Winter Snowstorm Ahead; Wall Street Braces for Jobs Report; Blinken to Visit Middle East
On today's podcast:
1) New York City and Boston are straddling the line between what could be a snowy weekend or just a lot of rainhttps://www.bloomberg.com/news/articles/2024-01-04/us-east-coast-braces-for-weekend-snow-or-rain-weather-watch from a system sweeping up the US East Coast this weekend.
2) A monthly US jobs report due Friday will probably show many industries refrained from hiring as employment gains increasingly concentrated in a handful of sectors, according to Bloomberg Economics.
3) The options market for US Treasuries was abuzz Thursday following the emergence of a large bearish wager that Friday’s jobs report will trigger the biggest backup in benchmark yields in more than nine months.
4) Secretary of State Antony Blinken left for his fourth trip to the Middle East since the Oct. 7 attack on Israel, as part of US efforts to counter growing risks of a broader regional conflict.
Full Transcript:
Good morning. I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today. We begin with the first major winter storm to hit the East Coast so far this season. Let's get the very latest on that with Bloomberg meteorologist Rob Carol and Rob Nathan. The weekend storm is going to be worse to the north and west of the district in Baltimore, and also north and west of New York City and north and west of Boston. The major cities are going to see some mixing with rain that that's going to hold down the accumulations. But it's the areas to the north and west that are going to do quite well where it stays all snow. Three to five inches possible north and west of the district in Baltimore, while north and west of New York City as much as five to eight inches will fall. We could see as much as five to ten inches of snow north and west of Boston during the storm. Okay, Rob, So when do you expect this wintry weather is going to end. Storm's going to wind down during the evening and overnight hours in the district in Baltimore. In New York city. It comes to an end Sunday afternoon the Boston area. I will see it ending late Sunday night early Monday morning, and we should see quite a bit of an improvement weatherwise into Monday of next week. Okay, Rob, Carolyn, thanks for that. We'll be checking back with you for more on this East coast winter storm throughout the day. Mowe now turned to the crucial jobs are poored for the month of December. Nathan It's forecast a show one hundred and seventy five thousand jobs were added a last month, and we get more from Bloomberg's Michael McKee. Wall Street goes into today's jobs report expecting strength in hiring and wages. That was not what the Fed was expecting a few months ago. The central bankers want job growth of about one hundred thousand a month and unemployment in the fours to signal an easing of labor market inflation pressures. Instead, they're likely to get a continuing conundrum, a strong labor market but falling inflation, making it hard to know the best path for interest rates. They will probably focus on the composition of jobs. Some analysts say job growth should be concentrated in low wage sectors like healthcare, assistants and restaurants, and that will be the sign the Fed wants that the economy is slowing. McKee, Bloomberg Radio. All right, Mike, thanks for the options market. It's been a buzz ahead of the jobs report. There is a large parish wager underway on yields rising to four point one five percent by the end of the day. That would mark the biggest one day rise in tenure yields since late March. It would be a further retrenchment for treasuries following last year's furious two month rally. In checking the tenure right now, it is at four point zero three percent. Well, Nathan. Rates are also in focus overseas. Traders are pairing bets on cuts from the European Central Bank. Let's go to London and get the latest from Bloomberg's Ewen pots Hore Youwen, Karen, and Nathan. It's the first time since mid December that traders are betting on fewer than six quarter point rate reductions from the ECB. At the end of last year, the market was pricing as much as one hundred and seventy four basis points of cuts. That number has now slipped blow one hundred and fifty basis points and key data this morning, shining more lights on the inflation pitcher. You're area CPI coming in at two point nine percent in the year to December. That's a higher number than the previous month as energy subsidies expire in a number of countries. In London, you and pot Splomberg Radio, all right, you and thank you. Now we turned to the latest developments in the Middle East. Secretary of State Antony Blincoln is returning to the region, his fourth trip since the October seventh attack on Israel. Bloomberg Zamie Morris reports from Washington, there is a risk the war between Israel and Hamas can spread into a broader regional conflict. This trip is part of US efforts to prevent that. Secretary Blincoln will travel to Turkey, Jordan, Cotter, the United Arab Emirates, Saudi Arabia, Egypt, and Israel. State Department spokesman Matthew Miller says they don't expect some of these conversations to be easy. We want to prevent the conflict from spreading, but part of that means that people need to stop taking strikes against our soldiers, and if they take strikes against our soldiers, we're going to do what we need to protect ourselves. Groups backed by Iran have escalated attacks across Iraq, Syria, Lebanon, and Yemen and armed forces in a rocker also warning of a quote dangerous escalation after a US right killed a senior commander in an Iran backed militia in Washington, Amy Morris, Bloomberg Radio, all right, Amy, thanks. Meanwhile, the Islamic State group has claimed responsibility for the two explosions that killed almost one hundred people in Iran. The attacks risked inflaming tensions further in the Middle East, with Iran saying it had been targeted because of its stands on Israel. Bloomberg Henry Meyer looks at the impact of the Islamic State taking responsibility for the attacks. It's significant in the sense that it reduces the risks of a more confrontation between Israel and Iran. Iran had said that the bloss with the work of people who were trying to punish it for its stance on the Israeli offensive in Gaza. And you know, obviously any suspicion of Israeli involvement could have proved extremely explosive, and Bloomberg Henry Meyer notes US officials said from the start the attacks had the hallmark of a group such as Islamic State. Back here in the US, Karen, there's more fallout over the resignation of former Harvard president Claudine Gay. The Reverend Al sharped and led a protest at Bill Ackman's Manhattan offices yesterday. The civil rights activist says the billionaire investors campaign against Gay is a blow to the diversity, equity and inclusion movement. Gay stepped down as Harvard's first black president this week in a backlash over her handling of campus antisemitism and accusations of plagiarism. Meantime, Nathan Business Insider is reporting Bill Lackman's wife, Nary Auxman, plagiarized multiple sections of her doctoral dissertation at MIT. Acman responded to the report in a post on X, writing, you know you struck a chord when they go after your wife. Time now for a look at some of the other stories making news around the