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This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight Ahead on the program, we'll look to some key economic data in the US, along with more earnings in tech. I'm Nathan Hager in Washington.
I'm Caline Hepga here in London, where we're asking how central banks should respond to growing global economic anxiety.
I'm Doug Krisner looking ahead to the latest reading on consumer inflation for Australia.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three yeh New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius XM one twenty one, and around the world on Bloomberg Radio, dot Com and the Bloomberg Business App.
Good day to you. I'm Nathan Hager. We begin today's program with some key economic data in the US. The Fed's preferred gauge for inflation, the PCE Price Index, comes out this Thursday, along with April readings on personal income and spending, for more on the numbers and what they could mean for FED policy. We're joined by Stuart paul Us, economist with Bloomberg Economics. Of course we saw those hot
April readings on consumer and producer prices. Are the PCE numbers do you think going to be any different, Stuart?
Where they're also going to be hot. We're expecting about zero point four percent month on month headline PCE inflation. That'll push the year on year PCE inflation rate up to about three point eight percent from three point five percent in March. So still far too hot for comfort for the FED, that's for sure.
Yeah. Is it just these elevated energy prices that are driving things for this index?
You know, even in the core it's going to be hot. Were expecting core inflation to inch up to about three point three percent from three point two percent prior. Look, there's some energy prices that bleed into the core, for example in airfares. There's also a little bit of a quirk this month where shelter price is basically jump. It's all downstream of data collection issues during the government shutdown last October. So it's going to be an elevated core reading.
The annual pace of core inflation also just still too hot for comfort for the FED. And the bottom line really is that spending is continuing a pace, despite the fact that elevated energy prices are weighing on household and are effectively bleeding bleeding household a little bit drier than usual because they have to spend more at the pump.
Even though energy prices are really causing a little bit of an issue for household, household spending is con inuing a pace, so the FED can afford to weight, It can afford to sort of keep its foot on the brakes a little bit. It doesn't need to hike to address energy induced inflation. Instead, it can afford to wait to watch whether inflation pressures start to broaden. I don't expect to see that in this personal income and outlayers
report and PC inflation report. But still just inflation too high for comfort, spending continuing a pace, and that's all reason for the Fed's remain on hold.
So is that going to be reflected in what we get from the actual personal spending and income numbers as well? And what's the trend right now? Are we seeing the trend shift toward I don't want to say it persistent inflation.
Well, so the personal income element that we're going to get in this report on Thursday is going to show about zero point five percent month on month growth in personal income. Remember, we had a very hot jobs report, a lot of hiring, a lot of wage growth. That personal income in tandem with elevated tax refunds, also paired with positive wealth effects, those are all supporting spending right now.
So we're going to probably see spending on you know, about a zero point five percent month over month pace in the month of April. It's not as strong as in March, which was mostly driven by gasoline prices and gasoline spending, but it's still hot income, hot spending. Households are weathering the storm created by higher energy prices, and so the FED is going to be on pause for the foreseeable future.
For the foreseeable future. You're not expecting that we could see hikes anytime soon, then.
No, I don't think so. The FED has this balancing act that it needs to deal with right now. It's two different risks. The first is that low and even negative real aggregate labor income growth means that there will come a point in time where households do have to tighten their belt. We will get to that point in time at some point. The other risk that the FED has to contend with is that low real interest rates fuel a credit induced in expansion, So that would be inflationary.
That's exactly what the FED does not want to see. I think that right now the FED is betting on the former risk that a relatively cool labor market through time will prevent inflation pressures from broadening. And that's really what's going to matter. So the FED is going to lean towards that risk and is going to I think,
stay on hold rather than try to tighten financial conditions. Remember, financial conditions are already tightening a little bit, and for every move that we see upward in interest rates in the market, the FED can afford to wait a little bit more because markets are doing the heavy lifting for the FED by tightening financial conditions. The Fed doesn't have to rush to tighten financial conditions itself. If the market is already doing it, well, then what is.
The risk of a potential policy mistake if the Fed does stay on hold for a long time.
