Good morning. I'm Brian Curtiz and I'm Doug Prisner. Here are the stories we're following today. Kevin McCarthy no longer Speaker of the House of Representatives. Let's get to ed Baxter Eddie.
Yeah, quite a day, Doug history. The vote turned out to be relatively close.
The Ya's are two sixteen, the nays are two ten. The resolution is adopted without objection. The motion to reconsider is laid on the table. The office of Speaker of the House of the United States House of Representatives is hereby declared vacant.
Now, there was a thought that Democrats might rescue McCarthy. Democratic Congressman Adam Schiff says the Democrats didn't vote to save him because he's just plainly not trustworthy. We don't feel that it's in the best interest of the country to have the House of Represents continue to alert from crisis to crisis. Now right wing republic and Matt Gates has been the lightninggrod behind this movement and says nobody trusts McCarthy, and.
McCarthy has made multiple contradictory promises, and when they all came to he lost votes of people who maybe don't even ideologically agree with me on everything.
Now, McCarthy before the vote said he doesn't regret any decisions he's made.
The end of the day, keeping government open and paying our troops was the right decision.
I stand by that decision.
So next well, electing a new speaker. Now, the last one resembled mud wrestling, and Bloomberg's Wendy Benjaminson says, backroom deals or what ultimately brought McCarthy down.
That's right. And the one backroom deal he made that presumably the next person who's up for speaker will not make is the concession to allow any one member to post this motion to vacate. And that's what Matt Gates demanded in return for to vote to make McCarthy the speaker. And now that has come up home to rust and Matt Gates has vacated him a speaker. So that was a deal that you know didn't turn out so well for McCarthy.
So now, if you want to put another wrinkle on all of this, Bloomberg's Rick Davis says, McCarthy still has cards to play.
It's really up to Kevin McCarthy right now, do you want to be nominated to try another run for speaker where you think you can get more than two hundred and ten votes next time, or do you open it up to somebody else to be nominated and see how their luck fares. This is really the biggest question on the floor of the House of Representatives right now.
Yeah, so your witnessing history. Next steps are to try and elect a new House Speaker that will suck up most of the energy out of the chamber until the process is completed. Global News powered by more than twenty seven hundred journalists and and lists over one hundred and twenty countries, and we'll continue to have more details on this breaking story in San Francisco. I'm Ed Baxter. This is Bloomberg Brian.
It absolutely will have a lot more on this coming up shortly with Henrietta Treys, managing partner and director of Economic Policy at Vada Partners and get her insights. But first we'll take a look at some of the other top stories. Treasury yields hitting new multi year highs after the government reported an unexpected increase in US job openings during August. We get more here from Bloomberg's Michael McKee.
We've gone up in terms of job openings by six hundred and ninety thousand, two over nine million. Again, that is a significant increase. For the Jolts report job openings and labor turnover hirings. The number of people getting hired changed little, is still at about five point nine million, so a very stable situation there. And then the quit rate everybody's been focused on. The quit rate doesn't change
at all. Quits three point six million, pretty much the same as the prior month, and that leaves the quit rate unchanged at two point three percent.
Berg's Michael McKee the jump in job openings was mainly driven by white.
Collar position and today's data on the labor market did boost the case for the Fed to keep rates elevated. We heard today from the head of the Atlanta Fed, rafae Elbostik. He was saying rates should be held at elevated levels for a long time as a way of bringing inflation back down to the Fed's two percent target. He also said he is expecting just one rate cut being appropriate in twenty twenty four, and that would happen
sometime near the end of next year. Meantime, the head of the Cleveland Fed, Lorettamester, was saying she would support another rate hike. In November, we also heard from US Treasury Secretary Janet Yellen, and she said she's keeping an eye on this run up in market interest rates.
I'm very optimistic about the US economic outlook. Short term inflation is coming down in the context of an extremely strong labor market. We are now engaging in a very substantial program of investments to strengthen our economy.
That is US Treasury Secretary Janet Yellen. Interestingly, she said it's not a given that interest rates wilstay elevated for a long period of time, right.
