Bloomberg Audio Studios, podcasts, radio news.
This is the Blueberg Day Baqo podcast, available every morning on Apple, Spotify or wherever you listen. It's Thursday, the twentieth of March here in London. I'm Caroline Hepka and.
I'm Stephen Carroll. Coming up today, Jerome Powell calls tariff risks transitory as he seeks to downplay growth and inflation concerns.
On leashing a new China shock. We look at the unintended consequences of Trump's tariffs on developing economies.
Plus getting creative. How wealthy people in the UK are adopting new strategies to limit the effects of changes to inheritance tax.
Let's start with a round up of our top stories.
The Federal Reserve Charge your own.
Powell has downplayed concerns about US economic growth and the impact of President Trump's trade war on inflation, as the Central Bank held rates steady for a second straight meeting. Speaking to reporters following the two day policy meeting, Powell went as far as reviving the controversial term transitory.
It can be the case that it's appropriate sometimes to look through inflation if it's going to go away quickly without action by US if it's transitory, and that can be the case in the case of tariff inflation. I think that would depend on the tariff inflation moving through fairly quickly, and would depend critically as well on inflation expectations being well anchored longer term inflation expectations being well.
Pal's use of transitory was surprising too many after the Fed used the same term when inflation exploded after the onset of the COVID nineteen pandemic. The FED chair went on to call that scenario the base case, but then proceeded to stay, officials really can't know if the tariff effects will be temporary.
The S and P five hundred moved higher as Powell spoke, and treasure yields dropped as markets continue to look for clues on the impact of President Trump's trade policies. In apposed on truth social President Trump wrote, quote, the FED would be much better off cutting rates as US tariffs start to transition ease their way into the economy end quote.
The decision to actively lobby the Fed for lower interest rates came just hours after White House National Economic Council Director Kevin Hassett tried to reassure investors about the Central Bank's independence. In this back and forth with reporters, we very.
Much respect the independence of the FED.
There's a massive literature to independent sepprobates perform.
Better for academics, and so I don't think that's a districy. It doesn't think you en Mari. I think that's been resolved of the previous administration.
Kevin Hassett were speaking as the Trump administration prepares to ann as a fresh wave of so called reciprocal tariffs on the second of April.
New Bloomberg reporting is showing how US tariffs are reshaping global trade. Emerging markets are facing a so called China shock as cheap gods derive in developing countries. You and Parts has the details.
China's trade surplus last year reached a record of close to one trillion dollars, but as exports to the US flatline, China's hyper competitive manufacturers have been targeting other markets around the world. Blimok has been looking at the pressures being faced by the likes of Indonesia, Brazil, Thailand and Vietnam, as well as big ticket items like electrical vehicles and solar panels. China's exporters are causing job losses in sectors
like electrical goods, textiles and shoemaking. One academic described it to US as China Shock two point zero.
I'm ewine pots Bimberg radio.
Now, the Bank of England is expected to leave the benchmark interest rate on hold later today, markets and economists being leave. The Monetary Policy Committee will hold borrowing costs at four and a half percent, while reiterating a cautious
approach to further cards. Speaking earlier this month, the Governor Andrew Bailey said that although the impact of trade tarifs on inflation can be ambiguous, in his words, he did wol the risks to the UK economy from Trump's tariff war quote are substantial.
President Vladimir Zelenski is back to US proposal for Ukraine and Russia to stop strikes on energy infrastructure. The Ukrainian leader told US President Donald Trump it would be one of the first steps to fully ending the war. White As Press Secretary KARLN. Levitt says the call helped move towards ending the war.
The two leaders also agreed on a partial ceasefire against energy. Technical teams will meet in Saudi Arabia in the coming days to discuss broadening the ceasefire to the Black Sea on the way to a full ceasefire. They agreed this could be the first step toward the full end of the war in ensuring security.
Levitt also described the conversation with Zelensky as fantastic, and a US aid described a previous call with Putin as epic. Two weeks ago, the US temporarily cut off Ukraine's military aid and intelligence sharing, but promised fresh support after President's Trump and Zelenski spoke. Meanwhile, EU leaders are meeting in
Brussels today to discussed ramping up their defense capabilities. While that U has publicly welcomed US efforts to push for a peace steal, leaders have become increasingly alarmed about being kept out of Trump's dealings with the Kremlin.
The next generation of uk nuclear submarines starts construction today as concerns grow about the country's reliance on America for its defense. Pime Minister Kis Starmer is a tending a ceremony to mark the work starting on a new Dreadnought class submarine. James Walcock has more now.
