kathleen: i am kathleen hays in new york. welcome to "daybreak: asia." investors are way new signs of economic weakness from the u.s. and from china. treasury yields retreating with the dollar. elon musk may seek a lower price after questioning the platform's stats on spam and fake accounts. and shanghai nears a target. could it lead to the easing of covid curbs, with one million still confined to their homes? haidi: will need some resilience from asian markets as we get into the tuesday session. we saw the big fall in u.s. tech in particular and that will be denting sentiment. also seeing the big fall in the agriculture sub index. seeing pressure when it comes to commodities. the biggest gains we saw in food prices in more than two months. wheat is a major story driving that side of the inflation picture. take a look at asx futures. a gain of about 0.2% going to the start of trading. the 10-year yield is holding pretty steady but we are seeing stagflation or a risk -- stagflationary risks. this idea that perhaps yields have hit a peak and there is a rol

kathleen: good evening from bloomberg's world headquarters in new york. i am kathleen hays. our top stories this hour. asian investors face a new month with ongoing fears of central bank tightening. wall street closing out may almost exactly where it darted. his plan to fight price pressures starts with central-bank independence. the ukraine war threatens the opec-plus supply pack. >> let's get you straight to some numbers crossing the bloomberg. the final number ticking a little bit higher. we are also getting that first quarter gdp number a little bit later on today. that is expected to show the slowdown that we saw and the start of these downward pressure of inflationary expectations as well as inflationary pressures. take a look at the aussie dollar we are seeing some momentum trading so far in this session. let's get you straight to bell for a look at how we are shaping up for the rest of the day. >> first trading day of june about to be upon us. slightly higher open. we saw it lose 3%. in terms of dollar strength, we have seen the yen at a two-week low against the gree

kathleen: i will get to that now. national security strategy, you pick a time when it has followed an easy course or pathway across any administration i think it is appropriate to take your time on that strategy and get it right. strategy is something that you live and execute and it should be constantly reviewed and up dated, that is true of the national security strategy and you will see that in the coming months. the statutes from the united states congress is required to be delivered -- delivered in classified form. we have done that with an unclassified summary. we do like to be above and beyond the rule of law, and in the spirit of how we try to operate in the department provide that fuller description, but it is appropriate to wait and see how the nsf is built out, so we make sure it is best nested. roger: let us stick to that thread for a minute. back when bush 42 came into office they rolled out their strategy and of course the president george w. bush ran on a campaign of not doing humanitarian intervention.

i'm kathleen hays. a big leap for central-bank, the feds expected to push 50 basis point rate hikes. haidi: china's latest covid-19 outbreak leads to lockdowns and a decrease in economic activity. kathleen: warren buffett goes on his biggest stock buying spree in at least a decade undeterred by geopolitical turmoil. let's take a look at wall street. it was a bad day. it was a bad week. it was a bad month. stocks nosedived across the board. let's take a look. s&p 500 index, now you are looking at the futures could close down about 3.5%. after that kind of a loss, you see a bit of a rebound. the nasdaq also moving up after losing more than 4% on friday, amazon down 14%. that's its worst quarterly loss in years. it had a negative or not so positive outlook. that's what got investors going on nasdaq, apple, intel, and more. as for the 10-year note, it's about 6.5 basis points, 2.8 9%, after the biggest increase in wages and benefits at the employment cost index on record. we are continuing to see losses. th

kathleen: 25 basis points. inflation has doubled compared to what the bok would be a couple of months ago. however, growth is expected to take a hit. they had lockdowns, they are facing higher prices around the world. it also hurts demands and businesses. so we are expecting the hike. what we are looking at is this jump in inflation, up to its fastest pace in eight years now. that is where we are expecting to see yet another -- they have already done four rate hikes, this is going to top it off. another interesting element here is that they have a new head who was the imf's asia division chief, the director for all of asian research. when he was just going through his hearing spent being confirmed, he was asked a question about 50 basis point rate hikes and he acknowledged that was something they could do . he had to walk that back and said that was just a broad prospect of what might happen. 25 basis points is what everybody expects. haidi: andreaa, how are markets going to take this question mark we are seein

