Investors Ready for Fed Rate Decision; Cool China Eco Data

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Good morning, I'm Nathan Hager and.

I'm Karen Moscow. Here are the stories we're following today.

Thank Karen.

Our focus is on the markets this morning, as we head into the final full week of trading in twenty twenty four. Investors get key economic data this week, with retail sales due out tomorrow and November's core PCE, the Fed's preferred gage of inflation on Friday. Traders also have a slew of central bank meetings to follow. Rate decisions from the Bank of Japan and Bank of England come

Twenty twenty five remains unclear.

Last time in September, they had four recuts for twenty five base point recuts twenty twenty five, So this title will be two or three second. I think I'll talk about how inflation is a little bit sticky.

The economy is doing really well.

You'll price se some upper revisions of the FED estimates of so called our star, the neutral rate. So I think all those things together will make it pretty clear that Janguary is probably.

Going to be a pause.

And former New York Fed President Bill Dudley also tells Bloomberg the FED expects tax cuts from the first Trump administration to be extended, and we'll take that into account as it decides how to ease monetary policy next year. Stick with Bloomberg for live coverage of this Wednesday's FED decision will bring you a special edition of Bloomberg Surveillance. The Fed decides with Jonathan Farroll, Lisa Bromwoitz, and Tom Keane on Bloomberg Radio and Television.

Well and Politics, Nathan.

Much of the focus remains on policy and how a second Trump administration will implement proposed tax and a tariff policies.

To be specific.

Former Trump economic advisor Gary Colin told CBS.

Has faced the Nation this weekend.

He expects taxes to be a major focus of the coming administration.

We do know that taxes will be taken up by this Congress in this session. We know that they're going to have to deal with the personal side of the equation because if not, the personal side will revert back to the pre twenty seventeen tax code.

I don't think anyone wants on.

Either side the Aisle wants to go back to the prior tax code.

Former Trump economic advisor Gary Cohene was speaking on CBS's Face the Nation, which you can hear every weekend right here on Bloomberg Radio.

Also in focus something that's turned into more of a political issue now Karen drone sidings across the northeast. New Jersey Governor Phil Murphy and New York Governor Kathy Hocheler among state leaders demanding expanded authority to act against drones That could appear as a thread, but Homeland Security Secretary Alejandro Majorcis tells ABC's This Week Americans will likely see more drones, but there is no evidence of foreign involvement or a national security risk.

I want to assure the American public that we are on it. We are working in close coordination with state and local authorities, and it is critical, as we all have said for a number of years, that we need from Congress additional authorities to address the drawne situation.

Homeland Security Secretary Alajondromericus also says drone fightings may be increasing due to the Federal Aviation Administration deciding last year to allow nighttime drone flights.

Meanwhile, Nathan at the White House, the Biden administration has plenty to take action on land protections, clemency, and artificial intelligence in his final weeks in office. According to a memo to allies, the President's aiming to codify his legacy before a President elect Trump's inauguration.

Trump's repairing a flurry.

Of executive orders, some on his first day that could take aim at key planks of the Biden agenda.

Star Back to markets now, Karen, because bitcoin has hit another all time high. The digital asset continues to soar on optimism over a second Trump administration, reaching another record high, surpassing one hundred and six thousand dollars. That advanced also

Nathan Weturn overseas now to the continued economic slowdown in China. China's retail sales growth and expectedly weakened in November despite signs of improvement in the housing market. City head of Emerging Market Economies Johanna Chua said the data highlights the need for Beijing to introduce more measures to boost spending.

We really need to see actual consumption stimulus. I mean, what do we have so far this year has been very small, you know, targeted cash subsidies before the Golden Week or even the consumer trade in programs. I really expect going into twenty twenty five, which we've already seen this signal that we should get a larger fiscal stimulus with a composition much more skew towards consumption.

And City's Johanna Cheua says the global headwinds and on certainty of a second Trump administration's policy does not instill confidence in jobs and income prospects in China.

And China's soft retail sales reading is weighing on oil as well. Karen Crude slipped after advancing last week. Consumer weakness in China is reinforcing concerns over weakening demand, with the country's creud refining dipping to its lowest level in five months in November. Checking well prices right now, Nimex crudes down one percent at about seventy dollars fifty seven cents per barrel. Brent is down eight tens of one percent at seventy three dollars ninety three cents.

Well, Nathan, and Europe, we're getting a sense of monetary policy this morning. European Central Bank President Christine Laguard talked about the path for rate cuts while speaking in Lithuania today, saying she expects a further reduction in rates as the ECB approaches its two percent inflation target.

We are close to achieving our target, so we are no longer in a situation where we need to fix the policy horizon at the shortest possible transmission, like we can return to a situation the policy horizon can a just depending on the nature, size and persistence of the shock as needed.

He's to be President, Christine Leaguard, as is the Central Bank well came monetary policy sufficiently restrictive for as long as necessary to reach its inflation target.

Staying overseas, Karen, let's get you updated on the political turmoil in South Korea. The country's parliament voted to impeach President yunsukyol on Saturday, following his brief martial law declaration. With Yun's duty suspended, he now awaits a ruling from South Korea's Constitutional Court on whether he will be removed or restored to office. That decision can take up to one hundred and eighty days from the passage of impeachment.

And finally, back at home, Nathan.

