>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line," the intersection of business and economics with a main street perspective. we begin with breaking news. the u.s. federal reserve is releasing the minutes of its december federal open market committee meeting. peter cook joins me with details. peter, good afternoon. >> good afternoon. the minutes from the last fed meeting provide more color for the talk really table about when the central bank may lift interest rates. there is nothing in these

minutes different from what janet yellen revealed in her post meeting conference. remember, the minutes detailed the discussion around the language. most disciplines taught that the referenced participation indicated that the committee was unlikely to consider the process for the next couple of meetings area that puts any discussion of increase off until april at the earliest. there was debate about that language and some misgivings about it. some participants thought that the language gave an unwarranted expectation for the market on a narrow range of dates around mid 2015 and has not adequately allowed for the possibility that conditions might evolve in a way that could cause an earlier or later liftoff date. there will be three sets, of course, after this meeting.

they saw falling energy prices for -- as a plus for u.s. economic growth. and inflation -- some with more's concern than others -- but they suggested they would be prepared to start raising rates even if inflation was running low the preferred target. with lower energy prices and the stronger dollar, it was noted that the committee may begin normalization at a time when core inflation was near current levels, although in that circumstance participants would want to be recently confident that inflation would move toward 2% of her time. no great divergence from what janet yellen was talking about. it seems that most of the committee members were with her in terms of patients, so they will lift off at april at the earliest, if conditions hold as they are now. >> our chief washington

correspondent peter cook. peter, thank you. let's look and see if there is market reaction to the release of the fed meetings. julie hyman joins us. what a couple of days make on wall street. >> yes, and the minutes do not initially appeared to be making much of a different spirit if you look at treasuries, not an enormous amount of difference in where we were a few minutes ago before the minutes came out. they do seem as peter was talking about, to reemphasize the message the fed had already put out there. there is more work in the details, but not necessarily any large surprises. you have to keep in mind the context. the rebound that we are seeing in stocks is off a fall the worst we've seen about 13 months. you might have investors coming in and going, maybe some of this outlook for rates going up is beginning to be priced in. we are still down about 3.2% on

the s&p 500 where we were on december 29, when the s&p was at a record. that selloff, despite today's record, is still off 3%. one caveat to all of this sometimes you see a delayed reaction, both to the federal statement itself and then to the minutes. in just looking at the dollar. there, deal well, we are not seeing an outsized reaction. yes as people parse over the minutes a little bit more and see if there is something they can trade on, but as of now, not a lot of change in trajectory for stocks and bonds. >> our senior markets correspondent, julie hyman. julie, thank you. we will have more coming up with the executive president of pimco, joining us from newport, california. that is coming up in about 10 minutes right here on "bottom

line." let's get you the latest on the parachuting. the city is on edge and walked down after men armed with kalashnikov rifles attacked the charlie hebdo newspaper office. the french president francois hollande just finished speaking to the nation, and in his address the president saying several terrorist attacks have been foiled in recent weeks. he continued that france will wijn for -- he continued that france will win for unity. speaking in the oval office yesterday, president obama condemned the attack calling it cowardly and evil. >> [indiscernible] an attack on journalists. in attack on our free press. these terrorists fear freedom of

speech, fear the free press. [indiscernible] charlie hebdo -- >> for more on the attack, ryan chilcote joins us, and we have the current adjunct senior fellow of the council of foreign relations. and we have our correspondent in paris. caroline, i understand people are gathered in these streets of fairness -- streets of paris, showing solidarity? >> yes, there is a gathering to show support for the victims of these attacks. this is taking very near the -- this is taking place very near the charlie hebdo headquarters. all of these people are chanting

