tv Bloomberg Surveillance Bloomberg September 9, 2022 6:00am-9:00am EDT
>> queen elizabeth ii was the rock on which modern britain was built. i do and opportunity to meet her and she was a gracious and decent woman. >> she served us with strength and wisdom for 70 years. >> she was a reassuring constant admit rapid change. >> she was the spirit of great britain, and that spirit will indoor. >> this is bloomberg surveillance with tom keene, jonathan ferro, lisa abramowicz. >> >> the u.k. is at the epicenter of the world. live from london for our
audience worldwide, this is a brick surveillance, alongside tom keene and lisa abramowicz, i am jonathan ferro. we are live from london for the next 10 days. a somber mood hanging over the country. tom: different from january. he picked it up right on heathrow today. it is the beginning of 10 days of mourning for the queen. getting used to it, we will hear from charles the third. >> a change of leadership in more ways than one. lisa: massive change on multiple fronts. you have a change for the new prime minister and change for the new inflationary regime. you had the change with brexit and the change in the person who is the glue for cultural aspects of modern britain. how will the new leader take over? tom: the number one buzzword has been continuity. how many times have we heard the word continuity?
70 years on the throne. the biggest statistic i've heard over the last 24 hours has been the fact that she rained for longer than 85% of this country has lived. get around that. jonathan: that's extraordinary. and there other parallels, but i take your point. a huge part of england has lived with this queen, and now there is a new -- i would suggest that not we are going to do the royal chauffeured 10 days, but there is a huge mystery about that. tom: equities are bouncing back, today on the s&p 500, around 8/10 of 1%, and in equity futures, but we need to begin with team coverage. guy johnson is in london and anna edwards is that buckingham palace. anna, first you. walk us through what the next 10 days will look like for this country.
>> good morning. europe buckingham palace, it is somber as you would expect. many people are gathered to pay respects, and many people are in shock. a fast-moving situation over the last 24 hours. yesterday, we were dealing with the news around the death, now we are parking her passing. here a. of mourning. the queen's has returned to london and she lives in state. people are walking past. they are signing books of condolence, but we will hear from king charles. he will return and address the people, the things he will say in the way he will speak to the people. it will be compared to the queen, and watch very closely. tom: the fondest memory of my childhood as my grandfather and i doing agent saw puzzle and watching the changing of the guard. how does this fit in to the
royal family as they mourn? we know of windsor palace, and we know of the palace fitting into the schedule they will see for the next 10 days. >> this is a place that is the center of the london life. there are residences in scotland as well. it's interesting that you cast your mind back to family memories. i do as well. there are messages from family members. older family members talking about seeing the queen at the time of their coronation on tour around the country. a lot of thoughts are on london, but she was someone who taught the world as a head of state, but also in 15 other countries around the world, and it is in all those cases where people are feeling this news read lisa: she met with more world leaders than
any other person. she also is known for founding a modern version of what the monarchy is within rich culture. what is the new modernity of the monarchy, given where we are with king charles? >> we were discussing this in the last program, and we haven't seen a coronation for 70 years. britain has changed so much. do you want to project a face of tradition and history and all that it taps into, or do you want a sense of moving with the times, and moving on a little. he was reflecting on that. you might find the coronation will not come for many months or a year or so, but the coronation might be more multicultural than we would have seen in 1952 or 1953. in many ways, it will hark back to the britain of old, and that
is what people sign up for. you don't want to shine too much light on it but you don't want to normalize it. >> i want to bring you in on king charles. this is not a person who highs his feelings over the years. how will that take shape in the years and decades to come? >> will see how things develop. the queen wasn't inherited grid it was earned over many years. it was earned by the way she handled various situations read we will see whether charles can earn the same authority and respect. it is too early to tell. we have an idea. he has served a long apprenticeship, but that was different. it is different when you are king. to the learning process, you go through. it will be interesting. we find ourselves with a new king. a moment of instability for the country, and it is interesting over the next few days to see
this obsessive transition working read some things will be working. we won't get an ons today, but we will get a bank of england next week we had we will need to ultimately kick back into gear, but the next few days will be about transition. this country has a lot of questions to answer, and notably, how do we afford what we need to mark >> you mentioned a bank of england. how much of the country will shut down over the next 10 days. rugby events and the like? >> there will be a series of events that will not take ways. kids will go to school and people go to work, and that process will continue. the data will continue to be released to your back to the bloomberg world. but the set piece events will not take place. strakes will not take place. there will be certain things that are not look -- normal. much of the country will
continue, but we are in a 10 day. of mourning. it is a hiatus, and there are questions that need answering around the future of this country. the next 10 days are a break that. it will delay an understanding, a detailed understanding, of how we will pay for this package. >> this comes at a time of great uncertainty for the whole country in regards to this project. there are leadership members connected to the united kingdom and the rest of the european union. as you talk to members, how present are they? how are modern -- how much are they aware from a physical standpoint, but also the leadership changes? >> i think i would point to the words of the french president who said we are so sad by this.
that was echoed by the german government, the monarchies of europe. these are houses connected by blood, going back centuries. there has been tension after the brexit referendum, but that is forgotten this morning. behind the scenes, the institutions do show a european flag at half mast, and there was a moment of silence today, and politics have been very difficult. they are completely forgotten, and this is something that is a giant of history. it will go down in history as such. jonathan: politics forgotten, but problems don't go away. how do we address them going into the weekend? >> problems do not go way, and at times it is hard to deal with emotion that you can feel, but then there is the reality of life. this is going to be a very hard winter for a lot of europeans.
there is an energy meeting behind the scenes that is essentially at this point throwing out ideas. brainstorming. it can bring down prices, but it is not what the market wants. there will be a political impotence -- if it us -- this -- in protests -- in protests -- impetus. they will only meet at the start of october, unless there is an emergency meeting of end of the month area jonathan: good to catch up to you. guy johnson is in london as well. tom, it is easy few forget because it has been buried in the news flow, but rightly in the last 12 hours or so, we just had one of the biggest pieces of physical intervention in this country in the last 24 hours.
tom: that's a good place to begin. as we go through this week of morning, we are in the tradition of the queen and all of the different monarchs over the years. huge fiscal crises. this is no different. this is no different than the physical crisis that charles the first faced or charles the second. it's a different modern way. same issue. jonathan: i said it was a change in leadership. it not just a monarch create is attainment -- it snaps to monitor area it is a change in prime minister. -- it's not just a monarch. it is a change in prime minister. >> it's a massive moment. this is a seat on many different leadership standpoints, but also monetary. we are talking about what we've looked at. what we can expect from the bank of england. >> seaworld -- to you she was a queen. for many she was the leader.
moments ago, coming up, the head of global fix income at morgan stanley will catch up with us. futures are positive. 7/10 of 1%. live from london, this is bloomberg read best. >> keep you up-to-date from around the world with firth word -- with the first word. that they said the united kingdom is changing. charles will be formerly just formally proclaimed as king. in a ceremony heading back 100s of years, he will succeed his mother with the longest reigning monarch. she died on thursday at the age of 96. her death set off a morning. that will end with a state funeral. european union held an emergency meeting in brussels. it was the first political staff on how to present the cut off of energy supplies with rationing, blackouts and social arrest -- unrest.
it will tame energy prices and keep the lights on. kim jong-un is raising the stakes for a military confrontation with united and its allies. it expanded circumstances under which they would launch a nuclear strike. they launched five conditions, and one of them was if kim was threatened. the justice department will appeal a special master to seize donald trump's documents from a florida home. the ruling has thwarted a ruling from the national securities impact. they want to continue using the materials as part of an ongoing investigation. a federal appeals court has saved cities group -- citigroup from an attack on wall street. they rejected a lower court ruling, and they could keep more than half a billion dollars. the bank sent them. james frazer said the mistake
>> we need to act now. as strongly as we've been doing, we need to keep at it until the job is done. to avoid that, we think we can avoid the very high social cost that the fed had to bring in to get inflation down, instead of setting it up for a price stability. jonathan: the chair with counter programming. did it work? tom: when the president of the cato institute says that the bitcoin guy married his daughter, --. jonathan: you have to explain this.
