US Strikes Iran Targets, US Inflation Warnings, More

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Bloomberg News Now 6 min 7 speakers 3 chapters transcribed 3 months ago
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What is the main topic discussed in this episode?

James Woolcock 0:00
News when you want it with Bloomberg News Now. I'm James Woolcock.
Caroline Hepker 0:04
And I'm Caroline Hepker.
James Woolcock 0:06
The U.S. has carried out further airstrikes on Iranian targets as hopes for an imminent deal continue to fade. As with its attacks earlier this week, a U.S.

What recent actions has the US taken against Iranian targets?

James Woolcock 0:15
official described the latest bombings as defensive. The U.S. says it shot down four one-way Iranian drones that were fired at a commercial ship and also struck another drone-launching unit near the Strait of Hormuz. The latest flare-up in hostilities came just hours after President Trump said that no single nation would control the vital waterway as part of any deal with Tehran.
Donald Trump 0:38
Nobody's going to control it. We're going to watch over it. We'll watch over it. But nobody's going to control it. That's part of the negotiation that we have. They would like to control it. Nobody's going to control it. It's international waters and Oman will behave just like everybody else. So we'll have to blow them up. They understand that. They'll be fine.
James Woolcock 0:57
President Trump speaking there as the U.S. Treasury says it has taken action against Iran's Persian Gulf Strait Authority, accusing it of launching a new attempt to monetize transit through the strait.
Caroline Hepker 1:08
Elevated energy prices and inflation risks are complicating the outlook for central banks. As traders turn their focus to Thursday's US economic data, the Federal Reserve's favoured inflation gauge, the PCE price index, is expected to have increased to 3.8% in April. Now, that's well above the Fed's 2% target. Fed Governor Lisa Cook says that inflation is headed in the wrong direction.
Lisa Cook 1:33
After five years of above-target inflation, I am particularly attuned to the risk that elevated inflation will become embedded in price and wage setting behavior. As such, I am prepared to raise rates if the expected disinflation does not appear in a timely manner. Likewise, I will continue to monitor labor market developments as well and would be prepared to adjust my policy stance downward should the labor market deteriorate.
Caroline Hepker 2:02
Lisa Cook speaking there. As the Fed Vice Chair Philip Jefferson says that he expects inflation to cool later this year, though he warned that risks remain lifted to the upside. Meanwhile, Chicago Fed President Austin Gulby says that strong productivity spending could fuel inflation and require high interest rates.
James Woolcock 2:21
Here in Europe, the outgoing vice president of the ECB says the central bank should consider the impact of the Iran war on the economy when setting rates next month. Luis de Guindos told Bloomberg that while inflation in the Eurozone responded quickly to surging energy costs, the effect on economic growth is less clear.
Luis de Guindos 2:38
We have to take into consideration the impact on growth. I think that the data that we have received so far, inflation immediately reflects the evolution of energy prices. But I think that for growth, it's going to take a little bit longer. But if you look at soft indicators, sentiment indicators, I think that these indicators clearly point at an important impact on growth.
James Woolcock 3:04
Guindos' dovish tone comes as a number of other European central bank policymakers have signalled they are weighing interest rate hikes. Both Isabel Schnabel and Yanis Stouran Thornanis have pointed to the need for higher borrowing costs after inflation hit 3%.
Caroline Hepker 3:21
Here in the UK, a surge in youth unemployment risks creating a, quote, lost generation. That's the finding of a government-commissioned review carried out by the former Labour Health Secretary, Alan Milburn. He says that the proportion of 16 to 25-year-olds not in work, education or training is set to rise to one in six.
Alan Milburn 3:42
We've got a chronic problem. It's getting worse, not better. We currently don't have either a system or a plan to deal with it. What is needed is a radical reset.
Caroline Hepker 3:53
Alan Milburn speaking to Bloomberg Radio earlier. The Labour grandee is calling for major reforms in order to help with youth unemployment.
James Woolcock 4:05
The European Union's top diplomat, Kaya Callas, says Russia is on the back foot in its war with Ukraine. Speaking to reporters ahead of an informal meeting of EU foreign ministers in Cyprus, she also discussed the bloc's plan surrounding possible peace talks.

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