Fed Rate-Cut Delay; Trump Trial Update

Bloomberg Audio Studios, Podcasts, Radio News. 0:00:11.000 --> 0:00:11.559 Good morning. 0:00:11.600 --> 0:00:12.840 I'm Nathan Hager. 0:00:12.720 --> 0:00:15.920 And I'm Karen Moscow. Here are the stories we're following today. 0:00:16.120 --> 0:00:18.960 Karen, we begin with the latest messaging from the FED. 0:00:19.160 --> 0:00:22.800 Chairman J Powell signaled that policymakers will wait longer than 0:00:22.840 --> 0:00:26.600 previously anticipated to cut interest rates following a series of 0:00:26.680 --> 0:00:28.960 surprisingly high inflation readings. 0:00:29.400 --> 0:00:31.720 So we've said at the FMC that we'll need greater 0:00:31.800 --> 0:00:35.840 confidence that inflation is moving sustainably toward two percent before 0:00:36.000 --> 0:00:39.319 be appropriate to ease policy. You know, we took that 0:00:39.479 --> 0:00:43.239 cautious approach and sought that greater confidence so as not 0:00:43.360 --> 0:00:46.879 to overreact to the string of low inflation readings that 0:00:46.920 --> 0:00:48.480 we had in the second half of last year. 0:00:49.040 --> 0:00:52.440 Now, policymakers narrowly penciled in three interest rate cuts and 0:00:52.479 --> 0:00:56.240 forecasts published last month, but investors are now betting on 0:00:56.400 --> 0:00:59.280 just one to two cuts this year. The yield on 0:00:59.320 --> 0:01:03.600 the two year no briefly crossed five percent yesterday. This morning, 0:01:03.600 --> 0:01:05.800 it's at four point nine four percent. 0:01:06.360 --> 0:01:09.080 Well, Nathan, Some on Wall Street have speculated the Fed 0:01:09.120 --> 0:01:13.760 could raise rates, but Bloomberg Opinion columnist Muhammadalarian says there 0:01:13.800 --> 0:01:17.000 are real risks. If the FED boost rates from here. 0:01:16.959 --> 0:01:19.720 If inflationing gets much worse, they could hike. But I 0:01:19.720 --> 0:01:22.800 think if they do hike, we're going to have a 0:01:22.880 --> 0:01:25.360 regional banking crisis. We're going to have all sorts of 0:01:25.480 --> 0:01:29.360 damage in the marketplace. And I think that is at 0:01:29.360 --> 0:01:31.560 the back of the head. So I think the likelihood 0:01:31.600 --> 0:01:35.440 of them hiking is low. Is it zero? No, they 0:01:35.440 --> 0:01:36.720 could Bloomberg. 0:01:36.720 --> 0:01:40.480 Opinion columnist Mohammedalarian says another rate high could put the 0:01:40.520 --> 0:01:43.200 Fed on a path to a new tightening cycle and 0:01:43.240 --> 0:01:45.640 that could derail US growth. 0:01:45.319 --> 0:01:48.400 Well, Karen. Inflation and rates are also in focus in Europe. 0:01:48.560 --> 0:01:52.400 UK inflation slowed less than expected last month. This fuel 0:01:52.440 --> 0:01:55.840 price is corrept higher. Consumer prices rose three point two 0:01:55.960 --> 0:01:58.400 percent in March compared with the year earlier. That's down 0:01:58.400 --> 0:02:01.640 from three point four in While that is the lowest 0:02:01.720 --> 0:02:05.240 since September twenty twenty one, three point two is above 0:02:05.280 --> 0:02:07.720 the three point one percent inflation that the Bank of 0:02:07.760 --> 0:02:10.280 England and private sector economists had expected. 