Progress Made to Avoid Government Shutdown; Lagarde Talks ECB Rate Cuts
On today's podcast:
1) Treasury Secretary Janet Yellen called on lawmakers to pass a temporary spending bill this week and avert a partial US government shutdown.
2) The European Central Bank is likely to cut interest rates in the summer, according to President Christine Lagarde. Interviewed at Bloomberg House in Davos by Francine Lacqua, she was asked if there could be majority support for such a move, given that several policymakers have signaled that timing.
3) Apple Inc.’s iPhone dethroned Samsung Electronics Co. devices to become the best-selling smartphone series over the course of 2023, the first time South Korea’s largest company has lost the top spot since 2010.
Full Transcript:
Good morning. I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today. We begin in Washington. That's where a temporary spending bill to avoid a government shutdown this weekend has cleared its first hurdle. Bloomberg's Amy Morris has more from the nation's capital. The Senate voted to advance the measure that will fund some federal agencies through March first and others through March eighth. The interim funding is the support of congressional leaders, including House Speaker Mike Johnson, so the prospects for passage in both chambers are good. Does not include several disputed items like eight for Ukraine restrictions along the US border or an eighty billion dollar business tax package. And there are hard right conservatives in the House who oppose funding agencies at current levels, but Speaker Johnson can bypass them by relying on Democrats for support. In Washington. Amy Moore as Bloomberg Radio. All right, Amy, thanks well. Now to the latest on the race for the White House. It's on to New Hampshire for the Republican candidates, and Bloomberg's at Baxter reports are really starting to heat up. Nicki Haley has been very careful not to directly attack Donald Trump, but one day after Iowa as she's calling him a bully and a liar. Trump lamb based Haley as a disaster. Now this all comes with polling that chowse the two very close. In New Hampshire, Real Clear Politics has Trump by about fourteen points, but the American Research Group even called it dead even at forty four percent, with Ron Desatus at only four percent. Tomorrow's schedule debate has been canceled because Haley declined if Trump wasn't going to be there at Baxter Bloomberg Radio, Okay, and thanks. Now let's turn to the Middle East. Israel and Hamas have reached a deal to deliver medicine and other aid to Gaza. That's according to the government in Kadra, which says this is in exchange for medicine reaching the hostages being held by Hamas. White House National Security Advisor Jake Sullivan says there is still a risk this war widens to a regional conflict. We do see a pathway to a shift in the military campaign in Gaza, a reduction in tensions and the exchange of fire along Israel's northern border, a reduction in the risk of escalation in other parts of the region, and we'll have to continue to deal with the Hoothi threat. National Security Advisor Jake Sullivan spoke from the World Economic Forum in Davos. Israeli President Isaac Herzog plans to bring the families of hostages to the slopes in Switzerland today to step up pressure for their release. Well, Nathan, back here in the US, we are waiting for a key economic group board as doubt grows on whether the FED will start cutting rates as soon as March, and we get the very latest with the Bloomberg's John Tucker, John and Karen. Retail sales probably increased in December. However, the control group sales, which strip out volatile items, that likely slowed to a more subdue pace. Traders are launching on every piece of data as the FAN enters a blackout period next week. Yesterday, Federal Reserve Governor Christopher Waller threw a little cold water around the idea of FED rate cuts as soon as March. With economic activity and labor markets in good shape, and inflation coming down gradually to two percent, I see no reason to move as quickly or cut as rapidly as in the past. With Wallner's comments, Transury suffered their biggest one day price drop in two months. Yield Seweragetan also drag stocks lower. John Tucker Bloomberg Radio, John thanks, rates are very much in focus overseas that the World Economic Forum. European Central Bank President Christine Legard said the ECB will probably cut rates by the summer. I would say it's likely too, but I have to be reserved because we're also saying that we are data dependent and that there is still a level of uncertainty and some indicators that are not anchored at the level where we would love to see them. ECB President Leaguard made those comments to Francine Lockwha at Bloomberg House in Davos. You can hear their full conversation on the Bloomberg Talks podcast. Well Nathan investors are scaling back their expectations for rake cuts from the Bank of England this year. Inflation in the UK unexpectedly accelerated for the first time in ten months. December's consumer price index was four percent higher than the previous year. On Wall Street, Karen JP Morgan Chase is bucking a trend, the bank plans to hire more workers. We caught up with JP Morgan president Daniel Pinto at Davos. We are employed at the end of the year around three hundred and twenty thousand people. So the number of people that employ has been growing and not ranking. So I think that where we see opportunities and we can have our clients, for sure, we'll focus on that. Daniel Pinto's comments come after JP Morgan closed out the most profitable year in US banking history. Also more banking news this morning, Nathan, the government is unveiling a long awaited rule that could slash the biggest bank's income from overdraft fees by as much as three and a half billion dollars each year. Under the regulation from the Consumer Financial Protection Bureau, banks would only be able to charge what it costs for them to break even for covering an overdraft or a bu by a specific cap that would effectively eliminate overdraft charges for customers, which right now average about thirty five dollars. Let's turn to some corporate news now. Karen Apple has reached a milestone. The company's dethroned Samsung to become the world's top phone maker in twenty twenty twenty three. IDC estimates the iPhone accounted for a fifth of the global market last year with close to two hundred thirty five million shipments. Apple's dominated recent holiday quarters, but the full year surge is unprecedented, and it suggests Apple is weathering an industry wide slump better than its rivals. And finally, Nathan, it was supposed to be the merger from Heaven, or at least from thirty thousand feet, but now a federal judges block Jet Blues three point eight billion dollar acquisition of Spirit Airlines. The judge says the combination