kathleen. kathleen: ok, so i guess we are going to do -- to wrap it up. thank you so much. now, we are going to move on to this question to haidi. gdp. haidi: due out later today, analysts are expecting growth to slow due to flooding, and rising inflationary pressures. our economics reporter joins us now so these numbers are always a bit backwards looking but it does give us a good sense of what sort of economic landscape the new government is dealing with. >> that's right. the treasurer has done a few standups since he was sworn in last week and he has repeatedly talked about the economic challenges that he is facing, fiscal pressure because of high debt and fiscal deficits on the government's balance sheet. there is of course a crisis that they have been talking about because of rising inflation. and falling real wages which means wages are not growing at the same pace as inflation. petrol prices have gone up and food prices have gone up which is likely to exceed consumer spending power. at the same time, home prices are falling. we had house price data this morning which

kathleen: i will get to that now. national security strategy, you pick a time when it has followed an easy course or pathway across any administration i think it is appropriate to take your time on that strategy and get it right. strategy is something that you live and execute and it should be constantly reviewed and up dated, that is true of the national security strategy and you will see that in the coming months. the statutes from the united states congress is required to be delivered -- delivered in classified form. we have done that with an unclassified summary. we do like to be above and beyond the rule of law, and in the spirit of how we try to operate in the department provide that fuller description, but it is appropriate to wait and see how the nsf is built out, so we make sure it is best nested. roger: let us stick to that thread for a minute. back when bush 42 came into office they rolled out their strategy and of course the president george w. bush ran on a campaign of not doing humanitarian intervention.

rishaad: kathleen, good stuff. local economic policy editor kathleen hays. let's get to mark cranfield having a look at all of this. it's going to be keep your dumb talking jay powell here. and if he does get more hawkish, then you might not see the dollar selloff that many people are saying could have been. mark: indeed. it is all about frontloading. that's what we saw here today as well. we expect something similar from the federal reserve. as kathleen was saying, you can see that there are investors already beginning to be concerned that even though we've got nowhere near the peak of interest rates, where thinking about the possibly of a recession may be the next two years. as i said, we will be just as well aware of this as anybody else and they will want to get rates up to a level where it is useful for them, so that they have the ammunition to lower rates quickly. should they need to when they see these headwinds become really severe. and because a big slowdown in the economy. so it is all about frontloading and we could hear the fed say that they are

rishaad: thanks kathleen. kathleen hays, global economics and policy editor. right, let's get over to new york or back to new york i should say. and join vonnie quinn because she's got the first word news. vonnie: thanks rishaad and good morning. president vladimir putin has invoked russia's fight against nazi germany and defending his faltering invasion of ukraine. he posed during the annual victory parade in moscow's red square marking the germans defeat in 1945 pretty he made no major announcements despite speculation he could declare war. he says conflict with ukraine and nato were inevitable. >> nato countries do not want to listen to us and in fact, they had completely different plans. as we have seen today. be openly prepared, the operation and don boss and the inflation including crimea. vonnie: and kyiv, president zelenskyy rejected couldn't's attempt to justify russia's invasion by invoking world war ii. he issued a video statement bowing to quote rise the occupiers out of our own land. his aide spoke with bloomberg television earlier and said there

kathleen: thank you for having me. ♪ geoff: in today's headlines... russia's neighb, finland, made official its declaration to join the western nato alliance. the finnish president heralded the move as a "new era." entering nato would end the country's decades-old position of military neutrality. the finnish parliament must approve the move, but is expected to endorse the decision in the coming days. russian president vladimir putin has said that any effort to join nato would damage their ce-friendly relations. but, in an interview this morning on cnn, finland's president made clear his recent conversation with president putin was more cordial than confrontational. pres. niinisto: actually, why i called him, i wanted just to confirm that, now, the situation is changed, we are going to apply membership. and, in the same way, he confirmed he thinks it's a mistake. we are not threatening you. altogether, the discussion was very, would i say, calm and cool. geoff: fellow nordic nation sweden has also moved a step closer to applying for nato membership, af

