Israel Suffers Worst War Death Toll; New Hampshire Primary Kicks Off

Good morning. 0:00:03.080 --> 0:00:06.040 I'm Nathan Hager and I'm Amy Morris. Here are the 0:00:06.080 --> 0:00:07.680 stories we're following today. 0:00:08.119 --> 0:00:10.479 We begin in the Middle East. It is being called 0:00:10.480 --> 0:00:13.320 the worst single day death toll for the Israeli military 0:00:13.360 --> 0:00:16.440 since the war against Hamas began in October. We get 0:00:16.440 --> 0:00:18.680 the latest from Bloomberg's Rosland Matheson. 0:00:19.040 --> 0:00:22.520 There was a serious attack on Israeli soldiers yesterday in 0:00:22.600 --> 0:00:24.279 Gas and we know about twenty one of them have 0:00:24.400 --> 0:00:28.440 been killed. They were looking to have explosives to demolish 0:00:28.440 --> 0:00:30.560 homes in the area when they were fired upon by 0:00:30.640 --> 0:00:35.400 rocket propelled grenade. Will that change the feeling inside Israel 0:00:35.400 --> 0:00:35.960 about the war? 0:00:36.040 --> 0:00:39.760 Probably not, Bloomberg's ros Mathison says. Israeli Prime Minister Benjamin 0:00:39.800 --> 0:00:42.400 Natan Yahoo is saying that the army will fight on 0:00:42.520 --> 0:00:46.839 until quote absolute victory. Meanwhile, three other Israeli soldiers were 0:00:46.920 --> 0:00:49.400 killed in a separate incident in han Yunis, bringing the 0:00:49.479 --> 0:00:53.120 total one day death toll to twenty four. Israel's military 0:00:53.159 --> 0:00:55.880 now says it has that southern Gaza city surrounded. 0:00:56.600 --> 0:00:59.120 Now staying in the Middle East, the US is signaling 0:00:59.240 --> 0:01:03.120 it intends to way just sustained campaign against Hoothy's in Yemen, 0:01:03.440 --> 0:01:05.600 Bloomberg said, Ed Baxter has that story. 0:01:05.840 --> 0:01:09.640 The latest attacks against eight sites hitting underground that the 0:01:09.760 --> 0:01:13.839 US has housed, arms and surveillance systems intelligence. It says 0:01:13.880 --> 0:01:17.560 the US UK operation did major damage and as setback 0:01:17.600 --> 0:01:20.760 Hoothy efforts to carry out attacks on US military and 0:01:20.800 --> 0:01:23.520 shipping of the Red Sea. The joint statement says, let 0:01:23.600 --> 0:01:26.679 us reiterate our warning to Hoothy leadership. We will not 0:01:26.800 --> 0:01:30.759 hesitate to defend lives and the free flow of commerce. 0:01:31.200 --> 0:01:34.360 The Iran backed Hoothy's also issued a statement saying the 0:01:34.440 --> 0:01:40.600 new aggression will not go unpunished. Ed Baxter Bloomberg Radio, All. 0:01:40.560 --> 0:01:41.240 Right, Ed, thank you. 0:01:41.280 --> 0:01:41.400 Well. 0:01:41.440 --> 0:01:44.720 Back here in the US, it is all about presidential politics. 0:01:44.760 --> 0:01:47.680 This is primary day in New Hampshire, and both Donald 0:01:47.720 --> 0:01:51.400 Trump and Nikki Haley have been urging their supporters said 0:01:51.480 --> 0:01:52.840 get out and vote. 0:01:52.600 --> 0:01:55.480 Get out of bed and just get to vote, Grab 0:01:55.520 --> 0:01:58.720 your neighbor, grab everybody you gotta you gotta go out 0:01:58.720 --> 0:02:00.880 because we have to win by big more margins. 0:02:00.480 --> 0:02:03.160 For The former president led a rally last night in Laconia, 0:02:03.240 --> 0:02:05.760 New Hampshire, while the former South Carolina governor made her 0:02:05.800 --> 0:02:07.440 case to voters in Salem. 0:02:07.760 --> 0:02:10.840 Chaos follows him, and we can't be a country in 0:02:10.880 --> 0:02:13.160 disarray and have a world on fire and go. 0:02:13.160 --> 0:02:15.920 Through four more years of chaosk because we won't survive it. 0:02:16.160 --> 0:02:19.240 The latest Real Clear Politics average shows Nicki Haley trailing 0:02:19.280 --> 0:02:22.600 Donald Trump by about eighteen percentage points in the Granite State. 0:02:22.639 --> 0:02:25.960 Bloomberg's Mike Shephard has more from Manchester. 