haidi: very good morning. welcome to "daybreak: australia." i'm haidi stroud-watts in sydney. we're counting down to asia's major market opens. shery: from bloomberg world headquarters in new york i'm shery ahn. the top stories this hour. concerns about inflation and supply disruptions weigh on wall street. apple falls in trading after bloomberg reports it may slash

iphone production targets. haidi: the i.m.f. trims its global growth forecast warning of a danger of divergence and says china faces a tough trade-off on evergrande. shery: plus we'll hear from the world bank and the a.d.b. as they weigh in on the inflation debate. here's a picture across wall street. we are seeing u.s. futures extending those losses that we saw in the s&p 500 which was down for a third consecutive session. we saw it plunge into the red deeper in the late session. and we had concerns over inflation, u.s. consumer inflation expectations, hitting new highs according to the new york fed survey. 10-year yields also falling below that 1.60% level and oil at the moment under a little bit of pressure but after edging higher in the new york session above that $80 a barrel level. take a look at some of those chip makers. because we did see the philadelphia semiconductor index lose ground for a third consecutive session. really moving toward correction territory. this is the after hour trade. we have already seen plenty of pressure in the new york session. and we have concerns over supply

shortages, profit warnings, pressure from rising treasury yields. amcor technology at one point was down given that credit suisse downgraded the stock and we had heard from bloomberg reporting that apple is poised to slash iphone production growls given that chip -- goals given that chip crunch. we're seeing the extension of the fall in the after hours session. take a look at third quarter earnings. because it's earnings season and that tievment year. this week will be a busy one. 20 s&p 500 members due to report. and analysts think overall earnings are likely to rise about 25% of this quarter. this is of course markedly slower than the previous two quarters. and we might see that also fading into next year. but really haidi, we are right now watching what's happening in congress because the house is again voting on temporarily increasing the debt ceiling. and that has played into the drama of the markets. we are expecting the house to clear that bill given that the

senate has already passed it. that would be sent to president biden. what this would do is raise the debt ceiling by $480 billion through december 3. but of course december will be a busy month, haidi, because we do have the stop gap funding bill also rounding out and also another vote on the infrastructure bill. a very, very busy agenda for congress. haidi: yeah. and all of this against a backdrop of increasing head winds for the global economy. take a look at what the i.m.f. has done. they are expecting global growth to come in at 5.9% this year. that really, though, masks some pretty deep downward revisions for a lot of countries. we've seen revisions downward incrementally for big major nations the likes of the u.s. on account of supply chain issues, china, the u.k., japan, canada as well. but really the biggest cuts, are surprising given that we continue to talk about the vaccine inadequacy in some of

these countries. the biggest revision coming in is low income countries. shery: yeah. the unevenness of the recovery. china was also downgraded slightly. 8% growth this year. which is big compared to other parts of the world. but the i.m.f. real interestingly weighing in on the evergrande crisis saying that there will be big trade-offs, right? the -- do you want to help evergrande and give up the perception that you're really backing off from that deleveraging effort? but then what happens is if you put off helping them out, that could help actually produce more stress in the property sector and the broader economy. so investors haidi will have to wait all of -- weigh all of those issues and we have more ahead of the key u.s. inflation print as well. let's bring in our global economics and policy editor kathleen hays for -- and economy editor molly smith and tech reporter mark gurrielen. kathy, the i.m.f. forecast we saw another warning of divergence across the global economy. kathleen: we certainly did. and of course that's something that's a theme at the i.m.f., at the world bank.

but basically in terms of how they changed their forecasts for 2021, they're looking at supply chain disruptions. the advanced economies look like they were going to surge ahead. but oh, boy, if you can't get the inputs to production, chips to produce new cars, etc., you're in trouble. and then the delta variant impact. that's in many countries, certainly it's been hitting emerging markets pretty hard. and to expand a little more on what haidi was running into with the numbers. 5.9%. that's what the world economy is supposed to do this year of the that's just down .1%. but looking ahead, out further than 2021, further loss of momentum in 2022 down to 4.9%. in the u.s. a downgrade was a full percentage point. 6% still very good by historical standards. 5.2% next year won't be so good but a reduction. i think china is interesting, but growth rate down to 5.6% next year perhaps because of a supply constraint that's hitting manufacturing countries so hard. euro zone down to 4.3%. low income countries, though, a