0:02:10.800 --> 0:02:13.040 Now, Nathan, we get the latest from the Middle East 0:02:13.040 --> 0:02:15.920 and Israeli Foreign Minister Israel Counts is meeting with the 0:02:15.960 --> 0:02:19.520 foreign ministers of the UK and Germany. He says Israel 0:02:19.600 --> 0:02:22.120 has the right to react to Iran's weekend missile and 0:02:22.200 --> 0:02:25.799 drone attack, and he's calling for sanctions on Around's missile program. 0:02:26.000 --> 0:02:29.160 The White House says it's preparing a package targeting around's 0:02:29.200 --> 0:02:33.120 weapons systems, but Bloomberg's Patrick psychs reports Iran has a 0:02:33.160 --> 0:02:35.160 track record of dealing with sanctions. 0:02:35.480 --> 0:02:38.520 The symbolism is much more important in this case. It's 0:02:38.639 --> 0:02:42.280 more of a diplomatic signal to israel Is saying, you know, 0:02:42.360 --> 0:02:45.680 we your allies, We're all here, We're acting immediately in 0:02:45.720 --> 0:02:49.519 the days after that attack, and therefore perhaps you don't 0:02:49.560 --> 0:02:53.679 need to go so hard in your planned military response 0:02:53.720 --> 0:02:57.280 to that attack. You know, take this as the message 0:02:57.320 --> 0:03:02.399 of support and feel reassured a few security. 0:03:02.160 --> 0:03:05.880 Meanwhile, Bloomberg's Patrick seikescherports the leaders of Saudi Arabia and 0:03:05.919 --> 0:03:08.880 the United Arab Emirates issued a joint statement calling for 0:03:08.919 --> 0:03:11.880 a maximum of self restraint in the Middle East and 0:03:12.000 --> 0:03:16.160 warning of the quote dangers of war and its dire consequences. 0:03:16.360 --> 0:03:18.440 Now, let's turn to the latest Karen on the criminal 0:03:18.520 --> 0:03:21.560 case against Donald Trump. It took two days to seat 0:03:21.639 --> 0:03:24.800 seven jurors, but there is progress in the hush money 0:03:24.800 --> 0:03:27.480 trial in Manhattan. Let's get the latest now from Bloomberg's 0:03:27.520 --> 0:03:28.680 June Grosso in New York. 0:03:28.960 --> 0:03:32.320 The first seven jurors were sworn in after lawyers grilled 0:03:32.360 --> 0:03:36.320 them about their social media posts, political views, and personal lives. 0:03:36.960 --> 0:03:40.160 Sitting on the jury will be an information technology worker, 0:03:40.400 --> 0:03:44.440 an English teacher and oncology nurse, a sales professional, a 0:03:44.480 --> 0:03:48.680 software engineer, and two lawyers. Four more jurors must be 0:03:48.720 --> 0:03:52.960 sworn in and six alternates before opening statements can begin, 0:03:53.240 --> 0:03:56.920 perhaps as early as next week. June Grosso, Bloomberg Radio, 0:03:57.280 --> 0:03:57.720 All Right. 0:03:57.680 --> 0:04:00.880 June, thank you. In company news, job cuts reportedly on 0:04:00.960 --> 0:04:03.560 the way at Toshiba, The nie K is reporting the 0:04:03.600 --> 0:04:07.520 company plans to eliminate five thousand jobs in Japan. That's 0:04:07.560 --> 0:04:10.640 about a tenth of its domestic headcount. The NIKA says 0:04:10.680 --> 0:04:13.600 with a cost cutting move, Toshiba is now focusing on 0:04:13.640 --> 0:04:16.599 its infrastructure and digital technology operations. 0:04:16.720 --> 0:04:19.920 Meanwhile, Karen Bloomberg News has learned that Morgan Stanley plans 0:04:19.960 --> 0:04:23.080 to start cutting about fifty investment banking jobs in the 0:04:23.080 --> 0:04:26.080 Asia Pacific region this week. At least eighty percent of 0:04:26.120 --> 0:04:28.960 those reductions will be in Hong Kong and China. The 0:04:29.040 --> 0:04:31.719 job cuts would be the deepest in years for Morgan 0:04:31.800 --> 0:04:32.880 Stanley in China. 