, and they have been chancing charlie, charlie. many are holding signs in support of the victims. it is very emotional. there has been gathering in other cities across the country. it is a very emotional moment tonight. >> has a been any claim of this possibility for the attack and do we know if the shooters were working alone or in concert with another organization? >> the investigation is still underway. the police are tracking the border of paris. no one is officially claimed responsibility for the attack but of course it has to be linked to some of the international anger against --

just as president francois hollande was addressing the french people, he reminded the french people that there were foiled attacks just before christmas. there were two. attacks linked to islamist -- there were two attacks linked to islamist extremists. they " shoutedallah akbar," which means god is great. the investigation is still underway in paris. >> as i mentioned, our ryan chilcote is standing outside the british prime minister's residence in london. prime minister cameron held talks at number 10 with german chancellor angela merkel.

what to the two say about the attacks in paris? >> the focus all of the talks was supposed to be the british prime minister's desire to crack down on eu immigration into the u.k.. he is up for reelection in four months and there are some groups that would like to see britain enter the european union or have a correct him and immigration, and then this happened. they have been very public both david cameron and the german chancellor condemning this very quickly. calling it barbaric. the two called up the french president to express their sympathy and readiness to support france with her intelligence. they also have an intelligence briefing together, the german and french leaders. we have also learned the british prime minister also at that press conference talking about the security threat. in this country, he was reminding people in britain that he raised the threat level in august to severe the second-highest threat level

saying there is always the possibility of an attack here. they cannot completely preclude an attack. all they can do is try to prevent it by going to the source and working. certainly political minds focused on what is going on in france today. >> aside from condolences and condemnation how will the international community likely respond to today's attack in paris? >> it's a really important question you're asking, but i think we need to go back to what we learned over the last 13 years since 9/11. this is a different kind of attack against journalists who were expressing freedom of expression in a variety of ways. there was a video made in california that the obama administration linked to the benghazi attacks. whether it is this or another crisis, you are seeing repeated mechanism extremists used to

gather support, gather the kind of reactions they know will be effective around the world. let's be very clear. if they do that kind of thing, it is not new. it is liable to be a one-off. what we have to do a better job of doing is stopping the recruitment of young children that would be willing to do this. >> ryan chilcote, how will this likely play out in britain and germany where there is growing anti-islamist sentiment? >> yeah, that is a good question. here in the u.k., i would say it is perhaps a little bit less of an issue. you do have the party that has been on the rise here that is publicly calling for britain to exit the european union, very anti-immigration. but i have to say it is mostly against immigration from other eu countries. it is not really anti-islamist. the leader of that party has been very public and saying if they are perceived as racist -- and many people do perceive them as racist -- he thinks that the

general public -- if the general public perceive them as racist that would be political suicide. germany, it might be a little bit of a different story. we saw anti-islamist demonstrations yesterday in dresden. german leaders' new year's eve address to the german people was focused on calling on them to turn their backs on these anti-alarmist -- anti-islamist demonstrations. this will definitely focus angela merkel from mind to read she has been -- angela merkel's mind. she has been focused on telling people not to attend these demonstrations and now this. >> the president of the union of the french mosque expressed outrage and called on muslims and christians to give strength to this dialogue, but do today's

attacks make that dialogue less likely or more urgent? >> you absolutely have to see as many voices as possible pushing back against the extremist narrative. we have to see more constantly all day, every day. >> we will ask you to stick around with us. i would like to thank my colleagues in london and paris. coming up, more reaction to the december fed report. whether plunging oil prices might convince them to alter policy. that is when "bottom line" continues in just a few moments. ♪

