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Amy Morris in Washington. We're watching the continual ship in the political landscape after Christian cinema changes parties. 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 at Hi. Everybody, I'm John Tucker, and let's start today's program with the big fed mad in this coming week, joining us, how to frame the conversation as always has events on fold. Bloomberg Global Economics and Policy Editor Michael McKee, Uh, no surprise, we're going to get another rate hike from the Federal Reserve? Mike, Yes, we are. Wouldn't you like it if you knew what Santa or what you were going to get from which we we can shake the FED box and we know

what's inside it, and we know the size. They've pretty much told us we're gonna do fifty basis points a half percentage point increase, which a year ago would have been considered very large because they hadn't done a fifty base point move in years. But now that we've had four seventy five in a row fifties, this seems like a slow down, a significant slowdown to some. But the Fed is continuing to raise interest rates, and that's the important thing that they keep going higher because they haven't

won the battle of inflation yet. Now I keep asking you this question every time we get together. I'm like a broken record. Are they trying to torpedo the labor market? Is that what they have to do to bring inflation under control while they are trying to shave Shall we say growth by shaving demand, bring down demand some so that Americans aren't spending as much money, which then translates into less production at the companies that make the things

that we're not buying, and therefore translates into uh, fewer jobs. Now, the Fed's view is, because there's so many job openings, they don't have to torpedo the labor market. They can slow it down. We can see a very small rise in the unemployment rate, and we can get a soft landing. That's their hope. In the past, they've never been able

to manage the increase in unemployment once. There's a rule called the some rule that once it goes of half a percentage point change, then it takes off to about three percentage points. So i've some rule gamed after No, I'm not who who came up with this when she was at the New York head And basically, any increasing unemployment over half a percentage point would then not stop until you get to unemployment rate and it would bring on a recession. So they haven't been able to do

it in the past. But even Claudia Sum says it's a guide, not a promise, So we'll wait and see. Okay, when we're talking about the rate of inflation and the increase, how much of that comes from labor costs, Well, it depends on the category you're looking at, because for service companies, it's about eighty percent of their overall costs is the cost of labor. So it is a very big part of services, and services is where the money is going right now. We yeah, that's the biggest part of the economy.

That's the biggest part of the economy. But we bought a lot of stuff. We were sort of out of whack for two years because people couldn't go out, so they bought stuff and goods. Inflation went went way up, and then there were shortages and supply chain problems, and that contributed to the inflation that we're seeing. Now there's a shift away from that supply chains and normalizing somewhat, and goods prices are not rising anywhere near the cost

of services. But as we go out, as we go on vacations and spend money at restaurants, Uh, we're seeing inflation there and that's largely driven by labor costs. They started raising rates earlier this year, and has it started to take effect yet. Certainly we've seen it in the housing market. I would we've seen it in the housing market, and we're seeing little bits of slow down in consumer spending.

Part of the problem for the FED is there was so much fiscal support from the government during the PAS endemic that people have a lot of money in the bank that they can keep spending. So demand is not slowing as fast, perhaps as they hoped it might. Now the FED knows that at some point soon we should start seeing a much bigger impact on consumer demand, but they don't know when, and they don't know how big, and because this is an unusual situation, UH, they can't

be sure. Also, in the years since we started looking for these lags, the development of companies like Bloomberg and others that provide data on the economy and consumers and companies UH may have shortened the lags. So that's one reason the FED wants to dial back. It's increases. What do you mean by that? The data increased visibility with the data has UH affected the lives The feedback effects become much faster because companies can see in real time

what is happening out there. Okay, to what degree is j Powe worried about reputational damage to himself and to the FED at this point. Well, he's got to be concerned in the sense that the Feds getting blamed a lot for the inflation rate skyrocketing over the past year, much more quickly than the FED anticipated, because they thought that what would end up happening is when everybody went back to work, things would go back to the way they were pre pandemic, and the inflation they were getting

was transitory, which obviously turned out not to be. Now the consensus is Powell and company have done a good job since then, and so we're waiting to see what kind of longer term credibility problem they have. Jay Power

would tell you he's not worried about himself. He'd worry about the FED, because if the FED loses credibility, if people don't think they're going to do what they say they're going to do, or that they're not going to get the forecast right, then it's going to be harder for monetary policy to work, and you can get things like either skyrocketing inflation or deflation. So the FED is going to keep keep their foot on the brake, and that's gonna be the big thing to watch in two