lot of them reduced this year but next year growth picks up probably because the vaccine picks up and the virus gets more under volume and some commodity producers are expected to be a little bit better this year because commodity prices are higher. when it comes to inflation, that's the big topic, isn't it? advanced economies, inflation seen rising to 2.8% this year. i.m.f. had been forecasting 2.4% and next year down to 2.3%. not exactly the fed's target. but definitely a reduction. that's what they're saying. i.m.f. is also warning this risk to financial markets as central banks start tightening. that could cause disruption. they're worried about stock and bond market selloff and they're a little bit worried about china facing a tough trade-off when they deal with evergrande. don't look like you're not tough enough by slowing down deleveraging. but you better be a little bit tough and move ahead anyway. so haidi, it's a lot of different factors for the i.m.f. and amazing to run through all the things they said today. haidi: yeah. and when it comes to the property sector and the

evergrande crisis this idea of how they address moral hazard. but still managing, we also spoke earlier to bill winters who spoke about the evergrande risk saying that china is not dumb enough, quote, for a lehman moment and also saying that they don't have really a meaningful concern of exposure to the property sector there. take a listen. >> as a bank, we're relatively underweight commercial property including in china. and as a bank we've always focused on top share developers. so i'm not particularly concerned about the first order impact for us. of course if it became -- if du plessis a contagion -- if there was a cobbling tainan effect it would be a concern for everybody but a lehman moment for china? i don't think china is frankly that dumb. haidi: we will have much more on that because bill winters goes on to talk about the inflationary pressures and how the markets very much rate sensitive right now. speaking of inflation, we hope from the fed's rafael bostic some strong words when it comes

to those who talk about transitory inflation. >> coming increasingly -- becoming increasingly clear that the future of this episode that's animated price pressures mainly the intense and widespread supply chain disruptions will not be brief. data from multiple sources point to these lasting longer than most initially thought. and by this definition, then, the forces are not transitory. haidi: and in comes ahead of the key inflation later on wednesday, monthly i, transitory is a dirty word. he said stagflation, is starting to become a pretty sensitive word for those in the markets as well. >> that's right. yes. rafael bostic literally described inflation as a dirty word. and actually had a swear jar on the table next to where he was speaking that he deposited a dollar into every time he used that word. so just to give you a feel for where he stands on team transitory. so instead he said that since these inflationary pressures are lasting so much longer than

expected, it's not appropriate to be referring to inflation as transitory unlike the way that the rest of the fed seems to be referring to the price changes we've seen lately. so definitely the inflation print that we're getting tomorrow in the u.s. is going to be really important to perhaps confirm what bostic is saying and to see just how long long lasting these price increases are going to be. haidi: mr. bostic there being very dramatic but understandably given all the supply chain serbs concerns that we're seeing, right? -- chain concerns that we're seeing, right? it's hitting apple. >> that's right. applal is the barometer for how the supply chain is doing for the consumer electronics market. and we've seen today that due to short mtion coming from broad kohl and texas instruments -- these products are made up of components from hundreds if not thousands if not tens of thousands of different suppliers and all it takes is one supplier not pulling their weight or one supplier having shortages to

impact everyone else in the entire product. and that is the game you're seeing in the supply chains today. and that's why you're seeing that massive impact, 10 million units up to 10 million units lower than expected for the iphone 13 in this calendar 2021. haidi: tech reporter mark germain and global economics poll and policy editor kathleen hays and our editor molly smith. we will be taking a look at the first word headlines at this point. including hong kong saying that a signal eight storm warning will remain in force on wednesday morning. disrupting trading on the city's stock change. -- exchange. and looking to scrap the premarket under severe weather trading arrangements with a signal unlikely to be taken down before 9:00 a.m. local time. hong kong schools are suspended. and services will operate on a limited timetable. let's get you the rest of our first word headlines with vonnie quinn in new york. vonnie: thanks, haidi. and good morning. fed vice chair rich clarida the

u.s. is not heading toward stagflation that developed in the 1970's when unemployment and inflation rose in tandem. told the institute of international finance he doesn't see a repeat of the monetary policy mistakes that led to that crisis. and also says the time is almost right for the fed to begin scaling back its bond buying program. >> substantial further progress standard has more than met with records to our price stability mandate and as of september meeting had all -- with regard to our employment mandate. the committee indicated that a progress continues expected. we judge that a moderation in the pace of our purchases might soon be warranted. vonnie: u.s. house speaker nancy pelosi is signaling that president biden's signature economic plan may be scaled back by focusing on fewer well-executed programs. democrats must slim you do a bill that was crafted by house committees from $3.5 million to roughly $2 trillion. that's a figure biden has floated as a potential compromise between progressive and conservative democrats.