kathleen, it's really just all over the place. they could possibly build the case of not doing things, 50 basis point hike and then 40 as an outliner. what's really driving the rba decision. >> there is a certain decision because of the election that has gotten more calls back and april. that creates a whole other element of complication for the rba. it's no wonder if you look at this, most people, 30, a economist we survey in 19 do see the smaller 15 basis point rate hike. there are six to look for a 40 basis point hike. and why these numbers. if you are at 10, or i should say, .10 to get to 25 to do 15, to get to 50 you do 40. that is a choice, there is a majority of a smaller move. inflation, well above target. 5.1% year-over-year. two to 3% is the band. inflation high, rising commodity prices, those are all the things behind this climbing inflation. the governor of the rba wants to see wages rising as well. they get down 1.4% year-over-year during the pandemic, that was very weak. they had a nice rise back up to 2.3. next read

haidi: kathleen hays. the head of the world health organization has delivered a rebuke of china's covid zero strategy, saying their efforts homework. stephen engle is in hong kong. what are we hearing from the who chief? stephen: that's interesting, these comments contrast with this study from a university in shanghai which says if they drop strict restrictions like lockdowns, there could be an absolute explosion in the number of cases and deaths. i will get to those projections in a minute. first off, it's essentially a rare rebuke to china's covid zero policy. let's hear what he had to say and we will talk more about it. >> when we talk about zero covid, we do not think that is sustainable, considering what we anticipate in the future, transiting it into another strategy will be very important. stephen: he is recommending china adapt its policies to be less restrictive to adapt to been every day situation. essentially, he was facing criticism early on for being too deferential to china. this comes in con

kathleen: what else can they do? until the lockdowns are over, until covid zero passes because either the virus is extinguished or controlled enough that lockdowns are not needed or we get into october and xi jinping's third term is a done deal, the assumption is wide across china and all of the china watchers i have spoken to that covid zero stays in place. as long as that happens it is difficult to stimulate the economy. however, they keep trying. you have to give them credit. in the last day, pboc bank regulators, a statement came out that they had met with china's largest banks and told them that they need to step up. they need to take responsibility and do more lending. they particularly focused on property lending. they want to keep it stable. now, let's remember, just this past week, they cut the loan prime rate, the five-year rate, which they were expected to move by 15 basis points. unprecedented. they did not move the short-term one year rate, as people were looking at. and this is more close to the five-ye

kathleen, what did you get out of the fed minutes. what was the signal for you about the future policy move? kathleen: #1, the fed has signaled what they are trying to do. federal reserve officials see a 50-basis point rate hike in the next two meetings. these are the minutes from the fed's may 3 and fourth meetings. for example, they said all of the federal open market committee were supporting expeditiously moving back towards neutral rates. most participants -- not quite everybody -- but most of them, were looking at the 50 basis point increase in that range in the next two meetings. they said that expediting the removal of policy accommodation, in other words, raising rates, would lead them to look at policy firming and how much economic development warrant more policy adjustments. this is the thing, we have to be nimble with policy. the fed has not been saying -- they said this is not underactive consideration. but that is confirmed when you see the meetings. raphael bostic said a pause might make sense if inflation starts coolin

kathleen: it is a good question. i think the our data dependent, but part of the data they are looking at our broad financial conditions, so that is going to include equity prices, the dollar, so how they see financial conditions evolving is going to help them calibrate where they think the fed funds rate is going to be, but i think right now, front and center for them is taming inflation, and that is what we're going to here for now. as we progress through 2022 and if things slow a little, they may pull back a bit on that really hawkish rhetoric. lisa: what would be a restrictive fed policy rate? kathleen: in our view, anything above 2% would get you to restrictive. the federal reserve thinks it is 2.4%, so there's a little pension there. markets probably a little closer to our view, but it is an unknown. it is an estimate that is very difficult to pin down precisely, but certainly once you get above 2%, that is going to have some ripple effects, and we see that in the mortgage market. you see mortgage rates already