Well, So it's exactly that that issue is that markets don't do enough of the heavy lifting, and the FED is too slow to move, and that we start to see a relatively low real interest rate lead to a credit induced expansion. That would really be the market. That would really be the policy failure that the FED runs the risk of dealing with. But I don't think that that's something that we would expect to see the FED trying to address or trying to get ahead of, perhaps even this year.
Thanks for the Stuart, good having you on with us. It's Stuart Paul, us economists for Bloomberg Economics. Let's take a look now, add some stocks making news in the week ahead. I'm Nathan Hager with Bloomberg Equities reporter, Avalon Pernell even more tech earnings as the season winds down. We're going to hear from Salesforce Wednesday. Avalon, Investor sentiment doesn't look all that great for this stock. What's weighing it down?
You're absolutely right, Ai, and future growth will definitely be top of mind for investors as Salesforce heads into that third quarter earnings report. Investors will be looking for greater
clarity on Salesforce's second half growth acceleration outlook. Many analysts across the street we're saying that at this point, it doesn't look like they're going to be able to reach the very high bar that they've set for themselves, and part of that is based on the question marks that remain on how exactly their business is going to continue
as AI continues to get more sophisticated. They were definitely an early victim of the sas apocalypse, as some of our reporters were calling it, so definitely something that we'll be keeping an eye on.
We'll talk a little bit more about how high the bar is right now and why it might be so tough for Salesforce to hit it.
Yes, absolutely so. Those gross margins for the second half of the year are very much a key concern as in increasing AI investments are expected to eat into operating margin.
Also important to note that Bank of America had a great note out they reinstated coverage of the firm with an underperform rating, noting that the company is facing an AI driven reset as companies that typically would have gotten contracts with them are either easing off or choosing to wait, and that's also causing a lot of issues for Salesforce.
A lot of question marks about how exactly a slowdown in new contracts as heightened geopolitical concerns driven by the Iran war and also longer sales cycles are going to impact companies like Salesforce.
So a little bit more of the software story to be told this week, and a little bit more of the broader tech story as well, because we're going to hear from Dell on Thursday. After all, we've heard from the computing names this quarter, what are we expecting from Dell?
Absolutely, Dell is also facing a very high bar heading into earnings next Thursday. Investors will be looking for the tech companies AI and server results to meet a fairly high hurdle, noting ahead of the results, analysts at Morgan Stanley and Bernstein have already boosted price targets, so clearly some people on the street think that they're going to
be able to reach that high bar. Meanwhile, though, UBS does have a great note stepping to the sidelines and saying that they are going to go ahead and downgrade the stock to neutral, saying that investors are largely already pricing in Dell's AI server demand and they don't necessarily see a ton more left to do. Bloomberg and Tellent just had a really great note out as well, saying that they expect a print to illustrate strong demand momentum across all of Dell's business segments.
Well, even with that sort of divided investor sentiment going into this print, this stock has had an amazing run so far this year. Does that raise the bar even more for Dell to sort of outperform for analysts and investors.
Absolutely, And I think that's really reflected in the options data, which currently at the moment is implying an eleven percent move after those results. Obviously that could be to the
upside or to the downside. But considering they've had a lot of really good news even this past month, they announced that they had added another one thousand customers for their KEYAI product line in the past quarter, and now that they're at around five thousand clients for its AI factory, and they're counting companies like Eli, Lilly, which I cover very extensively, Honeywell, and also Samsung among its customer base.
So that's definitely going to influence some investor sentiment and continue to make the bar higher and higher.
Yeah, you got to think about so many of these companies feeding into the AI story, whether it's pharma or anything else. I don't know if we can say that for Abercrombie and Fitch when they report on Wednesday, what are we expecting going into their results.