0:04:33.400 --> 0:04:38.160 Well Nathan. Jamie Diamond says artificial intelligence will transform banking, 0:04:38.279 --> 0:04:41.280 but it will also lead to job losses. The JP 0:04:41.400 --> 0:04:44.479 Morgan CEO's comments to Bloomberg come after he devoted a 0:04:44.600 --> 0:04:47.520 chunk of his annual shareholder letter to the importance of 0:04:47.680 --> 0:04:51.720 artificial intelligence for the Wall Street Giants business. Here's what 0:04:51.839 --> 0:04:55.120 Diamond told Emily Chang on the latest episode of The Circuit. 0:04:55.400 --> 0:04:57.560 It's a living breathing thing. So people want to ask 0:04:57.600 --> 0:04:59.560 what's going to do. It's a living breathing thing. 0:04:59.600 --> 0:05:00.440 It's going to change. 0:05:00.480 --> 0:05:02.640 They're gonna be all different types of models and different 0:05:02.680 --> 0:05:05.480 types of tools and technology. But the way to think 0:05:05.480 --> 0:05:10.040 about for us is every single process, so errors, trading, hedging, research, 0:05:10.400 --> 0:05:13.040 every app every database. You're going to be applying AI. 0:05:13.480 --> 0:05:15.479 So it might be as a copilot, it might be 0:05:15.560 --> 0:05:17.839 to replace humans. You know, AI is doing all the 0:05:17.880 --> 0:05:20.640 equity hedging for us. For the most part. It's idea 0:05:20.760 --> 0:05:22.839 generation as large language models. 0:05:23.320 --> 0:05:25.720 And you can watch the full wide ranging interview with 0:05:25.839 --> 0:05:28.200 Jamie Dimond on the latest episode of the Circuit with 0:05:28.240 --> 0:05:31.240 Emily Chang tonight at six pm Wall Street Time on 0:05:31.279 --> 0:05:34.520 Bloomberg Television. You can also get the circuit in podcast 0:05:34.600 --> 0:05:38.400 Forum on Apples, Spotify, or anywhere else you listen to podcasts. 0:05:38.560 --> 0:05:41.559 Let's check some stocks this morning, Karen. We're watching shares 0:05:41.600 --> 0:05:45.080 of ASML holding. They're down more than four percent. In Amsterdam, 0:05:45.320 --> 0:05:48.360 Europe's most valuable tech firm posted new orders that fell 0:05:48.400 --> 0:05:51.119 short of analyst estimate's hurt by a downturn in demand 0:05:51.200 --> 0:05:53.720 for its most advanced machines from the chip making industry. 0:05:54.360 --> 0:05:57.200 And shares of United Airlines flying higher by almost five 0:05:57.240 --> 0:05:59.839 percent in early trading that carry your forecast better than 0:05:59.880 --> 0:06:03.840 a expected profit this quarter. That's tempering concerns that Boeing 0:06:03.880 --> 0:06:08.039 aircraft delays and regulatory pressure will put expansion plans at risk. 0:06:08.160 --> 0:06:08.320 Well. 0:06:08.320 --> 0:06:12.320 Boeing safety record will be under pressure today on Capitol Hill, Karen, 0:06:12.400 --> 0:06:15.920 the Senate is holding two separate hearings on a whistleblower's 0:06:15.920 --> 0:06:19.640 claims of poor assembly processes and shortcomings in the seven 0:06:19.680 --> 0:06:23.400 eighty seven Dreamliner program. Senators will hear from a Boeing 0:06:23.440 --> 0:06:26.479 engineer who worked on that plane for years, plus safety 0:06:26.480 --> 0:06:30.440 experts from NASA and the academic world. Boeing executives will 0:06:30.440 --> 0:06:34.440 not be there. CEO Dave Calhoun is expected to testify 0:06:34.520 --> 0:06:35.400 at a later date. 0:06:39.040 --> 0:06:40.320 And it's time now for look at some of the 0:06:40.360 --> 0:06:42.839 other stories making news in New York and around the world. 