blue origin on track to launch its second human space flight mission on our -- october 13 after a delay four days due to weather conditions. the new shepherd n.s.a. team rocket will carry four passengers. among them is star trek actor william shatner. who at age 90 is set to become the oldest person ever to go into the final frontier. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2,700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi. haidi: still ahead we'll get some insight into the a.d.p. economic outlook for developing asia. the impact of these global energy prices and the shortage with a.d.b. managing proper woochong um. coming up next we discuss the global economy as well. carmen reinhart chief economist at the world bank is with us. this is bloomberg.

haidi: we are hearing from the australian treasurer speaking at a conference talking about an expectation of 3 pes or more contraction from the australian economy in the third quarter g.d.p. and we do know that most analysts and economists are expecting a pretty steep contraction particularly when it comes to the month going into september as we have had a lengthened lockdown across major economies in new south wales and

victorian, we know sydney has just emerged this week from some of those lockdown restrictions, melbourne and victoria still remaining under lockdown. frattinberg also saying that vaccines prief a light at the end of the tunnel for the economy in south wales we're seeing really over 70% full vaccination of the eligible population there. so we'll continue to monitor those lines and he also said that he has had a chat with treasury secretary yellen exchanging notes ahead of that d-20 meeting. let's get back to our global and economics policy editor kathleen hays standing by with a guest ready to talk about the head winds and what's going on with the global economy this year and next, kathleen. kathleen: we're very happy with this very, very busy person could find time for us today. carmen reinhart, senior vice president and chief economist at the world bank and great to have you back on our show. and meetings kicked off this week, big, big issues on the world bank's plate. you got record low income debt.

you got full vaccine rollouts and you got economies diverging more and more. inflation, though, now at the top of the list it seems. everybody's list. you've been saying for months you would be a -- not transitory but persistent. what do you see now? carmen: well, you know, i think people have in mind also the aftermath of the global financial crisis in which we have seen large increase in monetary stimulus in the major central banks. and no inflation issues should follow. i think the point i've been making for some time is that post-covid is not just about the kinds of declines in aggregate demand, sharp dalliance in aggregate demand that we've had, you know, after the global financial crisis. and even more forceful ones after covid. it's about aggregate supply shock. they're not tightly bundled like

they were in the 1970's in which you can say a single supply shock. opec, oil. but many supply shocks that are manifesting themselves in all kinds of cost pressures. and in bottlenecks and shortages and the like which make for a more persistent -- more persistent and stubborn inflation album. kathleen: are central banks way too long to stress this? -- address this? carmen: i couldn't hear you. kathleen: are central banks waiting too long to address this? carmen: i gave a lecture a couple of weeks ago looking at the issue of central banks and my sense is central banks are in a tough position in which they don't want to derail what could

be still -- a fatherly uncertain recovery -- fairly uncertain recovery given the cycles we've been through with the various variations and gyrations and covid. and they're concerned about pulling back stimulus too soon. but i think the end point may be that the central banks are more likely to follow markets rather than lead them. i would point out that following markets, and acting on the later side start raising interest

rates, does that increase the risk for these poor or highly indebted nations that they'll default, that there will be bankruptcies, household, government,government, business? carmen: look, kathleen, this is the time immemorial issue. international interest rates and their cycles have importantly impacted for better or worse emerging markets throughout

history. what it means now is really a two tier, you know, two tier effect within the emerging markets and developing countries. many developing countries. are already facing serious debtt difficulties in the here and now. even if interest rates remain low. youulow. you know, more than half of the 73 low income countries that are eligible for thee eligible for th debte service suspension initiative are either in debt distress or high risk of debtrisk of debt distress. so that's the one -- the layer that i think would stand to be vulnerable to the -- you know, to a tightening in international monetary conditions. are of course some of the middle income emerging markets that are still, you know, have access to capital markets and are still not in that -- you know, danger