world. For that, we're joined by Bloomberg's Amy Morris. Amy, Good morning, Good morning, Karen. Residents in the small town of Perry, Iowa, held a vigil last night, hours after a gunman opened fire at the local high school, killing a sixth grader and wounding four other students in the school's principal, Andrea Meyer, is a two thousand and four alumna at the school, and she spoke at last night's vigil green rally around our survivors, our community, our teachers, our first responders, and we're going to show them what we've shown them every day for as long as I have known that we appreciate them, enjoy them, respect them, and dare I say love them. The suspect, identified as seventeen year old Dylan Butler, a student at Perry High School, also died of an apparent self inflicted gunshot wound. Classes are canceled throughout the school district for today. Florida Governor Ronda Santis and former UN Ambassador Nicky Haley held back to back CNN town halls in Iowa last night as they fight to be primary GOP presidential challenger to Donald Trump, who already has a huge lead in the polls. DeSantis called Haley a phony who is quote playing for voters who are not even core Republicans. I'm the only one that has a chance to beat Trump and win the general election. Nicki Haley can't get conservative voters. She's the darling of the never trumpers. While in New Hampshire, Nikki Haley said of the primary process, quote, Iowa starts at New Hampshire corrects it. So she responded to criticism about that comment during CNN's town hall in Iowa. We're going to continue to be here. I mean, I've told people get used to this face, and I've been here over and over again. But if I didn't love Iowa, I wouldn't keep coming to Iowa. While they did take jabs at each other, Haley and Desantas also focused their attacks on front runner Donald Trump, and next week will be a busy one for Trump. Bloomberg's Nancy Lyons reports Donald Trump has two major court hearings next week. One of them is in Washington on his claim of immunity from charges he overturned the twenty twenty election that's set for January ninth, Then two days later, planning to attend the closing arguments in Manhattan that's for the New York civil trial against him and his sprawling real estate company. Days after that, the nominating process begins with the January fifteenth Iowa CAUCUSUS. Then a day after that, a civil defamation case against Trump begins in New York in which Ejing Carroll is seeking to million dollars in damages. It's unknown if Trump will be attending that trial in Washington. Nancy lyons Bloomberg Radio Global News twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Amy Morris, and this is Bloomberg Karen. All right, Amy, thanks soby to bring in news throughout the day right here on Bloomberg Radio. But now, as Amy said, you can get the latest news on demand whenever you want it. Subscribe to Bloomberg News Now. You can get the latest headlines right at the click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app Bloomberg dot Com, but also apples, Spotify, and anywhere else you get your podcasts. Time now for the Bloomberg Sports update. Here's John stash Hour John Karn. What a game in San Francisco, battle of the last two NBA champions. The Warriors had an eighteen point lead on the fourth quarter on the Nuggets, and then Denver closed the game on a twenty five to four run and he won at one thirty to one twenty seven thanks to Kolo Jokins thirty four points, ten assists, nine rebounds. He hit the game tying shot and then after a Steph Curry turnover, he hit the game winner, a forty footer that he banked in at the buzzer. Milwaukee won at San Antonio won twenty five to one twenty one. This was the first time that Jannis, sent to the Compo won against the guy that many field plays like, Giannis Victor Wembinama. Yanna scored forty four points. Wem bin Yama scored twenty seven. Ricky Rubio, retiring at age thirty three, twelve years and the NBA, played for four teams, most recently Cleveland, who bought out his contract. He was a professional player in Spain at the age of fourteen. Bruins lost at home to Pittsburgh six to five. Sydney Crosby wont it for the Penguin the power play goal in the third period. The Red Sox traded Chris Sale to Atlanta. He just got a two year extension with the Braves for thirty eight million dollars, despite all the injuries he's had in recent years. Week eighteen in the NFL starts tomorrow. Nine teams have Clint playoff spots. Five spots still up for drafts. Buffalo, Jacksonville, Tampa Bay, and Green Bay are in with Week eighteen victories. The winner tomorrow night, patried Houston, and Indianapolis is in the playoffs. Pittsburgh tomorrow needs a win and then a Buffalo loss on Sunday night. John Stashwer Bloomberg Sports from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Well. The first weekend of twenty twenty four is going to bring the East Coast the first major winter storm we've seen in quite a while, actually, so let's bring in Bloomberg beedrologist Rob Carolyn to help us get set for what's coming. What you're looking at, Rob, the first accumulating snow of the season for lots of us. It's taken a time for winter to get going, but it's going to get going now with Gangbusters Nathan storm coming out of the lower Mississippi River Valley is going to come up the along the East coast during the weekend, and it's going to bring us eisenble snowfall to many of the suburban locations around the major cities in the mid Atlantic and Northeast. This isn't a huge snowstorm for the District of Baltimore, for New York City or Boston because the ocean is still fairly warm water temperatures than in the forties. That influence is going to mean that we see Boston and New York City, and especially Washington and Baltimore mixing with and changing the rain at times. But once you get inland away from that influence to the ocean, there's going to be some sizeable snowfalls from say Frederick, Maryland, all the way on up through the suburbs north and west of New York City, and then well north and west of Boston. There could be some spots to get over ten inches of snow from this storm, no kidding. So, like you said, it's been a while since we've had a major winter storm along the East coast. I mean, or are we ready for this? I think we're ready. I mean we've had a lot of practice. Anybody over the age of fifteen has seen, you know, a number of snowstorms in their lifetime. But yeah, last winter, I think the deepest snow we saw in the Boston area was like three and a half inches in February. So I think the big problem is going to be pe will not used to driving in it because it's been over a year. The good news is it's falling on a Saturday night and a Sunday in many areas, so their traffic won't be as bad. We don't have school in session, so that'll be helpful. But people are definitely going to have to take some time, particularly in those areas where there's going to be that transition from a mixture of rain and snow to snow, because that snow will be heavier and wetter. Therefore it's more slippery, it's greasy. So those areas just north and west of Boston, New York City, Washington, and Baltimore really need to be careful when the precipitation's falling during Saturday afternoon through Sunday. Well, a lot of people who live along the Interstate ninety five quarriter