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Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, the surge in futures this morning comes after a Vassil session following the Fed's fifty basis point rate cut. The S and P five hundred wiped out a one percent gain yesterday after FED share, j Powell cautioned against assuming big rate cuts would continue.
I do not think that anyone should look at this and say, oh, this is the new pace. Have to think about it in terms of the base case. Of course, what happens will happen. So in the base case, what you see is look at the SEP. You see cuts moving along. The sense of this is we're recalibrating policy down over time to a more neutral level, and we're moving at the pace that we think is appropriate.
And Jay Powell, the Fed's first rate cut in four years was accompanied by projections indicating an additional fifty basis points of cuts across the remaining two policy meetings this year.
Well, Nathan, we have plenty of reaction from the FED raid cut. We caught up with Bloomberg Opinion columnist Muhammad Alarian, KMPG Chief US Economist Diane Swank, and former New York Fed President Bill Dudley.
We're going to look back and either this will be the absolutely white bet, which is be preemptive on the labor market after you were reactive to inflation. This is a fundamental change in the reaction function. Alternatively, we will look at this as being too aggressive. I'm hoping that it will be the first.
This was a huge victory for j.
Powell, who really laid out at his Jackson Hole speech that he was worried about employment, and that is what this is about.
It's pretty much I was expecting in the sense that one of the issues that Paul had is how do you two fifty without scaring people that you know something bad about the economy? And I think you did that very well. He basically said, we're doing this because the news is good. We've made progress sound inflation, as opposed we're doing this because the news is bad. So I thought it was a very providing reassurance to people that FED thinks that they've got it.
That was former New York Fed President Bill Dudley. KPMG Chief US Economist Diane Swank and Bloomberg opinion columnist Mohammad Alarian. The decision was not without some controversy. Michelle Bowman cast a dissenting vote in favor of a smaller quarter point rate reduction that marked the first ascent by a FED governor since two thousand and five.
Well, Karen, investors aren't the only ones cheering the Fed's rate cut. Bloomberg's John Tucker joins us Now and John. The Biden Harris administration may have caused to celebrate as well.
Yeah, Nathan, and they're taking kind of a victory lap. In a speech today to the Economic Club of Washington, President Biden will celebrate the Fed's decision of slash interest rates as a validation of his economic vision. This is part of an effort to recast his handling of the economy, particularly as voters continue to give him low marks for
tackling inflation. It's important for both the President personally and the Democrats more broadly, as Vice President harr Is is locked in that tight election battle Donald Trump, his eighth say, Biden will outline ways he believes the economy could still be made stronger while pushing costs lower. I'm John Tucker Bloomberg Radio.
All right, John, thank you. It's now to the Bank of England and it's turned to make a policy decision. That BOE is expected to maintain a patient approach to easing at its meeting today after a first rate cut last month. And Bloomberg's Lizzie Burdon has more from London.
It's decision day on thread Needle Street, but economists that investors are expecting policymakers to stick to the status quo, holding the benchmark rate at five percent. However, wages are increasing on a faster Bank of England cutting cycle ahead after inflation readings came in lower than Central Bank forecasts in July and August. Attential will be focused on Governor Andrew Bailey for hints that borrowing costs could be lowered again in November after committee members voted narrowly to end
their sixteen year high last month. Traders are also awaiting news on the speed of quantitative tightening, a decision which could prove pivotal for new Chancellor Rachel Reeves is October budget in London. Lizzie Burden Blueberg Radio.
Okay, Lizzie, thank you. Now we want to get you caught up on the latest developments in the Middle East. Israel has declared a new phase in its regional war with Islamist groups. It comes as Hesbola official say explosions went off in Beirut and multiple parts of Lebanon in an apparent second wave of detonations of electronic devices. We get more from Bloomberg's Jumana Barsecchi in Dubai.
It's a second day of communication devices exploding across not just baby routes, but across the entire country, eastern Bikar as well as southern Bay Roots. And this time the catalyst were walkie talkies. These were walki talkies that Hezballah group members had been using. They also exploded be it in cars and people's houses, even within cafes, so very similar in nature to the attack that took place the
day before. The Lebanese Health Ministry has put u out a statement saying that four hundred and fifty casualties were brought into hospitals as a result of these attacks. Twenty people have now lost their lives.
Bloomberg's Jewniver said. She notes Israel has not taken responsibility for the attacks.
None of the latest in the presidential race. Nathan and former President Trump was on New York's Long Island for a rally last night, and he promised to lift the cap on state and local tax deductions that he imposed as president but is valuable to many New York homeowners. Trump also announced plans to go to Springfield, Ohio, the city where he said during last week's debate, Haitian migrants have eaten people's pets.