It's a really good question because analysts remain fairly mixed heading into that print. Raymond James has already trimmed its price target on expectations based on their expectations that it's going to have softening trends at Hollister, which, for those unfamiliar, Abercrombie and Fitch does have a brand geared towards younger consumers, those teens and tweens at Hollister. Jeffrey's also writing that decelerating data has been a key concern fors and is
likely weighing on shares. Abercrombie and Fitch has been a company that we've had in focus for the past couple of years as they've been in the middle of a wider turnaround. They very much got a lot of upside as teens and tweens got really interested in the nineties and early two thousands clothing styles. But now there's a lot of question marks as fuel cost increase, whether those customers are still going to be going to Abercrombie and
Fitch or if they're going elsewhere. It's definitely something investors will be keeping in mind.
Making me feel old about the nineties trend coming back. I remember when Abercrombie and Fitch was a for teens and tweens. But at any rate, we're going to hear from a lot of other retail names as well, not just Abercrombie, but Gap is reporting in Dollar Tree. Could they give us a different sense of what we can expect from the consumer.
Absolutely, it's really going to be a question of how is a consumer across a very wide spectrum of price points like a Dollar Tree, like Gap and even Abercrombie and Fitch, how exactly a US consumer faring. We already know from Abercrombie and Fitch. Day were very early to say that they are expecting those headwinds from the Iran conflict on its business, from those extra fuel costs, and also customers being pinching their dollars to say the least,
as gas prices increase. But it'll be really interesting to see if companies that are geared more towards the lower end of that price spectrum, like a Dollar Tree, we'll see a little bit of upside.
Thank you for this, Avalon, great having you on with us. That is a Bloomberg Equities reporter Avalon Parnell And coming up on Bloomberg Daybreak weekend, we'll look at how central banks should respond to growing global economic anxiety. I'm Nathan Hager, and this is Bloomberg. This is Bloomberg Daybreak weekend, our global look ahead at the top stories for investors in the coming week. I'm Nathan Hager in Washington. Up later in our program and will look to a key inflation
reading in Australia. But first in the coming days, Senior policymakers and academic figures from the world of macroeconomics gather in Iceland to discuss the evolving role of central banks in today's landscape. This year, the Reykiavik Economic Conference is set against the backdrop of geopolitical tensions and persistent inflation worries. So how will central banks respond? For more, Let's go to London and bring in Bloomberg Daybreak. You're a banker, Caroline Hepker Nathan.
As a net importer of energy, Europe's economic growth for carts have begun to be cut inflation is expected to rise and governments have little ammunition to shield their citizens and businesses from the Middle East shock. The Secretary General
of the OECD is just one voice raising concern. Mattirs Corman, speaking on the sidelines of the recent Group of Seven meeting, said the challenge for central banks will be to deal with the combination of elevated inflation risks and weaker economic activity. Is they weigh possible interest rate increases. The Paris based OECD became the first major international institution to warn in March that the Iran war would fuel price increases and
dampen economic activity. Since then, a bond market route has injected urgency into the situation, forcing ministers and central bankers to reckon with growing policy challenges from the shock of rising oil prices. The increasing uncertainty is something at the forefront of Iceland's central bank governor Alskier Johnson, who is hosting the event.
We've seen inflation expectations rise, although the situation in Europe is different. Market is cooler, slower growth, but the main problem is that the old price development is very difficult to focust.
You have a lot of central packers sampling here next week, Can you just briefly tell me what's ahead, what you're expecting from that meeting or from that conference.
My camp is just between you, you know, Europe and America. And in this conference we have both academics, most in the US and policymakers and now also tip economist from the main bank's main Kumoto Banks.
That was Iceland Central Bank governor Asker Johnsen speaking to Bloomberg's Wagna Hilda Sigur dar dott this ahead of the Rekavic Economic Conference that is taking place in the next few days and joining us now for more on the event and the macroeconomic backdrop is Bloomberg's director of Global Economics, Jamie Rush and our Iceland based reporter Wagna Hilder Cigar Dar dotted Wragnahilder. What can we expect?
So the Reykavik Economic Conference is happening now for the third time, and we will have central bank governors and academics along with economic leaders from all over the world, and they will gather and discuss the current economic situation and its main challenges. Say, it does come against the backdrop of major and sudden geopolitical shocks that have been changing the inflation calculus for central banks globally, so that will obviously be discussed, and there's a really high profile
lineup of central bank speakers, sploding multiple FED precedents. There's the Governor of the Reserve Bank of India, Sanjai Malhotra, and the Bank of England's Andrew Bailey, and and many others including from Europe, Scandinavian countries and so.