threshold.. threshold. kathleen: ok. carmen: but definitely bad news. from the vantage point of an emerging emerging market. kathleen: how about china? how about the global risk from spillover for trying to deal with evergrande and hit that balance between not too tough and not tootoo easy? is that a risk you see for the global economy? carmen: absolutely.en: absolute. look, china played a critical role as engine of growth for emerging markets at the end of the global financial crisis. remember, the u.s.sis. reme went intomber, the u.s. recession. europe was in recession.sion. and china was between 2003 and 2013, you had double 2013, you ha digitd double growth which kept commodity prices verys very high. this was a big boon for emerging markets. and especially many commodity producers. i think apart from the risk associated with, you know, a

tighter -- should central banks move to tighter financial conditions, another significant risk for emerging markets ris isk for emerging markets further slowing in china that the chinese slowdown of 2015, 2, when china's growth rate slowed to around 6%, had a bigg hit on e.m.'s and i think one cannot underestimate what further slowing in already an environment where there's a lot of vulnerabilities from the covid legacy. so at the moment, i would say these -- thesee -- these are twn the downside to keep in mindep d when looking at -- at the emerging world which has been disproportionately hard hit by the covid pandemic. from wealthier count parts. kathleen: the taper is pretty

well on the table and advertised is that the federal reserve going totonow that the fe annou. priced into markets and nothing to worry about or is this theryh beginning of somethingis the tht could ripple through emerging markets at a time when they are vulnerable onulnerable on many ? kathleen: look, i think there's, you know, there's a group out there that's saying are we going tokathleen: l have another tape? i don't think the risk that i'm talking about are risks about another round of taper tantrum. in 2013, emerging markets were, you know, in a boom, large capital inflows, very upbeat scenario, and then the taper tantrum really was a major pivoting point. andd strange finances for a lot of e.m.'s was -- current account deficits. def now.t therere i thinkicits. we're the risk thatnot ther i'm talking about are rising

interest rates, a tighter financial conditions, also mean potentially more hits on sovereign risk. risk premium. on sovereign debt goes up with interest rates by a multiple. kathleen: alliple. kathleen: all right. carmen: and i think that especially given the post-covid higher debt levels is -- increased is -- increa debtsed burdens. but it's different from the taper tantrum episode. kathleen: all right. thanks so much to carmeno carmen reinhart. thank you for joining us, carmen. i hope the rest of the week goes for you at the world bank annual meetings. kathleen: thank you, kathleen. kathleen: always a pleasure talking to you. shery: ay: a great conversationd by our own global policy economics editor kathleen hays who will be back with anotherr big interview. we'll hear from philippine central bank governor benjamin

on thejamin on the policy direction as the country eases pandemic restrictions. we do have an alert on the havee bloomberg right now. the fed is clarifying a position earlier on the term ending for the vice chair. federal reserve vice chairman forfor supervision randall quars will be removed from his role on the supervisiononthe supervisio. he was the chair on that committee. that will expire withith his tie officially expiring on wednesday as well. that's according to a fed statement. quarless has also -- also has aa seat -- will chair the supervisory bank committee the main watchdog of wall street lenders and president biden has yet to nominate a candidate for that role.e. haidi. haidi: let's take a look at the day ahead for australia. chinese state mediadia says more trade strikes are coming. this after the former prime minister tony abbott visited taiwan last week..taiwan last w. he accused beijing of bullying the island and interestingly, we

are hearing from the australiann treasurer, josh fryberg saying he wants a constructful, respectful constructful, respec relationship with china andtful also saying that exporters hit by china have identified new markets. that china's trade actions against australia have impacted less than 6% of exports. here in new south wales the new premier has signed off onigned e country's biggest hydrogen plant today and expected to grow the state economy more than 600 million aussie dollars by 2030 and some good news for avocado and lunch lovers. supplies are at record levels. avocado toast is of course a favorite of cafe brunch men jews and lockdowns keeping people at homepeople at home just as -- menus and lockdowns keeping people at home. home.ow cheapp and h avocados have been hereow cheap in supermarkets hen sydney. shery: i'm eating them every week. haidi: everyone it seems staying healthy. shery: healthy and nutritionltht going into -- plenty of supplies it does seem.

