Bloomberg Daybreak: June 23, 2022 - Hour 1 (Radio)

say Glene Maxwell to get thirty years in prison. On Michael blarm More Ahead, I'm John Stas Sharon Sports comeback win for the Yankees, loss with the Mats in Colorado, be Tampa Bay, and overtime at the Stanley Cup Final.

That's all s train ahead on Bloomberg Daybreak on Bloomberg eleven three, on New York, Bloomberg ninety nine one, Washington d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Sirius x M one nine team and around the world on Bloomberg Radio dot Com and via

the Bloomberg Business Up. Good morning, I'm Nathan Haggard and I'm Karen Moscow and ust Dock Index futures are mixed this morning, coming up to five o one on Wall Street, and we check the markets every fifteen minutes throughout the trading day. On Bloomberg. SNP futures down six points down, futures down a hundred four Nastack futures higher up, twenty three ten year Treasury up fifteen thirty seconds the three point oh nine percent, and a yield on the two

year three point oh one per cent. Nathan, Karen, we begin this morning with day two of congressional testimony from j. Powell. This morning, the Fed Chair appears before the House Financial Services Committee, But yesterday was Pal's most explicit acknowledgement yet

that raising interest rates could lead to a recession. It's not our intended outcome at all, but it's certainly a possibility and and frankly, the events of the last few months around the world have have have made it more difficult for us to achieve what we want, which is two percent inflation and still a strong labor market. Powell told the Senate Banking Committee the economy is well positioned

to handle tighter monetary policy. Meantime, Former New York Fed President and current Bloomberg opinion columnist Bill Dudley says the recession is inevitable within the next twelve to eighteen months. I would expect a mild recession like or or two thousand and one, not the deep recession like seventy three, seventy four, or of course the Great Financial Crisis. Former New York Fed President Bill Dudley made those comments on Bloomberg Surveillance Catch the program weekdays at seven am Wall

Street Time on Bloomberg Radio and television. Well Nathan Stocks gave up early gains on Powell's recession comments. The market veteran Abby Joseph Cohen says, the era of everything going up is now over. I think we're now back into a period in which it does matter where it's the fundamentals of earnings, the fundamentals of margins, the fundamentals of inflation, interest rates, and putting that all together in terms of appropriate valuation models that will make a big difference for

investors going forward. Abby Joseph Cohen, who was a former senior investment strategist at Goldman Sachs, believes a mild recession as being priced into markets. Well, crude oil is taking a leg lower care and is concern over global economic slowdown intensifies, checking prices Downimex crudes down two dollars fifty cents at a hundred three dollars sixty nine cents of barrel.

President Biden's continuing his push to ease gas prices. It's got the latest on that life from Bloomberg's rined A Young. Good morning, Nita, Nathan, good morning. President Biden is running out of options to ease prices at the pump, and in his latest action, he proposes a three month gas tax holiday. I suspending the eighteen cent gas tax federal gas tax for the next ninety days. We can bring down the price of gas and give families just a

little bit of relief. It's a long shot for President Biden, as lawmakers, even his fellow Democrats, quickly signaled they have little appetite for the move. Senate Majority leader Chuck Schumer says Democrats in his chamber had already attempted a gas tax suspension and Republicans blocked it. Live in New York, I'm Renita Young, Bloomberg Daybreak, Right, Reneeda, thank you and like you say, support for a gas tax holiday is

garnering little support. Bloomberg Politics contributor or Genie shehn Zano says it flies in the face of the president's own energy policy. Many people, particularly on the left, are asking themselves, you know, essentially, who is Joe Biden. He could have used the challenge in Ukraine and the challenge with prices to push for renewables. You know, the old saying, don't let a good crisis go to waste. Why hasn't he pushed for something that people on the Democratic side believe in.

Bloomberg Politics contribute or Genie shehn Zano spoke with Our Washington corresponded Joe Matthew on Bloomberg Sound on Catch the Show weekdays at five pm Easter and on Bloomberg Radio. Well. Another major story in Washington were following this morning. Karen has talked from both sides of the aisle that a gun safety bill could soon pass the Senate. Bloomberg said, Baxter has the story. Senate my noority leader Mitch McConnell

seems to be on board. But I'm mainly concerned about is dealing with the issues that have been brought to the fore by these mass shutings, which are directly related to school safety and mental health, and Senate Majority Leader Chuck Schumer says passage should be soon. The bill is real progress, it will save lives, and it is my intention to make sure the Senate passes this bill before the end of the week. They hope to beat their summer recess. In San Francisco, I'm at Baxter Bloomberg Gay

break and thank you for turning. Overseas. European Union leader has planned a grant candidates status to Ukraine. The move will come at the EU summit that's beginning today in Brussels. We get more from Bloomberg's Maria today. Oh, even though it is seen as a given and there's no surprise it will happen by tomorrow, Ukraine being granted this candidate status it is pretty historic. The question is how much will it change for the country overnight. Probably not a lot.