know that that freeway is often right along the boundary between where rain and snow happens. I mean, if this system sticks around for a little bit longer than expected, could we be in for a pretty dicey Monday morning commute. I think Monday morning is going to be okay, particularly in the district in Baltimore, because it dries out Sunday afternoon, So I think the roadways are going to be okay. York City Boston different story. Those areas where they don't get a chance to clean up the slush along the I ninety five corridor. Temperatures are going to be going down Sunday night, and that's going to have the tendency allow those surfaces to refree. So it could be a little bit more dicey New York City on up in the Boston Monday than it is around the district in Baltimore since it is on the weekend. We think in good skiing, well, you know, the ski areas in northern New England and northern New York State really aren't going to see much from this storm. At all too far out to see. It'll be cold enough so they can make some snow. Where this is going to help out is the resorts in West Virginia and on up into Pennsylvania. They'll do fairly well. The Poconos are going to do great. This is going to be their best snowfall in a while, and they'll have real good conditions come Monday and Tuesday in the Poconos. But for northern New England northern New York State, I think the snowfall amounts are probably going to be under two inches. Well anyway, I guess this couldn't have come in a better time, happening on the weekend. But thanks for this, Rob. Again, that was Bloomberg meteorologist Rob Carolyn getting us ready for the first winter storm for the East Coast of twenty twenty four. Well, let's move on from watching the weather to watching the data. Investors have their eyes out for the last look at the US labor market in twenty twenty three with the December non farm payrolls report. Do out an eight thirty am Wall Street time here to get a set for those numbers. Simon French, chief economist at panmir Gordon Simon. Great to speak with you this morning. Now, the consensus on the Bloomberg terminal, it calls for more moderation, one hundred and seventy five thousand new jobs expected, a tick up for the unemployment rate to three point eight percent. What's your expectation, I think a little bit stronger. Good morning, Nathan. I think the big question for me is US labor market participation appeared to peak during the summer and come back down, but there's conflicting data points as to whether that labor supply pictures is true. And if we start a season more people coming back into the labor market, I think there's potential to still add more jobs than than that estimate. Yes, I think the big influence though for futures on interest rate expectations will be the unemployment rate rather than the number of jobs added, and that I think when you're looking at the kind of rules of thumb we sort of saw the Federal Reserve and moved to in their recent minutes, anything three point eight three point nine will start to firm expectations of the rate cutting cycle this side of the mid year. There's been a lot of talk about four percent potentially being the trigger point for the Federal Reserve to think about cutting interest rates further. Could we see an upside surprise? What's the potential for that? Well, I think four percent is being focused in on by a lot of analysts because of the Palm rule. This is the if you like, the equivalent in the labor market for what we know in the bondom market from a Yeald curb and version is a decent signal of a recession. The Psalm rule looking at er point five five percent increase on the twelve month low point for unemployment, and that would something like four percent would take you there, But you have to get there on a three month average, and we're not going to get that even if we get that print today. But what it would do is it would suggest that by February, the time of the February report, you potentially hit that farm or threshold, which could prepare the ground for rate cutting cycling Q two. So that is why I think analysts are focusing on four percent. Of course, we're going to be keeping an eye out for average hourly earnings as well. Labor force participation feeds into that as well. Where do you see wages going If we find evidence that companies are holding on to employees, or perhaps more people are coming off the sidelines. Yeah, so I think there's I think one of the failures actually of the economics profession in the last couple of years, it's been an inability to recognize that nominal pay awards take their queue from overall price inflation, and therefore I think the helpful price dynamics from gasoline prices, from overall prices coming down in the US economy or the rate of increase coming down, should ever a spillover effect into nominal wage awards. I think there's an over focus, perhaps two model driven from the way central banks model this stuff to look purely at participation in capacity rather than the signals coming from the overall price level. So I actually expect a continued moderation in nominal pay awards with the quits rate and job openings falling as well. What does that tell us, Simon about the state of the US economy. Are you still thinking that we could be in for a soft landing given where labor dynamics are right now? Nathan, I think you know I'm not a fan particularly of the soft landing hard landing descriptor, mainly because lists. Economists, they tend to define it that they see fits reverse fit their narrative. But if you're looking at a moderation of those jolt data points on quits on hires from some very very extreme levels and a moderation without overshooting, then actually that's the message we got from the Joltz data I felt, which is you are starting to hone in on more normalized levels of labor market churn, and that has to be a positive thing, whether it's a soft landing or hard landing in terms of the hard data of economic activity pass but on those metrics, it's quite encouraging. From the Federal Reserve, they've been able to engineer this. We've seen a lot of activity in the options market ahead of this report, a pretty big bet that we could see ten year yields rise more than ten basis points by the end of the day. What kind of volatility are you expecting off the back of this jobs report in the bond mar So, I think that's that would be my whether it's an hourly end of day expectation, some more medium term view from my perspective is the bomb mark has got over excited by the pace of potential rate cups. In my view, I think pricing in five to six for the year when it's unlikely the first pirmacy you're going to have enough data to start cutting before the middle towards the back end of Q two, that becomes a really difficult thing to do with only four better reserve meetings in the second half of the year. So I think that expectation that you allude to of slightly firming yield is consistent with perhaps a reassessment of quite how aggressive the FED can be in the data have in front of them. Got about a minute left here, Simon. Not only is the FED going to be focused on the labor market, but we've got inflation data, more inflation data coming out next week as well. Well. What's your expectation on where we could see consumer prices headed. Well, a lot of the base effects that have been