Surveillance: Central Banks Fight Inflation

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Jordan.

Let me go and overlay the GDP question on your euro call. Germany is not getting it done right now? How does that change? A euro call from Nomura?

Well, right now, Tom, we already knew growth would be weak. We've got that from the PMISER surveys. So I'm not really convinced that the GDP is the way to look at euro right here, right now in the short term. What's more important is what they did to those inflation forecast times. So there's been a bit of a revision down in the front tend for headline, but for core inflation.

Five percent.

This is none of this.

None of these forecasts for inflation have it going back towards two percent and actually going below two percent in the horizon. The twenty twenty five inflation forecast revised up just very slightly. But all of this says the ECB is being hawkish. We'll find out in the pressor how Madame Cguarde will express it. But we've seen the pricing Tom for the ECB for the next meeting jump already

Does this make a four percent ECB rate much more likely? And actually the base case in your view, it's.

Not the base case, but look, it makes it possible. And the reason why is because we're seeing all this animal spirits inequities picked back up, boosting risk sentiment, boosting the sort of inflation pressures that we could see this summer, and as I mentioned earlier, natural gas going up. That should really worry the ECB. If it's like last year August. Last year we had energy prices at the highs. It's

Jordan Rochester, thank you for the effort today with no murder there. Ja Bryson rides heard over a terrific economic team at Wells Fargo. They have a fabulous heritage of measuring this nation from C to Shining Sea, and right now I'd like you to go over the other C. J Bryson too, Maybe summarize here what Wells Fargo sees in manufacturing in America versus a clear slow down in

So Tom, I guess i'd roughly say that when I think about the manufacturing sector here in the States right now, I would say it's flat ish, you know, it's you know, if you look at the hard data of manufacturing production over the last year or so, it has been kind of flat, and you know, I think what's going on There is two things. There's a slowdown in the rest

Which is the best leading indicator of all of the data that we just got. Is it the retail sales coming in hotter than expected, or is it unemployment rising perhaps at a faster pace at least jobless claims than many people expected.

Well, I guess I would say they're both kind of coincidence sort of indicator. Certainly, that's what we think about the labor market as being very very coincident. It gives us an idea where we are right now, you know, in terms of the retail sales sorts of numbers, you know, there's a little choppy in there right now. But I would say what I would say is what it's showing us is the consumer continues to spend at a modest pace. As long as that continues to happen, then the consumer

Now if nothing really changes, no sort of big shocks to the system, and we get data like this for the next I guess four weeks, do you expect to fed we'll have to raise by another twenty five basis points. That yesterday's meeting was not the end of the rate hiking cycle.

You know, I think that's that's right, Lisa, and I kind of think of it as yesterday was a little bit of a compromise between the you know, the doves on the committee who kind of want to pause right here, and the hawks who kind of want to keep on pressing ahead. And I think it was easy for them, the consensus, I think was easy for yesterday to call us around Okay, we'll keep rates on hold, but we'll send a signal of a hawkish pause if you will.

Suggest doctor Bryson that none of this is in Chapel economics, Chepel Hill economic textbooks. I mean, it's absolutely original. Where we are. How much are we beholden to American exceptionalism right now? Europe has so many struggles, is seen with a subpar one percent GDP view forward, and we're different, We're doing better. Does Wells Fargo suggest there is an American difference, an American exceptionalism?

Well, you know, Tom, I don't know if I would. So if you step back and you look at the broad sort of stuff, I mean, what we are with the United States is continues to be the technological leader in the world. Right this is where AI is being developed, et cetera, et cetera. I think that will probably continue. But I also think that you know, right now where

Think yesterday when we had esteemed people like you on who said they just should have raised race and stopped with all this mumbo jumbo, skip pause, all this other stuff. Jay Bryson, would green Span or burns of raised rates?

