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I'm Any Morris in Washington. We're gaging the turnout in the last minute scramble before the mid turns. That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three on New York, Bloomberg one, Washington d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties, San Francisco d A B Digital Radio, London, Sirius XM one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg Business app. Him nobody, I'm John Scer Let's

start today's program with the inflation. Households are watching the Feds certainly watching it, and we're tracking developments for you right here on the Bloomberg Radio Studio with Boomberg Global Economics and Policy Editor Michael McKee. You have inflation in your title that keeps getting longer. Um, So I guess we're talking about c p I that prints coming out. That that's become sort of like the mother of all economic indicators. Lately, it was always the Job's Report, and

now it's the CPI again. Of course, Um, that depends on how old your mother is, because back in the Paul Vulgar day, don't talk about my Back in the Paul Vulgar days, the CPI was important as well. And then we had very very low inflation for a very very long time, and then all of a sudden we've got big inflation again. So people care about this number. We used to talk about a word transitory, and now we're talking about a word. I think it's sticky. Has

replaced transitory, right about them retired the word transitory. Uh, sticky. Price inflation has been around for a long time, and it's basically a concept that prices change very slowly. The old example that they would use in economic school is restaurants would be reluctant to change their prices because they would have to print all new menus and that would be an expense. But of course, nowadays restaurants give you message on your phone your phone, so I don't know

if that's a good example anymore. But there are things that like that that take a while to adjust, and that's the idea of sticky price inflation. And some of those things have have not moved as much as the Fed would like. That's the question for uh next week's uh CBI report is do we see some movement in any of the areas that the Fed has been waiting for. What's the breakdown? Well, prices won't come down, probably, but the whole point of the inflation numbers is the rate

of change. The rate of increases is what the Fed look looks at in their arget is a two annual rate of increase. In these things, Um, you don't get prices going down except in crises situations. We saw some prices fall at the beginning of the pandemic, and then they went back up because there were shortages. What we're looking for here is a decline in the month to month increases. When you look at the year over year because of base effects and the fact that inflation was

higher last year. Uh, you would see declines. But what the Fed wants to see is that right now we're seeing inflation slowing down, and for that they're looking at things that have had a big impact on it. Um. Obviously, energy over the recent months has has come down. Gasoline prices have come down. That's helped the CPI. But now the basic premises it's for the month of October it

went up, so that should add. But things like medical care as the COVID crisis has fallen out of the public consciousness, used car prices on the wholesale level have been falling significantly because suddenly there are cars available and so that should change. Airfares they think may go down, Hotel room prices may go down. So there are areas that had not moved as much as the Fed thought they would. That people are expecting to see some progress

on not huge, but some progress. Okay. So the thinking is with the Central Bank, short term pain i e. Higher interest rates will lead to longer term gains. Right, that's I mean, how much pain do I have to endure? Well, that depends on a lot of things that are out of your control, UM, like you know what you're gonna pay at the gas pump and what what you're going to have to pay for, um, things that you buy in the store that maybe suffering from supply chain problems.

Supply chains are getting better, so we should see goods prices continue to drop. We're still seeing services prices rise with the higher rates. Are are they having an impact that we can see, Well, it depends on the category. Certainly they're having an impact on real estate and housing. Mortgage rates have gone way up and new home sales and existing home sales have gone way way down. Mortgage Bankers Association Mortgage Activity index is at a level that

last reached, so we're seeing a definite impact there. It's going to be interesting to see what happens with other inflation sensitive things like car purchases, UH and UM, whether or not people continue to use credit cards as much as if they have adjustable rate credit cards. We're seeing some slowing in the overall economy in terms of retail sales. People still have a lot of money, but they're not spending as much of it UH as as they so we're seeing some movement on the margins was the way

that Powell put it this last week. So what's the expectation from the consumer prices index that we're gonna be going well? On a month over month basis. Economists think we're gonna go up by seven tenths of a percent in the month of October, which would bring the year over year rate to eight percent, a tick down from last month. But that's base effects. Now, the Fed's gonna be looking at the core and that should increase by