Britain's nuclear submarines are emblematic of the country's defense debate. Despite being the country's ultimate nuclear deterrant, all four subs are active beyond their twenty five year service life and rely on America for maintenance. Kiss Arm's rare visit is a way to highlight the public the need to improve the country's defenses, but the next generation will be debated too. It's Britain's most expensive military procurement program, costing an estimated
thirty six billion pounds. That's six years worth of the government's welfare cuts announced earlier this week in London, James Wilcock the Radio.
And Finland's unbroken streak as the world's happiest country has continued for an eighth year, with the UK in twenty third place in the global ranking. The US came in at twenty fourth for happiness, its lowest ever level. The study by the Well Being Research Center the University of Oxford is based on a three year average of a population's self assessment of its quality of life. Researchers found that belief in the kindness of others is much more
closely tied to happiness than previously thought. Denmark, Iceland, Sweden and the Netherlands rounded out the top five.
And those are your top stories this morning. Now, let's look at the markets. US DOT futures are up, so perhaps a little bit happier after FED chared your own power reassured them in terms of the fears over tariffs, although, of course President Trump talking about his view that the FED would be much better cutting interest rates. That doesn't really seem to have landed with investors, will it at some point? Tenny US treasury yields of flat four twenty four? Though,
remember that Japanese markets are closed for holiday today. The Bloomberg dollar spotl in Leggs is slightly stronger this morning, the Japanese yen extending Wednesday's recovery, gold hitting a fresh record high this morning. The Euro trades at one sport zero eight nine eight, so slightly softer right now. That is a look at the markets.
And a moment to bring in more and her.
Trump's tariffs are pushing Chinese exports into other markets.
Plus how wealthy people.
In the UK are developing new strategies to avoid paying inheritance tax. But in the story that colt right this morning, a bottle of whiskey a very rare bottle of whiskey in cased in what looks like concrete to try and add to its rarity value. Have we reached peak collector whiskey?
Possibly yes, because the whole idea of this Scottish distiller, Glen Rothis releasing its oldest and rare single mold is that it's meant to be drunk. You're meant to smash the bottle because apparently you know, once you smash the bottle then you can't resell it, or the casing around the bottle you can't then resell the bottle because its almost like selling the bottle without the casing.
So the extent to which they've gone with this, so our writer Brad Jaffi has tasted the whiskey unless you read his description.
But the bottom line is it's good.
But the ideas you can so you can break the packaging, then you can send it back to the distillery, who will get a sugi artist to reassemble the column, filling in the cracks using gold in according with the Japanese practice as well as there's a whole collector's element this, but it's a very interesting dilemma because unlike other high end collectibles of course it is a consumable good, so you have to make the decision as to whether you're
you know, keeping the action figure and its packaging or you're taking it out and playing with it.
Essentially.
Yeah, it's such a nice story anyway, once to think about it, I might be smashing the bottle maybe later for hot Toddy if anyone can hear my little bit of a cult this morning.
That's bringing more there on our top story this morning and the latest on the trade tariffs, but our reporting looking at how President Trump's determination to rebalance the US's trade relationship with Beijing is pushing Chinese manufacturers and exporters to look for alternative markets. It's on leading a new China shock on the rest of the world, with job losses and economic devastation in Indonesia and other emerging markets. Let's bring in our Asia Economics reporter Katie Dimitrieva for
more on this story. Kat Indonesia is your case study in this reporting. What's happened to jobs and the textile industry there.
Well, it's pretty grim, especially in the past year in Indonesia, because there has been such a fast pace of layoffs, like particularly in textiles and shoes elsewhere as well and in other emerging markets, but Indonesia's really being felt there and a large reason for that. People there are blaming and workers and industry groups are blaming China and cheap
Chinese imports. And we've seen other other countries in the region reacting to that as well by putting in taxes against companies like Tamu and she and because a lot of the goods are coming in that way, a lot of the clothing is coming in that way, and these small packages. But essentially what's happening is very similar to what we saw in the US rust belt right in the nineties and early two thousands when China first came
onto the scene in global trade. We saw a lot of lost jobs two point four million in the US. And while those numbers are not as high in Indonesia, of course, smaller population, they are much faster. The job loss is happening at a much faster pace.
Yeah, But of course child is trade surface hashitted all time high, and so the goods that child is muddy. Factually they have to go somewhere. Who else is being affected?