with stifle competition and raise fares for consumers. Jet Blue and Spirit contended that consolidation is the only way smaller airlines can effectively compete with the dominant carriers. Time and not for 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. President Biden is worried about his supplemental bills stalling out in Congress, so he's inviting some of the key players to the White House today. Bloomberg's Nancy lyons with the latest. White House Press Secretary Karine Jean Pierre provided a list of those invited to the meeting, and then Biden will host congressional leaders from the Senate and the House, along with key committee leaders and ranking members. She says there's a lot to talk about, but President Biden has one topic he's especially concerned with. This is going to be about discussing critical importance of the President's Facial Security supplemental request. That's the proposal to further fund Ukraine, Israel, and Taiwan. Republicans are refusing to move on that until there's a consensus on a new border policy in Washington. Nancy lyons Bloomberg Radio. Secretary of State Anthony Blincoln says soil should be treated as a precious resource, telling the World Economic Forum in Davos that lack of food is causing unprecedented global migration flows at Russia's war in Ukraine and attacks by who they rebels and the Red Sea have made things worse. A parent who can't put food on the table for their children picks up the family and moves because it's the most basic thing, the most important thing that they can do. Lincoln says, the problem is likely to get worse as climate change threatens to reduce crop yields. Now Climate Envoy John Kerry, also at the World Economic Forum, says he's stepping down from the role within the Biden administration so he can take on a more vocal position for the Biden campaign. He assured other world climate leaders that yes, he'll still be around. I'm going to stay at this and there are so many different ways to continue to be able to be engaged in this. So unfortunately you're stock. You'll see me at the copy you see. Rivia Carrie says regardless of who wins the election, the global climate agenda will remain solid, and the World Health Organization says the number of adult tobacco users is on the decline. The organization says the biggest decrease in tobacco use is seen happening in lower to middle income countries. We have nineteen million less smokers than we had two years ago. That is the first time that we see such a decline. Doctor Rudiger Kresh is urging countries to continue putting control policies in place for tobacco. 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, thank you. We do bring you news throughout the day right here on Bloomberg Radio. But now you can get the latest news on demand, and that means whenever you want it. Subscribe to Bloomberg News Now to get the latest headlines of 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 plus apples, Spotify, and anywhere else you get your podcasts. Time now for the Bloomberg Sports Update. Here's John stash Hour John Charny Atlanta Falcons, one of seven NFL teams looking for a head coach at indications that the Falcons are looking for a big name to be their new coach. The day after they interviewed Bill Belichick, they interviewed Jim Harbaugh, who previously had already interviewed with the Los Angeles Chargers. So Harbaugh clearly hasn't interest in returning to the NFL and leaving Michigan, where he just won a national championship. Reportedly, Harbaugh if he stays with Michigan wants it written into his contract that he can't be fired due to NCAA violations. Mike Tomlin has reportedly told his team in Pittsburgh that he'll remain as coach of the Steelers. It's the job he's had for seventeen years. The Steelers had only had three different head coaches in the last fifty four years. Jason Kelsey told his teammates in Philadelphia just after that blowout loss at Tampa Bay at the end of their season that he's retiring at age thirty six, thirteen years all with the Eagles. He won a Super Bowl, He went to the Pro Bowls seven times. Taulliat tadabaloo. That's to his younger brother, who's been playing quarterback for Maryland. Denied a waiver for another year of eligibility, so he journing the Pro Battle. The NBA's top two big man and Joe lmb And outplayed the Kola Yokiz. He scored forty one points in the second straight game. Philadelphia beat Denver one twenty six one twenty one big comeback and Phoenix, led by Kevin Durant, they were down twenty two to the fourth court of the Sun's rallied top Sacramento by two. Hockey of the Capitals are two nothing to win over Anaheim, kyl and Shops second right, Purdue an easy win at Indiana. John Skashanwer Bloomberg Sports from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on siriusxam, the Bloomberg Business app in Bloomberg dot com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. European Central Bank President Christine Legard says aggressive bets on interest straight cuts from the financial markets are not helping policymakers with their task to bring down inflation, but she says it is likely the ECB will cut rates in the summer. Madame Lecguard spoke with our editor at large France seen Lockwow from the World Economic Forums Bloomberg House in Davos, Switzerland. Let's listen in to part of that conversation. Now, when you look at inflation, when you look at monetary policy, what's changed your mind on how quickly we get a cut from the ECB? You know, when I look at a year ago in doubles and when I compare that with where we are today, I see a slope downward, but certainly not a slope which is at target where we want it. So that's what we have achieved. I think in a little over a year, bring inflation back from where it was in October twenty two at ten point two percent down to a two point nine percent month and month December, and certainly with the prospect of keeping it down and further down because our target is two percent and we are you know, I would have said a year ago that we are determined we want to get it to SI I would say to you now that we are confident that we will get it to that target two percent medium turn. Are market's too optimistic on the industry. I'm not going to comment on markets. Markets do their job, they have their numbers, they have their objectives. What we do at the CB, and what I think most central banks would do, is work as hard as we can collecting data using artificial intelligence by the way for that, analyzing data, confronting viewpoints, checking models against empirical data, doing scenario analysis, and being as as comprehensive as we can to anticipate what's coming. And it's hard because what many people don't understand is that monetary policy works with a lag. So whatever we do now is going to have an impact in a few months and sometimes a year or two, and we have