driving US inflation lower over the last twelve months, and this is simply some very exceptional numbers leaving leaving the annual comparison. That does mean we're in for a period where the data is going to bounce around in a sort of stubborn stubborn range around three percent. And the question, I guess the Federal Reserve need to ask themselves not all just based on the data, but their understanding of how price setting is going on at district level as well. Is the degree to which that can over an eighteen month two year of you moderate back towards two percent of their central forecast suggest But actually the real economy is not necessarily showing those signs. So I think we're in for a period where month to month will dot around very uncomfortably higher levels than the two percent targets, and is consistently all be seeing in terms of commodity imple prices shipping rates providing less of a down with base effect push than the single last one month. This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify, and anywhere else you get your podcasts. You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three to zero in New York, Bloomberg ninety nine to one in Washington, Bloomberg one oh six to one in Boston, and Bloomberg ninety sixty in San Francisco. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus. 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Good morning. 0:00:03.080 --> 0:00:05.920 I'm Nathan Hager and I'm Karen Moscow. Here are the 0:00:05.960 --> 0:00:07.480 stories we're following today. 0:00:07.760 --> 0:00:10.640 We begin with the first major winter storm to hit 0:00:10.680 --> 0:00:13.240 the East Coast so far this season. Let's get the 0:00:13.320 --> 0:00:16.439 very latest on that with Bloomberg meteorologist Rob Carol and 0:00:16.560 --> 0:00:17.680 Rob Nathan. 0:00:17.680 --> 0:00:19.479 The weekend storm is going to be worse to the 0:00:19.520 --> 0:00:21.840 north and west of the district in Baltimore, and also 0:00:21.920 --> 0:00:23.759 north and west of New York City and north and 0:00:23.800 --> 0:00:26.439 west of Boston. The major cities are going to see 0:00:26.440 --> 0:00:28.160 some mixing with rain that that's going to hold down 0:00:28.200 --> 0:00:30.720 the accumulations. But it's the areas to the north and 0:00:30.760 --> 0:00:32.440 west that are going to do quite well where it 0:00:32.479 --> 0:00:35.479 stays all snow. Three to five inches possible north and 0:00:35.520 --> 0:00:38.240 west of the district in Baltimore, while north and west 0:00:38.280 --> 0:00:40.000 of New York City as much as five to eight 0:00:40.040 --> 0:00:42.320 inches will fall. We could see as much as five 0:00:42.360 --> 0:00:45.000 to ten inches of snow north and west of Boston 0:00:45.320 --> 0:00:46.159 during the storm. 0:00:46.320 --> 0:00:48.360 Okay, Rob, So when do you expect this wintry weather 0:00:48.479 --> 0:00:49.320 is going to end. 0:00:49.520 --> 0:00:51.920 Storm's going to wind down during the evening and overnight 0:00:51.960 --> 0:00:54.240 hours in the district in Baltimore. In New York city. 0:00:54.280 --> 0:00:56.760 It comes to an end Sunday afternoon the Boston area. 0:00:57.120 --> 0:00:59.720 I will see it ending late Sunday night early Monday morning, 0:01:00.080 --> 0:01:01.720 and we should see quite a bit of an improvement 0:01:01.760 --> 0:01:03.640 weatherwise into Monday of next week. 0:01:03.960 --> 0:01:06.119 Okay, Rob, Carolyn, thanks for that. We'll be checking back 0:01:06.120 --> 0:01:08.639 with you for more on this East coast winter storm 0:01:08.680 --> 0:01:09.440 throughout the day. 0:01:09.959 --> 0:01:12.600 Mowe now turned to the crucial jobs are poored for 0:01:12.680 --> 0:01:15.280 the month of December. Nathan It's forecast a show one 0:01:15.360 --> 0:01:18.160 hundred and seventy five thousand jobs were added a last month, 0:01:18.200 --> 0:01:20.679 and we get more from Bloomberg's Michael McKee. 0:01:20.720 --> 0:01:24.080 Wall Street goes into today's jobs report expecting strength in 0:01:24.200 --> 0:01:27.600 hiring and wages. That was not what the Fed was 0:01:27.640 --> 0:01:30.920 expecting a few months ago. The central bankers want job 0:01:30.959 --> 0:01:33.880 growth of about one hundred thousand a month and unemployment 0:01:33.880 --> 0:01:36.720 in the fours to signal an easing of labor market 0:01:36.720 --> 0:01:41.080 inflation pressures. Instead, they're likely to get a continuing conundrum, 0:01:41.200 --> 0:01:44.800 a strong labor market but falling inflation, making it hard 0:01:44.840 --> 0:01:47.280 to know the best path for interest rates. They will 0:01:47.319 --> 0:01:50.760 probably focus on the composition of jobs. Some analysts say 0:01:51.080 --> 0:01:54.520 job growth should be concentrated in low wage sectors like healthcare, 0:01:54.520 --> 0:01:57.560 assistants and restaurants, and that will be the sign the 0:01:57.560 --> 0:02:01.280 Fed wants that the economy is slowing. McKee, Bloomberg Radio. 0:02:01.400 --> 0:02:03.600 All right, Mike, thanks for the options market. It's been 0:02:03.640 --> 0:02:05.800 a buzz ahead of the jobs report. There is a 0:02:05.880 --> 0:02:09.080 large parish wager underway on yields rising to four point 0:02:09.120 --> 0:02:11.280 one five percent by the end of the day. That 0:02:11.320 --> 0:02:13.760 would mark the biggest one day rise in tenure yields 0:02:13.800 --> 0:02:16.600 since late March. It would be a further retrenchment for 0:02:16.680 --> 0:02:19.880 treasuries following last year's furious two month rally. In checking 0:02:19.880 --> 0:02:22.000 the tenure right now, it is at four point zero 0:02:22.200 --> 0:02:23.080 three percent. 0:02:23.480 --> 0:02:23.960 Well, Nathan. 0:02:24.040 --> 0:02:27.240 Rates are also in focus overseas. Traders are pairing bets 0:02:27.320 --> 0:02:29.960 on cuts from the European Central Bank. Let's go to 0:02:30.000 --> 0:02:33.440 London and get the latest from Bloomberg's Ewen pots Hore Youwen. 0:02:33.840 --> 0:02:36.320 Karen, and Nathan. It's the first time since mid December 0:02:36.360 --> 0:02:39.120 that traders are betting on fewer than six quarter point 0:02:39.160 --> 0:02:42.160 rate reductions from the ECB. At the end of last year, 0:02:42.160 --> 0:02:44.240 the market was pricing as much as one hundred and 0:02:44.320 --> 0:02:47.360 seventy four basis points of cuts. That number has now 0:02:47.400 --> 0:02:50.840 slipped blow one hundred and fifty basis points and key 0:02:50.919 --> 0:02:53.760 data this morning, shining more lights on the inflation pitcher. 0:02:54.080 --> 0:02:57.040 You're area CPI coming in at two point nine percent 0:02:57.120 --> 0:02:59.240 in the year to December. That's a higher number than 0:02:59.280 --> 0:03:02.160 the previous month as energy subsidies expire in a number 0:03:02.200 --> 0:03:04.959 of countries. In London, you and pot Splomberg Radio. 0:03:04.800 --> 0:03:06.359 All right, you and thank you. Now we turned to 0:03:06.400 --> 0:03:09.119 the latest developments in the Middle East. Secretary of State 0:03:09.160 --> 0:03:12.400 Antony Blincoln is returning to the region, his fourth trip 0:03:12.480 --> 0:03:16.040 since the October seventh attack on Israel. Bloomberg Zamie Morris 0:03:16.080 --> 0:03:17.720 reports from Washington. 