and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. jon: i'm jon erlichman. welcome to "bloomberg markets: the close." vonnie: i'm vonnie quinn. the s&p 500 within one percentage point of its all-time high, continuing to drift higher today, as our bonds. the 10-year yield down to 390 a few minutes ago, 3.92 at this point.

crude oil continuing to add to those gains that we saw even as the u.s. announces joint military task force with many other countries. it is not stopping shipping companies from pausing going through the suez canal. 8% of wti goes through the suez canal. in the end, 143.88. it is weakening after what was seen as a dovish meeting for the bank of japan turned a little less dovish in the sense that we didn't get any timeline for when the bank will exit negative interest rates. jon: and we will have more central-bank talk coming up on the tech front. stocks have been pretty hard recently including affirm, continuing to gain ground after the expenditure self -- it expanded to self-check out areas and walmart stores. in the e-commerce world, chewy

getting a nod from an analyst at jefferies. a bullish call fueling those shares to an 8% advance today. i want to highlight kenvue, which had been spun off from johnson & johnson. that is a notable gainer on the day, although not addeds best levels -- not at its best levels. a key court win tried to a time in a lawsuit. -- tylenol lawsuit. with fedex, because control is something the street is very interested in. vonnie: the big picture focus for investors does remain what the fed will do next, and when exactly. officials still at odds over a policy which mohamed el-erian says is a communication issue. >> every time the fed goes towards the market, there is a decoupling, and the market runs away further from the fed. the market has understood that it can drag the fed along. that has got to stop, because we

get overshoots, and then we have got to pay for the consequences later on. jon: ok, let's get more perspective on that from an rbc economist in the studio with us on a day when we got inflation data from canada's economy what do you make of mohamed el-erian's comments about what the market is interpreting and the messaging from the fed? >> yeah, i think there's definitely -- well, as we've seen all along to the hiking cycle, there has been pretty much the markets leading the fed in the way and we are seeing that these days as well. and over the past two years, along the way is this overreaction at the same time to each and every single data release. i think it is almost more prudent at this point, at least from the central bank's perspective, to take a step back.

today's report is a great example that inflation can move four steps forward and one step back. that is a longer-term framework for the central bank to take a more longer-term view and stay data-dependent, but at the same time watching out for signs as to where inflation is really heading. it's the same approach when it comes to central-thank decisions in canada as well as the united states. jon: the bank of canada governor told bloomberg that thinking about 2024 as the time for rate cuts at some point is likely a reasonable expectation. with respect to the inflation data today, clearly they would like to see more improvements. what do you make of the fact that a good component of the inflation is being seen through something that comes from higher interest rates, the fact that borrowing costs, mortgage interest costs are playing a key role in the inflation story in canada? claire: for sure, starting from

your mentioning of the comment, you can see the back-and-forth because in his speech last week, he did push back against toxic rate cuts in 2024. -- talk of rate cuts in 2024. this is where the central bank along with all of us, to your point, are watching inflation data and try to figure out how sticky inflation pressures really are. this morning, upside surprise has been much discussed. but i think the key point is shelter continues to be the sticking point for inflation both in canada as well as the united states, with the own or rent component. the rent measure in canada, we are starting to see an easing, but at the same time, a huge upside surprise this morning that came from travel tours, that alone is not bad news, the fact that you can

pinpoint one or two components of the consumer basket for the monthly upside surprise. it in a way highlights how much progress has been made for pretty much everything else. in a way the scope of inflation pressure is narrowed enough for us to say that this month, we can reasonably expect that to not be repeated in the coming months vs. what you have, shelter components, those things that are considered more sticky is gradually coming down. vonnie: canada has a lot of the same problem as the u.s. in the sense that the market is pricing an imminent rate cuts. when does the rate cut come, though? claire: our expectation for the first rate cut from the bank of canada is very similar to the fed. there are a lot of similarities when it comes to both economies, and the outlook in 2024. starting from early solid -- a really solid economic backdrop as consumers continue to pull back over the first half, that sort of mild recession in a way

goes hand-in-hand with our rates call, because it doesn't warrant an immediate reaction from the central bank. it is not saying conditions are so bad we need to cut right away. that in a way just speaks for a more cautious approach, again just given the uncertainties can very much still happen with inflation readings these days, that we are starting to expect a cut around the middle of 2024 for both central banks. vonnie: and there is another sort of similarity in the sense that the inflation target at some central banks are targeting may not be the inflation target that should be being targeted. mohamed el-erian indicating that perhaps the fed should be fine with inflation being 2.3%. is that something that some of the central banks will change what they're looking for for a healthy economy? claire: the inflation target itself is very obviously timely, given the backdrop we are in.