five tenths which is lower than the prior month. And six point six percent is the year over year estimate for the core rate, which would be the same as the prior month. Any little bit would be seen as progress. The real concern for the markets is if we get a surprise upward. Mike, always a pleasure, Bloomberg's Michael McKee And just to hand on Bloomberg Daybreak weekend, the United Nations COP twenty seven Climate Summit in Egypt. On John,

this is Broomber. This is Bloomberg Day Break weekend, our global looking ahead at the top stories for investors in the coming week. I'm John Tucker in New York. Up later in the program, Taiwan and it's tricky business relationship with China. But first world leaders, activists, diplomats and throngs of journalists gathering for the United Nations COP twenty seven

Climate Summit in Egypt. And for more, let's say to London, bring in Bloomberg Daybreak, euro Bagger Caroline Hecker John COP twenty seven takes place in Chamel shak amid an energy crisis and global economic upheaval that's testing the commitment of many countries to cutting emissions. The world is still not on track to keep global temperature rises below one and a half degree celsius. This, of course, is seen as

a key threshold for averting catastrophic climate change. For more, I'm joined by Bloomberg Green in a senior climate reporter, Actual Ratty and Bloomberg Green reporter Lower Milan in Madrid. Lor I want to start with you, what is the mood like? Well, I would say that based on the conversations that both actually and I have had with people attending over the last few days, Um, everyone's expectations are

really high. Um. You can think that COP meetings happen every year and so many people go there, Over forty five thousand registered participants UM for this one, according to the Egyptian presidency, and everyone wants to um do the best they can. They know the eyes of the world will be on them for these two weeks, that climate issues will be on top of the agenda, on the news everywhere for these two weeks, and they just want to make sure that they do the best they can. Yeah.

And also because the consequences of climate change are becoming so apparent. Actually, what is the latest research on trying to keep global warming in check? It's a two step process. Essentially, if we go back seven years, the world was on track for catastrophic climate change and now it isn't quite that bad. But even what we have today, which is three degree celsius farming, not one and a half degree celsius farming, that is still in sight. And the world

is not cutting emissions fast enough. So we had two reports, one from the United Nations and one from the International Energy Agency saying two things that seem opposite, but they are actually quite aligned, which is we're not making enough progress, but we are making some progress, and that we might be able to speak emissions UH and fossil fuel use

within this decade. A lot more just needs to be done though, Okay, and this of course because energy security has has become so much more important and central because of Russia's warren in Ukraine. Has that concern around energy security scuppered some progress on climates, you know, given the energy crisis in Europe, it certainly has. In the short term, you know, countries are turning to whatever fields they can get access to if it means burning more cold, they are,

but scoping long term goals. That hasn't happened. If you've seen what has happened in the US with the US passing a climate bill called the Inflation Reduction Act, or Europe which is doubling down on deploying more renewables while legislating it's green deal. Those are clear actions that if the world wants energy security and wants to act on climate change, it needs to double down on green energy.

But in the short term, because building out green energy takes a while, people are turning to more fossil fields and that's going to reverse some of the progress made so far. Pakistan and that the awful monsoons that have killed hundreds of people, um, you know, and and submerged the country underwater. I mean This is perhaps one of the clearest examples of the sort of devastation from changing

weather and climate. Do you think there's going to be a lot more focused in on this idea of loss and damage on demands from countries that are being affected now by climate change is one group in the G seventy seven, but there are you know, demands for richer

countries to pay more, to support more. Definitely, as we think that the so called issue of loss and namit will be the central theme and in this year's cop one of the reasons is because this is a COP that's being held in Africa for the first time in a few years, so obviously the presidency of every cop um holds certain power over which issues it wants to prioritize.