to take that in account to decide what we do, how long we hold, and what decision we make in due course. When you say that you gather data also with AI, it does AI also analyze because again you're looking at the current data. You're trying to forecast what your monetary policy is doing in the future. So is it algorithms? Like, how does that work? We do data collection a lot, we don't We don't determine monetary policy using algorithm and artificial intelligence. And I think that time we can check with the AI experts, of course, but I don't think that that time has come yet. When you look at again the forecast, and I understand you're not focused on the market, but if the markets prices that are not focused, we look at them, we look at what they say. We are attentive, but everyone has their job and we cannot, you know, sort of second guess what they will think that we are thinking that they are second guessing. I mean, it's it's a catch twenty two job, right, But if the market is too optimistic about cuts, does it actually hurt and not help the fight against inflation by doing that? I was going to ask you that, So it makes sure your job harder if if they're actually mispricing what you're trying to tell them, it is not helping a fight against inflation. If if the anticipation is such that you know, they are way too high compared with what's likely to happen. Is it too early to cry victory against inflation? How do you see it behaving? We are on the on the right path, We are directionally towards the two percent. But unless and until we are confident that it is sustainably at two percent medium term and we have the data to you know, support it, I'm not going to shout victory. No, not yet. How much is the inflation reduction thanks to your monetary power and how much of it is like, No, I wouldn't call it luck. I think two factors have played a critical role, and it's the decline in energy prices that we have observed. You know, energy prices pushed prices up massively, and energy prices decline of course has a similar impact. So that's number one. Number two the bottlenecks that we have observed as a result of COVID in particular, and which lasted quite a lot of quite a long time, has gradually faded out, and that also had an impact, you know, more supply, more availability of goods. Second factor. The third factor is monetary policy, and it's undoubtedly been effective, if only to anchor inflation expectations, which we know is really important. So it has had an impact on inflation itself, but it has definitely had an impact on inflation expectations, which by all accounts and all surveys and all measurements have come down and are really now broadly onto that two percent medium term target that we have. I know it's obsessive two percent medium term targets, but yeah, that's what it is. Yeah, but at least it's auld guide the markets, right, I mean, it's good to be upsetsed. Well, if they don't know that that's what we are aiming for, then they need to have the head examined, that's for sure. And then again talk to me a little bit about wage bargaining. So again is that going to be on the upside and could that change you know, the timing of a possible work. Well, I'm glad you mentioned wages in general, wage bargaining in particular, and I'll go to that, but I want to tell you that there are three things that I'm watching carefully. Wage bargainings, profit margins, energy prices, and hopefully not but the coming back of supply bottom Miex. Those are four key components which could have a serious impact on the work that we're doing against inflation. But back to your wage question. Wages have gone up, but relatively slowly, so in prices have gone up earlier and faster than wages, so we are now facing a moment of not only some degree of alignment, but catch up as well. So employees have lost purchasing power in the course of twenty one twenty two, and there is now a catch up effect in the bargaining discussions that are taking place. We will know a lot more, probably in April May, because the numbers the bargaining agreements are being negotiated in the first quarter of every year, and the results come in after the agreements have been closed, so that gives us indication that we can corroborate and verify in the late spring, I would say of of twenty four, that will be a strong indication our wages slowly catching up, and that catch up process will take place over the course of two or three years possibly, or is there a very strong catch up coupled with an alignment with inflation, which would give me concern because while we're not seeing today's second round effect, that could be the result of this sort of twofold process. Are you confident there will be a cut this year in interest rates? Confident? I'm confident that short off another major shock, we have reach reached a peak. Okay, Now we have to stay restrictive for as long as necessary to make sure that we get to that state where we're all saying, okay, confident that it is at two percent medium term. I know some people argue that maybe we are overshooting, maybe we're taking risks. I think the risk would be worse if we went too fast and had to come back to more tightening, because we would have wasted all the efforts that everybody has put in the last fifteen months. The US election, Yeah, let me have some coffee. How arid are you about the US election? It's for the American people to decide what they want with their politics, with their government. With their future. But obviously we are all concerned about it because the United States is the largest economy, the largest defense country in the world, and has been a beacon of democracy with all its upside and downside. But this is what they should be considering, and of course we cannot interfere with their choice. It's their choice and that's the beauty of democracy. But we have to be extremely attentive and anticipate, just as we do with inflation. You know, we do scenarios. What if, what if? Then what do we do? Because that's the real question. And you know where I sit now in Frankfurt, head of the ECB, I think that we have to be strong as Europeans and not assume that we can rely on whoever our friends are around the world, because these things change over the course of time, as we have seen. So what if Donald Trump gets into the White House, what are some of the policies that europe could be put in place to not be cut also between China and the US with Donald Trump and the White House. Well, for one, it has to be strong of its own and if I look at my own shop, because it matters to monetary policy transmission, I think that and you will hear that from others. We have to accelerate capital market union. We need financing in Europe. There is a lot of saving in Europe, and we have to make sure that those savings actually stay here to finance what needs to be financed, which