Fed Leaves Rates Unchanged, FedEx Beats Estimates

Good morning.

I'm Brian Curtis and I'm Doug Krisner. Here are the stories we're following today.

Let's take a closer look here at the FED. Doug, it held at benchmark interest rate steady today, as mentioned, in a range between five and a quarter and five and a half percent. The FED central message was that rates will be higher for longer. At the news conference, Chair Powell addressed the issue of a soft landing, saying it's a primary objective for the FED, although he wouldn't call a soft landing a baseline expectation.

Ultimately, this may be decided by factors that are outside our control at the end of the day. But I do think it's I do think it's possible. A soft landing is a primary objective, and I did not say otherwise. I mean, that's what we've been trying to achieve for all this time.

FED share J Powell. He described the current rate environment as not yet sufficiently restrictive.

And that means one more rate hike is possible this year, but former New York FED President to Bill Dudley is saying he'd be surprised if another rate hike occurred in November, so taking.

Quite a bit of signal of the fact that the labor market seems to be ginning to better balance, even without the unemployer rate rising very much. So they're more confident that the labor market essentially normalized on its own, that the FED doesn't have to generate as much slack in the labor market to get inflation back down at two percent.

He is Bill Dudley, the former head of the New York Fed, Brian Well.

FedEx posted profit that topped analyst estimates, and then it raised its earnings forecast to be a little bit higher. The move is in part to cost cutting or the move on profits, and partly due to cost cutting as well as strong pricing customers who switched to the courier from its main rival ups due to concerns over a potential strike. We get more from Bloomberg Intelligence senior transportation analyst Lee Clascal.

You know, the beat is what's telling us as that management is beginning to execute on its strategy to cut around six billion dollars and expenses. FedEx for a long time has been a show me story, and they're actually starting to, I guess, not show me, but show people that they're able to execute on their plans.

FedEx Is Freight unit also picked up some volume from trucking company Yellow, which had declared bankruptcy back in early August. The company raised its guidance for annual adjusted earnings per share to between seventeen and eighteen dollars and fifty cents for fiscal twenty twenty four. Investor seemed to like the story. FedEx shares about five percent ors So in late trading, let's.

Talk IPOs next, we had shares in Clavio climbing nine percent on their trading debut. This is the marketing and data automation provider. The company raised five hundred and seventy six million through this offering. Now, the IPO is the third major US listing in the past week, and you would include on that list Arm Holdings and the grocery delivery company Instacart. Well, speaking of Instacart, today, shares down nearly eleven percent to close just ten cents above the

Brian, Well, let's take a closer look here what we're getting from the PBOC. So we had some comments from a current leader at the PBOC and then also the former head the People's Bank of China saying it has sufficient policy space to support the economy's recovery. And get the story from Bloomberg's Joan Wong in Hong.

Kong, Dolan, head of the PBOC Monetary Policy Department, said the central Bank has ample policy room to react to challenges. He also said the PBOC will step up its counter cyclical adjustments. The comments add to expectations that there could be more easy to come, including interest rate cuts. Separately, former PBOC chief Yeegong said the central bank should ramp up support for the economy in order to reach growth targets. He made his remarks in an official paper affiliated with

So in one sense, Doug, it seems like Igong, the former governor, is calling for the central bank to do more. And then we had the comments there from the current monetary policy chief at the PBOC saying, you know, we're in a good place. We have the tools. So if we look at what the currency did the currency weakened a little, so it seems to imply that there are more rooms for monetary easing. Thus the currency would slip a little bit, So it'll be fun to watch it today.

Yeah, and a number of guests in our program have been talking about their expectations for a cut in the triple R in China. We'll have to see if that comes to pass. But just to get back to the FED in the notion of easing, one of the things I was struck by Brian as a part of the new dot plot the FED projecting just fifty basis points

So if you put that together with the feds expectations to raise one more time this year, and if you put that together with the markets, the bond market in particular, with the inversion of the yield curve, it seems like you're getting a sort of bearish input into risk assets. And it may not be the case depending upon your time frame, but if you look at the performance today, it was definitely.

Weaker definitely weaker in terms of equity market action. You're right, and then moves up across the yield curve, particularly in a two year right where you're up about seven basis points to five seventeen. That's high yield.

So we'll be talking with our guests about this all throughout the morning. Coming up. Danielle di Martino Booth, the CEO and chief strategist for QI in Research. Used to be Quill but now QI Research. That's coming up in a few moments. Now it's time for Global News UK Prime Minister Rishie Sunak diluting key parts of his Climate Nets zero agenda at Bacheter covering that story and with Global News in San Francisco.

Ed.

Yeah, all right, Brian, thank you. You're right. Sunakas pushing back on a ban on the sale of new petrol and diesel cars by five years. It's now will be twenty thirty five. He says, most citizens will have electric cars by that time. Anyway, we've had.

The fastest reduction in greenhouse gas missions in the G seven down almost fifty percent since nineteen ninety, France twenty two percent, the US, no change at all, China up by three hundred percent, and when now our share of global emissions is less than one percent, how can it be right that British citizens are now being told to sacrifice even more than others.

And he says the effort faces a major pushback if it continues the way it is now.

If we continue down this path, we risk losing the consent of the British people and the resulting backlash would not just be against specific policies, but against the mission itself, meaning we might never achieve our goal.