we are counting down to the start of trading inof trading i. and we're seeing futures up by .2%. and these inflationn concerns, supply chain issues that apple slashing or set to slash slash production goals due to the ship crunch that will be playing out when it comes to a lot of apple supplier apple supplier names trading in asia today. lots more to come. this is

>> do i see persistence in inflation? yes. you know, i believe it's more than transitory related to supply chain issues and commodity prices. >> hopefully it will straighten out over the next six months. history shows it should. if the supply chain holds people back from certain goods they find other places to spend it. >> people are very, very confident that you know they are transitory. but they will be solved. and whether it's three months, six months, nine months i don't

know. i don't think it will -- personally i don't think it will be longer than that. so i am confident that we will get past this. haidi: banking c.e.o.'s at international finance meeting and discussing the impact of supply chain chaos on inflation. our next guest says price pressures remain benign in developing asia. but he's -- but it's expected to accelerate next year. let's bring in woochong um, managing director general at the asian development bank. so good to see in you person here in new york. thank you so much for joining us. we continue to see the supply chain disruptions. and although inflation remains benign in asia, when could this become problematic? woochong: we need to monitor this very closely. and as the global recovery continues, there's going to be upward pressure for inflation. but we are looking at what's going to happen in our current projection for inflation for this year of 2.2%. and for next year, it's going to be about 2.7%.

which is stillwell below the 3.2% of inflation average for the last decade. so we feel there's still a cushion but we do need to monitor and see if it really is a transitory situation. shery: do you buy into the stagflation debate? woochong: well, we'll have to see. that's a very difficult one to call. and i'm sure our i.m.f. colleagues who just spent in the previous session has much more insight on that issue as well. shery: but economic groight, right? how could it be impacted, especially as we see reopening and also at the same time more variance of the disease? woochong: that's a big issue of our region in asia. you know, two years ago, we projected economic growth to be about 5.2%. but it ended up being negative 0.1%. but with the increased knowledge on how we can manage this pandemic, and also of course the vaccine rollout, we are seeing a lot of encouraging signs of activity.

so we're projecting that the economic -- growth this year will be 7.1%. and for 2022, we are expecting the growth to be about 5.4%. so we are seeing some promising signs. haidi: how deep are the effects of a fractured labor market as a result of some of the migration flows that have stopped because of covid as well as just the broader supply chain and logistics issues? are you seeing that playing out in the forecast? woochong: the migration -- the trade -- there's going to be an increased trade activities as the economic growth is picking up. but again, it really depend on how the vaccine is roll out in our region. because many of the countries -- economies in our region are dependent on tourism, for example. and with a global restriction on travel, it's still putting downward pressure on the economic activity as well. haidi: when it comes to

agriculture, there's been just a hot theme, an overheated theme when it comes to food supply and food prices. are there structural problems with supplies in -- across the asian region in particular, do you see how -- longer-term changes that would be able to avoid the price fluctuations and market fluctuations that we've seen this year? woochong: so -- in terms of food security, the production itself is not a big issue. but the transportation. and in terms of transport of goods and products, it's been ok. so we don't expect any downturn in the near future. shery: what about the pressure coming from the fed starting to normalize policy? especially in exchange rates across the region, not to mention perhaps portfolio outflows? woochong: that's one of the possible risks that we are facing in addition to the vaccination that the potential market turbulence resulting from the process that the u.s.

monetary policy, and normalization is happening. so again, that's a big issue that we need to monitor. and of course a possible -- political tension that's going around in the region would be something we need to watch. shery: who in developing asia is most vulnerable right now? woochong: many terms of -- shery: in terms of these outflows and perhaps covid as well because the impact of the disease has been so divergent? woochong: yeah. so within -- unlike the developed countries, the vaccination has been quite low. you still have 38% of the asian average where fully vaccinated compared to 55% in the u.s. and 65% in the european union or japan. and even within the asian region, the poorer countries are countries are still below 30% of full vaccination. so these are generally the smaller poorer countries. and that's going to be a key issue in terms of whether we're

