Markets Rally on Big Fed Cut; Israel Sees ‘New Phase’ in War

Bloomberg Audio Studios, Podcasts, Radio News. 0:00:09.720 --> 0:00:10.280 Good morning. 0:00:10.320 --> 0:00:13.119 I'm Nathan Hager and I'm Karen Moscow. Here are the 0:00:13.160 --> 0:00:14.640 stories we're following today. 0:00:14.840 --> 0:00:17.520 Karen, the surge in futures this morning comes after a 0:00:17.640 --> 0:00:21.720 Vassil session following the Fed's fifty basis point rate cut. 0:00:21.760 --> 0:00:24.040 The S and P five hundred wiped out a one 0:00:24.120 --> 0:00:28.240 percent gain yesterday after FED share, j Powell cautioned against 0:00:28.320 --> 0:00:30.600 assuming big rate cuts would continue. 0:00:30.960 --> 0:00:32.960 I do not think that anyone should look at this 0:00:33.000 --> 0:00:35.159 and say, oh, this is the new pace. Have to 0:00:35.200 --> 0:00:37.200 think about it in terms of the base case. Of course, 0:00:37.520 --> 0:00:41.120 what happens will happen. So in the base case, what 0:00:41.200 --> 0:00:43.520 you see is look at the SEP. You see cuts 0:00:43.560 --> 0:00:46.479 moving along. The sense of this is we're recalibrating policy 0:00:46.880 --> 0:00:50.200 down over time to a more neutral level, and we're 0:00:50.240 --> 0:00:53.320 moving at the pace that we think is appropriate. 0:00:53.600 --> 0:00:56.120 And Jay Powell, the Fed's first rate cut in four 0:00:56.200 --> 0:01:00.000 years was accompanied by projections indicating an additional fifty basis 0:01:00.000 --> 0:01:03.360 points of cuts across the remaining two policy meetings this year. 0:01:04.000 --> 0:01:06.520 Well, Nathan, we have plenty of reaction from the FED 0:01:06.600 --> 0:01:10.360 raid cut. We caught up with Bloomberg Opinion columnist Muhammad Alarian, 0:01:10.560 --> 0:01:14.839 KMPG Chief US Economist Diane Swank, and former New York 0:01:14.840 --> 0:01:16.320 Fed President Bill Dudley. 0:01:16.520 --> 0:01:18.520 We're going to look back and either this will be 0:01:18.520 --> 0:01:21.960 the absolutely white bet, which is be preemptive on the 0:01:22.040 --> 0:01:25.280 labor market after you were reactive to inflation. This is 0:01:25.319 --> 0:01:30.000 a fundamental change in the reaction function. Alternatively, we will 0:01:30.040 --> 0:01:32.800 look at this as being too aggressive. I'm hoping that 0:01:33.000 --> 0:01:33.959 it will be the first. 0:01:34.400 --> 0:01:35.880 This was a huge victory for j. 0:01:36.040 --> 0:01:39.080 Powell, who really laid out at his Jackson Hole speech 0:01:39.400 --> 0:01:42.440 that he was worried about employment, and that is what 0:01:42.520 --> 0:01:43.160 this is about. 0:01:43.600 --> 0:01:46.640 It's pretty much I was expecting in the sense that 0:01:46.840 --> 0:01:48.960 one of the issues that Paul had is how do 0:01:49.000 --> 0:01:52.000 you two fifty without scaring people that you know something 0:01:52.000 --> 0:01:54.160 bad about the economy? And I think you did that 0:01:54.360 --> 0:01:56.960 very well. He basically said, we're doing this because the 0:01:57.000 --> 0:02:01.280 news is good. We've made progress sound inflation, as opposed 0:02:01.320 --> 0:02:03.520 we're doing this because the news is bad. So I 0:02:03.520 --> 0:02:07.960 thought it was a very providing reassurance to people that 0:02:08.360 --> 0:02:10.120 FED thinks that they've got it. 0:02:11.080 --> 0:02:14.239 That was former New York Fed President Bill Dudley. KPMG 0:02:14.400 --> 0:02:19.000 Chief US Economist Diane Swank and Bloomberg opinion columnist Mohammad Alarian. 