You know, I don't think so. I mean green Span was you know, at the end of the day, he was very very cautious as well. You know, you look at his last tightening cycle starting in twenty twenty, two thousand and four. It's twenty five basis points, you know, constant sort of thing. You know, So did they do the right thing yesterday? Obviously? You know people can can disagree on that, but we all know that monetary policy

We're about three and a half minutes away from Christineleaguard taking the helmet explaining a pretty hawkish proclamation and rate hike that we just got from the ECB right now, the euro versus the Japanese yen. It was extending the gains up one point one percent to the highest level, the strongest going back to going back to two thousand and eight, as you see that differential and rate policies really start to bleed into the currency, the agony back a.

Zillion years and really not comparable. And I defer to Jordan Rochester, Steve England or others, but it's a one sixty maybe a one sixty three. We're distant from OMG, the worst ever. But I think scope and scale back to two thousand and eight really signals how removed Japan is from the other three.

Banks, Jay, As we set up for Christine Leguard to give some explanations, some meat behind the statement, what are you expecting to hear? What was the biggest shocker to you at a time when this ECP is forecasting out a three percent core inflation figure next year in a five point one percent inflation this year.

You know, I think she's going to be very very hawkish as well. I think you know, she's speaking for the entire governing council. We all know that there's a lot of hawks on that on the Governing Council, and I think you know what they want to send as a signal of uh, we need to be hawkish here. You know, their mandate is two percent. We're far away from two percent inflation right now, so I would think she's going to reinforce a very very hawkish sort of view.

Is your press conference operating doctor Bryson within eurosclerosis.

To find that term time, I'm not sure I get to just.

The sluggish and as you mentioned, the technological superiority of America they're going after Google again was in the news today. Is there just that weight to the European model that was definitive twenty years ago?

You know, they always lag us somewhat in terms of you know, productivity, growth and vibrancy of the of the economy, and I don't think that's going to I don't think that's going to to change anytime soon. Again, you know, when you look at all the AI breakthroughs that are happening here in the United States and they're not happening in Europe.

Jay Breston, thank you so much for the brief Here is with Wells Fargo, They've been hugely helpful to us. Here on the economic facts and forth, Amy was Silverman joins us, Now, how to derout a strategy in RBC capital markets? Amy, It's real simple. You say, we've got upside here and we may not get the traditional equity market rotation. This is important to Global Wall Street. Why will we not rotate?

Yeah, this is the question, you know, we've been asking the last few weeks. And I thought, yesterday's knee jerk reactions, Tom, we're just really telling So you know, look for the last few weeks, the options market's been chasing upside an IWM, and then you get a little bit of a hawkish tone from the Fed and from Palin.

What happens?

You have IWM sell off yesterday, you have Ques rally, you have nvideo rally, And I think that just tells you, you know, how the market is thinking about these different sectors. The one question we've been asking ourselves is, you know, if the data continues to come in more economically strong, is it possible essentially to have a narrative where it's not really about value versus growth or small versus large gap. It's simply tech becomes your rallying point because of a

Just it's a developed some of what you were talking about. This idea that big tech has become defensive has become the secular growth story, and really perhaps the fear of recession is playing out in the small caps in a new way and even in some of the non tech names, which really highlights a diversification that is very different than it was six months ago.

Yeah, exactly. And one thing I'll say is what has been interesting, especially given yesterday, is we saw IWM sell off sort of in that reaction to the hawkage tone from Powell, but we didn't see any change in the option sentiment. So going into yesterday, Lisa, the option sentiment in IWM was quite full, as you saw almost a skew in version or that call demand is outweighing the poot demand. And that's been true for the last few weeks when people think, you know, that small cap is

So basically, are you saying that people who are talking about bad breath getting into some sort of broadening out not happening, and it's not going to happen even if you continue to get a rally in the equity indexes.

Yeah you said bad breath, not me this time, But yeah, I think that is possible. And the one major implication that has for volatility is one reason we've been counting on that breadth of widen is because it's going to change your correlation function, which obviously feeds into your index volatility.