going to come out of the pandemic sooner or later. haidi: the other big risk is climate change, going into 2026 what are the policy priorities particularly as we still have so many countries in asia reliant on the agrarian economy? woochong: yeah. so climate change is one of the -- the pillar that we have to deal with. and unlike the covid-19 pandemic, which will disappear sooner or later whether-the-a few months or a few weeks -- whether it's a few months or a few weeks or a few years, climate crisis will not go away unless we take concrete action. so we do need to have a collective action and at cop 26 we are hoping that there could be some ground breaking agreements in terms of how the carbon market will play out and also how the various countries will make a contribution to this joint effort. shery: you just today increased your climate financing pledge. woochong: yes. so a couple of years ago, we set up a strategy of 2030, we

thought the economy change is going -- is going to be very important so an ambitious target of $80 billion. but the last couple years the situation has gotten worse. so we looked at it and see what we can do. so we elevated it to $100 billion. and with that, we do need to continue to promote mitigation actions and renewable energy and energy efficiency and energy storage as well as climate adominatation because no -- adaptation because no matter how much we cut we are still locked into certain changes. there are vulnerable sectors such as water resource management, urban planning or flooding and drought. and food security. agriculture sectors are the key sectors that we are focusing on to build adaptation and also the financial resources that is required for climate action, the public is not enough so we have to crowd in private sector which means that we have to put in a lot of reforms and develop projects so that they become

investment grade for private capital to come in. haidi: what about thee i don't political fault lines -- the geo political fault lines and the serviceability of the debt at the moment? woochong: in terms of climate financing you're talking about? haidi: no. more across the board. woochong: so -- that's the roll of the development community where we do need to build the capacity of the developing countries so that they can make the best use of their opportunity in terms of development and building the bank -- the project so that they can provide support to the citizens of their countries so that they are not just burdened with debt but without proper effectiveness. shery: it was great having you on. bloomberg markets. and thank you so much for coming into the studio here in new york. asian development bank managing director general with the

bayne's views on economic growts on economic growth. and we are watching what's happening in practice. we do have the house vote when it comes to the short-term debt ceiling. we are talking about increasing the debt limit by $480 billion in order to tide the treasury over until december 3. but it was already passed by the senate. the house is now expected to pass it. they do not have the votes as of this time. but of course if that passes, it goes to president biden. and then the treasury will be able to meet obligations through december 3. and it will be a busy december we're talking about the stop gap funding and also the infrastructure bill and a massive tax and spending bill all on the agenda. house speaker nancy pelosi has already signaled that the president's signature plan could be scaled back by focusing on fewer and well-executed programs, haidi. so we'll continue to watch what's happening in congress as we await that house vote. they do not have the votes as of yet but if it passes through, we

know that it will go to president biden for his signature. haidi: continuing to watch that stop story and talking with the a.d.p. about climate and bill winters and mark carney led a group to establish high standards for carbon offset trading earlier this year. he spoke with bloomberg's francine lacqua. >> one of the criteria for our core carbon principles is we do no harm f you do harm to local communities and indigenous people and biodiversity it will not qualify as a contract under our carbon brin pell. that's the defensive approach and the offensive approach is create market and we are doing that right now which -- this is the carbon standard that we set. but there's also -- you may have additional attributes that are valuable to you. local unemployment. protection of water resources. not do no harm but do some good. you may want to pay extra for that contract. so when we talk to the people who are really big in the

climate investment game, many of them happen to be oil companies or other -- airlines. very advanced in their thinking. and they're investing directly in projects to protect rainforests but also almost with a secondary objective as well. promote local unemployment -- employment to protect biodiversity and protect natural carbon and protect biodiversity and they'll pay more for that because it's important to them and their business-month-old. we want -- business model. and we want to capture that in the transparrot market and get that advisor -- transparrot market and fit get that virtuous circumstancal and doing something big but by being transparent you get the scale and the acceptability and maybe we can do more. >> are we transparent enough? >> not -- right now, no. the vast majority of it happens -- is over the counter and undisclosed. so we're trying to urge everybody to come forth and put the trades out onto a platform. and one of the things standard chartered has done together with partners in singapore we've

created something called climate impact x. and we got our first auction of high intec credit carbon projects -- integrity carbon projects. 12 projects all nature based and for the most part -- maybe in -- all in southeast asia and create some noise around this and we want to be transparent so it's an option. we're going to publish the price. and hopefully that will bring more people into the market. >> final question, when do you think will be the day where banks say i am not financing fossil fuel anymore? >> it depends on what you moon by not financing fossil fuel. so i think the day that banks are completely disengaged from the fossil fuel industry will be the day that there's no more fossil fuels. but if you look at the international energy agency or science-based target initiative or people who have really studied this carefully, in 2050, we're still going to be producing oil and gas. coal is more debatable but definitely producing oil and gas. but --