0:02:19.320 --> 0:02:22.760 The decision was not without some controversy. Michelle Bowman cast 0:02:22.840 --> 0:02:26.080 a dissenting vote in favor of a smaller quarter point 0:02:26.160 --> 0:02:29.400 rate reduction that marked the first ascent by a FED 0:02:29.440 --> 0:02:31.120 governor since two thousand and five. 0:02:31.360 --> 0:02:34.160 Well, Karen, investors aren't the only ones cheering the Fed's 0:02:34.240 --> 0:02:37.800 rate cut. Bloomberg's John Tucker joins us Now and John. 0:02:37.840 --> 0:02:41.760 The Biden Harris administration may have caused to celebrate as well. 0:02:41.919 --> 0:02:44.640 Yeah, Nathan, and they're taking kind of a victory lap. 0:02:44.680 --> 0:02:47.200 In a speech today to the Economic Club of Washington, 0:02:47.480 --> 0:02:50.560 President Biden will celebrate the Fed's decision of slash interest 0:02:50.600 --> 0:02:53.799 rates as a validation of his economic vision. This is 0:02:53.840 --> 0:02:56.320 part of an effort to recast his handling of the economy, 0:02:56.480 --> 0:02:59.040 particularly as voters continue to give him low marks for 0:02:59.080 --> 0:03:02.880 tackling inflation. It's important for both the President personally and 0:03:02.919 --> 0:03:06.400 the Democrats more broadly, as Vice President harr Is is 0:03:06.480 --> 0:03:09.760 locked in that tight election battle Donald Trump, his eighth say, 0:03:09.840 --> 0:03:12.919 Biden will outline ways he believes the economy could still 0:03:12.960 --> 0:03:16.480 be made stronger while pushing costs lower. I'm John Tucker 0:03:16.520 --> 0:03:17.400 Bloomberg Radio. 0:03:17.919 --> 0:03:20.560 All right, John, thank you. It's now to the Bank 0:03:20.600 --> 0:03:23.239 of England and it's turned to make a policy decision. 0:03:23.280 --> 0:03:26.360 That BOE is expected to maintain a patient approach to 0:03:26.480 --> 0:03:29.640 easing at its meeting today after a first rate cut 0:03:29.760 --> 0:03:32.640 last month. And Bloomberg's Lizzie Burdon has more from London. 0:03:32.840 --> 0:03:35.320 It's decision day on thread Needle Street, but economists that 0:03:35.400 --> 0:03:38.839 investors are expecting policymakers to stick to the status quo, 0:03:39.000 --> 0:03:42.920 holding the benchmark rate at five percent. However, wages are 0:03:43.000 --> 0:03:45.920 increasing on a faster Bank of England cutting cycle ahead 0:03:46.040 --> 0:03:49.160 after inflation readings came in lower than Central Bank forecasts 0:03:49.200 --> 0:03:52.880 in July and August. Attential will be focused on Governor 0:03:52.960 --> 0:03:55.600 Andrew Bailey for hints that borrowing costs could be lowered 0:03:55.640 --> 0:03:59.120 again in November after committee members voted narrowly to end 0:03:59.160 --> 0:04:02.600 their sixteen year high last month. Traders are also awaiting 0:04:02.680 --> 0:04:05.200 news on the speed of quantitative tightening, a decision which 0:04:05.200 --> 0:04:08.440 could prove pivotal for new Chancellor Rachel Reeves is October 0:04:08.480 --> 0:04:11.280 budget in London. Lizzie Burden Blueberg Radio. 