0:06:42.960 --> 0:06:46.200 For that, we're joined by Bloomberg's John Tucker, John Good Morning. 0:06:46.160 --> 0:06:49.479 Good Morning Karen. President Biden calling for higher tariffs on 0:06:49.600 --> 0:06:53.320 Chinese steel and aluminum. Bloomberg Steve Ponas says this is 0:06:53.360 --> 0:06:55.600 part of a series of steps to shore up the 0:06:55.640 --> 0:06:59.360 American steel sector and win over workers in this year's election. 0:07:00.000 --> 0:07:03.240 In a visit to Pittsburgh today, mister Biden will propose 0:07:03.320 --> 0:07:06.640 new twenty five percent tariffs on certain Chinese steel and 0:07:06.680 --> 0:07:09.479 aluminum products as part of an ongoing review, while the 0:07:09.640 --> 0:07:13.960 US also launches a formal probe into China's shipbuilding industry. 0:07:14.240 --> 0:07:17.520 The steps target a relatively small segment of the US market, 0:07:17.640 --> 0:07:21.080 with imports of Chinese steel and aluminum totaling roughly one 0:07:21.120 --> 0:07:24.400 point seven billion dollars in twenty twenty three, but US 0:07:24.400 --> 0:07:27.600 officials said the announcements were designed to head off an 0:07:27.600 --> 0:07:31.640 expected surge and safeguard the US market. The President will 0:07:31.680 --> 0:07:35.440 also reiterate that United States steel based in Pittsburgh should 0:07:35.440 --> 0:07:38.760 remain American owned. Steve Potisk Bloomberg Radio. 0:07:38.840 --> 0:07:42.800 A newly unsealed court document so US Senator Bob Menendez 0:07:43.040 --> 0:07:46.160 is prepared to blame his wife at his bribery trial 0:07:46.560 --> 0:07:49.800 for withholding information from him. Lawyers for the New Jersey 0:07:49.800 --> 0:07:53.520 Democrat asked the judge to try him separately from his wife, Nadine. 0:07:53.760 --> 0:07:56.800 They're accused of accepting brimes of cash, gold bars, and 0:07:56.880 --> 0:07:59.640 a car in the Bronx. Police is searching for four 0:07:59.720 --> 0:08:01.960 sons books who shot four people on a street corner 0:08:02.040 --> 0:08:05.520 Tuesday evening, killing one of them. According to NYPD Chief 0:08:05.560 --> 0:08:08.920 Benjamin Gurley, the victims were all shot by passengers riding 0:08:08.920 --> 0:08:10.960 on two scooters with. 0:08:11.080 --> 0:08:14.600 Two males on each scooter abreast. 0:08:15.920 --> 0:08:20.360 The rear passengers of those scooters pulled off firearms. That's 0:08:20.400 --> 0:08:23.920 two firearms, and he fired approximately ten rounds. 0:08:23.960 --> 0:08:26.680 So far, had no arrests. Former US Senator and two 0:08:26.760 --> 0:08:30.160 termed Florida Governor Bob Graham, who gained national prominence as 0:08:30.240 --> 0:08:33.000 Chairman of the Senate Intelligence Committee in the aftermath of 0:08:33.080 --> 0:08:35.559 the two thousand and one terror attacks and as an 0:08:35.559 --> 0:08:38.520 early critic of the Iraq war, has died. He was 0:08:38.679 --> 0:08:41.719 eighty seven years old, Global news twenty four hours a 0:08:41.760 --> 0:08:44.000 day and whenever you wanted with Bloomberg News. Now, I'm 0:08:44.040 --> 0:08:47.240 John Tucker and this is Bloomberg Nathan and Karen. 