And we should also notice that even if you're a country you had given this prdusy status, it doesn't mean the accession talks are going to happen quickly or swiftly. You know, there's many countries in Europe that have applied for it. Granted the canory status and then of course get stuck in the process for years before they get the membership. And Bloomberg's Maria TODAYO and Brussels says Ukraine will be told it has to meet a set of conditions related to the rule of law, justice and anti

corruption before joining the EU. In the US, care and the Fed releases results from its yearly bank stress tests this afternoon. We get more from Bloomberg's Tom Busby. All thirty four banks monitored by the Federal Reserve, which I have a hundred billion dollars in assets, are part of this year's stress test to see if they can withstand a hypothetical economic downturn, a crash and the commercial real

estate market and a surge in unemployment. That number up from twenty three lenders last year after some larger regional banks like Fifth Third Bank Corp. And Ally Financial got to pass. The results will dictate how much capital those banks will need to have on hand and how much they can return to shareholders in the form of share buy backs and dividends. But they'll have to wait until Monday to announce any of those Tom Busby Bloomberg Daybreak.

Thank you, Tom SMP futures down one point right now, dal futures down seventy two, NASTAC futures up thirty eight points. Straight ahead your latest local headlines in the Check of Sports. This is Bloomberg five oh seven on Wall Street where at sixty one degrees in Central Park. It's still dealing with some roadwork on the New Jersey Turnpike car lanes. We'll get to the details on that Shortland traffic first. Michael Barr has more on what's going on in New

York and around the world. Good morning, Michaul, Good morning. Nathan Pete Redondo, the chief of the school District Force in Uvalde, Texas, has been placed on administrative leave for his delayed response the last month's mass shooting at around elementary school. A gun been killed, nineteen students and two teachers in the attack as police officers stood by for

more than an hour. Meanwhile, Democratic State Senator Roland Guterres as he filed a freedom of information request against the Texas Department of Public Safety, but has yet to hear back from the agency. We're frustrating because we're getting half truce in you Windo, a lot of finger pointing, UH and that's been the case in day one with DPS. Senator gu Terriss spoke to kat r K. The January

six Committee holds its fifth hearing today. The focus will be on the pressure former President Trump exerted on the Justice Department to overturn the presidential election results. Federal prosecutors say Galine Maxwell, the British socialite convicted of engaging in a ten year sex trafficking scheme with former boyfriend Jeffrey Epstein, deserved to spend thirty to fifty five years in prison.

Maxwell will be sentenced on June. New York City's subway system may only reach about a pre pandemic writership by the end of twenty two, lower than the eight percent forecast the m t A had been anticipating. Meanwhile, authority he's planned to place cameras on subway cars in an effort to increase safety. A train shooting in San Francisco has left one person dead at another injured. Authorities say they are still looking for a suspect behind the shooting

near the city's Castro neighborhood. Officer Katherine Winters is with the San Francisco Police. We are working together information which will include surveillance footage in any other footage front of any Trent officer. Winders says it happened during the Heart a Pride week with police say the attack does not appear to be related to events in the area. FDA officials are investigating the death of another infant who was given formula made by Abbot laboratories. The infant died in

January and the FDA was notified. June tenth, Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven journalists and analysts more than a hundred twenty countries. I Michael Barr, and this is Bloomberg. Nathan Alright, Michael, thank you five o nine on Wall Street. Time for the Bloomberg Sports Uptake. In Morning, John Stashun Morning, Ephan Yankees. We're looking at a rare

two game losing streak. East Soak Paridis, who hit three home runs Tuesday, had another than the first any Tampa Bay led four to one, back came the Yankees to home runs for Aaron Judge, now up to seven at Jose Travino where he yet another huge hit, game winning two on over eighth inning. The Yanks one, five to four. They're home tonight for Houston. Astros just beat the Mets five three. Is Yourdan Alvarez homer twice he's had twenty one.