I mean, if we believe in a bull market and we've had a first leg from October, I've been calling it the income for ardentity bull market after two people that were way out front and identifying it. If that's the first leg, how do you use the cross moments? How do you use derivative mathematics to assist in identifying the second leg of a bull market?

Yeah, so I'll give you one Bloomberg function that I like to look at a lot, which is BCA, which gives you the volatility landscape across you know, any constituents like the S and P five hundred and when you organize that tom By Skew level. So again that component of call demand versus put demand, you start to see where the really really bullish parts of the market are.

Are the big names out there, whether it's a big name Procter and Gamble, the big name Walmart, Intel is a dog of the moment or as you mentioned AMD, are they under owned by institutions in the traditional sense, not hedge funds, but along only byside.

Are they under owned in what's.

Worked they are?

And that's part of the problem. There's sort of two interesting things. The first is that portion of the asset management community you've been talking about has been under allegated, and the issue is that begets this positive momentum situation where we've talked about in options, where you get that exacerbation of gamma. So essentially buying of calls can lead to more buying stock, which can lead to more buying of calls. This is what you saw during the meme prase.

Yeah, the headline there, folks, if you're keeping score at home, is Amy wu Silverman says, Apple is a meme stock.

That's what we're going to do. We're going to go there.

If I get gamma is an acceleration, you know within the derivative jargon, Are we gamma? Are we gammaing our way to melt up?

So you know we already have.

That's already been happening, and I think that can continue. So when you look kind of to the weak right post Navidia's earnings, that's what you saw. You saw those skew in versions, you know, on that VCA function, and then you continue to see that now that actually hasn't changed all that much. Even though you know some people are asking it that AI rally is tired, you don't

And it was silver in terrific opening Briefforce today with RBC Capital Market. Patrick Tumey is one of our more interesting senators. A former senator. He is of Pennsylvania. It's his fault the Phillies lost, and he excided after that and he joins us today. He's on the board of Apollo now, among other good duties here in his former career. What's the biggest difference of moving from the August Senate of Washington into the private space.

Well, there are a lot. Having control of your own schedule is one of them. The Majority leader gets to decide when votes will occur, and you have to be on the floor in person to cast a vote. When you're out of the Senate, you have a lot more saying it just a human and.

We're huge difference in the House right now where there's one or two people away and that changes it for Speaker McCarthy.

And that can happen in the Senate.

Also, Yeah, how much do you kind of feel like you wouldn't necessarily run if the dynamics were the same now as they were when you started in politics.

Honestly, for me, I was in federal office for eighteen years, twelve consecutive years in the Senate, and prior to that a gap, and then six years in the House.

For me, that was enough.

I was ready to move on.

I have no regrets, and I really enjoyed and appreciated the chance to pursue the policies that I believed in. But I don't like the idea of being there forever for anybody, myself included.

You're cut from a different cloth. I mean, there's Morgan Grenfell and then you're in Rookies restaurant in you know, Lehigh.

Valley and all that. But what you're really.

Acclaimed for is standing up to the former president saying the behavior is not appropriate. We have seen an absolutely historic moment for the nation that will continue right coming weeks.

In months.

What is the best practice right now of centrist Republicans is they address this indictment in Miami.

Well, so I'm a conservative Republican and my conservatism sort of requires me to call out the completely unacceptable and egregious behavior of the former president as it manifests itself periodically.

Look, I think Republicans should call it for what it is.

This is a completely unforced, unnecessary, outrageous abuse of the responsibility that the American people gave this president. He knew those documents didn't belong to him. But it wasn't just a sloppiness. It wasn't just a matter of Okay, a few papers got mixed in with some of my momentos. It was lying about it, It was hiding it. It was suggesting to a lawyers that they make it disappear.

I went back and looked at a September effort by Philip Bump in the Washington Post working off Pew research, and I was thunderstruck at the accountable research of how small mega is. It's not that great a part of the American pie. How does the broader sense of Republicans in independence not defend themselves but just react, adjust and move forward. If Mega is really not all that big boy, their megaphone's large.