the testimony. how many years ago is that? a number of years. there's a man in the background. he is the son-in-law of the president? lisa: that was the most notable thing of the press conference. jonathan: you thought was boring? lisa: did he say anything new other than reiterate that he will court tail inflation? doubling down. tom: the interns flew into london. hello. what's important about jerome powell, what's so important about what he said, is that he continued the dialogue to give other meetings. we don't know about the bank of england they are all reacting to the fed. jonathan: the clock is ticking to re-anchor inflation expectations. i think he doubled down on the effort from jackson hole. they came out an hour or so
after the address. they said 75, but 75 becomes the number for a lot of people. we didn't get pushback on that address. lisa: was it lael brainard coming out and doubling down? everyone is same -- singing from the same hymn sheet. raised rates aggressively. for percent looks more realistic than 3.5%. >> president moments ago, said rising inflation is a major concern. i thought that headline would excite you. the ecb is determined to bring inflation back to 2%. can't do much to lower gas prices, and it brings us back to the u.k.. i want to go back to this. we are paying respect to someone who is dedicating their life to this country. as we should. we will cover the 10 days that take place in all of the devoutness i go along with it, but i don't think we should lose sight of what was delivered
yesterday. there is something we need to discuss. the biggest intervention, one of and in the postwar. from this government and the u.k.. addressing a major energy issue. it does not go away. not because the news flow has changed. there is something that needs to be worked out. tom: the backdrop of the war of the ukraine advancing red and makes things complex. it's what we will do for the next number of days, for the morning of the queen of england, and to keep forward the bloomberg surveillance world with futures writ do a data check for me. i noticed, coming off the plane, on real yield, i couldn't get wi-fi on my gulfstream, but 8.5 basis points is important. >> that seems to be the front end of the yield curve, and that seems to be where we are hanging out. yields are back by three basis points. but 350, that kind of range, that is where we are anchored at
the moment. >> too short a conversation, but brian is joining us. the head of fixed income. how is your view changing in this tumultuous week? >> a somber week, but has not changed that much. welcome to the u.k.. it is not a lot of new news. they have not doubled down on what they've said, and there's not a ton of information, but fiscal stimulus from the u.k., and more fix stimulus come across europe is going to make their job harder. they need to be diligent on rates staying high. in order to stave off inflation, and the psychology of inflation. lisa: let's talk about that. the premium for u.k. guilt, that has given other areas of the european region, and frankly, in the united states, as a result of certain physical measures, it is expending the deficit and raising questions about who will finance it. has that been priced into
britain and european bond yields? >> it's been priced in more in the europe than in the u.s., but i think the short answer is no. this is a tough situation, and it is difficult to be the head of that. we are fighting inflation from inflation and from psychology, and you are finding growth falling because of it. if you raise rates aggressively, there's energy can't control, and credit spreads should have a premium, and as you said, more debt on the heels it -- of it. lisa: why is it that the federal reserve has shrugged off suggestions of recession and not use that as a base case. they doubled down on raising rates. this that lead to a lack of credibility, or people saying this is what they have to do? >> i think they're trying to buy back credibility. it stayed easy for too long, and if they had a crystal ball, they would have raised rates long before they did. i think in light of where they started, there is no choice.
there is a slowing in a perfect world, but now they have no choice. to be credible, they have to fight inflation and worry about growth later. it is a nod to the market that they have to ease again, but it is more likely going forward. jonathan: a question we lead to is that we have a long list of people saying they saw the high of the year on the 10 year, and some people are starting to lean against that red are you leaning against that view that there is more up site on the end? >> i continue to be in the camp that it will invert more. banks have been clear on that. on the 10 year note, we are testing a new high. i don't think there's anything outrageous happening, but it feels like rates have not found their high. i would say it is not an outrageous new high. 4% may be a place i would lean against, but as i set on the show before, the market will test well.
jonathan: morgan stanley's investment manager. thank you. if we test above 350, i do wonder how many people, the program is a350 is a great by? lisa: i don't know. elds move up, so does the background. the narrative. i think about deutsche bank, and there is a strategist who came out and said what they did, what they said, it is 75 basis points in a rate hike on the november meeting and the october meeting. the idea is that they will be raising again at the same kind of record pace. >> unsurprisingly, they were criticize yesterday over the forecast from the ecb. the baseline did not include a recession. no recession and the baseline for so many people. what is the base case for this economy going into recession? tom: there is a war on the uncertainty chart. i'm surprised there was a more language on the recession as
well. we hear from the bank of england on our visit to london, and that's uncertain right now, but if we do, it is the same risk. how do they gauge gdp and how do they gauge a lack of the united states? >> is difficult. this is not forward guidance, but we will have five more meetings. what's the language we got from the president? >> we will do more than that. >> what does it mean? does it mean three or four? >> its forward guidance. >> there is no tang in london. >> is that appropriate? probably not. no. futures are up. from london, this is bloomberg.
>> live from london, and good. we're with you for the next 10 days as the country goes and morning. after the passing of queen elizabeth. let's check the markets. futures look like this. equity futures on s&p 500 up .8%. that's the story of the equity market and the bond market. yields look like this. three basis points on a 10 year.
down five basis points to 326 or 327. the strength for you -- up about 9/10 of 1%. 10090. >> right now an important moment has been in bloomberg surveillance over the years. this is the president of queens college cambridge, they are deeply affected by the death of their patron. dr., the history of your college is extraordinary. we don't need to go over it now, but it is the back or of queen and king over centuries from roughly 1445. we've got a new transition as well. how do you perceive your patron in the shift to kings charles the third. >> thank you for having me. we are sad at the passing of her majesty. i don't think i can find words to express the size and scale of
the loss being felt by the united kingdom and people around the world, and especially by our community it as you say, she was a patroness. she visited the college. she encouraged and inspired generations of students and faculty and staff. there is a sense of loss and morning wanting to honor her incredible rain. we are not looking forward to what is next right now. this is a. of deep flexion ingratitude. for what she did for queens college in cambridge. tom: one of the hallmarks of her rain was cambridge being leading on things. there is a shock of the trust cabinet. senior officials showing the diversity of united kingdom,
from the university of king's. state the diversity that she brought? >> she would speak to everyone, and she would encourage us to be more inclusive and more diverse, and to continue in the daily fight of reducing obstacles with access to cambridge education. it is all about access and participation. her majesty was a leader in this regard. she believed in an inclusive community. i cannot tell you that when she would come and visit us, she would spend as much time with the president as she would with the head gardener. with the head of the student body. she would go around and talk to people in an engaging fashion, and she was an inspiration in terms of inclusion and diversity. jonathan: the last time she visited do was 2019.
can you share with us how special that visit was for you and the college? asked it was special. not only because we were hosting her for lunch, but we invited the community to come out, and the joy with which we came to queens, and the interaction with her, there are pictures on her website of her meeting with the students, meeting with the staff, spending time and caring, and there was a wonderful lunch which we thanked her for her very strong support of our college. she followed the queen mother. it was a constant for us, just like it was a constant for the whole nation area. lisa: this is a key embodiment of the spirit of the united
kingdom that we will find hard to replace, and she created a modern version of a moderate. can you give us a more tangible sense of why it is, especially for people outside of the united kingdom, she acted in this role, even though she is a figurehead she is a political -- by definition, she is looking to remain as sort of a public relations persona, rather than a leader like parliament. >> it was her inspiration. she has inspired so many. i would argue that she will continue to long inspiring people around the world. where did that come from? i think from three things. one is empathy. she was very empathetic, and she listened to people. second, her dedication. she said on the first day that she would be dedicated to serve the nation.
she continued serving the nation for over seven decades as the monarch. third, a responsiveness. when you put these things together, it sums up inspirational leadership. it overcomes all sorts of division within society, and that was flexible enough to take the united kingdom to a massive change. if you look at how difficult and different the united kingdom is today, compared to 70 years ago, when she became queen, she was able to navigate all of that and inspire us and inspired a whole nation throughout that whole. lisa: given how things have changed, given brexit and the united kingdom has shrunk in its scope with relation to these trade partnerships were nomenclature, what is the vision
going forward. does it end here back to that, or is it truly a marking of a new regime russian mark >> there are many challenges facing the uniting them. that is true for the new prime minister, who recognize that on the first day. right now, it's about her majesty, queen elizabeth the second. it is about warning her death. it is about honoring her accomplishment and honoring her rain. there will come a day when we will sit down and talk about all of the challenges ahead. i think this is an important moment in history. she has played such an important role. not just in this country, but around the world. >> thank you. we appreciate it. we all agreed this is not the day to discuss that, but thank you for giving us your time. queens college, cambridge.
as we reflect on what's been left behind, and i think naturally, we will look to the future, the two words we talked about a lot over the last 12 hours. continuity, and the other one was unity. the ability to unite the country at a time when it's becoming increasingly divided. we will discuss that over the next 12 days, and we will discuss this in the years to come. >> world's leaders are gathering for a service here. i think what is so important, and i can't recall where i saw this, but someone had the empire of an early queen elizabeth, and where it is now with barbados becoming a republic just in the last number of years. you see the diversity of the night kingdom and americans are thunderstruck by the diversity of the last 72 hours. former prime minister. it is amazing, to make -- two
americans to see the different melting pot that she helped invent in the united kingdom. >> dear point, if that is the case, that is why unity is all the more forefront, especially with the challenges. i think that is one of the main challenges, going forward. especially given that the news has overshadowed the biggest fiscal package offered up in modern history. we are on the precipice of action in the european union. they are on the brink of inflation that might reach as high as double digits and beyond. how do you navigate this, without unity. it is pivotal that we discuss this. >> you see a difference in politics by definition. you are bound to see division. we see that in the u.k.. it is no different red i think
the fact that scotland is pushing for independence is bigger. that is a threat to the union and the push to break it up. that lingers over this country. it's not going anywhere anytime soon. i was in scotland of fairmount, and i was naive. i was a dumb american. you see it now, speaking from a distance, and infilling the ireland position, and a new cabinet, she got her hand, but it was a challenge to get it filled. it's not just scotland, but it is also whales. >> the economy is in a difficult place. as we returned to having a discussant about what happened in the u.k., we see the trust, and the leader of the opposition came out, and pushed for that taxed. that defines the divide in this country at the moment. it is not unique to britain.