0:03:17.680 --> 0:03:20.440 There is a risk the war between Israel and Hamas 0:03:20.639 --> 0:03:24.000 can spread into a broader regional conflict. This trip is 0:03:24.040 --> 0:03:27.040 part of US efforts to prevent that. Secretary Blincoln will 0:03:27.080 --> 0:03:31.639 travel to Turkey, Jordan, Cotter, the United Arab Emirates, Saudi Arabia, Egypt, 0:03:31.720 --> 0:03:35.040 and Israel. State Department spokesman Matthew Miller says they don't 0:03:35.080 --> 0:03:37.320 expect some of these conversations to be easy. 0:03:37.520 --> 0:03:40.600 We want to prevent the conflict from spreading, but part 0:03:40.600 --> 0:03:43.880 of that means that people need to stop taking strikes 0:03:43.920 --> 0:03:47.360 against our soldiers, and if they take strikes against our soldiers, 0:03:47.560 --> 0:03:49.560 we're going to do what we need to protect ourselves. 0:03:49.680 --> 0:03:54.000 Groups backed by Iran have escalated attacks across Iraq, Syria, Lebanon, 0:03:54.000 --> 0:03:56.960 and Yemen and armed forces in a rocker also warning 0:03:57.000 --> 0:04:00.400 of a quote dangerous escalation after a US right killed 0:04:00.400 --> 0:04:03.600 a senior commander in an Iran backed militia in Washington, 0:04:03.600 --> 0:04:05.240 Amy Morris, Bloomberg Radio. 0:04:05.160 --> 0:04:07.720 All right, Amy, thanks. Meanwhile, the Islamic State group has 0:04:07.760 --> 0:04:11.000 claimed responsibility for the two explosions that killed almost one 0:04:11.080 --> 0:04:15.160 hundred people in Iran. The attacks risked inflaming tensions further 0:04:15.280 --> 0:04:17.200 in the Middle East, with Iran saying it had been 0:04:17.200 --> 0:04:20.520 targeted because of its stands on Israel. Bloomberg Henry Meyer 0:04:20.600 --> 0:04:23.719 looks at the impact of the Islamic State taking responsibility 0:04:23.760 --> 0:04:24.520 for the attacks. 0:04:24.680 --> 0:04:28.360 It's significant in the sense that it reduces the risks 0:04:28.560 --> 0:04:33.520 of a more confrontation between Israel and Iran. Iran had 0:04:33.600 --> 0:04:36.400 said that the bloss with the work of people who 0:04:36.400 --> 0:04:39.039 were trying to punish it for its stance on the 0:04:39.080 --> 0:04:43.240 Israeli offensive in Gaza. And you know, obviously any suspicion 0:04:43.240 --> 0:04:47.560 of Israeli involvement could have proved extremely explosive. 0:04:47.279 --> 0:04:49.960 And Bloomberg Henry Meyer notes US officials said from the 0:04:50.000 --> 0:04:52.559 start the attacks had the hallmark of a group such 0:04:52.600 --> 0:04:53.559 as Islamic State. 0:04:53.800 --> 0:04:56.240 Back here in the US, Karen, there's more fallout over 0:04:56.240 --> 0:04:59.719 the resignation of former Harvard president Claudine Gay. The Reverend 0:04:59.760 --> 0:05:03.120 Al sharped and led a protest at Bill Ackman's Manhattan 0:05:03.120 --> 0:05:06.960 offices yesterday. The civil rights activist says the billionaire investors 0:05:07.080 --> 0:05:10.520 campaign against Gay is a blow to the diversity, equity 0:05:10.520 --> 0:05:14.440 and inclusion movement. Gay stepped down as Harvard's first black 0:05:14.480 --> 0:05:17.159 president this week in a backlash over her handling of 0:05:17.160 --> 0:05:20.760 campus antisemitism and accusations of plagiarism. 0:05:21.120 --> 0:05:25.440 Meantime, Nathan Business Insider is reporting Bill Lackman's wife, Nary Auxman, 0:05:25.640 --> 0:05:30.600 plagiarized multiple sections of her doctoral dissertation at MIT. Acman 0:05:30.720 --> 0:05:33.880 responded to the report in a post on X, writing, 0:05:34.200 --> 0:05:36.520 you know you struck a chord when they go after 0:05:36.600 --> 0:05:42.000 your wife. Time now for a look at some of 0:05:42.000 --> 0:05:44.039 the other stories making news around the world. For that, 0:05:44.080 --> 0:05:48.200 we're joined by Bloomberg's Amy Morris. Amy, Good morning, Good morning, Karen. 0:05:48.440 --> 0:05:51.200 Residents in the small town of Perry, Iowa, held a 0:05:51.240 --> 0:05:54.160 vigil last night, hours after a gunman opened fire at 0:05:54.160 --> 0:05:56.960 the local high school, killing a sixth grader and wounding 0:05:57.000 --> 0:06:00.600 four other students in the school's principal, Andrea Meyer, is 0:06:00.600 --> 0:06:02.640 a two thousand and four alumna at the school, and 0:06:02.720 --> 0:06:07.120 she spoke at last night's vigil green rally around our survivors, 0:06:07.560 --> 0:06:11.640 our community, our teachers, our first responders, and we're going 0:06:11.680 --> 0:06:14.000 to show them what we've shown them every day for 0:06:14.000 --> 0:06:14.800 as long as I have. 0:06:14.800 --> 0:06:19.359 Known that we appreciate them, enjoy them, respect them, and 0:06:19.440 --> 0:06:20.600 dare I say love them. 0:06:20.880 --> 0:06:23.880 The suspect, identified as seventeen year old Dylan Butler, a 0:06:23.960 --> 0:06:26.760 student at Perry High School, also died of an apparent 0:06:26.800 --> 0:06:31.240 self inflicted gunshot wound. Classes are canceled throughout the school 0:06:31.240 --> 0:06:34.880 district for today. Florida Governor Ronda Santis and former UN 0:06:34.920 --> 0:06:38.279 Ambassador Nicky Haley held back to back CNN town halls 0:06:38.320 --> 0:06:40.960 in Iowa last night as they fight to be primary 0:06:41.040 --> 0:06:44.599 GOP presidential challenger to Donald Trump, who already has a 0:06:44.680 --> 0:06:48.040 huge lead in the polls. DeSantis called Haley a phony 0:06:48.080 --> 0:06:51.000 who is quote playing for voters who are not even 0:06:51.120 --> 0:06:53.880 core Republicans. I'm the only one that has a chance 0:06:54.200 --> 0:06:56.000 to beat Trump and win the general election. 0:06:56.080 --> 0:06:59.120 Nicki Haley can't get conservative voters. She's the darling of 0:06:59.120 --> 0:07:00.000 the never trumpers. 0:07:00.320 --> 0:07:03.840 While in New Hampshire, Nikki Haley said of the primary process, quote, 0:07:04.000 --> 0:07:07.400 Iowa starts at New Hampshire corrects it. So she responded 0:07:07.440 --> 0:07:11.480 to criticism about that comment during CNN's town hall in Iowa. 0:07:11.600 --> 0:07:12.960 We're going to continue to be here. 0:07:13.320 --> 0:07:15.480 I mean, I've told people get used to this face, 0:07:15.480 --> 0:07:16.320 and I've been here. 0:07:16.240 --> 0:07:17.200 Over and over again. 0:07:17.480 --> 0:07:19.920 But if I didn't love Iowa, I wouldn't keep coming 0:07:19.960 --> 0:07:20.360 to Iowa. 0:07:20.520 --> 0:07:22.520 While they did take jabs at each other, Haley and 0:07:22.520 --> 0:07:26.080 Desantas also focused their attacks on front runner Donald Trump, 0:07:26.360 --> 0:07:28.200 and next week will be a busy one for Trump. 0:07:28.360 --> 0:07:29.920 Bloomberg's Nancy Lyons. 0:07:29.640 --> 0:07:32.840 Reports Donald Trump has two major court hearings next week. 0:07:32.920 --> 0:07:35.560 One of them is in Washington on his claim of 0:07:35.600 --> 0:07:38.920 immunity from charges he overturned the twenty twenty election that's 0:07:38.920 --> 0:07:42.400 set for January ninth, Then two days later, planning to 0:07:42.400 --> 0:07:45.440 attend the closing arguments in Manhattan that's for the New 0:07:45.520 --> 0:07:48.760 York civil trial against him and his sprawling real estate company. 