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at the controversial cutter footballing World Cup. I maybe Morris in Washington. After the midterms. What comes next for the GOP and Donald Trump. 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 nine ten, and around the world on Bloomberg Radio dot Com and via the Bloomberg Business App. Hi,

everybody on John Tucker. Let's start today's program with the FED and becoming fed minutes headed our way, joining me to talk about it. Bloomberg Global Economics and Policy editor Michael McKee. You know, we had what Bloomberg is calling a deafening chorus of Fed hawks speaking this week, including St. Louis FED President Jim Bullard. Here's how he put it. Even under these generous assumptions, the policy rates still isn't

at a zone that might be considered sufficiently restrictive. To get to this sufficiently restrictive level of policy will need to increase the policy rate further. Bullard presenting those charts at an event in Kentucky Hosted by the Greater Louisville, Inc. He showed a restrictive zone of somewhere between five and seven percent. So, um, how draconian is between five and seven that's encompasses the range from about as expected to

draconian we have. Uh. Bullards go on to clarify that he's thinking five to five and a quarter percent for a terminal rate that's not outside the right can back up for people who don't follow this minute by minute like you, to the terminal rate is where the Fed's gonna stop and stop. What the rate is going to be when the Fed stops raising rates? And he thinks five to five at a quarter percent, where is it right now? Right now it's at four percent is the

top of the range. Uh, it trades a little bit below that. So if you get to five and a quarter percent, you'd probably be trading around five to five point one percent something like that. So, uh, that's not outside the range of what other FED officials have been saying. There's sort of a feeling that they got to get to four and three quarters too, in the neighborhood of five maybe something a little bit over that seven percent.

That would indicate that inflation is much stickier than they anticipated, and the economy is uh in need of much more restraint, and they had anticipated. What he did was used the tailor rule, which you've heard of, which is a way of plugging in economic indicators and it spits out what the optimal policy would be. Uh. It's really designed to look backward at what had happened, but some people use it looking forward. And he wanted to make the case

that the FED is not done. No matter what happens, the FED is not done right now racing interest rate, you also got to consider the source. Jim Bullard is a bit of a hawk, right Well, he's been a hawk. He's been all over the map in his career, but lately been a hawk. The reason people pay attention to him is he's usually the first one to raise an idea that may then get into the mainstream. He was the first one to suggest that the Fed might do a seventy five basis point move this year, and now

they've done four in a row. So when he says five to seven percent, obviously Wall Street sets up and takes note. When we get clues that maybe inflation, the rate of inflation has peaked, that the rate of inflation might be slowing, it's off to the races for the equity markets that we've seen with the latest CPI report. Um is the that's the c p I, that's inflation, the prices that we pay at the market. But in the employment report that still doesn't seem to have been

impacted by any Fed policy. Am I right in saying that? And do they have to torpedo employment? That's a big

argument out there. Historically that's what happens. The FED raisers interest rates, and so companies in particular, but people as well, with their auto loans and home loans stop borrowing money, and that means less economic activity, and then companies look at who they have on staff and they don't need as many people if they're not going to be doing as much work, and so you see the unemployment rate

go up. Now in this case, uh, this is a very unusual situation because everybody lost their jobs at once and a lot of people didn't come back when the job's reopened. So you're during the pandemic. So you're seeing a slowdown now in the pace of job growth each month. But is that because companies don't need to hire as many people because they finally got people back, or is it because they see bad business conditions ahead. We don't know.

We're looking at the unemployment rate and it went up from three and a half to three point seven percent, but it did that in August as well, and went back to three point five in September. So the Fed FED officials are saying, you know, as far as employment is concerned, we don't know yet what the actual trend is. They think unemployment has to go up to around four and a half percent or so, but it's not. I've

been moving very quickly in that direction. So they're gonna want to see more and I'm sure that was a discussion at the meeting that will show up in the minutes. Can I utter the most dangerous words in investing? This time things are different? Uh, this time things are different.

I mean it was the first thing they taught you in economics graduate school is this time things are never different, except that they are because we haven't had a pandemic, global pandemic like this since nineteen eighteen, and we didn't have good economic data at that point. So yeah, this time things are different. In the FED and Wall Street

and everybody's trying to model what's going to happen. They're doing their best, but there's not a lot of historical data to put into those models, so they can't be sure. All right, Mike, as always, we appreciate it. Michael McKee, and just a hand on Bloomberg Daybreak weekend. Big decisions looming for the Bank of Korea and New Zealand's Central Bank as well. I'm John Summer. This is Bloomberg. This is Bloomberg Daybreak Weekend, our global look ahead at the

top stories for investors in the coming week. I'm John Sucker in New York. Of Later in the program, the world copy and Cutter is upon US and the event and politics surrounded getting a lot of attention. But first central banker is in Asia steering down inflation and for more, let's go to Bloomberg Daybreak Asia host Doug Krisner John. As you know, inflation has been at historic levels in many countries across the globe, and the respective central banks

have been fighting to bring those prices down. Well. In the week ahead, we have monetary policy decisions from the Bank of Korea and the Reserve Bank of New Zealand. Now it's going to be particularly delicate for the b OK since South Korea has been dealing with a credit crunch in the last week. On day Break Asia, we ask Rajeev de Mello, global macro portfolio manager at Gamma Asset Management, for his take. The Bank of Create is somewhat more dubbish than central banks in in Latin America

or the US for many domestic reasons as well. But inflation has not only gone up for domestic reasons, but the one has been weak until most recently, and that's also not been very good for the Bank of Korea. Will high rates we expect to twenty five basis points hike. That's Rajiv Demelo of Gamma Asset Management. So let's take a preview of the b OKA meeting with Bloomberg's Global Economics and Policy editor Kathleen Hayes. So, this is the last rate decision that the b OK will have for

a rate hike. I think, Kathleen, seems to be a foregone conclusion. If there's a debate right now in markets or fifty basis points, is that fair? It's completely fair because they did a fifty basis point rate hike when they had signaled twenty five basis points at the last meeting,

and they got a bit of pushback after that. That's one of the reasons why I think some economists has been saying, uh that even with inflation still high, but with a property market under pressure and a credit market that's has been gone through some major gyrations in the last month or so, it would be prudent to go back to the twenty five basis point hike for now,

that seems to be the consensus. It will be quite a surprise if they do the fifty and the wand wanting to keep its stable might be a reason for them to do that, because going into the previous meeting that's one of the reasons why they're expected to step up a little bit more to put a floor into the currency. There seems to be this view in markets that the risk of corporate default is greater now and in particular concentrated in some segments of the business community

within South Korea. Leverage we know is a problem in household activity, but I didn't realize that it was so critical on the corporate side. First step one, so setting the whole thing up, was the global bond route. That's what pressured bond markets around the world. But then the funniest thing happened on September, UH, the developer of the Lego Land Korea theme park in Gangwong Province, missed its payments on its commercial paper repackaging loans. There these project

financing asset bait commercial papers what they're called. But the bottom line is um It's the biggest shareholders is Ganguan. There was there's a kind of a government side of this. There was the previous mayor that I would say the local government that was backing the developer. They wanted to bring in this. It has finished. It's the second largest UH Lego Land park in the world and then with a new president taking over, change of political power, the

next administration didn't want to back the developer anymore. Anyway, It's a long story, but that default just just shot through the corporate bond market, yields on five year corporate debt rising more than a hundred fifty basis points at

one point, uh liquidity drying up. And then there was an insurance company that didn't call its perpetual bonds bottom line, they were going to just pull back their refinancing of the bonds, and that was another bang to the corporate bond market, and that's created a big loss of confidence. It has Koreans worried about investors continuing to want to

invest in their bond market. And it's not entirely settled yet, but it also doesn't in a in a way at harkins to what we saw in the UK, where suddenly a market that's been stable doesn't seem to be a problem. A lot of different things happened. Of course, it was the the ill timed and ill designed package budget package that Liz Trust had for a while. Anyway, I digress a bit, but it's that kind of a thing for

create seems to stable for now. But talking about the Bank of Korea, it's another big reason to say, hey, this is not time for a fifty basis point high. So that's the corporate story. Then on the household side, we know that debt levels are pretty high and viewed as being maybe a little vulnerable, although I think Fitch Ratings this week had a note said that that vulnerability

can be managed. Rising interest rates and the way that that correlates to mortgage rates in a different way than it does in the States puts even greater pressure on the households. In Korea, well, about eight of crean households have adjustable rate debt, so I believe it was one of the b Okay of ischials who said, so a fifty basis point hike by the Bank of Korea is more like a seventy five basis point hike by someone

like the Federal Reserve. Remember most most Americans, or at least many Americans, have thirty yor fixed rate mortgages, so it's a big difference when your central bank starts raising rates. So be okay. This week we also have the rb n Z, the Reserve Bank of New Zealand. Right now, I think that the consensus is that we're going to see a much weaker economy in New Zealand in three uh. It's really been struggling as many economies across the world have been to come back to some degree of normalcy

after the pandemic. What do we know about the outlook for rate policy in New Zealand, Well, we know that their inflation rates very high. It's continued to rise. It's

up to seven point two percent year over year. We know that Adrian or, the Governor of the Reserve Bank of New Zealand, is not afraid to do aggressive, bold moves because remember at the very beginning of the downturn globally, when the pandemics started, they suddenly went from one percent on their key rate seventy basis point down to zero point to five. Who else was They were out front, and they were out front on the way back up.

But I think now they're there. Rad hikes, they're they're aggressive tightening have been very effective in hitting the housing market. There are high prices, the market was overheated, but and that hasn't stopped them yet. And there are other parallels too, when you look at the tightness of the labor market in the face of higher interest rates. In the States, the labor market is pretty pretty tight. Same is true in Australia, even though the r b A has been

tightening the labor market. We just had in the last week a shockingly strong employment number, double what the market was forecasting. And in New Zealand, labor market conditions are very tight. Although I think the expectation now is that things will begin to loosen in the new year. Yes, but is loosening enough. That's the thing. I think It's all relative, isn't it. And that's another reason why Um,

some of these uh particually. I think developed nation central banks or in this position where they can maybe slowed down the pace of rate hikes, the size of rate hikes for various reasons be okay, their corporate bond markets still being in turmoil, still being tight. Um. The RBN said, maybe figuring that the what the impact that they've had on housing is is pretty what I want to say, significant.

But at the same time, the economies are holding up and their inflation rates are still higher, well above target, so the doors open to more hikes at this point, just like the FED. The question isn't do they stop yet or anything like that. It's just how big. The Bloomberg's Global Economics and Policy Editor Kathleen Hayes. I'm Doug Krisner. You can join us for Bloomberg Daybreak Asia beginning at seven am in Hong Kong, six pm on Wall Street. John Doug, thanks a lot, and just to have the

world cough a N. Cutter. I'm John Tucker is Bloomberg broadcasting live from the Bloomberg Getteractive Broker Studio in New York. Bloomberg eleven three oh to Washington, d C, Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine to the country Sirius XM Channel one nineteen to London d A B Digital Radio, and around the globe the Bloomberg Business apt in Bloomberg Radio dot Com. This is

Bloomberg day Break Weekend. I'm John Tucker in New York with your global look ahead of the top stories for investors in the coming week. Big weekend for Cutter and for soccer fans with the World Cup for more. Let's send to London and bring in Bloomberg day Break. Euro Banker Caroline Hempger, John the Cutter World Cup is becoming

one of the most controversial sporting events in history. Cut a country of three million people, won the vote to host the tournament back in despite its scorching climate and lack of footballing history. It's faced enormous critics is um for its lack of freedom's mistreatment of migrant workers a country where homosexuality is illegal. But Cutter has defended itself against the sports washing accusations and the event could deliver

record revenue for organizers FIFA and a diplomatic dividend. Now. FIFA's president Gianni Infantino says that the tournament and cut Are can be used as a force for good. Football and the World Cup are offering you and the world a unique platform of unity and these all over the world. So let's take this opportunity to where everything we can to start something. An end to all conflicts, okay, an enter all conflicts. So in Fantino also did as a

ceasefire in Ukraine for the month long World Cup. Well for more. Joining me now is Bienberg, Simon and Foxman in Doha and here in the London studio, David Hellier. Welcome to both of you to discuss I mean, what is a huge event in the footballing in the global sporting calendar. David, can I ask you first? I mean Cutter wanted a global platform through football. It really has one. What do you think this World Cup is going to be like? Well, I mean, obviously the jury is out

on this, um. I mean the build up has been unremitting lye uh you know negative in terms of criticisms of of of the country and it's it's sort of treatment the migrant workers and uh LGBT rights, um, all that kind of thing. Um. But on the from on the on on the other side, you know, a number of stadiums have been built that look amazing. Uh. There would have been a you know, a great rebuilding the infrastructure of guitar. So from that point of view, it

leaves a useful legacy for the country. Um. But we really I don't think we've really seen anything quite like this before. The clash of cultures and it really, you know, it really will depend on how uh you know, how they mix, um, And so we wait and see. I guess yeah, and I know of course, because hey, you are a huge football fan. Also you write a great deal about the business of sports and you're going to be in Cutter to actually see some of the footballing

action and simone in Doha. I mean, this is this is it isn't it? It's Western footballing countries kind of outrage that cut off for all the reasons that I mentioned, is actually hosting the event. What are the Qataris see? How do they see it? You know, I think there's a degree of surprise that some of the criticism has

gone on for so long. Mind you, it's not just about human rights where or migrant rights, or the rights of minorities, including LGBT people, but it's also remember think back to um the early twenty tens when there were all these swirling controversies around corruption. You know, Cutter is thought to have won this bid to host the World Cup, um maybe for unsavory reasons, as well as Russia eighteen. And I think particularly in the UK, you know, fans

haven't really forgotten about that. Here on the ground, though, you know, the attitude has changed a little bit. I think there was some openness to labor reforms. Certainly the expose as that came out painted a very dire picture of what life is like for the lowest income workers. But this campaign has been unrelenting, and recently Mohammad Athani, the ruling emir, talked about this as an unprecedented campaign against the country for reasons that may not be um.

I guess I'm just may not be so justified. And so we've sort of seen that kind of evolved a bit more resistance. Okay, so football, but also much beyond football as we look ahead to the World Cup two. Thank you so much for being with me, blom Big Simone Foxman in Doha and David Helliot in London. Of course they'll be at some of the matches in cutter and I'm callin Heger here in London. You can catch

me every weekday morning for bloom Bag Daybreak. That's beginning at six am in London, one am on Wall Street, John Caroline, thanks alone just to hear on Bloomberg Daybreak weekend the battle lines already being drawn for the four presidential race. I'm John Tucker. Emptis Bloomberg. This agains Bloomberg Daybreak Weekend, our global look ahead of the top stories for investors in the coming week. I'm John Tucker in

New York. A lot of uncertain among Republicans and some level of uncertain among Democrats as well as we start to set up now for the presidential race. More. Let's into our Bloomberg ninety one one newsroom in Washington and Amy Morris Amy, all right, thank you, John. One of the biggest question marks hanging over the GOP right now after the midterms. What comes next for the GOP and Donald Trump? Who want to take a deeper look at this with Bloomberg editor Megan Crane. Megan, thank you for

taking the time with us today. Oh, thanks for having me. Now, Donald Trump announced his own plans to run for president again from his Moral Lago estate in Florida, in order to make America grated glorious again. I am tonight announcing my candidacy for president of the United States. Now. He seemed a bit muted during that announcement compared to the

last time he ran Megan, what's your thoughts? Um. You know a lot of people have said that the announcement sounded more uh muted is the right word, yeah, sort of a less energetic. Um. He did say that he's hoping to recapture the underdog spirit of UM a smaller, scrappier campaign apparatus than he had in Um. You know, it's harder to make an announcement in front of a room full of your friends at Mara Lego than it is in front of a crowd of supporters, you know,

sort of out in the country somewhere. But you know, it sort of remains to be seen whether he's able to recapture that energy. Now Here's what fellow Republican New Hampshire Governor Chris Sunew had to say, Uh, the same time, at the night that the former president was announcing, the political atmosphere today will be a hundred eighty degrees different six months from now, eighty degrees six months after that, and then we'll get to June of twenty four and

we'll we'll see where we are there. It's gonna go up and down and in and out. We are so far away from all of it. So that's why I say it's going to be kind of an up and down wild right. Enjoy the show because we are so far whatever whatever announcements may or may not be happening tonight, Uh right, that nobody is going to care. That was New Hampshire Governor Christannu Knew speaking there at the Republican

Governor's Conference. And I guess what I want to know about that, Megan, is are we starting to see a shift or a rift? Are we starting to see a split within the Republican Party or is the party going back to the more conservative, traditional type Republican Party that we we may have grown up with in the seventies and eighties. Where are we seeing? Sure, Well, that's a really good question, and I think a lot of people

in Washington would love to know the answer. Um. You know, Josh Holly, Senator Josh Holly's said that the mid terms had been a funeral for the Republican Party as we've seen it in the recent you know, in recent years. So a funeral for the Trump Republican Party. Yeah, I suppose you know, yeah, that would be what he meant

to say. Sure, but the traditional Republicans weren't supporting supportive of Trump in sixteen either, So, uh, you know that riff isn't really new, Um, and we've seen this show before. Trump is a force to be reckoned with, and I don't know that they can just turn the page on him so quickly. But it's not just the politicals, right, it's also those wealthy conservatives who are starting to turn their backs on him. You actually have been reporting on

that on the Bloomberg terminal. Um Ken Griffin, founder and CEO at the hedge fund Citadel, actually put it this way. He lost, We lost Georgia because of his behavior in the Senate race. In that's a second loss. And then this year the Republicans lost the Senate because the Trump back candidates in the Senate races were rejected by American voters.

That's a three time loser. And I'd like to think that the Republican Party is ready to move on from somebody who's been for this party a three time loser. It's important to note here that Griffin is also very heavily invested in Florida. He's openly supporting a possible run for president by Governor De Santis in Florida, but also calling the former president a loser. I would think, really stings. That is a word that for Donald Trump is a

naughty word. Yeah, it's like the ultimate insults. Isn't Trump right? Um? A three time loser? He's not alone in saying that he won't support Trump going forward. Uh. Stephen Schwartzman came out with a statement saying he would not be supporting Trump's run and then he was really looking to a new generation. He did not specifically speak to de Santis, but that's sort of, you know, somewhat coded that we talked about de Santis when we talked about a new

generation of Republicans. Um importantly, though, those big or i'm sorry, deep pocketed Republicans didn't give to Trump before either, and you know, they didn't support him early on in his candidacy, and he ran without that kind of money in so, uh, you know, it's impossible to know whether he's able to

move on without him. Some people think that these big donors moving away from Trump is actually good for him because he it reinvigorates his image as sort of working for the working class and the working man as opposed to sort of being you know, tied to big business and big money and rich people. You know, that's an excellent point because it occurs to me he probably doesn't need the money. He hasn't need the money, has quite the war chest he does. He has you know, lots

of money on hand that he can spend it. It gets more complicated how he can spend it now that he's announced. But you know, he does have access to funds. I think the um the signal from people like Griffith and um Swordsman is basically it opens a lane for other people. If you're Rhonda Santis, you're Glenn yuncan it sort of lets it be known that there's money out there for them. It's not as important that they're worth holding from Trump, that they're making it available to other people.

Right that That exactly what I was going to ask you about next. If it opens up that lane, and if it also opens a lane for other big ticket donors, big heavy donors, to sort of be empowered or be emboldened to say, oh, you know what, we're gonna throw our money behind this other candidate as well. For sure. I mean these aren't necessarily people who you would say follow the leader so much, but it is a little

bit of that. Right. You know, when the tide turns, people people don't like throwing good money after bad, so you know they'll be sort of looking to see who people are supporting, where the money is going, and where that's often where they'll put their dollars. Did it surprise you when the president's daughter, Ivanka Trump stood up and said I'm not going to be a part of this one and enjoy good luck. But I'm out right, Um,

did it surprise me? Is not really? She's been signaling for a while that she was pretty done with politics. It maybe wasn't as fun as she had expected fun. You know, it's not that glamorous. Policy work is actually harder than sometimes people maybe expect. I think that she and her husband took a lot of criticism for taking jobs in the White House, Um, and that maybe so you know, they've been there and done that. Maybe you know, it's time for their family to move on. So then

what's the next step for Donald Trump? You know, I think that Trump doesn't want his legacy to be ending on a loss, right, and so he has one way to change that, which is to try again. And he'll do that if he can. You know, what sort of remains to be seen whether he can marshal the energy that he needs personally and also among his supporters. But you know, he is the leading candidate for the Republican

nomination by a lot. Like people are talking about Rhonda Santis, but those poles showed to Santis, you know, sort of like early who would you prefer to be the Republican nominee. Poles showed to Santis behind by like fifty percentage points. It's not you know, it's not like running neck and neck. It was like, you know, Trump a whole bunch of space and then a few other people. So de Santis rises, he won by a lot. You know, he's very popular

right now. But also that's a very dangerous play to be Politics is a law as it's kind of dirty, long business. And the Washington Post had a story this week about how the air of inevitability is sort of a death sentence in politics. Um, I'm not certainly saying Rhonda Santis is not doing well and writing a wave right now, but two years out, we've often talked about a lot of frontrunners who are not who never became president. A lot can happen, Yeah, Bush, you know it was inevitable.

John Edwards was you know, had inevitability. So you know, we can go way back to when you know that's sort of a dangerous position to be in. It puts a lot of targets on your back as well. And we are talking with Bloomberg editor Megan Crane about what comes next for the Republican Party and for Donald Trump. But let's also talk about Democrats to the mid terms a huge win for President Biden in a way. The results are mixed though, but not as bad as they thought.

So a moral victory. I'm not sure how they would describe it. Certainly the Senate numbers are evidence of that. Um, there's some questions about you know, Biden's age. There are other questions that persist. But is there a way that the Democrats can take advantage of this? Yeah? So you know, Joe Biden turns eighty on Sunday. Um, he is already the oldest president and you know he would be eighty two if he were reelected. That definitely. There's a lot

of talk about generational change in the Democratic Party right now. Um, the House is led by three people in their eighties right now? Is that just the Democrats? I mean the on both sides of the political aisle, you see a lot of people who are in their seventies and EIGHTI yes, that's right. Donald Trump is seventy six. You know, there's definitely, UM, there seems to be a tied turning. Generational change is

sort of what you keep hearing people talk about. There are lots of UM, Democrats, you know, who are decades younger than the president, who are looking looking to the future, looking to be the future of the party. Um Weather, But you know, right now Biden is the president, which is of course an incredibly powerful place to be. It's a you know, um, it's a he would be a natural front runner. Bloomberg Editor Megan Crane, thank you very much for taking the time with us. And that is

what is going on in the nation's capital. For more of our political news coverage, tune into Balance of Power with David Weston weekdays at noon Wall Street Time, and Sound On with Joe Matthew week days at five pm Wall Street Time. Here on Bloomberg Radio, I'm Amy Morris and this is Bloomberg John. Amy Morris reporting from our Bloomberg in Washington. Thanks a lot, Amy, and that does

it for this additional Bloomberg day Break weekend. Join us again Monday morning at five again Wall Street Time, for the latest on markets overseas, at the news you need to start your day. I'm John Tucker and this is Bloomberg