On, Jamie. So the conference does come at a particularly challenging time for the global economy, and as Wagner Hilde is describing, there will be a lot of important central bank leaders and economists there. So what do you think are the kind of major hurdles that central bank governors are thinking about right now?
Well, I think for all central bank governors that is a difficult time because they're faced with the worst kind of shock that they can have, one that makes the economy weak and inflation highs. They ought to be trying to support the economy through the shock, but they can't
because they're worried about inflation. And so for them, balancing what to do in this sort of environment is extremely uncomfortable that it'll be occupying all of their thoughts and they'll be hoping to get the decision right because their careers will be won or lost on this.
Yeah, Ragna Hilda, What do you think is going to emerge? Do you think that there will be common themes? That's a big question, isn't it. Europe, for example, is a major energy importer. Other parts of the world it might be a slightly different story. How much consensus. What are people are going to be discussing.
The major topics are likely to revolve around the oil price and geopolitical uncertainty. Tariffs will be discussed and as well as currency and how monetary policy will need to react to these varying factors. They will be I'm told they will be talking about currencies, for instance, and how they can both work as buffers and amplifiers of shocks, and the process and cons of bigger currency areas, effects
of inter spread between different currency areas. One of the things that will also be discussed is how tighter regulation for financial institutions are leading to financial services being provided outside of the banking sector, and there is currently a concern over the growth of private credit and lending that's happening away from the underwriting standards of the banks. Or public bond markets. So this is a trend that can essentially increase economic fluctuation rather than diminish it.
Yeah, okay, so lots then for people to think about, Jamie. We seem to be at a pivotal moment also because of the uncertainty around the inflation re shock around you how that's going to be dealt with. We started to see downgrades to European economic growth, deterioration in terms of PMI type data, and the worry that inflation is going to start rising. How much is that going to weigh on central bank governors and how are they going to try to respond to some of these threats.
Well, I think the initial feeling was, or the hope was that the conflicts would be over quickly, the straight would open and things would get back to normal, And of course that just hasn't happened. So central bankers basically started off by saying, we need time to assess the data and see what the layer of the land is.
That's reasonable. Well, the layer of the land is becoming clearer and it's not looking very good, and so they're now moving towards acting, and so acting means trying to signal that they are credible actors and probably hiking or at least canceling any rate cuts that they'd had planned. So I think that's how things were evolving.
Do you think that central bankers and economists are preparing for a longer closure of the Strait of Homers, or at least trying to signal anticipate that they might be ready were that to happen.
Well, I really think they ought to be. If you look at the negotiating position of Iran and the US, they are very, very far apart. If you take into account the views of Israel as well, who are not at the negotiating table, but the Israeli view matters, then they're even further apart. And of course Irani leverage just increases as the midterm elections in the US get nearer, so I don't think there's any particular incentive for them to reach the deal. So yeah, central bankers should be
thinking this could be a prolonged conflict. Oil could be missing from global markets, twenty percent of the world be missing. How we're going to respond, and they should be thinking about that in advance of time, not waiting for its sharp and the data.
Ragna Hilda You've been speaking to the Icelandic Central Bank governor. What are the particular issues for Iceland and his assessment of the uncertainty around the backdrop Economically, well.
Iceland has been battling high inflation for quite a while now that the central Bank has been struggling to bring down. So, you know, Iceland being a small, open economy, we are very dependent on what happens in the rest of the world. We are dependent on decisions that are being made on both sides of the Atlantic with the FAT and the ECB. But obviously just all microeconomic developments also will factor in Iceland. So I think they are just watching very closely. They
stand ready to hike if needed. I think this is a very critical moment this summer for Iceland to bring inflation down, So I would say they're stand ready to react as needed.
Yeah, Jamie. In terms of that question, then about European policy, how much will it be determined by the US Federal Reserve. That's also been a major issue in bond markets, hasn't it in terms of the recent run up in rates.
