Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
The latest developments in the Middle East. Who the militants and Yemen have fired missiles once again at an American owned commercial vessel, and we get the latest from Bloomberg's Rosalind Matheson.
Most of these attacks have not done significant damage. Some of them actually have hit ships but not prevented them continuing their journey. But what it really shows is that they're succeeding and continuing to disrupt shipping because if there's any risk at all that some of these things might land, ships are having to take the long way round. And that's not just including things like commodities, oil and gas, but increasingly perishable stuff fruit and vegetables, livestock.
Bloomberg's ros Mathieson says this latest attack comes on the same day President Biden acknowledged that US air strikes have not halted the Red Sea attacks.
Meanwhile, Nathan Israeli Prime Minister Benjamin Netanya, who is rejecting calls from the US to scale back his military offensive Gaza or to push for a two state solution with the Palestinians after the war. Netanyahu's spoke through an interpreter at a news conference.
In any future arrangement, settlement or no settlement, Israel needs security control over all territory west of Georgia.
Prime Minister inn At Yeaho's comments came a day after Secretary of State Anthony Blincoln said Israel will never have genuine security without a path toward Palestinian independence.
I'm back here in the US Karen. Congress has done it again, passing a temporary spending bill to avoid a partial government shut down this weekend. Details from Bloomberg's Amy Morris in Washington.
The measure will finance some federal agencies through March first, and others through March eighth. House Speaker Mike Johnson squashed a last minute effort by members of the House Freedom Caucus to stymy the legislation by tacking on immigration policy demands. Some GOP hardliners are angry that the Speaker went back on his promise to not allow any more stopgap funding measures.
The White House says President Biden will sign the continuing resolution, but urges Congress to set along long term funding to keep the government open. In Washington, Amy Moore as Bloomberg Radio.
All right, Amy, thanks we all lawmaker's pass that spending bill just in time for another winter storm to head toward the East Coast. It's on its way now, and we get the very latest from Bloomberg meteorologist Rob Caerala and Rob Karen and Nathan.
Today's storm is going to bring a light to moderate snowfall from the district in Baltimore all the way to Boston. Looks like the district in Baltimore pick up the most. They'll see one to three inches today. It'll taper off during the evening hours between five and seven pm and the district in Baltimore, so it certainly affects the commute. New York City will see the snow ending same time period five to seven pm. New York City sees about
an inch or two. It's less in the Hudson River Valley and also is less in southern Connecticut could see three inches south of the city as this storm system passes through the region today. Boston, being further north, doesn't see the type of snow that the city gets or that we see in the district in Baltimore. Snow will arrive late in the day in the Boston area. Less than an inch of accumulation in Boston went to trenches for the South shore and in the Boston area. The snow's all done by ten pm.
And as Bloomberg meteorologist Rob, Carolyn will be checking in with Rob throughout the morning with weather updates.
Okay, Karen, let's turn back to the markets. Get an update there. The NASDAC enters this last day of the trading week in record territory despite data underscoring labor market strength and signs that the FED could delay rate cuts. We talked about the economy in the markets with Blackstone chairman Steve Schwartzman.
The economy is slowing a bit. That's normal with high interest rates, So on the other side of the latcher, the expectation that interest rates are going down is creating animal spirits again.
Blackstone Steve Schwartzman spoke with Bloomberg from the World Economic Forum in Davos and said the timing on rate cuts from the FED is not clear.
Well, Nathan asked for commercial banks, US regulators are getting ready to require them to tap the Fed's discount window at least once a year, And we get the latest from Bloomberg's John Tucker John A bank.
Taps into the fed's discount window to borrow money in a pinch, but it's been something of a badge of shame. The new requirement is an attempt to reduce that stigma.
This comes after the regional bank crisis last year. FED officials found that some of the lenders weren't even set up operationally to quickly borrow from the window even when they needed it or The Acting Controller of the Currency says the changes regulators will propose aim to ensure banks are more prepared to respond to sudden flights of deposits. He says, it's almost like doing a fire drill. If it's required when a real liquidity fire comes, then the
banks can do it in real life. I'm John Tucker, Bloomberg Radio.
Well John One Banks given quite the payday to Jamie Diamond. JP Morgan Chase raised the CEOs paid to thirty six million dollars in twenty twenty three. That's up four point two percent from the year before. That boost came in a year in which JP Morgan Chase not the biggest profit in the history of American banking.
Nathan is a big day for the future of Apple now, So this morning, the tech giant is taking pre orders for its long awaited Vision Pro headset. This will be the first real taste of consumer demand for the thirty four hundred and ninety nine dollars device it arrives in stores February second. Sorry, Nathan, thanks time not for a look at some of the other stories making news around the world, and for that we're joined by Bloomberg's Amy Morris Say good morning.