0:02:25.800 --> 0:02:29.760 New Hampshire's famous for surprises, and yet I think that 0:02:29.919 --> 0:02:33.880 we are heading toward what could be another Trump victory 0:02:34.000 --> 0:02:36.760 based on the polling that we're seeing ahead of the 0:02:36.800 --> 0:02:38.520 actual primary kicking off. 0:02:38.480 --> 0:02:41.239 And Bloomberg's Mike Shepherd notes the primary did kick off 0:02:41.280 --> 0:02:44.680 at midnight on the East Coast in tiny Dixville Notch, 0:02:44.760 --> 0:02:47.959 New Hampshire, where all six votes in that tiny village 0:02:48.320 --> 0:02:50.880 went to Nicky Haley. Join us for a special edition 0:02:50.919 --> 0:02:53.960 of Balance of Power Today live from New Hampshire. Joe 0:02:54.000 --> 0:02:56.120 Matthew and Kaylee Lines will bring us the latest all 0:02:56.240 --> 0:02:59.239 day long, starting at noon to two pm Eastern Time, 0:02:59.280 --> 0:03:02.720 then again from the Granite State, and tune into our 0:03:02.720 --> 0:03:06.920 New Hampshire primary special coverage tonight at eight pm Wall 0:03:06.960 --> 0:03:08.919 Street Time. You can hear and watch it all live 0:03:09.280 --> 0:03:11.880 on Bloomberg Radio and television. 0:03:11.680 --> 0:03:14.160 And Nathan turning to the markets now. Futures are a 0:03:14.200 --> 0:03:18.960 little changed today after stocks closed at another record high. Meanwhile, 0:03:19.000 --> 0:03:22.080 Bill Gross has some advice for the FED stop winding 0:03:22.120 --> 0:03:25.680 down its balance sheet and start cutting interest rates. We 0:03:25.760 --> 0:03:28.080 spoke yesterday with the co founder of Pimco. 0:03:28.440 --> 0:03:30.919 The Fed should lower interest rates over the next six 0:03:30.960 --> 0:03:34.680 to twelve months. Real interest rates are simply too high. 0:03:34.760 --> 0:03:38.080 The ten year reel interest rate is one point eight percent, 0:03:38.200 --> 0:03:41.120 which historically is very restrictive. 0:03:41.360 --> 0:03:44.440 Bill Gross also said stocks are too expensive relative to 0:03:44.480 --> 0:03:46.680 the level of real yields. 0:03:46.360 --> 0:03:49.800 Man Amy Goldman Sachs chief economist John Hatzius also thinks 0:03:49.800 --> 0:03:52.120 the Fed could start cutting rates. He says a March 0:03:52.240 --> 0:03:55.240 cut quote would make sense. He spoke with Bloomberg from 0:03:55.280 --> 0:03:55.720 Hong Kong. 0:03:55.960 --> 0:04:00.680 The Fed is on its way to achieving the soft landing. 0:04:00.920 --> 0:04:04.160 Obviously no guarantees, but I like what I'm seeing. 0:04:04.440 --> 0:04:07.360 Goldman Sachs Chief economist John Hatzey says an easing in 0:04:07.440 --> 0:04:10.400 March would be consistent with the trajectory of consumer prices 0:04:10.440 --> 0:04:13.800 and comments last month from Fed share Jpel that the 0:04:13.840 --> 0:04:16.479 central bank would like to cut before inflation returns to 0:04:16.520 --> 0:04:17.160 two percent. 0:04:18.000 --> 0:04:20.919 It is generally known that happy workers tend to be 0:04:21.120 --> 0:04:25.240 productive workers. Bloomberg's Jeff Ballinger reports on new research that 0:04:25.360 --> 0:04:28.000 shows the opposite is also true. 0:04:28.200 --> 0:04:33.200 Gallup estimates disgruntled employees cost American companies one point nine 0:04:33.279 --> 0:04:37.159 trillion dollars in lost productivity in twenty twenty three. The 0:04:37.279 --> 0:04:40.919 report says more workers feel detached from their employers in 0:04:40.960 --> 0:04:44.159 the aftermath of the pandemic, in part because they no 0:04:44.240 --> 0:04:46.880 longer know what is expected of them. The stakes are 0:04:46.960 --> 0:04:51.440 high for companies. Engaged workers increase productivity, sales, and profits, 0:04:51.680 --> 0:04:54.800 and they're less likely to leave. Gallup says half of 0:04:54.839 --> 0:04:59.400 all workers now put forth minimum effort, something called quiet quitting. 0:05:00.080 --> 0:05:02.080 F Bullinger, Bloomberg Radio. 