Colos Carrasco roughed up left from the parent injury. Only a two game series, but the first time the season the Mets have been swept over time at the Stanley Cup Finals, quickly ahead, Now a Cadrey inside the circle? Catrey, where's the fuck? How did that not go in? It? Did it did go in? It? Did it? Did? We were the Scars? No the CATRAI Getchadre. Cad I didn't said okay, yes he Tampa Bay thought Colorado has been

called for too many men on the ice penalty. With the adds one three tow they leave the series three one and they can win the Cup in Denver tomorrow night. NBA Draft takes place tonight. The Nets host the draft, but they don't have a pick. They could have used Philadelphia's first round or they elected to save it until next year. Nick's have the eleventh pick. Reports they're trying to move up Orlando as the first pick, expected to

take Auburn's Javari Smith. There's golf today near Hartford is the PGA Tour announces changed as if they claim they were gonna make anyway, but they admit they may be moving them up to the competition they're now facing from the Live Tour, more prize money. Several tournaments will no longer have the field cut midway through. John Stashar Bloomberg Sports all right. John thinks SMP future is now down one point down, futures down sixty eight. NASSECT futures are

higher by thirty five points. As we await day two of FED Chair J. Powell testimony on Capitol Hill. The tenure Treasury is up fifteen thirty seconds. The yield three point zero nine percent on the benchmark tenure note and the yield on the two year right now three points zero one per cent. You're listening to Bloomberg Dave Bred Bloomberg eleven three oh weather cloudy through the morning. High's

cool in the low seventies. Will be in the low eighties tomorrow with a mix of sun in cloud Saturday, mostly sunny, might hit ninety degrees right now sixty one in cloudy in Central Park. Markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com. The Bloomberg Business atand at Bloomberg Quick Tape is a Bloomberg Business Flash and I'm Karen Moscow and European stocks retreating

this morning. Bon yields tumbling is comments by Federal Reserve Chair Jerome Powell, and growth data in Europe stoke fear about a global downturn. Oil is extending losses, and the yield on German tenure bond Sinc seventeen basis points after an indicator of Euro Area economic activity count to a sixteen month low. Wh check the market every fifteen minutes throughout the trading day on Bloomberg. Taking a look at

futures this morning, they are mixed. SMP futures up six points down, futures down the sixteen and nasday futures are up sixty eight. The decks in Germany is down nine tenths of upper cent. The ten year treasury up thirteen thirty seconds. You'll three point one zero percent yield on the two year three point oh one percent. Nine max Screwed oil is down two percent or two dollars fifteen cents at a hundred four dollars four cents of barrel co mexs go down to ten percent or three dollars

fifty cents. At eighteen thirty four and ninety announced the euro is at one point oh five oh nine against the dollar, British ground one point one eight, the n one thirty five point four. It too, And this data check brought to you by Informatica and the Cloud. Your data has the power to do the extraordinary. Managed data across any location in the cloud for accurate and actionable insights. More at Informatica dot com. That's a Bloomberg business flash.

Now here's Michael bar with more. I'm must going on around the world. Michael, good morning, Good morning Karen. Facing stubbornly high gas prices, President Joe Biden has urged Congress to to spend federal gas and diesel taxes for three months. The p g A Tour is countering the Saladi mag liv Golf Series. Tour Commissioner j Monahan unveiled his plan to increase purse sizes and revamped the schedule in an

effort to keep players from leaving the tour. In baseball, the Yankees one, the Mets lost, the Orioles shut out, the National seven zip, the Red Sox won the Giants and A's lost in the NHL. After Game four, the Avalanche are a game away from winning the Stanley Cup. Colorado beat the Lightning in overtime. Three two. Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than journalist and analyst more than a

hundred twenty countries. Michael bar this is Bloomberg. Nathan alright, Michael. Thanks, It's five nineteen on Wall Street Live from the Bloomberg Interactive Brokers Studios. This is the Bloomberg day Break. Let's get more now in President Biden's call for a three month gas tax holiday and progress in the Senate on a bipartisan gun safety bill. Lots happening in the nation's capitol this morning, so we're pleased to be joined by

bloombergvern At Congressional reporter Jack Fitzpatrick. He's in our Bloomberg studios in Washington, d C. Jack, Good morning. This call from President Biden for a three month gas tax pause doesn't sound like it's getting the warmest of receptions on Capitol Hill or Am I wrong? No, you're You're right. And I think the most interesting part of that is not the Republican pushback, which is unsurprising, but also that there there are key Democrats who don't seem impressed by this.