0:04:11.240 --> 0:04:12.800 Okay, Lizzie, thank you. Now we want to get you 0:04:12.840 --> 0:04:14.920 caught up on the latest developments in the Middle East. 0:04:15.120 --> 0:04:18.040 Israel has declared a new phase in its regional war 0:04:18.080 --> 0:04:21.920 with Islamist groups. It comes as Hesbola official say explosions 0:04:21.960 --> 0:04:24.680 went off in Beirut and multiple parts of Lebanon in 0:04:24.720 --> 0:04:29.080 an apparent second wave of detonations of electronic devices. We 0:04:29.160 --> 0:04:31.799 get more from Bloomberg's Jumana Barsecchi in Dubai. 0:04:32.040 --> 0:04:35.760 It's a second day of communication devices exploding across not 0:04:35.800 --> 0:04:38.960 just baby routes, but across the entire country, eastern Bikar 0:04:39.200 --> 0:04:41.760 as well as southern Bay Roots. And this time the 0:04:41.800 --> 0:04:46.080 catalyst were walkie talkies. These were walki talkies that Hezballah 0:04:46.120 --> 0:04:50.640 group members had been using. They also exploded be it 0:04:50.760 --> 0:04:55.200 in cars and people's houses, even within cafes, so very 0:04:55.279 --> 0:04:57.840 similar in nature to the attack that took place the 0:04:57.880 --> 0:05:00.240 day before. The Lebanese Health Ministry has put u out 0:05:01.040 --> 0:05:05.000 a statement saying that four hundred and fifty casualties were 0:05:05.480 --> 0:05:08.159 brought into hospitals as a result of these attacks. Twenty 0:05:08.200 --> 0:05:09.920 people have now lost their lives. 0:05:09.960 --> 0:05:13.839 Bloomberg's Jewniver said. She notes Israel has not taken responsibility 0:05:13.880 --> 0:05:14.600 for the attacks. 0:05:15.400 --> 0:05:17.800 None of the latest in the presidential race. Nathan and 0:05:17.839 --> 0:05:20.880 former President Trump was on New York's Long Island for 0:05:21.000 --> 0:05:23.479 a rally last night, and he promised to lift the 0:05:23.520 --> 0:05:26.640 cap on state and local tax deductions that he imposed 0:05:26.640 --> 0:05:30.200 as president but is valuable to many New York homeowners. 0:05:30.400 --> 0:05:33.680 Trump also announced plans to go to Springfield, Ohio, the 0:05:33.760 --> 0:05:37.279 city where he said during last week's debate, Haitian migrants 0:05:37.320 --> 0:05:39.039 have eaten people's pets. 0:05:39.279 --> 0:05:41.320 I'm going to go there in the next two weeks. 0:05:41.360 --> 0:05:47.240 I'm going to Springfield, and I'm going to Aurora. 0:05:47.560 --> 0:05:49.800 You may never see me again, but that's okay. 0:05:50.160 --> 0:05:51.200 Gotta do what I gotta do. 0:05:51.920 --> 0:05:54.159 Whatever happened to Trump, well, he never got. 0:05:54.000 --> 0:05:54.960 Out of Springfield. 0:05:55.760 --> 0:05:59.600 Trump also said he'll go to Aurora, Colorado. He's repeatedly 0:05:59.640 --> 0:06:03.880 claimed that city has been overrun by migranted gangs from Venezuela. 0:06:04.000 --> 0:06:06.560 As for Kamala, Harris Karen, the vice president, plans to 0:06:06.560 --> 0:06:09.800 meet with Vladimir Zelenski next week. The Ukrainian president will 0:06:09.800 --> 0:06:12.159 be in Washington, sources say is expected to push his 0:06:12.200 --> 0:06:15.520 country's bid to join NATO and the European Union, along 0:06:15.560 --> 0:06:18.480 with more advanced weapons, as part of his victory plan 0:06:18.600 --> 0:06:21.640 against Russia. Zelensky plans to present that plan to President 0:06:21.680 --> 0:06:24.440 Biden on the sidelines of the UN General Assembly later 0:06:24.480 --> 0:06:24.960 this month. 