these are the same issues that europeans will face in winter, and one of the biggest calls you have to make of the financial market, and allow me to take this broader, it's the weather this winter. amateurs. you speak to the market participants, and the thing that they would love to forecast is that never mind the gdp or inflation, what it means for gas prices, that will be the issue. >> is a worldwide issue. there are so many machinations here, but what happens if you don't dampen demand, and it's eight u.k. issue at a u.s. issue. i was just reading that there is a potential for another release of the strategic petroleum preserve to get oil prices lower. head of the elections, all of these things. what does that mean for consumption to create this revolving cycle. >> $85.19. that is a miracle for where we
were 90 days ago. >> a bounce back of 2%. crude futures are up .9%. equity is running a little bit. coming up, we will continue this conversation with the director of chatham house. we are just on the corner. this is bloomberg. >> keep you up-to-date with news from around the world with purchase -- first word. this is the end of one ear and the beginning of another. the day after queen elizabeth the second died, following more than seven decades as monarch, charles will be formerly -- formally proclaimed as king. he was 73 years old. as the oldest person to rise to the throne in british history. they have begun a 10 day morning. that ends with the queens enroll. china is stepping up as there is a tight lockdown. there is more restriction on internal travel.
it is designed to reduce the risk of outbreak before beijing. that is when the president is expected to secure a precedent breaking third term in office. president biden rallied democrats with an attack on donald trump supporters. he blasted the former president for promising to hardened writers who attacked the capital. they also warned voters of those in charge of the house and senate. the series about queen elizabeth the second's reign will likely's stop production -- start production on season six, following the death of the oldest reigning monarch. that is according to variety. they are set to premiere november, and features a new cast. they have not yet released a statement. global news, 20 for hours a day, on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg.
>> this is a day of great loss. queen elizabeth the second leaves a great legacy. today, the crown passes as it has done for more than 1000 years to our new monarch, our new head of state, his medicine, king charles the third. >> the prime minister as the nation mourns its monarch. live from london, good morning. a bit of news that pales in comparison to the conversations we have, but it gives you an idea of the changes we are witnessing to get to the next 10 days. the english premier league will postpone its masses -- matches.
next week maybe proponent -- proposed -- postponed as well. this is a decision that has been made. >> the benchmark is 1963. john f. kennedy. the nation came to a complete stop prop --. i knew this day would happen, and this makes the week a point for the nation. as mentioned, there is no way this starts. the people will work to move around as they do. >> the other thing, the way you can remember, you don't need to belabor this week, but to put these games on, it requires resources. particularly, the police. those resources of the next 10 day are needed elsewhere. >> that's what we will see for the next number of days, we have good coverage for you. guy johnson is helping out with a london perspective, we are thrilled to go to them in a bit. right now, we spoke to a homage from queens college in cambridge. we touch on another effort in
chatham house. you've heard that name in america. you are less mill your, but it is dominant is one of the great thing takes of perspective for the united kingdom. robin joins us. the director of chatham house, and i thought on your website, the commitment of the queen to the academics that you did in 2014, her leadership, the jumpstart of the project, give us a window into that red what the queen did. >> i'm happy to. we have a new director as of a month ago, but i had the pleasure of -- excuse me. >> i had a pleasure of hosting her majesty twice in recent years, once for the prize in 2019, which she gave to david attenborough, but in between 19, we gave the queen elizabeth academy of intentional affairs, and one of the big challenges for institutions in london was
being able to make sure that we were well connected to young people around the world. engaging them in what london has to offer or britain has to offer as a place of independent thinking, which is what it is about. her majesty gave her name to the creation of a new academy, and she became -- she met with the academy fellows, and all over the world. i think what we wanted to do, we had an academy named in her honor. we were not going to have a patron it -- of institution for several years. it was wonderful to connect in that way, but also, we could attract the brightest and most driven changemakers around the world. her example is a draw. it was the most important part of this. >> in her example, there was the commonwealth red there was a commonwealth of the early 50's and 60's and 70's. what is charles commonwealth
look like? >> it will be different for number of reasons, in a way, it was held together, by respect for her majesty in the queen. as well as by a common sense of heritage. it forms part of the british empire. that is something we received a lot more scrutiny with than in the past. what we will find in the coming years is charles having to enable the commonwealth to redefined his purpose among those nations without the queen to hold it together. we've already had some moves away from having a sovereign as the head of state, and from one commonwealth member, barbados,.", and there is a worry that the review of slavery and so on will start to come back in in a much more difficult
position for the future. >> we marked the end of an era. exactly as you say. not only as a unifying force, but in redefinition of globalization. a redefinition of the night kingdom. a broader empire that used to have that. redefining aspects of the new moment. what will be the new definition of the next 10 years. how will charles the third come out and shaping new vision in the world, as you see it. >> the challenge that any monarch will see, is that they have two establish a vision to the rest of the nation. they really are the holders of continuity. they are not the agents of political change in politics. it will be up to this trust and future private insert two establish a vision of the country. they have to communicate the linkage to the continuity. part of the soft power has been the fact that it has had such a
stable politics for so long. however quickly the government changes this, the fact that the head of state has to go to the family as part of this. what the monarchy does is give space to the government for profound change without a sense that the nation's been called into question, so i think, in a way, prince charles, who is led forward quite a bit as the prince of wales on climate change and architecture and biodiversity, exactly. they will step back and have to become a cipher that the queen was for what other people believe the nation's. it's a delicate change. >> real estate investors might be happy with this. they might back away bit. >> i think they will be happy for that reason. they will be able to weigh in as they did before. >> i read the new yorker for the last 24 hours, and rebecca made a good point. it was good about the
psychological shift that any monarch estimate. he's charles. he's king charles the third. >> was a chelsea all those years ago? >> yes. royal to royal. they were able to have a different conversation. >> amazing. >> i love your pet projects. i learned the back story. he lived in chelsea and walked past. there was a big conversation. >> i did a phd at oxford, and it was being built in front while in college. it was done in all of the old-style, but being built in 19 30 or something. as i watch the building go up, a person across the top of the gaggle of people was prince charles. he was being shown around. >> measured. imagine that. it was the old tilting in the keeping, and it worked building -- worked beautifully. >> we can see the winning --
king doing that. thank you. thank you so much. a distinguished fellow at chatham house. quite a bit of flavor. >> this is an insert of guy. -- this is unassertive guy. he will make a shift. he understands the weight of the throne. >> one of the articles i read, coming over, is that the queen was never formally interviewed ever. there was conversation like you and i have, but she was never interviewed. >> are you sure the conversations with the ones we have? >> live from london, with tom keene, i'm jonathan ferro. this is bloomberg.
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>> the nation is in morning. after losing the longest reigning monarch, queen was with the second. they will proclaim the king dating back 100 years. 73, as he purred repeatedly over the last day or so. he becomes the oldest person to a the throne in british history. with tom keene and lisa abramowicz, i'm jonathan ferro. a lot to do over the next 10 days. have to work through 10 days of
mourning in the country. think about the future of this country. in a very divided world. >> as mentioned, the moment here, the shock of seeing liz truss with a hugely diverse original cabinet, being greeted by the queen, literally, in her final hours. if fragile 96 years old. the backdrop is the cold world of bloomberg, saying it is sterling and it is a drop of crisis there are other crises in the country that they will endure, but it is as if the script was made of crises. >> we talked a couple of times with guy johnson this morning. can you walk us through what the next 10 days will look like in this country? >> there will be a lot of ceremony. i walked past the artillery forming up on the rope. with the guards headquarters, they are making their way to
hyde park corner. they will mark the queen's death with a salute. a gunshot for every year that she range. it will continue from there. we will see a series of ritualistic events taking over that will mark the transition of power from queen elizabeth to king charles the third. we will see a meeting of the prime minister and the new king, and we will see a series of readings at the various councils that are going to run for the next 10 days. ultimately, this is run by the norfolk red they have always run the process of a funeral of a monarch. it is a very ritualistic process that will take place, but behind the scenes, there will be a series of events that is deferred. there is a hiatus in government. ultimately, this is a question we are discussing it big
questions need answering. what will happen with the physical package and rates. do we know whether the bank of england will have a meeting? there's information coming out. we will get a clearer picture. >> the tone of king charles the third's speech. it is 6 p.m. in london, and 1:00 p.m. in york. what should we listen for in that speech? >> i thing we should expect continuity. he is standing on the shoulder of a giant. his mother, queen elizabeth. she earned the authority that she had. she earns the respect that she has. you will be aware of that. this is by birth, but you have to earn the respect she built up. this doesn't happen if you are not able to deliver upon that. he will be aware of that. i wouldn't expect fireworks. i wouldn't expect surprises.