You know, there's a statement out by Speaker Pelosi that didn't endorse the deal, almost just acknowledged it, but sidestepping the substance of it. Uh. And then meanwhile, we heard from Peter DeFazio, the Transportation and Infrastructure Chairman in the House, who argued that, you know, this would do more to take funds away from the Highway Trust Fund than it

would to make a noticeable difference for individual consumers. Uh. There's also no guarantee or or nothing that would presumably be in a bill that would in or that all the savings go to consumers. You can't tell exactly how much of this would go to the owners of gas stations, for example. Uh. So there's there seemed to be some

key Democrats who are not really hot on the idea. Uh. Expecting cooperation from Republicans right now on an idea like this is uh not realistic, But it's an example of the President feeling the need to have a plan, have a proposal, make it clear that he's trying to do something.

Is there a sense Jack that this is almost like a desperation move from President Biden to put out something like this when other ideas that he's put out there so far, like releases from the strategic reserve, haven't worked so far. Yes, a sense of desperation has been pretty palpable. Uh. You hear it when the President talks publicly about gas prices and inflation in general, because he has he has made the case that there's only so much he can do and putting it in the global person active of

broader price increases, the war in Ukraine. Uh, things that are beyond not only the President's control, but that even Congress can only do so much in the short term. There can be a longer term debate over energy policy, over oil and natural gas production and exports, but when it comes to addressing the high prices today, his hands are tied to some significant extent, and he has gone around making the case that that that's the that that's where he is. Uh, And he can pitch some ideas,

but yes, a sense of desperation is pretty significant. Well, it is interesting that we are seeing, on the other hand, progress on something that we haven't seen progress on literally in decades in Washington, and that is a gun safety package on Capitol Hill. Yeah, they're still moving along. Despite some negative talk a few days ago. They did come to a led agislative agreement. They worked out, UH, their their concerns about taking that framework that they announced and

actually figuring out the details. They're trying to move through the procedural votes as quickly as possible in the Senate. UH. They did a little bit of a maneuver by holding the first procedural vote on another issue and then amending that with this bill. But they're they're they're past the sixty vote threshold already in that initial procedural vote, and there are enough Republicans on board UH to try to move this along. And unless there's some significant surprise or

a group of lawmakers change their mind. Is there a sense among Democrats Jack, that this is something that they can capitalize on in the November elections or is the economy and inflation the overriding concern we have about a minute left here. I think both are true. The economy is the overriding concern, But I don't think you'd want to be a Democrat running for reelection UH and have

no real response to mass shootings. Uh, Democrats are trying to show people that they can accomplish things, and they can go campaign on a variety of things. They can talk about the infrastructure bill, they can talk about this. It doesn't change the underlying fact that families are seeing a lot of those savings that they've built up dissipate. The price rises have been much more persistent than a

lot of people thought. Uh, it doesn't undo the frustration with the economy, but it's something that Democrats have wanted to do for a long time, and an ability to have a bipartisan accomplishment is definitely not a bad thing. Thanks for this, Jack, and having on with us. Jack Fitzpatrick, congressional reporter for Bloomberg Government. With all the developments happening in the nation's capital, will have Jack back on later in the program to talk more about these stories, as

well as the latest on the January six hearings. They'll be going into a pause as the committee members look at yet more evidence into the attack at the capital. Right now, SMP futures are up two points now, futures down forty five, NASTAC futures are higher by fifty points now. This is Bloomberg. Bloomberg eleventh three oh weather cloudy this morning with a high in the low seventies. Today will be in the low eighties under a mix of sun

and clouds. Tomorrow could see ninety by Saturday. Right now sixty one in Central Park, broadcasting live from the Bloomberg Interactive Broker Studio in New York, Bloomberg in Living freon to Washington, d C. Bloomberg on to Boston, Bloomberg one O six one to San Francisco, Bloomberg N sixteen to the country Sirius XM Chado one nineteen and around the globe the Bloomberg Business app in Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's five thirty on Wall Street.