Good morning, Caaren. President Biden is for giving nearly five billion dollars an additional student debt as the administration seeks to deliver on one of his signature initiatives. Almost seventy four thousand student loan borrowers will see debt canceled as a result of administrative changes by the Education Department in the latest round of relief now. Those affected include borrowers enrolled in the government's income driven Repayment and Public Service
loan forgiveness programs. Each program requires at least a decade of payment or service to be eligible for relief. Thousands of pro life activists are in the nation's capital today for the twenty twenty four March for Life. Linda Bell as President of the Florida Right to Life, and she says she expects thousands of people to speak out this weekend.
You know, that's amazing.
How many people at the own expense, you know, take planes, stay in hotels.
I'm a nursed in upward of one hundred thousand people in these marches.
This is the second march since the Supreme Court overturned rov Waite. Hunter Biden has agreed to appear before House Republicans for a private deposition next month. The move ends months of defiance from the President's son, he had insisted on testifying publicly. The House Oversight Committee says the younger Biden will sit for a deposition on February twenty eighth. Committee chair James Comer, You've done this the right way.
We are in a position to win in court.
If we were, he.
Wouldn't be coming in to do this deposition. We have done everything the right way.
We've been transparent, we followed the law.
Hunter Biden's attorney, Abby Lowell says his client's cooperation is dependent on the Committee issuing a new subpoena, which they will now do the updated deposition date. A new poll shows just over half of Americans worth thriving. In twenty twenty three, a Gallop survey finds that more than fifty two percent of Americans evaluated their lives positively enough last
year to be thriving. That's according to the poll, and that's a decline from previous years, where between fifty two and fifty five percent of Americans were shown to be thriving. The only years the amount of thriving Americans were lower was during the Great Recession between two thousand and eight and in twenty twenty during the onset of the COVID nineteen pandemic. Global news twenty four hours a day and
whenever you want it with Bloomberg News Now. I'm Amy Morris, and this is Bloomberg Karen.
All right, Amy, thank you, and we do bring you news throughout the day right here on Bloomberg Radio. But now you can get the latest news on demand. That means whenever you want it. Subscribe to Bloomberg News Now to get the latest headlines at the click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot Com, plus apples, Spotify, and anywhere else you get
your podcasts. Time now for the Bloomberg Sports Update. Here's John Stashauer John.
Karen indications the Atlanta Falcons are serious about trying to hire Bill Belichick as their new coach. They interviewed him earlier this week. They just had them in for a second interview. NFL Division Playoffs begin tomorrow. The first game is Houston at Baltimore. The Texans have been a you
surprised this season with eleven wins. That's as many games as they won in the previous three seasons combined, but there are nine point hundred o of The Ravens have outscored the opposition the season by more than two hundred points. The Packers tomorrow go to San Francisco. It's the fifth time the two teams have met in the playoffs in the last eleven years. On Sunday, Tampa Bay at Detroit, Lions just won a playoff game. Could they win two
in the same year. That hasn't happened since nineteen fifty seven. And then it's Kansas City at Buffalo. The Bill six game winning Street began with a win over the Chiefs.
Hockey.
The Capitals and Bruins both won by the same score of five to two. Both teams got hat tricks and victories tj Oshie for the Caps and the win over Saint Louis. David Fostermach for the Bruins in a home win over Colorado. At the Australian Open, American tailor Fritz, who won his match in four sets. He's into the fourth round. The fourth seed, yannicks Seener lost only four games in advancing Coco Goff won her match six love six twos. He won the US Open in a final
over Arena Sabolanka. Sabalanka won her match six loves six Love Warriors game tonight against Dallas post Bone, second game in a row that the game has been postponed because of the death of Golden State assistant Coche Dejon Elosevich. Johns Deshawer.
Bloomberg Sports from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on Syrias Exam the Bloomberg Business Appen Bloomberg dot Com. This is Bloomberg Day Break.
Good morning.
I'm Nathan Hager on a morning where red sea shipping remains under threat from houthy militants.
In Yemen.
The Iran backed group fired missiles yesterday at another US owned vessel for the third time in as many days, and it came on the same day that President Biden admitted that US and UK led air strikes against that militant group have not deterred the attacks. So let's get more now. We're joined by Bloomberg's news director for Europe, the Middle East and Africa, Roslind Matheson and roz It does appear that deterrence is proving very difficult in the Red Sea.
What is the.
Latest, Well, that's right.