kathleen: very interesting question. let me start here. i think you are hitting on very important things. a strong labor market, normally it is not that great. but if it is too strong, like the u.s. where you have labor shortages, the jobs are going unfilled. what good does it do the economy broadly if it remains that way. . in terms of what is being expected on payrolls. jay powell said yesterday the labor market is extremely tight, what he thinks job creation will slow. if jobs -- jobs isn't just about strength of the economy it is also about inflation. in terms of the specific forecast, payrolls are supposed to slow to 380,000. that is healthy. unemployment is set to go lower, 3.5%. this is what people are looking at. when we spoke to devon lockhart, the former president of the atlanta fed, he's not quite as convinced the fed will be as aggressive as richard clarida do. it will take more time to see how it plays out. >> we are now catching up. having said that, we have to watch how the economy evolves. we are already seeing some signs o

get to new york and joined our global policy editor kathleen hays. kathleen: the fact they have a cash rate rising to at least 3.25% this year must say something about what the rbnz thinks the neutral rate is, right? it had been estimated at about 2%, and there was conjecture going into the meeting that we might hear officially they not estimate something higher, maybe even 3%, so perhaps they are looking at that 3.25 percent because they realize they have to get to 3% or higher. they do see inflation slowing to 3% i the third quarter of 2023, and they think that -- they agreed to risk -- briskly lift the official cash rate, so i don't think -- they have made it clear they have moved aggressively and are ready to move aggressively again and they see larger earlier hikes as producing their risk of persistent inflation. the rbnz has been out in front of the fed for a while on these rate hikes, but that is what we are hearing from any officials now, and it seems to me they are sending the same kind of message -- hit it hard. hit it now, and then maybe w

kathleen: a person familiar told bloomberg news that yes, they could do more. they got $600 worth of foreign currency reserves, so they have plenty more ammunition. interesting that they did a surprise rate hike early last week. still, the dollar strength and the really has continue to fall. it fell a full percent against the dollar, the dollar getting up to 77.5 rupees. that is a very high level as you can see from that chart. and you know, the fundamental, this person familiar and said great, the economies are expanding. this should not have a weak currency but experts around the world including the national monetary fund and world bank two weeks ago at the spring meeting in washington once again putting out that warning that aggressive fate -- rate hikes are going to put pressure on emerging markets. you're going to push her old yet -- her own bond yields uprooted that will draw capital out of the emerging-market at a time when some of them are indebted right now. that creates risk. heidi: editor kathleen hays and chief asian rate correspondent true let's ge

kathleen: we certainly are. in fact, that is the lending rate that most bank loans, this one-year rate are based on. it's a very important rate, as you could see looking at the green light, it hasn't been changed in a while, but it looks like it's expected to get down to about 3.65%, that's the bloomberg consensus down from 3.70 although bloomberg economics will do a full 10 basis points. that will have an impression on the market. not quite as important for investors in terms of what they are focused on, but the consensus says no change, bloomberg economics thinks it will come down five basis points. even though the pboc, people think china passed on the medium lending facility rate lowering it recently, they are expected to do that in the next few days and bring it into alignment. lockdowns and shanghai, china's economy is hurting and investors are thinking there's nothing else they could do except finally give it some more stimulus. haidi: our global and economic policy editor kathleen hays. investors feeling

kathleen: sure. we will get two 50-basis-point hikes. that's 100 basis right there, so if you're looking in september, maybe another 50. it remains to be seen, but one thing for sure -- jay powell has made it clear that they are worried about inflation. they know is it's causing pain to the american people. this is now their number one priority, bringing it down. let's look at what he said. >> inflation is much too high, and we understand the hardship it is causing, and we are moving expeditiously to bring it back down. we have both tools they need and the result it will take to restore price stability on behalf of american families and businesses -- the resolve it will take. kathleen: the fed has not done a 50-basis-point rate hike since the year 2000. now it will do 1, 2, 3 in a row. that 75-basis-point hike was only done once in that history back in 1994 when they had to catch up after pausing just ahead of the november election that year, so it made it bigger rate move. it does not usually happen. it is also interesting, the policy s