thousand twenty three. Markets think the FED will back down if we start to see unemployment rise, and Powell and company are saying they will not. So we will see what that showdown produces. And the bond market seems to be saying that there is going to be a recession. Is that? Is that what I'm reading? Well, that's a

fair interpretation of what you're reading about. Is the inverted yield curves where longer maturity treasury bonds and notes are the interest rate on those is lower than short rutten treasuries. And that's because people think that either there's going to be a recession and interest rates will come down across the board, or they think that we're going to achieve

the soft landing and inflation will come down. It's a little hard to separate, but the kind of the feeling in the bond market is it's going to be the recession scenario because that's general only what's happened in the past. What's the message that he's going to send at the FED policy meeting and what questions do you have for Chairman Powell. Well, it's gonna be sort of two messages.

One is that fifty basis points as opposed to seventy five does not mean the Fed is loosening its conviction that interest rates have to go up, and two that it's going to be steady as she goes. He wants to reinforce the idea that the Fed is going to keep raising rates and they probably aren't gonna be done after December. They'll probably do some more in early, but

then they're gonna leave them there for a very long time. Uh. We heard John Williams, the president of the New York Fed, say last week that he thought it would be throughout and maybe into and the bond market, as you pointed out, is not buying that right now, so he he will be trying to convince them. And I guess the uh, the overriding question for every one is, uh, how high do they think they have to go? At this point?

We will get a new survey of all of the FED members and they'll give us a median dot plot that shows where they think they're going to have to go, But uh, we'd like to get more clarity on that.

Remind ofpability what their target for inflation is. Well, two percent is the target, and Fed officials think it's still realistic the most most economists and the FED have projected we would get to about three and a half percent by the end of which is UH on the pc index measurement, not the c p I is the preferred measure for the preferred measure for the FED. Now, then after that three and a half, how much harder is

it going to be to get down to two. That's a big argument among economists at this point, something that we could go down very fast and go below get some disinflation below two pers and and others think it's gonna be another year or two after the end of three before you can get there. So that's also started a debate about whether the FEDS should raise its target, But Fed's not buying that all right. The other big number is the terminal rate is kind of alluded to that.

Where is that right now where the FED winds up. Well, we're at four percent going into the meeting, and the general consensus now is we will get to about five percent. Uh. Some members of the Open Market Committee that the decision makers think they're gonna have to go over five five to five and a quarter what poland Uh. Some of the leadership of the FED have said is we don't know um and there is this consensus out there and that might be right, but it's not going to keep

us from going beyond it if we feel it's necessary. Mike, as always a pleasure, Michael McKee, And just to hand on Bloomberg Daybreak weekend, we're gonna head to Europe for a look at the neck central bank poise to raise interustrates this week. I'm John Tucker, and this is Bloomberg. This is Bloomberg Daybreak weekend, our global look ahead of the top stories for investors in the coming week. I'm

John Tucker in New York. Coming up, look at the balance of power in the Senate after Senator Kirsten Cinema's flipped too independent. But first, the Federal Reserve isn't the only major central bank meeting of the coming days. In Europe. The Bank of England, the European Central and the Swiss National Bank will all announce rate decisions Thursday as they face massive inflationary pressures. And for more I let's said to London and bring in Bloomberg Daybreak Europe anchor Stephen Carroll.

John and the central banks in London and Frankfurt are both facing double digit inflation. The Bank of England got a headstart on hiking rates a year ago there now at our highest level since two thousand and eight, while the ECB has been raising borrowing costs at a record pace for its relatively short history. Or we have our top team of central bank reporters with us to look ahead to this week's decisions. Yan Rando joins us from Frank Fertilizes on the ECB and Philipolitics here in studio

in London watching the Bank of England. To get this conversation started, though, I want to bring you a bit of a chat that we had on Bloomberg Radio with Alex Brazier. He's a former director at the Bank of England now deputy head of the black Rock Investment Institute. Let's take a listen. We need to rethink the way central banks are operating these days. They're they're not the cavalry that's riding to the rescue when the economy turns down.

They're actually deliberately creating economic damage. And that's because their economies are basically overheating because of supply constraints, and if they want to get inflation all the way down to two pc. They actually need to generate recessions, so that's what central banks are working with. Let's start with you, Philipolgic here in London, and the recession may well have already started in the UK. Will the Bank of England be easing up on the monetary breaks? Do you think? No?

