Bloomberg Daybreak: June 16, 2022 - Hour 2 (Radio)

for the first time. The gunman who killed black people in a racist attack the Buffalo faces federal hate crimes charges, plus hearings resumed today on the January sixth Capitol Riot. I'm Michael Blar More ahead, I'm John Stash Howard sports another win for the Yankees, a loss for the Mets, Colorado on the Stanley Cup bottle Opener, and the US

Open golf agains today. That's all strained ahead on Bloomberg Daybreak on Bloomberg Eliving Free on New York Bloomberg nine nine one, Washington d C, Bloomberg one O six one, Boston, Bloomberg nine sixties and Francisco Syrius XM one nineteen and around the world. Old on Bloomberg Radio dot Com and by the Bloomberg Business app. Good morning. I'm Nathan Hagar and I'm John Tucker. Bloomberg day Break being brought to you by Informatica. In the Cloud, your data has the

power to be extraordinary. Managed data across any location of the clouds were accurate and actionable insights more at Informatica dot Com. Futures are slumping this morning. We're coming up to six o one on Wall Street, and we check the markets every fifteen minutes during the trading day. On Bloomberg SMP futures are down eighty four point, Staff futures down five dred forty six. Nasdaq futures are lower by three hundred twelve points. The tenure Treasury is onto decline

down one in eight thirty seconds. The yield three point for three percent yield on the two year three point three seven percent John Well, Nathan. The reversal in futures comes after a rally yesterday following their latest decision for the Fed J. Powell engineering the biggest US interest rate increase in twenty eight years to fight inflation. Markets responded the rally that halted a five day ten percent rollity in the sp We at the FED understand the hardship

that high inflation is causing. We're strongly committed to bringing inflation back down, and we're moving expeditiously to do so. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses. J Pal and Company raised rates by seventy basis points and lived with the target range for the federal funds rate to one and a half to one and three quarters percent. Former Richmond Fed

president Jeffrey Lacker says more is needed. I think it's gonna have to go to about five and a half or six percent. That's my own sense, and that's based on just the historical record. Uh that indicates that real interest rates, inflation adjusted short term policy rates have to get above zero in order to have any chance of frustraining inflation. Former Fed Bank of Richmond president Jeffrey Lacker,

who says the Fed should have raised rates last year. Well, this rate high John now has many on Wall Street forecasting a recession for the US economy. We caught up with Guggenheim Chief investment officers Scott minored, there's a chance

that we are already in a recession. And so if if we are in a recession or we're close to a recession, and the FED pushes on this more and then we find that that all of a sudden we have a decline in asset prices like stocks did in eight seven, then uh, if the Fed reversus course, they're gonna look like they're week on inflation. So this this is a very very tough situation that we're maneuvering. Googgenheim Chief investment Officers Scott Miner says cracks are forming in

the credit world. He says the worst is probably not over and after the Fed, now it's the Bank of England's decision. Investors in economists are betting the UK Central Bank would deliver a fifth straight hike later this morning, raising the base rate by twenty five basis points to a thirteen year high of one point to five percent, But former Bank of Angland viavnor Mark Garney says that

he thinks policymakers are folding behind real world events. I think what's clear as central bankers need to catch up to their economies. They've you know, they've been behind the curves. They've acknowledged this um and they need to start to get interest rates uh above inflation effectively, or at least perspective inflation inflation expectation. Mark Arney stepped down from the Central Bank of twenty He is now a vice chair at Brookfield Asset Management. We have another interest rate decision

in Europe to tell you about, John. The Swiss National Bank unexpectedly raised its interest rates for the first time since two thousand seven. Policymakers ompted to join the global bandwagon of monetary tightening, lifting the policy rate by fifty basis points to negative zero point to and staying in Europe. Natural gas prices jumping after Russia has stepped up a new energy war, cutting supplies to Europe's top buyers. Let's

get more from Bloomberg Energy reporter Stephen Sovsnavsky. This is a big deal, and this is like the worst case scenario that that traders were expecting in Europe. Absolutely, it is um you know, for for weeks, for months, you know, when this war broke out, the fear was Russia was going to curb supply to customers, and they curb to some customers. They curb to Poland, to Bulgaria, they curbed to these countries. But they're not major buyers. Germany is