Yeah, I mean the answer is not much. I think. I mean, first of all, the US is just in a different position from Europe right as it's not an exporter really, but it's neither an important or an exporter of crude, so it doesn't have the same economic consequences. There's politics happening in the US which isn't happening here in Europe, so you wouldn't want to follow the FED playbook if you think that that there's a political element
to the decision making. So I know, I don't think there's a big reader cross from what's happening in the US to ECB or Bank of England policy. But of course global bond yields, they're determined globally, so we will be seeing some of that co movement in bond pricing and indeed tightening financial conditions.
That's interesting because we're going into a new era with the Federal Reserve onto a new leadership. It's also noteworthy when you mentioned politics that the US Treasury Sectory Scott Bessett, you know, is very active. I wonder what you're thinking is around you know, maybe those US Central Bank governors, what might they be thinking about and discussing in what will be their perspective as they visit Iceland.
It's a tricky one isn't it. So we don't know very much about the new FED chair and exactly how he's going to interact with the rest of the governors, and that'll be the key relationship to follow. Will he be able to persuade them that they shouldn't hike That
seems to be the question in markets at the moment. Meanwhile, our US team think that actually, despite all the hor moves related oil related inflation, that actually there's some reasons to think that inflation may be coming down more on a more sustained basis and that would actually argue for cuts. So there's lots we'll see how it will unfold, but we will certainly be monitoring that very closely.
How concerned are you about the kind of current picture in terms of the deterioration of the economy in Europe? If I can ask you that broad question about where we are for consumers and businesses in Europe.
Well, the economy is not exactly going gangbusters. So coming into this, the labor market wasn't all that strong. But I think there are there are some reasons to be optimistic because if you think back to twenty twenty one, when oil prices, gas prices went up well even since then. Actually a lot of resilience has been achieved in the European energy sector and so our reliance on oil, our reliance on gas has been falling over even over the past few years, and so we're actually in a slightly
better position, I think to deal with the shop. Also, because the labor market is weak, the ECB, the Bank of England, they don't have to respond as forcefully as they did in twenty twenty one because they already know that they're not going to get loads of wage growth. It's very unlikely to happen. So I think for a couple of reasons, it's going to be a bit different to what happened last time.
So my thanks there to Ragna Hilda Sigurder dotted and to Bloomberg's Director of Global Economics Jamie Rush So we learned something about economics and also about Iceland. Will have more coverage of all the talking points from the Rekivic Economic Conference on Bloomberg platforms. I'm Caroline Hepget. You can catch us every weekday morning here Bloomberg Daybreak youre at beginning at six am in London. That's one am on Wall Street. Nathan.
Thanks Caroline and coming up on Bloomberg day Break weekend, we'll look ahead to some key economic data down under. I'm Nathan Hagar and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead at the top stories for investors in the coming week. I'm Nathan Hagar in Washington. We go to Australia next, where markets expect an elevated reading on consumer inflation in the coming week. For more, let's go to Doug Krisner, host of the Bloomberg Daybreak Asia podcast.
Nathan, there has been no escaping the global worry over higher inflation as the result of war in Iran. In Australia, the Central Bank was quick to tighten policy after the conflict began. Now in the week ahead, we'll get the consumer inflation data for Australia. To help us preview these numbers and what they mean for the RBA, Let's bring in Bloomberg. Swati Pondi Swati is a member of the ECOGUV team for Southeast Asia and Asion. Swati, thank you
so much for being here. Can you give me a sense of what the market is expecting in terms of the cost of living in Australia.
So Doug in Australia, we have had elevated inflation for quite some time. Even before the war in Iran began, the Reserve Bank of Australia was sounding quite worried about a hi or strong domestic demand and strong inflationary impulse across the economy, and the war in Iran, which has
caused an energy price shock, further exacerbated those concerns. So the Reserve Bank targets inflation at the midpoint of its two to three percent target, so that's two point five percent, and we have had inflation overshooting not just two point five but also the three percent the top of the band,
for quarter after quarter. And the RBA released latest forecasts earlier this month and it's not looking like we will be back hitting the midpoint until twenty twenty eight, So that is the backdrop against which we get this monthly report next week, which will be the first month of the new quarter. And the RBA looks at the quarterly data because the monthly report is still new for Australia and it's not that reliable, so a lot of the economists would look at the April data and try and
see whether inflationary impulse. Are strong getting stronger feeding into services or other parts of the economy or is it just restricted fuel prices?