But climate control advocates are not happy at all. C and then caught up with al Gore today, who says he realizes he's not a British citizen, but.

I've heard from many of my friends in the UK, including a lot of Conservative Party members by the way, who have used the phrase utter disgust. And some of the young people there feel as if their generation has been stabbed in the back.

Sunak, by the way, says, still committed, dude, not zero by twenty fifty, but in a more proportionate way. US Secretary of State Anthony Blincoln took verbal aim at Russia in front of the UN Security Council today.

For over a year and a half. Russia has shredded the major tenants of the United Nations Charter, the Universal Decoration of Human Rights, international humanitarian Law, and flouted one Security Council resolution after another.

Now b Lincoln says Moscow is blocking Ukrainian food exports, using illegal Iranian drones, and even arranging weapons deals with North Korea. US President Joe Biden. Meanwhile, i'm the sidelines of the UNA sat down with the Brazil's president Lulu Lula to talk about workers' rights. The message to Lula, but most importantly in an indirect way to the labor situation in the United States for.

Working lockstep to tackle a climate crisis, including mobilizing hundreds of millions of dollars to conserve the Amazon and the critical ecosystems in Latin America.

And this comes with a UAW and strike as well as the writers and Actors' unions. China says it's simplified. It's a visa application process as it looks to attract more visitors from overseas. Now applicants now need to list where they have traveled in the past year rather than five. It says it wants more streamlined process. Global News Fower by more than twenty seven hundred journalists and analysts in over one hundred and twenty countries. In San Francisco, I'm at Baxter and this is Bloomberg.

This is Bloomberg Deabreak Asia. I'm Brian Curtis in Hong Kong along with three Salama. Our guest is Danielle di Martino, Booth CEO and chief strategist for QI Research. Danielle, thanks very much for joining us. We've just been talking here about the FED projections implying a hike at the end of the year and two fewer cuts next year. I suppose it sort of encourages us to think that maybe this is a little bit more of a hawkish pause than what the market was expecting.

What do you think, Well, I think that the market was fully anticipating that the Fetter Reserve was going to keep November or December a live meeting. But I don't think, to your point, that they were anticipating that two rate cuts would be coming off the table, which really hammers home this idea of higher for longer.

Well, absolutely, you think when you look at that, how do you think the market is interpreting this?

Well, I think that the market is rightly concerned that there might be a larger element of dissent entering into the debate among members of the Federal Open Market Committee. When you look at the June dot plot, and I'm not suggesting you just visualize the dots being a lot closer together, more cohesiveness philosophically, And then you take a look at September and you could drive a mack truck

Well, the FED seems as mystified as the rest of us on why the economy is resilient in the face of all these FED rate hikes, And I think, from an intellectual standpoint, can he really say that a soft landing is the primary objective given the mandate?

Well, when I think that, when Powell was pointedly asked by a Reuter's reporter, do you have soft landing as your base case pre Powell, who is picarly a very dignified and quiet spoken individual, interrupted the reporter to say no, no, that that is not his base case. And then he flipped pronouns and moved to the word I. So I found that to be absolutely fascinating. And he is focused on that two percent, and it is that two percent that he is going to push towards.

Is that's the case. If two percent, if inflation is the killer mandate, then how can you really say that a soft landing is a primary objective. I don't think you can.

I don't think you can. But that conflicts with members of the Federal Open Market Committee raising their GDP forecast, lowering their unemployment forecast, which which we saw today in the Summary of Economic projections. So again a lot of at least for me, I was I was only the set for nine years, But there was a ton of con usion that was entered. At least to me, there was just a ton of confusion broadcast by j. Powell.

Well, you know at the end of the day that you're looking at the FED and internal divisions. It's not surprising because you know, the data itself is really very much of a potpouri. It's really how you want to interpret it. There's so many different data points that it's very confusing as well.

Well, it's it's the data is confusing. The data revision are making me dizzy when when you get a retail sales report out and they they revised July and then June deeper, and economists are moving their GDT bogies around

Is very important. To the point you raise about oil. Now, this really has through an a spanner in all the works.

Look, this, this situation can really get out of hands. There was not one time today at the podium that that care Powell used the word supercore. He actually altered the narrative without without actually saying so, because he mentioned oil, but he did not mention his supercore, which excludes just about.

Every I think, you know, none of us would want to be in his position up there taking questions like that. And given you know, this incredibly complex mosaic that we have a quick question on China, it seems like there's a little bit of a of a you know, at the PBOC, a little bit of confidence that they're doing the right thing. But then the former chief said, you need to do more. How do you see it?

Well, look, arguably we have seen a delay in the reopening trade because we've seen so much, so much new resilience in the domestic data coming out of China. But you have to ask yourself what's coming behind that, and the answer is not altogether that much. And so you know, compared to two fifteen, twenty sixteen, the industrial recession and the great natural part of China's not applying near is much stimulus.

Yeah, yeah, absolutely, Danielle, Thanks very much for joining us. Danielle di Martino, Booth CEO and chief strategist at QI Research. This is Bomberg Daybreak Asia, your morning brief on the story's making news from Hong Kong to Singapore and Wall Street.

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I'm Brian Curtis and I'm Doug Krisner. Join us again tomorrow for all the news you need to start your day right here on Bloomberg day Break Asia.