Bloomberg Daybreak: Europe Edition Daybreak Weekend: Fed Decision, Germany Chancellor, China Eco
May 2, 2025
John Liu, Bloomberg's Executive Editor for Greater China, discusses the impact of the U.S.-China trade tensions on China's economy, including potential stimulus measures. James von Moltke, CFO of Deutsche Bank, highlights the economic hurdles facing Germany's next Chancellor, Friedrich Merz, focusing on trade policies and defense spending. U.S. economist Stuart Paul analyzes the upcoming Federal Reserve's policy meeting, discussing interest rates and inflation pressures, amid significant corporate struggles. It's a deep dive into global economic challenges!
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Fed's Cautious Rate Hold
- The Fed is expected to hold rates steady given current low inflation but high job growth.
- Inflation risks from tariffs could push year-end core PCE inflation above 3%, necessitating caution.
Earnings and Consumer Sentiment Risks
- Corporate earnings guidance amid tariffs and input cost pressures will be crucial for market direction.
- Consumer sentiment is low due to economic and policy uncertainty fueled by trade tensions.
Disney's Mixed Business Outlook
- Disney's parks, contributing over half its profits, face risks from consumer spending slowdown and new competitors.
- Streaming profits are rising, turning losses into expected $1 billion operating income this year.