he is trying to sound calm with a note of continuity. we talked about that in the last hour. we heard a lot about this. there is a word for it. we are coming out of a. of turbulence, and we have a death of a monarch. we need to stabilize the situation. that will be the tone of the speech. >> is a delicate moment because of what you say. some of the issues facing the nation need to be addressed. this comes as they announced one of the biggest packages ever in the united kingdom's history. we talked about the process of what happens over the next 10 days. is parliament in action? is there governance in their, hashing out these significant plans that were laid out? >> in theory, it stops. the parliamentary process stops. there is a process we need to go through. a swearing of allegiance or
wreck and of parliaments. all of that will take place. there will be a sitting tomorrow for senior mps. that process will continue. parliament has been recalled, and it is here. it is in this process. in answer to your question, are we going to learn the details of this package? are we going to learn how it is paid for, will we understand what is happening in its response. i suspect not. this is a hiatus in the process. this is a delay in the process. these are details that the markets want. they want to hear about this. they want to know of rates will go up. if so, how much smart will we have a meeting with the bank of england to pay for this package? how will they respond to that? how will it be paid for in terms of the management. these are huge numbers. we are going to see a delay in answering questions.
>> thank you. guy johnson is outside of buckingham palace. we will catch up with him on tv and radio. joining us now is the former mp and visiting professor in the london school of economics. fantastic to happy with us. >> thank you. >> we will talk about change and what what will change. a new monarch is on the throne. what will change for you? >> i was privileged to meet with her majesty, and i understand that i was close. there were reasons why the country has such respect and affection for her. at this moment, on the one hand, it is very predictive. we knew this was going to happen, but it is also momentous, you have a generation of people who have lived their whole life at this age. for a politician, retired
politician, i think the significance was that although we had great change in turbulence with changes over time, the monarchy was a bedrock of continuity and stability throughout. it remains an underlying strength of the country. it rests on the fact that it is a constitutional monarchy, and is a political world you will be important that the new king is seen by the world and the country as a nonclinical figure. >> i think it's important to speak to you here. i love to do it in a two hour conversation. if you look at your party history as a kid. then, you find that you were the chief economist for the dutch outcome as well. you have a backdrop of an emergency moment for your united
kingdom. how does charles the third provide support to a prime minister? >> i think given the way in which this works, there are very few republicans in britain, but it is respectfully a boundary of politics and the head of state role. king charles is in a normatively difficult job. he has been auditioning for 50 years. he could've stepped into the monarch role at any time. it is requiring extraordinary self to post -- discipline from them. it is a difficult role. he is now 73 years old. he has inherited this responsibility. i think one of the things he will be mindful of, bearing in mind the enormous respect for his mother, who is scrupulously
nonpolitical through her rain. he has strayed into the political world as recently, and he will, in order to maintain the solemnity of the monarchy, and being very careful, not to go. >> is he a democrat? >> i don't know. i met him a few times, and i like what he did, and he was generally socially concerned. i absolutely have no idea about his politics. >> is trying to cause some trouble. >> this is a delicate moment. >> if he was a politic or he didn't tell me. >> we are dovetailing the deaths of monarchs who really represent the united kingdom for so many years. we drove through steamboats and smartphone. we are here on the precipice of a massive fiscal package without the unity required to give
confidence about how it will be executed. how effectively it will be managed with respect to the fiscal profile of this nation. how are you watching this is a warmer member of parliament and the deliberations that have been proposed. >> i'm surprised at the linkage that's being made with this economic moment. i think they are wholly separate. certainly, the new king will want to have absolutely nothing to do with the controversy around the physical package. his role is to provide a phrase that you've been using. continuity. stability. it is nonpolitical. that is a job. it is not to take up a position on these economic decisions. that will happen, anyways. the big change in treasury will be the sacking of the secretary. that is the big event from the economic point of view.
the planning will proceed. maybe a slight hiatus in the announcement, but it will not disturb the policy. >> things will pause. that is for the faint of them than it has been rescheduled to the 22nd of september. i understand that is a one-week delay for the bank of england it the first thing you asked this morning, we landed, if we will get a tank decision next week. i said i don't know. we will see. here we are. it is delayed by one week. >> whether this gives us certainty, that will be interesting to see. more concretely with the european union, as well as from the team over in parliament. >> it's been set. things will continue, but now they pause. we see that with the bank of anger. we see a host of events scheduled to take place over the next 10 days. >> my take away from this is in a very different moment from
1963. i have the clearest memories of how america paused for the funeral of president kennedy. it is different from the premier league. now with the bank bingen, who is going to push against those institutions? >> >> thank you for being with us. >> thank you very much. we appreciate your time. very much. the bank of england decision will be rescheduled for september 15 pretty will now get that on september 22. the bank of england decision was widely anticipated. perhaps, it gives them an extra week to work out what the problem is. it's a very different outlook for the economy. based on the intervention, to do something about energy. >> andrew is not an admirable spot, given the balance sheet. what you do with that, given the credit risk at >> and 24 hours, after the fed raises 125 basis points. >> is the day after.
>> queen notes with the second has been a wise and encouraging god. always watching the best or our nation. creating each change with understanding, good grace, and an abiding faith in the australian judgment. from her first trip here, it was clear that her majesty had a special place in our hearts. we were in hers. >> tributes are pouring in from heads of state around the world. that was the australian prime minister. live from london this morning, good morning. good afternoon. alongside tom keene, i'm
checking on the markets. 1218 london. things look like this. the s&p 500, with a 10th of 1%. >> don't play with the markets today. i would say, a 22 handle on the vix, and we are back to 4000, s&p 500, and it was you who's and the views at deutsche bank the other day. the spread of diversity, even from one strategists. >> come on. we need to get here. let's get on. the difference between recession and no recession cannot be the s&p at 3000 and the s&p of $47. tom: that's not the way were doing it. seriously, i think the uncertainty is extraordinary, and that means you have sarah hunt there in the moment it it really quite important. jonathan: where's the
intervention? lisa: deeming monetary intervention or tom and john intervention? i don't want to stand between you. carry on. tom: we have a dollar break. that is the news item. jonathan: a euro pop. we'll have to see where that goes. we welcome you all from london. lisa, john, and myself. we are here for the next 10 days, and will be an extraordinary ceremony at of course, many, i have to be honest, i presume dr. biden will attend. we can presume that. jonathan: heads of state from all around the world will fly here. tom: that will evolve with leadership. sarah hunt joins us. a chief market strategist. we continue to consider the markets. i usually don't call market strategy with you.
i'm much more interested in or folio dynamics, but i believe we had a june rally. is this a redux of what we lived in june? >> let me say, from america, we mourn the passing of the queen. she has been the queen for my entire lifetime, and it was a shock, so getting back to monetary policy, i'm not sure if it is the reject from june. but we were going to do a mini version of that. it has come down, but i look at what is going on with energy across the globe, and i have to say, it is hard to say that were don with that high price, and how will affect people. i think right now, we have relief from the dollar because the rates have been height, and that swaps out the policy a little bit, so it gives help to
the equity markets. i'm not sure if it is a full redux. jonathan: can you build on something you said about energy? are you saying we don't realize the consequences of the places were now. are you saying it is going to get worse? >>, long turn -- i am a long-term energy person. we use the forecast to see what prices are going to do, and if we don't have a severe winter, and a mild winter, that will help a lot, but i think there is a lot of usher, and it is unclear how that will be alleviated. there is a program in the united kingdom announced yesterday, for how to fix that for consumers, but that will not fix things for the companies with prices, and how that will look overall. i think there is still a lot of uncertainty, and the idea that we are sitting here in september when it is fairly minor, that is a little premature. lisa: we are talking about liz truss and her plan to bring down
energy costs for households and how she did not include a windfall tax. how does the lack of inclusion in the tax, the opposition in places in the united states as well, feed into the bullish stance on energy companies? >> i think there is never any relief. it is a little bit of an argument to make. there are circumstances we are under, and taking it off the table entirely doesn't help in a situation because you are trying to find funds for the release to what they are doing for households and businesses, and they will have the same issue. we have seen a lot of complaining from businesses. it is skyrocketing -- skyrocketing, so in the industrial problems, as well as consumer problems, they have to pay for that. it becomes a question, and a lot of the policies that take years to get to where we are, they are
difficult to reverse. it is difficult to see a situation resolving itself in an easy manner, except that you have some demands on the front because of china, but in general, we are talking about conservation, but it doesn't have to be the malaise of the 70's. it can be part of the conversation, and that seems to be not part of the package, as well. jonathan: thank you. words on the energy situation. lisa, there is a liability that we talked about some eight times. you can't come up with the number for how much it will cost because it is uncapped liability. no one can forecast the price of gas. no one can get in the mind of a dictator in russia, and what it would do to get supplies. or, how europeans are going to respond to it if it gets worse from here. it is not just the war. it is the response to that war. it is taken us to this place. with that in mind, the stance of
the windfall tax is based on where we are now. if you tell me down the road for next year, energy prices and gas places -- prices will explode, the government has to cover the difference. fatter margins for the energy companies, they are on the hook that. they get bigger and bigger. all of this depends on what happens for the gas price. where we are, they're telling us there is no windfall tax. if there is another 30% rally in the gas, do you think that holds? we don't know the answer to that. lisa: it becomes untenable. we can say that with some certainty. if energy companies are making bank and not investing as was the plan and the opposition to the windfall tax, if they are not investing in becoming independent by what -- 2030? jonathan: it might become untenable in the short term. it could become infeasible, and they will visit that, but it is
interesting to see where the emphasis is, even as they raise money with some investors. jonathan: high yield? we see that over the last month. lisa: they may have to intervene on some level. , particularly on the bond market. we will see that through much of 2022. a global fixed income strategy. we will be joined shortly with the equity market. we are counting down to the opening bell. equity futures are up. that's not against the law in london. i'm pretty sure. that is against the law. there are rules.