0:05:01.960 --> 0:05:05.120 Okay, Jeff thanks. Heading overseas, Bloomberg News has learned Chinese 0:05:05.160 --> 0:05:08.080 authorities are considering a package of measures to stabilize the 0:05:08.160 --> 0:05:11.200 slumping stock market. More on that from Bloomberg China Government 0:05:11.279 --> 0:05:13.000 editor Jill Desis in Hong Kong. 0:05:13.400 --> 0:05:15.720 The idea would be to mobilize about two hundred and 0:05:15.760 --> 0:05:20.360 eighty billion dollars worth of funds, mainly from offshore accounts 0:05:20.360 --> 0:05:23.520 of state owned businesses. So the idea would be this 0:05:23.600 --> 0:05:26.159 is all part of a stabilization fund. They would use 0:05:26.200 --> 0:05:29.240 this money to buy shares onshore through the Hong Kong 0:05:29.320 --> 0:05:30.560 Exchange length to the mainland. 0:05:30.640 --> 0:05:33.520 Bloomberg's Jill Lisis says a gauge of Chinese stocks listed 0:05:33.520 --> 0:05:35.479 in Hong Kong rose on the news by two point 0:05:35.560 --> 0:05:36.080 eight percent. 0:05:36.680 --> 0:05:39.880 Staying in Asia, the Bank of Japan is keeping its 0:05:39.920 --> 0:05:43.200 negative rate for the time being. Policy Makers maintained the 0:05:43.240 --> 0:05:45.920 banks er point one percent short term rate and kept 0:05:46.000 --> 0:05:49.719 yield curve control parameters intact after a two day meeting. 0:05:50.040 --> 0:05:53.120 Speaking at a press conference after the decision, boj Governor 0:05:53.200 --> 0:05:56.880 Kazuo Uweeda said that uncertainties related to the outlook for 0:05:56.960 --> 0:06:04.600 prices still remain high. Time now for a look at 0:06:04.600 --> 0:06:06.839 some of the other stories making news around the world. 0:06:07.120 --> 0:06:10.560 For that, we're joined by Bloomberg's John Tucker. Good morning John, Yeah. 0:06:10.480 --> 0:06:13.719 Good morning Aamy. While lawmakers negotiate new policy at the 0:06:13.760 --> 0:06:17.240 Southern border, the Supreme Court has issued a ruling concerning 0:06:17.320 --> 0:06:19.880 policing of the border. That story in this report from 0:06:19.880 --> 0:06:21.320 Bloomberg's Nancy Lyons. 0:06:21.600 --> 0:06:24.320 The Supreme Court says it will allow federal border agents 0:06:24.320 --> 0:06:28.360 to cut razor wire that Texas installed to discourage crossings. 0:06:28.680 --> 0:06:31.680 That's while a lawsuit makes its way through the court system. 0:06:32.000 --> 0:06:34.800 The Justices, by a five to four vote, granted an 0:06:34.800 --> 0:06:38.320 emergency appeal from the Biden administration, which has been in 0:06:38.400 --> 0:06:41.440 an escalating standoff with Texas over the handling of the border. 0:06:41.640 --> 0:06:44.320 The razor wire was installed at the request of Texas 0:06:44.360 --> 0:06:48.240 Governor Greg Abbott. In Washington, Nancy lyons Bloomberg Radio. 0:06:48.360 --> 0:06:51.160 Democrats in New Hampshire are calling un officials to investigate 0:06:51.200 --> 0:06:55.000 some suspicious robo calls that a Hampshire Attorney General's office 0:06:55.000 --> 0:06:58.040 says it's investigating reports of an apparent robo call but 0:06:58.279 --> 0:07:02.800 used artificial intelligence to mimic President Biden advising people in 0:07:02.839 --> 0:07:05.800 the state not to vote in the primary. One of 0:07:05.839 --> 0:07:09.400 Boeing's biggest customers has lost confidence in the playmaker's ability 0:07:09.440 --> 0:07:13.480 to overcome the ongoing quality lapses that climax this month 0:07:13.520 --> 0:07:17.560 with a midair emergency in Alaska Airlines Flight United Airlines 0:07:17.640 --> 0:07:21.440 chief executive officer Scott Kirby has been venting his frustrations 0:07:21.480 --> 0:07:25.000 with management to colleagues and voicing his concerns over the 0:07:25.040 --> 0:07:28.840 handling of the max grounding in California, rain ripped through 0:07:28.880 --> 0:07:31.880 San Diego from North County to South Beach Mende, which 0:07:31.960 --> 0:07:35.720 led to flooding and rescues, as well as devastated homeowners. 