0:08:47.520 --> 0:08:54.679 Sorry, John, thank you. It's time now for the Bloombergy 0:08:54.679 --> 0:08:56.640 Sports Update with John Stashaur. 0:08:56.760 --> 0:08:58.319 John, Good morning, Good morning, Carry. 0:08:58.360 --> 0:09:00.800 The Yankees had the hot start they off. The Mets 0:09:00.800 --> 0:09:03.240 had a brutal start to the season five straight home losses. 0:09:03.280 --> 0:09:06.000 They've turned it around moved over five hundred where a 0:09:06.040 --> 0:09:08.240 three to one win over the Pirates at Cityfield. Mets 0:09:08.240 --> 0:09:10.559 scored all three and the seventh, ending their bullpen to 0:09:10.760 --> 0:09:13.440 four Scorelesshitians gave up just one hit. A night after 0:09:13.480 --> 0:09:16.600 the Yankees first two game losing straight, the skid reached 0:09:16.600 --> 0:09:19.880 three in Toronto. Blue Jays led five to one. Yankee 0:09:19.920 --> 0:09:23.040 comeback fell short. They lost five to four. Jose Trasvigno 0:09:23.120 --> 0:09:25.160 drove in three runs, but Anthony Bupe went over four 0:09:25.200 --> 0:09:28.000 with four strikeouts and Aaron Judge went over four. His 0:09:28.080 --> 0:09:31.280 average fell to one eighty two. Orioles beat the Twins. 0:09:31.280 --> 0:09:32.880 They are only a half game behind the Yanks. Red 0:09:32.880 --> 0:09:36.240 Sox lost to Cleveland. Nationals lost to the Dodgers Hall 0:09:36.280 --> 0:09:39.280 of Fame manager Whitey Herzog has died at ninety two. 0:09:39.400 --> 0:09:41.880 Managed the Cardinals throughout the nineteen eighties, won the World 0:09:41.880 --> 0:09:44.360 Series in eighty two, and also passed either way. One 0:09:44.360 --> 0:09:47.760 of the last living Boys of Summer, Carl Erskine was 0:09:47.800 --> 0:09:50.280 the main stay on the Brooklyn Dodgers pitching staff. He 0:09:50.360 --> 0:09:53.760 was ninety seven. The NBA play in began in New Orleans. 0:09:53.840 --> 0:09:57.079 Lakers had a fifteen point lead the Pelicans rallied. Lakers 0:09:57.160 --> 0:09:58.400 prevailed down the stretch. 0:09:58.840 --> 0:10:03.120 Here is Breeves dribbling rights all the way to the middle. 0:10:03.440 --> 0:10:08.040 T low for three shot it two s three for Russell, 0:10:08.559 --> 0:10:14.240 put the Lakers up by four with fifty seconds remaining. 0:10:14.200 --> 0:10:17.320 In the fort on klac and LA fift three four 0:10:17.320 --> 0:10:19.400 of the night for D'Angelo Russell and the Lakers won 0:10:19.480 --> 0:10:21.200 one ten to one oh six, So they'll be the 0:10:21.320 --> 0:10:24.240 seventh seed in the West. They'll face Denver, who swept 0:10:24.320 --> 0:10:26.439 the Lakers last year, in the West Finals. New Orleans 0:10:26.480 --> 0:10:29.760 will now host Sacramento Friday to see who the eighth 0:10:29.760 --> 0:10:32.160 seed will be. The Kings blue out Golden State one 0:10:32.240 --> 0:10:34.840 eighteen to ninety four. The Rangers found out their opponent 0:10:34.880 --> 0:10:36.640 first round of the Stanley Cup playoffs will be the 0:10:36.760 --> 0:10:41.160 Washington Capitals Bruins lost Florida one. The Panthers won the 0:10:41.240 --> 0:10:44.880 Atlantic Division. Josh Dashawe, Bloomberg Sports Camp, Nathan. 0:10:44.800 --> 0:10:47.720 All Right, John, thank you. SMP futures up a quarter percent, 0:10:47.800 --> 0:10:50.160 or fourteen points down, futures up a third of upper 0:10:50.200 --> 0:10:52.840 cent or one hundred and twenty eight points, Nasdaq futures 0:10:52.920 --> 0:10:54.800 up a tenth of upper cent or twenty four points, 0:10:54.800 --> 0:10:57.079 and the ten year Treasury yield at four point sixty 0:10:57.120 --> 0:10:57.800 three percent. 