, even if it comes in at 0:11:22.520 --> 0:11:25.480 one hundred one hundred and fifty thousand. They'll say it's 0:11:25.600 --> 0:11:28.640 just one print. We're going to look at the unemployment rate. 0:11:28.720 --> 0:11:31.120 I think even if we get a very strong jobs number, 0:11:31.120 --> 0:11:33.600 we're going to keep the unemployment rate higher at three 0:11:33.640 --> 0:11:35.920 point nine percent. And that's because so many people are 0:11:35.920 --> 0:11:38.640 coming into the labor market, and then you're still going 0:11:38.679 --> 0:11:41.120 to get wage pressures that are coming off. So when 0:11:41.160 --> 0:11:44.440 you talk about a Goldilock scenario, right, that's going to 0:11:44.440 --> 0:11:47.080 be a report that says the economy is still strong, 0:11:47.559 --> 0:11:50.000 but it's not something that gives a definitive signal to 0:11:50.040 --> 0:11:52.360 the Fed that they need to cut very soon. 0:11:52.480 --> 0:11:54.400 Here, well, Chap Powell agrees with you. 0:11:54.960 --> 0:11:58.320 It's a bigger economy, not a tie to one thanks 0:11:58.360 --> 0:12:02.000 to immigration. But you've put the neutral jobs rate of 0:12:02.040 --> 0:12:04.920 growth at two hundred and sixty five thousand moons. 0:12:05.280 --> 0:12:07.679 Why is Pole's estimate of one hundred thousand wrong? 0:12:08.160 --> 0:12:11.040 So look, I had an estimate of one hundred thousand 0:12:11.720 --> 0:12:15.160 just six months ago. Essentially, we've gotten new data, and 0:12:15.200 --> 0:12:17.760 this is something that markets have to deal with, economists 0:12:17.800 --> 0:12:21.359 have to deal with. We have gotten significantly upward revisions 0:12:21.400 --> 0:12:25.160 to population growth in the US, and faster population growth 0:12:25.240 --> 0:12:28.439 means faster economy. It means faster growth in the labor market, 0:12:28.800 --> 0:12:31.200 and it also means that you're going to have a 0:12:31.320 --> 0:12:34.000 higher what we call break even level for employment, the 0:12:34.000 --> 0:12:35.880 amount of jobs you need to create in order to 0:12:35.960 --> 0:12:37.400 keep the unemployment rates steady. 0:12:37.880 --> 0:12:40.560 And so this is a supply side story. 0:12:40.840 --> 0:12:43.199 That supply side story is something that Chairpal has been 0:12:43.240 --> 0:12:46.400 focused on since later last year. Twenty twenty three was 0:12:46.520 --> 0:12:50.320 all about improving supply chains, improving labor supply. 0:12:50.760 --> 0:12:52.840 Twenty twenty four extends. 0:12:52.320 --> 0:12:55.840 That labor supply improvement where the growth in the population 0:12:56.720 --> 0:12:58.000 is just that strong. 0:12:58.040 --> 0:13:00.800 And so this is a real supply side story that is. 0:13:00.800 --> 0:13:04.600 Supporting growth in the economy without creating inflationary pressures. 0:13:04.760 --> 0:13:06.840 I want to come back to where rates will go 0:13:06.960 --> 0:13:10.840 in a moment, but just staying on immigration, Ellen, it's 0:13:10.880 --> 0:13:12.520 going to be a key issue, of course in the 0:13:12.640 --> 0:13:13.320 US election. 0:13:13.880 --> 0:13:15.960 If you get Trump two point. 0:13:15.840 --> 0:13:18.520 Zero, what sort of economic impact you're expecting. 0:13:18.760 --> 0:13:21.080 So I do think that this puts the administration in 0:13:21.080 --> 0:13:26.120 a sticky spot because according to our surveys households a list, 0:13:26.200 --> 0:13:30.680 immigration is the second most concern, just behind inflation. Yet 0:13:30.720 --> 0:13:35.080 from an economist, just objective lens on the economy. Faster 0:13:35.200 --> 0:13:39.680 population growth drives faster growth in the economy, and so 0:13:39.800 --> 0:13:42.000 it is a positive for the US economy. It's been 0:13:42.040 --> 0:13:44.480 a positive for US job gains, it's been a positive 0:13:44.480 --> 0:13:48.840 for US consumption. But immigration itself is a hot button 0:13:48.920 --> 0:13:51.720 political issue, and so I think focusing on just the 0:13:51.760 --> 0:13:55.480 economic benefits from it will be something that needs to 0:13:55.520 --> 0:13:57.600 be separated on the campaign trail. 