kathleen, our bloomberg global policy and economics editor. let's look at futures after what was a volatile session to the downside. we saw a slide in european stocks, the fed optimism giving way to growth fears particularly with pessimism out of the bank of england. european stock futures looking soft at the moment, dax futures off .25%, investors there are turning their attention to slowing growth and rising inflation. we have had a warning about the risk of inflection, double-digit inflation, the risk of labor market conditions deteriorating at all of that weighing on the pound, falling the most 2020. it was the gloomiest outlook of any central bank this year. governor andrew bailey, warning of double-digit inflation and prolonged stagnation or even recession. >> i wouldn't agree with the statement that the cure for higher inflation is higher inflation. we think that a lot of the work in terms of a cure is going to be done by the fact we are experiencing a historically long shock to real incomes in this country, coming from outside the coun

haidi: our asset editor, andreea and kathleen hayes speaking. in the commodity space, we will be talking about evolution mining. and a global biotech leader will be joining us later. and another interview with anz, what it means for the bank after it was reported this morning that there was a better-than-expected first half profit. let's get you to vonnie quinn for first word headlines from new york. vonnie: china's capital is avoiding for lockdown as it attempt to control an outbreak that saw 53 new cases on tuesday. beijing is restricting movement in districts deemed medium to high risk with authorities locking down some apartment blocks. they ordered three rounds of mass testing. students are suspending in-person classes for a week. china's growth forecast over covid lockdowns, the agency trimmed the 2022 gdp estimate to 4.3% from 4.8%. with economic activity contracting sharply asked month due to virus restrictions. the agency cited systems risk due to china's coveted zero policy. russia has avoided its first foreign default in a century wit

shery: kathleen hays with the latest. let's look at hong kong, the hong kong monetary authority has moved to support the local currency for the first time since 2019 50 intervention comes as the hong kong dollar is the weekend of trading for the first time in -- the weak and trading for the first time. how unusual is this and what are the implications? >> it reflects what is going on in the u.s. with inflation, interest rates, hong kong keeping its currency pegged to the u.s. dollar, 7.5, seven -- 8.5, so when you have u.s. interest rates going one way, you have people bracing against the hong kong dollar. and the gap is the widest since 2019. that is encouraging traders to get in and do this carry trade -- parry trained, that is putting pressure on the hong kong dollar and affected by the interest-rate story in the u.s.. but the other side is about the hong kong economy. it is going through a very rough patch. it is not just a money market bet, it is also reflecting underlying bets in terms of what is going on here. i th

shery: andreea and kathleen joining us. the tech theme will be a big focus on day number two for the china summit in hong kong. stephen engle will be speaking to a number of big guests in the coming hour. steve is joining us from the city. what do you have for us? stephen: we will pick up on those big themes that andreea and kathleen just talked about whether it is inflationary pressure or a potential recession in the u.s. and higher rates. what does that mean for deal flows? we will be speaking with j.p. morgan's asia-pacific head of investment baking -- banking paul uren. mark leung will be joining us, j.p. morgan china ceo. he will pick up in the conversation we had yesterday with asia pac ceo philip on gory -- mongorri. they said they will not be seduced by addressing the short-term shocks that are seen in the china market right now. they will be looking long-term. philip: the longtime perspective of the region in general and the china in particular, i think nobody has any doubts about that. therefore, we try to stay aw

inflation numbers, with kathleen hays and andreea papuc. these inflation numbers seem to be very persistent. the breadth of the price pressures. tell us about the components of the cpi numbers this time around and what this means for the federal reserve. kathleen: peaking is the word i have been trying to underscore lately. it is kind of meaningless right now. persistent is the word the fed is facing and that is the word that will be very important for policy. when you look at the headline number, it was supposed to go down to 8.0. even that would have been a 40 year high. instead and only one down to 8.3 from 8.5 year-over-year. the core cpi was supposed to go down to 6.0. it only one down to 6.2 from 6. 6. they are staying at a high level and that is the problem. and another problem here is the momentum of inflation is shifting from goods prices to services prices. remember during and coming out of the pandemic, one of the reasons inflation was transitory is it was all about supply cane -- supply chain constraints. when people went back t

