>> from bloomberg world headquarters in new york, i am mark crumpton, and this is "bottom line." ♪ to our viewers here in the united states and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this tuesday. "market makers anchor erik schatzker on the greece bailout extension period and peter cook will speak with the senate banking committee chairman on

fed chair janet yellen's's before the committee today. first, let's get you right to the top stories we are following. janet yellen serve notice that a change in the fed's plus -- pledge to be patient on the timing of an increase would signal that liftoff could come at any meeting. yellen's comments come before testimony at the senate banking committee. >> modification of the forward guidance should not be read as indicating that the committee will necessarily increase the target range in a couple of meetings. instead, the modification should become too understood -- the conditions improve to the point where it should be the case the change in the target range could be warranted at any meeting. >> up near quarter percent at

20. -- 2115. up over half a percent at 18,000 tonight. and the nasdaq composite, 49 and free. the conference board says consumer confidence fell more than expected this month. february's number is slightly below the monthly average for an expansion. the greek bailout has been put on hold for at least four months. the greek finance minister in -- improved the packet to ratify the deal which keeps the bailout in place through the end of june. the current bailout expires this week p a the greek government pledged to crack down on the corruption and tax evasion and it continues selling off state own assets.

war-torn ukraine is signaling it will need new money soon. international monetary fund has promised a $17.5 billion bailout. officials are indicating that might not be enough. foreign ministers from ukraine russia, germany, and france are trying to make both sides respect the cease-fire deal. a merger will combine two of the biggest u.s. bridges outside new york. agreed to buy in a cash stock deal worth $100 million. >> we announce yesterday our 19th consecutive year of record revenue. we grew through the financial crisis and the tech crisis. one other firms are shrinking and cutting back on businesses my view is the market will be better five years from now and we will grow. it is contrary and but has worked for us. >> u.s. prosecutors want to know if the world's biggest banks try

to manipulate the prices of gold and silver. the justice department is investigating at least 10 things. another of the bank says it is cooperating with officials. prosecutors are also deciding whether in bank lending rates in currency markets. that is a look at the top stories we are following. more on jack -- any own pods congressional testimony on 2015. she was pressed by democrats and republicans for everything from under policy to legislative proposals to rating in the fed. peter cook is on capitol hill with a lawmaker who led today's questioning. the chairman of the senate banking committee peter? questioning you. i'm joined by lieutenant shelby who hosted. thank you for the time. but was your takeaway to the

testimony, specifically when it comes to the monetary policy? it seems like she was trying to raise credibility. the second she was very careful and measured in what she said and how she said it. she does have flexibility. she seems to not be in any hurry to start raising the interest rates at this point. >> you expressed concern. are you worried? >> i am not worried. you do not get behind the curve of inflation. there is always concern and stability, one of the biggest mandates. she was careful and measured. >> you get a sense from her she was looking in june for the interest rate? there is always concern and any along those lines? >> i think she was. what are the indicators there? >> what about the economy?

did she described what she had to say about the approval? still worried about inflation being too low? >> the economy has improved but you have got to remember that 10 or 11% of the people names of people people who are not looking. 5.7 or whatever the figure was. they admitted it was a rosy picture. >> on the inflation front, they were not about inflation running too high, but running too low. >> that deflation and it is always a concern. right now, things are ok because of oil. what will happen in june is what the fed passes jobs about. >> let me ask you about the oversight by congress. the u.s. has questions about the government's changes. what is it you would like to see

happen in regards to changes? >> there are a number of things and we would hold other hearings on this. and maybe propose legislation. i do not know anybody, a member of congress, who i talked to who wants to be a member of the board of governors. congress should not run the fed. some people think otherwise. we should have strong oversight overhead. and what they do. the fed should not be so independent they are subject to no one. >> there is a lot of talk about auditing the fed. >> i do not know what you mean by auditing. i do not want to create monetary policies. i am interested in what in particular is in the 4.5 train dollars. >> the hearing next week, could you here for example -- >> not yet. he is talking about holidays at the fed.

we will hold hearings at the proper time. >> you also today asked jenny on about specific proposals put out there. one by the fed president who would give the regional fed more power and take some power away from the president. is this a proposal you get behind? >> it is a proposal we are looking at strongly. >> what with that achieved? >> i think it has more. the fed and they are out there where the real life is going on every day. >> this would take some power away from the board. >> but not from the fed. >> you mentioned another proposal from 12 to 5:00. an idea you could support? >> we will probably flesh it out a little more. that is from 12:00 to 5:00, a pretty good number. will it bring more clarity?