So they raised rates three quarters of a point um in November and they're expected to raise rates by a half a percentage point in December, so it's still, you know,

all all guns blazing. There is some division though on the committee because two members didn't vote for the three quarter point rise and one member only wanted a hut a quarter point increase and warned that you know, we both of those members that actually are warning that, um, you know, two aggressive future moves will risk extending the recession and making what is projected to be a nasty period over three even even worse. And I think that effectively would do some of the work that rate rises

will be are doing. So they would like to to to slow down. So the expectation for the moment is fifty basis points, are right? Yeah, that's right? Okay, So let's turn to Juyana and Frankfurt as well, so whereas we're looking at this sort of dilemma about slowing down rate rises, here it seems to be more so, and perhaps at the ECB is going sets foot off the break very much so. UM. What we're seeing is that the appetite for UM a third consecutive seventy five basis

point move has UM has really dwindled. It's not really there UM. The market is pricing UM fifty as well, which um you know, if you read the minutes of the last meeting very closely, which was an argument in their last decision market expectations. So everything seems to be lining up UM for for a slight slowdown in the pace of tightening to fifty. That takes the interest rate UM of course to two, which is um you know, widely in the range of what people consider neutral UM.

But what might actually even more important for the might actually be even more important for the e c B um uh at at their upcoming meeting is a decision on qt UH. They want to outline key principles for how they how they plan to tackle that UM details probably only arriving at this uh you know, at some point next year. But but that in itself is such an important decision. The e CP has never done it before. UM. You know, there is probably the one or two bargain

uh to be made about the pace about the start date. UM. Maybe that will feature in the in the rate debate as well. Who knows. UM, it's not going to be straightforward at all, because of course, the CBS balance sheet is absolutely huge, so quantity of tightening could potentially be a massive shock to the Euro Area. UM. It could

and it couldn't. It's interesting when when you talk to economists and watchers in general, they tell you, well, you know, if if one trillion rolls off the ECB balance sheet in terms of liquidity, that's actually not going to do much, which makes you wonder, of course, um, you know, why

was that money out there in the first place. Um. But one other feature that that um, you know, we need to take a look at when when we talk about QT is of course the long term loan initiatives the ECB has uh you know, has has done over the past years. UM. A lot of that money is is expiring. UM. Banks have the option to repay um you know over the next month, um, all the way into into the first half of next year, and and that in itself might actually remove a lot of liquidity

from the system. UM. Put QT on top of that, UM, it makes it makes a decision really really difficult. UM. Yeah, but all the more fascinating for us to be watching. Of course, back back here in in the UK, of course, the bank having and already started a quantity of tightening, should we expect to hear more about it this week? It's unlikely. I mean, we're sort of on a on a trajectory already. We're so bonds are maturing, so they're being rolled off and not being reinvested in guilts. So

that's the passive aspect of quantitative tightening. But we're also doing active quantity of tining, which is we are we are now selling guilts which uh you know, at at market prices to to to basically shrink the balance sheet. The explanation for that, UM is that so in America the Fed is doing passive quantity of tightening, but because the bonds are rolling off so quickly, they are reducing their balance sheet at a at a rapid pace, where in the UK are just relying on maturities will reduce

the size of the balance sheet relatively slowly. So they're doing the active sales basically to keep up, you know, with that this kind of pace of tightening that you're seeing at the FED. But it is a more complicated operation.

And and the question I'm always wondering about with the with the QT operations is they say that quantity of easing the bank central banks say the quantity of easing was most effective when markets were in periods of volatility, so um, and what they're doing QT at a time when markets are, you know, seriously volatile at the moment, and yet they say it will have relatively little, if

any impact on market pricing and market dynamics. They're obviously keeping an eye to to watch out for disruption, but there seems to be some kind of logical inconsistency in there the way the q E works and the way that QT will work. Obviously it's the it's the same set of guilts. One of the volatili volatile events I suppose we've had was everything around the ill fated Many budget at the end of September and everything that every

everything that went wrong since then. Will the Bank of England kind of be telling us that that's all over and calm down now, yes, I think they they've been saying that already. I mean the fact that they did. There was a period where people believed that they were not going to press ahead with with the active QT operation because of the level of volatility caused by the Many budget, which which actually caused the long end of the guilt market to completely blow up and needed a