a major buyer. And this pipeline they've the North Stream one that cut supply my well, the European benchmark rose as much as twelve percent a day after surging by in the previous two sessions. Thank Here in the US, John, the White House says President Biden is willing to use emergency measures to ramp up gasoline output. Bloomberg said, Baxter has the story. This is the same Cold War era law he invoked to increase production of baby formula and

bolster solar manufacturing. Biden saying his administration is prepared to use all reasonable government tools to increase refinery capacity. Meanwhile, the White House spokesman Karen Jean Pierre says the oil companies need to step up, calling on them to do the right thing, to be patriots here uh and not to use the war as an excuse for higher costs leading to higher profits. In San Francisco, I'm at Baxter Bloomberg day breaking Thanks that incorporated news, A big day

for Twitter and Elon Musk. Let's get the latest live from Bloomberg's Rena Young Morning. John. Elon Musk is addressing Twitter employees for the first time today since agreeing to buy the company for forty four billion dollars. At the virtual meeting, Musk will take questions directly from employees, many of who have not been happy with him lately. Meantime, Twitter CEO recently announced a series of cost cutting measures, including canceling the company wide retreat that was scheduled to

happen in January twenty three and a hiring freeze. Live in New York, I'm Rernita Young Bloomberg Day Break, Thanks Nita, and a big name in the cosmetic style is filing for bankruptcy. Revlon is applying for Chapter eleven protection. The company, owned by billionaire Ron Perlman, has been unable to manage it's heavy debtload. Revlin got its start selling nail Polishy in the throes of the Great Depression. Promins Holding Company took control in five after a bitter takeover funded with

junk debt raised by Michael Milken. Futures are falling this morning. Straight ahead, we have your latest local headlines and a check of sports. This is Bloomberg all right, Thanks Nathan six Oh settled on Wall Street time to bring in Michael Barr to find out what else is going on in New York and around the world. John, thank you

very much, sir. The gunman who killed ten black people in a racist attack at a Buffalo supermarket has been charged with federal hate crimes that could potentially carry a death penalty the Department of Justice, as eighteen year old Peyton Gendren told investigators his goal was to kill as many black people as possible. Attorney General Merritt Garland visited at the Top supermarket where the shooting happened. Hate fueled acts of violence terrorized not only the individuals who are

all attacked, but entire communities. Hate brings media devastation, and it inflicts lasting fear. Attorney General Garland placed flowers at a memorial and men with families. Lawyers for British socialite Galaine Maxwell say she should face no more than four to five years in prison at sentencing later this month for her role in financier Jeffrey Epstein's sex abuse of teenage girls. Epstein took his own life in August of

nineteen while awaiting a sex trafficking trial in Manhattan. The role of former Vice President Mike Pence will be a major focus of Today's congressional hearing on last year's Capital riot, the January six committee will focus on the pressure put on Pence that day and includes efforts to keep Pence

from certifying President Biden's election victory. The House January six elect Committee released video showing Republican Georgia Representative Buried louder Milk leading constituents on a tour around the Capitol complex on January f The committee claimed one of the participants in the two were marched to the Capitol the next

day and may detail threats against members of Congress. New York Democratic Congress Remember Alexandria Ocassio Cortez and the fact that he was inviting and letting people in that he did not know when the capital was close to the public. The fact that he was giving a tour at all is extremely concerned. Representative Occassio Cortez spoke to ABC. Congressman Loudermulk has denied any wrongdoing. COVID vaccines for infants and Toddler's from MODERNA and Visor one support from a panel

of US regulatory advisors. The Committee advising the FDA voted unanimously in favor of Viser's three dose vaccine for youngsters ages six months through four years. It also gave a strong endorsement to Moderna's two Dose for children six months through five years. Global News twenty four hours a day on air end on Bloomberg Quick Tank, powered by more than twenty seven hundred journalists analysts more than a hundred twenty countries. I'm like Labar, this is Bloomberg, John Michael,

thank you. Sound sixteen of walls free, best time for the Bloomberg Sports Update. Here's John Stasher, All right, John Scott. Often you see a team be thirty games over five hundred and mid June. But the Yankees are forty six and sixteen at stadium and Aaron Judge Holmes run first, hitting the twenty five. That's seven more than anyone else in the majors. Three run shot for Kyle Agashi Yoka fifth and he hadn't homer all year until he hit two just this past Sunday, and now he's got a third.