0:07:35.840 --> 0:07:40.600 All my collectors, valuable cars, everything have been collected since 0:07:40.640 --> 0:07:43.640 South Style Everything's gone. 0:07:43.840 --> 0:07:46.320 Cars were trapped in the water from the storm. Traffic 0:07:46.400 --> 0:07:49.400 was stopped. I fifteen was closed for a while. The 0:07:49.520 --> 0:07:53.320 Dana Farber Cancer Institute, that's a leading Harvard Medical School 0:07:53.320 --> 0:07:57.680 affiliated teaching center, is seeking retractions of six studies and 0:07:57.760 --> 0:08:01.160 corrections on another. Thirty one papers a bit allegations that 0:08:01.240 --> 0:08:05.800 some of its senior researchers falsified data. A spokesperson said, well, 0:08:05.880 --> 0:08:10.360 Harvard Medical School doesn't comment on individual circumstances. It's fully 0:08:10.360 --> 0:08:14.360 committed to safeguarding the integrity of its research. Global news 0:08:14.440 --> 0:08:16.560 twenty four hours a day and whatever you want it 0:08:16.560 --> 0:08:19.440 with Bloomberg News Now. I'm John Tucker. This he is 0:08:19.440 --> 0:08:20.360 Bloomberg Amy. 0:08:20.480 --> 0:08:22.320 All right, thank you, John, and we do bring you 0:08:22.560 --> 0:08:25.440 news throughout the day here on Bloomberg Radio. But now 0:08:25.480 --> 0:08:28.000 you can get the latest news on demand whenever you 0:08:28.080 --> 0:08:30.680 want it. Subscribe to Bloomberg News Now to get the 0:08:30.720 --> 0:08:33.880 latest headlines at the click of a button. Get informed 0:08:34.000 --> 0:08:37.239 on your schedule. You can listen and subscribe to Bloomberg 0:08:37.280 --> 0:08:40.840 News Noow on the Bloomberg Business app, Bloomberg dot com, 0:08:40.880 --> 0:08:44.760 plus Apple, Spotify, and anywhere else you get your podcasts. 0:08:49.880 --> 0:08:52.440 Time now for our Bloomberg Sports Update, and for that 0:08:52.520 --> 0:08:54.080 we bring in John stash Hour. 0:08:54.840 --> 0:08:56.920 Amy was at night at Big Men's scoring a lot 0:08:56.920 --> 0:08:59.920 of points in the NBA. In Minnesota, the Timberwolves call 0:09:00.000 --> 0:09:02.880 All Anthony Town scored sixty two points. He made ten 0:09:02.920 --> 0:09:06.920 three pointers. All the Timberwolves were upset by Charlotte. In Philadelphia, 0:09:07.280 --> 0:09:10.240 Joe L. M Beats scored seventy. He had fifty nine 0:09:10.280 --> 0:09:12.920 while still in the third quarter. The Sixers beat the 0:09:13.000 --> 0:09:15.840 Spurs for their six straight win. M Beat shot twenty 0:09:15.840 --> 0:09:18.360 four of forty one, only made one to three. He 0:09:18.440 --> 0:09:21.400 was twenty one of twenty three from the free throw line. 0:09:21.480 --> 0:09:23.920 Celtics won at Dallas one nineteen to one. Ten Jason 0:09:24.000 --> 0:09:28.000 Tatum scored thirty nine and Milwaukee's winning Detroit thirty one 0:09:28.040 --> 0:09:30.439 points in a triple double. Piannis sun to the Compo 0:09:31.000 --> 0:09:34.960 and Phoenix's win over Chicago forty two points for Kevin Durant. 0:09:34.960 --> 0:09:37.800 Brewins made it five straight wins. They beat Winnipeg four 0:09:37.840 --> 0:09:40.760 to one. Kyleege hoops North Carolina, now ranked third eight 0:09:40.800 --> 0:09:43.760 tozero in the ACC Easy went over wake for US. 0:09:43.840 --> 0:09:46.640 Kansas dropped US seventh of the rankings. Jayhawks did win 0:09:46.720 --> 0:09:50.160 last night over Cincinnati out of the semifinals for Nobak 0:09:50.200 --> 0:09:52.440 Djokovic at the Australian oer For He took out the 0:09:52.440 --> 0:09:56.000 American tailor Fritz in four sets. Fritz is now zero 0:09:56.000 --> 0:09:59.400 to nine lifetime against Djokovic. A struggle for Coco Goff. 0:09:59.679 --> 0:10:01.760 She was down five to one in the opening sets. 0:10:01.760 --> 0:10:03.880 She rallied a win and a tiebreaker, then lost a 0:10:03.960 --> 0:10:08.200 second set tiebreaker. She beat Mark da Kostyuk of Ukraine 0:10:08.280 --> 0:10:10.640 six to two in the third set. We'll find out 0:10:10.679 --> 0:10:13.400 today who's going to the Baseball Hall of Fame. Adrian 0:10:13.480 --> 0:10:15.600 Beltre expected to shoe win in this first year on 0:10:15.640 --> 0:10:18.360 the ballot. Joe Mauer may join him. Billy Wagner and 0:10:18.400 --> 0:10:22.560 Todd Helton came close last year. John Stash that went Bloomberg. 0:10:22.120 --> 0:10:27.960 Sports from coast to coast, from New York to San Francisco, 0:10:28.280 --> 0:10:32.959 Boston to Washington, DC, nationwide on Syrias exam the Bloomberg 0:10:33.000 --> 0:10:37.160 Business app in Bloomberg dot Com. This is Bloomberg Day Break. 