Yeah.

But the unfortunate reality, in my mind is the president still the former president still does have a large level of support. And that's complicated, right. It's part of it is historical, part of it is a sense of the grievances that he fans. Part of it is the perception that he's being unfairly treated and so even if he did something wrong, it's not a fair treatment. So it's complicated.

One of the rare things about you is that you can really dovetail from Washington to Wall Street. And that's sort of been your background, going back and forth. And we're talking about the politics of the moment at a time when FED policy is going to dictate a lot on Wall Street for the next couple of years.

How can start are you growing giving.

The politication politicization of the inflation debate. How concerned are you that this FED is not really convicted enough to go through with their mandate and get inflation back down to where it should be.

So I lean in the other direction. I think this FED is very, very concerned about their legacy, their reputation. They know that they got this badly wrong. They kept rates way too low, monetary policy way too easy for way too long. They established a flawed paradigm for determining when they would change.

They got behind the curve.

I think the risk is that they overdo it, and partly for the same reason that they went too far. In my conversations with FED governors and senior staff, I was always surprised at how dismissive so many of them are about money supply, how dismissive they are about what Milton Friedman taught us, and how focused they are on things like inflation expectations rather than the forty percent growth than M two that they were responsible for in eighteen months.

Go too far.

Are you agreeing with Elizabeth Warren?

I don't think so, because I think Elizabeth Warren was opposed to any kind of normalizing of interest rates. I think maybe a mischaracterization, but I think that's true. We now have positive real interest rates. I would argue, you know, certainly, if you're looking on a month to month basis, we have had money supply growth go to zero. We have the Fed shrinking its balance sheet. We have the Treasury's going to go out and absorb what a trillion dollar's

Now.

I'm not in the camp of easing by any means. I think the pause is probably the right thing to do. But you look at the dot plot and it looks as though they're going higher from here, So maybe that's the right call. I'm just I think the era is more likely to occur on excessive tightening.

Bloomberg surveillance of a great affection for politicians who come from a different territory than just pure politics as well. I was talking to our Greg Gerro and he looks at the mess which is known as the coming presidential campaign. Yeah, and I would just suggest sir that you consider here in your private moments, private citizen moments, that we need a Locell Academy ticket.

Now.

I think Governor Romando and Pat Toomy could get together and bring Rhode Island to the nation. What's in the pixie dust at Lacel Academy, robins Rhode Island. That gives us the Commerce Secretary and the former Senator.

I think our Commerce Secretary is a very capable, very capable person, one of the more impressive members of the entire administration. But our worldviews still differ considerably. And a great experience at Lasal Academy. It's a great school. But miche and I won't be teaming up anytime soon.

What's the world?

What's the worldview?

You see at the debates of the Republican Party. I believe they start in August.

What is that going to be?

There's some very big ones, right, and this is really important. There's what is our role in the world. I mean, you have a wing of the party that thinks we shouldn't even be helping Ukrainians. I think that's crazy, but there's people who are advocating that you have a wing of the party that wants to completely explicitly reject market capitalism and have central planning of industrial policy.

We're have to leave it there.

After your Apollo Board meeting, please come back and continue, and we do want to talk to you about China. I think that's really fun center as well.

Thanks for having me.

He is with A.

Paul Patrick Toomey is a former Senator of Pennsylvania.

I'm not going to mince words.

Leland Miller is an outlier with this granular analysis of China. Leland, you aggressively push against the China economic gloom. What are the gloomsters getting wrong?

Well, I think there's reason to be gloomy, but I think everything has to be relative at this point. So these are these are probably some of the most difficult economic numbers that we've ever had to unravel, you know, in over a decade. If you look at what we do know, we do know that the early expectations that there would be you know, a rallier in the year those were those were wrong. If you look at what's happening with Q two, the idea that there's going to

The PBOC responded after getting these disappointing retail sales figures over the past twelve hours. They cut this rate on the one year loan aspect of their portfolio by ten basis points. And that's not necessarily a significant move. This follows another very small move earlier in the week. What does this signal about what they are prepared to do in terms of stimulus.