Yanks be Table Bay four to three. Nest Court has to win the other's safe for Clay Homes in City Field night to forget for the Mets, who lost in Milwaukee, tend to two in Atlanta one again. The Braves are at fourteen and oh in June and they're now four games behind the Mets. Second straight night of near no hitter that Dodgers Tyler Anderson lost it when Shoeotani hit a triple with one out in the ninth inning overtime

to start Stanley Cup Final. Colorado Blue a three one league, but got a goal from Andre Barakowski minute twenty three and oh t for a four three game one victory over tamp of May. To night in Boston, it's Game six of the NBA Finals. Either Golden State wins the championship or it's back to San Francisco for a game seven. And what a sports day in Boston because this morning they too off to begin the US Open Country Club of Brookline, of course, that first hosted they open in

nineteen thirteen with a victory by Brookline native Francis. We met Roy McElroy looking forward to plane in historic court. That is what's so good about golf is the history, in the tradition and these stories. Um. You know the fact that he grew up just off the seventeen goal here, um, and we're still talking about it to this day. Over a hundred years old, Like that's so cool. That's the great thing about this sport. McIlroy has got an early

tea time, so does Defenny Champ. John Ram updates throughout the attorney here on Bloombrig Radio. John Stanshard bloom Brig Sports, John all right, Thanks John. Ahead of the cash open on Wall Street. After yesterday's rally, Futures this morning firmly in the red Dalla futures down four hundred nineties seven points, SMP eveny futures seventy six points. Lower futures down two

hundred seventy seven points. This is Daybreak, Bloomberg Daybreak Bronck you by Hofstra University's Frank gez Arm School of Business, top running to online NBA program with a real world foundation. Learn more at Hofster dot e d u slash go grad Markets, headlines and breaking news twenty four hours a day, at Bloomberg dot Com, The Bloomberg Business at and at Bloomberg Quick Tape. He's a Bloomberg Business Lash. I'm Nathan Hager.

The stock rally that followed the FED supersized rate high yesterday has evaporated as recession fears take over This market. We check the numbers every fifteen minutes during the trading day. On Bloomberg, STP futures down down seventy eight point. STOUT futures down five eleven. Nasdaq futures are lower by two d ninety points. The tenure Treasury is down one in eight thirty seconds. The yield three point or three percent of fifteen basis points two year yield three point pree

five percent. Dimex screwed is down two tenths percent at a hundred fifteens a barrel. Comex called up two tenths percent at eighteen seventy announced. The euro one point zero four zero six against the dollar in agin is at one thirty three point one five. That's a Bloomberg business flash. Now here's Michael Barr with more on what's going on

around the world. Michael Nathan, thank you very much. The January six Committee is plunging into Donald Trump's efforts to pressure Vice President Mike Pence to reject the electoral count. At today's hearing, testimony is expected from retired federal judge Michael Luddick, who called the plan incorrect at every turn. In baseball, the red hot Yankees one again. The Mats lost along with the Nationals, Orioles and Giants. The Red Sox beat the A's Game one in the NHL Final.

The Avalanche beat the Lightning in overtime. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists and analyst more than a hundred twenty countries. I'm Michael Barr. This is Bloomberg, John Michael, thank you, six Ena Wall Street. We are live from the Bloomberg INTERACTI Broker's Studios. This

is Bloomberg daybreak Feed. Reserved chair Jerome Powell seems to have acknowledged that reigning and inflation may result in a recession. Let's get more now against today's Fed meaning. Allen Sander Mortgang, Stanley's chief of U S E Commerce, joins us this morning. A pleasure, good to talk to Allen. Um, how far into restrictive territory is the FED willing to go at this point? Ellen Sender, can you hear us? Can? All right? Sorry having I have a little trouble with the line there, Ellen,