0:10:38.480 --> 0:10:41.520 Good morning, I'm Nathan Hager. On this primary day in 0:10:41.679 --> 0:10:45.440 New Hampshire, both Donald Trump and Nikki Haley have made 0:10:45.440 --> 0:10:47.760 their final pitches to the voters and what is now 0:10:47.800 --> 0:10:51.920 down to a two person race for the Republican presidential nomination. 0:10:52.000 --> 0:10:55.520 And joining us now from New Hampshire is Bloomberg's Lord Davison, 0:10:55.600 --> 0:10:59.640 part of our political team covering today's primary and the race. 0:10:59.679 --> 0:11:02.960 To Laura, thanks again for being with us. So we've 0:11:03.000 --> 0:11:06.720 heard from both Trump and Haley in their final Granite 0:11:06.760 --> 0:11:09.400 State rallies. Where's the enthusiasm? 0:11:10.840 --> 0:11:14.160 Well, both Haley and Trump gave these very dramatic speeches 0:11:14.240 --> 0:11:19.280 last night. Hailey's main argument was that Trump is chaos 0:11:19.320 --> 0:11:23.480 and America can't survive another four years of chaos. Trump 0:11:23.559 --> 0:11:26.640 then followed with a big rally, of a very raucous 0:11:26.720 --> 0:11:30.000 rally with lots of protesters and yelling and even some 0:11:30.120 --> 0:11:33.920 canon slogans being yelled during during pauses in his speech, 0:11:34.400 --> 0:11:36.400 and he ended in a way that he never really 0:11:36.440 --> 0:11:40.480 has before. He played the sort of low level, almost 0:11:40.520 --> 0:11:43.880 trance like music and kind of got quiet and then 0:11:43.920 --> 0:11:46.600 went through this long list of grievances. If you know 0:11:46.679 --> 0:11:49.520 we are a nation in decline, we are a nation 0:11:49.960 --> 0:11:54.120 of open borders or you know, criminals are crossing, and 0:11:54.600 --> 0:11:57.200 so this was, you know, different than how he has 0:11:57.320 --> 0:12:01.760 ended all of his speeches, but he really have made 0:12:01.800 --> 0:12:04.439 the case and tried to project the air of inevitability 0:12:04.880 --> 0:12:06.920 that he would be the one to win in New 0:12:06.920 --> 0:12:09.720 Hampshire today and quickly seal up this nomination. 0:12:10.280 --> 0:12:13.599 Interesting to think about this sort of sinister and to 0:12:14.520 --> 0:12:18.160 Trump Rowley, what does that tell you about potentially where 0:12:18.320 --> 0:12:20.959 he sees things going in this race. 0:12:22.200 --> 0:12:25.520 He said very explicitly last night that he believes that 0:12:25.600 --> 0:12:28.640 he thinks that that Hayley will drop out very quickly. 0:12:29.240 --> 0:12:33.720 You know, we'll see the results tonight will really determine 0:12:33.720 --> 0:12:35.800 that the future of her campaign. If she is close 0:12:35.840 --> 0:12:39.280 to Trump, or even beats Trump, it's very likely she 0:12:39.360 --> 0:12:41.920 will stay in the next major contest in this race 0:12:42.280 --> 0:12:45.040 is in South Carolina, her home state, and not for 0:12:45.080 --> 0:12:47.640 another month, so that gives a lot of opportunity for 0:12:47.720 --> 0:12:50.960 you know, potentially the polls to swing in her favor. 0:12:51.040 --> 0:12:53.640 You know, right now she's trailing Trump significantly, so if 0:12:53.679 --> 0:12:56.240 she doesn't do well tonight, that would signal you know 0:12:56.280 --> 0:12:58.840 that her campaign, her window of opportunity is closing. 0:12:59.080 --> 0:13:02.040 Yeah, as we've been reported, howarding the polls show former 0:13:02.080 --> 0:13:05.120 President Trump with a double digit lead over Nikki Haley 0:13:05.480 --> 0:13:08.240 in New Hampshire is something like eighteen percentage points in 0:13:08.280 --> 0:13:12.560 the latest Real Clear Politics average. Are those polls necessarily 0:13:12.640 --> 0:13:19.280 reflective of the sort of moderate and independent outlook of 0:13:19.360 --> 0:13:22.079 the voter base in New Hampshire. 