An update on the deadly shooting of United Health CEO Brian Thompson. Police claim to have overwhelming evidence that suspected gunman Luigi Maggioni fatally shot Thompson in Midtown Manhattan, with evidence including video footage, fingerprints, a weapon, and a manifesto

John Good Morning, Good Morning, Karen toom Atwinzer to New York City's mayor resigns, joining a wave of departures is a corruption probe Titans. Let's get more in this report this morning from Bloomberg's Jeff Bellinger.

Ingrid Lewis Martin is one of Mayor Eric Adams's closest confidants and longest serving aids. She is one of a dozen senior administration officials who have retired or resigned since late September, when Adams became the first New York City mayor in modern history to be indicted on federal corruption charges. Lewis Martin and has been scrutinized as part of the multiple investigations into Adams and his administration. Investigator seized her phone when she returned from a trip to Japan the

Israel struckt Syrian weapons depots and air defenses over the weekend in what appeared to be part of an effort Israel says is aimed at depriving extremists of military assets after the rebels seize power in Syria. In all, Israel struck its neighbors seventy five times at attacks that began Saturday night near the Syrian capital Damascus. Unionized to Amazon workers at two New York warehouses gave leaders the authority

All right, John, thank you, and it's time now for the Bloomberg Sports Up Day, brought to you by Try State Out. He here's John stash Hour, John, good morning, Good.

Morning, Carey.

The NFL Sunday and begain with another flyover at Medlighte Stadium, again directed at Giants owner John Marra, this one with the words enough, we won't stop until you fire everyone. And then the Giants with the club record time ninth loss in a row, unable to stop the Baltimore Evans quarterback.

That's it. What's the throw?

Spreading to the right, spreads out, valley goes deep. He's got a man wide opener shot. Bavement has it at the ten paston.

Of five sacks up to Jackler touchdown. Riggins pres Shan Bateman on a beautiful catch from Lenard Jackson's throw on WBAL one of five Jackson td passes had more TV passes than incompletions. Baltimore beat the Giants thirty five to fourteen. The Giants at QB started Tommy Devido and then finished with Tim Boyle due to a DeVito concussion. They've now played four different qbs of the last five games, and none have played all that well. Giants are two and twelve,

Hundred and ninety eight receiving yards.

Patriots dropped to three and eleven and lost to Arizona thirty to seventeen. The Commanders a twenty to nineteen winning New Orleans. The Saints scored on the final play but got stopped on the game winning two point conversion at ten. Two late afternoon games that are possible Super Bowl previews, Buffalo won at Detroit forty eight forty two, with Josh Allen in on four touchdowns. He was in on six last week. Jared got through five ten passes in defeat.

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. The wave of central bank decisions around the world crashes.

Into the US this week.

The FED begins its final policy meeting of twenty twenty four tomorrow with the rate decision on Wednesday, and we're also going to hear from the Bank of Japan and the Bank of England before this final full training week of twenty twenty four is out here to get a set for at all. Bloomberg Radio and TV anchor Kritty Gufta, so critty. It seems like a cut this week from the Fed is just about baked into this market. But the big question remains, what about twenty twenty five?

Good morning, Good.

Morning, Nathan. Yeah, that seems to be the question.

Goldman Sachs, for example, already saying that that's where you get a rate cut skip for example. And remember this was a really key strategy that the Fed had done on the way up where they were hiking. They said we would maybe hike, take a pause, hike again and just give the economy a second to digest at a time when they need to act quickly, but not enough

Because it had worked on the way up as well.

But Nathan, the concern I think is what happens if you startainly get more inflation in twenty twenty five.

That's when cutting is not the strategy that works.

What's to stop the Fed from going ahead and pausing this week? Is it just about the messaging that's been put out there that if they sort of gave the market a head fake like that, that it would cause even more volatility.

It's a really hard question.

I can't see why, just given kind of the message that they've given so far, why there would be hesitation simply because when they have looked at things, citing the labor market for example, they've said there's been a lot of strength, but that they do want to ensure that that strength continues, and that there is still a lot of hikes kind of bakes the system. So even cutting that policy still leaves the federal reserve at a fairly restrictive level.

They're just kind of creating a little bit of that headroom.

So that's at least the argument that's been posed by a lot of these FOMC members when it comes to labor market. Even when it comes to the CPI. But Nathan, I imagine when you look at the commentary, that's where

I've seen a lot in the IT industry. You've seen it a lot in.

Kind of more public funded roles like teaching, for example. That's really where some of the data is starting to come up. But net net, the numbers on wage growth, on CPI, on labor, even on housing prices have been positive. So when they're saying that they want to potentially cut rates, and it's in response to not slowing any of that down but perhaps creating a little bit more headroom where they may need it.

In twenty twenty five.

And just thirty seconds left, is there a concern that the Fed that Trump policy is going to force them to keep stay more restrictive.

I mean, that's the highlight, that's the elephant in the room, right. The idea that in twenty nineteen J. Powell and the first things he did was cut interest rates when Donald Trump was talking about a trade war with China was the first inclination of it. And that actually worked because again it created more headroom. But the question is do you create insurance rate cuts given that the lag could still be twelve to eighteen months, And that's the strategy that no one has quite figured out yet.

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I'm Karen Moscow and I'm Nathan Hager.

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