Yeah, In twenty twenty four, hitting nearly trillion dollars and so Indonesia's one of them. A Southeast Asia in particular is interesting because these countries are I mean, they're certainly geographically close to China, but geopolitically speaking historically are very close, and they rely on China for a lot of foreign direct investment, building of infrastructure, roads, things of that nature.
And so to have these countries facing as challenges most recently very it stands out right, But there's also Brazil, there's Mexico, and President Schinbaum there is doing a lot right now to try to limit again these cheaper goods
from entering. And again that's you know, clothing, its shoes, it's steel, but it's also components and kind of these smaller parts that go into big machines and manufacturers that manufacturers use, and is you know, having the dual effect of both hitting demand in the domestic economy, so people are buying these cheap Chinese goods domestically, but also competing internationally is just that much harder when you're competing with China.
How much leverage do these countries have to act to be able to push back against China. I mean, they don't have the same economic haft as the US.
Yeah, it's and this is what makes this shock quite different, right, the shock two point zero or three point zero is quite different in that a lot of these economies can't really push back. You know, they have industries coming to them, and a lot of the folks profiled in our story are going directly to their industry groups. For are going directly to the government and commerce and trade and saying we need to put in tariffs or something to stop this,
and you're seeing some of that. There's some investigations and to steal dumping. There are some tariffs on small packages or like a value added tax, but they're really limited because if they take too strong of a stance, well, there goes your foreign direct investment, there goes your relationship and certainly your geopolitical ties, which is something that countries would be concerned about. So they're really between a rock and a hard place.
Gotta thank you so much for being with us this morning. All Asia economics will pull to Catty Dmitrievia and you can read that story in full. Trump's tariffs on Lesha, New China, shock on the rest of the world in depth reporting.
Study carried out by AJ Bell in twenty twenty two found a significant investment gap between men and women in the UK of as much as one point sixty five trillion pounds. How much could addressing that help to boost the UK investment landscape? In a bid to close the gap, former Goldman Sachs executive Isiho Fori founded Propelled, the UK's first female focused investment platform.
For a work, isshow has.
Been shortlisted for both Kliko's Bold Future Award and she's with us in studio now for more. Isha, Good morning to you. What is the background to the issue here? Why are women in the UK investing less than men?
There are a few reasons. One of them, i'd say, Well, the main one is that women lack confidence, or i'd say it's perceived confidence. Often when you ask them lots of questions and things like this, they do actually know more about investing than they think. However, they don't act on it because they think that they need to know more or they need an next expert to sort of guide them, so they inevitably tend to be savers rather than investors.
Okay, isn't this also part of the gender pay gap and the fact that women often work slightly fewer hours, fewer years on average over the course of their working lives.
So that is part of it, but not all of the story. It's a number of things. So the pay gap obviously is one of them. Women are the ones who have children and tend to be the careers, so take time out. Women also tend to be the careers for relatives, parents, and then women also are affected quite
a lot during menopause and take time out again. So when you add all of these things together on top of the fact that women live longer and that they're saving rather than investing, it all sort of contributes to the problem.
So there's huge untapped potential here as well to boost both investment and individual wealth. How do you tackle it?
So for us, it was really about trying to understand the psychology of women when it comes to money in investing, but also what are the those hurdles that have been holding women back and how can we put those into a platform that's accessible to the masses and enable women to really feel comfortable and confident when they start investing. That's the only way to sort of shift the behavior from saving more towards investing.
Are you concerned that perhaps initiative like initiatives like yours might suffer some pushback as we see a rollback of diversity actually an inclusion in the United States and that focus on women. Do you think that that perhaps will affect what happens here in the UK.
I think absolutely. One of the ways that we reach women is working with corporates, and we've already started to see a shift. But it's really interesting the individuals within those companies, particularly in the UK, are sort of like, we still love what you're doing, we still want to help. However, you know, money and funding and sort of departments are being shut down. That said, they still recognize the need and so they are still trying to see how we
can continue to work together. But I've never been afraid of sort of having that pushback. Even when I first had the idea, a lot of people told me I was insane and if women weren't investing, they didn't want to.
Well, investing in female lab businesses is a broaderish as well, one being highlighted this morning by Hannah Bernard, the co chair of the invest In Women Task Force in the UK as well, writing in the Financial Times, what is the issue and is it getting worse? I mean, I wonder what your own experience was even getting investment for your own company.