But also because obviously of the devastating floods in Pakistan earlier this year, but also another developing nations who which are bearing the costs of climate change even though they contributed very little to eat in comparison to developed nations. So we've just seen, for example, devastating floods in Nigeria as well, and we can expect developing nations to demand reach countries to pay or to come up with a system of funding that can help them recover when these

extreme weather events happen. Yeah, and that's for the sort of developing countries. Actually. I think we had a conversation when the UK hosted the last COP in Glasgow. Of course, just the latest report though from the Independent Climate Change Committee here in the UK for two has kind of underlined the issues for Britain itself on how committed we are and there is, you know, still some doubt about

how committed Britain is in some ways to decarbonization. What do you think of that, the pressure that the UK is this as a G seven country. Yeah, that's certainly one topic that's come up, especially through the leadership contests that have happened in the Conservative Party. Um, and we have heard from certain wings of the Conservative Party are

pushback against climate policies. But where things stand, the UK still leads among the G seven countries on how much emissions it has cut since nine more than forty UM and the UK has met its climate goals until twenty two. So this year it will be the third UH carbon budget as they are called here in the UK, and the UK will have met it. But you are right that it is going off track, especially this year. Renewable's

energy investments have gone down. The UK is in dire straits with its financial situation, having to give a lot of money to energy companies to try and keep prices of energy low for consumers, and so questions are being asked. But as you as you can see commitment from the UK government. If it ravers, there is a lot of backlash and that causes governments to change their mind. So it richis and that wasn't going to come to COP now he is. Okay, Good luck to both of you.

I hope you'll join us next week on Bloomberg Radio to tell us more. That is our Bloomberg Green Senior Climate Reporter actual at Ratti and from Madrid Bloomberg Green Reporter at Laura Milan. Thank you so much for your time taking us through what to expect from COP twenty seven and Climate summit in Egypt. I'm Caroline hepget here in London. You can catch us every weekday morning for full coverage of COP twenty seven and so much more on Bloomberg Daybreak. You are beginning at six am in London.

That's one am on Wall Street. John Alright, Caroline Thanks alone as the head up Bloomberg day Break Weekend Taiwan's tech companies in China. I'm John Tucker. This is Bloomberg broadcasting live from the Bloomberg Interactive Broker Studio in New York. Bloomberg eleven three oh to Washington, d C, Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg nine to the Country, Sirius XM chto one nineteen to London, d A B Digital Radio, and around the globe the

Bloomberg Business Act and Bloomberg Radio dot Com. This is Bloomberg day Break Weekend, John Tucker in New York with your global look aheathly top stories for investors in the coming week. Time one businesses are facing more challenges in China for more, Let's go to Hong Kong and Bloomberg Daybreak Asia host Brian Curtis. John not much warning on this, but China lockdown the world's largest iPhone factory this past week.

It's a whole high complex in Chung Show, China, and it's probably the last thing that Apple needed, never mind hone high or Fox Con. It brings in so many issues China's COVID zero policies, Apple's efforts to diversify production, other big companies and their plans as well, and also the changing nature of supply chains, the ever complex relationship that Taiwan companies have operating in mainland China, as well as Taiwan China relations and US China relations. It's a big,

big story. Joining us now to discuss this is Samson. Ellis Bloomberg's type a bureau chief. He's embedded with Green at the moment, and he's right here in our Hong Kong studios with us. Sam, thanks very much for coming in. So we've we've got the local authorities. They're sterilizing the

Fox Con campus and there have been mass walkouts. So it's a it's a complicated moving story as we speak, but it's a it's a kind of contained bubble, right it is, you know, and as you've laid out very well, you know, it's been a bit of a week to forget for for Hunghai or fox Con, and and all of this really stems from China's strict adherence to this COVID zero policy, where you know, as soon as you get a few cases of COVID the local authorities come in and locked down a whole area, and when that

area happens to be where Nghai's largest iPhone plant is in jung Gaol, then that obviously causes problems and creates ripples that extends to Cupatina, right, and people want to escape the restrictions, so some of them just escape and

actually walk out of there. Yeah, and the Chinese social media has been a wash with videos of hundreds of not thousands of people, young people walking down roads and highways, pushing large suitcases, walking, you know, sometimes tens of miles home to escape the impending lockdown, or at least escaping you know, the increasingly worst conditions there. You know, they're

worried about getting COVID themselves. In the days preceding the lockdown, you know, it was it became increasingly difficult to get food and basic supplies into the manufacturing complex, and so some people were having to subsist on just bread for for several days. So that's why people are just fleeing these plants right now. And what do we know about the impact on production? Fox con says they are going

to keep manufacturing. It's a question of like how much it does lower production by and you know it couldn't really couldn't come at the worst time. You know, this is the ramp up ahead of the holiday season, which is obviously peak sales season four things like your iPhones, and so Fox can't a really trying hard to contain this.

They're they're offering to increase people's salaries by up to thirty six percent to persuade them to stay on the production lines and stop them from you know, walking out. All right, let's take a a sort of lofty look at things, and and let me ask you that if you if you take COVID zero parlor sees and the changes that we saw coming out of the Party Congress, the further emphasis on national security and perhaps as somewhat of a small lessoning on pure economic interests, is two

the year that China semi loses the West. Yeah, that's an interesting question. I think, you know, the economies are so bound to each other, so interconnected. People are not going to stop buying iPhones all the various other gadgets that are largely manufactured in China. But you know, you are certainly going to see companies reducing their reliance on China.

There's definitely been this realization that maybe you know the risk of over concentration in China, and so while you might not see companies directly pull out of China, I think what you definitely are going to see and the numbers do back this up certainly from Taiwanese investment, you know, and the taime Andese brands and manufactured factors are often the operators of the plants in China. For example, is

that much less new Capex is going into China. I think a lot of people would be interested in how ordinary people in Taiwan. You live in Taiwan, how ordinary people feel about these tensions with China. Taiwan has been facing the threat of invasion by China for the last seventy plus years, so they're very, very used to living with this threat. I think also largely the feeling is that you know an invasion is not certainly not imminent, and China does also still hold out hope of being

able to conduct this peacefully. Sam thanks very much for joining us and for sharing your insights with us. Samson Ellis Bloomberg's Taibe Bureau achieve is with us here in our Hong Kong studios. I'm Brian Curtis in Hong Kong along with Doug Prisner. You can catch us every weekday for Bloomberg Daybreak Asia, beginning at six am in Hong Kong and six pm on Wall Street. John Brian, thanks a lot just ahead on Bloomberg Daybreak weekend. A lot

hanging on this coming week's US mid term elections. I'm John Tucker's this is this is Bloomberg Daybreak weekend, our global look ahead at the top stories for investors in the coming week. I'm John Tucker in New York O. Candid It's are scrambling to cover as much ground as possible ahead of Tuesday's mid terms, and some key races are close, some are just hard to predict. And for a look at what to expect. Let's head to our

Bloomberg ninety nine one newsroom in Washington and Amy Morris. Amy, all right, thank you, John, big steaks for Democrats and Republicans in these mid terms. Joining me now to talk about it all. White House reporter Jordan Fabian Jordan, thanks for taking the time with us, Thanks for having me on, Amy. What has the White House and perhaps maybe the President cancerned at this point? Well, they're certainly concerned about the possibility that Democrats could lose control of one or both

chambers of Congress. That would essentially spell the end for their policy agenda. And so President Biden is going around the country two different states to try and campaign and save some of these jobs and also gubernatorial candidates trying to save some statehouses as well. But if you look at where he's going, he's going to New York, New Mexico, California.

These are states that are traditionally blue states. So that shows you the kind of trouble that Democrats are in that he's having to go to these uh places that were thought to be safe in order to try and salvage key lawmakers. And it's not just that they all see their policy fall by the wayside um. They're also they've got to be concerned that they're gonna see sort of a little tit for tat when it comes to

investigations and subpoenas that sort of thing. Certainly, they're they're very well aware of the fact that if Republicans gained control of Congress, not only will there be investigations, but there could be also impeachment proceedings brought against Joe Biden perhaps, but also key cabinet secretaries like a Trinity General General Merrick Garland or the Secretary of Homeland Security Alejandro my Orchis.

So they're preparing for all those possibilities. But I'm told by senior White House officials and just the course of talking folks this week, that they think that there's a strong possibility these kind of investigations could backfire on Republicans and that it will be viewed as overreach, especially if they go after Hunter Biden and some sensitive subjects like that. So that would be something to watch next year if

Republicans do indeed take control in Jordan. The White House is saying now it supports the Fed's rate hikes, it's still painful for people to see their mortgage rates go up, things of that nature, while at the same time, the One House says it is trying to fight back against inflation. Let's hear more now, White House Press Secretary Korean Jean Pierre. The FED is is independent. It's an independent agency, and we believe the President believes that it has uh the

it has the best monetary policies to address inflation. Now, Jean Pierre did take it a step further, stable and steady growth with lower inflation. This is the kind of economy that delivers for working families, and that's how we see the work of the of the Fed. So Jordan is being on the side of rising rates going to wind up being a liability for the president even though he's fighting inflation. How does he balance that. It's a

really it's a really tough balance to strike. And look, if there is a recession at the end of this, Uh, yeah, there'll be a political fallout for for the President and the Democrats. And you're seeing more and more Democratic lawmakers actually raised concern about the size and scope of these interest rate hikes. At first, there was Elizabeth Warren, but you're seeing other Democratic senators like John hickyl Looper from Colorado come out and say, hold on a second, there

could be some real fall out for the economy. But that being said, the White House has been very careful to say that the Fed is independent. We're not going to ask them to slow the pace of right hikes or really do anything for that matter, that we want them to do. We're gonna let them do what they think is best to try and whip inflation and right now, the FETE is signal that they're going to continue with this course of rate hikes, possibly you know, next month

and in the future. And that's really sucked all the air out of the room. I mean, it wasn't really that long ago when the big concern was abortion access and and it seemed to really give Democrats something of a boost, and it just evaporated, that's right. And you know, you look at it and you think, maybe if this the court really came out closer to the election, that that boom for Democrats would have been better time for them.

But yeah, I guess enthusiasm or interest in that issue, uh, seemed to wane as concerns about the economy really have

continued and grown in voters. So if you look at polls from around the summer, there are actually a couple of polls that that said abortion access and uh, you know, threats to democracy were right up there with the economy, which you typically don't seat that's usually the number one issue for voters, but now those of ebbed and the economy is front of mind, and now the president is sort of pivoting on that as well, warning of economic

chaos if Republicans do sweep the midterms. New Jersey Governor Phil Murphy told us on Balance of Power this past week that a weird economy is actually making things harder for Democrats. It's a weird economy where we have our lowest unemployment rate ever below the national average. Our revenues as at the state level continue to be solid, We've been upgraded by credit rating agencies would pay debt out. And yet at the same time, there's enormous pain at

that kitchen table, largely due to affordability. So how do they balance that? You know, they haven't really figured it out yet. Um. And you know, part of the problem is that if you look at Biden's record over the first couple of years, he's actually gotten a lot done. He's gotten the Infrastructure Bill, He's got that Inflation Induction Act, which is really you know, a climate and prescription and

drug health bill. Uh. He's got this is an agenda if you look at it would be great for any president. But what they've struggled with is getting people to understand or explaining to people how that's going to help them afford groceries and clothes and gas, and and they're they've tried to strike this balance of, you know, touting their accomplishments but also acknowledging the economic pain that people are feeling. And they really haven't figured out a message that's stuck.