Good morning. I'm Nathan Hagar and I'm Karen Moscow or just about four hours away from the open of you US trading. Let's get you up to date in the news you need to know at this hour. We begin with day two of congressional testimony from J Powell this morning. The fence here appears before the House Financial Services Committee Yesterday was his most explicit acknowledgement yet that raising interest

rates quid lead to a recession. You're seeing growth slow from the very elevated levels of last year associated with the reopening. You're seeing the beginnings of job growth slowing to more sustainable levels, and you know there's risk in that. There's obviously risk in that we monetary policy is famously a blunt tool, and there's risk that weaker outcomes are certainly possible, but they're not our intent. Fans here, j Powell to lawmakers the economy is strong and well positioned

to handle tighter monetary policy. Markets gave up early gains Karen on Powell's recession comments, Jeanette Garritty, E chief economist with Robertson Stephen, says, as recession talk grows, we could see inflations start to come down. I don't think it's firmly rooted, and there are awful lot of people who are now beginning to think about recession, and in thinking about recession, actually do believe that that will take the pressure off prices. Jeanette Garritty with Robertson Stephen says she

believes j Pal's credibility is no longer an issue. Well, let's turned to oil now, Nathan, which is lower once again as concerns over a global economic slowdown intensify. Meantime, President Biden is continuing his push to ease gas prices. Bloomberg's Nia Young joins US Live with more Good Morning nied Down, Good Morning Care and President Biden is running out of options to eat prices at the pump, and in his latest action, he proposes a three month gas

tax holiday, urging gas stations to play their part. I call on the company's to pass this along every penny of this eighteenth cent reduction to the consumers. This is there's no time now for profiteering. It's a long shot for President Biden, as lawmakers on both sides of the aisle quickly signaled they have little appetite for the move. Live in New York, I'm rened a Young Bloomberg Day Break. All right, we need to thank you. Another major story

we're watching in Washington in this morning. A gun safety bill could soon pass the Senate Majority leader Chuck Schumer hopes for approval by the end of the week, and Nathan turning overseas, European Union leaders planned a grant candidate status to Ukraine. The move will come at the EU summit.

That's beginning today in Brussels, Ukraine will have to meet a set of conditions before joining the EU, and S ANDP futures are now little change, down futures down forty three, nasday futures up forty and the tenure Treasury at fifteen thirty seconds yeld three point nine percent. Straight ahead your

latest local headlines plus a check of sports. This is Bloomberge on Wall Street, sixty one degrees in Central Park scenes and work on the northbound Van Wick and Michael Barr has more on what's going on in New York and around the world. Michael, thank you very much. Nathan. If you're not getting Internet, it's not the fault of your set. There are reports of a widespread internet outage with Verizon, according to down Detector. User reports indicate problems

at Verizon this morning. Today was on the nature of the outage are limited at the moment. In Texas, the Uvaldi School District has placed police chief Pete Rodondo on administrative leave. Nineteen students and two teachers were killed as police officers stood by for more than an hour at rob Elementary School. Meanwhile, the state Senator filed a lawsuit against the Texas Department of Public Safety to access records on the investigation into last month shooting Democratic State Senator

rolland to terrace. This was a failure at every level. Uh, not just the local cops, shriff, the police, DPS. We all had people in there. Texas State Senator gu terrorists told k t RK he flowled the lawsuit on A thirty one, but has not heard anything yet. The January six committee will hear from former Justice Department officials who faced down a relentless pressure campaign from Donald Trump over

the presidential election results. Today's hearing aims to show how Trump tried to leverage the authorities of federal ex Ecutive Branch agencies in pursuing his false claims of election fraud. The FAA is investigating a helicopter crash in Logan County, West Virginia that killed six people. Officials say that Huey helicopter went down on the rural roadway last evening. Logan Mayor Safino no Letting very heart ranching. Why not we heard what happened? Yeah, there's people in they called Megan.

One of us was a mayor. Serafino no Letty says the chopper was based out of Logan County Airport and was apparently used for tourist flights. Federal prosecutors say Glane Maxwell, the British socialite convicted of engaging in a ten years sex trafficking scheme with former boyfriend Jeffrey Epstein, deserved to spend at least thirty years in prison. Maxwell will be sentenced to Global News twenty four hours a day on airand on Bloomberg Quick Take, powered by more than twenty

seven hundred journalists and analyst more than a hundred twenty countries. MICHAELA. Bar This is Bloomberg, Nickel. Thanks Michael on Wall Street on Sinshrist. The Bloomberg Sports Update anks Nathan more surprising than Aaron Judge having hit twenty seven home run six more than anyone else in baseball, is that Jose Trevino has hit six and only had five last season with Texas.

