Bloomberg Audio Studios, Podcasts, radio news. Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen Willcom has been restored to stock in bond markets for now. After the hotter than estimated inflation report for March, yesterday, a gauge of global bond suffered it's worst performance since February of last year. Investors now bet the FED will cut interest rates just twice this year. Neil Dutta, partner at Renaissance Macro Research, talked about the difference between the Consumer Price Index and the feds preferred inflation gauge, the PCE.
You know, there are differences of scope between the CPI data and the pc data, and the CPI data is running, you know, over a full percentage point higher than PCE. That's about twice almost three times what's normal, and so you know, in some respects, I do think the market might be overstating how important CPI is for the FED reaction function, but you know, it's a bad number.
Renaissance Macro Research partner Neil Dutta now expects the FED to cut rates twice this year, with the first move in.
July, Well Nathan, Former Treasury Secretary Larry Summers says cutting rates would be a mistake. In fact, Summer says a rate hike may be necessary.
You have to take seriously the possibility that the next rate move will be upwards rather than downwards, and anything could happen. Markets could crash, the indicators could turn down. But on current facts, a rate cut in June, it seems to me would be a dangerous and egregious error.
Former Treasury Secretary Larry Summers estimates the chance of a rate hike in the fifteen to twenty five percent range. Here the full conversation on the Bloomberg Wall Street Week podcast downloaded on Apples, Spotify, or anywhere else you get your podcasts.
Karen.
Investors now turn their attention to another key inflation reading, the March Producer Price Index. Let's get a preview from Bloomberg's Michael McKee.
The Producer Price Index is forecast to come in cooler than yesterday's Consumer price index, and that may matter more to the Fed than the CPI. The reason the Fed's target is based on a third inflation measure, the Personal Consumption Expenditures Index or PCE. It tends to run lower than CPI. Some sectors in the PPI feed directly into PCE. For example, while CPI measures what consumers pay for medical care,
PPI and PCE measure what insurance companies pay. So today's numbers matter for analysts and central bankers as they try to understand the direction of inflation. A strong PPI would reinforce pessimism about rate cuts a week one would revive hope. Michael McKee Bloomberg Radio.
Right, Mike, thanks well. Interest rates are very much in focus overseas. Later this morning, the European Central Bank makes a policy decision, and we go to London and get a preview of the Bloomberg's You and Pots You in Good Morning.
Karen and Nathan boringcoss Across the euro Area are set to be held at a record high today of four percent, but investors are expecting the ECB to further lay the ground for cuts to get underway in June. Euro Area inflation is within sights of the two percent target, but President Christine the Guard has indicated they'll need more confidence in the data, particularly wage growth, by the middle of the year. That decision comes at seven fifteen Eastern time in London. Immune pots beenber radio.
Okay ewan, thank you. Oil is on the rise, and speculation hostilities may be escalating in the Middle East. Source to say the US and its allies think an Iranian strike on Israel is imminent. We get more from Bloomberg Israel Bureau chief Ethan Bronner.
This is in retaliation for an attack that is presumed to have been done by Israel about ten days ago in Damascus on a diplomatic compound in which seven people were killed.
The key point there is that the two of.
The people were Revolutionary Guard command as to say, Iranian commanders of militias in Lebanon in Syria.
Bloomberg's Ethan Bronner says Israeli officials have publicly threatened Iran that if it hits Israeli soil, Israel will hit Iranian soil.
Well back here in the US, Nathan, the Biden administration is cracking down on unlicensed gun dealers, and we get the very latest at Bloomberg's John Tucker, John, Good Morning.
And Karen.
The Biden administration is issuing the rule designed to close a gap that allows gun buyers to avoid background checks. It targets the so called gun show loophole by expanding the definition of who must obtain a license to engage in firearm sales. The regulation specifically singles out sellers online and at gun shows, where the background checks are often not conducted. According to a White House official, more than twenty thousand individuals engaged in unlicensed dealings could be affected
by the changes. The President has seized on the issue of gun violence to contrast himself with former President Trump and Republicans. In a State of the Union address in March, mister Biden sattled his administration's efforts to address gun crime, including establishing the first ever Office of Gun Violence Prevention. John Tucker, Bloomberg Radio.
All Right, John, Thanks at a disclaimer, Michael Bloomberg, founder and majority owner of Bloomberg Radio parent Bloomberg Lp, donates to groups at support gun control.
All Right, Karen.
In Legal News this morning, Donald Trump has lost his third try in a week to delay his Manhattan hush money trial. Bloomberg's Ed Baxter has the story.