>> there has been so much talk about the auto and the fed. other proposals, as i talk about democrats of a look and, there may be more bipartisan's port for perhaps more modest changes. is that your sense right now that the fed is maybe not as likely as the other changes? >> it depends on what you mean. the fed has artie audited in some respects. my interest is to see what is going on with fed here at is in that portfolio? what is that portfolio worth in things like that, rather than create monetary policy. that is the fed's job. >> you heard a fed pushed back from janet yellen from the proposal. she accuses members of congress of playing politics with the federal reserve. >> we should not a politics, but we should do strong oversight. >> right now, this federal

reserve, is janet yellen getting the -- getting what she needs? >> no. the fed has been to independent p are we want him to be strong and we want him to be independent, but not independent of the congress. question made the case today that an independent said overtime, the central banks produced better economic results in the end. i second the market produces economic results. centralthe fed plays a role but not the central role. >> what is your level of confidence at the end of this year that there will be legislative changes for the federal reserve that will come out of your committee? >> we have to see what develops help people vote and what we propose. >> do you think democrats will be on board? >> depends on how it is framed and what it is. >> all right and i appreciated very much. the first of many hearings on the fed and others in the banking committee. >> thank you both very much.

you can watch us live forever you are. bloomberg tv is on roku players and android tv streaming for free. also on your phone and tablet. up next, we will take you to athens where erik schatzker we'll have details on the greek bailout extension period tonight on charlie rose on bloomberg, larry fink for the hour. chairman and ceo of black rock. the world's largest asset manager it oversees more than $4.6 million. they discussed greece and the private sector. >> in 2010, if greece fails in the private sector, most of the greek debt. today, 7% of the greek debt is held by the ecb, greek banks, and then you have the imf, who has a huge loan outstanding to greece. it is not a private sector problem.

>> more of that interview tonight at seven: 10 -- 7:10 eastern time. ♪

>> here are the top stories we are following. in southern california, a passenger train hit a truck on the tracks. three cars of the southern california metrolink commuter train fell on its side. dozens of people were hurt. no word on the extent of their it -- their injuries. a golden parachute for the ceo if things do not work out with his new loss. they stand to get $109 if he is fired once allergan is acquired by activist. most of that would be in cash and stock for equity awards. activist has already said it plans to reduce or replace most of allergan's current executives with their own. that is a look at the top stories we are following at this

hour. more now on the next steps needed for a greek deal to sell the reform program. erik schatzker joins me from athens. the proposal got approved the what have they been saying about it? eric: good afternoon, mark. there is near unanimity that this a list of proposed reforms is a good or a valid starting point. after that, the opinions the verge. mario draghi calls it sufficiently comprehensive. the spanish economy minister seen behind the closed doors as the hardliner says it is evidence that the terms of greece passes bailout need to be revised because the country's economy is weakening. however, madame lagarde managing director of the imf,

was critical saying it was not specific enough and that it lacks firm commitments on pension reform. >> what happens now? what is the next phase? >> that is an excellent question. i have to tell you so much could yet go wrong. first of all, the agreement must be approved by 19 eurozone governments. finland among the countries seen as hardliners who need to improve this. there are other risks in the four months ahead, including execution. here is an analyst here in athens and the former member of the task force on greece talking about the execution risk. >> it must be done. the government has no time to lose and very little margin for error. part of the learning cost in the past two weeks.