0:11:00.120 --> 0:11:04.200 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, 0:11:04.320 --> 0:11:07.200 and around the world on Bloomberg dot Com and the 0:11:07.240 --> 0:11:11.760 Bloomberg Business app. This is Bloomberg Daybreak. Good morning. 0:11:11.840 --> 0:11:14.560 I'm Nathan Hager. Higher for longer. That has been the 0:11:14.559 --> 0:11:17.560 message for quite some time from Fed Chairman Jerome Powell 0:11:17.559 --> 0:11:20.079 when it comes to interest rates. But after the latest 0:11:20.080 --> 0:11:24.000 hot inflation data that has started this year, Powell really 0:11:24.120 --> 0:11:26.000 seems to be trying to send that message home to 0:11:26.080 --> 0:11:28.600 markets in an even bigger way. And for more. We 0:11:28.640 --> 0:11:32.840 are joined by Bloomberg's Kritty Gupta. Critty good morning. Sounds 0:11:32.840 --> 0:11:35.280 like the new message from chairman Powell is higher for 0:11:35.559 --> 0:11:36.640 even longer. 0:11:37.360 --> 0:11:41.160 It is, and it's kind of this almost admitting that 0:11:41.760 --> 0:11:44.080 there is I mean, he said this right, that there's 0:11:44.080 --> 0:11:46.000 still more work to do. The last mile is always 0:11:46.040 --> 0:11:49.280 going to be the hardest. His wording seems to have 0:11:49.320 --> 0:11:53.040 pushed those market expectations of a cut potentially to into 0:11:53.240 --> 0:11:56.720 next year, moving it out of twenty twenty four altogether. 0:11:56.800 --> 0:12:00.400 So it's more a question of not only higher for longer, 0:12:00.400 --> 0:12:02.800 but there's also a question of credibility here that is 0:12:02.840 --> 0:12:06.080 this the tool that can actually tack on inflation? And Nathan, 0:12:06.120 --> 0:12:09.040 you know, well early on when we had inflation takeups 0:12:09.080 --> 0:12:12.280 back in twenty twenty one, the verbiage that Jay Powell 0:12:12.320 --> 0:12:14.280 and some of his critics even us is we don't 0:12:14.360 --> 0:12:17.720 want a vulgar repeat, We don't want that reacceleration of inflation. 0:12:18.760 --> 0:12:21.360 This is kind of his worst nightmare, that's almost coming 0:12:21.360 --> 0:12:21.920 to fruition. 0:12:22.280 --> 0:12:24.400 Yeah, he seems to be sort of hoping that this 0:12:24.679 --> 0:12:28.520 isn't the reacceleration. But it's raising the question when it 0:12:28.520 --> 0:12:33.160 comes to FED credibility about whether that last mile should 0:12:33.200 --> 0:12:35.600 be maybe a little bit less than a mile. There's 0:12:35.679 --> 0:12:38.640 a growing debate in this market about whether the two 0:12:38.720 --> 0:12:40.920 percent inflation targets still makes sense. 0:12:41.400 --> 0:12:43.559 There is a growing debate, and it's one that's kind 0:12:43.559 --> 0:12:45.640 of going global as well, because right here in the 0:12:45.800 --> 0:12:48.240 UK as well, we are having the exact same debate. 0:12:48.600 --> 0:12:51.439 Of course, setting the precedent by the Federal Reserve. But look, 0:12:51.440 --> 0:12:53.800 that's a much longer process that isn't going to be 0:12:54.720 --> 0:12:59.480 adjusted anytime soon. It requires even congressional approval to adjust 0:12:59.520 --> 0:13:02.320 that target. It Something you are, however, seeing, is what 0:13:02.360 --> 0:13:05.199 the inputs into this inflationary process is. So when we're 0:13:05.240 --> 0:13:08.640 talking about what's actually driving this inflation uptick, you're starting 0:13:08.640 --> 0:13:10.720 to see some of the commodity prices actually take higher. 