>> nothing else -- >> maybe new wells. and this is embedded in the science is technology which is scalable and economic to take the carbon out of the environment. whether it's carbon capture storage or development of green hydrogen technologies and things and a half -- things of that nature. so out of the fossil fuel industry, i don't know. when can we sign up and say we are highly confident that we are on a science-based target to zero emissions consistent with the paris agreement which should do our part to save the planet? in the next couple of weeks. shery: bill winters speaking exclusively with bloomberg's francine laqua. first word news with vonnie quinn. vonnie: shery, thank you. the international monetary fund says the global economic recovery has lost momentum and becoming increasingly divided. but it still sees a robust rebound from the pandemic without expanding 5.9% worldwide this year. that's down just .1% from july's

view. chief economist keith agope says he thinks inflationary forces are transitory although huge to the upside. >> we would like to see broad based inflation again at the kind of level we're used to seeing. now, the question is as that spirals out of control and end up with very high inflation numbers, much above the comfort range of central bankers and enough people in central. there we're not seeing that yet. vonnie: a race to buy supplies of merck's promising covid pill before it's even approved is raising concerns that poorer nations could be left behind. a potential repeat of the unequal vaccine rollout, countries including australia, singapore, malaysia and thailand have followed the u.s. in speaking -- seeking to obtain mover mover. monday pifer and taking steps to ensure distribution to generic drug makers. u.s. federal judges have upheld new york covid vaccine requirements in three separate decisions as the contentious issue winds its way through the

court system. the rulings rejected claims against mandatory jabs lodged on racial, medical and religious grounds. and the white house has criticized the texas governor greg abbott's order banning many vaccine mandates saying he's putting politics ahead of health. the trump organization is in advanced talks to sell the rights to its washington hotel in a deal that could be worth more than $370 million. sources tell bloomberg that the firm c.g.i. merchant group is in negotiations to buy the lease for the hotel on pennsylvania avenue. the trump family has been in on and off efforts to sell the hotel since 2019. and an asking price of more than $500 million. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2,700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi. haidi: time now for morning call ahead of the asian trading day.

this mid week session. soph. sophie: well, haidi, ahead of the u.s. c.p.i. data a recent note from goldman's jan hatzius sees upside risk next year end target for 10-year treasury yields at 1.6% inflation if inflation turns higher and he does see further upside gains for commodities, particularly in the energy space. but by next year, flipping the board, goldman does expect the -- current bottlenecks will ease as china manufacturing normalizes and strong demand growth is seen to slow down. and should allow manufacturers to restock and therefore rein in goods price inflation but going into year end we have seen asia's export engine spotter and china trade data due out this wednesday is likely to show a continued slowdown. we got p.m.i. data new export orders in china fell for a six straight month through september and import growth softer domestic demand is likely to have dented that picture given that cash registers have been a

weight and pulling up the board china's power prices adding to apple supply chain headaches as suppliers like t.p.k. have had to adjust operations on the mainland to meet the government's electricity restrictions and we are seeing signs of a worsening chip crunch with industry lead times for delivery up for a ninth consecutive month to now average 21.7 weeks. shery. shery: coming up next, j.p. morgan set to kick off bank earnings season reporting third quarter results before the market opens on wednesday. we'll get a preview next. this is bloomberg.