joining us now is kathleen belew, an assistant professor of history at the university of chicago. she is the author of bring the war home, the white power movement, and paramilitary america. thank you very much for joining us tonight. i just want to give you an open mic here to start off with the your reaction to what we've seen in buffalo. >> it's another one of these events, lawrence. i mean, it's a tragedy that keeps happening, and happening, and happening. and although we are learning something about how these are interconnected events, about the huge danger that is caused to vulnerable communities into our society at large, we seem to really be at the end of a road and coming up with real solutions. i think that this is a difficult one, because the not of problems have become so tangled in itself. there's the problem of the violent, white power movement, militant right, putting forward lone wolf style attackers, that carry out these events. they are the problem of the same set of groups putting forward direct threats and our democracy, and performative activism like the janua

let's get in kathleen hays. it was down from the previous months but not as much as what people had been anticipating. the question is, how long does it stay hot? that is divided economists and strategists. >> it certainly is proving to be persistent, regardless of whether or not it has peaked. and may have peaked but the fed is going to have to see a lot more improvement. as you noted, what was our print there, 8.3% down to 8.0. the core, falling 6.2%. these are still at 40 year highs and what is going to bring it down? goods prices have improved. there was a mixed picture during the pandemic it was good prices that were really pushing prices up. now, the concern is a services. used car prices were hot, they fell down and new cars missing the chips they needed. anyway, the services prices are up at a rate of 2.9% year-over-year. a few months ago it was down 1.7%. the concern is, as the momentum shifts, because demand is so strong, that will increase the persistence of inflation. the core services rose 8% annual

kathleen hays -- clear inflation is in retreat. kathleen hays is here. he took it up a notch today. >> he was hawkish. no equivocation. he made it clear inflation is a problem and we have to get it under control. we need to see clear signs that it is starting to move lower. if you did not get that message the last two or three times he spoke, you got it now. he said that this is something that is very imperative, duty, must get it done, price stability. that is with the federal reserve is all about. if they have to move above neutral, they will. he said the economy is strong and can take the tightening like this. in fact, they have to get demand under control. there are a lot of supply chain-induced shortages in consumer demand pushing prices higher, something they can control, the demand side. interestingly, he said this on a day when the retail sales report for april came in stronger than expected, or actually the same as expected, but what you want to see here is the bid upward revisions, it went from 0.5 in march up to 1%, 0.9% for the headline numbe

let's bring in our global economics and policy editor kathleen hays. charles evans has a planned speech to be delivered in new york today. in terms of the markets, we saw the bounce in sentiment that seems to spread throughout the asian session. andreea: that is right. investors were looking for an opportunity to wade back in after the sharp selloffs we have seen. they did that overnight following the strong u.s. retail numbers and the solid factory numbers. that could support asian stocks today. having said that, it did push back those concerns about a recession that we have seen recently. but investors are still trying to digest so many crosscurrents from the war in ukraine to the covid lockdowns in china. and also from concerns about a slowing economy in the u.s. and china. monetary conditions are tightening. the bond yields jumped overnight after jerome powell sounded resolute in his efforts to fight inflation. this looks that they do get a chance to come back with positive news like we saw overnight and will trade that. shery: kathleen, we have se

kathleen hays. u.s. stocks soared, powell pushing back on the more aggressive policy tightening. let's get some analysis on how markets will react, but also given that china is set to reopen after a three-day break. how will they come back? good to have you with us. if you markets are so closed and away on holiday, but will we see a more positive reception to what was perceived as a more dovish chair powell? guest: i think the asian markets will take the news very well. we have had very tight monetary and financial conditions over the course of the last week, strong dollar, widening credits reds for corporate's and sovereigns, the potential for a much higher rate hike has given a nice backdrop for equity markets, because much of that reverse very quickly in the last 12 hours. asian forces will take the news very well, and financial conditions were looking very difficult 24 hours ago. haidi: where is it headed now? what will affect its course? guest: that is pertinent for our markets. the dollar became very overbought, and paradoxically, almost as strong as it was during the defla