>> for more on the fed minutes we turn to tony krasinski, a portfolio manager at pimco from sunny california. tony, it was not too long ago

that the fed chair janet yellen said that they would look beyond energy prices. will she have to rethink that position going forward? >> probably not. the word trend is one of the things that is important to look at, along with normalization. the fed knows that it operates with a long lag. as it raises rates, the effect on the economy will have a long time. years. it is like walking a dog with a long leash. the economy will benefit from the following energy. there was a bounce for the month of november and it was lower than expected because of the big bounce in oil imports. that caused many economists to

raise their gdp forecasts for the fourth quarter and four of the last five quarters we have seen growth of over 3.5% in the united states, so it looks like the united states is growing are about where pimco projects. the fed has to pay attention to that mostly and not think about where the dog is. >> if it is in that range will it be affected by the fed's tame table --timetable for a rate hike? >> the fed, in the minutes you see a long discussion about it -- they are examining it closely. the statement for last month distinguished between inflation compensation, which is a way of describing what markets are pricing in versus inflation expectations, which is a way of

describing what people on the beach, so to speak, on main street leave. the fed has been emphasizing what people believe in the fed has been saying that inflation expectations remain anchored. it suggests that the fed is still studying the issue. if oil were to fall more it it could delay the timing. but one thing, do not get too wrapped up in the timing. think about the speed and the magnitude. it suggests these speed will be slow and the magnitude will be low. when the fed raises rates in the next cycle will not raise rates much like the rest of the developed world. the ecb keeping its rates and the same with the bank of japan. this will compel investors to seek higher returns in equities and fixed income and investor

should be looking for those opportunities. >> most people we have spoken to a bloomberg believed that the fed will raise interest rates by the middle of this year at the earliest. will that inflation rate, the below 2% target, will that influence housing makers to hold off the rate hike? >> no and there were a couple of comments the janet yellen gave, ratified in the minutes which means that the fed will not move until the april meeting at least. it does seem more likely it will be june. the fed wants to get started. unless the conditions change between now and then or if oil falls more or there is some other disruption for the fed to keep its timetable as it to get ahead of what it expects will be strong growth. one footnote on this -- the fed says for 2017, like 2016 and

2015, they believe that the u.s. economy growth will be beyond the ability to grow, which is a way of saying that we will see a jobless rate the klein potential for the next three years. that is what the fed needs to get ahead of and not think too much about what janet yellen called the transitory effects of oil the klein. -- oil decline. it is likely the impact will not pass through too much. >> ok, we have about a minute left. let's continue on that oil beat for a moment. the sharp decline in oil prices could it be overall beneficial for the u.s. economy? >> without question. we consumed millions of gallons of oil last year. bill dudley -- one of the three most powerful at the fed -- said a month or so ago, a $20 drop in the price of oil globally will

shift a benefit to consumers of $670 billion. so, it will be beneficial. and today's figures on trade are instructive to that end. >> ok, tony crescenzi executive vice president and market strategist. >> thanks and stay warm. >> from your words to you nowhere. tony, thanks. let's check the markets with our senior markets correspondent julie hyman after a quick break and then we will have more on that terrorist attack in paris and more from our correspondent phil mattingly traveling with president obama, who is on his way to michigan bureau you are looking at live pictures from paris, citizens taking to the street showing support. we will be right back. ♪

>> it is 26 minutes past the hour. that means bloomberg tv is on the markets. let's look at where stocks are trading. we do have the rally holding steady even after the fed minutes came out the emphasizing what we already knew, and that is rates could go up in april. in terms of individual movers -- take a look. these shares are rising the most in almost a year and it may be a takeout target for cg partners a bay out -- a buyout firm. and a 3.7% increase in sales for

the holiday season for jcpenney. they also reported at the high-end of their previously projected range. we will have more on the markets and 30 minutes. more "bottom line" is next. ♪