much more of this. daughter weakness snapping back in after a charge. tom: the end of next week toward the queens funeral, we will have a balance between the surveillance world and the worldwide of morning. it is hard to go from dollar-yen. jonathan: the events, the sequencing that we expect to happen next week. the bank of england. starling at 1.5080. much-anticipated decision expected. they will now delay that decision to september 22. a shift in the schedule but ultimately some big decisions need to be made. tom: one day after the fed meeting that is a huge deal. jonathan: can you imagine one
month? 75 basis points from the ecb. 75 basis points from the federal reserve. perhaps a day later, 75 basis points from the bank of england. massive intervention from the state to cap energy bills. i wonder what that means for the outlook for inflation over the next couple of years, interest rates? tom: it goes away from price change. this has been a year where theory does not work. marilyn watson joins us now, had fixed income strategy at blackrock. which rock do i hide under right now? is a bond portfolio is simple solution to shortened duration? >> there are a lot of moving parts at the moment.
we are seeing a lot of volatility in the markets at the moment. you hit the nail on the head. maybe you find safety in the markets. the shift that we see in terms of yields, spreads, we see more attractive carry in the market. u.s. duration, rates at the front end. you are looking at the front and in terms of quality carry. we are expecting to see continued volatility going forward over the next few months and we have inflation growing high in the u.s., eurozone. tom: on a nonlinear basis, the
path from under 2% on the 10-year yield in march, if we break out where many expect to go, 3.5, 3.9% 10-year yield, how does that change your world? marilyn: it does not change it that significantly. we along with many investors are still cautious about when the peak might be in rates. we expect it to be somewhere around 4%. looking at the path now, if you see a spread of where it might be, we are expecting volatility.
we have money on the sidelines in terms of cash. we expect to see a lot of opportunities. looking at the market, there is tightening going on as the fed is reducing its balance sheet, as rates continue to rise in the u.s. and elsewhere, we can use this volatility to take advantage. lisa: let's talk about some of the guys that you use when you're looking for opportunity at a time when we have inflation that may come down to 8.1% in the eurozone region, 2.8% several years from now. this is the baseline from the ecb. same talks from the federal reserve. how do you factor inflation into your forecast? is that the reason you are underweight duration or is the physical response what has your attention? marilyn: both.
the fiscal responses are going to play into inflation going forward, potentially could make the job of central banks harder. inflation does play a key role in terms of central bank monetary policy, the yield going forward. it is something that we pay attention to. in the u.s., we have data coming out with inflation, cpi, ppi, and the fed will be paying close attention to those. they will be aggressive trying to get inflation back down toward the target.
central banks are also concerned about credit. they don't want investors to be anchored in high inflation. it will be important to see the credibility of central banks and bring the central right down. lisa: when you talk about the idea of credibility, the ecb is not projecting a recession, even as they get recession down to a time when even the ceo of deutsche bank as saying a recession is all but inevitable in europe's biggest economy. what does that to for their credibility, that we are not hearing the recession calls from the central bank to a wall street, the rest of europe? they are seeing a different picture. marilyn: in terms of the credibility, the hawkish stance they took yesterday in terms of raising rates by 75 basis
points, announcing they will continue on an aggressive path. they referenced they could go above range. in terms of the rhetoric and the comments they made yesterday, they were hawkish. but the growth forecast, especially for this year, was higher than expected. next year still looks positive albeit lower in terms of gdp. there is so much uncertainty out there. i think there is a lag in the numbers come through for the eurozone. we have yet to see the impacts into the winter, energy prices, that will have a potentially negative impact on gdp. i think that is the difficult thing. if you had a chart, it would be
very wide in terms of what the ecb is projecting. that middle number, aiming for a positive number. the risk of uncertainty is very high at the moment. jonathan: marilyn watson, thank you. but now we are getting tributes to the late queen in parliament. let's listen. >> i remember more than 10 years ago after the opening ceremony of the london olympics when i told her that the leader of a friendly middle eastern country seemed actually to believe that she had jumped out of a helicopter in a pink dress and parachuted into the stadium. i remember her equal pleasure on being told just a few weeks ago that she had been a smash it in
her performance with paddington bear. and perhaps more importantly, she knew how to keep us going when times were toughest. in 1940, when this country and this democracy faced the real possibility of extinction, she gave a broadcast that was intended to reassure the children of britain. she said then, we know, everyone of us, in the end, all will be well. she was right. and she was right again in the darkest days of the covid pandemic when she came on our screens and told us that we would meet again, and we did. i know i speak for other prime minister's, x prime ministers, when i say that she helped to comfort and guide us, as well as the nation.
she had the patience and the sense of history to see that troubles come and go and that disasters are seldom as bad as they seem. and it was that endowment ability, that humor, that work ethic, that sense of history which together made her elizabeth the great. when i called her that, i should add one final quality, which was her humility. her tupperware, refusing to be grand. unlike politicians, with our armor plated convoys, she drove herself in her own car without detectives or bodyguards, often at alarming speeds over the scottish landscape at the
amazement of the tourists we encountered. and it is that indomitable spirit with which she created the modern constitutional monarchy, and institution so strong and so happy and so well understood, not just in this country but in the commonwealth and around the world, that this succession has already seamlessly taken place, and she would have regarded her own highest achievement that her son, charles iii, will clearly follow her extraordinary standards of duty and service. and the fact that today we can say with such confidence, god save the king, is a tribute to him, but above all to elizabeth great. jonathan: the former prime minister, boris johnson, paying tribute to queen elizabeth ii.
yesterday, a story passed around about the queen and her driving, something that boris is beaten to. driving a member of the saudi royal family and her land rover around the estate. at the time come it was illegal for a female to drive in saudi arabia. she is in the driver's seat and the member of the royal family is concerned. what does she do, pow, as fast as she can. the guy in the passenger seat got scared. she had a reputation for driving those cars fast. tom: an iconic photo, and the young lady was a mechanic, except it was not a photo op. it was a real skill. she would not drop the screwdriver down the chrysler engine, something that i did. lisa: she was not the stereotype of simply a dainty queen who
didn't want to get her hands dirty. i love the image of her with her horses and dogs, their paws up on her, and she was absolutely happy. jonathan: joining us now from brussels is our european correspondent maria tadeo. as we said repeatedly today, europe has work to do even if a lot of it has to stop for a while. talk about the work being done in brussels today. maria: there is a meeting which is still going on. i have been here since 8:00, and this is still going on four hours. this meeting was called a week ago when it felt the energy market in europe was about to break. the goal of the meeting is to stabilize the market, bring down prices. we know european energy ministers have been talking about a cap on russian energy gas.
what i've been hearing is there is no deal, no agreement. i have a contact who told me that if i were you i would tone down the expectations. it is a long road ahead. the issue is there is an active debate if you should put a price cap on all european gas or just russian gas? overall, strip away the jargon, it shows europe as a big problem and they don't have a solution. tom: you know what the experts tell the politicians. do the economists agree that a price cap is efficacious? maria: it depends on who you ask. at this point you see a clash between the economics and the politics. the politicians worry about potential social unrest in the winter.