I don't think it signals that much. I think in and of itself, it's a signal that they understand the data and not where they need to be or not where people expected them to be.

But here's the problem.

People, every time they see week data, they expect stimulus, big stimulus, some other stimulus is coming down the road to save them. You know, this is like a time machine. You go back to twenty twenty, twenty twenty one, twenty twenty two. Now it's twenty twenty three. We're in having the same type of conversation we've had for years. The Chinese data overall getting weaker. Expectations for stimulus to stay the same. Look, they are unlikely to do any type

I think that's still very unlikely.

Nothing that we're seeing in China suggests that they want to go back on that model that they have different priorities right now. So I think that these signals are sending some centiment boost to market markets because the data are relatively weak, But I don't think that they foretel a big movement towards bigger stimulus Leland.

They're sort of a conflicted picture here that on one hand, you don't think the data is as dire or some of the expectations are as dire as people expected to be in terms of the deceleration of the Chinese economy. On the other you don't expect stimulus to come and save the day and propel growth substantially above five percent. What is the new growth Paara time? How much will China's GDP expand this year and then going forward than your normal Well, look, our.

June data, which we get in two weeks are probably I'm anticipating these these are to be the most interesting data we've seen in over a decade because June, whether the second quarter growth can be saved, whether they're gettingwhere near the five percent number. Keep in mind, they're coming off an extremely poor base in twenty twenty two, so hitting some of these numbers for the second quarter, for instance, are not as hard as people think, but again, what's

Leila Mello, Jonathan Spence one oh one is went in doubt as a totalitarian regime employ the masses. I'm looking in February and I'm sure you've read this in Chinese Measures for the Administration of National Work Relief. Does all this come down to the primal scream that the totalitarian elites in Beijing have to employ millions of unemployed, millions of low wage this immense labor pressure that's been there for fifty years.

Well, labor pressure is at the center of this, because you know, the talk for years now has been that China needs to restructure the society from investment and investment driven to consumption driven, you know, to from all type of the economic model to a new type of economic model. You know, that's a restructuring of jobs along the way, and so you need to make sure you keep people employed.

I mean, they got the challenges there that were there ten years ago, twenty years ago. I personally observed them in Shanghai, and I found it extraordinary to see basically served them in modern pseudo capitalism, if you will. What's the Leland Miller unemployment rate from Chengdu to Beijing.

Oh wow, you know a lot of this is the methodology how to use it. I mean, people look at this youth unemployment rate, which is awful, bad news, and it's scary. It's done very differently than the way it's done in the United States. For instance, you mean you're unemployed, if you're uneployed, you're unemployed. You're not different waiting times and other things. For being categorized. It does show there's a problem. I don't think it's the key problem that

So they're in a.

Weird position where they're not getting the organic recovery so far that they were expecting, but they're also a lot less likely to be going down the stimulus route, at least compared to what most people around the globe think.

So they're in a position where the pressure is on.

Meanwhile, we see that Tony Blinken, Secretary of State, is heading over to Beijing to get a sense of whether they can really ease some of the tensions that have been escalating ratcheting up between the US and China. What are you looking for in terms of understanding the points of leverage and what China wants in terms of international participation from these meetings.

I'm not sure they want much.

I mean, one of the sources of leverage for the Chinese right now is the fact that they don't want to interact with their American.

Opposites. They don't want to answer military hotlines.

They want to say, look, if you're going to be rough on us from an international relations standpoint, then we're going to ignore you.

And that raises the risks.

For everybody that there could be some sort of misunderstanding or confrontation. I think that works for China's favor in their minds at least, so I don't think they want.

Much of it.

Better communications, more communications is a good thing, but I don't think that this is going to solve anything.