0:13:23.040 --> 0:13:24.800 One of the things about New Hampshire that's a little 0:13:24.840 --> 0:13:28.240 bit tricky to measure are One is they don't have 0:13:28.320 --> 0:13:31.400 any live voter calling polls like we had in Iowa. 0:13:31.440 --> 0:13:33.680 Those are known to be the most accurate, but they're 0:13:33.679 --> 0:13:36.120 also incredibly expensive to do, and they just don't have 0:13:36.160 --> 0:13:39.240 any in the state. So that's one issue. The second 0:13:39.360 --> 0:13:42.160 is New Hampshire is different in how it votes from 0:13:42.160 --> 0:13:45.160 many places and that you have a large number of 0:13:45.160 --> 0:13:47.640 what they call undeclared voters. Is are you know, essentially 0:13:47.720 --> 0:13:51.000 independents and neither Republicans nor Democrats, so they can go 0:13:51.080 --> 0:13:54.680 in on primary day and request the ballot of either party. 0:13:55.320 --> 0:13:57.600 So because of that, there's a lot of you know, 0:13:57.679 --> 0:14:00.800 gray area on you who who's going to go in, 0:14:00.880 --> 0:14:03.760 who's actually going to vote in which race, and how 0:14:03.800 --> 0:14:06.560 are they going to break. Independence in New Hampshire aren't 0:14:06.600 --> 0:14:09.400 like independence in other states where they tend to be 0:14:09.440 --> 0:14:12.840 more centrist, more moderate. Independence here run the whole gamut. 0:14:13.120 --> 0:14:15.680 So it's just a difficult way to sort of determine, 0:14:15.720 --> 0:14:17.240 you know, if they're going to go Trump, if they're 0:14:17.240 --> 0:14:19.000 going to go Haley, if they're going to stay home, 0:14:19.080 --> 0:14:20.480 or if they're going to go for someone else, like 0:14:21.160 --> 0:14:24.280 Dean Phillips, for example, who's challenging Biden on the Democratic side. 0:14:24.360 --> 0:14:27.360 All right, let's talk about Dean Phillips on the Democratic side, 0:14:27.400 --> 0:14:30.800 because we have been in discussions with the congressman who's 0:14:30.840 --> 0:14:36.000 mounting this primary challenge in a roundtable discussion with Bloomberg News. 0:14:36.280 --> 0:14:37.160 What's his pitch. 0:14:38.480 --> 0:14:41.560 So he's saying that Biden has done a good job, 0:14:41.680 --> 0:14:43.600 but his time is up and it's time for him 0:14:43.640 --> 0:14:47.080 to pass the torch to a new generation of leaders. 0:14:47.480 --> 0:14:50.480 And Phillips is he's a businessman. He's a little bit 0:14:50.480 --> 0:14:55.560 more moderate than Phillips or than Biden. Though he's not 0:14:55.600 --> 0:14:58.200 particularly well known. You know, he's been in Congress since 0:14:58.200 --> 0:15:03.480 twenty eighteen from Minnesota, kind of came in kind of 0:15:03.520 --> 0:15:08.280 in a wave of anti Trump backlash. The reality here 0:15:08.360 --> 0:15:10.960 is he does not have a chance to unseat Biden here, 0:15:11.200 --> 0:15:13.720 but he's sort of running his campaign is sort of 0:15:13.760 --> 0:15:18.000 to raise a you know, a protest to Biden running 0:15:18.040 --> 0:15:21.000 again after he said that he would only serve one term. 0:15:21.360 --> 0:15:24.360 So what you're looking for here is, you know, what 0:15:24.560 --> 0:15:28.000 percentage of the vote does Phillips get, you know, and 0:15:28.040 --> 0:15:30.640 that could really signal, you know, kind of Biden's strength 0:15:30.720 --> 0:15:32.440 or lack thereof with Democrats. 0:15:32.680 --> 0:15:36.680 All Right, lots to watch as primary day is officially 0:15:36.800 --> 0:15:41.120 underway in New Hampshire. Laura Davison of Bloomberg News, thanks 0:15:41.120 --> 0:15:43.200 for joining us giving us a look at what's going 0:15:43.240 --> 0:15:45.840 on in the Granite State. Now, we want to turn 0:15:45.880 --> 0:15:48.720 to a conversation with the co founder of pim Co 0:15:49.600 --> 0:15:53.200 Bill Gross, the self described bond king, who says the 0:15:53.720 --> 0:15:57.200 Federal Reserve should stop winding down its balance sheet now 0:15:57.600 --> 0:16:01.920 and start cutting interest rates soon to avoid a US recession. 0:16:02.280 --> 0:16:05.480 In a conversation with Bloomberg's Remain Bostic and Alex Steele, 0:16:05.520 --> 0:16:08.040 Bill Gross also said the yield curve has to go 0:16:08.160 --> 0:16:11.120 positive in order to produce that stable economy. 