Travino acquired just before the season began, far exceeded expectations, and he won the game for the Yankees with a two run homer eighth dinning and a night where Judge homer twice. Yankees came from four one down beat Tampa Bay five to four. Mets in Houston, trailed four nothing first and even lost five to three of The Astros started four game series with the Yanks tonight at the

Stadium for Hacks. The playoff preview the Yankees in the East by twelve games in the Astros in the West by ten overtime and controversy at the Stanley Cup Final, where Tampa Bay scored the opening minute, never trailed Game four until Colorado's Nazeem Cadre's goal twelve minutes into ot The Lightning felt a too many men on the ice penalty should have been called, but the As one three two. As Cadre gets the game winner in his first games was breaking his thumb a few weeks ago, and the

As now lead the series three one. They can win the Cup at home tomorrow night. NBA draft tonight in Brooklyn, Orlando, as the first pick, the NIXT pick eleven, and Nets do not have any picks. NFL Commissioner Roger Goodell testified virtually before a congressional committee looking into workplace violations by the Washington Commander's. Goodell insisted owner Dan Snyder is not involved in running the team. He said he does not have the power to remove Snyder, who has refused to testify,

may now be subpoened. Tragic day for the Baltimore Ravens the death of linebacker Jalen Ferguson only twenty six no cause of death, val play ruled out, and the passing of former defensive lineman Tony Saragosa he was fifty five. Goose, also played for the Colts, was now a Fox analyst. John Stashower Bloomberg Sports Nathan all Right. John thanks High thirty seven on Wall Street Time for the Tri State Business Report with Bloomberg's head Corey. It's getting harder to

find an affordable apartment in New York City. You need to make at least one hundred ten thousand dollars a year to afford the median asking rent of twenty seven hundred and fifty dollars median rent in Manhattan sward to an eye popping four thousand dollars for market rate apartments. In May, New Jersey will suspend sales tax collection for ten days on back to school purchases, saving buyers about seventy five million dollars. The discount will be in effect

from August to September five. It will apply to basic goods, as well as higher priced items like computers. Although it doesn't have a store in the Hamptons, Sacks Fifth Avenue is making its presence known out East throughout the summer. It's hosting a series of dinners with designers, influencers and media. It'll throw a celebratory dinner July fourteenth at the new Southampton location of the Lobster Roll. That's your Bloomberg Dry

State Business Report. I'm ind Corey. Thanks on Wall Street Bloomberg Radios on the air from San Francisco to New York, London to Hong Kong. Let's check in with our global news team for some of the top stories heard on our three hundred affiliate radio stations around the world. I'm Steve Poliskan on ten ten Wins in New York. We're talking about big job cuts at JP Morgan's home lending business.

I'm Jeff Pollinger and on w k D and in Columbus, I'm talking about how inflation has eaten away in American's emergency saving I'm cal I head killed Bloombeg DAB Digital Radio in Onto waverporting on Germany, triggering the next stage of its emergency gas plan which could see consumers paying moved I made Gory on ww J and Detroit reporting Auto Executives one, Lawmakers with Strength, and semiconductors of blind change.

And those are some of the stories our twenty hundred Bloomberg journalists and analysts are working on this morning around the world. It's five thirty nine on Wall Street. The following is an editorial from Bloomberg Opinion. In the chaos of Latin American politics, Columbia has in recent years looked like an island of stab building now changes certain. On Sunday, voters elected leftist Gustavo Petro, a former guerrilla, as their next president. Petro should learn from the experience of other

anti establishment leaders in the region. Without broad support and an I on public finances, he won't be able to deliver the improved living conditions that voters demand. In Colombia, which lost its investment grade status last year, has little room for air. Although its economy has made a good recovery from COVID nineteen, deep seated problems remain. A botched tax reform last year led to weeks of violent protests, and inequality is pronounced even by the standards of the region.

Petro would do well to seek out experience, technocratic advisors who are prepared to meet the country's challenges. Populism alone is no remedy for Columbia's hills. This editorial was written by the Bloomberg Opinion Editorial Board. I'm David Shipley. For more Bloomberg opinion, please go to Bloomberg dot com, slash Opinion or Opango on the Bloomberg terminal. This has been Bloomberg Opinion, and you can hear Bloomberg opinion editorials every weekday.