>> welcome back to the second half-hour of "bottom line" on bloomberg television. i am mark crumpton in new york. thanks for sticking with this. in about an hour, prison obama will speak to auto workers in michigan. it is the first of several events providing a sneak preview of the state of the union address. we want to start with phil mattingly in michigan. good afternoon. >> good afternoon mark. today was supposed to be the

kickoff for a two week grant push before the state of the union. a beasley that has taken a backseat now, starting at about 6:00 in the morning. we have the public statement from the press. there was a meeting with secretary of state john kerry. national security officials tell me that they are working very closely with their white house counterparts. they are being very cautious. they do not want to raise too much alarm within the united states, but they are concerned. they are keeping a very close eye on things right now. >> is there any sense from u.s. officials whether the attack in paris may be an indication of something bigger? >> at this point i have spoken to officials in the department of homeland security, law enforcement officials as well -- they are checking nationally, at the state and local level,

whether there is a reason to increase the threat level in the united states. at this point, they have not found one. that said, they are saying on this. there is a lot of concern of any potential spillover effect that may come. they have just not reached that conclusion yet. >> let's go to the original reason the president is in michigan. he is going to be talking to workers, and no doubt one of the things he is going to highlight is the fact that some who called for the auto industry to basically die a slow death, but he said no. >> they view what happened in 2009, their willingness to bailout the auto industry, as a major success. they saved about 400,000 jobs. more automobiles are being created by u.s. workers right now than any time since 2006. i think what the president is doing today, he is starting to lay that groundwork. it is an economic success story for the u.s. auto industry.

tomorrow he will be pushing on housing. we will see more going forward that's for sure. >> phil mattingly traveling with president obama in michigan. thanks. continuing our coverage of today's deadly attack in paris my colleague olivia sterns joins us in the newsroom. we have the crimp handed joining us from washington and we have the director of the woodrow wilson center joining us from washington and on the phone ian bremmer the president of the eurasia group. olivia, tell me about what that city may be going through right now. >> of course, everyone in paris is stunned. that said, you have to take this in the context of what has happened in paris and france over the last week. there has been a media firestorm over this book. charlie hebdo is a satirical

magazine whose headquarter was rampaged by gunmen. the author was on the evening news, the 8:00 p.m. news, which everyone watches. everyone was paying attention to this. it was a sendup, a political satire in which france is run by the alarmist party. -- the islamist party. everyone in france has been talking about it. obviously no one expected a terrorist shooting but this magazine has before been attacked. that is why they moved their headquarters, because previously they published a rather incendiary cartoon of the prophet mohamed and their office was firebombed. french president francois hollande saying they have foiled several attacks in recent weeks. there are massive demonstrations in paris as this manhunt enters its 11th hour for the three alleged gunman, but you also have to take this with a grain

of salt. there have been attacked before and there were probably people who were not too surprised there was an incident. >> ms. harman, what is america's role when one of our closest allies is subject to an attack of this magnitude? >> john kerry spoke very forcefully both in english and in french about our solidarity with france and the values it stands for. certainly freedom of expression. we are trying to find whether there are intelligence clues obviously we want to find if there are intelligence clues that would help our country, too, and to aid in the manhunt. i would add that i do not take this with a grain of salt. the killing of 12 people and wounding of 11 others is a total tragedy. but the backlash is going to mobilize tens of thousands of people all over france, and all

over the u.s., and oh, by the way, in some middle eastern countries against threats like this. i think these terrorist's, wherever they may come from -- and i think they were terrorists , whatever organization they may be affiliated with -- there is a counter message to be enhanced. >> the respect for religion, as authors, and rushed the -- as salman rushdie wrote today, is that code for fear of religion? >> no, i do not think so. jane is absolutely correct. our hearts go out to those who are the families of the victims and the injured. we have to go back 13 years to the 9/11 attacks in our country. we see that there is its recruitment of young people based on this idea that no one

can speak out, that they have to reduce the ability to be analytical someone who looks at life and we celebrate democracy and the freedom of expression is really important. what policymakers need to think about is how do we stop the recruitment of young boys and girls removing this direction that is appealing to the extremist? that is where our focus really needs to be on. >> what are the economic consequences out an attack like today's, especially in a city like paris which is one of the world fell most popular tourist destinations? >> you have major sales in paris and you are on your highest possible terrorist alert, with three men on the loose, it will be devastating in the near term. i do not think it will affect gdp for the quarter. leaving aside that, the european recovery is anemic. they are nearly out of

