ConnectOne's Sorrentino Says Fed Should Not Raise Rates (Audio)

also be speaking with Frank Sarantino. He is the chief executive of connect One Bank. They are the fourth largest bank in New Jersey. We'll talk about such topics as financial technology, interest rates, regulation, and yes, cybersecurity. But right now let's go to Charlie Pellet in the Bloomberg news room for Bloomberg Business Flat and I thank you him, I thank you Kathleen. The DAL the SMP nez DAK

holding APT their best level of the day. This data is brought you by Van Eck Vectors e t f S. Expect more from your muni's target tax exempt income by maturity and credit quality all with low cost ETFs visit van ec dot com slash muti van eck access the opportunities. Stocks are higher, adding to an advance after their strongest one day gain since Marches. Signs of a stronger economy

spur speculation it can withstand higher interest rates. People familiar with the matter say Chinese officials plan to ask their American counterparts in annual talks next month about the chance of a Federal Reserve interest rate increase in June, and people say that Chinese delegation will try to deduce whether a June or July rate rises more likely as the nations policy makers prepare for the potential impact on financial markets.

Dan Skelly, as head of the Equity Model port folio team at Morgan Stanley Wealth Management, he told bloom Bird Television, whenever the Fed does move, China will definitely be watching. Our official view of Morgan Stanley is that we actually don't get the first rate hike this year till December, so really not till the end of the year, so we'll see what happens. But obviously the Chinese are very

concerned about financial conditions. When we had the first rate hike back in December with the FED, and then back in August when the Chinese were fixing or appreciating their currency, financial conditions tightened and markets sold off very, very dramatically. So that's why the Chinese are concerned. But again our view is that the Fed doesn't hike till later this year. In December. Gold down five three a drop of point four SMP up sixteen a gain of eight tenths of

one percent. And now let's take a look at other news from around the world. Thank you, Charlie from the Boomberg newsroom. I'm Bonny Quen. A State Department audit addresses Hillary Clinton's use of a Pivot email accountant server, while Secretary of State. Boomberg's Michael Bahr has more. The State Department audit claims previous secretaries of State, including Hillary Clinton,

poorly managed emails and other computer information. The Associated Press obtained a copy of the report by the agency's Inspector General. According to the report, there were longstanding systemic weaknesses related to communications. The report also says the Department and its secretaries were slowly recognized and respond to new cyber security risks. Michael Barr Bloomberg Radio, how Speaker Paul Ryan has told reporters he has not come to a decision yet on

the endorsement of Donald Trump. Earlier, two people close to the lawmaker told Bloomberg News speaker Ryan was ready to end the standoff. Those people said Ryan may and doors Trump for president this week. The speaker was said to be concerned about the split that's developed in the Republican Party. A Ukrainian pilot is thanking those who fought for her release from Russian custody. Nadejda Savchenko was released today and swapped for two Russian servicemen who were jailed in Ukraine.

The pilot had been convicted of involvement in the deaths of two Russian journalists and was sentenced to twenty two years in prison. She was released after two years. A retrial for a New jerseyman accused of the nineteen seventy nine murder of six year old Eton Pots will begin after Labor Day. Pedro Hernandez Is May two thousand fifteen trial ended in a hung jury. The child advantished on

his way to school and was carried dead. In two thousand one, Global News twenty four hours a day, powered by our twenty journalists and more than one fifteen news bureaus around the world. From the Bloomberg Newsroom, I'm Bonnie Quinn, Charlie, and we thank you and again recapping stocks are advancing the now up one sixty seven, a gain of one percent, Sump up sixteen, a gain of eight tenths of one percent.

I'm Charlie Palatin. That's a Bloomberg business flash. This is taking stock the FED in focus on Bloomberg Radio feed a reserve? Will it raise interest rates next month July? And what does it mean for big banks? Big banks to have a lot of challenges from increased regulation, shin to increase, increased cyber security risk. Joining us now to discuss all of this. And Morris Frank Sergantino. He is chief executive officer at Connect One Bank. He is joining

us from our New York studio. So, Frank, a lot of the markets actually moving a lot on FED rate hike, UH expectations right. And one of the ways they're moving is bank stocks start going higher when there's more signals the Fed's actually going to move. Are you in the camp that is hoping to Fed will will make the move so you can increase your net interest margins. Hi, Kathleen, always get to be with you. Um, you know it's interesting.