At this time, terminal customers can read more at OPI end go. Futures little changed as we wait day two of testimony from Fed Chairman Jerome Powell on Capitol Hill. Right now, SMP futures are up four points down, futures down thirty five NASTACK futures up fifty four points. You're listening to Bloomberg Daybreak Bloomberg eleven three oh. Weather cloudie through the morning with highs in the low seventies today.

We'll get into the low eighties tomorrow under a mix of sun and clouds, mostly sunny, warmer for Saturday, oper eighties. Right now sixty one in Central Park markets, headlines and breaking news twenty four hours a day at Bloomberg dot com, the Bloomberg Business Out and at Bloomberg Quick Tape. This is a Bloomberg Business Flash and I'm Karen Moscow and European stocks are rich. Treating bond yields are tumbling is commenced by Federal Reserve Chair J. Powell and growth data

in Europe. Stoke fear about a global downturn, oil extending losses and US stock index futures They're mostly higher. We check the markets every fifteen minutes throughout the trading day on bloomberg s and P futures up eight points now, futures that will change downs day futures up sixty eight The decks in Germany's down one percent, the ten year treasury up thirteen thirty seconds. He'll three point one zero percent yield on the two year two point nine nine percent.

Nine max screwed oil is down one point six percent on a dollar sixty six at a hundred four dollars fifty two cents of barrel comex schooled at a third of percent, or six dollars thirty cents at eighteen thirty two fifty announced the euro one point oh five oh three against the dollar British found one point to one nine nine and the ends at one thirty five point four to. And look at a bitcoin this morning, moving higher up three point four percent at twenty thousand, five

hundred dollars. That's at Bloomberg Business Flash. Now here's Michael bar with more on what's going on around the world. Michael Karen, thank you very much. There are reports of a wide spread Internet out. It's with Verizon, that's according to down detector. The January six Committee will hear from former Justice Department officials today. The panelst says they face relentless pressure from Donald Trump over the presidential election results.

The PG eight tour plans to increase purse sizes and revamp the schedule, and an effort to keep players from heading to the Saudi Back liv golf Series. In baseball, the Yankees one, the Mets lost, the Orioles shut out, the Nationals, the Red Sox one, the Giants and as lost. In the NHL, the Avalanche or a game away from winning the Stanley Cup after beating the Lightning. Global News twenty four hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalist and

analysts more than a hundred twenty countries. Michael barn this is Bloomberg. Nathan. Hi, Michael, thank you. We're coming up to five forty nine on Wall Street Live from the Bloomberg Interactive Brokers studios. This is Bloomberg Daybreak. And the words that have been reverberating in markets over the last several hours certainly a possibility. That's what FED chaired Jerome Powell told the Senate Banking Committee when it comes to the risk of recession, as the FED is strongly focused

on getting inflation down to a two target. Let's get more on this. Brett Ryan is with US now senior US economist at Deutsche Bank Securities. Brett, good morning to the FED chairman's comments about the risk of recession. Have you changing your forecast? Uh? No, good morning, and thank

you for having me on the program. We've actually been calling for a recession since really the beginning of April, when the inflation data, you know, showed certainly more persistence and we we thought that the FED would have to tighten more aggressively. Uh. And that's exactly what's played out

thus far. So I think I think the fed's latest forecast hinted that this is going to be a difficult and more difficult landing, And I think you're seeing more admittance on the part of federals or officials that recession is certainly a higher probability given the amount of titaning they need to do. Do you think we're in for

a mild recession, a moderate recession, something more prolonged. Yeah, So we think it's more of a mild recession similar to something like because there aren't really large imbalances that you can identify in the economy right now other than really elevated good spending relative disservices, and that's good spit. That elevated good spending is part of what's causing such high inflation right now. There is an imbalance, though, isn't

there when it comes to UH, supply versus demand? Isn't that a lot of what's feeding into the inflation right now, particularly in the energy market. Sure, And that's something that share Powell was quizzed upon by by Liz Warren and the other Senate officials UH yesterday in that you know, can interest rates impact supply side? Is the FED raising interest rates doesn't help in terms of bringing more oil

onto the market. Whoever, the FED does a control over services inflation, things like rent, and that is directly impacted by the growth and income growth and a strong job market. So the FET is trying to cool a very hot labor market in order to bring that that side of the equation down because services inflation has been picking up just as strongly as good inflation. Well, what's it going to take, Brett for the FED to cool down the