0:06:25.600 --> 0:06:29.520 Meanwhile, Nathan the International Brotherhood of Teamsters is declining to 0:06:29.600 --> 0:06:32.719 endorse a candidate for president, and Bloomberg's Amy Morris has 0:06:32.760 --> 0:06:33.800 more from Washington. 0:06:34.279 --> 0:06:37.000 It is a blow to both Kamala Harris and Donald Trump. 0:06:37.040 --> 0:06:40.800 Teamster's general president Sean O'Brien released a statement saying that 0:06:40.880 --> 0:06:43.359 neither candidate was able to make serious commitments to the 0:06:43.440 --> 0:06:46.520 union quote to ensure the interests of working people are 0:06:46.560 --> 0:06:50.000 always put before big business. Now, the Teamsters released internal 0:06:50.040 --> 0:06:54.520 polling data showing members had initially favored endorsing Biden over Trump, 0:06:54.880 --> 0:06:57.960 but after Harris became the nominee, the majority of respondents 0:06:58.000 --> 0:07:00.560 back to Trump. And Poland conducted a few days ago, 0:07:00.800 --> 0:07:04.120 fifty eight percent supported endorsing Trump, compared to thirty one 0:07:04.120 --> 0:07:07.000 percent for Harris. And you may recall O'Brien spoke at 0:07:07.040 --> 0:07:10.040 the Republican National Convention in July, the first time a 0:07:10.160 --> 0:07:13.720 leader of the Union has done so. Amy Morris, Bloomberg Radio. 0:07:13.840 --> 0:07:16.600 Amy, thank you. We have breaking news crossing the Bloomberg terminal. 0:07:16.640 --> 0:07:19.160 Apple is set to be warned by the European Union 0:07:19.440 --> 0:07:22.160 that it needs to open up its highly guarded iPhone 0:07:22.200 --> 0:07:27.040 operating system to rival technologies or eventually risk significant fines. 0:07:27.200 --> 0:07:29.880 Sources say EU watchdogs are due to announce under the 0:07:29.880 --> 0:07:33.160 block's new Digital Markets Act that Apple must step into 0:07:33.200 --> 0:07:36.280 line with strict new rules on making operating systems fully 0:07:36.320 --> 0:07:38.080 functional with other technologies. 0:07:41.520 --> 0:07:42.840 And it's time now for a look at some of 0:07:42.880 --> 0:07:45.440 the other stories making news in New York and around 0:07:45.480 --> 0:07:47.800 the world. And for that we're joined by Bloomberg's Michael 0:07:47.840 --> 0:07:49.240 Barr Michael, Good Morning. 0:07:49.080 --> 0:07:53.280 Good Morning, Karen. Lawyers for Sean Diddycomb's unsuccessfully thought to 0:07:53.360 --> 0:07:56.600 keep him out of jail after his sex trafficking arrest. 0:07:57.040 --> 0:08:00.400 The music Moguls lawyers highlighted a litany of home horrors 0:08:00.480 --> 0:08:04.480 at the Brooklyn Federal lockup, described as hell on Earth. 0:08:04.920 --> 0:08:09.440 They include horrific conditions, rampant violence, and multiple depths. Comb's 0:08:09.440 --> 0:08:11.760 attorney Mark agnifano I. 0:08:11.760 --> 0:08:14.200 Told mister Colmbs, I'm going to try and get his 0:08:14.240 --> 0:08:17.080 case to trial as quickly as possible. I'm going to 0:08:17.080 --> 0:08:19.880 try and minimize the amount of time he spends in 0:08:20.080 --> 0:08:25.000 very very difficult and I believe in humane housing conditions 0:08:25.080 --> 0:08:28.960 in the special housing unit of the Metropolitan Detention Facility. 