is predominantly the climate transition, which is digitalization, which is enough industrialization conducted with a targeted approach so that we can on the key in the key areas be self sufficient. Are there policies that you would put in place now for Europe to I guess counter the US exceptionalism, which you know could be questioned going forward. I think I would accelerate many of the initiatives that have been taken, and I would encourage European leaders to put aside a little bit they respective idiosyncraty idiosyncratic differences to be more together because you know, it's a question of off size and scale, and Europe is a very large market, has a very sizable population, has capacity to innovate, has financing. It has to you know, be a little bit more cohesive together and forward looking. This is Bloomberg Daybreak 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. Listen coast to coast on the Bloomberg Business app, SERIUSXM, the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager and I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak and be
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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 --> 0:00:07.440 stories we're following today. 0:00:07.840 --> 0:00:09.639 We begin in Washington. 0:00:09.760 --> 0:00:12.559 That's where a temporary spending bill to avoid a government 0:00:12.600 --> 0:00:15.520 shutdown this weekend has cleared its first hurdle. 0:00:15.680 --> 0:00:18.280 Bloomberg's Amy Morris has more from the nation's capital. 0:00:18.680 --> 0:00:20.919 The Senate voted to advance the measure that will fund 0:00:21.000 --> 0:00:24.480 some federal agencies through March first and others through March eighth. 0:00:24.640 --> 0:00:27.720 The interim funding is the support of congressional leaders, including 0:00:27.720 --> 0:00:30.840 House Speaker Mike Johnson, so the prospects for passage in 0:00:30.920 --> 0:00:34.760 both chambers are good. Does not include several disputed items 0:00:34.840 --> 0:00:37.760 like eight for Ukraine restrictions along the US border or 0:00:37.800 --> 0:00:41.040 an eighty billion dollar business tax package. And there are 0:00:41.200 --> 0:00:44.239 hard right conservatives in the House who oppose funding agencies 0:00:44.240 --> 0:00:47.479 at current levels, but Speaker Johnson can bypass them by 0:00:47.520 --> 0:00:49.519 relying on Democrats for support. 0:00:49.920 --> 0:00:51.920 In Washington. Amy Moore as Bloomberg Radio. 0:00:52.159 --> 0:00:54.080 All right, Amy, thanks well. Now to the latest on 0:00:54.120 --> 0:00:56.200 the race for the White House. It's on to New 0:00:56.200 --> 0:00:59.760 Hampshire for the Republican candidates, and Bloomberg's at Baxter reports 0:01:00.320 --> 0:01:01.920 are really starting to heat up. 0:01:02.440 --> 0:01:05.679 Nicki Haley has been very careful not to directly attack 0:01:05.760 --> 0:01:08.880 Donald Trump, but one day after Iowa as she's calling 0:01:09.000 --> 0:01:12.240 him a bully and a liar. Trump lamb based Haley 0:01:12.280 --> 0:01:15.440 as a disaster. Now this all comes with polling that 0:01:15.560 --> 0:01:18.119 chowse the two very close. In New Hampshire, Real Clear 0:01:18.400 --> 0:01:21.840 Politics has Trump by about fourteen points, but the American 0:01:21.920 --> 0:01:26.280 Research Group even called it dead even at forty four percent, 0:01:26.360 --> 0:01:30.000 with Ron Desatus at only four percent. Tomorrow's schedule debate 0:01:30.000 --> 0:01:33.440 has been canceled because Haley declined if Trump wasn't going 0:01:33.480 --> 0:01:36.199 to be there at Baxter Bloomberg. 0:01:35.840 --> 0:01:38.520 Radio, Okay, and thanks. Now let's turn to the Middle East. 0:01:38.560 --> 0:01:41.120 Israel and Hamas have reached a deal to deliver medicine 0:01:41.160 --> 0:01:43.840 and other aid to Gaza. That's according to the government 0:01:43.880 --> 0:01:46.319 in Kadra, which says this is in exchange for medicine 0:01:46.319 --> 0:01:49.520 reaching the hostages being held by Hamas. White House National 0:01:49.520 --> 0:01:52.160 Security Advisor Jake Sullivan says there is still a risk 0:01:52.240 --> 0:01:54.480 this war widens to a regional conflict. 0:01:54.720 --> 0:01:59.560 We do see a pathway to a shift in the. 0:01:59.520 --> 0:02:04.760 Military campaign in Gaza, a reduction in tensions and the 0:02:04.800 --> 0:02:09.000 exchange of fire along Israel's northern border, a reduction in 0:02:09.080 --> 0:02:11.359 the risk of escalation in other parts of the region, 0:02:11.639 --> 0:02:14.520 and we'll have to continue to deal with the Hoothi threat. 0:02:14.639 --> 0:02:17.679 National Security Advisor Jake Sullivan spoke from the World Economic 0:02:17.720 --> 0:02:21.240 Forum in Davos. Israeli President Isaac Herzog plans to bring 0:02:21.280 --> 0:02:24.400 the families of hostages to the slopes in Switzerland today 0:02:24.720 --> 0:02:26.520 to step up pressure for their release. 0:02:26.919 --> 0:02:29.280 Well, Nathan, back here in the US, we are waiting 0:02:29.320 --> 0:02:32.520 for a key economic group board as doubt grows on 0:02:32.560 --> 0:02:35.200 whether the FED will start cutting rates as soon as March, 0:02:35.200 --> 0:02:37.680 and we get the very latest with the Bloomberg's John Tucker, 0:02:37.800 --> 0:02:38.959 John and Karen. 0:02:39.000 --> 0:02:43.519 Retail sales probably increased in December. However, the control group sales, 0:02:43.600 --> 0:02:46.760 which strip out volatile items, that likely slowed to a 0:02:46.800 --> 0:02:49.840 more subdue pace. Traders are launching on every piece of 0:02:49.919 --> 0:02:53.720 data as the FAN enters a blackout period next week. Yesterday, 0:02:53.800 --> 0:02:56.840 Federal Reserve Governor Christopher Waller threw a little cold water 0:02:56.880 --> 0:02:59.639 around the idea of FED rate cuts as soon as March. 0:03:00.080 --> 0:03:04.440 With economic activity and labor markets in good shape, and 0:03:04.480 --> 0:03:08.160 inflation coming down gradually to two percent, I see no 0:03:08.280 --> 0:03:11.280 reason to move as quickly or cut as rapidly as 0:03:11.320 --> 0:03:11.920 in the past. 0:03:12.200 --> 0:03:15.600 With Wallner's comments, Transury suffered their biggest one day price 0:03:15.680 --> 0:03:19.560 drop in two months. Yield Seweragetan also drag stocks lower. 0:03:19.840 --> 0:03:21.280 John Tucker Bloomberg. 0:03:20.960 --> 0:03:24.079 Radio, John thanks, rates are very much in focus overseas 0:03:24.120 --> 0:03:27.240 that the World Economic Forum. European Central Bank President Christine 0:03:27.280 --> 0:03:30.519 Legard said the ECB will probably cut rates by the summer. 