hot labor market? He's the FED Sherman Palell says he's strongly focused on getting inflation down to the two target. Is it going to mean even more aggressive rate hikes than the fet is signaled at this point? Uh? And our view, um, yes, we are. They are going to be need to be more aggressive. Um, we expect the FED to reach four point one percent, so between four

and by the by March of next year. Now, the fet IS signaled of the medium dot at least of the dub plot is three point eight percent, So we do think they need to be a little bit more aggressive, But they certainly have come at a relative to where the FED was at the March. The March meeting in terms of tightening, they've come a long way and you've really seen it's sort of it's a uniform consensus, you know,

across the hawk dove spectrum. Um they want to get they're going to need to be in the restrictive territory. So you know, they haven't decided yet how restrictive that they need to be, but they all agree that that's where where they're going at this point. In our last minute here Brett, the chairman is going before the House Financial Services Committee this morning. What message are you going

to be looking for from Chairman Powell today? Anything different? Uh? Actually, the one thing I will look for is any reaction to the latest European data. So the European poms missed fairly broadly this this morning, and you know, I think there's both services and manufacturings that so there wasn't a really a clear identifier there in covid um and so I'm curious to see if there's any reaction to that.

The latest data data that's changed between yesterday and today, and that's you know, another twenty basis point rally in the tenure German Bund, which is pretty aggressive, and so we've had these these three large pawn market moves. The two year yield has moved moved seventy basis points in five trading sessions last week, and that's the largest. And Lehman Brothers um and we've pretty much unwounded about half

of that. At the same time, the ten year yield went from three forty seven last week to you know, now pressing close to three. So you know, I think the volatility, the volatility in the bond market, um shaff how may get a few more questions about that today. Thanks for this bred good having gone with us. Fred Ryan, senior US economist at Deutsche Bank, Karen and Nathan, thank you.

It is at four on Wall Street. Now to a legal story where following this morning this week, the Supreme Court once again ruled in favor of religious rights over a robust separation of church and state. In a six or three decision down ideological lines, the Justice is ruled that man cannot exclude religious schools from a program that pays for private instruction in rural areas that lack public schools, opening the door to more use of public dollars for

religious schools. In a case with implications beyond that state for more Bloomberg. June Grosso speaks to Richard Garnett, a professor at Notre Dame Law School. What does this ruling stand for? Well, this decision reaffirms the principle that the Justices have applied in several recent cases, and that is that the free exercise clause of the Constitution does not permit governments to exclude or to discriminate against religious entities or in the jules, when they're operating a benefit program

or a funding program. So a simpler way of putting that, I suppose might be that the free exercise clause of the First Amendment doesn't permit governments to discriminate against religion. And in the Carson case, the Justices applied that principle to conclude that the state of Mainz policy, which is to allow parents in rural school districts to get public support to send their kids to some private schools, was unconstitutional because Maine denied similar benefits to parents if they

chose a religious school. And the Court said, relying on these recent precedents, that discrimination simply on the basis of the school's religious character violate the free exercise guarantee of the First amendment, is this making taxpayers fund religious education? Well, uh, soul no, because the Court was very careful to say that states don't have to fund religious schools if they

don't want to. But once the state decides that it wants to fund some private education, then it can't discriminate against religious schools. Now, the upshot of that is that indirectly, because you know, the stable assist parents to choose to send kids to school where they will receive religious instruction, Indirectly, the parents decision to seek out religious instruction is being supported. But of course the states indirectly pay for some religious

education all the time. You know, the g I Bill for more than seventy years has been paying for people to attend Boston College and the Game. So I think the language of forcing overlooks the point that it's it's the state's choice whether or not to create a program that's open to some private schools but not others. And as Richard Garnett, a professor at Notre Dame Law School,

speaking with Bloomberg to Juan Grosso. Catch more in that interview plus analysis of the latest legal news by subscribing to the Bloomberg Law Podcast or downloading the show at Bloomberg dot com slash podcast. Attorneys can find exception on legal research and business development tools at Bloomberg Law dot com and on the Bloomberg terminal at b law Go. And futures this morning are starting to strengthen. US and P futures up about twelve points, down features up twenty

six and nastday futures up seventy eight. The ten year treasury up eleven thirty seconds. You have three point one one percent and the yield on the two year three point o percent. Nine Max Scrude oil is down one point one percent out of dollar twelve and a hundred five dollars seven cents of barrel co mix school down a third of a percent, or six dollars thirty cents at eighteen thirty two. Ten announce and Bloomberg Daybreak continues. This is Bloomberg