thank you kathleen, so there's a simple answer here. then there's a more complicated version of the answer. the simple answer is that we need to do three things in terms of fixing the immigration system. first is legalize the tendo 11 million undocumented immigrants so that they can pursue a path to citizenship and fully own the american dream. second is to create a functioning legal immigration system. so that meets the needs of our economy right now with a labor shortage, you know, one of the few quick fixes that we have at our disposal is actually increasing immigration, but also the needs of families, so that families can be reunified and then third is to have a an enforcement system that not just treats people humanely but is actually effective and strategic. so for example, you know every day in the newspaper right now, what are we reading about? us mexico border a potential surge of migrants and what we have been trained to do is to see the migrant as the one to blame. as i said earlier who's winning here? it's the cartel. the ca

our policy editor kathleen hays is with the latest. they have signaled very aggressive tightening. >> and they have done very aggressive tightening in the last couple years. people can see that the rbnz going for the bigger hike again but it will be the second one if they do so, taking the key rate up to 2%. in fact, this is a race apparently to get to neutral, get to the point where you are no longer stimulating the economy by keeping the rate too low. so it's going to pull inflation down. 2% is the estimate for the new tilray. they have not been at neutral since 2015. and when you look at that chart, what you see again, if you go to the big drop down, march 20 20, 75 basis point rate hike. the fed had done 50. that is when they first showed how aggressive they can be. then back in october when -- most did not think about raising their key rates, they did a 25 basis point hike, two more and then in april of 50 basis point hike. that is another reason why they expected to go for it again. one more thing to show you. what are they going

kathleen hays is here. what are they hoping the effect will be? >> that it will ease the pressure on the economy hit hard by many stressors. they are looking at providing more tax relief. the package, $21 billion is the tax relief. tax rebates to companies. cuts on taxes paid when a customer purchases cars. that will help as well. tax cuts equal 0.1 percent of china's gdp but when added with the billions of fiscal steps taken in march, it is starting to add up. they are going to double the quota for low and -- for small and medium-size businesses and expand -- they put a delay on how much time companies have to pay with they oh the government for social insurance type -- what they oh the government for social insurance type payments. this is going to businesses. if you help businesses, people will get jobs, they can spend more. one important thing, a lot of people pointed out that this initial statement from the channel -- china state council does not say how they will pay for this. we are looking at something that will add to the gdp and they are

we are also joined by our policy editor, kathleen. more than two years into this pandemic, give us a snapshot of how the bad the situation is in terms of education for the poorest children out there. ms. pangestu: you showed a number that we use often. what we call the learning poverty, from around 53% before the pandemic to now around 72%. we know there has been -- on average, kids did not go to school 285 days. in some regions like south asia, it was like 480 days. the impact has been unequal with lower income households, with those not being able to access remote learning, 30% of schoolchildren were children of school age did not have any remote learning during the lockdown. this is a huge loss. shery: we are now seeing restrictions being lifted, more countries reopening. when you take a loss of this magnitude in education among children, how long does it take to recover from it? ms. pangestu: that is a really good question. we know the cost of not addressing and doing the catch up. we can put a number to it, it is $17 trillion wor

kathleen: it's interesting. think back about three months ago, we were just talking about 50 basis point hikes. 75 is on the table. what this shows is the markets are seeing it by the end of the year. 75 would help them get there faster. number one, there is no federal reserve official who is calling for it now. the president of the st. louis fed said it could be an option if needed. in 1994 it worked well. more methodical moves sound like 50-50, they see a decent chance because powell has been talking about a labor market that is to type, new job openings. a lot of demand for jobs and not enough workers. this is keeping pressure. one more thing about the greenspan 75 basis point hike, the hot labor market, behind the curve. alan greenspan added on 25 basis points. people say no, that's why it's not going to happen at this meeting. if you want to click the questions, inflation. the peak of rate hikes by the end of the year. what is the neutral rate target? 2.5%? 2.8%, even 3%? a lot of people are worried because