I'm going to go there in the next two weeks. I'm going to Springfield, and I'm going to Aurora.
You may never see me again, but that's okay.
Gotta do what I gotta do.
Whatever happened to Trump, well, he never got.
Out of Springfield.
Trump also said he'll go to Aurora, Colorado. He's repeatedly claimed that city has been overrun by migranted gangs from Venezuela.
As for Kamala, Harris Karen, the vice president, plans to meet with Vladimir Zelenski next week. The Ukrainian president will be in Washington, sources say is expected to push his country's bid to join NATO and the European Union, along with more advanced weapons, as part of his victory plan against Russia. Zelensky plans to present that plan to President Biden on the sidelines of the UN General Assembly later this month.
Meanwhile, Nathan the International Brotherhood of Teamsters is declining to endorse a candidate for president, and Bloomberg's Amy Morris has more from Washington.
It is a blow to both Kamala Harris and Donald Trump. Teamster's general president Sean O'Brien released a statement saying that neither candidate was able to make serious commitments to the union quote to ensure the interests of working people are always put before big business. Now, the Teamsters released internal polling data showing members had initially favored endorsing Biden over Trump, but after Harris became the nominee, the majority of respondents
back to Trump. And Poland conducted a few days ago, fifty eight percent supported endorsing Trump, compared to thirty one percent for Harris. And you may recall O'Brien spoke at the Republican National Convention in July, the first time a leader of the Union has done so. Amy Morris, Bloomberg Radio.
Amy, thank you. We have breaking news crossing the Bloomberg terminal. Apple is set to be warned by the European Union that it needs to open up its highly guarded iPhone operating system to rival technologies or eventually risk significant fines. Sources say EU watchdogs are due to announce under the block's new Digital Markets Act that Apple must step into line with strict new rules on making operating systems fully functional with other technologies.
And it's 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. Lawyers for Sean Diddycomb's unsuccessfully thought to keep him out of jail after his sex trafficking arrest. The music Moguls lawyers highlighted a litany of home horrors at the Brooklyn Federal lockup, described as hell on Earth. They include horrific conditions, rampant violence, and multiple depths. Comb's attorney Mark agnifano I.
Told mister Colmbs, I'm going to try and get his case to trial as quickly as possible. I'm going to try and minimize the amount of time he spends in very very difficult and I believe in humane housing conditions in the special housing unit of the Metropolitan Detention Facility.
Audio courtesy of ABC seven. The judge cited possible witness tampering by Combs if bail is granted. Combs was sent to the Metropolitan Detention Center after pleading not guilty in a case that accuses him of physically and sexually abusing women for more than a decade. Disgraced movie mogul Harvey Weinstein pleaded not guilty to a new indictment charging him
with criminal sex acts. According to the Manhattan District Attorney's office, three separate women have accused Weinstein of section really assaulting them. It's not part of Weinstein's conviction, which was later overturned on appeal. This morning, a judge in Washington, d c. Will sentence five people accused of helping to lead the
infamous January sixth initial breach of the Capitol. Prosecutors will recommend nine years in prison, saying this group was among the first to breach a police barricade, saying hundreds, if not thousands, of rioters would follow. A new study finds that preventable risk factors are driving a global increase in strokes. Doctor Valerie Fagan is the director of the National Institute for Stroke and Applied Neuroscience at the University of Auckland in New Zealand.
Stroke is probably one of the most preventable and yet very fatal and disabling conditions.
Dr Fagan says strokes killed more than seven million people each year. The study, published in the journal Lancet Neurology, finds environmental factors like air pollution and heat waves, and individual factors like blood pressure and bad cholesterol are behind the recent increase. Global news twenty four hours a day, whenever you want it with the Bloomberg News. Now, I'm Michael Barr, and this is Bloomberg Cameron.
All right, Michael Barr, thank you, and it's time now for the Bloomberg Spores Update with John Stanshowery John, good morning.
Good morning Karen. Over the last thirty seasons, Yankees have gone to the postseason twenty five times, didn't go last year, barely finished over five hundred, but headed back clinched at least a wildcard when they won two to one in ten innings at Seattle Champagne. Then float in the clubhouse Aaron Judge hoping there's more of that next month he was on the Yes Network.
Oh well, we're excited, you know, we definitely know the job's not finished.
Now we're hunting this divisions like.
You get an opportunity to, you know, punch our ticket back in the pro season after last year missing out.
It means a lot.
You know, he got a special group here.
The boys are definitely excited, but they know the mission.
That's that definitely.
