Episode summary
Daybreak Weekend: Fed Preview & Tech Earnings, Bank of England Decision, Japan's Golden Week |...
Bloomberg Daybreak: US Edition
· · 38 min · Hosts: Nathan Hager
Summary
The week ahead is framed by three central bank tests and one major earnings cluster. Nathan Hager opens with the Federal Reserve’s April meeting, where Michael McKee says no change is expected in rates, projections, or the dot plot, leaving Powell to manage the message around a still-tight policy stance and lingering inflation risks. McKee argues Powell will be remembered as an effective consensus builder, even if the Fed was slow to recognize inflation was not transitory in 2021.
Tech is the other big US story, with Mandeep Singh saying the Magnificent Seven are all being judged through the lens of AI-related capital spending. He expects investors to focus on Azure growth at Microsoft, expanding Google Cloud momentum, and Meta’s ability to sustain strong ad pricing and roughly 30% revenue growth. The key question across the group is whether more capex is justified by faster AI workloads and stronger cloud demand.
In the UK, Caroline Hepker’s guests say the Bank of England faces a sharper inflation-growth trade-off after the Middle East shock pushed up oil prices. Dan Hanson says the labor market is looser than in 2022, which raises the bar for hikes, while Alice Gledhill says gilts have already repriced from cuts to some hike expectations. The Asia segment turns to Japan’s Golden Week, where Alice French says weak yen tourism, higher energy costs, and sticky inflation will shape spending, even as consumers still find reasons to shop and travel.
Key takeaways
- Michael McKee says the Fed is likely to hold rates steady and give no new projections at Wednesday’s April decision.
- McKee says Powell’s legacy is that of a consensus builder, though he was slow to see inflation as nontransitory in 2021.
- Mandeep Singh says AI capex is the common thread for Microsoft, Alphabet and Meta, with Azure growth a key test for Microsoft.
- Dan Hanson says the Bank of England faces higher inflation from oil, but a looser labor market makes rate hikes harder to justify than in 2022.
- Alice Gledhill says gilt markets have already moved from pricing cuts to pricing some hikes, but not for the coming BOE meeting.
- Alice French says Golden Week spending in Japan should stay resilient, though higher fuel costs and inflation are pressuring households.
Notable quotes
“they're not going to do anything. They're not going to raise or lower interest rates”
“there is still tight monetary policy. May not be very tight, and there's disagreement over how tight”
“the common thread across all of them”
“the bar for hiking interest rates into this shock is high much, much higher than it was, say, in 2022”
“the weak yen, which is making it more expensive for you know, Japanese residents to travel elsewhere”
How the episode opens
Bloomberg Audio Studios. Podcasts, radio, news. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world.
Straight ahead on the program, we'll look ahead to the April rate decision from the Federal Reserve. Plus, a big week for Magnificent Seven earnings. I'm Nathan Hager in Washington.
I'm Caroline Hepke in London, where we're looking ahead to the Bank of England's rate decision as the Middle East upends Europe's plans for growth. I'm Doug Krizner looking ahead to the Golden Week holiday in Japan. That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 1130 New York, Bloomberg 99.1 Washington D.C., Bloomberg 92.9 Boston, DAB Digital Radio London, Sirius XM 121, and around the world on bloombergradio.com and the Bloomberg Business App.
Good day to you. I'm Nathan Hager. We begin today's program with the Federal Reserve.
The Central Bank's latest two-day policy meeting kicks off this Tuesday for what may be the final rate decision under Chairman Jerome Powell on Wednesday. Bloomberg International Economics and Policy Correspondent Michael McKee will be in Washington D.C. for the decision and Powell news conference.
And Mike is here with me now. I always ask you what your question to Chairman Powell is going to be at the news conference. I I dare ask whether it's going to be um "What are you going to do, Jay?
Is is that where you're going? You know, um the I I know you're going to ask me what what the Fed's going to do, and they're not going to do anything. They're not going to raise or lower interest rates.
Right. Yeah. — And there's no there's no new economic projections, and there's no new dot plot. So, it could very well be that that's the first question somebody asks is "Where are you going from here?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed rate decision
- tech earnings
- bank of england rate decision
- japan golden week
- week ahead market outlook
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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