0:08:29.600 --> 0:08:34.080 Audio courtesy of ABC seven. The judge cited possible witness 0:08:34.120 --> 0:08:38.520 tampering by Combs if bail is granted. Combs was sent 0:08:38.600 --> 0:08:42.000 to the Metropolitan Detention Center after pleading not guilty in 0:08:42.080 --> 0:08:45.720 a case that accuses him of physically and sexually abusing 0:08:45.760 --> 0:08:49.120 women for more than a decade. Disgraced movie mogul Harvey 0:08:49.120 --> 0:08:52.120 Weinstein pleaded not guilty to a new indictment charging him 0:08:52.440 --> 0:08:56.880 with criminal sex acts. According to the Manhattan District Attorney's office, 0:08:56.920 --> 0:09:01.440 three separate women have accused Weinstein of section really assaulting them. 0:09:02.000 --> 0:09:05.239 It's not part of Weinstein's conviction, which was later overturned 0:09:05.240 --> 0:09:08.160 on appeal. This morning, a judge in Washington, d c. 0:09:08.480 --> 0:09:11.720 Will sentence five people accused of helping to lead the 0:09:11.760 --> 0:09:16.480 infamous January sixth initial breach of the Capitol. Prosecutors will 0:09:16.520 --> 0:09:19.959 recommend nine years in prison, saying this group was among 0:09:20.000 --> 0:09:24.120 the first to breach a police barricade, saying hundreds, if 0:09:24.160 --> 0:09:28.080 not thousands, of rioters would follow. A new study finds 0:09:28.120 --> 0:09:32.600 that preventable risk factors are driving a global increase in strokes. 0:09:33.120 --> 0:09:36.479 Doctor Valerie Fagan is the director of the National Institute 0:09:36.480 --> 0:09:40.400 for Stroke and Applied Neuroscience at the University of Auckland 0:09:40.440 --> 0:09:41.199 in New Zealand. 0:09:41.720 --> 0:09:47.000 Stroke is probably one of the most preventable and yet 0:09:47.760 --> 0:09:52.440 very fatal and disabling conditions. 0:09:53.040 --> 0:09:56.000 Dr Fagan says strokes killed more than seven million people 0:09:56.040 --> 0:09:59.840 each year. The study, published in the journal Lancet Neurology, 0:10:00.240 --> 0:10:03.480 finds environmental factors like air pollution and heat waves, and 0:10:03.600 --> 0:10:08.160 individual factors like blood pressure and bad cholesterol are behind 0:10:08.200 --> 0:10:11.080 the recent increase. Global news twenty four hours a day, 0:10:11.160 --> 0:10:13.400 whenever you want it with the Bloomberg News. Now, I'm 0:10:13.440 --> 0:10:15.040 Michael Barr, and this is Bloomberg Cameron. 0:10:15.240 --> 0:10:21.959 All right, Michael Barr, thank you, and it's time now 0:10:22.000 --> 0:10:25.720 for the Bloomberg Spores Update with John Stanshowery John, good morning. 0:10:25.440 --> 0:10:28.240 Good morning Karen. Over the last thirty seasons, Yankees have 0:10:28.280 --> 0:10:31.200 gone to the postseason twenty five times, didn't go last year, 0:10:31.280 --> 0:10:33.920 barely finished over five hundred, but headed back clinched at 0:10:34.000 --> 0:10:36.160 least a wildcard when they won two to one in 0:10:36.280 --> 0:10:39.640 ten innings at Seattle Champagne. Then float in the clubhouse 0:10:39.679 --> 0:10:42.240 Aaron Judge hoping there's more of that next month he 0:10:42.320 --> 0:10:43.480 was on the Yes Network. 0:10:43.880 --> 0:10:46.200 Oh well, we're excited, you know, we definitely know the 0:10:46.280 --> 0:10:47.080 job's not finished. 0:10:47.600 --> 0:10:50.520 Now we're hunting this divisions like. 0:10:50.480 --> 0:10:52.480 You get an opportunity to, you know, punch our ticket 0:10:52.480 --> 0:10:54.360 back in the pro season after last year missing out. 0:10:54.400 --> 0:10:54.880 It means a lot. 0:10:55.040 --> 0:10:56.400 You know, he got a special group here. 0:10:56.880 --> 0:10:59.040 The boys are definitely excited, but they know the mission. 