rescue operation. But so the fact that they then pressed ahead with the QT operation, the active qut was was striking. So they do believe that you, even even at that point, the conditions were stable enough to go ahead, and they have proved to be so. So there's certainly no suggestion that they're going to They're going to say an think other than we think that these operations can continue and

we've not seen any any undue stresses so far. M okay, Well, let's talk about I suppose the bigger picture of the the economic forecast or updates we'll get from these central banks, and let's hear from the Governor of the Irish Central Bank and member of the e CPS Governing Council, Gabrielle mcclufu's in speaking to Bloomberg in the past few days. We're likely to see the euro Area in a technical recession.

I suspect that Q four this year, the one that we're in now, we'll see a very slightly negative GDP number, and we're likely to see that for Q one next year. On the other hand, my expectations were not going to see three as a year of recession. Okay, Philip Aldrick, our banking Think the Reporter. I thank you very much for joining me here in the studio. Thank you to Yana in frank first as well. I'm Stephen Carroll in London.

You can catch us every weekday morning here for Bloomberg Daybreak Europe, beginning at six am in London and one am on Wall Street. John all right, Stephen, thanks a lot, and coming up on Bloomberg Daybreak weekend. Arizona Senator Kristen Cinemas switched from democratsy independent Democrats, tenuous grip on the Senate. 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 six to the country Sirius XM Channel 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 Daybreak Weekend. I'm John Tucker, New York with your global look ahead of the top stories for investors in the

coming week. Shifting political say asked for Democrats even after their big Senate win in Georgia. More, let's head to our Bloomberg newsroom in Washington and Amy Morris Amy, all right, thank you, John. We're coming off a wild week politically, with the Democratic win in Georgia followed by Arizona Senator Kirston Cinema's defection from the Democratic Party. She's now registered as an independent. We've got a lot of questions about what might happen next, even just in the next few weeks.

Joining me now to talk about this Bloomberg Capital He'll reporter Stephen Dennis Stephen, thanks for taking the time. Okay. Senator Cinema has always been a bit of a magverick. She didn't always tow the Democratic Party line. Why is she doing this now? Yeah, So, if you look at the polls, all the polls this year of her standing

in Arizona have been terrible with Democrats. You know, there was a pole way back in January showing her getting blown out by Representative rupen Diego in a hypothetical primary contest set four to sixteen. And then there was a poll right before the midterm elections by Civics that had her at seven percent approval among Democratic voters that you know, she basically if she tried to run for re election as a Democrat, she was going to get primaried and

she was going to lose that primary. This might be the only chance for her to try to win re election is to try to appeal to independent voters, which is a growing election block, and to some Republicans and

the moderate Democrats. Um, but you know it's going to be an uphill fight for her, and and really this complicates the Democratic efforts to keep their majority because if she creates a three way race and splits the Democratic vote, that could make it a lot easier for a Republican candidate, maybe Carry Lake or somebody else, to win that Senate seat in Arizona for the Republicans. So in the short term, it doesn't really change much for the Democrats on Capitol Hill.

At least in the Senate, they still have a slim majority, but it is their majority. But that's only in the short term. What you're looking forward to is what and how she's positioning herself there exactly. I think that's what this decision was about, was to try to expand her appeal in Arizona to independent voters and to just sort of clear the decks where she's not constantly being asked

about her standing among Democratic primary voters. You know, Diego slammed her immediately afterwards with a statement for abandoning the Democratic Party and hinted that he's going to run. So, you know, it's kind of creates a bit of a mess for Democrats for their political strategy. Four it's a key to presidential primary state as well. But she did

talk to Chuck Schumer, the Senate majority leader. She is going to stick with Democrats as far as controlling their control of committees, their ability to subpoena corporations, which is something that Schumer has highlighted. Uh. And you know, so they'll still technically sort of have a majority um for for all practical purposes, it doesn't really change how Washington

is going to work the next year or two. But it does change that Democratic political strategy as they try to keep the Senate majority in which is already looking very tough because that Senate map is much much more difficult for them than it was just a few weeks ago. One more question for you, Dennis, before we let you go. Her strategy for the next couple of years. She said she was not going to caucus with Republicans, but she didn't specifically say she was going to caucus with Democrats.