they have to sell this to their populations. they have to show the effort, the bills that they paid is going to something, helping ukraine, freedom, european values. different countries have a different assessment. at this stage, these are 27 different countries. we talked about the european energy market, but you know there is not a european energy market, there are 27 different countries with 27 different energy mixes. bringing them together with a solution that fits all is frankly very difficult. lisa: the fact that there is not a european energy crisis but specifically a germany, italy, france crisis, is this an energy challenge for most nations and a german energy crisis? is this what we are talking about? maria: germany is the biggest economy, it would be incredibly
naive to think that the euro area can go by without the biggest economy and export machine going into recession. i know we sometimes talk about the revenge of the southern european countries. they do not want germany to go into recession because this won't have ripple effects on everyone -- this would have ripple effects on everyone else. when you look at germany, this is a gas crisis. when you look at the french, this is a nuclear, electricity crisis. you are looking at a market that is being hit from all sides by different regions. finding a solution that works for all is incredibly hard. on top of that, you need to be able to sell it politically at home. jonathan: maria, thank you. i have to say, where she is in belgium, they have been most upfront about the risks on the table, the duration, how long this could go on for, and also
the prospect of a sudden stop to the economy if this energy crisis gets a lot worse. we are hearing that language from the belgians. i'm not sure that we are hearing it elsewhere in the same way. tom: the idea of what do we do forward on energy in europe. when you look at rotterdam co al, that is something that no one expected. jonathan: did your flight go over rotterdam? i mean, once you set it. tom: i looked out the window and said is that gatwick? i was looking at rotterdam because of rotterdam coal.
if you look at all of these different stories, none of this was a discussion. lisa: i am just going to pivot completely. i am going to take this in a different direction. talking about the different crises. what are the different solutions, are they market-based? gasoline in the united states has fallen for 86 consecutive days. is it because of demand destruction that will lead to lower energy prices naturally, or is this due to an artificiality in terms of opening up the strategic petroleum reserve? tom: one of our favorite guests is darwei king, particular knowledge on commodities. what is the story right now in commodities that you do not hear
in the media? what is the back story for the fourth quarter of 2022? darwei: energy is a big part of the commodity market. what is going on in europe today is really the result of the fact that there is less gas available now. russian gas is not being delivered to europe. we should focus more not just on the immediate situation but also what happens after this winter. in some ways europe has been lucky this year. the drought conditions from 2021 did not repeat itself in asia, so there is more available liquid natural gas for europe because demand went down earlier in the summer. the covid-19 situation in china reduced demand.
we can actually see oil demand in china declining as a result. that is very helpful for europe. i am not sure that it will repeat again next year. tom: jon mentioned this. we don't really know the winter that is coming in europe. how naive are we about what cold actually does to your world? darwei: it would cause the energy price to spike if demand suddenly increases because of the weather condition. this limited amount of switching that can be available to europe at this time, we anticipate coal burning power plants to be used this winter. the only way for europe to get through that is to reduce demand
somehow, reduce activity, which would mean direct impacts to the economy. lisa: i remember when we talked with you earlier this year, you said you could see crude climbing above $150 a barrel or beyond in the wake of some of the concerns about supply. we have now had a supply cut on the prospect of weaker demand. do you stand by some of those earlier forecasts, or do you think the likelihood of recession in a number of different regions has completely changed the landscape? darwei: a couple things to realize now compared to what i said earlier. in early march it was not clear how much of the oil from russia could be exported. now we know much less destruction. expecting 2.5 million barrels a
day could be disrupted. that did not occur. in fact, russia has been able to export most of the oil it produces. less than 900,000 barrels a day disrupted. the covid situation in china has been severe in the sense of government lockdowns. it has been very thorough and enduring. that has caused demand in china to go down. prices outside of china have also curved demand. we are seeing demand declined year-over-year from the gasoline consumption perspective, and that is significant. the demand change, the ability for russia to continue to export, resulted in the price movement that we see. spr is helping right now. at some point, that will reverse
out the effect. jonathan: one of our favorites. darwei kung, thank you. javier blas, whether you agree with it or not, he raises some important questions. truss' policy falls short. identify the cost in the way to pay for it. no. that was on bloomberg opinion this morning. tom: it is supply-side economics but i will not go into it. you have to provide market incentives. two his point, where are the market incentives of a fiscal or hydrocarbon policy that directly helps the people that need it most? we have not heard that yet. jonathan: let's take a
multifamily who have just had their energy bills cap by the government. they can go on consuming as much as they like knowing that even if prices go higher, the government will pay for it. tom: i was hoping i missed something. jonathan: to really calibrate this, the view that came up repeatedly, if you are going to do this, surely, you should make it more targeted. and if not, do something about containing demand. lisa: that is why it is so interesting that darwei kung is coming out saying the demand destruction was more than expected. we heard from ed morse, this is the market doing its job, some people restraining their use. at what point do you end up creating a spiral? tom: i am not want to do a look
back but hear the call is so important, will kennedy and his team, need to do a look back on the cause on people like ed morse who nailed this call. jonathan: what he had to say to us on the last week on energy prices in europe, how many years it would take to get them back to where they were in 2021. lisa: it will be a difficult and very long project. jonathan: decent rally on s&p 500 futures.
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opportunity to meet her before she passed and she was an incredibly graceful woman. >> her majesty was a rare and reassuring constant amidst rapid change. >> she was the very spirit of great written, and that spirit will endure. >> this is bloomberg surveillance. jonathan: the tributes pour in as a nation mourns its longest reigning monarch, queen elizabeth ii. good afternoon, this is bloomberg surveillance. being conducted right now, a 90-gun salute, 96-gun salute. tom: all across the united kingdom i'm sure there will be imagery to show the span of the united kingdom, the geography,
the honor of these military forces saluting their queen. the attachment of prince philip to the military, navy is noted. also the children and grandchildren of queen elizabeth. i would suggest this is symbolism that goes beyond other moments we have seen in british history. jonathan: the first day of 10 days of mourning. lisa: the consulates also happening in wales, scotland, northern ireland. this really raises the theme that we have heard about this morning, that queen elizabeth was a uniter, united the united kingdom in a way that few others have. jonathan: also a confirmation that president joe biden will attend the queen's funeral. getting that report from nbc. tom: that will be extraordinary.
the images for bloomberg radio, wonderful images with london bridge in the background on the thames. i believe we also saw the tower of london. a huge number of images. jonathan: amazing to see a country that is repaired for this to happen and then feel totally surprised and unprepared for it. one friend reached out to me yesterday and said this figurehead insured national identity. for me, personally, that is something that you only come to appreciate later in life. particularly, that is punctuated with her passing in the last 24 hours. tom: my shock, the telegraph, seeing at the top where they announced king charles iii. to see that shocked me.
lisa: from the u.s. view, i was talking to my father, who remembers the day that she was coordinated. they have to ship film from the united kingdom over to the united states to play it on the reels. giving you a sense of just what the reach was, the importance even back then. jonathan: we can get you team coverage right now. guy johnson and annmarie hordern. we have gone back and forth on this a lot together, anticipating a moment that the country never thought would come is here. walk us through what is on the schedule, what is off the schedule. guy: what is on the schedule is a series of ceremonial events. i can hear the guns from here, the ceremonial armory firing
those guns, 96 shots fired marking the lifespan of queen elizabeth ii. we will see a lot of ceremony like that. we will get details over the next day or so about the funeral that will take place in 10 days time. that will be a national holiday, market holiday if it falls on a weekday. in the meantime, they will be a series of ceremonial events that will take place. formally putting forward king charles as the monarch. he is already the monarch but that will formalize the process. we will see parliament return, swear allegiance to the king. they will effectively have a vote making the king, the king. parliament's recognition of that. the queen will go to edinburgh,
ultimately down here to london and will lie in rest. the public can come and pay their respects to her. a series of events will take place, transition of power ultimately. this evening we will hear from king charles iii. that speech will be delivered at 6:00 london time. tom: do we know where the family is? beneath king charles, the brothers, sisters, children, grandchildren. do we know where they are? guy: they are all migrating south from the highland home of the royal family in bal moral. they gathered there. ultimately they will come here to buckingham palace, quite literally the changing of the guard. they will come back down here, charles will start the process of his role within this
incredibly -- a lot of history involved in that process. he is the figure here, he is in charge of all of this would he will meet with the nor folks, he will decide how this will go, details of the funeral. he will come back now and make those decisions. lisa: and maria, from the u.s. perspective, we learned president biden will attend the queen's funeral. he talked fondly about his experiences with her. we know that she had quite the relationship also with the obama family, 14 presidents that she was the queen through. i wonder what this means in terms of the u.s.-u.k. relationship, how that has been crystallized over the years,
considered a nonpolitical job but also is one of the key ambassadorial roles. annmarie: queen elizabeth ii was the constant in these 14 presidential administration that she had a relationship with. the only individual she did not personally meet was lyndon b. johnson. it started when she was a princess, at blair house, under truman, this relationship between queen elizabeth ii and these presidents started. you heard an outpouring, whether it was senator schumer, saying she was the first british monarch to give a statement to a joint session of congress. president biden saw her last summer at windsor castle with joe biden. just an outpouring of love. this sums it up in the president's statement yesterday. she deepened that the alliance
between the united kingdom and united states. she helped make our relationship special. getting to your point, this special relationship, this was something that all presidents found fondness with the queen, comes on the backdrop of a difficult moment politically and economically for the united kingdom with this new prime minister being ushered in and what she is facing, double-digit inflation, skyhigh energy bills. jonathan: new leadership in more ways than one. annmarie, just to wrap things up, have you got a decent idea of who from washington is attending the funeral? annmarie: the president said yesterday to a reporter that yes he will be going. it will be him and the first lady. secretary of state antony blinken was just in brussels yesterday.