0:03:30.880 --> 0:03:33.680 I would say it's likely too, but I have to 0:03:33.760 --> 0:03:37.760 be reserved because we're also saying that we are data 0:03:37.800 --> 0:03:40.560 dependent and that there is still a level of uncertainty 0:03:40.640 --> 0:03:44.640 and some indicators that are not anchored at the level 0:03:44.640 --> 0:03:46.040 where we would love to see them. 0:03:46.200 --> 0:03:49.240 ECB President Leaguard made those comments to Francine Lockwha at 0:03:49.280 --> 0:03:52.160 Bloomberg House in Davos. You can hear their full conversation 0:03:52.320 --> 0:03:53.960 on the Bloomberg Talks podcast. 0:03:54.360 --> 0:03:57.560 Well Nathan investors are scaling back their expectations for rake 0:03:57.640 --> 0:04:00.800 cuts from the Bank of England this year. Inflation in 0:04:00.800 --> 0:04:04.680 the UK unexpectedly accelerated for the first time in ten months. 0:04:04.800 --> 0:04:08.160 December's consumer price index was four percent higher than the 0:04:08.240 --> 0:04:09.000 previous year. 0:04:09.360 --> 0:04:13.040 On Wall Street, Karen JP Morgan Chase is bucking a trend, 0:04:13.120 --> 0:04:15.960 the bank plans to hire more workers. We caught up 0:04:16.000 --> 0:04:18.560 with JP Morgan president Daniel Pinto at Davos. 0:04:18.760 --> 0:04:20.800 We are employed at the end of the year around 0:04:20.800 --> 0:04:24.080 three hundred and twenty thousand people. So the number of 0:04:24.120 --> 0:04:26.279 people that employ has been growing. 0:04:26.000 --> 0:04:26.800 And not ranking. 0:04:26.920 --> 0:04:30.719 So I think that where we see opportunities and we 0:04:30.760 --> 0:04:33.359 can have our clients, for sure, we'll focus on that. 0:04:33.720 --> 0:04:36.599 Daniel Pinto's comments come after JP Morgan closed out the 0:04:36.600 --> 0:04:39.440 most profitable year in US banking history. 0:04:39.920 --> 0:04:42.599 Also more banking news this morning, Nathan, the government is 0:04:42.640 --> 0:04:45.839 unveiling a long awaited rule that could slash the biggest 0:04:45.880 --> 0:04:48.840 bank's income from overdraft fees by as much as three 0:04:48.920 --> 0:04:51.839 and a half billion dollars each year. Under the regulation 0:04:51.960 --> 0:04:55.440 from the Consumer Financial Protection Bureau, banks would only be 0:04:55.480 --> 0:04:57.479 able to charge what it costs for them to break 0:04:57.560 --> 0:05:00.400 even for covering an overdraft or a bu by a 0:05:00.440 --> 0:05:04.800 specific cap that would effectively eliminate overdraft charges for customers, 0:05:05.080 --> 0:05:07.120 which right now average about thirty five dollars. 0:05:07.360 --> 0:05:10.159 Let's turn to some corporate news now. Karen Apple has 0:05:10.240 --> 0:05:13.800 reached a milestone. The company's dethroned Samsung to become the 0:05:13.800 --> 0:05:17.760 world's top phone maker in twenty twenty twenty three. IDC 0:05:18.000 --> 0:05:20.320 estimates the iPhone accounted for a fifth of the global 0:05:20.320 --> 0:05:22.480 market last year with close to two hundred thirty five 0:05:22.520 --> 0:05:26.120 million shipments. Apple's dominated recent holiday quarters, but the full 0:05:26.160 --> 0:05:29.400 year surge is unprecedented, and it suggests Apple is weathering 0:05:29.440 --> 0:05:31.599 an industry wide slump better than its rivals. 0:05:31.880 --> 0:05:33.839 And finally, Nathan, it was supposed to be the merger 0:05:33.880 --> 0:05:37.000 from Heaven, or at least from thirty thousand feet, but 0:05:37.120 --> 0:05:39.520 now a federal judges block Jet Blues three point eight 0:05:39.560 --> 0:05:42.680 billion dollar acquisition of Spirit Airlines. The judge says the 0:05:42.680 --> 0:05:46.599 combination with stifle competition and raise fares for consumers. Jet 0:05:46.640 --> 0:05:49.719 Blue and Spirit contended that consolidation is the only way 0:05:49.760 --> 0:05:57.200 smaller airlines can effectively compete with the dominant carriers. Time 0:05:57.200 --> 0:05:58.680 and not for look at some of the other stories 0:05:58.720 --> 0:06:00.560 making news around the world. For that, we're joined by 0:06:00.600 --> 0:06:04.240 Bloomberg's Amy Morris Amy, Good morning, Good morning, Karen. 0:06:04.320 --> 0:06:07.680 President Biden is worried about his supplemental bills stalling out 0:06:07.720 --> 0:06:10.720 in Congress, so he's inviting some of the key players 0:06:10.760 --> 0:06:11.920 to the White House today. 0:06:12.120 --> 0:06:14.120 Bloomberg's Nancy lyons with the latest. 0:06:14.440 --> 0:06:17.880 White House Press Secretary Karine Jean Pierre provided a list 0:06:17.920 --> 0:06:20.120 of those invited to the meeting, and then Biden. 0:06:19.880 --> 0:06:22.719 Will host congressional leaders from the Senate and the House, 0:06:22.760 --> 0:06:25.720 along with key committee leaders and ranking members. 0:06:25.880 --> 0:06:28.120 She says there's a lot to talk about, but President 0:06:28.160 --> 0:06:31.120 Biden has one topic he's especially concerned with. 0:06:31.240 --> 0:06:34.200 This is going to be about discussing critical importance of 0:06:34.600 --> 0:06:36.640 the President's Facial Security supplemental request. 0:06:36.800 --> 0:06:40.440 That's the proposal to further fund Ukraine, Israel, and Taiwan. 0:06:40.800 --> 0:06:43.440 Republicans are refusing to move on that until there's a 0:06:43.480 --> 0:06:47.560 consensus on a new border policy in Washington. Nancy lyons 0:06:47.560 --> 0:06:48.400 Bloomberg Radio. 0:06:48.520 --> 0:06:52.000 Secretary of State Anthony Blincoln says soil should be treated 0:06:52.080 --> 0:06:55.320 as a precious resource, telling the World Economic Forum in 0:06:55.400 --> 0:06:58.960 Davos that lack of food is causing unprecedented global migration 0:06:59.120 --> 0:07:02.040 flows at Russia's war in Ukraine and attacks by who 0:07:02.080 --> 0:07:04.440 they rebels and the Red Sea have made things worse. 0:07:04.560 --> 0:07:06.400 A parent who can't put food on the table for 0:07:06.440 --> 0:07:11.440 their children picks up the family and moves because it's 0:07:11.480 --> 0:07:14.160 the most basic thing, the most important thing that they 0:07:14.200 --> 0:07:14.520 can do. 0:07:15.040 --> 0:07:17.440 Lincoln says, the problem is likely to get worse as 0:07:17.480 --> 0:07:21.160 climate change threatens to reduce crop yields. Now Climate Envoy 0:07:21.280 --> 0:07:24.160 John Kerry, also at the World Economic Forum, says he's 0:07:24.200 --> 0:07:27.640 stepping down from the role within the Biden administration so 0:07:27.680 --> 0:07:30.320 he can take on a more vocal position for the 0:07:30.320 --> 0:07:34.440 Biden campaign. He assured other world climate leaders that yes, 0:07:34.480 --> 0:07:35.400 he'll still be around. 0:07:35.480 --> 0:07:38.240 I'm going to stay at this and there are so 0:07:38.320 --> 0:07:41.400 many different ways to continue to be able to be 0:07:41.480 --> 0:07:42.160 engaged in this. 0:07:42.360 --> 0:07:43.880 So unfortunately you're stock. 