0:13:57.679 --> 0:13:59.200 But then what's the flip side of that? 0:13:59.280 --> 0:14:02.360 If you have less immigration, could inflation strike again? 0:14:02.720 --> 0:14:02.880 Well? 0:14:02.920 --> 0:14:06.320 I think that there is a question mark out there 0:14:06.440 --> 0:14:11.760 as to how much do immigrants contribute to inflation in 0:14:11.800 --> 0:14:12.360 the economy. 0:14:12.760 --> 0:14:12.920 Now. 0:14:12.960 --> 0:14:16.400 The US is very different than other economies where we 0:14:16.480 --> 0:14:20.440 have low skilled labor coming in. They're helping fill jobs 0:14:20.600 --> 0:14:23.520 that are the positions that are open where we need labor, 0:14:23.880 --> 0:14:27.440 and they come in at low wage paying service sector 0:14:27.480 --> 0:14:30.360 areas of the economy that help bring wage pressures down, 0:14:30.640 --> 0:14:33.680 so that tends to not be inflationary in the US. 0:14:33.920 --> 0:14:38.000 That is very unlike countries like our neighbor Canada, where 0:14:38.120 --> 0:14:42.200 they have very high skilled immigration coming in. Thirty percent 0:14:42.240 --> 0:14:45.040 of their labor market is unionized. Those are high skilled labor, 0:14:45.360 --> 0:14:47.360 and there's a lot of household formation and a lot 0:14:47.360 --> 0:14:50.720 of inflationary pressures that come from that, So the US 0:14:50.800 --> 0:14:55.440 is quite different there. Now, that said, it's more of 0:14:55.520 --> 0:15:00.040 an economic growth rather than inflation problem. If you we 0:15:00.080 --> 0:15:02.280 were to have a shift in policy you have a 0:15:02.280 --> 0:15:04.680 big drop off in immigration and suddenly you have a 0:15:04.760 --> 0:15:07.920 very big slowdown in population growth, then that is more 0:15:08.000 --> 0:15:13.080 of a growth narrative, dampening growth and dampening inflation. 0:15:13.520 --> 0:15:14.600 So immigration is. 0:15:14.520 --> 0:15:18.000 Neither here nor there's neither inflationary nor deflationary for the 0:15:18.040 --> 0:15:20.920 immigration that we have today. But if we were to 0:15:20.960 --> 0:15:24.440 suddenly turn that off, then you would have an impact 0:15:24.440 --> 0:15:27.000 to growth and a gravitational pull on inflation as well. 0:15:27.360 --> 0:15:28.120 If we can come. 0:15:27.960 --> 0:15:30.960 Back to the Mona tree, you're in the beautiful Lake 0:15:31.040 --> 0:15:36.560 Como area in Italy. If the ECB cots before the fad, 0:15:36.960 --> 0:15:40.040 how much is how much divergence would be a problem. 0:15:40.200 --> 0:15:41.680 I don't think that's a problem at all. 0:15:42.040 --> 0:15:45.640 The FED is on a track to cut rates, and 0:15:45.960 --> 0:15:49.240 not all on the FMC agree that rates will be 0:15:49.320 --> 0:15:54.680 appropriate this year, but all but one believe that we 0:15:54.720 --> 0:15:57.880 will cut rates this year in the US, and so 0:15:57.960 --> 0:16:02.440 that market expectation of about three cuts this year I 0:16:02.440 --> 0:16:04.280 think is in line with the Fed's view, and I 0:16:04.320 --> 0:16:06.280 do think that that's in line with what the FED 0:16:06.400 --> 0:16:07.840 thinks it will deliver. 0:16:08.080 --> 0:16:09.240 We expect four cuts. 0:16:09.280 --> 0:16:11.640 We actually expect them to speed up cuts in the 0:16:11.680 --> 0:16:13.720 fourth quarter of the year because we have inflation coming 0:16:13.720 --> 0:16:16.600 down faster at that point than the FED. But I 0:16:16.600 --> 0:16:20.400 don't think that the timing of when central banks globally 0:16:20.400 --> 0:16:23.480 are cutting is really going to be an issue for 0:16:23.800 --> 0:16:27.520 the FED. Markets already have cuts priced in as an expectation. 