Basically, what you have from the US is an acknowledgment of reality, and that is that despite a series of air strikes from the US and in some cases the UK on Houthy targets inside Yemen, they haven't really degraded the Houthis to the point that they're going to stop attacking or trying to attack ships in the Red Sea. And of course the Houthis have been at this game
for many, many years. They dealt with aerial bombardments from Saudi Arabia for a long time, and their stuff is quite mobile and they're very astute at hiding it and moving it. Around, so it's always going to be difficult. But what we've got is really an acknowledgment from the US President that they haven't managed to achieve very much despite quite a few serious strikes on their targets. Inside Yemen, we've seen yet another attempt to attack a ship in
the Red Sea. We're seeing shipping still having to divert a long way around, and that's not just aill in gas, but that's also increasingly produced fruit and vegetables, livestock, things that don't do very well on very long trips on ships and can end up degrading as a result. And it just points again to the reality the US has kind of boxed in on two fronts. One is what to do about the Houthis and secondly, what to do with Israel and the war in Gaza.
Now that box gets even tighter when we've just heard once again from Israeli Prime Minister Benjamin Netanyahu yesterday that he's going to keep up his war against Thamas until it's completely destroyed, and he's rejecting the idea of a two state solution after the war's over.
And that's right, and that's the issue really fundamentally a disagreement about what the future might look like for Gaza, and if Israel is insisting that cannot be a two state solution, and the starting point for the US and countries in the region is that you have to have a two state solution to have a proper resolution of
this issue in the longer term. So they can't agree on that, they won't be able to agree then or who's going to rule or manage Gaza in the aftermath of this conflict Benjamin who is now saying it can be a civil authority, but it has to be the one that he's comfortable with. And so there's a lot of obstacles in the way here to getting some kind
of resolution to that conflict. And despite all the US trips to the region, despite the US pressure, and we're really talking about the biggest ally for Israel on the planet, militarily and economically, to some extent that Benjamin and you know, he's just not paying any heed to that. He's saying, I need to do what I need to do for Israel.
And you're seeing that hardening in general in Israel now publicly also not just with the with the politicians, but a sense that they feel that this war has to play out.
So in our last minute, Roz, what can we foresee that could get the US out of this box.
It's very difficult to see what that is. I mean, in reality, the thing that will probably wind a lot of it for the US is for the conflict in Gaza to wind down, for Israel to slow down the fighting there, to accept some kind of conversation around a solution for Gaza, because that might then slow the houthy attacks, for example on ships in the Red Sea. It might stop Hasbalah and their aerial attacks from Lebanon. So things
might sort of slowly unwind in all those directions. But that's really dependent on the on the conflict in Gaza slowing down.
Okay, Roslind Mathis and our EMEA news director for Bloomberg News, Roz, thank you as always. Now we want to take you to Davos for a conversation with Bank of America CEO Brian moynihan from the World Economic Forum. He says four interst rate cuts could be coming from the Federal Reserve in twenty twenty four and twenty twenty five. He also says proposed regulatory changes that would require an increase in
capital at major US banks need to be altered. Brian moynihan sat down with Bloomberg's Jonathan Ferrell and Lisa Bromwitz for an extended conversation from the World Economic Forum in Davos.
Let's talk about this economy and the consumer. You are the number one small business lender in the country. You've got a massive retail business. What do you see him right now versus where we were, say, twelve months ago.
So we got sixty six million consumers and we track every week sort of how they move money in another accounts to credit, debit, card, spending, checks, written cash on the atm xell payments and everything, and so over the last twelve months, they've gone from a year of year growth rate in the first part of twenty three versus twenty two of ten percent, down a year of year growth right now, four and a half five percent in December,
in the first part of January, pretty consistent since the midsummer. Now that's good news and bad news. The good news is it's slowed down because it's more consistent where it was sixteen seventeen eighteen, sort of low inflation, lower growth economy, meaning the drag effect is starting to tame their behavior, which helps feel inflation. The bad news is as they're
slowing down. You know, our core prediction by our research team, which is the best in the world, is we go from almost a four and a half whatever it was in the third quarter growth rate to a one percent positive soft landing. That's still a quick slowdown.
Mike Gaben, who leads that team on the economic side of things, looking for that early rate cut from the FEDA reserve insame March. Based on what you are seeing, do you think that's necessary that the Fellaw Reserve would need to be doing that as early as March.
You've seen the marketplay out here a pretty good swing on that debate.
But it's great.