recession. france's president is the least popular since world war ii. there has been an historic rally around the flat affect in france after major tragedies before -- there has been an historic rally around the flag effect after major tragedies before. but for the french to work together on economic issues that is just off the agenda for the near term and they desperately need it. in the meantime you have support for anti-immigrant parties that has been on the rise, not just in france, but all over europe and that becomes much more prevalent. and i will tell you it is one of the most disconcerting statistics -- 8% of the french countryside is made up of islam it citizens but ask the average frenchman how many they think that they have in the country, they respond 31%. that is only going to get worse

unfortunately after today's tragic attack. >> ms. harman, as someone who has spent many years in the house of representatives, given the toxic atmosphere in washington, typically -- particularly between lawmakers and the white house, how should the administration view this and what should they be doing to work with counterparts in france and europe to prevent these types of attacks? >> there is no such thing as 100 percent security. these people, whoever they are and they are terrorists they attacked us where we are weakest. we cannot shore up every possible outlet or mall or place everywhere for every minute. so that needs to be understood. some amount of risk has to be tolerated. as i said, we're already collaborating with france on intelligence. we have been for years. many more threats have been

forded then have gone through. so, there have been intelligence successes. at home, playing games with the dhs budget i think, is total lunacy. congress passed a continuing resolution for the budget for the next year, except for homeland security, which expires in early march, the point was to protest against -- president obama's executive order on immigration. well, hello. dhs is the department in charge of the wording threats -- wording trusts against our homeland. that cannot stand. congress has to protect the people that these representatives were elected to protect. let's start with that. second point -- let's also not hyperventilate here. there is no credible evidence i'm aware of some part of the u.s. is under threat. it has to be reviewed, but i do think that we have very good people at dhs and a superb

secretary, jeh johnson, doing their jobs. >> this is olivia. i have a question about the source of all this. a lot of people are turning on the tv, seeing this terrible slaughter, hearing these rumors that the gunmen were yelling allah akbar and thus were linked to islamists. no one has claimed responsibilities. one sources that he thinks that this is al qaeda trying to get attention back because the islamic state is running the show and everyone is paying attention to that. >> there is no basis to say that it is al qaeda at this point. that is pretty responsible. it is very clear that we are talking about a well organized and planned terrorist attack. i will say the french government has been quite good at infiltrating these organizations

over the past years. they put a lot of resources at it. they were closely with united eight as well, and that is what makes this so disconcerting. you have refugees coming from islamic nations into europe over the course of the past to them years, particularly as a consequence of these wars in iraq and syria, vucevic a much more violent. you have large numbers of refugees, many of whom are radicalized, it takes a long time to develop contacts and work your way into those networks with your counterterrorist forces in france. that is the big challenge. the concern is hey, this is happening in paris. this could have happened in any major european capital. i do not think we would have been more surprised. that is the danger. that is why the problems of europe become so problematic as we look at the global risk environment of 2015. >> ian bremmer olivia sterns,

jane harman -- thank you all so much. as we had to break, here is u.s. secretary of state john kerry speaking about the relationship between the united states and france in the wake of today's attack on paris. >> i would like to say directly to the people of paris and all of france that each and every american stands with you today not just in horror or in anger or an outrage but a vicious act of violence. that we stand with you in solidarity and commitment both to the cause of confronting extremism and in the cause which the extremists fears so much and which has always united our two countries -- freedom.