0:16:27.800 --> 0:16:30.200 Well, the last thing any central bank current in the 0:16:30.240 --> 0:16:33.080 world wants to do is to reverse course. 0:16:33.160 --> 0:16:34.760 Who do you think is most at risk of a 0:16:34.880 --> 0:16:35.280 U turn? 0:16:36.000 --> 0:16:37.520 Well, I think that. 0:16:39.080 --> 0:16:42.480 You know the FED has communicated that it will cut, 0:16:43.400 --> 0:16:46.600 it's likely to cut. Real rates are already quite restrictive, 0:16:46.600 --> 0:16:48.760 and you don't want them to get further restrictive if 0:16:48.800 --> 0:16:51.440 inflation continues to fall. So the risk there, of course 0:16:51.520 --> 0:16:56.080 is inflation doesn't fall. If this immigration story provides so 0:16:56.160 --> 0:16:59.320 much strength in the economy, it starts to become inflationary. Right, 0:16:59.400 --> 0:17:02.640 then it's not necessarily it's reversing courseness sins from we 0:17:02.640 --> 0:17:06.119 were set to cut and then we're not going to cut. 0:17:06.160 --> 0:17:08.200 I think the bar is just too high to get 0:17:08.200 --> 0:17:09.560 to a point where they're going to be willing to 0:17:09.640 --> 0:17:12.600 start hiking again. But I think the strength of the 0:17:12.680 --> 0:17:16.119 US economy really stands apart on the global stage at 0:17:16.119 --> 0:17:18.000 this point, so there is there is that risk the 0:17:18.040 --> 0:17:20.560 Cashcari pointed out that they don't cut at all, but 0:17:20.600 --> 0:17:22.919 I don't see anything in the forward looking data that 0:17:22.960 --> 0:17:25.320 suggests they should not stay on this cutting track. 0:17:25.600 --> 0:17:28.760 And that is Morgan Stanley, Chief US economist Ellen Zenner, 0:17:28.840 --> 0:17:32.159 speaking with Bloomberg's Lizzie Burden, head of the release of 0:17:32.200 --> 0:17:35.040 the March non farm payrolls report, due out this morning 0:17:35.080 --> 0:17:38.320 at eight thirty am Wall Street Time. Now, we want 0:17:38.359 --> 0:17:41.040 to bring you more of Bloomberg's exclusive interview with the 0:17:41.080 --> 0:17:44.280 President of Argentina, Javier Malay. He has been speaking with 0:17:44.320 --> 0:17:47.200 our editor in chief John Micklthwaite on a wide range 0:17:47.240 --> 0:17:52.480 of issues, in particular his country's relationship with China. President 0:17:52.520 --> 0:17:55.680 Malay had promised to curb ties with Beijing if elected, 0:17:55.800 --> 0:17:59.600 but Argentina does have deep financial links to Beijing, which 0:17:59.640 --> 0:18:03.840 include being the biggest source of foreign reserves for Argentina's 0:18:03.840 --> 0:18:08.639 beleaguered Central Bank. John Micklethwaite asked the Argentinian president if 0:18:08.640 --> 0:18:11.560 he stood by comments last year in which he called 0:18:11.560 --> 0:18:13.639 the Chinese government fascist. 0:18:14.160 --> 0:18:18.920 Last year, you called the Chinese government an assassin. Now 0:18:18.960 --> 0:18:23.080 you're in government, do you still see China that way? 0:18:25.880 --> 0:18:29.639 As for the Chinese government, what we've always said is 0:18:29.640 --> 0:18:32.439 that we are libertarians, and if people want to do 0:18:32.560 --> 0:18:36.280 business with China, they can carry on business as usual. 0:18:36.440 --> 0:18:39.560 What I said was that I wouldn't be aligned with communists, 0:18:41.400 --> 0:18:44.840 and that's precisely one of the things. Who did I 0:18:44.840 --> 0:18:47.560 say I was going to align with the United States 0:18:47.560 --> 0:18:51.040 and Israel? Do you have any doubt that that's my 0:18:51.200 --> 0:18:52.879 alignment the United States and Israel. 