0:16:11.720 --> 0:16:15.160 A negative yield curve and I use the two to 0:16:15.320 --> 0:16:19.160 ten year spread, which is about a negative twenty three 0:16:19.280 --> 0:16:21.760 or twenty four, it's been as high as fifty to 0:16:21.800 --> 0:16:25.040 seventy five basis points. So it's less negative now. But 0:16:25.560 --> 0:16:28.000 when you think about it common sensically, when you think 0:16:28.000 --> 0:16:31.840 about it, capitalism and a finance based economy, which is 0:16:31.840 --> 0:16:36.000 what we have, can't really do well when you can 0:16:36.040 --> 0:16:39.360 get a higher return for less risk. That's not the 0:16:39.400 --> 0:16:42.680 basis of a capitalistic economy. You need to get a 0:16:42.760 --> 0:16:46.120 higher return for more risk. And it's just the reverse now. 0:16:46.200 --> 0:16:49.840 And so you know, I think ultimately the yield curve 0:16:50.000 --> 0:16:54.320 has to go positive in order to produce a relatively 0:16:54.400 --> 0:16:58.840 stable economy and a stable inflation rate around three percent? 0:16:59.400 --> 0:17:01.520 Do you have face right now in the economy? And 0:17:01.560 --> 0:17:04.560 more importantly, the folks who are shepherding that economy. 0:17:04.440 --> 0:17:10.000 Well, no, you know, let's let me put it out there. 0:17:10.200 --> 0:17:12.479 You know, the Fed is not done well in the 0:17:12.520 --> 0:17:15.240 past three or four years in terms of or five 0:17:15.320 --> 0:17:19.720 years in terms of trying to find that magic Fed 0:17:19.760 --> 0:17:25.560 funds rate that will neither increase inflation or produce deflation. 0:17:25.720 --> 0:17:29.240 And so you know, are they wise enough now to 0:17:29.880 --> 0:17:33.560 know exactly what the Fed funds rate should be at 0:17:33.600 --> 0:17:36.119 any point in time or even you know, six to 0:17:36.160 --> 0:17:40.040 twelve months down the road. Now, I'd be very cautious, 0:17:40.080 --> 0:17:46.280 and I'd view economic statistics like they do, but from 0:17:46.520 --> 0:17:52.399 an investor's standpoint that you know, speak to fundamentals that 0:17:52.440 --> 0:17:54.920 the FED isn't necessarily following. 0:17:55.040 --> 0:17:57.439 Well, let me ask you, what would you do different 0:17:57.440 --> 0:17:59.359 if if for some reason, you were magically in the 0:17:59.400 --> 0:18:02.480 shoes of j what would you do different at this point? 0:18:02.680 --> 0:18:09.560 Well, I would stop quantitative tightening. I think that's just 0:18:09.680 --> 0:18:13.399 not a correct philosophy and policy at this point in 0:18:13.440 --> 0:18:18.120 time to you know, continue to tighten quantitatively. They should 0:18:18.200 --> 0:18:23.280 leave the you know, the reserve balance around seven trillion 0:18:23.359 --> 0:18:28.879 dollars and just see what happens going forward. I also 0:18:28.960 --> 0:18:32.160 think that yes, the FED should lower interest rates over 0:18:32.160 --> 0:18:35.439 the next six to twelve months. Real interest rates are 0:18:35.480 --> 0:18:38.760 simply too high. The ten year real interest rate is 0:18:38.800 --> 0:18:43.520 one point eight percent, which historically is very restrictive. And 0:18:43.640 --> 0:18:46.119 you know, I think not only the FED, but I 0:18:46.119 --> 0:18:49.359 would like to see the real interest rate on a 0:18:49.400 --> 0:18:51.920 tenure come down to one and a half or one percent. 0:18:52.000 --> 0:18:54.560 And so the way to do that is to lower 0:18:54.640 --> 0:18:58.120 interest rates from where we have it now at five 0:18:58.160 --> 0:19:01.520 and quarter percent for food funds and you know, basically 0:19:01.600 --> 0:19:04.719 balance out real interest rates and lower them so that 0:19:05.359 --> 0:19:08.240 the economy won't go into a significant recession. 0:19:08.480 --> 0:19:10.280 So, Bill, if you think we're going to get cuts 0:19:10.320 --> 0:19:12.919 in the next day six to twelve months, are we 0:19:12.960 --> 0:19:16.439 cutting because of normalization to get that real yield kind 0:19:16.480 --> 0:19:18.560 of at a more normal level, or are we cutting 0:19:18.560 --> 0:19:20.200 because the economy looks really bad. 0:19:20.359 --> 0:19:22.720 Well, we're certainly not talking about. 