Well, a lot of uncertainty in the markets, and we saw that with what happened to the end, the yen rebounded from the weakest levels of the year with a strong rally. Bloomberg's Joan Wong has the story.
Japan's currency reached one fifteen point one six per dollar on Tuesday in New York trading. The yen then sold nearly two percent in a matter of seconds to as strong as one hundred and forty seven point four to three per dollar. It lasts traded at around one forty nine, with traders selling yen again as US yields rose to
the highest level since two thousand and seven. There's speculation that Japanese officials were acting to slow the currency slide, and official with Japan's Ministry of Finance had no comment on whether Japan had intervened on the yen in Hong Kong joined Wang Bloomberg Radio later.
Today, the Reserve Bank of New Zealand has a rate decision, and the RBNZ is seen keeping rates on hold at five and a half percent. Even so, the central bank is also expected to keep open the option of future rate hikes. We have a preview from Bloomberg's Paul Allen.
All Twenty two economists surveyed by Bloomberg expect a hawkish hold from the Reserve Bank of New Zealand. Today. Inflation is trending down but still well outside the target band, but growth is holding up. Revised data shows the country actually dodged a shallow recession in the second quarter. A hold would certainly come as a relief to the governing Labor Party, with opinion polls indicating a heavy election defeat
and store in ten days time. Uncertainty over who forms the next government may also tempt the RBNZ to wait and see if changes to fiscal policy are coming, Paul Allen Bloomberg radio.
Back in the United States, jurious election was conducted today in the trial of Sam Bankman Freed, he's accused of swindling billions of dollars from the crypto Exchange FTX. Tomorrow, the prosecution will begin laying out its case. Here's Bloomberg's Kayley lines.
The prosecution also will be assisted by the accounts of multiple key witnesses, some of the Bankman Fried's closest associates at the time all of this went down, Gary Wong, who co founded FTX with him, Nishad Saying who used to be ftx's head of engineering, and Caroline Ellison, who was the CEO of alime To Research, the aforementioned training firm,
and also his ex girlfriend. All of them have already pleaded guilty to federal charges and are cooperating with prosecutors, so they will be able to lean on their testimony on the defense side. Though Sam Bankman Freeing already leading up to this trial, has said repeatedly it was never his intention to commit fraud, and intention is what is going to have to be proven over the course of this trial.
That's Bloomberg's Kayley Lines bankman. Freed has pleaded not guilty to all seven charges, including fraud and conspiracy to commit money laundering. I'm Brian Curtis along with Doug Christner, and the big story of the day Republican Kevin McCarthy ousted by this disas within his own party. Joining us now is Henrietta Trees, managing partner and director of Economic Policy at Veda Partners. Henrietta, thanks so much for joining us. I think that's the right way to put it, that
he was ousted by dissidence within his own party. We know that the big part of the story, as well as the Democrats refusing to rescue him, and we talk about that in a moment. In the short term, it means that the speakership battle will begin again, and it doesn't mean that Kevin McCarthy won't get the job back. So how do you see that moving and is there a lot of horse trading coming?
I think it's a very good point. The unknowns are more voluminous than anybody would care to admit. I think that what is plaining is that his replacement, Patrick McHenry is not there of his own volition. You could see that as he gabbled out this afternoon. I think Speaker McCarthy would be just a glutton for punishment if you
tried to go for this again. More realistically, you'll see representatives emerans plice either have their names thrown into the ring to either be dismissed by themselves personally Scalise for example, for health issues, or they will immediately sort of be rejected by the far right again for being part of
the establishment or old guard. There are one hundred and ninety six to two hundred and ten members of the Republican Party who have supported Kevin McCarthy over the last five days, and for many in the far right that's just an untenable position for them to take. So I think the effort to get to two eighteen is going to be fraught, and we could easily be here for weeks before we have a final speaker.
Yeah. Late last month, I don't need to remind you. Moody's the only remaining major credit greater to give the US a top rating, said confidence in the US was wavering a bit insofar as the firm was concerned because of their concern about governance. Where does that leave us right now in terms of how markets have to discount the dysfunction that we seem to be seeing.