The week legally has had his attorneys trying to delay the trial on charges that he faked business records to cover up a sex scandal. The so called hush money trial. His attorneys say they want a delay based on several rulings that have been made, including waiting until after the
final ruling comes down on immunity. How this latest ruling could be heard by a panel of five appellate court justices going forward, but it would be nearly impossible for the court to hear and rule before the trial's beginning. Jury selection is scheduled from Monday the fifteenth at Baxter bloom.
Radio, all right ed, thanks well. Staying in Manhattan. There is not as much of a hush in New York City office buildings. The return to work rate is now close to eighty percent of where it was before the pandemic. We get more from Bloomberg's Doug Prisner.
The data come from placer Ai. They show how Wall Street firms including Goldman, Sachs and JP Morgan helped drive New York City's return to office rate. A similar rebound was also seen in Miami, with a rate of seventy eight percent last year. The return to office rates for these two cities were the highest among seven major US markets. They were also above the national average of about sixty three percent. San Francisco saw the greatest growth in office
visitations in twenty twenty three. However, it still lagged behind other major cities with an RT rate of forty five percent in New York. I'm Doug Prisner, Bloomberg Radio.
Okay, Doug, thanks for watching shares of Alpine Immune Sciences on some deal news this morning. They're up thirty six percent in early trading. The kidney drug developers being bought by Tech Pharmaceuticals for four point nine billion dollars in cash.
And it is time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's and Michael Barr. Michael, good Morning, Good morning, Karen.
House.
Republicans have failed to advance a bill that would renew the Foreign Intelligence Surveillance Act FISA, gives law enforcement the authority to monitor suspicious interactions with foreign adversaries. After former President Trump posted kill FAISA. Nineteen Republicans voted against the procedural vote, despite House Speaker Mike Johnson urging them to
approve it. Republican Congressman Dan Crenshaw, Texas says he believes the laws renewal is necessary for the US to monitor bad actors all over the world.
You lose our collection on our adversaries. That's one of the most seriously bad things that I can think of happening. I've never been worried like I'm worried now.
However, critics on both sides of the aisle saying that Americans often get surveiled improperly because of it. The fallout continues in the fight over a newly revived eighteen sixty four Arizona law criminalizing abortion throughout pregnancy unless a woman's life is at risk. The Arizona Legislature devolved into jeering yesterday as Republican lawmakers shut down discussion on a proposed
repeal of the law. The Arizona Supreme Court cleared the way this week for enforcing the pre statehood abortion ban throughout pregnancy, without exceptions for rape or incest. Democratic State Senator Anna Hernandez called the GOP bloc politically foolish.
It's not about convincing somebody to have an abortion or not.
That is their choice.
This is about do we trust the people to make the best decision for themselves, And we're saying yes, we do.
A proposed ballot initiative may ask voters in November whether to place abortion protections into the state constitution. New York City, fighting back against people who steal packages delivered to residents, city officials have now introduced new public delivery lockers. Each locker can hold twenty five packages at one time. New York Mayor Eric Adams New.
Yorkers will be able to receive and send packages using secure lockers on public sidewalks. The program is available to all New Yorkers twenty four to seven and it is the favorite four letter road of New Yorkers free.
Currently, seven lockers are installed around the city, including in Brooklyn and Hell's Kitchen. Global News twenty four hours a day and whenever you want it with the Bloomberg News. Now, I'm Michael Barr, and this is Bloomberg Karen.
All right, Michael Barr, thank you time now for the Bloomberg Sports Update with John stash Hour. John, good morning, Good morning, Karen.
There hasn't been a Master's without a drop of rain since twenty eighteen, and ranged in the forecast for this morning sounds like togat at least some of the opening round in It is expected to be clear Skys the rest of the weekend. The eighty eighth Masters, John Rahm, the defending jam Scottie Sheffer won two years ago. Here's the world number one on playing.
That's the national I mean to me, it's just a special place. It's kind of the mecca for us growing up being you know, grown up here in the States and you know, being Americans. I think this is the tournament that we all look for, and to be here on property every year is extremely special. And I mean it seems like it all stands out. Everything has done so well here.
Yesterday's par three won by Ricky Fowler, no one has ever won it, and then won the green jacket. They were five holes and won in the event, and including one by Gary Woodland, who's playing the Masters after undergoing brain surgery. Last fall at the Stadium Marlin's with the Yankees, five's too, Jake Berger a three run homer off Marcus Stroman, John Carlos Stanton homer for the Yanks. Mets and Braves
reigned out in Atlanta. The Red Sox had a five to nothing lead in the sixth inning, lost to the Orioles seven to five. Twenty year old Jackson Holiday went over four Big League debut for Baltimore. He's the son of Matt Holliday. He's considered MLB's top prospect. Giants beat the National seven to one. Cleveland top the White Sox. The Guardians have brothers in their lineup, and Bow and Josh Naylor both homeward in the fourth inning. Big NBA
game for first place in the West. Denver beat Minnesota. Nikolaoa could scored forty one. The netsbeat Toronto one of six to one oh two. The next play tonight in Boston. Rangers trying to finish first overall. They host Philadelphia, the Islanders, seeking a playoff for their home for Montreal. The WNBA TV schedule is out. Thirty six of Indiana's forty games will be on National TV. The Fever Expecutive Draft Caitlin Clark on Monday, John Stashawer Blueberg Sports, Karen Nathan.