0:13:10.720 --> 0:13:13.280 So oil prices, for example, was one gas prices that 0:13:13.280 --> 0:13:15.960 we watch, especially ahead of the election in the States. 0:13:16.320 --> 0:13:19.440 Another piece that's especially relevant for the global audience is 0:13:19.440 --> 0:13:22.360 simply this idea that you were starting to yield much 0:13:22.400 --> 0:13:24.520 much higher. A lot of the work, a lot of 0:13:24.520 --> 0:13:27.440 that kind of easing of the Federal Reserve was kind 0:13:27.480 --> 0:13:29.400 of pushing off in terms of rate cuts. A lot 0:13:29.400 --> 0:13:31.400 of that has actually been done by the markets in 0:13:31.440 --> 0:13:33.520 a good chunk a way. When you look at financial conditions, 0:13:33.559 --> 0:13:35.199 take a look at the stock market rally, take a 0:13:35.200 --> 0:13:38.120 look at the dollar rally, credit spreads have tightened. Those 0:13:38.120 --> 0:13:41.319 are all ways to kind of through the markets without 0:13:41.360 --> 0:13:45.360 that FED intervention tighten or extracy ease some of the 0:13:45.360 --> 0:13:49.040 conditions that allow for things like financing, for example, in 0:13:49.280 --> 0:13:51.000 the broader market. So that's going to be one thing 0:13:51.040 --> 0:13:53.600 to watch. The bond market is another story here, where 0:13:53.640 --> 0:13:56.280 you start to see so many people piled on to 0:13:56.360 --> 0:13:58.720 the front end of the curve that their market is 0:13:58.800 --> 0:14:02.160 almost partially in control of where rates go. Some would 0:14:02.240 --> 0:14:04.680 argue at an even faster pace than where the FED 0:14:04.760 --> 0:14:07.920 is expecting. They're higher for longer as well. So you're 0:14:07.960 --> 0:14:10.560 seeing yields tick up higher. That makes the FED its 0:14:10.640 --> 0:14:13.480 job even more difficult when it comes to working in 0:14:13.520 --> 0:14:14.360 the opposite direction. 0:14:14.760 --> 0:14:15.319 So does this. 0:14:15.440 --> 0:14:18.520 Raise the idea once again that we could see no 0:14:18.920 --> 0:14:22.200 interest rate cuts this year? Perhaps as a base case? 0:14:22.280 --> 0:14:25.480 I mean, does Torsten Slock of Apollo Management sound like 0:14:25.520 --> 0:14:26.960 a profit at this point? 0:14:28.560 --> 0:14:30.560 It could be, and then look, it wouldn't be the 0:14:30.600 --> 0:14:33.600 first time that he's claimed that profit status, and very 0:14:33.600 --> 0:14:35.600 easily could be. He also mentioned that some of these 0:14:35.640 --> 0:14:40.200 financial conditions are incentivizing capital markets activity, IPO deals, et cetera. 0:14:40.440 --> 0:14:42.440 And he's been right about that, and he's really shown 0:14:42.480 --> 0:14:45.560 that kind of pickup as well. I'll answer your question 0:14:45.760 --> 0:14:48.200 in terms of market pricing here, because the market's always right, 0:14:48.240 --> 0:14:51.880 isn't it, Nathan. And when you look at the market 0:14:51.880 --> 0:14:54.520 pricing you can find on the Bloomberg terminal, it basically 0:14:54.640 --> 0:14:56.760 is it has pushed out cuts all the way into 0:14:57.080 --> 0:14:59.880 twenty twenty five. The most kind of the biggest percentage 0:14:59.880 --> 0:15:02.080 you is about a forty seven percent odds of a 0:15:02.120 --> 0:15:05.040 cut in September, though the next one coming out forty 0:15:05.080 --> 0:15:08.040 eight percent in December. Remember're also dealing with the election story. 