But let me just repeat the question for you. How far into a restrictive territory. Is this FED willing to go at this point? Yes, I think the message from Pale yesterday was not quite the will do whatever it takes message that we were expecting. But to acknowledge that recession could be an outcome is really realistic. I mean, you know, we've not had to deal with accelerating inflation

in a very long time. Before the Great Moderation, it was pretty standard that an acceleration inflation led recessions because of the FED response. And if that's what it takes to get inflation down. If the Dead's not able to slow the economy enough or overdoes it, it can't course correct fast enough, well, then recession is the obvious uh in game there. I don't think investors should be that scared of it though. Okay, but the upper bound somewhere

three and a quarter to three fifty. Uh, that has moved. But is that enough at this point? Do you think? Yeah, you know, we'll see. I mean, the market was pricing an even higher peak rate and the SAD funds rate before this meeting, but some of that is the investors have had to put a greater weight on the possibility of procession so the FED can go it high as the FED wants to go, but it preaches the ecmmune recession and has to back out some of those rate hikes.

And I think that's what we're seeing in terms of investors. Assuming the Feds may be able to only go as high as three and a half percent, I think with the path of inflation that we envisioned, the FED is going to have to go higher than that. UH and Charepel is very confident that he is the leader to be nimble enough to do that course correction, similar as something that they did in Twinning eight team. They pivoted very quickly when they saw liquidity troubles and the global

slowdown UM, and they were able to UH stabilize economic conditions. Unfortunately, COVID hit, but you can't test how long those conditions might have been stable. But what we like to call, you know, UM recession is really opportunistic disinflation because when the economy is in a downturn, it tends to take steam off of inflation. It has that gravitational pool, and so if the FED can't do it alone from taking rates into restricted territory, they'll have to go even further UM.

And a recession is a risk they're willing to take. Right, Is this the inflation simply demand driven? How complicated is the fix and doesn't really test UH of FED policy? Yeah? So I think John, we're past the point of of worrying if it's demand or supply driven. I mean, I'm

I'm in the camp that it's both. That You've got UH in even more acute lack of goods and availability of labor at a time when we have a lot of tip of demand in the in the country now it's pink of demand for services and travel and leisure

and hospitality and enjoying ourselves. Um. But but you know, we have to get past that and just say, look, whatever the supplied destructions are, whatever is creating higher inflation, the FED needs to force demands lower in the economy to align with that, to align with tighter supply and bring demand down. So it just means that they have a bigger job to do, UH to do here. So what's going to happen on the employment front? Well, on the employment for jobs have to slow, I mean not

in the near term. I think all the indicators are that employers are still hiring. My concern is that what we're hearing from our companies is that we have filled the need to have jobs and we're going to close out the nice to have jobs. And I think we're really going to see that in the fourth quarter. It's gonna look like the job market has much more slack

in it um than the SAID has assumed. UM. If that is the case, then the SAID may recognize that and not have to take rates um as far because it's really that slack in the labor markets that they're looking for. We need to slow the economy to take some pressure off of the labor market and raise the unemployment rate. That's that's the ugly truth of it. I've seen a number of comparisons to the vulgar era. Are those comparisons valid? I think in terms of the message

of doing whatever it takes. In terms of the urgency UH and UH the intolerance for sustain higher levels of inflation that is absolutely bulker like area UM having to take rates high enough to get the economy into deep de profession I don't believe that's the case. We also don't have a wage price spiral. We're actually seeing things in liked market work like they should. Retail. We've seen a surgeon restaurants. We've seen the surgeon applications. Wage pressures

are coming off in that sector. As we get more people back to work. Things are working like they should, They're just not working quickly. Allen always a pleasure. Ellen Center Market, Stanley's chief US economists with us this morning. Jaffy yesterday's rally. It is a risk off for the moments. Dalla futures right now five hundred forty three points lower, the S and B in many futures down to eighty five. Nasday features three hundred and fifteen points lower ten year

yield right now three forty three. That is a fourteen basis points of the This morning, you're listening to the Bloomberg day Break Bloomberg Weather from mediologists Rob Carolin Partlet mostly cloudy, chance of a showering thunderstorm behind today, Mostly

cloudy tonight, lows dipping to around seventy degrees. This is Bloomberg Markets, headlines and breaking news twenty four hours a day at Bloomberg dot com for the Bloomberg Business at and at Bloomberg Quick Tape is a Bloomberg Business lash. I'm Nathan Hagar. Well, so much for the Post fed rally futures are diving this morning. We go live to the First Word Breaking news desk for today's morning call. Here's Bill Maloney. Good morning, Bill, Hey, good morning Nathan.