Our core team has four cuts and four cuts twenty four and twenty five, and so if you sort of
sort that through, people would interpret that. But that is actually higher for longer because you came off of twenty five basis points and if you end up at three and a half next year, eight quarters away from now, so I think the team might get the team they basically they're saying they're going to have to start cutting because they have a space to cut and the economy can keep growing and the last thing you want to do is tip this thing over. And so the consumer
spending good shape, their credits some pretty good shape. The credit statistics for everybody's all. It's normalizing. It's normalized in nineteen and eighteen. Those are like fifty year good records in our companies. It's not normalized in too stress. It's normalized. And then the base case. So if you think about that, they've got access to credit. Inflation hurts, especially meetia income.
That's tough on people. That's what you read about. But in the end of the day, they've got to set up so they have to start cutting lest the drag gets too strong. And the housing market's got to get a little more oof to it. You've got to get a car purchases up. You've got these things that kind of keep the economy roll along.
Just on the housing point, how much do rates have to drop before you really see the mortgage.
Market come back.
Well, I think there'll be two parts of that equation. If you've got to all the people in the consumers, say, if you get a six handle consistently, even you know, I five's low sixes, then people sort of get just need time too, and so when I got my first mortgage eight and a half, I thought I had a deal. You know, I first went into business in the primary was twenty three and so, but I was everybody's used
to that. People aren't used to. So it's going to just take time for them to think about it differently and get used to the pricing. It's got to flatten out and adjust. Their wages have to come up. But the good news is, you know, most Americans have a fixed rate mortgage, which in an inverse sort of is a is an asset right now and to have against the market. And so it's going to be slow in the first part of next year. It should start picking up as people get more and more used to this.
And frankly, there's just a turn of in a housing because people get divorced, gets sick, you die, move to bigger house. Those are very pleasant things. But the rallities, that's what happened.
Here.
So there's always an activity. It's just that the refinance activities were mortgage driven. But that's that's done.
For a while.
But the purchase activity will pick up because people have kids in one houses and things like that.
I'm curious you know in your in your earnings call, you express some cautiousness around your outlook. Other CEOs of certain financial firms have been less so, particularly at this defic speeding you talked about hiring, talking about the incredible boom and m and a IPOs, everything coming back. How do you explain the difference.
Well, we're cautious because economy is slowing down and that's just how you have to manage expenses. You know, we have a big enterprise. We over the course last year probably went down four or five thousand headcount. We still hired fifteen thousand people last year, so we are always hired people hire a thousand to fifteen hundred people a month and with a turn of a rate which has actually gone down to six percent now probably the lowest
we've ever had. And reason why numal times in the company's history that we can find you don't have to hire as many as you did in the Great resignation. So we looked three years out for headcount. We plan into but it's how you keep the expensive At the end of day, our expense phase sixty three billion, thirty eight to forty billion is people and so it's all about managing people and using AI and technology and applied technologies take work away and then migrate people to other
places we need to work. And so are we hiring commercial bankers absolutely, Financial advice is absolutely middle market investment bankers will probably double that staff for the next couple of years. Will be hiring salespeople in the branches. Yes, but at the same time, the service side of that keeps going more digitized and automated. Even deep in we had a billion two digital reactions and consumer last quarter.
Just think about that, and you still have a lot that isn't so you can you always get an a bene for that. So it's a balance. Core economy we think is solid. Most people think I'm optimistic and just giving the facts of whether our talent team tells us. But you know, at the end of the day, you have to manage expenses because it's ani flattens out and then starts growing, and that's income that's sixty percent of
the revenue. So you've got to make sure the expenses are in line with the next question, Bazil three, end game. It sounds like a bad movie. Let's talk about it.
Given what's proposed, do you think it will go through as proposed, and let's start with what's proposed. What are the conversations, what do they sound like between you? And regulates to the moment. I think there's an openness.
You don't have to really take what I say, just listen to the people who are going to actually have the vote, that people actually have to prove it. And the difference of opinion, which which is a bit unusual. Honestly, I've been doing this stuff around forty years and I've never seen that the board itself have out in the open divergence of opinion. And that's because what it affects is so penetrative across the society. A small business, lending,
you know, mortgages, tax credit, equity deals, trading things. So a lot of what you heard after financial crisis really had about ten or twelve of us that you know, we're making adjustments that then another group came behind this goes deep and saying that's what you're hearing more noise, And of course they're going to their Congress team people, they're going to the regulars and saying, wait a second,
is this what you want to do? And so I think that means there's going to be debate around changing and probably change, but we'll see a play out and even you know, even the Fed self has said that do they have to change it? Yes, because I don't think it's the right balance. And that's why the comment letters flooded in to this day or whatever. It was all over the place. And you know, we've made the points clear. Twenty percent increase our capital doesn't seem to
make sense given where we are now. We have one hundred ninety five billion dollars of regatory capital.
This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day, right here on Bloomberg Daybreak