0:15:08.080 --> 0:15:10.760 How close to the election does the Fed have room 0:15:10.800 --> 0:15:13.000 to cut? And how many data points in between do 0:15:13.080 --> 0:15:17.040 you get suggesting that inflation is either upticked further, that 0:15:17.080 --> 0:15:19.920 there is a reacceleration, or gone in the opposite direction 0:15:19.960 --> 0:15:22.400 that we can claim that transitory status. And right now 0:15:22.480 --> 0:15:27.520 you've had three hot prints across CPI, PPI, PCE. At 0:15:27.560 --> 0:15:29.520 the moment, three data points is starting to feel like 0:15:29.560 --> 0:15:29.960 a trend. 0:15:30.400 --> 0:15:32.480 Only about thirty seconds left here, Kritie. But we're in 0:15:32.480 --> 0:15:36.359 this situation where inflation is easing just a bit overseas. 0:15:36.440 --> 0:15:39.560 Now we got the lower than well, the lower inflation 0:15:39.680 --> 0:15:42.160 print out of the UK not lower than expected. But 0:15:42.240 --> 0:15:44.960 this idea as well, that the ECB could be cutting 0:15:45.040 --> 0:15:47.840 in June. I mean, what about the divergence here? 0:15:48.280 --> 0:15:50.640 Well, the divergence is one of concern, and it's one 0:15:50.680 --> 0:15:52.800 that actually kind of makes the trade a little bit 0:15:52.840 --> 0:15:54.480 easier when it comes to the bond market and even 0:15:54.520 --> 0:15:57.040 the FX market. You're already seeing cracks of that where 0:15:57.040 --> 0:15:59.960 the strong dollar story is actually weighing on the year 0:16:00.240 --> 0:16:03.160 and the pound because the market is expecting that divergence 0:16:03.360 --> 0:16:05.880 to manifest as soon as the summer. Is this an 0:16:05.880 --> 0:16:08.600 issue not really seems to be the consensus at the 0:16:08.600 --> 0:16:10.840 moment because it'll only last for a couple of months 0:16:10.840 --> 0:16:14.160 at most. Does that narrative change Absolutely? But right now 0:16:14.160 --> 0:16:16.160 you're one hundred percent right. The ECB is looking like 0:16:16.200 --> 0:16:18.120 it's going to be the first to cut rates. 0:16:18.520 --> 0:16:21.440 This is Bloomberg day Break Today, your morning brief on 0:16:21.520 --> 0:16:25.040 the stories making news from Wall Street to Washington and beyond. 0:16:25.320 --> 0:16:28.040 Look for us on your podcast feed at six am 0:16:28.160 --> 0:16:31.840 Eastern each morning on Apple, Spotify, and anywhere else you 0:16:31.880 --> 0:16:33.080 get your podcasts. 0:16:33.200 --> 0:16:35.880 You can also listen live each morning starting at five 0:16:35.920 --> 0:16:38.520 am Wall Street time on Bloomberg eleven three to zero 0:16:38.600 --> 0:16:41.400 in New York, Bloomberg ninety nine to one in Washington, 0:16:41.520 --> 0:16:44.400 Bloomberg one oh six to one in Boston, and Bloomberg 0:16:44.480 --> 0:16:46.160 ninety sixty in San Francisco. 0:16:46.520 --> 0:16:49.680 Our flagship New York station is also available on your 0:16:49.720 --> 0:16:55.160 Amazon Election devices. 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