Front, showing continued moderation. The market is pricing in the summer. That is quite reasonable. They have room to be very patient. Likely you could see the rate cuts get pushed back. There is a cyclical Recovery Room in this economy which may or may not support that june cut. The baseline remains two or three cuts starting in june. Hopefully now we have less chatter about a hike or no hikes this year. This is bloomberg surveillance with jonathan ferro, lisa abramovitz, and annmarie hordern. Jonathan good morning. This is bloomberg surveillance. Your equity market is negative by one third of 1 on the s p 500. Chairman powell says he needs more evidence. He will get more evidence this week. Cpi, ppi, retail sales, jobless claims all on deck. Lisa cpi is on deck tomorrow, likely the biggest. Will a decline in yearoveryear cpi, when you strip out food and energy, falling to 3. 7 be sufficient to cut rates . Maybe not this month but maybe in june. Jonathan that data has whipsawed market
There is a Reasonable Risk that they do not cut year. The start of cuts is not easy. In is about normalizing. Inflation is slowing down. Jonathan this is it. The third hour of bloomberg surveillance starts right now. Good morning. Inflation data right around the corner. I know how much work goes into this. Strip out food and energy. Lisa everyone will be looking at it because there is this impulse. Jonathan where does this leave the Federal Reserve . Annmarie they will be focused on this, but this is not going to be enough. What strikes me is the yearoveryear cpi is not too far with the budget put out. The projections are interesting. 2. 9 inflation is not going to help them or the fed. Jonathan 2024 real gdp. 2. 4 this year. Lisa they will probably keep it there. The disinflation so far is kind of going to stall out. We heard that with respect to airline tickets, but the demand is there. These have to be paying on the fed. Jonathan is an a beat for this market . There is a difference
Your equity market slightly negative on the s p 500 for the second or third time this week, waking up and looking at china. To the data and commentary around that economy right now. New loans extended on chinese banks ranging to the lowest since 2009, there are concerns about what is developing in the worlds secondlargest economy. Tom you look at the income statement dynamics and the Balance Sheet statement dynamics. I agree. I believe i mentioned this the day before. The flows on the Balance Sheet in and out are what matter. This is fbi from us to them off a cliff from them to us. Maybe not a cliff, but it is down. Jonathan the data dropped in the last hour. The response clear from many on the south side. Stop gin weighing in. We will see. We have not seen it. Lisa what kind of stimulus when they are concerned about debt load in local governments . If they want to move away from leverage and create a more sustainable economy, how do they stimulate the economy where you look at these l
Ferro, Lisa Abramowicz and annmarie hordern. Jonathan lisa told me off last time we did this, lets get to the weekend. I will start every hour with that. Live from new york city, good morning for audience worldwide. It is payrolls friday, equity futures on the s p 500 positive by. 1 . The most important payrolls print since the last one, until the next one. Will a double down on the booming 353,000 of last month. Lisa we are positioned for heads i win, tails i win, ultimately no one is betting on a reaccelerating inflation growth and thats what we are expecting from the payrolls report. 200 k is the estimate this morning. Weve had the adp, the services component, the employment component. None of it was this big blowout upside surprise that we all feared a few weeks ago. I was going through this and every time i kept kicking myself everything about the data has been goldilocks. Its the reason why people are pricing out the idea of reinflating the economy or true real weakness either. I
Country seems to be fueling some kind of negative sentiment worldwide. Tom i agreed to start there for the western world. Its not just about china. There disinflation, we dont need a bunch of charts this early in the morning but the vector of deflation and disinflation in china from the beginning of covid and they did covid differently than we did but im sorry, its disinflationary and get you down to a run rate of a positive 1 even with the present deflation and thats not good enough. Jonathan at the same time, the western developed markets are finding inflation and we had deflation in china and people are asking, we are in it now so how long will it last . Lisa and is this the bottom . It could have a more inflationary time later on. How much does china matter as a disinflationary force for the rest of the world at a time were places like the u. S. Are moving away from importing some of their goods and the eu is trying to be more aggressive with lyft service. And we have budget defici