0:10:59.080 --> 0:11:00.000 That's that definitely. 0:11:00.640 --> 0:11:03.160 The win last night was helped by a bizarre double 0:11:03.200 --> 0:11:05.000 play in the bottom of the tent. The Meriners had 0:11:05.080 --> 0:11:07.360 runners at first and third. Nobody at Randy or Rose 0:11:07.400 --> 0:11:10.720 Arena struck out and his bat went flying towards the 0:11:10.760 --> 0:11:13.040 head of Julio Rodriguez at third as he got out 0:11:13.080 --> 0:11:15.200 of the way of the bat. Austin Wells through the 0:11:15.240 --> 0:11:18.400 third and Rodriguez was picked off. Orioles lost again, Yankees 0:11:18.440 --> 0:11:21.520 moving out towards Clinton, the division they lead by five games. 0:11:21.520 --> 0:11:23.280 At City Field, the night after the Mets won ten 0:11:23.320 --> 0:11:26.760 to one, they won ten nothing over Washington. Jose Quintana 0:11:26.800 --> 0:11:28.600 went the first seventy and these gave up just two hits, 0:11:28.640 --> 0:11:31.880 brand of nimmoa three on homer. Arizona and Atlanta both 0:11:31.920 --> 0:11:33.920 won the Mets State tied with the d Backs, with 0:11:33.960 --> 0:11:37.080 both teams two games ahead of the Braves. Red Sox 0:11:37.120 --> 0:11:39.760 won two to one of Tampa Bay Milwaukee clinch the 0:11:39.880 --> 0:11:42.880 NL Central Tonight at MetLife It's the Jets home opener 0:11:42.960 --> 0:11:46.120 New England. Also one and one. First ballot for the 0:11:46.120 --> 0:11:48.679 Pro Football Hall of Fame is out. It has sixteen 0:11:48.760 --> 0:11:53.720 first timers, including Eli Manning, John Stashedward, Bloomberg Sports, Jarnon, Nathan. 0:11:55.920 --> 0:12:00.120 Coast to Coast on Bloomberg Radio, nationwide on Sirius XAM 0:12:00.160 --> 0:12:03.040 and around the world on Bloomberg dot Com and the 0:12:03.120 --> 0:12:06.520 Bloomberg Business app. This is Bloomberg Daybreak. 0:12:06.880 --> 0:12:09.640 Good morning. I'm Nathan Hager. The Fed is determined to 0:12:09.720 --> 0:12:12.960 achieve a soft landing. That is the message Chairman Jpowell 0:12:12.960 --> 0:12:15.480 sent to markets as the Central Bank pivots to cutting 0:12:15.480 --> 0:12:17.920 interest rates with a half percent move. 0:12:18.360 --> 0:12:20.960 The economy is growing at a solid pace, inflation is 0:12:21.000 --> 0:12:24.240 coming down closer to our two percent objective over time, 0:12:24.960 --> 0:12:27.920 and the labor market is still in solid shape. So 0:12:28.160 --> 0:12:31.880 our intention is really to maintain the strength that we 0:12:31.920 --> 0:12:33.600 currently see in the US economy. 0:12:34.000 --> 0:12:37.319 That was the Chairman of the Federal Reserve, Jerome Powell 0:12:37.320 --> 0:12:40.240 at the news conference following that fifty basis point cut. 0:12:40.240 --> 0:12:42.720 For more this morning, we are joined by Veronica Clark, 0:12:42.880 --> 0:12:46.840 us economist at City. Veronica, good morning. You were first 0:12:46.880 --> 0:12:49.400 out of the gate with this call. You've said in 0:12:49.480 --> 0:12:52.840 July that the Fed is going to do fifty basis points. 