but mind you, with high inflation, historically what came as high volatility. that is a really dangerous piece. i think that is what the central banks want to avoid, essentially. number one is obviously losing this anchor of 2%. losing their credibility is the most important thing. but also as inflation gets higher, they tend to move a lot more, making it more difficult for consumers and businesses to to plan their budgets as well as rate increases, where we still see a little residual cost pressures these days. just a prime example of how fast inflation the past two years, high inflation can have residual impact feeding into current everyday normal ongoing business planning. there is a lot of more cons than pros with adjusting inflation targets, which is why the central banks have not

approached of this solution. jon: at the end of the day, who do you think moves first on lower rates, jay powell or tiff macklin? claire: i hate to give you the middle-of-the-road answer, but our expectation is around middle of the year for 2024. we as the central bank, even though they are not using the word data-dependent, that is very are these days. before the january meeting it was one more round of employment report as well as inflation report for both economies. canada will see the consumer expectation survey, which bank of canada has used to signal what they are going to do next. we will all be looking for more clues as to, number one, how has price setting behavior among businesses really changed over the past quarter and among consumers more importantly. are expectations drifting higher? those are all important information alongside the actual

inflation data that will feed into decision-making moving forward. vonnie: thank you so much for joining us today. rbc economist claire fan. everyone focused on what the fed will do next, including bank of america and chair and ceo brian moynihan. david westin caught up with him today. >> we have the number one research team in the business, they do a great job. they basically just shifted yesterday, literally, and they moved to more rate cuts in 2024. the real key was what do they see in the economy, they have moved from half a percent growth rate annualized for the first three quarters next year of about 1%. soft landing, let's just say that. by doing that, they said that when the fed has seen inflation slow as fast as it is, they think we got to low-inflation bacteria trying 24 and 2025. the fed needs to bring the rate structure down. it still leaves you 3.25, 3.5.

the last time we were fundamentally at that rate structure was 18 years ago. we've had a long stretch of very low rates instead of what happened recently. now the rate structure can be fundamentally higher and is more structurally sound, the fed is pivoted to be cut to normalize this, not done yet, but all indications, everything we can see that consumer spending is consistent with the 2% inflation economy. that level of spending growth with their customers was word 27th -- was where it is in 2017, 2018. david: are you concerned of the markets are overreacting to chairman powell? brian: he has this challenge. the fed in our vision was late. i think people have to be a little careful. this is the 10-year moving round between 390 and 450, 470.

it is not the real economy. the real economy is impacted by the overall rate level. against that we have a lot of stimulus coming to this system. the chips act, ira, those are coming through the system. that is the tug-of-war he is up against, but we believe you will engineer a soft plant -- he will engineer a soft landing for the interest-rate market. jon: brian moynihan there. if we think about the road ahead, the fact that moynihan is indicating that there will go be more capital deployed by bank of america, particularly on the capital-markets inside of their business, would suggest that there is a benefit to my guess, to pushing through the uncertainty. they have seen benefits the last three or four years and they will try to continue doing that. vonnie: certainly, jon, and that will be music to the use of the smaller and medium-sized businesses. perhaps it will be next year.

we will have to way for interest rates to come down for this to happen. we had more fed to speak today, bostick saying the policy will need to be resolute and patient, and the richmond fed is saying that the fed will cut interest rates if progress on inflation continues. really putting the brakes on. coming up, the digital bridge and ceo joins us to discuss his investments and the data centers fueling the ai revolution. this is bloomberg. ♪ you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

jon: this is "bloomberg markets ." i am jon erlichman, with vonnie

quinn. time for our stock of the hour segment, but we want to broaden it out to the last year. digital shares have advanced more than 50%. the company's assets include data centers, and in a year when there has been talk about artificial intelligence and computer power, demand for those centers is strong. ceo of digitalbridge -- they manage more than the data centers, $70 billion-plus in assets overall --marc, it is good to have you with us. how would you characterize what this year has been like so far? marc: it can only be characterized by explosive demand of year. we have had a tremendous year. we have been of over 80% in terms of same-store organic growth across our portfolio, and that is a global footprint of 30 million square feet, 168 data centers on a global basis. we have not seen this kind of demand and 25 years. vonnie: it must be a little bit

of relief because going into 2023, data center demand was not looking so great. i guess the power has moved towards the landowners. what do you see for 2024? marc: this year we deployed 7.2 billion of into cloud and ai data centers -- capex into cloud and ai data centers. that should take us to about 1.6 gigawatts of computer power, almost four gigawatts of computer power. that is another step function in the total amount of capacity we will bring online for customers not only in ai, but public and private cloud. we see this trend continuing well through the next five years. we think the build for ai takes about a decade. we are still in the early infancy of cloud deployments. as they move into the edge and into the enterprise, a little bit deeper. we don't think this is a blip on the radar screen.

the pricing for landlords has been strong for the better part of six quarters now, and we see the pricing pressure or capability staying quite strong into 2024 and 2025, because it is a supply and trade imbalance in terms of what the hyper scalers need and what the landlords are willing to supply on a global basis. vonnie: marc, you went from transforming your business from legacy real estate to infrastructure, towers, small cell, everything to do with 5g and someone, and now you have your eye on ai. how does that impact what you buy and what digital assets you need? marc: we look at this ecosystem investing, and allocators across markets, particularly in private markets, they are generally under allocated infrastructure and they are very under allocated to digital infrastructure. when we sold our $52 billion in real estate and pivoted to $75 billion of digital real estate, we thought that was the right move.

ultimately that is proven to be correct. we think we can take our $75 million and transform that to $150 billion of aum the next few years, and we are continuing to raise capital because ultimately where do investors want to put capital? they want to put it in safe places. when you look at digital infrastructure, those attributes are fantastic. most of our leases are between 10 years and 30 years. giving investors that safety where they have the contract, but most important you are investing with great customers with great ratings and ultimately are growing, and we are investing in the future of the economy, and that is why we made that give and it has proven to be the right pivot. jon: let's talk a little bit more about the future of power usage and how that changes. you have talked about it in the past. how are you were approaching when demand is growing what happens on the actual power side

-- power sources, really? marc: this honestly is our biggest challenge the next three to four years. we have been very clear to investors, very clear with the street that there is a limiting factor to how fast we can continue to grow ai dennis centers. we made a critical pivot about a year ago. we made a decision to start investing in renewable energy, principally through an investment in switch. we took the business private last year, that is proven to be a great investment for us. it feels all of its capacity through renewable energy. we believe that is the future. if you are not building data centers adjacent to low-cost renewable power, you will not have a full conversation with the hyper scalers and cloud players today. it is not just an aging transmission grid that is hurting us, but our customers want to know we are delivering renewable solutions. one of my big charters over the next decade is to convert our

portfolio of assets not just in data centers, but in towers and small-cell infrastructure, 5g networks. we have to begin the process of fueling all of that with renewable energy, whether it is a solo, i drove, wind -- hydro, wind-adjacent data centers. it is an absolute must if we wanted to be business without -- repeat business with our customers that have been with us the last 25 years. we are super focused on it. we know there is a lot of work to do on the transmission grid in places like virginia, california, and europe. we cannot just rely on the grid anymore. we have got a ticket in our own hands and deliver for our customers, which we did this year and plan to do next year. vonnie: i'm curious of what you make of what the markets are doing federal reservewise. talk about digital credit and liquid securities as part of your business, but if the

markets are looking at fixed rate cuts, the fed is talking about three so far, and you can't fully decide when you are going to raise capital or how you're going to manage these digital credit ideas that you have. what are you thinking in terms of the rate cut cycle? marc: look, when we pivoted to an alternative asset manager, we have been great at investing in infrastructure and logic products -- flagship products. but when we made the pivoted to digital credit, it was something that we saw in our day-to-day interactions with banks and our day-to-day interactions with rating agencies. as rates rise, we saw pivot to private credit. you see this with our peers like aries and apollo. they are very skilled at it. also very skilled at it, we have a great team. you have it hundred billion dollars -- $800 billion maturing in the next 24 to 36 months.

thanks can't support that. we believe product credit will represent 30% of the refinancings over the next two to three years, irrespective of rate cuts. we've gotta have that solution. we have that solution. our first credit fund was really successful. we are looking at how to expand that credit strategy and we will work with the likes of blackstone and apollo as we do credit deals with them, and pretty ridiculous -- and particularly with the loan initiated two months ago. we are also providing capital as a private credit solution provider. i don't think that trend goes away irrespective of interest rates. vonnie: marc, thank you so much for joining. digitalbridge ceo marc ganzi. wall street bonuses looking pretty bleak after a year of few deals, collapsing banks, and job cuts. this is bloomberg. ♪

jon: let's get to today's "for what it's worth." 30%. jp morgan and citigroup have been weighing to cut by that much. something to consider. this is bloomberg. ♪

i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app. can i sleep over at your new place? can katie sleep over tonight? sure, honey! this generation is so dramatic! move with the xfinity 10g network.

romaine: a reinforcement of that soft landing narrative. live at bloomberg headquarters in new york, i am romaine bostick. katie: and i am katie greifeld. we are not at a record yet when it comes to the s&p 500 but getting closer and closer. the s&p 500 currently up 0.4%. slightly outperforming big tech. the nasdaq 100 up 0.3%. 10-year yield coming down yesterday. he