But doesn't she have to if she wants to keep her committee assignments. Does that change? Yeah? No, So basically she's keeping her committee assignments. From a de facto perspective, she's caucusing with Democrats and giving them control of committees. You know, the past for her to win re election is to keep in the center of American politics and get more things done by bridging the gap between the parties. And certainly we've got a lot of messy stuff happening

next year that limit all kinds of other things. You know, I suspect she's going to be in the thick of things all of that the next two years. All right, Thank you so much. For taking the time with us. Great to be here. Bloomberg Capitol Hill reporter Stephen Dennis with what happens next now that Senator Kirsten Cinema of Arizona has left the Democratic Party, she is an independent, and we've been watching the national and political implications of

the Democratic victory in Georgia. It is my honor to out of the fore most powerful words ever spoken in a democracy, the people have spoken, alright, and that was Democratic Senator Raphael Warnock of Georgia during his victory speech after winning the runoff election in Georgia this past week. During his concession speech, Republican Herschel Walker encouraged his supporters to remain engaged in the political process. And I want

to say, God is a good God. God bless you guys, and let me say stay together, continue to believe in our elected official. Always, always cash your vote, no matter whatever has happening, cash your vote and joining me now to talk about all of this, Bloomberg National political reporter Christian Hall. And Christian, it's important to note you were there in Georgia as all of this was happening. What is your bottom line take away from the victory that

the Democrats saw in Georgia. You know, I think that this is really big for Democrats. Georgia has been a Republican bastion for years and years, and I think a lot of the voter turnout efforts from Democrats really uh made the state possibly become a swing state. That is probably one of the biggest takeaways from this. That final vote that was coming in between um Warnock and Walker h fifty one percent for Democrat Warnock fort point six

percent for Republican herschel Walker. A clear victory, but not a landslide. That is pretty much as razor thing as you can get without having to force another runoff election. What's your take on what maybe at play there? You know, I think that it has been a very republican state. There have been you know, restrictive voting rights laws in

the state. UM, but also I think herschel Walker part of the reason he didn't win was because he was a deeply flawed candidate, and I think, you know, voters really got in the booth and they had to make a decision. You know, do you think it put some voters, some Republican voters particularly who may have otherwise backed Walker in a position of having to hold their nose and vote for the Democrat because Walker was so flawed. Yeah. Absolutely.

I mean I think if you take a look at Stacy Abrams, uh, and she didn't win, she was the Democrat on the ticket, and I think Republicans went in and they voted for Kemp. They liked what they saw with him, and they weren't really sure on Walker. Well, you know what you talked about Stacy Abrams. Let's get into that just for a minute. Did did her loss in the gubernatorial race, uh to to Kemp? Did? Did that help Democrats? Did that motivate them to get out

the vote even more? Was that some sort of motivation? Well, I think you could say that, you know, Stacy Abrams really built this political machine, especially amongst black voters in the state of Georgia. You know, traditionally Democrats focused on the metro areas of Georgia in Atlanta. UM, but I think Stacy Abrams really understood that if you got voters to turn out across the state, if you talk to black voters and smaller towns within the state, you could

possibly win. And that's what happened with Democrats. Now, just a sidebar here, go on a little bit off track. I want to talk a little more about Stacy Abrams because she seems to becoming more of a political activists sort of. I don't want to say kingmaker. She's not there yet, but she knows how to get out the vote. I mean, she has shown that she knows how to

mobilize people. Does that look to be her future role in the Democratic Party because she didn't win the Democratic uh race for or the race rather for governor in Georgia, But it's not as though she doesn't have a role there, absolutely. I mean, she has done a really good job of working with New Georgia Project Black Voters Matter, you know, really grassroots organizing throughout the state of Georgia in a way that no one else has really done in the past.