So beyond fuel, are there certain components that you think might represent sticky inflation. You and I were talking a moment ago just about housing, and I'm wondering whether shelter cost could be a contributor to this upward push and inflation.
Yes, housing is the biggest contributor for inflation in Australia and it has been the case for many quarters now. That includes electricity, so utility prices which are also elevated. The cost of building a property is also quite high because material costs have gone up and expected to go up further right because of their supply chain issues as a result of the war. And the other thing that goes into the housing basket is rents, and even though we are seeing some slow down in house price growth,
rents remain elevated. Rentals can see rates are near record lows and there are still a lot of anecdotes around the big cities like Sydney or Melbourne where people are queuing up for rental inspections to find a place to live.
In the last week we had the Bloomberg Forum for Investment Managers, and we had a chance to visit with the Assistant Governor for the RBA, Sarah Hunter, and she highlighted the danger of rising inflation expectations. And I'm wondering away from the reading on CPI whether the RBA is perhaps more concerned about what the expectations for inflation may be in the future.
Absolutely, inflation expectations currently have been anchored, especially the long term inflation expectations, and that has been the biggest reason why the RBA was very cautious when it was using interest rates just after the pandemic and the infrast cutting interest rates and throughout it kept saying that we want to make sure that inflation expectations are anchored, not just inflation, and they also wanted to preserve the gains that we've
had in job market, so unemployment is quite low here. But there are now worries that with inflation remaining elevated for so many quarters, like it's probably been one and a half years or so of elevated inflation, that they are kind of getting worried that it may get entrenched. And once that happens, then it starts to feed into other things like people demanding higher wages or businesses feeling more confident about passing on their costs and so on.
So when that happens and it becomes a vicious cycle, that is a nightmare for any central banker.
Right now, I believe that money markets are pricing in at least one more rate hike from the RBA this year. Is there the possibility that we get a second Yes.
It definitely looks like that, especially because the RBA is forecast which I mentioned a little while ago, which point to inflation returning to target not before twenty twenty eight. That is based on expectation that the cash rate would go up to four point six percent, which is one more interest rate hike, and their forecasts actually show four point seven percent, which means there is a chance of
another one after this. So if they are not doing that, then probably they may not reach there or meet their inflation forecasts. And right now, one thing, the biggest thing that they are really worried about is inflation, and against the backdrop of the Iran war, they don't want a situation where inflation gets out of hand.
What is this doing to the growth story? That the risk that interest rates in Australia will be rising. Are there concerns now that growth will be compromised as a result, Doug.
When we finished twenty twenty five, Australia's economy was on a strong footing. The start of twenty twenty six also looked pretty good and that was one of the reasons that we had strong economy economic demand which was flaring inflation as well, So the starting point for the economy was good. However, there are increasing reports now of subdued consumer sentiment, which basically means consumers will be a little bit more reticent to spend, so we may probably see
a slow down there. We are seeing signs of slowdown in the housing market, which is one of the biggest countrybuty to economic growth in Australia. One thing that is going well is resources exports. So Australia is one of the biggest exporters in the world of LNG liquefied natural gas. It's also the top exporter of cole and arnore and we've seen commodity prices skyrocket in the aftermath of the
war in Iran and that is benefiting Australia. So the trade side of things, the external demand side of things remain good. The domestic side of things are starting to look a little bit shaky.
Swati will leave it there. Thank you so very much for helping us understand what's happening with the economy in Australia as we look ahead to that CPI data in the coming week. Bloomberg Swati Pondi from our bureau in Sydney. We go to Shanghai next where the twenty second annual JP Morgan Global China Summit happened in the last week, and it was there that we had the opportunity to catch up with JP Morgan chairman and CEO Jamie Diamond. Diamond spoke with Bloomberg's hustling to Aman.