0:19:24.119 --> 0:19:27.520 The Fed funds rate based upon an economy that looks bad, 0:19:27.640 --> 0:19:31.760 although there are indicators such as the you know, leading 0:19:31.840 --> 0:19:37.520 indicator number that came out today and other indicators that suggest, 0:19:38.080 --> 0:19:40.240 like we talked about in terms of the negative yeal curve, 0:19:40.280 --> 0:19:43.040 that suggests that you know, at some point we're going 0:19:43.080 --> 0:19:46.520 to see a zero line you know, real gene and 0:19:46.560 --> 0:19:52.280 PN maybe something lower. I think, you know, to basically 0:19:52.359 --> 0:19:55.600 keep an economy going, and this finance based economy that 0:19:55.640 --> 0:19:58.560 we've had for a long time now five, ten, fifteen, 0:19:58.640 --> 0:20:04.960 twenty years, you need interest rates lower than nominal GDP. 0:20:05.320 --> 0:20:09.520 That's what drives you know, basically today's economy as opposed 0:20:09.560 --> 0:20:11.880 to what we saw fifty to. 0:20:11.840 --> 0:20:12.840 One hundred years ago. 0:20:12.960 --> 0:20:16.760 And so with nominal GDP at five and six percent 0:20:16.880 --> 0:20:20.800 and perhaps out at four, but we need the tenure 0:20:21.000 --> 0:20:24.800 to be lower than nominal GDP in order to continue 0:20:24.840 --> 0:20:28.280 a you know, a steady progression in terms of economic growth. 0:20:28.600 --> 0:20:31.000 So, Bill, in that environment, does it make sense that 0:20:31.040 --> 0:20:33.080 equities are at a record right now based on what 0:20:33.119 --> 0:20:33.840 you're talking about? 0:20:34.880 --> 0:20:35.040 Oh? 0:20:35.320 --> 0:20:36.359 No, I don't think it does. 0:20:36.480 --> 0:20:39.919 I mean, you know, I've got some historical charts and 0:20:39.960 --> 0:20:45.560 others have provided those for me, Bloomberg being one of them. 0:20:44.920 --> 0:20:48.080 That basically suggest that PE ratios. 0:20:47.680 --> 0:20:50.880 Of nineteen to twenty times, which is what we're at 0:20:50.880 --> 0:20:53.639 the moment, and perhaps a little bit lower based on 0:20:53.760 --> 0:20:58.760 forward expectations that you know, PE of nineteen times is 0:20:59.000 --> 0:21:01.760 much too high relative to a one point eight percent 0:21:02.280 --> 0:21:04.920 real interest rate, you know, real interest rates who are 0:21:04.960 --> 0:21:08.600 down at a negative minus two percent, you know, just 0:21:08.640 --> 0:21:12.080 as recently as two to three years ago, and so 0:21:12.960 --> 0:21:14.360 they've risen significantly. 0:21:14.440 --> 0:21:17.439 But PE ratios haven't haven't really dropped. 0:21:17.440 --> 0:21:20.280 And so I think, ultimately, and this is a long 0:21:20.359 --> 0:21:24.639 term type of statement, in a long term thesis, ultimately 0:21:24.720 --> 0:21:28.119 PU ratios have to get more in balance with real 0:21:28.160 --> 0:21:31.120 interest rates, which are you know, relatively high. 0:21:31.160 --> 0:21:36.159 Nown This is Bloomberg Daybreak today, your morning brief on 0:21:36.240 --> 0:21:39.879 the stories making news from Wall Street to Washington and beyond. 0:21:39.960 --> 0:21:42.920 Look for us on your podcast be by six a m. 0:21:43.080 --> 0:21:47.280 Eastern each morning, on Apple, Spotify, and anywhere else you 0:21:47.359 --> 0:21:48.440 get your podcasts. 0:21:48.720 --> 0:21:51.400 You can also listen live each morning, starting at five 0:21:51.440 --> 0:21:54.040 am Wall Street time on Bloomberg eleven three to Oho 0:21:54.119 --> 0:21:57.000 in New York, Bloomberg ninety nine to one in Washington, 0:21:57.040 --> 0:22:00.800 Bloomberg one six one in Boston, and Bloomberg sixty in 0:22:00.880 --> 0:22:01.679 San Francisco. 0:22:01.840 --> 0:22:05.360 Our flagship New York station is also available on your 0:22:05.480 --> 0:22:10.920 Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus. 0:22:11.040 --> 0:22:15.960 Listen coast to coast on the Bloomberg Business app, Serriusxmbiheartradio app, 0:22:16.000 --> 0:22:18.920 and on Bloomberg dot com. I'm Nathan Hager. 0:22:18.760 --> 0:22:22.360 And I'm Maybe Morris. Join us again tomorrow morning for 0:22:22.440 --> 0:22:25.160 all the news you need to start your day right 0:22:25.200 --> 0:22:26.840 here on Bloomberg Daybreak