That's right. US futures are plunging right now, with DOWN futures down six hundred points says He's drop, and nasdeck futures are lower by three huntrewy four the US ten Ye know that three point for three percent, Gold is down eleven, oil is in the red, and Bitcoin is down by another two point seven percent. Hong Kong fell two point two percent overnight, while Europe markets are also in the red, led by three percent losses in Italy and note the Swiss National Bank surprise markets with its

first interest rate hike in fifteen years. Back in the US, on the economic Frinday thirty initial jobs claims, Housing starts, and Philly fed Regarding earnings, look for Kroger and Jabil to report in the pre market. In other news, Tessela increased prices across its lineup and Revlon filed for chapter eleven wrapping things up. Auto Zonner was raised to overweight

at Morgan Stanley. Boeing was upgraded rats City Group Live from the first Breaking News Daskam Bill Maloney, Nathan Okay, Bill, thanks you get live breaking news over your Bloomberg type squawk on the terminal. S qu a go is how you do it? That's the Bloomberg Business Flash. Now here's Michael Barr with more on what's going on around the world. Michael, thank you very much. Nathan. The House Committee and investigating the January Riot is holding its third public hearing today.

The panel is expected to focus on threats against former Vice President Pence. Less than two weeks after restarting production, Abbot's troubled infant formula plan in Michigan is now being forced to shut back down again. Torrential storms cause power outages and flooded parts of their facility. In baseball, the Yankees one, the Mets lost, along with the Nationals, Orioles and Giants. The Red Sox beat the A's in Game one of the NHL Final. The Avalanche beat the Lightning

and overtime. Thus Celtics will try to stay alive tonight in Game six of the NBA Finals. The Warriors could win it all tonight. In Boston, Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than journalists and analysts and more than a hundred twenty countries. Michael Barr and this is Bloomberg, Nathan, Thank you, Michael. It is sixty nine on Wall Street.

Let's turn out to news in science and technology. The Bloomberg n j I T STEM Report is brought to you by New Jersey institut To to Technology, offering New Jersey's first undergraduate degree in fintech and j I T is Future in the Making, tech driven, finance focused. Learn more at n j I T dot E d U slash Fintech and now Here's what's making news and science, technology, engineering, and math. Shanghai will conduct mass COVID testing throughout the

entire city every weekend through the end of July. A temporary lockdown will also be imposed on any residential complex where COVID cases detected. Workers at supermarkets, small's, restaurants, and other public facing businesses in Shanghai will be tested now every day. The California Supreme Court has left intact a ruling that allows customers to sue Amazon for failing to warn buyers that some products itsels may contain hazardous substances.

Such as mercury. The court denied a request by Amazon's lawyers to review a lower ruling that said Amazon violated the state's Proposition sixty five, that the law requires companies to warn consumers about products they make or sell that contain chemicals known to cause cancer, reproductive harm, or birth defa and Tesla is raising prices across its line up. The electric car maker and other global vehicle makers continue

to grapple with surging costs for raw materials. Electrac is reporting that Tesla lifted the price of the long range Model three by dollars to just under fifty eight grand. The longer range Model X dual motor all wheel drive was bumped up six thousand dollars to a sticker price of almost one one thousand dollars. And that is the Bloomberg and j I T Stem report John Nathan tex A Lot, we are live for the Bloomberg Interactor Brokers

Studios where it's sixty one Wall Street. That means it's time to check what's going on at d C. And some of the top stories in our nation's capital include the FED triggered recession may cost President by the second term, President by the open it using Cold War era laws to ramp up gasoline output, and former Vice President Pants aids to testify the false electors. And as the January six hearings they continue. Key Republican senator says gun safety talks of hit bumps in the road. Let's take a

deeper dive ahead of these stories. This morning, we're joined by Bloomberg government reporter Jack Fitzpatrick. Jack, thanks a lot, and let start with the first story. I guess I have to ask the question who owns inflation? Oh boy, that is a debate that is raging in Washington, and they may be spinning their wheels a little bit at A lot of the conversation about inflation on Capitol here and Hill, and when you hear from the president has