I use the word horrendous, and I don't use it lightly. I perhaps was a bit naive and thought that it wouldn't be so challenging for me. I know the statistics around women, but also it's even worse for black women. But I sort of said to myself, I have a master's degree in physics from Imperial, I worked at Morgan Stanley Goldman Sachs. I've got an MBA from London Business School. Surely those things count for something. But it was still incredibly difficult, and inevitably. What I found is that a
lot of the investors are men. They're the ones that tend to have money that they're looking to invest in these types of businesses. And I guess it's partly they didn't understand the story or the need as to why women need additional resources or an investment platform for women. But I also think it's just inherent biases as well.
But the way that I got around it is, you know, over seventy percent of my investors are women, because they just naturally understood what we were doing and were also prepared to invest in a business run by a woman.
Okay, how is propelled doing as a platform? I you know, I'm very interested in this subject because on the one hand, you've got you know, like Hannah Bernard and Debbie Wosco who are leading the government, backed back by Rachel Reed's sort of personally the Invested Women's Task Force focus on women. Okay, investing in female led businesses is going down, but nonetheless
they're you know, the they're making that case. And on the other hand, a lot of kind of female led clubs in London, for example, trying to build networking bridges. Those have shut down recently, so it's really a very difficult space. How are you going to manage this and navigate this when it comes to propel itself and building that business.
So I think a lot of resilience, I say, is the first thing. But when you speak to women, what I found is they actually do want to invest. We're also going through something called the Great Wealth Transfer, so women are amassing wealth and accelerating rate. I think it's actually this year that the statistics say that sixty percent of UK wealth is going to be controlled by women. So women are getting more and more wealth. And when you do actually speak to them they want to invest,
So for me, it's more about finding them. How do we reach them? And we do that, as I said, through companies, through organizations, but actually we've grown massively just by word of mouth, referrals and social media.
Are you worried though, with as you described it, how companies are real orientating their approach to efforts like this, that that funnel for you gets cut.
Off, I think in a sense of potentially companies paying for some of the services we provide. Yes, but we can still go into these companies and engage with their women's networks and things like this, and that has been incredibly fruitful for us, so, as I said, some.
More informal connections necessarily than perhaps the former ones funneled through companies exactly exactly.
So maybe the company can't formally engage in the same way anymore, but the individuals in these companies absolutely do, so those doors are still open.
Here in the UK, major changes to inheritance tax by the Labor Government means more wealthy Britains are embracing creative tactics to protect and pass on wealth, especially businesses, farmland and pensions. Joining us out to discuss Boinberg's Personal Finance and wealth reporter Alice Cantor Alice, good morning. Remind us, first of all, what has the government changed when it comes to inheritance tax.
The government has overhauled the tax system so that from next year, in the year after pensions, business in Farmland, they'll all be including a person's estate.
And what that.
Means is that when in the past people could pass on their pension and businesses mostly tax free, now they'll be tax at maybe twenty percent, sometimes even forty percent.
So what are the strategies so that people are thinking about or employing to basically pass on that wealth, all that business and try to find a creative way around this.
Yes, so people are drawing down on them sorry, they're drawing down on their pensions. They're gifting more money to family members and sooner as well. They're establishing trusts, Some are taking out costly life insurance policies. They're considering selling their businesses. They're considering setting up savings accounts for their kids, even leaving the country in some cases just to avoid paying the levey, to avoid putting all that pressure on their children when.
They pass on.
Are they downsides to these strategies Alice, What are the people that you spoke to most concerned about or perhaps complaining about them most so most wealth advisors.
They say that no matter the strategies that you put in place, the reality is that this tax is going to hurt because there's only so much money that you can draw on from your pension spot without being taxed on that as well. And then there's only so much money you can take away from your business without having some implications as well on the running of the business itself.
So one problem that people are encountering is that they often have young children who aren't ready to take over their businesses, and so it would be foolish to kind of try to pass on too much too early and then deal with the consequences of that, and then family dynamics might also change. So imagine that you give too much to a family member that you end up having a confrontation with and you might want to change what
you've done there. So inheritance tax linning in general is just really hard because of end of life healthcare costs, because of life expectancy that are all quite unpredictable by nature. So peop they want to give money to their family, they want to protect that they want to protect them, but they also want to keep enough for themselves.
This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond.
Look for us on your podcast feed every morning, on Apple, Spotify, and anywhere else you get your podcasts.
You can also listen live each morning on London Dab Radio, the Bloomberg Business app, and Bloomberg dot Com.
Our flagship New York station, is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hipka and I'm Stephen Carroll.
Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe