Fed's Final Rate Decision of Year; Honda & Nissan Merger?
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the Fed's final policy decision of the year. Economists expect the central bank to lower borrowing costs for a third straight meeting while signaling fewer interest rate cuts next year. We get a preview from Bloomberg's Michael McKee. Fed officials are in a way between a rock and a hard place. The economy is slowing, but inflation has gotten stuck above their 2% target.

Interest rates for mortgages, cars and credit cards remain tight, but financial conditions are easy and stock markets are setting all-time highs. Before their blackout period, most central bankers were signaling they would support a rate cut today, although several said they do see reasons to pause. That puts the emphasis on their new economic forecasts and dot plot. When do they cut again and how many times in 2025?

Michael McKee, Bloomberg Radio. All right, Mike, thanks, and stick with Bloomberg for full Fed coverage with a special edition of Bloomberg Surveillance, The Fed Decides, with Tom Keene, Jonathan Farrow, and Lisa Abramowitz. That's today, 1.30 p.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcasts page on YouTube. Monathan Bank of America CEO Brian Moynihan expects the Fed to cut rates. He spoke about the future of monetary policy with Bloomberg's David Weston.

If the economist's view is you have to have a real rate structure across the curve of 75 basis points, 100 basis points, if you're 475, 450 now and the inflation rate is 3.3, that's bigger. So you got to start to bring it in normalized. We got to get to positive slope and curve, a curve that has real rates across it. An inverted curve means something anticipatory is going to go the other way.

all that's got to happen. So I think they need to bring it down a little bit. They just have to be more careful because the economy is stronger than we thought three months ago, six months ago, but it still has potential weaknesses. Bank of America CEO Brian Moynihan sees the Fed lowering interest rates to the 3.75% level or three more cuts from where they are currently.

conversation on the Bloomberg Talks podcast feed on Apple, Spotify, or anywhere else you download podcasts. Well, Karen, in the UK, inflation rose to an eight-month high in November. The Consumer Prices Index increased 2.6%, drifting further above the Bank of England's 2% target. Economists say the latest report effectively ends any hope of an interest rate cut at the BOE's final meeting of the year.

Well, the stock story of the day, Nathan, comes out of the auto industry. Shares of Nissan soaring on merger talks. We get the very latest at Bloomberg's Lisa Mateo. Lisa, good morning. Good morning, Karen. Yeah, that merger reportedly between Nissan and Honda. Now you have Nissan shares up about 23% in Japan. Honda down 3%.

SOURCES TELLING BLOOMBERG THE DEAL COULD BE EXPANDED TO INCLUDE MITSUBISHI MOTORS, WHICH ALREADY HAS CAPITAL TIES WITH NISAN. AND WHAT'S MORE, SOURCES SAY FOXCONN, THE TAIWAN-BASED PRODUCER FOR IPHONES, APPROACHED NISAN ABOUT TAKING A STAKE. NOW, THE NIKE IS REPORTING THAT THAT MOVE WILL HAVE HELPED ACCELERATE MERGER EFFORTS OUT OF FEARS THAT THE JAPANESE COMPANY COULD BE VULNERABLE TO TAKE OVER BY THE TAIWANESE FIRM.

But here's the thing, if that deal were to go through, it would create the world's third largest automaker, putting the pressure on rival Toyota, as well as provide Honda and Nissan with more resources to compete with larger peers, especially EV rivals like Tesla and Chinese automakers.

And something else to keep in mind, French automaker Renault, well, it could also have a say in the deal considering it owns about 36% of Nissan. Lisa Mateo, Bloomberg Radio. All right, Lisa, thank you. Now to the latest development in the killing of UnitedHealthcare CEO Brian Thompson. The suspect, Luigi Mangione, is now facing multiple murder charges in New York. Manhattan District Attorney Alvin Bragg laid out the counts. They include one count of murder in the first degree as a killing and further risk of terrorism.

Two counts of murder in the second degree. One, charging of the killing was done as an act of terrorism. And the second, pertaining to the fact that the killing was intentional. Manhattan DA Alvin Bragg was joined at the news conference by New York City Police Commissioner Jessica Tisch. She had a message for those who have celebrated the crime. There is no heroism in what Mangione did.

This was a senseless act of violence. It was a cold and calculated crime that stole a life and put New Yorkers at risk. Commissioner Jessica Tisch and Alvin Bragg spoke ahead of two scheduled hearings tomorrow for Mangione in Blair County, Pennsylvania. Bragg says Mangione could give up his fight against extradition. That could bring him back to New York to face these new charges by the end of the week.

Now, Nathan, let's get the latest on efforts to avoid a government shutdown. Lawmakers on Capitol Hill have released a stopgap spending measure, but it could be a preview of fights to come. We get more with Bloomberg's Gina Cervetti.

The bill would extend current funding into mid-March. It includes more than $100 billion in emergency relief for hurricane victims, the Maui wildfires and the bridge collapse in Baltimore. But the fight to get those measures attached could point to even more challenges for President-elect Trump's early priorities. Republicans will have just a one-vote majority in the House through at least April since Trump picked Thursday.

three GOP lawmakers to serve in his administration. That'll be right in the middle of a push to pass a new budget along party lines, not to mention bills on border security, taxes, and other budget issues. Gina Cervetti, Bloomberg Radio. All right, Gina, thank you. And President-elect Donald Trump has chosen football legend Herschel Walker to be U.S. ambassador to the Bahamas.

Trump made the announcement in a post on Truth Social, his social media website. Walker most recently had an unsuccessful run for the U.S. Senate in Georgia to hold the ambassador position. He'll need his nomination approved next year by the Republican-led Senate. Trump also announced he's nominating art collector Nicole McGraw to be U.S. ambassador to Croatia.

Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's John Tucker. John, good morning. Good morning, Karen. A Defense Department spokesman says none of the mysterious drones reported over the skies of the U.S. Northeast are being flown by the Pentagon or are part of a secret government test.

President Joe Biden also weighed in, saying there's nothing nefarious, apparently. There's a lot of drones authorized. I think one started and they all got everybody's line to get in the deal.

At the Pentagon, Major General Pat Reiner told reporters top department officials take seriously any cases of drones flying near or over U.S. military sites, though he added this was not a new concern. Boeing says it's resumed production across its range of aircraft programs at factories in the Pacific Northwest.

After they were shut down for weeks because of that lengthy worker strike following the resumption of output of its popular 737 model last week, Boeing's now began taking up building the larger 767 and 777 aircraft again. Twana Looney, a grandmother in Alabama, is on the road to recovery after receiving a genetically modified pig kidney at NYU Langone Health. It's just like getting a second chance in life.

Doctors hope this will be the first long-term success case that could open the door for similar procedures for tens of thousands of Americans waiting on the donor list. And more delays for the SpaceX crew still stuck on the International Space Station months after their mission was set to end. A new SpaceX rocket was set to launch this coming February to finally bring them home, but now NASA is pushing back that mission until at least late March, citing the need for more preparation time.

Global News, 24 hours a day, whenever you want it, with Bloomberg News Now. I'm John Tucker, and this is Bloomberg. Karen. All right, John, thank you. As criminal ransomware and state-sponsored attacks continue to escalate, a bolted-on approach to cybersecurity isn't cutting it. In fact, the more security tools an organization uses, the more security incidents it has.

According to new research from Google, companies that use 10 or more security tools average 14 incidents per year. That's more than double the amount for those that use fewer than 10 tools. To proactively manage cyber attacks, organizations should invest in productivity tools across email, documents, and video conferencing that are secure by design, hopping off the treadmill of software patching and lightening the load on their embattled IT and cybersecurity teams.

To learn more, visit g.co slash workspace slash more secure. From the Delta Sky Club to the Jet Bridge, Delta Airlines relies on 5G solutions from T-Mobile for business to power operations and serve customers faster. Together, we're putting 5G into the hands of ground staff so they can better assist on-the-go travelers with real-time information throughout the airport. This is elevating customer experience.

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Time now for the Bloomberg Sports Update, brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Juan Soto has never won an MVP award. The guy the Yankees just brought in to try and replace Soto as a left-handed hitting outfielder has. Cody Bellinger is a 23-year-old in 2019 with the Dodgers. He hit 347 home runs, but Bellinger has not been anywhere near that good since then, and he's nowhere near the player Soto is, but the Yanks will hope

He can regain that MVP form acquired from the Cubs in a Cody for Cody trade. Chicago gets pitcher Cody Poteet. Bellinger's father, Clay, was a Yankee on two world championship teams. Soto, not the only one who's gone from the Yankees to the Mets. Clay Holmes was a Yankee reliever. He's now a Mets starter. I want to look back at my career and say, man, what could have come from that? And I think it was something that still, deep down, I had a passion for it and it excited me and I'm very thankful for it.

Yeah, this opportunity has come. You sit here with the Mets. You know, you can stay here in New York and be with the Mets. Holmes met the media yesterday, as did Devin Williams, who the Yanks acquired to replace Holmes. What has happened to the Rangers a month ago? A record of 12-4, since then 3-11, shut out by lowly Nashville 2-0. Only the Predators...

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Brooks Koepka and Bryson DeChambeau. The Atlanta Falcons only a game out of first place, but they're making a quarterback change. Starting with Sunday's game against the Giants, they'll start rookie Michael Penix Jr. and bench the veteran Kirk Cousins, who has been struggling mightily late. John Stach, Shatware Bloomberg Sports. Karen and Nathan. All right, John, thank you. And Bloomberg Daybreak is brought to you by Audi. Visit your tri-state Audi dealer today and get behind the wheel of the Audi model you've always wanted.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. On this Fed Day, the final rate decision of 2024 is nearly upon us. Investors looking for more clues on the path for next year. Meanwhile, there may be a path to a deal for two Japanese automakers.

to take on the biggest carmaker in the world. Lots to discuss this morning, so let's get right to it with Bloomberg Radio and Television news anchor Kriti Gupta. Kriti, good morning. So how big a surprise would it be if the Fed decided they're going to pause today? Good morning.

Good morning, Nathan. It would be a surprise, but perhaps not a shock. And I think that's a crucial difference here simply because the market is primed and priced for what could be the last rate cut, not only of 2024, but that we could see for some time out of the Federal Reserve. But if they were to hold earlier, it would signal that there is perhaps extreme confidence in this economy's willingness to digest and ability to digest any sort of

pitfalls that we may see into next year. And I think this is a really crucial one because if you do see a cut, there's questions of what data justifies that cut. Now, Federal Reserve officials will likely say and have said on the wire in the last couple of weeks and months that any sort of cut is simply taking policy from a super restrictive level to a slightly less but still restrictive level in terms of being able to tackle that inflation up

tick. But others may question that and say, is this rate cut, if we do indeed get one, something similar to a rate cut that we got in the likes of March of 2019, when Jay Powell had that insurance rate cut in even though the economy was doing quite well at the time, the unemployment rate was quite low. The payrolls numbers were coming in quite strong, but it was an insurance rate cut in response to what could have been a more extreme trade war between the United States and China. And

In retrospect, say in a couple months time, there's a very real likelihood that we ask the same questions about what drove today's rate cut if we indeed get one. And as if a Fed day weren't enough, now this news that Nissan and Honda are apparently in merger talks. This is really a fight for survival for Nissan, correct?

It is. And look, there's a third and fourth player worth mentioning here, which is Renault has a more than 43 percent stake in Nissan at the moment. It's been trying to reduce its stake to about 15 percent and do it in a way that they can get a pretty decent kind of bang for their buck. If they do see this kind of consolidation between Nissan and Honda, it could be a pretty big blowout.

boost for the likes of Renault. But then there's another player here worth paying attention to, and that's Foxconn, what we know as kind of the assembler of smartphones. It's in the Apple supply chain. They've been trying to get a stake in the EV maker for some time and struggling to get that stake. If they do indeed get it, though, Nathan, it brings up a lot of questions about kind of cross-border consolidation, cross-border stakes between a Taiwanese company into what could be a Japanese car-making giant.

This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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