0:18:53.359 --> 0:18:55.680 No, but you have a very good example, very good 0:18:55.680 --> 0:18:57.760 example at the moment. And I'll come back to Israel 0:18:57.840 --> 0:18:59.920 in the United States later. But now, as you know, 0:19:00.320 --> 0:19:04.040 in Argentina, the focus is on a Chinese space station 0:19:04.720 --> 0:19:09.080 in Patagonia that your predecessor allowed to get built. The 0:19:09.200 --> 0:19:14.360 US says that the space station has military purposes. Will 0:19:14.359 --> 0:19:16.680 you close it down? 0:19:18.040 --> 0:19:23.760 Well, the point is this, the negotiations are beginning to 0:19:24.280 --> 0:19:27.560 ordit and inspect that because the Chinese say that is 0:19:27.600 --> 0:19:31.240 not the case. So we will move towards a situation 0:19:31.560 --> 0:19:33.840 we will be looking at that. So that is not 0:19:33.880 --> 0:19:34.280 a problem. 0:19:34.359 --> 0:19:37.119 Either is a factor in this the fact that you 0:19:37.240 --> 0:19:41.919 have that eighteen billion dollar currency swap line with China, 0:19:42.480 --> 0:19:44.760 which you do need. You need it for the reserves 0:19:44.760 --> 0:19:47.760 at the central bank. It's a big portion. Does that 0:19:48.600 --> 0:19:51.760 influence your thinking on China? 0:19:53.080 --> 0:19:55.480 That situation has to do with an agreement that was 0:19:55.640 --> 0:19:58.639 entered into and which has to do with the trade 0:19:58.640 --> 0:20:04.399 exchanges between countries. I won't modify trade exchanges because I 0:20:04.440 --> 0:20:08.600 think there are trade exchanges between privates, just as we 0:20:08.720 --> 0:20:13.359 have a part in our central bank. They have, of 0:20:13.400 --> 0:20:17.879 course their central bank counter. But I don't see a problem, 0:20:18.119 --> 0:20:22.600 and honestly, the trade relations haven't changed, not a problem. 0:20:23.000 --> 0:20:25.200 The problem would be if I was the Chinese government 0:20:25.240 --> 0:20:27.840 tonight and you called me an assassin, I might be 0:20:27.920 --> 0:20:31.120 less keen to renew the currency line. 0:20:31.640 --> 0:20:33.240 The almost in gamely figure to. 0:20:33.320 --> 0:20:37.480 Have trade relations change. They haven't, not one bit. So 0:20:37.920 --> 0:20:42.840 that is actually counter factual. There's no truth than of Argentina. 0:20:42.960 --> 0:20:46.600 Javier Malay speaking through an interpreter with Bloomberg News editor 0:20:46.640 --> 0:20:49.200 in chief John mikeoath Waye. You can get much more 0:20:49.200 --> 0:20:53.160 of their conversation. It's on today's Bloomberg Pigged Big Take. 0:20:53.720 --> 0:20:56.000 You can find that on the Bloomberg terminal, on the 0:20:56.000 --> 0:21:01.200 Bloomberg Business App, and always on Bloomberg dot com. 0:21:01.240 --> 0:21:04.320 This is Bloomberg Daybreak Today, your morning brief on the 0:21:04.359 --> 0:21:07.760 stories making news from Wall Street to Washington and beyond. 0:21:07.960 --> 0:21:10.280 Look for us on your podcast feed by six am 0:21:10.359 --> 0:21:14.080 Eastern each morning, on Apples, Spotify, and anywhere else you 0:21:14.160 --> 0:21:15.280 get your podcasts. 0:21:15.440 --> 0:21:18.160 You can also listen live each morning starting at five 0:21:18.200 --> 0:21:20.879 am Wall Street time on Bloomberg eleven pri er in 0:21:20.960 --> 0:21:24.320 New York, Bloomberg ninety nine to one in Washington, Bloomberg 0:21:24.320 --> 0:21:27.000 one oh six to one in Boston, and Bloomberg ninety 0:21:27.040 --> 0:21:28.439 sixty in San Francisco. 0:21:29.080 --> 0:21:31.720 Our flagship New York station is also available on your 0:21:31.760 --> 0:21:36.719 Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus. 0:21:36.720 --> 0:21:39.720 Listen coast to coast on the Bloomberg Business app, Sirius 0:21:39.880 --> 0:21:43.879 xmb iHeartRadio app, and on Bloomberg dot com. I'm Nathan 0:21:43.880 --> 0:21:44.600 Hager and. 0:21:44.560 --> 0:21:46.920 I'm John Tucker. Join us again tomorrow morning for all 0:21:46.960 --> 0:21:48.920 the news you need to start your day, right here 0:21:49.240 --> 0:21:50.280 on Bloomberg day Break