he is already in brussels. i imagine he will be attending. maybe the vice president. we don't know but the u.s. will want to send a strong message at this moment. jonathan: thank you. as guy pointed out moments ago, a televised address from the king at 6:00 local time, 1:00 eastern time. king charles will be addressing the nation later on. tom: and the world. jonathan: the commonwealth, sure. tom: as we heard, there is a terrific mystery here, i mentioned the new yorker article. there is a mystery here of who this new king charles iii will be. jonathan: interesting what robin had to say, how assertive king charles was on certain issues. perhaps how, as king, he will
have to take a step back and become a different kind of person. lisa: more of a diplomat, not putting forward his own agenda, but pushing forward the agenda of others. what i am concerned to see -- interested to see is the role of william. prince charles is the oldest person to ascend to the monarchy. what will his role be? where is his popularity in this? jonathan: do you think chairman powell would like to schedule an address -- just kidding, trying to make a joke. tom: we should explain to the audience on radio. lisa, jon, and i, a huge part of our team joining us in london for these last few days. there is a bit of sleep deprivation going on.
we were going to see manchester city- tott. lisa: don't give us a, nobody could to. [laughter] jonathan: coming up, bill dudley, on chairman powell's questionable scheduling. from new york and london and worldwide, this is bloomberg. ♪ >> keeping you up to date with news from around the world, with the first word, i am lisa mateo. within hours, charles will be proclaimed king in a ceremony dating back hundreds of years. he is succeeding his mother who was the country's longest reigning monarch when she died thursday at the age of 96. her death set off a 10-day mourning period which will end with a funeral at westminster abbey.
european ministers will discuss first steps on how to prevent russia's cut off of energy supplies, which could lead to rationing. the eu is considering a series of plans to tame runaway energy prices and keep the lights on. the king is raising the states for any military confrontation with the u.s. and its allies. he expanded the circumstances under which north korea would launch a nuclear strike. north korea listed fiveconditions of using weapons of mass destruction . one of them is it king's leadership is questioned. the u.s. justice department will appeal a judge's order to appoint a special master to review documents seized from donald trump's home. they also want to continue using the classified materials as part of an ongoing criminal investigation. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.
>> think what she gave. she showed the world not just how to reign over a people, she shown the world how to give, how to live, and how to serve. as we look at that best arc of service, the duration is almost impossible to take in. jonathan: a beautiful tribute in parliament from former prime minister boris johnson to britain's longest-reigning monarch. about one hour and 12 minutes away from the opening bell in
new york city. equity futures bouncing back the last couple of days. 30 points on the s&p 500. yields down by negative four basis points on the 10-year. dollar weakness. euro-dollar positive by almost half of 1%. tom: a more accommodative, less restrictive state of financial conditions. that is not what chairman powell wants. i would suggest it is something worth marching into the weekend and on monday open. jonathan: do you know who we have to call? 1-800-kashkari. tom: is he speaking saturday? we are thrilled that you are with us on radio and television.
as we begin our 10 days of mourning, it is great to talk to john micklethwait. i want to go to a what if. we do not know the schedule going forward. the first time i walked into it, i fell apart, westminster hall, not westminster abbey, but the small area next to it. somebody said we have to save westminster hall, let the commons burn. john: also the place, i think, where charles the first was before he was executed. it is very related to the monarchy in british history.
strangely, in this case, your sense of history is correct, there is something very historical about this moment. if you look at the inheritance from charles' point of view, he is coming into a kingdom that is in danger of breaking up, coming into a kingdom that has poor relations with its ancestral other have in things like germany, france, has a brand-new chancellor in liz truss. it is a not easy inheritance. in terms of history, from the monarchy point of view, this is an unusually difficult time, notwithstanding the coming together happening at the moment. jonathan: how do you think he will reposition the monarchy?
john: i think it is a mixture of trying to keep the inherent strength his mother had, the ability to bring people together. we were just talking about it, you could come from wildly different countries, races, genders, everything, and people saw this woman as center of what this country was about. in terms of international influence, she was about as strong as soft power could get. even rulers in asia, a couple of weeks ago, they are still fascinated by this woman who did meet everybody. it is this kind of weapon of soft power. she was extraordinarily. now you have a new person coming in. the challenge for charles is perhaps to step back a little bit in his advocacy.
he is no longer the heir to the throne. he is the person in the middle of the english constitution. he selects who the prime minister can be. that means you have to be a more objective figure. how do you update the monarchy quietly without losing that sense of power? lisa: when you talk about updating the monarchy, one thing that queen elizabeth dead, she became an icon -- did, she became an icon. how much can a new king, king charles iii, come out and represent something cultural? if not, what relevancy will this monarchy have? john: i was thinking while you were talking, when we grew up, the world was massively different.
you are used to seeing the monarch's head on the stamp. we don't see that much anymore. difficult to see it on and email. i think it is a question of rebranding. when you looked at the jubilee celebrations recently, in which charles was right in the middle, there were some things that worked, great images from buckingham palace, other things that felt like your granddad trying to dance. 11 bit of that. the other thing about the queen, she was good at letting the junior royals go off and try things. jonathan: you have to explain this now. john: a game show that appeared on television.
the more i think about it, it is harder to defend beyond any audience. tom: you royals had a game show? jonathan: they went on a game show. john: it was like a guest version for charity and it didn't work well. i cannot remember all the details, so please don't -- jonathan: there have been times in the history of this royal family, even with queen elizabeth on the throne, where they have had difficulty connecting with the british people. do you think king charles will have the difficulty? i think of a particular generation enamored with princess diana who are uncomfortable with camilla taking the title of queen. john: my personal view is that has moved on. my sense of that has moved on. charles, notwithstanding certain netflix series, films, has
pushed himself back into the middle, is now a more respected figure than he was then. the interesting point is, the thing that determines a monarch, events, dear boy. nobody could have guessed what would happen to elizabeth. nobody can guess what will happen to charles. we know he faces the possibility of things like scotland and northern ireland may be leaving. tom: we are here for 10 days, do you have a restaurant that you like? jonathan: did you mention "the crown" on netflix?
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u.k. a couple of updates so far today. king charles addressing the nation at 6:00 u.k. time . we went looking ahead to a bank of england rate decision next week. we have learned next week they will postpone that decision one week. we look get that decision on september 22. a one-week delay from the bank of england. tom: an important point, it is very fluid, not just the mourning for the queen but the news flow into the weekend. i would start with the war in ukraine. it is good that we are in london given the european star that is out there. jonathan: inevitably, no surprise to anybody, every front page of the newspapers in this country is on the queen.
if the queen had not died yesterday, we could all predict what would be on the front page this morning. it would have been on that massive fiscal intervention by the prime minister. lisa: and the potential consequence for bonds and currency, credibility of a nation right now struggling to find the right policy response for something very difficult to pinpoint, difficult to solve. tom: we will see if the early days of truss are delayed. jonathan: i think they have been already. tom: let us continue right now with an important essay. william dudley joins us now, former president of the new york fed. bill dudley puts to rest one of the great concerns, the doom and gloom crowd who says we are going to have some form of paper crisis, liquidity crisis.
this is the wheelhouse of the new york fed. why do the adults at the new york fed, including you, disagree with the doom and gloom crew? bill: they are very different this time. they have the experience of last time to go by. last time they were surprised by the demand from banks for reserves, so they drove the rights to low. that is why we had the spike in repo rates in september 2019. second, they put in place a standing repo facility, slightly above market rates. if repo rates were to spike up, banks would turn to the fed standing repo facility. it would be a little spike at this time. lastly, the fed will be tapering how the balance sheet shrinks as we get deeper into this process. at first we are running up to
$60 billion in treasuries, 80 billion dollars in mbs every month. once we get to a lower level, the fed will slow the rate of runoff, and that it will stop before they think we are at that critical point where reserves are too scarce. they will learn from past experience. i don't think they will make them same mistakes this time. tom: have we done this before? the new york that is down in the basement, underneath one of those pizza partners in lower manhattan. have you done an experiment that says this works or are you flying blind? bill: i think you did the experiment last financial crisis, the fed shrunk the balance sheet in 2019, did it a little too much. they will learn from that episode. last time than ever slow the rate of asset runoff, they never stopped the headset runoff prior
to the reserves becoming scarce, and they didn't have a standing repo facility. this time they have belt and suspenders, and last time they didn't have either. lisa: for a problem that won't necessarily repeat itself. where are the belt and suspenders for a dollar getting too strong for the rest of the world to sustain its momentum? bill: the fed follows monetary policy for what is best for the united states. the consequences for the rest of the world is a consequence for the rest of the world. a strong dollar is a consequence of the fed tightening monetary policy. they want the dollar to be relatively firm. a stronger dollar strains economic activity and reduces inflation. it reduces the cost of imports into the united states. the fed is not unhappy with the dollar strength. this is just one aspect of how you tighten financial conditions. lisa: that being said, there has been a lot of discussion about
the confluence of tightening around the world. 75 basis points from the ecb. deutsche bank calling for another 75 basis point hike by the ecb at the next meeting. the federal reserve doubling down on their hockessin -- hawkish message. when do we see this coming together into something that can move markets significantly? bill: what everyone is wondering about, could the central banks collectively overdo it? that is a premature thing to worry about. the federal funds rate in the u.s. is still at 2.3%, well below what you would consider to be neutral in this current inflation environment. let's get to a tight monetary policy setting first before we worry about the fed being too tight or too long, as other central banks may turn out to be. the fed has made clear they need to make the mistake of getting inflation back down to 2%.