0:07:44.000 --> 0:07:45.600 You'll see me at the copy you see. 0:07:47.800 --> 0:07:51.240 Rivia Carrie says regardless of who wins the election, the 0:07:51.280 --> 0:07:54.800 global climate agenda will remain solid, and the World Health 0:07:54.960 --> 0:07:57.880 Organization says the number of adult tobacco users is on 0:07:57.920 --> 0:08:01.520 the decline. The organization says the biggest decrease in tobacco 0:08:01.640 --> 0:08:04.480 use is seen happening in lower to middle income countries. 0:08:04.600 --> 0:08:09.680 We have nineteen million less smokers than we had two 0:08:09.800 --> 0:08:12.800 years ago. That is the first time that we see 0:08:12.920 --> 0:08:13.960 such a decline. 0:08:14.040 --> 0:08:17.920 Doctor Rudiger Kresh is urging countries to continue putting control 0:08:18.000 --> 0:08:21.760 policies in place for tobacco. Global News twenty four hours 0:08:21.800 --> 0:08:24.280 a day and whenever you want it with Bloomberg News Now. 0:08:24.520 --> 0:08:27.559 I'm Amy Morris and this is Bloomberg Karen. All right, Amy, 0:08:27.600 --> 0:08:27.920 thank you. 0:08:27.960 --> 0:08:30.000 We do bring you news throughout the day right here 0:08:30.080 --> 0:08:32.360 on Bloomberg Radio. But now you can get the latest 0:08:32.400 --> 0:08:34.840 news on demand, and that means whenever you want it. 0:08:35.160 --> 0:08:37.960 Subscribe to Bloomberg News Now to get the latest headlines 0:08:38.000 --> 0:08:40.960 of the click of a button. Get informed on your schedule. 0:08:41.160 --> 0:08:43.920 You can listen and subscribe to Bloomberg News Now on 0:08:44.000 --> 0:08:47.679 the Bloomberg Business app, Bloomberg dot com plus apples, Spotify, 0:08:47.840 --> 0:08:55.040 and anywhere else you get your podcasts. Time now for 0:08:55.040 --> 0:08:58.400 the Bloomberg Sports Update. Here's John stash Hour John. 0:08:58.400 --> 0:09:00.959 Charny Atlanta Falcons, one of seven NFL teams looking for 0:09:01.040 --> 0:09:03.800 a head coach at indications that the Falcons are looking 0:09:03.840 --> 0:09:05.880 for a big name to be their new coach. The 0:09:05.920 --> 0:09:09.679 day after they interviewed Bill Belichick, they interviewed Jim Harbaugh, 0:09:09.760 --> 0:09:13.720 who previously had already interviewed with the Los Angeles Chargers. 0:09:13.760 --> 0:09:16.760 So Harbaugh clearly hasn't interest in returning to the NFL 0:09:17.120 --> 0:09:20.200 and leaving Michigan, where he just won a national championship. Reportedly, 0:09:20.559 --> 0:09:24.240 Harbaugh if he stays with Michigan wants it written into 0:09:24.280 --> 0:09:27.960 his contract that he can't be fired due to NCAA violations. 0:09:28.000 --> 0:09:31.280 Mike Tomlin has reportedly told his team in Pittsburgh that 0:09:31.360 --> 0:09:34.079 he'll remain as coach of the Steelers. It's the job 0:09:34.120 --> 0:09:36.520 he's had for seventeen years. The Steelers had only had 0:09:36.559 --> 0:09:40.080 three different head coaches in the last fifty four years. 0:09:40.160 --> 0:09:43.520 Jason Kelsey told his teammates in Philadelphia just after that 0:09:43.800 --> 0:09:46.000 blowout loss at Tampa Bay at the end of their 0:09:46.000 --> 0:09:48.959 season that he's retiring at age thirty six, thirteen years 0:09:48.960 --> 0:09:51.240 all with the Eagles. He won a Super Bowl, He 0:09:51.280 --> 0:09:54.240 went to the Pro Bowls seven times. Taulliat tadabaloo. That's 0:09:54.240 --> 0:09:56.640 to his younger brother, who's been playing quarterback for Maryland. 0:09:56.960 --> 0:09:59.760 Denied a waiver for another year of eligibility, so he 0:10:00.120 --> 0:10:02.840 journing the Pro Battle. The NBA's top two big man 0:10:02.840 --> 0:10:05.280 and Joe lmb And outplayed the Kola Yokiz. He scored 0:10:05.320 --> 0:10:08.000 forty one points in the second straight game. Philadelphia beat 0:10:08.000 --> 0:10:11.000 Denver one twenty six one twenty one big comeback and Phoenix, 0:10:11.080 --> 0:10:13.040 led by Kevin Durant, they were down twenty two to 0:10:13.120 --> 0:10:16.440 the fourth court of the Sun's rallied top Sacramento by two. 0:10:16.559 --> 0:10:18.920 Hockey of the Capitals are two nothing to win over Anaheim, 0:10:19.200 --> 0:10:21.040 kyl and Shops second right, Purdue. 0:10:20.720 --> 0:10:25.960 An easy win at Indiana. John Skashanwer Bloomberg Sports. 0:10:27.440 --> 0:10:30.440 From coast to coast, from New York to San Francisco, 0:10:30.760 --> 0:10:35.840 Boston to Washington, DC, nationwide on siriusxam, the Bloomberg Business 0:10:35.840 --> 0:10:37.559 app in Bloomberg dot com. 0:10:37.640 --> 0:10:42.120 This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. 0:10:42.200 --> 0:10:46.000 European Central Bank President Christine Legard says aggressive bets on 0:10:46.120 --> 0:10:49.240 interest straight cuts from the financial markets are not helping 0:10:49.280 --> 0:10:53.160 policymakers with their task to bring down inflation, but she 0:10:53.240 --> 0:10:56.440 says it is likely the ECB will cut rates in 0:10:56.520 --> 0:10:59.720 the summer. Madame Lecguard spoke with our editor at large 0:10:59.720 --> 0:11:03.320 France seen Lockwow from the World Economic Forums Bloomberg House 0:11:03.520 --> 0:11:04.920 in Davos, Switzerland. 0:11:05.000 --> 0:11:07.000 Let's listen in to part of that conversation. 0:11:07.200 --> 0:11:10.480 Now, when you look at inflation, when you look at 0:11:10.559 --> 0:11:15.480 monetary policy, what's changed your mind on how quickly we 0:11:15.640 --> 0:11:16.880 get a cut from the ECB? 0:11:18.440 --> 0:11:20.800 You know, when I look at a year ago in 0:11:20.840 --> 0:11:24.800 doubles and when I compare that with where we are today, 0:11:25.400 --> 0:11:31.800 I see a slope downward, but certainly not a slope 0:11:31.880 --> 0:11:34.640 which is at target where we want it. 0:11:34.880 --> 0:11:36.240 So that's what we have achieved. 0:11:36.240 --> 0:11:39.480 I think in a little over a year, bring inflation 0:11:39.679 --> 0:11:41.959 back from where it was in October twenty two at 0:11:42.280 --> 0:11:45.720 ten point two percent down to a two point nine 0:11:45.760 --> 0:11:49.640 percent month and month December, and certainly with the prospect 0:11:49.800 --> 0:11:54.120 of keeping it down and further down because our target 0:11:54.200 --> 0:11:56.680 is two percent and we are you know, I would 0:11:56.679 --> 0:11:58.959 have said a year ago that we are determined we 0:11:59.000 --> 0:12:01.680 want to get it to SI I would say to 0:12:01.720 --> 0:12:04.320 you now that we are confident that we will get 0:12:04.320 --> 0:12:07.160 it to that target two percent medium turn. 0:12:08.120 --> 0:12:12.200 Are market's too optimistic on the industry. I'm not going 0:12:12.240 --> 0:12:13.720 to comment on markets. 