It's not just about markets, it's about AI, It's about tech. I mean, you know, JP Morgan has come out to say it is actually a tech company that just happens to be a bank. You have a huge tech budget. I think nine billion dollars three billion for twenty billion, and then I think three billion for cybersecurity. Talk to us about how you're mobilizing the capital. Where are your areas of Priorah.
So we don't actually deploy capital by saying we'll put capital there we and everywhere we do in every business we grow in China like here, if you look at just China, we've gone from banking ten companies to banking I think it's two or three hundred. We've gone from banking thirty multinationals coming here to banking six hundred multinationals coming here. As we serve them. It deploys capital. So deployment of capital, deployment loans are outcome of building the business.
That's true for every country. It's true we open branches in the United States, it starts to demand capital as people will give us deposits, we start to make loans, and so we are pretty company. We can deploy capital intelligently serving clim We don't deploy capitale and investor saying oh this is the best place to put it. It's kind of an outcome of how we kind of grow with the business and always.
Give us AI though I mean how we invested absolutely AI.
If you any business meaning we have and we've been doing it for thirteen years, and every business meaning you have, we talk about how you can use technology do a better job for your clients. What are the projects you have? So we're using AI for risk, fraud, marketing, design, document management, who you should call in the morning, salesforce type things, branch location, hedging, And it's the type of iceberg. You know, it's moving very very quick. Coding, it's moving very quickly.
So we want to just stay up there and use AI to serve our clients. And we're going to do that. How can I do a better job for our clients using a technology called AI, just like we did it with a technology called digital, a technology called cloud, and way back at technology called mainframe, Like, it's no different. We got to do a better job for a client because that's how we compete.
So how will Jimmy mulgan look like in three to five years on the lack of developments in aill what how will Jimmie Walgin look like? I mean, how will are you business?
I hope with thriving. But what's not going to change? People have to hold money, movement and invest money, raise money. I think how it happens will probably change. You know, we use blockchain, there may be more blockshain being used to do that. There may be more people in AI jobs and less people in certain jobs, you know, so it'll all morph. But that's our job to serve the client.
And of course, you know, I always point out that we in the old days, we had you know, the big banks who are big competitors, and the investment banks, and that was global, different banks in every country. Now it's fintech in every country, and they're good. You know a lot of these people in Revolute, Stripe and Citadel, they're quite good. So we have to compete with all and a lot of that competition will be technology and AI. So we are investing that money to be competitive, to
do a better job for our clients. And if we're not fast and nimble, we'll lose.
And you're false and nimble, right.
Sometimes we're faster and nimbal Sometimes I feel like we're I feel like we're a dinosaur and elephant riding a bronco.
It is about menpower in the end, with the Licena women power, it's about the workforce. We had from Santa Chata chatting about eight thousand jobs of a spread of three years. We also had metas saying it's shutting the same number of people. I mean, how are you looking at menpower? Women power? How are you looking at the workforce on the back of you know advances being made in the I think the most.
Important thing is we do a good job for our clients and use AI. Will it change the structured jobs?
Yes?
Will.
I think there's been very few announcements are AI related. I think a lot of coming to too much bureaucracy, and they may use AI to cover up the fact that they should never hire those in the first place. But AI is going to change jobs, I don't know. I think we'll overdo some of our jobs down the road.
I don't think you'll be all different types of jobs and you have to deploy it at a level like I think we'll be hiring more AI people and probably less bankers in certain categories, and it'll make them more productive.
That was Jamie Diamond, JP Morgan, chairman and CEO, speaking with Bloomberg's Hustling to Ahman. I'm Doug Prisner. You can catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast. Nathan.
Thanks Doug, and that does it for this edition of Bloomberg Daybreak Weekend. Join us again Tuesday morning at five am Wall Street Time for the latest on markets overseas and the news you need to start your day. I'm Nathan Hager. Stay with US. Top stories and global business headlines are coming up right now