0:12:53.520 --> 0:12:54.720 Was this the right call? 0:12:55.640 --> 0:12:58.840 Yeah, good morning for having me. I do think it 0:12:58.920 --> 0:13:01.840 probably was. Of of course, in the end, the decision 0:13:01.880 --> 0:13:03.640 was very close, and we didn't know what this was 0:13:03.640 --> 0:13:06.079 going to be going into yesterday, the first time in 0:13:06.120 --> 0:13:08.640 a long time that that's happened. But I do think 0:13:08.679 --> 0:13:11.160 the argument for a fifty basis point Kaui is strong. 0:13:11.800 --> 0:13:13.560 Even tar Pale said it, you know the sense in 0:13:13.600 --> 0:13:15.840 which if you had had those July employments, you know, 0:13:15.960 --> 0:13:19.160 data points, just a couple of days earlier, maybe they 0:13:19.200 --> 0:13:21.400 would have cut in July. Maybe you were making up 0:13:21.440 --> 0:13:24.320 first and lost time. But we are never going to 0:13:24.320 --> 0:13:26.560 be further from a neutral interest rate than when you 0:13:26.600 --> 0:13:29.199 start cutting, so it makes sense to do it right away. 0:13:29.760 --> 0:13:32.800 The same time, Palell said, don't get used to it, 0:13:32.920 --> 0:13:35.719 that this isn't necessarily meaning that it's always going to 0:13:35.760 --> 0:13:37.480 be fifty. You agree with that. 0:13:38.600 --> 0:13:40.839 I think if that is is of course going to 0:13:40.920 --> 0:13:43.280 stay pretty optimistic here, and we did have you know, 0:13:43.320 --> 0:13:46.920 the updated economic production yesterday. They only expect the unemployment 0:13:46.960 --> 0:13:49.560 rate to rise maybe another tent or two from where 0:13:49.559 --> 0:13:52.520 we are now, still expecting strong GDP growth, and I 0:13:52.520 --> 0:13:54.880 think if that plays out then and it's fair that 0:13:54.960 --> 0:13:57.840 you know, the pace of cuts would would slow. But 0:13:57.920 --> 0:13:59.839 I think for us, you know, we're always trying to 0:14:00.440 --> 0:14:02.800 you know, first and foremost based our FED call on 0:14:02.840 --> 0:14:05.880 where we think the economic data are headed, and we 0:14:05.920 --> 0:14:08.679 actually do see the chance of more labor market weakness. 0:14:08.679 --> 0:14:11.439 We do have two more employment reports to go before 0:14:11.480 --> 0:14:15.439 we get to the next said meeting in November. I 0:14:15.440 --> 0:14:17.600 think there could still be some weakness in the labor 0:14:17.600 --> 0:14:19.800 market data and those reports we think they're going fifty 0:14:19.840 --> 0:14:22.240 age and in November. Because of that, do. 0:14:22.200 --> 0:14:24.560 You think we need to hear more clarity from Chairman 0:14:24.640 --> 0:14:27.800 Pale about what the path is going to be for rates, 0:14:27.840 --> 0:14:30.720 what the size of the cuts is going to be. 0:14:30.960 --> 0:14:33.040 Is there too much data dependence from this FED. 0:14:34.560 --> 0:14:37.440 I don't think so. I think you know, he said it, 0:14:37.440 --> 0:14:40.520 of course when we're taking it meeting by meeting, it is, 0:14:40.680 --> 0:14:43.360 you know, really just the labor market data now first 0:14:43.400 --> 0:14:45.560 and foremost and I think we do know that their 0:14:45.920 --> 0:14:49.280 reaction function to if the data evolve in a certain way. 0:14:49.320 --> 0:14:52.600 If we do see weaker labor market data, their reaction 0:14:52.760 --> 0:14:54.760 is going to be to support the labor market is 0:14:54.800 --> 0:14:57.680 as much as they can, So we at least understand 0:14:57.720 --> 0:15:00.760 I think that they have a pretty sensitive reaction function 0:15:00.840 --> 0:15:02.400 to any weaker labor market data. 0:15:02.840 --> 0:15:05.640 Do you think there's still a reaction function to inflation? 