0:07:49.200 --> 0:07:52.200 Days after that, the nominating process begins with the January 0:07:52.240 --> 0:07:55.320 fifteenth Iowa CAUCUSUS. Then a day after that, a civil 0:07:55.360 --> 0:07:58.240 defamation case against Trump begins in New York in which 0:07:58.320 --> 0:08:01.800 Ejing Carroll is seeking to million dollars in damages. It's 0:08:01.840 --> 0:08:04.920 unknown if Trump will be attending that trial in Washington. 0:08:05.000 --> 0:08:07.360 Nancy lyons Bloomberg Radio Global. 0:08:07.000 --> 0:08:09.200 News twenty four hours a day and whenever you want 0:08:09.200 --> 0:08:11.840 it with Bloomberg News Now. I'm Amy Morris, and this 0:08:11.880 --> 0:08:12.840 is Bloomberg Karen. 0:08:12.920 --> 0:08:15.200 All right, Amy, thanks soby to bring in news throughout 0:08:15.200 --> 0:08:18.040 the day right here on Bloomberg Radio. But now, as 0:08:18.080 --> 0:08:20.480 Amy said, you can get the latest news on demand 0:08:20.760 --> 0:08:24.080 whenever you want it. Subscribe to Bloomberg News Now. You 0:08:24.120 --> 0:08:26.200 can get the latest headlines right at the click of 0:08:26.240 --> 0:08:29.760 a button. Get informed on your schedule. You can listen 0:08:29.800 --> 0:08:33.120 and subscribe to Bloomberg News Now on the Bloomberg Business 0:08:33.120 --> 0:08:37.400 app Bloomberg dot Com, but also apples, Spotify, and anywhere 0:08:37.400 --> 0:08:44.400 else you get your podcasts. Time now for the Bloomberg 0:08:44.480 --> 0:08:48.080 Sports update. Here's John stash Hour John Karn. 0:08:48.120 --> 0:08:50.560 What a game in San Francisco, battle of the last 0:08:50.559 --> 0:08:54.400 two NBA champions. The Warriors had an eighteen point lead 0:08:54.440 --> 0:08:56.840 on the fourth quarter on the Nuggets, and then Denver 0:08:57.000 --> 0:08:59.439 closed the game on a twenty five to four run 0:08:59.720 --> 0:09:02.160 and he won at one thirty to one twenty seven 0:09:02.240 --> 0:09:05.520 thanks to Kolo Jokins thirty four points, ten assists, nine rebounds. 0:09:05.559 --> 0:09:08.000 He hit the game tying shot and then after a 0:09:08.000 --> 0:09:11.520 Steph Curry turnover, he hit the game winner, a forty 0:09:11.600 --> 0:09:14.640 footer that he banked in at the buzzer. Milwaukee won 0:09:14.679 --> 0:09:17.199 at San Antonio won twenty five to one twenty one. 0:09:17.280 --> 0:09:18.800 This was the first time that Jannis, sent to the 0:09:18.800 --> 0:09:22.520 Compo won against the guy that many field plays like, 0:09:22.600 --> 0:09:26.960 Giannis Victor Wembinama. Yanna scored forty four points. Wem bin 0:09:27.040 --> 0:09:30.439 Yama scored twenty seven. Ricky Rubio, retiring at age thirty three, 0:09:30.520 --> 0:09:32.680 twelve years and the NBA, played for four teams, most 0:09:32.720 --> 0:09:35.520 recently Cleveland, who bought out his contract. He was a 0:09:35.520 --> 0:09:39.120 professional player in Spain at the age of fourteen. Bruins 0:09:39.120 --> 0:09:42.040 lost at home to Pittsburgh six to five. Sydney Crosby 0:09:42.080 --> 0:09:44.319 wont it for the Penguin the power play goal in 0:09:44.400 --> 0:09:47.520 the third period. The Red Sox traded Chris Sale to Atlanta. 0:09:47.880 --> 0:09:49.920 He just got a two year extension with the Braves 0:09:49.920 --> 0:09:52.200 for thirty eight million dollars, despite all the injuries he's 0:09:52.200 --> 0:09:55.600 had in recent years. Week eighteen in the NFL starts tomorrow. 0:09:55.760 --> 0:09:58.800 Nine teams have Clint playoff spots. Five spots still up 0:09:58.800 --> 0:10:02.480 for drafts. Buffalo, Jacksonville, Tampa Bay, and Green Bay are 0:10:02.559 --> 0:10:06.400 in with Week eighteen victories. The winner tomorrow night, patried Houston, 0:10:06.440 --> 0:10:09.320 and Indianapolis is in the playoffs. Pittsburgh tomorrow needs a 0:10:09.320 --> 0:10:12.280 win and then a Buffalo loss on Sunday night. John 0:10:12.320 --> 0:10:14.280 Stashwer Bloomberg Sports. 0:10:16.600 --> 0:10:19.600 From coast to coast, from New York to San Francisco, 0:10:19.920 --> 0:10:24.040 Boston to Washington, DC, nationwide on Syrias Exam. 0:10:23.880 --> 0:10:27.560 The Bloomberg Business app, and Bloomberg dot Com. This is 0:10:27.679 --> 0:10:31.240 Bloomberg Daybreak. Good morning, I'm Nathan Hager. 0:10:31.280 --> 0:10:31.400 Well. 0:10:31.400 --> 0:10:34.120 The first weekend of twenty twenty four is going to 0:10:34.120 --> 0:10:36.640 bring the East Coast the first major winter storm we've 0:10:36.679 --> 0:10:39.600 seen in quite a while, actually, so let's bring in 0:10:39.720 --> 0:10:43.120 Bloomberg beedrologist Rob Carolyn to help us get set for 0:10:43.200 --> 0:10:46.720 what's coming. What you're looking at, Rob, the first accumulating 0:10:46.720 --> 0:10:48.240 snow of the season for lots of us. 0:10:48.240 --> 0:10:50.320 It's taken a time for winter to get going, but 0:10:50.400 --> 0:10:53.600 it's going to get going now with Gangbusters Nathan storm 0:10:53.679 --> 0:10:55.959 coming out of the lower Mississippi River Valley is going 0:10:56.000 --> 0:10:58.880 to come up the along the East coast during the weekend, 0:10:59.160 --> 0:11:01.760 and it's going to bring us eisenble snowfall to many 0:11:01.800 --> 0:11:04.520 of the suburban locations around the major cities in the 0:11:04.559 --> 0:11:07.319 mid Atlantic and Northeast. This isn't a huge snowstorm for 0:11:07.360 --> 0:11:09.920 the District of Baltimore, for New York City or Boston 0:11:10.240 --> 0:11:12.920 because the ocean is still fairly warm water temperatures than 0:11:12.880 --> 0:11:15.600 in the forties. That influence is going to mean that 0:11:15.640 --> 0:11:19.080 we see Boston and New York City, and especially Washington 0:11:19.080 --> 0:11:21.440 and Baltimore mixing with and changing the rain at times. 0:11:21.760 --> 0:11:24.719 But once you get inland away from that influence to 0:11:24.800 --> 0:11:27.600 the ocean, there's going to be some sizeable snowfalls from 0:11:27.679 --> 0:11:30.800 say Frederick, Maryland, all the way on up through the 0:11:30.800 --> 0:11:33.160 suburbs north and west of New York City, and then 0:11:33.240 --> 0:11:35.400 well north and west of Boston. There could be some 0:11:35.440 --> 0:11:37.880 spots to get over ten inches of snow from this storm. 0:11:37.720 --> 0:11:40.360 No kidding. So, like you said, it's been a while 0:11:40.600 --> 0:11:44.280 since we've had a major winter storm along the East coast. 0:11:44.400 --> 0:11:46.640 I mean, or are we ready for this? I think 0:11:46.640 --> 0:11:48.280 we're ready. I mean we've had a lot of practice. 0:11:48.280 --> 0:11:50.400 Anybody over the age of fifteen has seen, you know, 0:11:50.440 --> 0:11:53.520 a number of snowstorms in their lifetime. But yeah, last winter, 0:11:53.880 --> 0:11:55.960 I think the deepest snow we saw in the Boston 0:11:56.000 --> 0:11:57.959 area was like three and a half inches in February. 0:11:58.040 --> 0:11:59.719 So I think the big problem is going to be 0:11:59.760 --> 0:12:02.240 pe will not used to driving in it because it's 0:12:02.280 --> 0:12:04.600 been over a year. The good news is it's falling 0:12:04.640 --> 0:12:06.760 on a Saturday night and a Sunday in many areas, 0:12:06.840 --> 0:12:08.800 so their traffic won't be as bad. We don't have 0:12:08.800 --> 0:12:12.440 school in session, so that'll be helpful. But people are 0:12:12.440 --> 0:12:15.000 definitely going to have to take some time, particularly in 0:12:15.000 --> 0:12:17.320 those areas where there's going to be that transition from 0:12:17.360 --> 0:12:19.679 a mixture of rain and snow to snow, because that 0:12:19.800 --> 0:12:22.880 snow will be heavier and wetter. Therefore it's more slippery, 0:12:22.920 --> 0:12:26.240 it's greasy. So those areas just north and west of Boston, 0:12:26.600 --> 0:12:29.440 New York City, Washington, and Baltimore really need to be 0:12:29.440 --> 0:12:34.559 careful when the precipitation's falling during Saturday afternoon through Sunday. 