The win last night was helped by a bizarre double play in the bottom of the tent. The Meriners had runners at first and third. Nobody at Randy or Rose Arena struck out and his bat went flying towards the head of Julio Rodriguez at third as he got out of the way of the bat. Austin Wells through the third and Rodriguez was picked off. Orioles lost again, Yankees moving out towards Clinton, the division they lead by five games. At City Field, the night after the Mets won ten
to one, they won ten nothing over Washington. Jose Quintana went the first seventy and these gave up just two hits, brand of nimmoa three on homer. Arizona and Atlanta both won the Mets State tied with the d Backs, with both teams two games ahead of the Braves. Red Sox won two to one of Tampa Bay Milwaukee clinch the NL Central Tonight at MetLife It's the Jets home opener New England. Also one and one. First ballot for the
Pro Football Hall of Fame is out. It has sixteen first timers, including Eli Manning, John Stashedward, Bloomberg Sports, Jarnon, Nathan.
Coast to Coast on Bloomberg Radio, nationwide on Sirius XAM and around the world on Bloomberg dot Com and the Bloomberg Business app. This is Bloomberg Daybreak.
Good morning. I'm Nathan Hager. The Fed is determined to achieve a soft landing. That is the message Chairman Jpowell sent to markets as the Central Bank pivots to cutting interest rates with a half percent move.
The economy is growing at a solid pace, inflation is coming down closer to our two percent objective over time, and the labor market is still in solid shape. So our intention is really to maintain the strength that we currently see in the US economy.
That was the Chairman of the Federal Reserve, Jerome Powell at the news conference following that fifty basis point cut. For more this morning, we are joined by Veronica Clark, us economist at City. Veronica, good morning. You were first out of the gate with this call. You've said in July that the Fed is going to do fifty basis points. Was this the right call?
Yeah, good morning for having me. I do think it probably was. Of of course, in the end, the decision was very close, and we didn't know what this was going to be going into yesterday, the first time in a long time that that's happened. But I do think the argument for a fifty basis point Kaui is strong. Even tar Pale said it, you know the sense in which if you had had those July employments, you know, data points, just a couple of days earlier, maybe they
would have cut in July. Maybe you were making up first and lost time. But we are never going to be further from a neutral interest rate than when you start cutting, so it makes sense to do it right away.
The same time, Palell said, don't get used to it, that this isn't necessarily meaning that it's always going to be fifty. You agree with that.
I think if that is is of course going to stay pretty optimistic here, and we did have you know, the updated economic production yesterday. They only expect the unemployment rate to rise maybe another tent or two from where we are now, still expecting strong GDP growth, and I think if that plays out then and it's fair that
you know, the pace of cuts would would slow. But I think for us, you know, we're always trying to you know, first and foremost based our FED call on where we think the economic data are headed, and we actually do see the chance of more labor market weakness. We do have two more employment reports to go before we get to the next said meeting in November. I think there could still be some weakness in the labor market data and those reports we think they're going fifty
age and in November. Because of that, do.
You think we need to hear more clarity from Chairman Pale about what the path is going to be for rates, what the size of the cuts is going to be. Is there too much data dependence from this FED.
I don't think so. I think you know, he said it, of course when we're taking it meeting by meeting, it is, you know, really just the labor market data now first and foremost and I think we do know that their reaction function to if the data evolve in a certain way.
If we do see weaker labor market data, their reaction is going to be to support the labor market is as much as they can, So we at least understand I think that they have a pretty sensitive reaction function to any weaker labor market data.
Do you think there's still a reaction function to inflation? Is the FED taking its eye off the ball on inflation too soon?
Yeah? Yeah, I mean, of course that is the other important element of their mandate. And I don't think, you know, we're you know, dismissing inflation altogether. But I actually was a bit surprised that we did have this stronger CPI reading, you know, last week, and we thought, maybe, you know, the best compromise then among the Hawks and the doves was to just do a twenty five even yesterday. But clearly,
you know, the labor market is taking precedent here. I think we had an even response from Para Powell about the stickiness of shelter inflation, and he was somewhat dismissive of that. So I think the focus for the FED is just very quickly shifting to the labor market data.
And speaking of the split between hawks and doves in our last minute here, how significant was it that Governor Bowman dissented on this decision?
Yeah, not surprising. She is certainly probably the most hawkish beneficial I was actually even maybe a bit surprised that there weren't more descents. Of course, the market was very fifty to fifty split on what the size of the cut was going to be. We really didn't know up until the last minute. I would have thought maybe there were even some more hawks, you know, arguing for starting a bit smaller. So I don't think that descent is
too meaningful. If anything, this is more consensus than I would have thought in a split posiion.
This is Bloomberg day Break, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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