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Good morning. I'm Nathan Hager.
And I'm Karen Moscow. Here are the stories we're following today.
Karin, we are hours away now from the most anticipated FED decision in years. After holding borrowing costs at a two decade high for more than a year, the Fed is widely expected to cut rates at least a quarter point. Today, we get a preview from Bloomberg's Michael McKee.
A FED rate cut would be the first since twenty twenty, when the Central Bank took rates to zero during COVID. The pandemic snarled supply lines and the government provided extra cash to consumers. The combination touched off the highest inflation since the nineteen eighties, and the FED took rates back up again to their current range of five and a quarter to five and a half percent. Hand Lists are divided over whether we'll see a half point or a
quarter point cut today. That will depend on whether policymakers see the risks tilted more towards an economic slowdown or to reaccelerating inflation. One thing that is certain, more rate cuts are to come. The Fed will suggest how many with a new dot plot today as well Michael McKee Bloomberg Radio.
All right, Mike, thank you. So will it be twenty five or fifty? We asked Laura Raim, chief US economist at FS Investments, Robert Teeter, chief investment strategist at Silvercrest Asset Management, and Michael Darta, chief economist at Roth Capital Partners.
I am in the twenty five basis point camp, but I cannot recall a FED meeting where things have been so up in the air and it is a really close call. There are great reasons for them to do a larger cut. I also can't remember a FED meeting where markets have been so split going into the decision. Half the market's going to be surprised either way.
I don't think there's a whole lot of difference between twenty five and fifty basis points.
Here.
We're sort of tracking to know maybe sixty percent odds of a fifty basis point cut, But it's all in the communication as to why they're making that cut. So is it tilted more at We've made a lot of progress on inflation. I think that's a hard story to tell me. You've had three months in a row of two point six percent or so on their preferred metric of PC eight.
Markets are thinking that maybe the FED is sending a signal here or at least much more open to starting with fifty rather than twenty five. And if the view of the committee is that they're substantially above neutral, we can debate neutral. But the highest estimates of neutral are about one hundred bases points below where the FED is, and you have markets pricing in a seventy one percent probability of fifty starting with twenty five. I think Carrie's significant risks for the FED, and that.
Was Rock Capital Partner chief economist Michael Darta, silvercrisht Asset Managements, Robert Teeter, and Laura Ray at FS Investments. Right now, markets are pricing and a cut closer to fifty than twenty five basis points Karen.
A couple of Wall Street Titans are weighing in as well. Here's JP Morgan, Chase CEO, Jamie Diamond and Bridgewater Associates founder Ray DALLYO.
I mean they're gonna do it.
You know, A twenty five or fifty basis poicte not gonna be earth shattering doesn't mean that much.
I mean, I think they need to do it.
You know, I think j Pellow does do a.
Great job, but it's a minor thing.
What does that that have to do? FED has to keep interest rates high enough to satisfy the creditors that they're going to get a real return without having them so high that the debtors have the problem. So, now, if we're looking at this, whether it's twenty five or fifty basis points, twenty five basis points would be the right thing to do if you look at the whole picture as a whole.
And that was Bridgewater Associates founder Ray Dallyo and JP Morgan Chase CEO Jamie Diamond for full FED coverage. Stick with Bloomberg for a special edition of Bloomberg Surveillance. The FED decides it's at one thirty this afternoon, Wall Street Time on Bloomberg Radio and television.
Now, Nathan, let's get the latest on the presidential race. Both former President Trump and Vice President and Harris are back out on the campaign trail after the assassination attempt last weekend. Trump is holding a rally on Long Island in New York today. Ahead of it, he's promising to bring back a tax break that he reigned in as president the state and local tax deduction. They got reaction from Republican Senator Bell Haggerty, who sits on the Senate Banking Committee.
I haven't had an opportunity to discuss this directly with President Trump, but I think this was happening in the context of a huge rally that will be underway there in New York. I know it's going to be very popular.
In New York.
Tax cuts in general in this environment, given the inflation that we've all experienced, are very appealing to the American public.
Senator Haggerty was a guest on Balance of Power on Bloomberry TV and Radio, and Trump's twenty seventeen tax law limited the popular deduction and high tax states to ten thousand dollars. The Committee for a Responsible Federal Budget says repealing the salt cap would cost one point two trillion dollars over ten years.
Well Karen Vice President Kamala Harris is proposing a cap of her own on the cost of childcare. She says no working family should pay more than seven percent of their income on raising a child. Harris made the comment at an event with the National Association of Black Journalists where She also talked about the attempt on Donald Trump's life.
I checked on and see if he was okay.
Yeah, And.
I told him what I have said publicly. There's no place for political violence in our country.