0:12:34.800 --> 0:12:36.600 Well, a lot of people who live along the Interstate 0:12:36.679 --> 0:12:41.120 ninety five quarriter know that that freeway is often right 0:12:41.160 --> 0:12:44.680 along the boundary between where rain and snow happens. I mean, 0:12:44.720 --> 0:12:48.040 if this system sticks around for a little bit longer 0:12:48.080 --> 0:12:50.720 than expected, could we be in for a pretty dicey 0:12:50.720 --> 0:12:51.959 Monday morning commute. 0:12:52.200 --> 0:12:54.439 I think Monday morning is going to be okay, particularly 0:12:54.480 --> 0:12:57.480 in the district in Baltimore, because it dries out Sunday afternoon, 0:12:58.000 --> 0:12:59.720 So I think the roadways are going to be okay. 0:13:00.080 --> 0:13:03.040 York City Boston different story. Those areas where they don't 0:13:03.040 --> 0:13:04.920 get a chance to clean up the slush along the 0:13:04.960 --> 0:13:07.160 I ninety five corridor. Temperatures are going to be going 0:13:07.200 --> 0:13:09.400 down Sunday night, and that's going to have the tendency 0:13:09.480 --> 0:13:11.520 allow those surfaces to refree. So it could be a 0:13:11.559 --> 0:13:13.719 little bit more dicey New York City on up in 0:13:13.760 --> 0:13:15.679 the Boston Monday than it is around the district in 0:13:15.720 --> 0:13:16.839 Baltimore since it. 0:13:16.800 --> 0:13:19.280 Is on the weekend. We think in good skiing. 0:13:19.440 --> 0:13:21.680 Well, you know, the ski areas in northern New England 0:13:21.679 --> 0:13:23.360 and northern New York State really aren't going to see 0:13:23.440 --> 0:13:25.760 much from this storm. At all too far out to see. 0:13:26.280 --> 0:13:28.160 It'll be cold enough so they can make some snow. 0:13:28.200 --> 0:13:30.720 Where this is going to help out is the resorts 0:13:31.080 --> 0:13:34.360 in West Virginia and on up into Pennsylvania. They'll do 0:13:34.480 --> 0:13:37.520 fairly well. The Poconos are going to do great. This 0:13:37.559 --> 0:13:39.280 is going to be their best snowfall in a while, 0:13:39.920 --> 0:13:43.640 and they'll have real good conditions come Monday and Tuesday 0:13:43.640 --> 0:13:46.720 in the Poconos. But for northern New England northern New 0:13:46.800 --> 0:13:49.160 York State, I think the snowfall amounts are probably going 0:13:49.200 --> 0:13:50.080 to be under two inches. 0:13:50.640 --> 0:13:52.199 Well anyway, I guess this couldn't have come in a 0:13:52.240 --> 0:13:55.240 better time, happening on the weekend. But thanks for this, Rob. Again, 0:13:55.240 --> 0:13:58.880 that was Bloomberg meteorologist Rob Carolyn getting us ready for 0:13:59.000 --> 0:14:02.520 the first winter storm for the East Coast of twenty 0:14:02.559 --> 0:14:05.079 twenty four. Well, let's move on from watching the weather 0:14:05.600 --> 0:14:08.200 to watching the data. Investors have their eyes out for 0:14:08.200 --> 0:14:10.400 the last look at the US labor market in twenty 0:14:10.440 --> 0:14:13.840 twenty three with the December non farm payrolls report. Do 0:14:13.920 --> 0:14:16.120 out an eight thirty am Wall Street time here to 0:14:16.160 --> 0:14:19.880 get a set for those numbers. Simon French, chief economist 0:14:19.960 --> 0:14:23.720 at panmir Gordon Simon. Great to speak with you this morning. Now, 0:14:23.760 --> 0:14:26.800 the consensus on the Bloomberg terminal, it calls for more moderation, 0:14:26.920 --> 0:14:29.920 one hundred and seventy five thousand new jobs expected, a 0:14:30.000 --> 0:14:32.600 tick up for the unemployment rate to three point eight percent. 0:14:32.680 --> 0:14:34.960 What's your expectation, I think. 0:14:34.800 --> 0:14:38.160 A little bit stronger. Good morning, Nathan. I think the 0:14:39.600 --> 0:14:43.520 big question for me is US labor market participation appeared 0:14:43.520 --> 0:14:46.600 to peak during the summer and come back down, but 0:14:46.640 --> 0:14:49.440 there's conflicting data points as to whether that labor supply 0:14:49.520 --> 0:14:51.880 pictures is true. And if we start a season more 0:14:51.920 --> 0:14:54.280 people coming back into the labor market, I think there's 0:14:54.320 --> 0:15:00.280 potential to still add more jobs than than that estimate. Yes, 0:15:00.440 --> 0:15:05.720 I think the big influence though for futures on interest 0:15:05.800 --> 0:15:08.960 rate expectations will be the unemployment rate rather than the 0:15:09.000 --> 0:15:11.960 number of jobs added, and that I think when you're 0:15:12.000 --> 0:15:14.920 looking at the kind of rules of thumb we sort 0:15:14.920 --> 0:15:16.960 of saw the Federal Reserve and moved to in their 0:15:17.000 --> 0:15:21.280 recent minutes, anything three point eight three point nine will 0:15:21.280 --> 0:15:24.880 start to firm expectations of the rate cutting cycle this 0:15:25.040 --> 0:15:26.320 side of the mid year. 0:15:27.880 --> 0:15:31.360 There's been a lot of talk about four percent potentially 0:15:31.560 --> 0:15:34.800 being the trigger point for the Federal Reserve to think 0:15:34.840 --> 0:15:39.480 about cutting interest rates further. Could we see an upside surprise? 0:15:39.600 --> 0:15:40.720 What's the potential for that? 0:15:42.040 --> 0:15:45.000 Well, I think four percent is being focused in on 0:15:45.080 --> 0:15:47.360 by a lot of analysts because of the Palm rule. 0:15:47.480 --> 0:15:51.600 This is the if you like, the equivalent in the 0:15:51.680 --> 0:15:53.640 labor market for what we know in the bondom market 0:15:53.680 --> 0:15:56.160 from a Yeald curb and version is a decent signal 0:15:56.160 --> 0:15:59.800 of a recession. The Psalm rule looking at er point 0:15:59.840 --> 0:16:03.320 five five percent increase on the twelve month low point 0:16:03.360 --> 0:16:06.480 for unemployment, and that would something like four percent would 0:16:06.520 --> 0:16:08.520 take you there, But you have to get there on 0:16:08.560 --> 0:16:10.360 a three month average, and we're not going to get 0:16:10.360 --> 0:16:12.600 that even if we get that print today. But what 0:16:12.720 --> 0:16:16.640 it would do is it would suggest that by February, 0:16:16.880 --> 0:16:20.000 the time of the February report, you potentially hit that 0:16:20.160 --> 0:16:24.200 farm or threshold, which could prepare the ground for rate 0:16:24.240 --> 0:16:26.480 cutting cycling Q two. So that is why I think 0:16:26.520 --> 0:16:28.080 analysts are focusing on four percent. 0:16:29.160 --> 0:16:30.960 Of course, we're going to be keeping an eye out 0:16:30.960 --> 0:16:35.840 for average hourly earnings as well. Labor force participation feeds 0:16:35.840 --> 0:16:38.800 into that as well. Where do you see wages going 0:16:38.880 --> 0:16:43.520 If we find evidence that companies are holding on to employees, 0:16:43.600 --> 0:16:46.200 or perhaps more people are coming off the sidelines. 