I guess it's from a from a selfish perspective. Sure, higher rates will probably translate into higher profit margins, better net interest income for most financial institutions. Um, but higher interest rates will have, as we saw in December, also have the capability of roiling the markets and really creating confusion. Uh. It would be my own perspective that the Fed does

not raise rates in the June time frame. Uh, we just don't see, you know, what what would be going on in the economy that would that would dictate to the Fed that they should raise rates. Frank and when if you get off our a little bit of detail about the business right now and tell us about things such as the real estate the operation. But I also know that that for example, you know, you know about the rideshare in the in the taxi industry, you're you're

a lender to a variety of businesses we do. Um. So there's lots going on in both the real estate marketplace, and interest rates play a really big role in what's happening relative to you know, the entire real estate industry. Rising rates there is probably not a good thing, um and is creating you know, sort of the wall of worry for you know, a lot of people in that sector. Uh, probably something that the FED appreciate that it's doing right. It's forcing people to think through the risk of of

higher rates in the future. So you know, a lot of disruption uh could potentially start to move into the marketplace relative to the thought process behind the FED raising rates on a consistent basis. So in terms of my glad you raised that question, they'll him about business because as a banker, particularly of a community banker, you see, you get it. You have your finger on the pulse in a way sometimes I think a lot of big

banks don't. What is your sense of the health of this region and the economy more broadly right now from a banking perspective, you know, I think the New York metro region is probably, if not one of the strongest thus strongest part of the economy here in the US.

Right it represents about ten percent of the U S economy, about one point six trillion dollars of GDP, and it's an incredibly diversified portfolio of businesses and you know, different types of operations you know right here within let's say a fifty mile radius of New York, say, uh, the the average business owner that we deal with here, it connect One bank certainly feels all the pressures, but at the same time sees a pretty good economic environment in

front of them. Very low interest rates, pretty stable prices, stable material prices, stable labor prices, all boats very very well. Yet that's all painted on the backdrop of a very tumultuous global economy. Right We're hearing things about negative interest rates and problems around the globe, and and and I think that's what's going to ultimately weigh on the FED, right, the stronger dollar and and lots of other factors as

to whether or not they need to raise rates. But at the same time, that jaw boning about rates, I believe is keeping is keeping things sort of in check, and we don't have runaway optimism in the marketplace, Frank, I want to keep things local for just a moment, if you can be sure, I think it has larger implications. Tell me about the taxi medallion, the loans secured by taxi medallions, and what you've seen there. Because we're living in an uber well at least an uber economy. It's

a certain extent. So, you know, the taxi business specifically in New York City. Um, while the headlines would have you believe it's going out of business tomorrow, is actually quite robust. The battle for the business there is really more related to the drivers who drive for whether it's yellow or uh, you know, any of the transportation network companies. But but the business of taxi, they're still doing about the same number of rides per day, and they're still

making about the same dollars per trip. Uh. And I don't know, I know, I think you guys live in the city as well as I do. It's uh, it's difficult that most times of the day to get a taxicab. And you've got more more more than a million, right, you've got more allion, we have a we have about that many. But like all other businesses, uh, there's a lot of change, right. So there's disruption in the transportation space.

There's disruption in the hotel space. Uh and and in some in some areas, there's even you know, disruption in the multi family space right where buildings that were originally designed to the apartments and homes are now being used as CLOSEI hotels. There's tremendous disruption coming into financial space, right, Look what's going on with fintech and and and all the other types of businesses. So this is not something

that's just relegated to transportation. The entire economy is being disrupted by technology plays and in some cases, you know, similar to the financial industry. Some of this disruption is good, right, it's forcing change, it's forcing forcing efficiencies within the system. Um, it's forcing business owners to think differently about their business. It doesn't necessarily mean those businesses are going to go away. Frank Sorrentino, thank you for spending time with this, Chief

executive officer of Connect One Bank. They're based in Englewood Cliffs, New Jersey. You're listening to taking Stock on Bloomberg Radio. Then in Focus, brought to you by willoughby since eighteen ninety eight, New York City's boutique camera store for precision craft at Hustle, Blood and Like a Cameras, plus a full selection of go pro action adventure cameras. Willoughby's at the corner of Fifth Avenue thirty first Street,