I look, Leland, you know, just just one final quick question here on the solidity of the federal administration in Beijing. I mean, everybody makes a deal, you know, Premier president for life, whatever she is. But how stable are they? What support do they have from the city's mayors and from the regional organization of the Communist Party.

Well, China, China is a black box. I mean that's that's that's still true. But there's nothing that we're seeing that suggests that the Chinese Communist Party, despite all these structural headwinds, despite weak economic growth, despite a challenging international environment, doesn't have the support of the people, that there's any type of pushback against Hijinping.

We're just not seeing that.

So obviously, underneath the system there's no pressure valve, like there isn't a democracy, you know, to throw the bums out. And but look, you know, it's hard to see any type of specific political stress in the system, although there's certainly lots of economic stress.

Thank you for the brief.

He is with China Babek.

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Thanks for listening.

I'm Tom Keen, and this is Bloomberg. Thanks for listening to the Bloomberg Surveillance Podcast. Now, stay tuned for today's edition of Bloomberg Daybreak. It's your daily news podcast, delivering today's top stories to your podcast feed by six am Eastern. It's all the news you need in just fifteen minutes. The Bloomberg Daybreak podcast. It starts right now.

From the Bloomberg Interactive Broker Studios. This is Bloomberg day Break for Thursday, June fifteenth.

Coming up today, the Fed pauses for the first time in fifteen months, but signals more rate hikes ahead.

Now it's the ECB's turn, with a policy decision coming this morning.

A busy week of economic data continues. US retail sales are two out, and.

Former President Trump holds onto GOP support in the wake of his indictments.

The retired marine charge with putting a Manhattan subway writer and a fatal choke hold has been indicted. Plus Texas has sent a busload of migrants to Los Angeles.

I'm Michael barn Ahead, I'm John Stansh.

Edward's Wards the Mets with a walk off win over the Yankees, the US Open golfed He's off today in Los Angeles.

That's all straight Ahead on Bloomberg day Break, the business news you need to starn your day in just one fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business Appen everywhere you get your podcasts.

Good morning, I'mthan Hager and I'm Amy Morris. Here are the stories we're following today.

Investors are still digesting yesterday's message from the Federal Reserve. The Central Bank did pause rate hikes after fifteen months of tightening, but the move is being viewed as a hawkish hold. Fed schhair Jaypal says he expects more hikes will be needed.

Today, we decided to leave our policy interest rate unchanged. Nearly all committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year.

And jay Palell declined to say whether another hike could come as soon as July, but he did emphasize it will be a live meeting next month.

Pell faced the challenging task of explaining two contradictory policies, deciding to leave rates unchanged while also indicating two more increases this year. Apollo Management chief economist Torsten slog says Powell did a good job walking that fine line.

They succeeded in what we expected namy delivering a.

Hawkish skip, because they did signal very stronger than more rate hikes are coming.

Lock at Apollo says traders are now betting on two more quarter point increases this year. We also get the view from Diane Swank, chief economist at KPMG.

This is a FED that is committed to additional rate hikes. The tricky part of this pause or skip was messaging it, and this was a very effective way to message. We're going to assess what titaning is out there and how much additional titaning is needed.

KPMG chief economist Diane Swank also expects the Fed to raise rates in July and September.

Well, the Fed appears to have laid out a plan. I mean, now we wait to see what the data say in the coming month. Today we get the latest reading on retail sales. Economists forecast a drop of two tenths of one percent in May, and Bloomberg's Vinnie del Judice has more.

The prior report showed April retail sales recovered from back to back declines. Even so, Bloomberg economics, as Americans are becoming more discerning with their money. Higher interest rates are taking a bite out of household finances. Inflation remains an issue too, and then to sign us businesses or racing for weaker demand, cardboard bakshipments are falling. Also on today's agenda, May industrial production economists anticipate moderation.

Vinnie del Judeis Bloomberg day Break.

Thank you, Vinnie.

It's also a busy day for economic news overseas. The European Central Bank makes an interest rate policy decision this morning. Let's go to London and get details from Bloomberg's U and Parts.