0:12:13.800 --> 0:12:17.240 Markets do their job, they have their numbers, they have 0:12:17.400 --> 0:12:22.520 their objectives. What we do at the CB, and what 0:12:22.640 --> 0:12:25.679 I think most central banks would do, is work as 0:12:25.679 --> 0:12:29.800 hard as we can collecting data using artificial intelligence by 0:12:29.840 --> 0:12:36.959 the way for that, analyzing data, confronting viewpoints, checking models 0:12:37.040 --> 0:12:43.120 against empirical data, doing scenario analysis, and being as as 0:12:43.120 --> 0:12:48.400 comprehensive as we can to anticipate what's coming. And it's 0:12:48.480 --> 0:12:52.440 hard because what many people don't understand is that monetary 0:12:52.480 --> 0:12:55.640 policy works with a lag. So whatever we do now 0:12:55.720 --> 0:12:58.400 is going to have an impact in a few months 0:12:58.400 --> 0:13:01.760 and sometimes a year or two, and we have to 0:13:01.920 --> 0:13:07.679 take that in account to decide what we do, how 0:13:07.720 --> 0:13:11.559 long we hold, and what decision we make in due course. 0:13:12.160 --> 0:13:14.800 When you say that you gather data also with AI, 0:13:15.040 --> 0:13:17.920 it does AI also analyze because again you're looking at 0:13:17.920 --> 0:13:20.440 the current data. You're trying to forecast what your monetary 0:13:20.440 --> 0:13:21.880 policy is doing in the future. 0:13:22.360 --> 0:13:24.720 So is it algorithms? Like, how does that work? 0:13:25.520 --> 0:13:30.480 We do data collection a lot, we don't We don't 0:13:30.520 --> 0:13:34.680 determine monetary policy using algorithm and artificial intelligence. And I 0:13:34.679 --> 0:13:37.960 think that time we can check with the AI experts, 0:13:38.120 --> 0:13:40.960 of course, but I don't think that that time has 0:13:41.000 --> 0:13:41.559 come yet. 0:13:42.760 --> 0:13:45.360 When you look at again the forecast, and I understand 0:13:45.360 --> 0:13:48.760 you're not focused on the market, but if the markets prices. 0:13:48.559 --> 0:13:50.760 That are not focused, we look at them, we look 0:13:50.800 --> 0:13:54.240 at what they say. We are attentive, but everyone has 0:13:54.280 --> 0:13:58.280 their job and we cannot, you know, sort of second 0:13:58.360 --> 0:14:01.640 guess what they will think that we are thinking that 0:14:01.679 --> 0:14:04.000 they are second guessing. I mean, it's it's a catch 0:14:04.040 --> 0:14:06.160 twenty two job, right, But. 0:14:06.160 --> 0:14:09.000 If the market is too optimistic about cuts, does it 0:14:09.040 --> 0:14:09.920 actually hurt and not. 0:14:09.960 --> 0:14:12.840 Help the fight against inflation by doing that? 0:14:13.120 --> 0:14:14.560 I was going to ask you that, So it makes 0:14:14.559 --> 0:14:18.840 sure your job harder if if they're actually mispricing what 0:14:18.880 --> 0:14:24.560 you're trying to tell them. 0:14:22.160 --> 0:14:25.840 It is not helping a fight against inflation. If if 0:14:25.880 --> 0:14:29.120 the anticipation is such that you know, they are way 0:14:29.160 --> 0:14:31.040 too high compared with what's likely to happen. 0:14:31.640 --> 0:14:34.760 Is it too early to cry victory against inflation? How 0:14:34.800 --> 0:14:35.760 do you see it behaving? 0:14:36.200 --> 0:14:38.440 We are on the on the right path, We are 0:14:38.720 --> 0:14:43.920 directionally towards the two percent. But unless and until we 0:14:44.040 --> 0:14:48.640 are confident that it is sustainably at two percent medium 0:14:48.720 --> 0:14:52.920 term and we have the data to you know, support. 0:14:52.480 --> 0:14:55.840 It, I'm not going to shout victory. No, not yet. 0:14:56.280 --> 0:14:59.760 How much is the inflation reduction thanks to your monetary 0:14:59.800 --> 0:15:00.800 power and how. 0:15:00.760 --> 0:15:04.040 Much of it is like, No, I wouldn't call it luck. 0:15:06.120 --> 0:15:09.080 I think two factors have played a critical role, and 0:15:09.120 --> 0:15:12.400 it's the decline in energy prices that we have observed. 0:15:12.480 --> 0:15:16.920 You know, energy prices pushed prices up massively, and energy 0:15:16.960 --> 0:15:20.000 prices decline of course has a similar impact. 0:15:20.040 --> 0:15:21.680 So that's number one. 0:15:22.040 --> 0:15:26.360 Number two the bottlenecks that we have observed as a 0:15:26.400 --> 0:15:29.720 result of COVID in particular, and which lasted quite a 0:15:29.800 --> 0:15:33.120 lot of quite a long time, has gradually faded out, 0:15:33.200 --> 0:15:35.880 and that also had an impact, you know, more supply, 0:15:36.400 --> 0:15:39.440 more availability of goods. 0:15:40.600 --> 0:15:41.360 Second factor. 0:15:41.760 --> 0:15:47.960 The third factor is monetary policy, and it's undoubtedly been effective, 0:15:48.360 --> 0:15:52.280 if only to anchor inflation expectations, which we know is 0:15:52.480 --> 0:15:57.760 really important. So it has had an impact on inflation itself, 0:15:57.840 --> 0:16:01.400 but it has definitely had an impact on inflation expectations, 0:16:01.720 --> 0:16:04.600 which by all accounts and all surveys and all measurements 0:16:04.960 --> 0:16:08.520 have come down and are really now broadly onto that 0:16:08.600 --> 0:16:11.120 two percent medium term target that we have. I know 0:16:11.160 --> 0:16:13.640 it's obsessive two percent medium term targets, but yeah. 0:16:13.440 --> 0:16:14.040 That's what it is. 0:16:14.240 --> 0:16:16.640 Yeah, but at least it's auld guide the markets, right, 0:16:16.680 --> 0:16:17.600 I mean, it's. 0:16:17.400 --> 0:16:18.160 Good to be upsetsed. 0:16:18.200 --> 0:16:20.840 Well, if they don't know that that's what we are 0:16:20.880 --> 0:16:23.520 aiming for, then they need to have the head examined, 0:16:23.840 --> 0:16:24.480 that's for sure. 0:16:25.560 --> 0:16:27.200 And then again talk to me a little bit about 0:16:27.200 --> 0:16:30.000 wage bargaining. So again is that going to be on 0:16:30.040 --> 0:16:33.720 the upside and could that change you know, the timing 0:16:33.840 --> 0:16:34.640 of a possible work. 0:16:34.680 --> 0:16:37.640 Well, I'm glad you mentioned wages in general, wage bargaining 0:16:37.680 --> 0:16:40.440 in particular, and I'll go to that, but I want 0:16:40.480 --> 0:16:42.160 to tell you that there are three things that I'm 0:16:42.200 --> 0:16:50.320 watching carefully. Wage bargainings, profit margins, energy prices, and hopefully 0:16:50.320 --> 0:16:56.200 not but the coming back of supply bottom Miex. Those 0:16:56.280 --> 0:17:00.440 are four key components which could have a serious impact 0:17:00.440 --> 0:17:02.160 on the work that we're doing against inflation. 0:17:02.600 --> 0:17:04.639 But back to your wage question. 