0:16:48.400 --> 0:16:50.800 Yeah, so I think there's I think one of the 0:16:50.880 --> 0:16:53.360 failures actually of the economics profession in the last couple 0:16:53.400 --> 0:16:58.160 of years, it's been an inability to recognize that nominal 0:16:58.200 --> 0:17:03.520 pay awards take their queue from overall price inflation, and 0:17:03.600 --> 0:17:07.520 therefore I think the helpful price dynamics from gasoline prices, 0:17:07.520 --> 0:17:10.320 from overall prices coming down in the US economy or 0:17:10.359 --> 0:17:13.440 the rate of increase coming down, should ever a spillover 0:17:13.480 --> 0:17:18.199 effect into nominal wage awards. I think there's an over focus, 0:17:18.720 --> 0:17:21.760 perhaps two model driven from the way central banks model 0:17:21.760 --> 0:17:25.840 this stuff to look purely at participation in capacity rather 0:17:25.880 --> 0:17:28.000 than the signals coming from the overall price level. So 0:17:28.040 --> 0:17:33.600 I actually expect a continued moderation in nominal pay awards. 0:17:33.960 --> 0:17:37.560 With the quits rate and job openings falling as well. 0:17:37.720 --> 0:17:41.359 What does that tell us, Simon about the state of 0:17:41.400 --> 0:17:45.240 the US economy. Are you still thinking that we could 0:17:45.800 --> 0:17:49.560 be in for a soft landing given where labor dynamics 0:17:49.600 --> 0:17:50.280 are right now? 0:17:51.840 --> 0:17:54.560 Nathan, I think you know I'm not a fan particularly 0:17:54.560 --> 0:18:01.159 of the soft landing hard landing descriptor, mainly because lists. Economists, 0:18:01.200 --> 0:18:04.240 they tend to define it that they see fits reverse 0:18:04.280 --> 0:18:08.480 fit their narrative. But if you're looking at a moderation 0:18:08.680 --> 0:18:12.560 of those jolt data points on quits on hires from 0:18:12.600 --> 0:18:17.399 some very very extreme levels and a moderation without overshooting, 0:18:17.920 --> 0:18:20.160 then actually that's the message we got from the Joltz 0:18:20.200 --> 0:18:23.359 data I felt, which is you are starting to hone 0:18:23.359 --> 0:18:27.280 in on more normalized levels of labor market churn, and 0:18:27.320 --> 0:18:29.560 that has to be a positive thing, whether it's a 0:18:29.600 --> 0:18:31.720 soft landing or hard landing in terms of the hard 0:18:31.800 --> 0:18:36.840 data of economic activity pass but on those metrics, it's 0:18:36.960 --> 0:18:39.199 quite encouraging. From the Federal Reserve, they've been able to 0:18:39.200 --> 0:18:39.679 engineer this. 0:18:40.960 --> 0:18:44.679 We've seen a lot of activity in the options market 0:18:44.880 --> 0:18:48.119 ahead of this report, a pretty big bet that we 0:18:48.160 --> 0:18:52.080 could see ten year yields rise more than ten basis 0:18:52.119 --> 0:18:54.199 points by the end of the day. What kind of 0:18:54.280 --> 0:18:58.280 volatility are you expecting off the back of this jobs 0:18:58.320 --> 0:19:00.000 report in the bond mar. 0:19:02.400 --> 0:19:06.040 So, I think that's that would be my whether it's 0:19:06.160 --> 0:19:09.720 an hourly end of day expectation, some more medium term 0:19:09.800 --> 0:19:14.359 view from my perspective is the bomb mark has got 0:19:14.440 --> 0:19:18.159 over excited by the pace of potential rate cups. In 0:19:18.200 --> 0:19:21.000 my view, I think pricing in five to six for 0:19:21.080 --> 0:19:24.359 the year when it's unlikely the first pirmacy you're going 0:19:24.400 --> 0:19:28.800 to have enough data to start cutting before the middle 0:19:28.880 --> 0:19:31.720 towards the back end of Q two, that becomes a 0:19:31.760 --> 0:19:34.639 really difficult thing to do with only four better reserve 0:19:34.680 --> 0:19:36.560 meetings in the second half of the year. So I 0:19:36.640 --> 0:19:41.119 think that expectation that you allude to of slightly firming 0:19:41.200 --> 0:19:44.439 yield is consistent with perhaps a reassessment of quite how 0:19:44.480 --> 0:19:46.520 aggressive the FED can be in the data have in 0:19:46.560 --> 0:19:47.560 front of them. 0:19:48.400 --> 0:19:52.159 Got about a minute left here, Simon. Not only is 0:19:52.600 --> 0:19:54.720 the FED going to be focused on the labor market, 0:19:54.760 --> 0:19:58.160 but we've got inflation data, more inflation data coming out 0:19:58.560 --> 0:19:59.920 next week as well. 0:20:00.000 --> 0:20:00.200 Well. 0:20:00.680 --> 0:20:04.359 What's your expectation on where we could see consumer prices headed. 0:20:06.520 --> 0:20:08.880 Well, a lot of the base effects that have been 0:20:09.000 --> 0:20:12.159 driving US inflation lower over the last twelve months, and 0:20:12.200 --> 0:20:17.679 this is simply some very exceptional numbers leaving leaving the 0:20:17.720 --> 0:20:20.879 annual comparison. That does mean we're in for a period 0:20:20.960 --> 0:20:23.159 where the data is going to bounce around in a 0:20:23.240 --> 0:20:30.200 sort of stubborn stubborn range around three percent. And the question, 0:20:30.280 --> 0:20:33.040 I guess the Federal Reserve need to ask themselves not 0:20:33.160 --> 0:20:35.439 all just based on the data, but their understanding of 0:20:35.440 --> 0:20:38.160 how price setting is going on at district level as well. 0:20:38.840 --> 0:20:40.960 Is the degree to which that can over an eighteen 0:20:40.960 --> 0:20:44.399 month two year of you moderate back towards two percent 0:20:44.440 --> 0:20:48.840 of their central forecast suggest But actually the real economy 0:20:48.880 --> 0:20:50.840 is not necessarily showing those signs. So I think we're 0:20:50.840 --> 0:20:54.160 in for a period where month to month will dot 0:20:54.200 --> 0:20:58.320 around very uncomfortably higher levels than the two percent targets, 0:20:59.600 --> 0:21:02.200 and is consistently all be seeing in terms of commodity 0:21:02.200 --> 0:21:06.680 imple prices shipping rates providing less of a down with 0:21:06.800 --> 0:21:08.920 base effect push than the single last one month. 0:21:11.320 --> 0:21:14.199 This is Bloomberg day Break Today, your morning brief on 0:21:14.280 --> 0:21:17.840 the stories making news from Wall Street to Washington and beyond. 0:21:18.080 --> 0:21:20.879 Look for us on your podcast feed at six am 0:21:20.960 --> 0:21:24.600 Eastern each morning, on Apple, Spotify, and anywhere else you 0:21:24.680 --> 0:21:25.879 get your podcasts. 0:21:25.960 --> 0:21:28.680 You can also listen live each morning starting at five 0:21:28.720 --> 0:21:31.280 am Wall Street time on Bloomberg eleven three to zero 0:21:31.359 --> 0:21:34.160 in New York, Bloomberg ninety nine to one in Washington, 0:21:34.320 --> 0:21:37.160 Bloomberg one oh six to one in Boston, and Bloomberg 0:21:37.240 --> 0:21:38.919 ninety sixty in San Francisco. 0:21:39.320 --> 0:21:42.480 Our flagship New York station is also available on your 0:21:42.520 --> 0:21:47.960 Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus. 0:21:48.000 --> 0:21:51.439 Listen coast to coast on the Bloomberg Business app, SERIUSXM, 0:21:51.520 --> 0:21:55.840 the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager. 0:21:55.560 --> 0:21:58.679 And I'm Karen Moscow. Join us again tomorrow morning for 0:21:58.840 --> 0:22:01.320 all the news you need to start your day right 0:22:01.359 --> 0:22:03.000 here on Bloomberg Daybreak