Good Morning New and good.

Morning Amy and Nathan. The ECB looks set to deliver what could be its penultimate rate hike later today. Economists overwhelmingly expect the deposit rates shared by the twenty nations which use the single currency to be lifted by twenty five basis points to three point five percent. The focus for investors will be on the ECB's guidance as to how much further they have to go in their fights against an inflation rate still three times the bank's targets.

Thanks Youan.

In Asia overnight, China's Central Bank was making moves ramping up monetary stimulus to help spur the economy, and Bloomberg Daybreak Asia anchor Brian Curtis has more from Hong Kong.

The action comes on new signs of weakness in May. The PBOC cut the interest rate on its one year policy loans by ten basis points to two point sixty five percent. That's likely to prompt the banks to lower their rates as well. On data, industrial output rose three point five percent from a year earlier, matching estimates, but

Relations between China and US are also in focus. Secretary of State Anthony B. Lincoln departs for China tomorrow as plans call for a two day trip aimed at stabilizing ties between the two countries. Lincoln's last attempt to visit China was derailed by that alleged Chinese spy balloon.

Back here in the US, amy presidential politics remaining focus. Former President Donald Trump's legal troubles are dominating headlines, but they don't seem to be derailing his support among Republicans. Bloomberg Zed Baxter has a look at the latest numbers.

The Quinnipiac University poll says bottom line, he is still the strong front runner for the nomination. The survey, conducted mostly after the latest indictment, shows support from fifty three percent of Republican and GOP leaning voters Ron DeSantis with twenty five percent. Now it should be noted that the fifty three is down from fifty six percent last month. Fundraising well, his campaign says since the indictment, the tills have been fed six point six million dollars. In San Francisco.

As former President Trump continues his campaign, he's accusing the Special Counsel of a double standard. Trump points to others accused of keeping classified documents who haven't been prosecuted, like President Biden and Hillary Clinton, but former resistant Special Watergate prosecutor Nick Ackerman says there's really no comparison.

I mean, the people who are making these arguments, they got to be questioned about the specific paragraphs in this indictment and ask them if they're fine with somebody doing that fine telling their lawyer to move boxes to hide documents, if they're fine with telling their lawyer to destroy documents.

Former Assistant US Attorney Nick Ackerman spoke with Joe Matthew on Bloomberg's Sound Catch That show weekdays at one pm Eastern on Bloomberg Radio or listen on demand wherever you get your podcasts.

Time now to look at some of the other stories making news in New York and around the world with Bloomberg's Michael Barr.

Good Morning, Michael, Good Morning.

Nathan. A man charge with a manslaughter for putting an agitated New York City subway writer in a fatal chokehold, has been indicted by a grand jury. Daniel Penny was charged by Manhattan prosecutors last month in the May first death of Jordan Neely, who struggled in recent years with homelessness and mental illness. Penny earlier this week talked about the incident in a video released by his attorneys.

The three main threats that he repeated over and over I'm going to kill you, I'm prepared to go to jail for life, and I'm willing to die.

New York City trial attorney Brian Buckmeyer spoke to ABC.

It's the idea of being safe in the subway, the ideas of mental health, and potentially substance abuse in the subway, and how these two ideas and these these themes kind of intersect and asking the question where is the line.

Penny faces up to fifteen years in prison if convicted. And there's another incident of a subway writer facing charges after the death of another man said to be harassing other passengers. Twenty year old Jordan Williams is facing manslaughter charges and the fatal stabbing on board of Brooklyn bound Jay train Tuesday night. The NYPD says a fight began

Some burnmarks appeared on his hands, realized he didn't have a pulse and began CPR. He was a parent that he was struck by lightning. He was still holding one of the machines. We were able to get that away from him. When more units arrived, we were able to get the AD hooked up to him and start breathing for him.

