Waller Backs Fed Cut Now, 1000% Return BOE Bet, Looking For G-20 Friends | Bloomberg Daybreak:...

Bloomberg Audio Studios podcasts, radio, news. This is the Bloomberg Daybreak podcast available every morning on Apple, Spotify or wherever you listen. It's Friday the 18th of July in London. I'm Caroline Hepker. Coming up today, Fed Governor Chris Waller breaks with fellow policy makers as he backs a rate cut at the next meeting to support the US jobs market. Traders place wages on more Bank of England reductions this year that could net them a 1,000% return. Plus, diplomatic speed dating. Nations use the G20 gathering in South Africa to forge new alliances as they face a US pullback. Let's start with a roundup of our top stories. Fed Governor Christopher Waller is backing a rate cut this month to support a labor market that he says is showing signs of weakness. His remarks set him apart from most of his fellow policy makers who have characterized the employment landscape in the US as still being solid, but Waller argues that inflation expectations remain anchored and wage growth isn't accelerating.

In a question and answer session after his speech at an event hosted by the Money Marketeers, Waller said that the timing of additional Fed rate cuts beyond the one that he's pushing for would depend on incoming data. Speaking separately to Bloomberg, San Francisco Fed President Mary Daly says that she thinks it's reasonable to plan on two interest rate cuts this year.

You can't wait forever because if we wait till inflation gets to 2%, well then we've lost. We've likely injured the economy in some way that was completely unnecessary. And so I'm of the mind that the summary of economic projections we put out which had two rate cuts for this year, I think that's a reasonable outlook to have.

Mary Daly, however, did not commit to an immediate cut. The latest commentary from policy makers comes as the S&P 500 closed at an all-time high on Thursday, briefly topping 6,300. Now, the latest news on rate cuts comes as Fed Chair Jerome Powell responded to concerns over the $2.5 billion renovation to Federal Reserve buildings in Washington. The criticism over the construction has coincided with President Trump's increasing hostility towards the Fed chair as the president lobbies for lower interest rates. In a letter to the White House's Office of Management and Budget, Powell now says that the Fed has added a web page for transparency about the renovations. With more, here's our international economics and policy correspondent, Mike McKe.

Powell says that they're misunderstood, that the Fed has been regularly monitoring the costs. They've gone up by circumstances outside of their control, plus the fact that they're renovating two buildings from the 1930s that have never been renovated. They have to do things like asbestos removal and shore up the building on the inside so they don't collapse.

Bloomberg's Mike McKe speaking there. Jerome Powell also says that he has now asked the US Inspector General to conduct a fresh review of the project. Now, some traders have placed contrarian bets that the Bank of England will cut interest rates in the UK by 75 basis points this year with a possible return for them of 1,000% on the line. The wages were made yesterday despite the market moving in the opposite direction after a hotter than expected inflation print. Bloomberg's James Wilcox has the story.

This gamble rests on the labor market. Although this week saw UK inflation rising to 3.6%, yesterday's jobs data saw the number of employees on payroll drop and vacancies fall for the 36th consecutive month. So although options trading is anonymous, the thinking behind the 1.5 million pounds in bets is likely the Bank of England will have to address Britain's cooling labor market. It's made even riskier by the ONS jobs data being subject to frequent, sometimes quite drastic revisions. In London, James Wilcox, Bloomberg Radio.

Staying with the UK, it has emerged that details of more than 100 Britons, including spies and special forces, were in a data leak of Afghan collaborators. Almost 19,000 people had their information compromised in 2022. Courts had blocked journalists from reporting the news as the UK government spent 850 million pounds on a secret relocation program for thousands of Afghans at risk of retaliation from the Taliban. Labour MP and leader of the House of Commons Lucy Powell says that the whole situation has been uncomfortable.

There are many, many questions here about how this data leak happened. What were the consequences of it? What actions were taken as a result and what procedures and policies have been put in place to make sure that that would never happen again?

Lucy Powell and other members of the government are facing calls for a public inquiry. The shadow defense secretary James Cartlidge apologized on behalf of the former Conservative government which was in power when that leak was discovered. The US Commerce Department will impose anti-dumping tariffs of 93.5% on imports of Chinese graphite, which is a key battery component. The new duties will be a blow to battery manufacturers as they add to existing rates, making the effective tariff 160%. Tesla and its key battery supplier, Japan's Panasonic, were among companies pushing to block the new tariffs. The new charges are set to make the global electric vehicle supply chain even trickier. And in earnings, Netflix has reported second quarter results that exceeded expectations in every major metric. Revenue at the firm grew to 11.1 billion over the period with earnings jumping to $7.19 per share. CEO Ted Sarandos says his outlook is positive.

We're feeling really good about the business. We had a plan to reaccelerate growth and we've delivered on that plan. Engagement, which we view as our best proxy for member happiness, because when people watch more they stick around longer, so it's retention.