>> well, may start tapering in november but the path for the fed is going to be if they start tapering and a shock in the fourth quarter and you have bond futures going higher and credit spreads going higher and the stock market correcting sharply and the economy slowing down very sharply i don't think they will be able to tough on inflation and they're going to wimp out and they're going to dodge it and postpone any finishing of tapering or raising rates. shery: speaking on what the fed will do given that we are going to see them tapering despite rising inflation concerns. we are now hearing from secretary yellen as well.

she's reiterating her view that high u.s. inflation is transitory in a local media interview and we're also hearing that she sees isolated shortages of goods in the coming months. but we're in the middle of earnings season. u.s. banks kicking off a third quarter earnings with j.p. morgan which reports right before the wednesday opening bell. bank stocks have been big outperformers on track for the biggest annual gain since 1997. bloomberg's su kennan joins us with a preview. many analysts are expecting j.p. morgan to set the tone. su: wall street continues to look at j.p. morgan as an industry leader and bloomberg intelligence analyst expecting j.p. morgan to set the global bar in terms of trading and investment banking fees. and also for loan growth which is a focus, it's been a difficult area in recent quarters for the broader banking sector. loan growth expected to come in at 5.4%. now, the consensus estimate is

for adjusted revenue of 29.9 billion -- $29.9 billion. barclay analysts expects j.p. morgan which has its stock up some 30% year to date to come in above consensus thanks in part to improving loan and controlled expenses. again, stock prices are considered to be at elevated levels by most analysts. so many caution the upside already built in. as to what to look for, trading revenue. some analysts expect trading revenue to actually decline with strong equity results overshadowed by a decline in bond trading. baird analyst expects j.p. morgan to emerge from the pandemic stronger than it's peers given its diversified franchise and other factors. now, if we dip into the bloomberg, we can see that bank stocks as a group are enjoying their biggest gains to the s&p since 2000, again on track for their best annual gain since 19 -- in many years.

and so there is a concern about whether stocks will behave well unless that are very strong results. interesting to note, citigroup will be following j.p. morgan on october 14 in terms of its reporting. and it may have to address recent scrutiny over its bonuses. three of c.e.o. the lieutenants are eligible for as much as $5 million in bonuses apiece. and that's tied to certain targets. but you got wells fargo's bank analysts saying there's no specificity on the targets. he says that's kind of like charging us for a dinner before we know if we're getting hotdogs or caviar. so that will be an interesting issue on that call. back to you. haidi: hotdogs than caviar. we are continuing to monitor the comments from the australian treasurer josh fryberg and had been speaking about china playing down the impact of these trade policies, beijing toward cambra saying the china actions

have affected less than 6% of australian exporters and exporters have found resilience and innovation and found new markets in lieu of chinese demand and also making commentary when it comes to the economic recovery saying that he expects australia's economy to contract by at least 3% in the third quarter due to the lockdowns. and now also saying that he's opened to a review of the reserve bank of australia saying it's been a while and it has been one in 40 years since an independent review of the r.b.a. has been called and the oecd among other bodies have been calling for one to be held. well, staying with australia, and major infrastructure work in the country set to double in the next three years. opening up a potential squeeze in skilled labor and materials. and paul allen has been tracking this and paul, this seems to come at a time where we continue to see supply chain issues, more demand than supply of just about everything including the labor market here. paul: that's right. this report from infrastructure australia looks out -- at three

years and one would hope some of those supply chain issues have eased a little by then and australia in the grip of a skills shortage at the moment as well thanks to the closed borders and perhaps some relief coming on that front as well. but to the content of the report, infrastructure australia sees infrastructure spending, peaking over the next three years at $38 billion. and that's going to require a couple of things. first off, workers. the report sees demand for skilled workers exceeding supply by 48%. and of course there is materials as well. and the report sees demand for materials 120% on average above where it is now. and there's good news for the r.b.a. in terms of helping it achieve its goals on the employment and inflation as well. shery: our pannell -- paul allen with the latest from sydney. we'll have plenty ahead on "daybreak." this is bloomberg.

shery: a quick check of the headlines. the plan to list in shanghai appears to be back on track. the exchange update the status of the i.p.o. plan on tuesday after it was halted pending earnings information. syngenta targeting a listing that could be the world's largest this year. v.m.h. beat viments but growth slowed from the previous period when purchases of luxury items

surged after stores reopened from lockdowns. asia excluding japan was v.m.h.'s biggest region. that is it for "daybreak: australia." airbnb is next. -- "daybreak: asia" is next. we have a little bit of upside trading in aussie futures. this is bloomberg.

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shery: hello. i'm shery ahn in new york. haidi: we are cap -- sophie: we are counting down to asia's market oceans -- major market opens. haidi: warnings of a dangerous diversio