really gone into mid term mode. It weighs on Democrats much more than Republicans, obviously, because Democrats are in control. As for the actual causes, you know, it's difficult for the president to make the argument that there's only so much he can do. He has put the weight on the Fed. He has mentioned that there are this is a global issue, but a lot of that is just sort of it's difficult for the president to to sweep away that and say well, other countries are experiencing it

as well. And it's an issue that is weighing very heavily on Democrats heading towards the mid terms, because it's safe to say it's issue number one for voters heading into November. Yes, absolutely, inflation is clearly dominating the political conversation in the country right now. Uh. And you know,

the idea of a recession is tied to that. I thought it was very interesting that a majority of Americans, according to a Yugov Economist poll, think that the US is either already in a recession or will be in the next twelve months. That's across a number of demographic groups. Uh. That that gets to independence. It's it's weighing on Democrats very heavily, and it's really an issue where inflation has helped turn into recession concerns. Five bucks a gallata Philip

car early this morning. What's the President going to do about it? If he can do anything? Uh, you know he has mentioned, or rather the Press Secretary of the White House, Koreem Jean Pierre, just mentioned recently that the Defense Production Act is on the table to try to increase the refining capacity of of oil to increase the supply of gasoline. They haven't put out a specific plan. A lot of the legislative back and forth has has not really gone anywhere for a short term solution on

gas prices. So that's another facet of the inflation conversation that has shifted away from anything that you'd call productive and more toward the campaign debate. But at least we now know that the Defense Production Act, even though there are not details, is something they're they're at least looking at. This is sort of an unfair question, but I think

you can handle it. Do we have a cohesive energy policy here in the United States is not particularly no. There are debates, you know, within this debate over inflation, a lot of Republicans will point to shortcomings that they see in Democratic policy on pipelines, on leasing for oil production. Those are much longer term issues rather than today's inflation debate.

But even if you if you get into the legislative conversation about broader energy proposals, uh, it's not as if they're moving forward on a carbon tax or something like that that's cohesive on climate change, And much of the conversation is, you know, can you can the federal government spend more on this program or that program to encourage research and development on cleaner energy, but it's not exactly

a clearly authorized energy policy at the federal level. UH. The next story the well, the January six hearings continue on Capitol Hill. Give us the update. Yes, so they're gonna be meet today at one pm. This one focuses on the amount of pressure and how Donald Trump pressured Mike Pence to overturn the results of the election. So they're gonna have testimony from Greg Jacob, who is the council to Pence, Michael Luddig, who is a more informal

legal advisor to Pence. We also understand there's going to be video testimony shown from Mark Short, who was Pence's chief of staff. On one hand, there will be an argument that that UH, the president at the time, UH inappropriately pressured Prince Pence to in many people's eyes, illegally overturned the election. That's the core argument that this panel

is making. But also there may be some information on the danger that might have been presented to Pence and the idea that people were going to potentially harm him, and what the White House knew and what Pence himself knew about that at that time. So the Trump Pence relationship is getting this late today. All right, Jack, thanks very much. We appreciate it. Bloomberg Government reporter Jack Fitzpatrick. And of course you can read more about these stories

on Bloomberg dot com or on the Bloomberg terminal. And also a reminder, you can follow all the latest on Bloomberg Radio in Washington's Bloomberg one at one oh five point seven FM HD two. Well after the rally that we saw yesterday after the Fed decision, it's risk off this morning. Down futures right now they are down five hundred seventy seven points, that's a decline of one point nine percent. SMPE many futures down to eighty seven points,

that's a decline of two point three percent. At the N day futures right now three hundred and fifteen points, lower, decline of two points seven percent. This as a recession. Fears returned to the markets as far as Yale's gale tenure yield right now three forty four. That is a rise this morning fifteen basis points. As we see US fell off in treasuries continuing compare that to two year yield that is at three five that is up sixteen basis points this morning, and the vix Wall Streets fear

gauge that is slightly elevated this morning. Thirty one nine and just ahead Bloomberg Savanllance with Tom Keane and Lisa Bramboits and John Farrell and for Nathan Hager. I'm John Tucker, and you've been listening the Boomberg Daybreak