0:17:05.400 --> 0:17:11.080 Wages have gone up, but relatively slowly, so in prices 0:17:11.560 --> 0:17:15.479 have gone up earlier and faster than wages, so we 0:17:15.520 --> 0:17:19.639 are now facing a moment of not only some degree 0:17:19.640 --> 0:17:24.439 of alignment, but catch up as well. So employees have 0:17:24.560 --> 0:17:28.159 lost purchasing power in the course of twenty one twenty two, 0:17:28.640 --> 0:17:32.199 and there is now a catch up effect in the 0:17:32.240 --> 0:17:36.679 bargaining discussions that are taking place. We will know a 0:17:36.720 --> 0:17:43.240 lot more, probably in April May, because the numbers the 0:17:43.280 --> 0:17:46.840 bargaining agreements are being negotiated in the first quarter of 0:17:46.880 --> 0:17:50.760 every year, and the results come in after the agreements 0:17:50.760 --> 0:17:54.000 have been closed, so that gives us indication that we 0:17:54.080 --> 0:17:59.200 can corroborate and verify in the late spring, I would 0:17:59.240 --> 0:18:02.119 say of of twenty four, that will be a strong 0:18:02.119 --> 0:18:07.600 indication our wages slowly catching up, and that catch up 0:18:07.720 --> 0:18:09.679 process will take place over the course of two or 0:18:09.680 --> 0:18:12.640 three years possibly, or is there a very strong catch 0:18:12.720 --> 0:18:18.280 up coupled with an alignment with inflation, which would give 0:18:18.359 --> 0:18:21.800 me concern because while we're not seeing today's second round effect, 0:18:22.640 --> 0:18:26.960 that could be the result of this sort of twofold process. 0:18:27.280 --> 0:18:29.840 Are you confident there will be a cut this year 0:18:30.000 --> 0:18:32.320 in interest rates? 0:18:33.160 --> 0:18:33.640 Confident? 0:18:33.880 --> 0:18:39.480 I'm confident that short off another major shock, we have 0:18:39.680 --> 0:18:44.720 reach reached a peak. Okay, Now we have to stay 0:18:44.760 --> 0:18:47.240 restrictive for as long as necessary to make sure that 0:18:47.320 --> 0:18:50.320 we get to that state where we're all saying, okay, 0:18:50.359 --> 0:18:53.199 confident that it is at two percent medium term. I 0:18:53.240 --> 0:18:56.080 know some people argue that maybe we are overshooting, maybe 0:18:56.080 --> 0:18:59.840 we're taking risks. I think the risk would be worse 0:19:00.119 --> 0:19:03.160 if we went too fast and had. 0:19:03.000 --> 0:19:05.680 To come back to more tightening, because we would. 0:19:05.440 --> 0:19:08.680 Have wasted all the efforts that everybody has put in 0:19:08.680 --> 0:19:12.080 the last fifteen months. The US election, Yeah, let me 0:19:12.160 --> 0:19:16.240 have some coffee. 0:19:17.520 --> 0:19:19.000 How arid are you about the US election? 0:19:19.400 --> 0:19:21.639 It's for the American people to decide what they want 0:19:23.000 --> 0:19:25.160 with their politics, with their government. 0:19:25.240 --> 0:19:25.879 With their future. 0:19:26.440 --> 0:19:29.399 But obviously we are all concerned about it because the 0:19:29.520 --> 0:19:34.359 United States is the largest economy, the largest defense country 0:19:34.400 --> 0:19:38.720 in the world, and has been a beacon of democracy 0:19:38.760 --> 0:19:42.360 with all its upside and downside. But this is what 0:19:42.880 --> 0:19:46.400 they should be considering, and of course we cannot interfere 0:19:46.400 --> 0:19:49.200 with their choice. It's their choice and that's the beauty 0:19:49.240 --> 0:19:52.920 of democracy. But we have to be extremely attentive and anticipate, 0:19:53.440 --> 0:19:55.960 just as we do with inflation. You know, we do scenarios. 0:19:56.440 --> 0:19:59.600 What if, what if? Then what do we do? Because 0:20:00.000 --> 0:20:03.560 that's the real question. And you know where I sit 0:20:03.640 --> 0:20:06.479 now in Frankfurt, head of the ECB, I think that 0:20:06.520 --> 0:20:11.040 we have to be strong as Europeans and not assume 0:20:11.119 --> 0:20:15.399 that we can rely on whoever our friends are around 0:20:15.400 --> 0:20:18.400 the world, because these things change over the course of time, 0:20:18.480 --> 0:20:19.280 as we have seen. 0:20:19.960 --> 0:20:21.680 So what if Donald Trump gets into the White House, 0:20:21.720 --> 0:20:24.119 what are some of the policies that europe could be 0:20:24.160 --> 0:20:26.600 put in place to not be cut also between China 0:20:26.640 --> 0:20:29.720 and the US with Donald Trump and the White House. 0:20:30.640 --> 0:20:32.720 Well, for one, it has to be strong of its 0:20:32.720 --> 0:20:36.840 own and if I look at my own shop, because 0:20:36.840 --> 0:20:40.119 it matters to monetary policy transmission, I think that and 0:20:40.160 --> 0:20:42.760 you will hear that from others. We have to accelerate 0:20:42.880 --> 0:20:46.679 capital market union. We need financing in Europe. There is 0:20:46.720 --> 0:20:48.879 a lot of saving in Europe, and we have to 0:20:48.920 --> 0:20:52.480 make sure that those savings actually stay here to finance 0:20:52.480 --> 0:20:56.800 what needs to be financed, which is predominantly the climate transition, 0:20:57.200 --> 0:21:02.399 which is digitalization, which is enough industrialization conducted with a 0:21:02.520 --> 0:21:06.560 targeted approach so that we can on the key in 0:21:06.640 --> 0:21:09.440 the key areas be self sufficient. 0:21:10.240 --> 0:21:12.520 Are there policies that you would put in place now 0:21:12.640 --> 0:21:16.960 for Europe to I guess counter the US exceptionalism, which 0:21:17.320 --> 0:21:19.240 you know could be questioned going forward. 0:21:20.160 --> 0:21:23.000 I think I would accelerate many of the initiatives that 0:21:23.040 --> 0:21:29.120 have been taken, and I would encourage European leaders to 0:21:29.160 --> 0:21:34.760 put aside a little bit they respective idiosyncraty idiosyncratic differences 0:21:35.200 --> 0:21:37.919 to be more together because you know, it's a question 0:21:37.960 --> 0:21:41.720 of off size and scale, and Europe is a very 0:21:42.400 --> 0:21:47.840 large market, has a very sizable population, has capacity to innovate, 0:21:48.280 --> 0:21:51.560 has financing. It has to you know, be a little 0:21:51.560 --> 0:21:55.439 bit more cohesive together and forward looking. 0:21:57.200 --> 0:22:00.280 This is Bloomberg Daybreak today, your morning brief on the 0:22:00.280 --> 0:22:03.720 stories making news from Wall Street to Washington and beyond. 0:22:03.960 --> 0:22:06.760 Look for us on your podcast feed at six am 0:22:06.840 --> 0:22:10.480 Eastern each morning, on Apple, Spotify, and anywhere else you 0:22:10.560 --> 0:22:11.720 get your podcasts. 0:22:11.840 --> 0:22:14.560 You can also listen live each morning starting at five 0:22:14.600 --> 0:22:17.159 am Wall Street Time on Bloomberg eleven three to zero 0:22:17.240 --> 0:22:20.119 in New York, Bloomberg ninety nine to one in Washington, 0:22:20.200 --> 0:22:23.040 Bloomberg one oh six to one in Boston, and Bloomberg 0:22:23.119 --> 0:22:24.800 ninety sixty in San Francisco. 0:22:25.200 --> 0:22:28.360 Our flagship New York station is also available on your 0:22:28.400 --> 0:22:33.840 Amazon Alexa devices. 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