Officer McPartland says. Bombgardner was rushed to Robert Wood Johnson Medical Center in New Brunswick for treatment. Global News twenty four hours a day, powered by more than twenty seven hundred journalists nantilists in over one hundred and twenty countries. I'm Michael Barr.

This is Bloomberg Neither Thanks Michael.

Ten half of the Bloomberg Sports Update, brought to you by Trice State out Eat.

Good morning, John Stanshout.

Good morning Nathan.

The Mets, losers of nine of their last ten games, did a lot of things wrong at Citi Field. Jeff McNeil's throwing air allowed the Yankees to take the lead seventh inning, and later in that inning they ignored Isaiah Connor pileeff and when he was at third base, they let him steal home. Then a base running blundered by Brandon Nimmo ended the chance to retake the lead in the bottom of the seventh, so the Subway series was still tied in the tenth.

The one swinging a high drive hit Teep right field hours back to the track at the wall.

It is off the wall. Escobar racing a round third, take you the turn. The cutoff throw from right center field.

Is out of time.

Escovar slides it safely.

Nimmo faced with it game winning RBI.

Trip on WCBS, Mets beat the Yankees four to three. Mets were without reliever Drew Smith, they with a ten game suspension. Smith had been tossed out a Tuesday's game before he threw a pitch as umpires found the sticky stuff, just like what happened to his teammate Max Scherzer and of the Yankees, Domingo Herman. The Oakland A's stunning seven game win.

Streak is over.

They were twelve and fifty before the streak, and the A's moved closer to Las Vegas with final approval by the Nevada Legislator and public funding for a new stadium on the Strip. US Open Golf Tee's off today on of course, it has not hosted any of the previous one hundred and twenty two opens, so most of the field unfamiliar with the La Country Club. The two betting favorite for Scottie Scheffler and John Rahm, both with morning

From coast to coast, from New York to Sen Francisco, Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg Business Appen Bloomberg dot Com.

This is Bloomberg Daybreak. Good morning.

I'm Nathan Hager. The Federal Reserve has hit the pause button on its aggressive run of interestrate hikes, keeping policy on hold for the first time since March of last year, but Chairman J. Powell is sending a message to markets the central banks fight against inflation is far from over.

Inflation has moderated somewhat since the middle of last year. Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to two percent has a long way to go.

That was Chairman Palell at the news conference you heard yesterday here on Bloomberg Radio following that decision to keep rates on hold and for more. We were joined by Bloomberg opinion columnist Marcus Ashworth. Marcus, what did you make of the messaging from the chairman and the big shift that we saw on the dot plot.

Well, let's start the last thing first. I don't believe particularly in the dot plot. It's more of a horoscope and it changes around as the wind. As the wind blows. I don't think Pow thinks much of it either. So I just think the Feller done a great job in talking out prospective rate cuts for this year. They've somehow managed to do a pause and make it incredibly hawkish. I don't really believe that. I don't think the market

Now.

That is really interesting because there has been so much of a focus over the last several months on the concern that wage pressures could be what's leading to the stickiness that we're seeing in inflation. What do you think the FED is seeing in the data now that could be justifying that shift.

Well, it's almost is that the causality is is potentially reversed. And I don't want to get too technical here, but in essence, everyone's saying high wage rises leads to future inflation.

In the minute we have left here, Marcus, you've got to look forward to the European Central Bank decision. I think I saw on the Markets Live survey yesterday. Will Madame Legarde be listening to Chairman Powell? What's your answer to that.

I think she is very much listening. Whether she'll admit to it, it's another thing altogether. I do think that the FED mothership is by skillfully you make might not think it's skillful, but compeditor what we have over here, the Fed's played this pretty well. I think they've got themselves a pause. They've got themselves the optionality the next

Whether they do or.

Not, I'm hopeful that they may see. Economy in Europe is already in recession. The start of second quart of Jemmy isn't great. This is not a time to be hiking rights.

This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.

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Plus listen coast to coast on the Bloomberg Business App, serious XM Channel one nineteen, the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager.

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