Vice President Harris also alluded to Trump's debate comments about Haitian migrants eating pets in Springfield, Ohio, without mentioning Trump directly. She said candidates have a responsibility when they're bestowed with a big microphone.
Well, Nathan, let's turn to the Middle East now. And pagers used by hundreds of members of the militant group Hesblah exploded nearly simultaneously on Tuesday in Lebanon in Syria, killing at least nine people, including an eight year old girl, and wounding several thousand. Hesbela and the Lebanese government blamed Israel for what appeared to be a sophisticated remote attack. Israel declined to comment. Bloomberg's Ethan Bronner is in Tel Aviv with Moore.
It looks almost certain that the Israelis, through massade or eighty two hundred, one of their major intelligence organizations got into the distribution or manufacturing chain of these pagers and installed small amounts of explosives in each pager, as well as a trigger inside that worked so that once a message was sent, the message was the trigger that exploded those little devices.
Bloomberg's Israel bureau chief Ethan Bronner notes that American officials said that the US was neither involved nor informed in advance of the pagers incident.
In company news, Karen a legal victory for Google. It's won a court fight with the European Union over a one point seven billion dollar fine for thwarting competition for online ads. Judges at the EU's General Court back to the Alphabet Units challenge to a fine doled out in
twenty nineteen, saying regulators made mistakes in their probe. The decision comes a week after the EUS Top Court ruled against Google's attempt to avoid a nearly two point seven billion dollar anti trust penalty for favoring its own product results on search Well.
An iconic American company has found for bankruptcy. Nathan and Bloomberg's John Tucker is here with Moore and John. I'm willing to bet that there's one of their products in just about everyone's kitchen.
Here's a hint, Karen put a lid on it. We're talking about Tupperware brands. For decades, they dominated the world of food storage. Toperware's founder, Earl Tupper this was back in nineteen forty six, introduced the plastic products to the public and patented their flexible airtight seal. The brand's goods later flooded into American homes, largely by the way of
independent sales Tupperware parties hosted in suburban homes. Tupperware has filed for Chapter eleven bankruptcy protection, their listing assets of up to one billion dollars and liabilities of up to ten billion. The company's going to seek court approval to facilitate a sale of the business, and they will continue operating during the bankruptcy proceedings. This all follows months of negotiations between Tupperware and its lenders over how to manage
hundreds of millions of dollars and loans. In New York on John Tucker, Bloomberg Radio.
And John It's an end of anier on Wall Street as well. Steve Cohen stepping away from the trading floor, the billionaire hedge fund founder will remain Point A seventy two Asset Management's co chief investment officer, but he's no longer investing client capital, the firm says. The sixty eight year old is instead focused on driving Point seventy two's growth and mentoring and developing talent. Cohen owns the New
York Mets. He's been one of the most dominant forces in hedge funds for more than three decades, building his firm into one of the world's biggest. After a costly insider trading scandal, time now for.
A look at some of the other stories making news in New York and around the world. And for that we're joined by Bloomberg's Michael Barr Michael, good Morning, Good.
Morning, Karen Sean. Dinny Combs was denied bail and ordered maya judge in a federal court in Manhattan to remain in prison until his trial on sex trafficking and racketeering charges. A newly unsealed federal indictment alleges he engaged in kidnapping, forced labor, and more. The fifty four year old music mogul, who has pleaded not guilty, was arrested late Monday. Prosecutors alleged that Combs used his business empire to force women
to engage in sexual acts at events. US attorney Damian Williams.
As alleged when Combs didn't get his way, he was violent and he subjected victims of physical, emotional, and verbal abuse so that they would participate in the freak offs.
US attorney Williams says it was there that Combs was violent toward the women, including dragging them by the hair. After the hearing, defense attorney Marc Agnifilio says his client intends to fight the case to the end.
He's been looking forward to this day. He's been looking forward to clearing his name, and he's going to clear his name.
Defense attorney Agnifilio will be back in court today for a to get Combs out on bail. The charges come after Homeland Security rated Combs's homes in Los Angeles and Miami last March. Movie producer Harvey Weinstein, whose alleged sexual misconduct helps spark the Me Too movement, will be arraigned today on new charges. The arraignment in Manhattan will clear up issues that resulted in a New York State appeals
court overturning Weinstein's original conviction. The appeals court ruled that the jury heard evidence that should have been inadmissible because it was involved in allegations from other women who never brought charges. All but two Republicans in the Senate voted to block a bill that would have ensured nationwide access to in vitro fertilization. Democrats had brought it back to the floor after Republicans previously blocked it from advancing in June.
After the vote, Democratic Senator Tammy Duckworth of Illinois said IVF is now threatened by former President Trump, who appointed three of the six Supreme Court justices who voted to overturn Roe v. Wade.