And that's why you're seeing a lot of these candidates struggle because frankly, voters are blaming this on Joe Biden, and his approval ratings have really sunk in the past few weeks because he's the guy in the White House exactly. We are talking with Bloomberg White House reporter Jordan Fabian about the upcoming midterms and what folks might be able to expect. Now you had mentioned Jordan's about how democracy

was an issue you for a hot minute. The President still trying to keep it in the spotlight, making the January six the insurrection an issue. He talked about it at this past week at Union Station, drawing a parallel between the attack on Paul Pelosi in his home, which also happened uh in this past week. He's the husband of House Speaker Nancy Pelosi, also of the violence of the January six the insurrection, talked about that as well,

condemning the rise in violence. He was actually kind of hinting that perhaps this could be part of Donald Trump's big lie of a stolen election, and that's what's whipping folks are. Can't pretend it's just going to solve itself. There's an alarming rise in the number of our people

in this country condoning political violence. Now, is there any indication Jordan's that, um, this is mobilizing Democrats to come out and vote, or maybe changing hearts and minds of folks on the other side, change your hearts and minds on the other side, I highly doubt. Um. You know, this place seems to be uh something to get the Democratic base going, because of course they're that's front of mind for them. And look, you know, these are really

important issues, you know, democracy. You know, the election denial follow from January six. You know, this is something that you know, President you know, probably should be talking about in the run of the election, given the kind of candidates that are running on the other side. But um, you know, as a matter of you know, political expediency and tactical decision making ahead of the mid terms, I'm not sure this is moving voters in Democrats favoritehead of

the midterms. You know, the cost of living, Like we're just talking about the economy. Those are things that are front of mind, and that's really imperative for Biden to address in the In the closing days here, I want to talk to you about some of the big races that have been top of mind over the past well the past several weeks. Really, you've got Georgia's Senate race, You've got Pennsylvania, you've got Nevada. What are some of the things that you're gonna be watching for in the

next few days. Well, especially in Nevada, you know, can you know Cortez Masto, the Democratic senator there, really harness the Hispanic vote. I mean, that's been the key turnout engine for Democrats. And you know that used to be a purple state and they've now you know, captured basically all the statewide offices there. But uh, since the pandemic, those a lot of those people work in the casinos. They had a really tough time during the pandemic. The

inflation is really hitting Nevada hard. So, uh, you know, all all these economic issues we're talking about, that that really you know, if you look at Nevada, that would say that's kind of the ground zero for that. But in in Georgia, you know, it's you have these other candidates like herschel Walker who have really been you know, poor candidates, and but traction has traction. You have traction because of the environment and the environment is so bad

for Democrats. And when you say the environment, you mean the tone, the political and vironment. You know, people are angry and upset with it with the economy and they want to take it out on Democrats. So is that going to be enough to propel kenn who has flaws like hershel Walker to victory? And so that's what I'll be looking for in you know, Georgia and also in Arizona and in Pennsylvania. Things have really tightened up between

Memo Oz and Fetterman. That's right. And so you look at uh, you look at what Joe Biden is going, right, He's avoided a lot of those states we were just talking about with the key races, but his advisors believe that he resonates in Pennsylvania's well, Joe Biden have took cottails here. Can he help really propel Fetterman, who's really struggled since having that stroke and fallen behind or I guess how his lead cut uh over odds? Like can he could Joe Biden propel at least one vulnerable Democrat

to victory this year? All right, we're gonna watch it with you. Jordan Fabian covering the White House for Bloomberg News as always, Jordan, thank you so much. Thank you, Amy.

That's what's going on in the nation's capital. For more of our political news coverage, you can tune into Balance of Power with David weston weekdays at noon Wall Street Time, and Sound On with Joe Matthew weekdays at five pm Wall Street Time here on Bloomberg Radio, and we will bring you live election coverage on Bloomberg Radio and television Tuesday night that starts at eight pm Wall Street Time. I'm Amy Morris and this is Bloomberg John, Amy Morris

reporting from our Bloomberg room in Washington. Thanks Amy, and that does it for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at five am Wall Street Time for the latest on markets overseas and the news you need to start your day. I'm John Tucker and this is b