I think it's a perfectly valid position at this point. They do not have anything to take to any incoming speaker and say this is our clear list of demands. They are worried about the border, but don't know if they can send border funding or border policy to a piece of legislation. They're worried about Ukraine funding, but the Senate Republican Conference wants all the Ukraine funding that they
can get. They are worried about the debt and the deficit, but they're looking to trim sixty billion dollars in spending this year when sixteen trillion dollars needs to actually be eliminated. So I think that what's happening is you're confronting a bunch of freshmen and relatively new House members who want it all and don't know how to get any of it. And that's effectively what the ratings agencies have called them out for.
Let's talk for a moment about the Democrats refusing to rescue McCarthy. Is that pure politics? I mean, this puts the Republican Party in disarray. Some might even say chaos. Is it the right thing for the country or was this a move really just to get a leg up on the Republicans.
You know, there were what five or six House Democrats that didn't vote today that should have been more than enough for McCarthy to work with. He got more than that in the previous votes that he needed to maintain the speakership or to even secure the speakership. He has lost less members than that on certain key and procedural votes, such as the ones on the motion to adjourn over
the weekend. There were plenty of Democrats that were not present and voting had he been able to keep the far right from eating into his caucus, So I'd have
a hard time ascribing blame to Democrats here. It's also really hard to imagine Minority Leader Jeffries given an opportunity to say, you know, go vote for another speaker, when of course they have the permission and the ability to vote for Jeffries, which is what we'll see from them throughout next week as they start taking votes on the speaker's position.
I think we can agree this rebellion was precipitated by some of the bipartisan deals McCarthy put together one on preventing a default on us, said the other just the other day on government funding, which only takes us through November seventeenth. What happens after November seventeenth.
Yeah, that's the question. The bipartisanship is really obviously the problem for the far right, but that is the math that we have to work with. The Senate is controlled by Democrats, so that doesn't change here. I think what immediately needs to happen is we need to reassess our odds or I certainly do, about what the prospect is
for a shutdown on November eighteenth. And I think that what we need to start off with is a hope at the barest level that we can get some standalone appropriations bills done for perhaps defense or maybe agriculture, get those buils done so that when we do face November eighteenth, it's not a full shutdown. But the odds of a shutdown have to start at sixty five percent or higher. For my clients, I usually am at about five percent.
I'm very bearish on these kinds of things. I was only at twenty five percent we would shut down going into this weekend. Now that we're in this new world. I think you have to start at least sixty five. There's a strong argument to make for seventy five, and I bet the street will be much higher than me come Monday morning.
We could talk until the cows come home about this story. From the inside look out, but I want to go outside the United States. I look at the press out here in Asia a lot for a feature that we do, and oftentimes you hear people talk about American exceptionalism. Is this the opposite of that? I mean, does the US look somewhat in disarray with something like this?
We are in an exceptional state of disarray. And there's a great quote that's effectively, we are a functional dysfunctional unit. And I wouldn't be surprised if you hear that all over the world. Now, I mean, this is the height of dysfunction. And it's not even party on party, you know, this is intra party fighting that we see here, and these slim majorities are exactly what it makes it so
difficult to govern. I can imagine some of the old guards coming out and saying, you know, this kind of dysfunction is what keeps America, you know, and our democratic rights alive. But it is obviously the kind of thing you think of. If you want to say something good about a dictatorship, you don't have to go through this.
So I wouldn't be surprised if that's the argument. I mean, the disarray in the US, particularly when it has real ramifications on things like at Ukraine, are understandably a big concern for our allies and not so allies abroad.
So the temporary speaker now is Representative Patrick McHenry Henrietta. Can he bring the temperature down? Do you think effectively?
I actually have a lot of questions about what he can do. I want to know if he's capable of path legislation. I want to know if he could put legislation on the floor. I don't expect him to immediately come in and claim the mantle of speaker. I think he's going to, at least for several hours or days, make it plain that he did not want this position. He was on McCarthy's shortlist and is not doing this of his own volition. I don't know a happy warrior is quite the way to term this yet, because I
don't think he's very happy. But I do think that he is going to be the person that's in power for probably a few weeks, which will give him time to secure a foothold within the conference and try to unite them around him. And it's the heavy task but certainly could be accomplished.
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