kathleen, a family friend is helping with the paperwork over to his club. i hope this works out. he, at me, there's nothing missing and really nothing can be missing. good man. but i've already been in contact with the people from the district office and a lot of back and forth. and they've already opened a file for them and everything should be okay. they've been waiting for this appointment for weeks with i you registered with the state of berlin yet. was leon. yeah. yeah. registered a yes, but there is no set appointment for talking. okay. and mm hm. do you have proof? yes. could be that i have it with me. they're missing the confirmation. the interpreter helps them massage through their emails again. and luckily they tracked on the right. one does. yeah. good. but he's if it have altamont. uh huh. yeah. okay, great. can you forward that to me? this enough been that's in looks on. it's a bit nerve wrecking making sure that absolutely nothing is missing. with content, we have a great feel because as far as i understand how you will receive the money directly afterwards, and tha

the 1st time that he has done this, and apparently we want to hear you ones tuning and kathleen to see how a when to print the queen herself, was tuning in to take a look at how has on was doing this really key constitutional role. now, in some sense, prince charles has been preparing for a moment just like this, his entire life. he has been in waiting for this roll. it will. so it has to be pointed out that much of this event is pumpkin patch and tree and, and tradition. so many time, all nodes, things that many outside of the u. k. u, indeed many within the u. k. think is often quite bizarre, but there is a lot of structure to this is prepared, the speech is relatively short and it's written by the government. and so this wasn't something the prince charles prepared himself, so we weren't expecting any real fireworks, nevertheless, and support huge amounts of attention here looking at how he was doing because essentially this is a glimpse into the future for the british public. really for the 1st time seeing him perform this constitutional role, you really do get the sense now that t

our global economics and policy editor kathleen hays is here with the latest, what is in the package and what are authorities trying to do here? >> as they said they are trying to lead downward pressure on the economy, the centerpiece is the $21 billion of tax relief to businesses. the hallmark of the tax cuts, the fiscal steps that china has taken so far. here is what we have, $21 billion in tax rebates to companies, 60 billion in yuan in passenger car purchase taxes. that equals about 0.1% of china's gdp, it is along with 1.5 trillion dollars in tax because they passed so far this year. they will also double the quota on small and medium size business loans. more people can get those, they will also expand social insurance payments, social security payments, that companies have to pay to the government,. all of those to provide relief, they are trying to do targeted forceful steps. again, most of this is going to businesses, not households, some people saying they be we should be sending checks to consumers. while some countries have done that, so far that is not in the works. they

rishaad: getting straight to kathleen hays. we have to ask, let's start with what we know, and that is certainly china. what is behind the spicier read? >> it is interesting, isn't it? the cpi at 2.1% year-over-year, supposed to be 1.8%, but still low. what is interesting is the jump in food prices, up 1.9% in april, after dropping 1.5% in march. what happened? what happened was covid lockdown. now it is harder for people to get the kind of food they usually get. there is some talk they will look at food reserves and make sure there are more. if not for the fact that pork prices have been falling month after month after month, apparently it would've been much bigger. the other thing about a lot down, if you look at producer prices, the gains there, on the one hand, the lockdowns are hurting the supply chains, one of the things that can put upward pressure on commodity prices, even at a time when energy prices are coming off the peak, some coming down, but fuel costs still very high in china, something that has not changed comes

haidi: garfield reynolds and kathleen hays. don't miss our continued coverage from the australian conference and we will be discussing all of those rba expectations with moves. we will talk with the founder of pinnacle management investor -- investment. let's get you to vonnie quinn. vonnie: european union administrators are attempting to keep a united front against russian demands to pay for natural gas in rubles. poland is pulling for an embargo. the eu is proposing to gradually phase out imports of russian oil but hungry may veto the move. european union will stick to step up cooperation with african countries to help replace imports of russian natural gas. a drafted document includes countries such as nigeria and senegal offering them untapped potential. the goal is to reduce dependence by two thirds this year. germany has confirmed its plans to invite indian prime minister modi to a g-7 summit in june. the invitation as part of an effort to grow global alliances against russia. the chancellor did not -- the indian leader d