0:15:05.880 --> 0:15:08.680 Is the FED taking its eye off the ball on 0:15:09.000 --> 0:15:10.760 inflation too soon? 0:15:10.960 --> 0:15:13.920 Yeah? Yeah, I mean, of course that is the other 0:15:13.960 --> 0:15:17.320 important element of their mandate. And I don't think, you know, 0:15:17.360 --> 0:15:20.560 we're you know, dismissing inflation altogether. But I actually was 0:15:20.600 --> 0:15:24.160 a bit surprised that we did have this stronger CPI reading, 0:15:24.240 --> 0:15:26.320 you know, last week, and we thought, maybe, you know, 0:15:26.360 --> 0:15:29.640 the best compromise then among the Hawks and the doves 0:15:29.720 --> 0:15:33.360 was to just do a twenty five even yesterday. But clearly, 0:15:33.480 --> 0:15:37.160 you know, the labor market is taking precedent here. I 0:15:37.160 --> 0:15:39.920 think we had an even response from Para Powell about 0:15:39.960 --> 0:15:43.280 the stickiness of shelter inflation, and he was somewhat dismissive 0:15:43.320 --> 0:15:46.520 of that. So I think the focus for the FED 0:15:46.600 --> 0:15:49.200 is just very quickly shifting to the labor market data. 0:15:49.360 --> 0:15:52.320 And speaking of the split between hawks and doves in 0:15:52.360 --> 0:15:56.120 our last minute here, how significant was it that Governor 0:15:56.160 --> 0:15:57.840 Bowman dissented on this decision? 0:15:58.640 --> 0:16:01.800 Yeah, not surprising. She is certainly probably the most hawkish 0:16:01.840 --> 0:16:04.760 beneficial I was actually even maybe a bit surprised that 0:16:04.800 --> 0:16:07.880 there weren't more descents. Of course, the market was very 0:16:07.880 --> 0:16:10.120 fifty to fifty split on what the size of the 0:16:10.160 --> 0:16:12.400 cut was going to be. We really didn't know up 0:16:12.440 --> 0:16:14.600 until the last minute. I would have thought maybe there 0:16:14.600 --> 0:16:17.280 were even some more hawks, you know, arguing for starting 0:16:17.320 --> 0:16:20.520 a bit smaller. So I don't think that descent is 0:16:20.560 --> 0:16:23.880 too meaningful. If anything, this is more consensus than I 0:16:23.880 --> 0:16:25.960 would have thought in a split posiion. 0:16:26.200 --> 0:16:29.160 This is Bloomberg day Break, your morning podcast on the 0:16:29.240 --> 0:16:32.720 stories making news from Wall Street to Washington and beyond. 0:16:33.000 --> 0:16:35.400 Look for us on your podcast feed by six am 0:16:35.440 --> 0:16:38.800 Eastern each morning, on Apple, Spotify, or anywhere else you listen. 0:16:39.040 --> 0:16:41.880 You can also listen live each morning starting at five 0:16:41.920 --> 0:16:44.640 am Wall Street time on Bloomberg eleven three to zero 0:16:44.640 --> 0:16:47.520 in New York, Bloomberg in ninety nine to one in Washington, 0:16:47.600 --> 0:16:51.560 Bloomberg ninety two nine in Boston, and nationwide on serious 0:16:51.760 --> 0:16:53.440 XM Channel one twenty one. 0:16:53.720 --> 0:16:56.440 Plus listen coast to coast on the Bloomberg Business App 0:16:56.480 --> 0:16:59.240 now with Apple CarPlay and Android Atto interfaces. 0:16:59.520 --> 0:17:02.520 And don't forget to subscribe to Bloomberg News Now. 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