He is the reason that IPF is in danger. He is to blame. He and every other Republican who cares more about staying good with Trump than about doing good for the Americans. They are supposed to be serving global.
News twenty four hours a day and whenever you wanted with the Bloomberg News. Now, I'm Michael Barr. This is Bloomberg Cart.
All right, Michael Barr, thank you time now for the Bloomberg Sports Update with John Stashaur.
John, Good morning, Good morning, Karen.
Mets and Yankees fans both enjoyed last night their teams won both by nine runs, and the teams they wanted to see lose did just that for the Mets ten to one over Washington at City Field. The Mets scored four times in the thirty eight, added home runs by Francisco Alvarez and Pete Alonzo. Tyler McGill six innings, allowed just two hits nowhere and wrungs. Meanwhile, Atlanta Blue of five to one lead, lost six to five at Cincinnati.
Arizona lost eight to two at Colorado. Wildcard standings now have San Diego followed by the Mets and Diamondbacks, who are tied. The Brains are now two games behind. Yankees won eleven to two at Seattle. Aaron Judge got him going before and out was recorded. Judge with a two run double. He added a two run single in inning later, Austin Wells later with a three run double, and one Soto with his fortieth home run two hundredth of his career.
Luis Hill got his fourteenth win. Marcus Stroman, just moved to the bullpen, got the save since he worked the last three innings. Slumping Baltimore lost to the Giants ten to nothing. The Yanks are four games ahead, their largest leads since June seventh, and Judge knows that if the Yanks win tonight, they're assured of at least a wild card.
Well, we'd definitely be excited, you know, especially after the season we had last year, missing out in the postseason. That's you know what we came into the season to do. You know, getting into the postseason gus ourselves an opportunity to out there and won a World Series. So I thought it'll be step one, but you know, we gotta get there first.
Also, last nine, the Dodgers lost Joeyo tanis forty eighth home run as he nears the fifty to fifty club. Stay shower, Bloomberg Sports Canada.
Nathan Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. We are hours away for one of the most highly anticipated and hotly debated Fed policy decisions in years. J Powell and company are widely expected to deliver a cut this afternoon, but just how big it will be remains an open question.
A gradual approach is what they're going to pursue.
Twenty five basis points is going to be dependent would be the right thing to do.
If they don't know fifty tomorrow, I'll be shocked.
Now tomorrow is today for former New York FED President Bill Dudley, Bridgewater founder Ray Dalio, and Ed Heyman of Evercors you just heard there, joining us now for more on this debate. Veronica Clark, us economist at City Veronica, good morning. I think you've been on both sides of this debate. We're one of the first out of the gate with a fifty basis point call after July jobs. Where do you sit now on FED day?
Yeah, good morning, Thank you for having me. I don't think anyone should have, you know, too high of a conviction, and what will happen today? Of course, we're repricing essentially fifty to fifty chance of a twenty five or fifty. Yeah, we were initially expecting that this would be a fifty basis point rate cut, and then we saw the CPI data last week and there were some stronger elements of that.
Maybe twenty five is now the path of least resistance in terms of an agreement amongst Seed officials, so expecting in twenty five today, but I think it will be a very duvish decision, keeping all options on the table for future meetings, and I do think we are probably in store for some big rate cuts down the line.
What makes you think that, Faronicam, Yeah, it.
Essentially comes down to what we're seeing in the labor market and the said reaction to that labor market data. You know, we know already that FED officials see the other inflation mandate and employment mandate really imbalance now, and the risks are very quickly shifting in favor of that employment mandate. We just see hiring pulling back, of course, the unemployment rate rising, the pace of job growth flowing.
We think that will continue in the next two jobs reports that we're going to get before the November decision, and I think we'll see more weakness and that will that will let them, you know, do fifty at that meeting.
Also, what do you think the market reaction will be if the Fed doesn't go big today? With this debate roiling for so many days? Now, what's the market talking itself into with this debate?
Yeah, I mean, we we luckily do have you know, updated summary of economic projections today. So that's the updated dot plots for you know, where FED officials see rates at the end of the year. Of course we'll have the press conference from Chair Powell and all of that will will matter if it's not a fifty basis point cut today it's just twenty five. I think there are ways that Fed officials can be sufficiently dubbish, you know, keep what is priced priced in already because you do risk.
You know, if you're doing too little, you risk may be looking complacent, looking out of touch, looking like you're behind the curve and risk assets. I don't think we would love that, you know, we would see yields, you know, for out moving lower on almost a policy mistake kind of pricing. So I do you think Charpala has to be sufficiently dubash today. I think they can do that. I think they'll show maybe one hundred basis point total
of kutzper for this year on the dot plot. But we'll we'll see what happened.
This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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