>> it is time now for the latin

america report. brazil's real rose on speculation that president dilma rousseff's economic team will prevail in promoting growth. two days ago, a new appointee said he would increase tax revenue to achieve what he called a necessary budget rebalancing. and that is your latin american report for this wednesday. stay with us. when we come back, more on the attack in paris. ♪

>> our coverage of today's terrorist attack in paris continues all afternoon. "street smart" anchor trish regan joins me now. you will be speaking to peter king? >> yes, peter king. he has been in outspoken critic.

it will be good to get his thoughts on the situation. the reality is this magazine had been attacked before. >> it sure had. >> authorities were on alert. now there is clearly a tragic, tragic situation questions as to what the u.s. could be doing or should have been doing. what should france have been doing to better acknowledge these terror threats? we will be discussing all of this with congressman king. he is a member of the homeland security committee. he is also the chairman of the subcommittee on counterterrorism intelligence. >> and i have just spoken with jane harman, the former california representative. she was a member of several committees, including armed services, and she was lamenting that there are several in congress that could jeopardize funding for homeland security. >> yes, that is clearly a tragic

thing because the reality is we need to be secure or and incidents like this call attention to the fact that mornings to be done on this front. france has had this problem for a while. this is a problem that has existed throughout europe. it has a large muslim population and a growing number of extremists. we have talked about this, including on this network. so, what can we do and should we be doing right now to better protect ourselves and everyone throughout the world? >> members of the muslim community in france outspoken in their criticism of the attack and calling out for some sense of unity and dialogue in paris in the wake of the accounts. peter king will be on "street smart" at the top of the hour.

stay with us. another check of the market movers on the other side of the break. "bottom line" continues. ♪

>> get the latest headlines at the top of the hour on bloomberg radio and streaming on your tablet on bloomberg.com. that does it for this edition of "bottom line." i am mark crumpton. "street smart" coming up in a few minutes. i will see you tomorrow. >> it is 56 past the hour. that means bloomberg television is on the markets. i am julie hyman. it is an hour until the closing bell. we have maintained this rally throughout the day. leading the gains -- health

care, consumer staples doing the best in the s&p 500. all of the major averages up at least 1%. i want to look at treasuries too. an hour ago the fed minutes were released, largely confirming what we already knew that raising rates was on the table for april. and generally not much changed after those minutes. lisa abramowicz covers the debt markets for us. not a lot of change here in reaction? >> yeah, not the stock markets nor the bond markets. it may be a success story for the fed. they communicated their message after the meeting and now in the minutes. it is clear that the fed is looking at actual economic data. the other interesting thing about these meeting minutes, the fact that they really show the fed does not see plunging oil

prices as an obvious detraction from economy. in fact they view it as a net positive, which is different from the way it is priced into certain risk markets. >> it's interesting. you wrote a column going up to the minutes and you said that in some ways traders do not listen to the message the fed is putting out, that maybe they do not believe the fed? >> people were so wrong with their expectation that rates were going to rise last year. >> not just last year. >> all of a sudden, people say, look, we not sure what the dynamic is completely. it does look like inflation will not pick up any time soon. we know globally the economy is cooling. we know that oil prices are plunging and that contributes to the headline inflation. perhaps not the number the fed is looking at. so, why should i sell my

treasury holdings question mark not hold on to them? it makes sense to hold onto the bonds. the fed is not saying, look -- we believe that the lower oil prices will be a net benefit to the u.s. economy. >> in terms of data points you mentioned, the next report will be friday, the jobs report, another important trading point for the markets as well. if you look at today's adp report, although there is a lot to be made about the correlation, that would seem to be a positive sign. >> that is exactly the point right? everybody is saying, why move ahead or friday's payroll numbers? take them on phaseout you. they are not going to hike rates in april. everything is going to look relatively normal. let's see what will happen. >>'s success story for the fed.

a lot of people do not like that -- >> no. >> thank you very much. lisa abramowicz, we appreciate it. >> hello, everyone, and welcome to the most important hour of the session. we have 16 minutes to go. welcome to "street smart." i am street smart. a manhunt is underway for the terrorists that bombed an organization in paris. we are covering every angle of this developing story. president obama expected to speak within the hour, and meanwhile, on wall street investors betting on the health of the u.s. economy, and we will walk you through the close of trading. "street smart" starts now. ♪