All Right, John Stashauer, thank you. SMP futures down to tenth seven percent, so our down futures Now's day futures down about the same. In the ten year treasury yield is that four point five six percent.
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. Well, the third month was definitely not the charm on the road to disinflation. The March Consumer Price Index did come in hotter than expected, once again, keviny investors pushing back bets on rate cut timing from the Federal Reserve. For more, we're joined by City US economist Veronica Clark. Veronica, good morning, Thanks so much.
For being with us.
Good morning, Yeah, thank you for having me.
So is the road to disinflation still bumpy or is this third in a row CPI hotness the new trend?
Yeah, I mean I think most food officials will probably still characterize this as bumpy. Of course, it will be core PC inflation that matters most for the Fed, and we'll see what that comes out today once we get details of PPI data. But I think, you know, maybe the hawks are getting a bit more uncomfortable and it does kind of get harder to come to a consensus
to cut maybe as soon as June. But there are a lot of uncertainties, of course, with all the other data that we're going to get before June.
Also, do you guys over at City count yourselves as Hawks, So are you getting more uncomfortable yourselves?
No, not necessarily. We're We're probably one of the more dubvish forecasts out there right now. We think the Fed is still cutting in June and then cutting every meeting after June. So that is one hundred and twenty five basis points of cuts this year. That's well more than what's priced right now. But I think for us, you know, we are trying to be more forward looking. We are trying to assess the other types of data that we
might see over the coming months. You know, labor market data that has been very strong, but some of the details look a bit precarious, and I think the said would be very dubvish if we know we're getting some weaker labor market data.
Yeah, first cut in June is looking more and more like a bold call given the data that we have seen so far. In some of the commentary that we're hearing from the likes of Larry Summers, the former Treasury secretary who was on Bloomberg yesterday, saying, maybe we they hold out the possibility that the next move from the Fed is a hike. I mean, how do you push back against that?
Yeah, I mean I think that is probably pretty unlikely. I think at least Fed officials will see at least that the current level of rates is restrictive. And we've heard that most FED officials, certainly from fair Powell. And so if you know, inflation is coming in a bit hotter than comfortable and they're comfortable with they're not, you know, getting that further confidence that they want to see. It's not necessarily that we're talking about hikes again. They would
probably just lead rights elevated for a bit longer. We're just talking about pushing out those cuts.
What is it that's keeping these price pressures so sticky? What are you seeing in the data that has inflation where it is and has you still thinking that there is still room for the Fed to make a cut.
Yeah, I mean, we honestly do still see a lot of stickiness and services inflation. So we've seen that for a while in shelter inflation, which which should slowing at some point and as we're getting into two later this year, but a lot of the strength and yesterday's CPI data with non shelter services. Actually about half of that strength and non shelter services had to do with auto insurance, which interestingly does not go into the Fed's preferred PC
inflation measure. But even in PC inflation, I think we're we're still seeing a lot of stickiness to services inflation and that has to do with, you know, a tight labor market. We're still running wages that are around four to five percent or so. That's a fit stronger than you want to see to be consistent with two percent inflation. So there is still some loosening to go. But I think we do see the signs in the labor market, details in demand for workers hiring that has really slowed down.
That leads us to think we are going into a much looser label market.
So we only have about thirty seconds left here, Veronica, what are you expecting when it comes to producer prices out this morning and whether that could change the narrative that we're in this market.
Yeah, this one one could be interesting. There's a couple things to watch, you know, we're looking at the transportation and the good kind of components of PPI data that could be a bit stronger. We might see a stronger headline PPI increase. But most importantly today, we're watching some very specific components that go into our mapping of core PCE inflation for March, and of course that's what the
said we'll care most about. We are expecting to see some strength in components like medical services, certain financial services, and that could mean that forecasters are expecting, you know, a bit stronger core PCE even than we had in February. We had a twenty six basis point increase in February. We're tracking at around thirty basis points right now. That could mean that we're just pushing these cuts further out
market continues to price outcuts. Yeah, but that might be a little bit tree mature.
This is Bloomberg day Break Today, your morning brief on the store where he's making news from Wall Street to Washington and beyond.
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