they will be tighter for longer than i think people expect. jonathan: you said something -- it is too premature. people are wondering if that conversation becomes more balanced. where do you think that becomes more balanced, where they can say that is a valid concern? the bigger risk is too little, not too much. when do you expect that conversation to be more balanced than it is now? bill: probably the beginning of next year when we see rates at 4% or higher, the labor market starting to lose some of the very strong forward momentum we have seen in payroll and employment growth, as we see the housing sector continue to weaken. the key thing to watch is really the status of the labor market. the u.s. labor market is too
tight to be consistent with 2% inflation. wages at 5% plus are too high. those are the things to focus on, what is happening in the u.s. labor market. lisa: looking forward, i'm wondering what the tea leaves will be. what about the rolloff of the balance sheet? some are talking about the sale of mortgages from the balance sheet, how that can be disruptive. have you heard any more on that in the past couple weeks? bill: i have not. i think they are unlikely to sell mortgages in the near-term, for the simple reason, almost all the mortgages they own are now underwater. the fed already has a problem that their earnings will turn negative as they continue to tighten monetary policy. the return on their assets will be less than the cost of their liabilities. to exacerbate those losses by selling mortgages and booking losses, i don't think that will happen in the near term. jonathan: bill dudley formally
of the new york fed, good friend of the show. some big questions to ask. what did you want to pick up on, coordinated intervention? lisa: he was talking about how it is too early to see everyone coming together for a pause. coordinated intervention to take a pause, how that is not going to happen, because right now the u.s. is benefiting disproportionately from some of these policies. that is why it is interesting, says it is premature. tom: i got at least three emails this week, doing some fancy bloomberg matt, but the bottom line is we are nowhere near what we saw in 1984. jonathan: you know how this show often goes, we have a conversation and then we give
feedback. we were talking about japan and the boj yesterday. i said a few times that if i where the treasury or the federal reserve, my response to the japanese would be simple. if you want to do something about your currency, do something about it. yield curve control. the upper bound is 25 basis points. you are keeping rates unchanged from everyone is hiking. it is obvious to expect a much weaker currency. somebody wrote, and the point they brought was important. what do you think will happen if they abandon yield curve control tomorrow? what would happen to the global bond market? that would be a rapid tightening of financial conditions in a way that would perhaps be disorderly. i thought an important element to think about that we had not thought about. lisa: that is a really good point. the integrity of the financial system, the priority for a lot
of the central banks, over specific moves. tom: the queen consort coming out of the private aircraft of prince charles, i should say, the united kingdom's aircraft. there is prince charles down below as they come back to london. jonathan: king charles iii. it will take a while to get used to that. you said something earlier that will resonate with me. two see it in writing -- to see it in writing. all of a sudden it feels so much more real. tom: my book over the summer is on charles i and ii. it was a shock. jonathan: returning from balmoral. we will hear from him a little bit later. about four hours, 20 minutes
from now. 6:00 local time. lisa: interesting whether he puts forward an agenda or just a unifying, somber address. jonathan: dan juergen will join us, a conversation coming up. from london, this is bloomberg. ♪ lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. in the u.k., it is the end of one era in the beginning of another. two days after queen elizabeth ii died, her son charles will be formally proclaimed king. at 73, he is the oldest person to a seed to the throne in british history. the u.k. has begun a 10-day mourning period that ends with the funeral for the queen. the queen's death has prompted the bank of england to delay their rate decision by one week.
the original date fell in the middle of a national mourning period for the queen. this gives official more time to consider more data. china is stepping up its defenses against covid. while portions of the country remain under lockdown, the government is putting more patricians on internal travel. it is designed to reduce bricks before next week's communist party meeting in beijing. that is when president xi is expected to obtain a third round in office. the trading platform is offering a monthly snapshot of top 100 stocks that its users are holding with the most conviction. robinhood measures conviction by looking at how highly concentrated it is across global portfolios. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg.
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>> she was your queen. to us, she was there queen. two us all, she would be with us forever. we will remember the value she never ceased to embody and promote. the moral fortitude of democracy and freedom. jonathan: a tribute to the late queen elizabeth ii from emmanuel macron, the french president. pictures coming in now of king charles iii touching down from balmoral, now heading to
buckingham palace, way later on this evening in the united kingdom, 6:00 local time, 1:00 eastern, we will have an address from the king to the nation. not just the nation, but the world. tom: president biden, dr. biden are confirmed now to attend the funeral. i hearken back to 1963, my only equivalent to the shock of charles de gaulle and haile selassie of ethiopia standing there at arlington cemetery. i don't mean there is an equivalent there, but i think the enormity of what we may see, to know lee scheduled monday of next week, could be really significant. jonathan: when is that -- waiting for confirmation. tom: this is an honor. we had an extra ordinary first day. we say thank you to our team
working around-the-clock since the death of the queen to bring you voices of perspective. daniel juergen is an s&p global author of a few books on oil, a world in which queen elizabeth was so much a part of. i go back to a conversation you and i had after the death of baroness thatcher, a funeral that you attended with great emotion in london, the politics of thatcher and such. there was a relationship of the commanding heights of british politics always with queen. what will that relationship look like forward with the king? bill: this is a king who was a part of the modern world. i went to school with him in cambridge where he was quite a good student. the queen was connected,
visible, so this will be more forward-looking. charles has carved out a series of issues that are important to him. his regal role will have to be more measured in what he engages in. tom: we spoke with mohamed el-erian earlier this morning, you brought up the linkage that something that the queen and philip wanted, educated children. give us a scope of king charle'' international view. bill: i think he has been very engaged in environmental issues. that has been very much on his agenda. as he travels the world representing britain, being a symbol of the commonwealth, as well, so that feeds into it.
i remember one of our common professors said he was a good student at cambridge, would have gotten some top honors but he ha d some other things that he had to attend to being the prince of wales that would take him away from the classroom. lisa: one that is very relevant at the moment given the pressing issues at hand, but when i look at the book title behind you, "the new map,"'s question of where the commonwealth fits in, how do you see how the alliances are shaping, what will the new commonwealth look like? will it be the united kingdom? there are so many questions around this unity. bill: britain has to cast itself a new role after brexit, closer to the u.s., and a sense be an independent global power. but it is doing so at a time
when the economy is really in trouble. liz truss, the new prime minister, has an interesting job ahead. she has embarked on a thatcher-like program at the beginning. she has made a turn. it really does invoke the woman that was the longest serving woman prime minister, margaret thatcher. lisa: you are an expert in oil and energy. this is at the epicenter of what you were talking about in terms of this thatcher-esque program. is this the right solution? how important is it to target the demand side of things, get things more in balance? bill: demand has to come down. if you can bring it down 50% through -- 15% through voluntary pricing, that can take pressure off. it is striking how volumes are down to 9%, 10%, when it was
40%. once they get the storage built in europe, that takes some of the pressure off in the market. talking to the different governments, they are all having to rush out financial support to consumers to weather this storm that is not well perceived in the u.s., but it is devastating for people's pocketbooks and economy in europe. tom: jonathan ferro has brought up a number of times the failure of germany and their hydrocarbon policy with russia. you are definitive on this. let me cut to the chase and use brutal language. how bad did germany screw up? bill: i think the big mistake, after the end of the cold war, russia is a nuclear power. you have to try to integrate it into the global economy. energy was one of the ways to do it.
the big mistake the germans made, they were confident they could rely just on that. they did not build diversity, so they were overly dependent. shutting down nuclear power, it turns out, was not a good idea. in fact, reactors that were to be shut down at the end of the year, a couple of them, for emergencies, may need to keep operating them. even in japan, they kept operating fukushima. jonathan: dan yergin, thank you very much indeed. i saw somebody choke yesterday on twitter, i will not name check them. they talked about maybe germany needing to adjust, accept some structural reforms, to make sure there is some european solidarity. you can see where i am going with this. it seems to me germany is asking
for european solidarity on this issue when they have made some questionable decisions on energy policy and foreign policy alike on the last couple of decades, and the sacrifices that countries like spain might have to make in the winter, when at the height of the debt crisis, have to take on structural reforms. where was the solidarity 10 years ago? lisa: when you are pointing to israel tension in the european union. it is only good when it is good for us versus something that is more widespread. tom: are we doing another hour? jonathan:
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