All Right, thank you so much, Bloomberg National political reporter Christian Hall. It was a pleasure. Thanks for taking the time. Thank you for more of our political news coverage. Tune into Bloomberg's Sound On with Joe Matthew, which you can hear weekday afternoons at five Wall Street Time, and Balance of Power with David West. And that's weekdays at noon Wall Street Time. All Right, here on Bloomberg Radio. I'm Amy Morris and this is Bloomberg John. Amy Morris reporting

from our Bloomberg newsroom in Washington. Thanks a lot, Amy, and coming up on Bloomberg Daybreak weekend. What do the easing of COVID restrictions in China mean for the country's a company. I'm John Tucker at this is Bloomberg. This is Bloomberg Daybreak weekend, our global look ahead of the top stories for investors in the coming week. I'm John Tucker in New York. China is very much in focus this coming week, and reopening is a theme as COVID

restrictions ease somewhat more. Let's go to Hong Kong and Bloomberg Daybreak Asia host Doug Chrisner John. In the last week, the Chinese government took major steps in relaxing it's COVID zero policy, and markets generally speaking expressed optimism, but the path of the reopening is far from clear, and the government appears to be bracing for a very bumpy process. As an example, last week, as more relaxations were announced, Beijing said prudent monetary policy should be targeted and forceful.

What will the shift mean for China and by extension, for the global economy in the year ahead. For that, we're pleased to join Bloomberg's chief Asia Economics correspondent and the current who joins us from Hong Kong, and I wanted to begin with a reopening angle because I think it's fair to say that if aside from the narrative

on inflation, the reopening ian China is critical. How China is reopening goes next year is one of the big wild cards, not just for China's economy but the global economy. So let's be clear in terms of where we are at. Hardly a day goes by at the moment with some new announcements on how the Chinese authorities are changing up their controls on meeting the spread of the disease. Analysts are interpreting these these changes, such as relax relaxations on

testing requirements and on quarantine, etcetera. They're saying this means the government is moving away from strenuous kind of covidy or lockdowns. The authorities themselves have have signaled as much. They're talking about a disease that doesn't isn't as harmful as previous variants. So that's the story in terms of where they're heading. The big question though, is we don't know how fast they will get there and how they

really will navigate this while also protecting the people. Of course, we know which China a lot of commentary around and elderly population still under under vaccinated, and of course it doesn't have yet the hospital network that other countries like Japan and South Korea has to be able to cope with such an outbreak. So in terms of the consumer, we know that people in China have been suffering, not just because of the virus itself and the lockdowns, but

economically speaking, what has happened at the property market. When you hear a statement from the PBOC that monetary policy prudent, monetary policy should be targeted and forceful, it sounds to me like they're ready to do much more in the way of stimulus. It'll be precise and surgical perhaps, but there's more coming. Fair statement, fair statement. The messaging is changing that they are sending more support for the economy. The PBUC, for example, has been trying to keep this

discipline line. They haven't been a fan of QUEI are splurging out to support the economy but nonetheless, last week, as you mentioned, they came out with a new statement saying that they will come with powerful support for those sectors of the economy that need the most. But one economist said to me, if they can reopen and move away from COVID zero, it will be the biggest stimulus for China's economy in years. So I mentioned earlier that

inflation is obviously the big problem globally. I guess China doesn't really have the same problem. It's not been facing the same level inflationary pressures as the West has been facing. I'm wondering what this does, the Chinese reopening does to the inflation narrative. What's the impact do you think? So let's say we're on the basis that China does reopen in three Several economists are already told about it. That's sooner than expected. So let's say that's good for China's economy.

Consumers are out and about again, Chinese tourists are traveling, Chinese business people and students of course are traveling. The impact will be not just in China's domestic economy, but it will mean more Chinese demand for oil, more Chinese demand for aviation, capacity around the world, more Chinese tourism spending and students spending, and global investment going into every corner of the world economy. The story for next year is inflation is going to slow down around the world

because commodity and energy prices have come off. People are spending less because of all the pressures on their under mortgages and under wallet and of course the favorable favorable base effect. But if you throw a rebounding Chinese into that mix, a lot of the columns are saying that will be something of a wild card. It doesn't mean we'll be back to where we war in terms of this year's inflation scare, but it will certainly put a

floor under falling price and it's always a pleasure. Thanks for sharing your analysis of the story on China and the current is A. Bloomberg's Chief Asia Economics corresponded. I'm Doug Prisoner. You can catch Bloomberg Daybreak Asia every week night here on Bloomberg at seven a m. In Hong Kong, six p m on Wall Street. John all right, thanks Doug, and that does it for this edition of Bloomberg Daybreak Weekend. Join us again Mounday morning at five am Wall Street.

Time for the latest on markets overseas, the lows you need to start your day. I'm John Tucker, and this is Bloomberg.