they sure the monitoring is in place. so you have a good working relationship. >> then, of course, there is a question will greece be able to renegotiate the bailout program? here is an opposition member of parliament talking about the prospects for debt renegotiation. >> it will depend upon the government to make good use of this. a lot also depends on what will happen after the four months after it expires. the plan was from the very beginning to exit the phase and allow greece to tap internet -- international capital markets. whether this can take place in months i do not know. it will require a change in rhetoric to convince the international capital markets

that this government here is about to reform. eric: the bottom line is there is a palpable sense of relief in aphis tonight but also the awareness that so much more has yet to be done. the next months are critical. >>. is joining us from athens. thank you. coming up, rate hikes. a look at how market players are readying janet yellen's definition are -- of patient, that is next. ♪

let's look back --

-- >> welcome back. >> months after doing so. it was previously understood once they removed the patient's language, they were on a set course to month after that. >> why does everyone think that path was two month. if they said something in march, a home -- april, may, or june? ? trying to get away from the timetable. they want to look at economic data and wage increases,

economic improvement in the u.s. >> chair yellen expressed one of her concerns. the housing market still not the. >> the markets are taking to a salvage statement and they are saying look, we're pushing back expectations. the likelihood market goes from a june rate hike, this would be september expectations for a first rate hike there p or 45% versus previously. people are pushing back the timetable of a first rate hike. >> what will make a market that it? let's is inflation data comes out and suddenly shows

acceleration in the wage increases, that would certainly change the market. i think also oil. they view this as a transitory trend, a net positive for the u.s. economy, that will actually give u.s. consumers the buying power to spend and ignite economic growth. if oil prices do rebound significantly or even a little bit enough to sustain companies that reliant energy, but also giving people the effective tax break or the effective budget cut, giving the extra money to spend, that would best mark: hesitation at this point? >> why would they? just because they feel like they should? just because it is not good to have a near zero the rate policy

for long? it is not good for them. ultimately, the economy is still much showing full growth. meanwhile, what was the art against it? potential asset bubbles p or the dollar is getting stronger that effectively ratchets back some of the cost from earlier effectively titans conditions in a defect a manner. the other argument is favors. they are getting nothing on their investments. from that perspective, there is a little bit of urgency. >> quickly and at -- in 20 seconds, how do human new bern all of this if you are an investor? >> that is the big question. it is likely it will continue to rise. people are trying to figure out, they are back into bonds. it is not clear whether that will be a good bet or not. >> all right, lisa. thank you. coming up first-quarter

estimates. we will talk about those results . expected areas of growth, and earnings guidance going forward. stay with us. ♪

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9. make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series.

>> welcome back to the second half-hour. im mark crumpton reporting from new york. thank you for staying with us. let's get you some of the top stories we are following at this hour. janet yellen is reaching patience and flexibility. chair yellen said inflation and wage growth are too slow, even as unemployment keeps falling and assisted the fed not be locked into a timetable to raise rates.

classes is important to emphasize a modification of forward guidance should not be read as indicating the committee would increase the target range of the couple of meetings. questionnaire yellen said she strongly opposes in congress to increase oversight. this tuesday here in new york checking a screen, the chart shows crude oil is down about one third of 1%, trading now at 4925. congress is sending president obama legislation for the keystone xl pipeline. the white house indicating the president would quickly veto it in private. it would be the third veto of obama's presidency. they have yet to show they could muster the two thirds majority in both chambers they would need. boeing has lined up buyers for 10 of the early overweight dreamliner's.

they became known for their problems during assembly. he is selling them for less than half the catalog price, $100 million each. the original customers balked at buying them because the planes were so heavy they could not fly as far. ethiopian airlines is expected to buy eight of the dreamliner's. that is a look at top stories we are following this hour. toll brothers beat wall street estimates in the first quarter. the largest u.s. luxury homebuilder earned a net income of $.44 per share, surpassing results and analyst estimates of $.29 per share. douglas joins me now from the company's's headquarters in pennsylvania. welcome and thank you for your time today. >> thanks for having me. >> on a conference call today, you described the housing market as a bit frustrating and confusing. what is holding back faster growth and what will it take to

turn things around? >> that was not today's conference call. that was a call last quarter. we talked about how the spring season is underway and we are really happy with where we are. orders are up 24% this past quarter, which ended january. starting february, the first three weeks look really good particularly out in california and texas and with our city living division in new york city. nothing frustrating right now. we are just feeling really good about where we are. >> california has been good for toll brothers p or why have you seen so much success out there? >> last year, we bought chapelle home for 1.6 million dollars which gave us 5000 of the best located lots in coastal california. it has transformed our company.

29% of our orders this past quarter came out of california. northern california the san francisco market, silicon valley is the best market for us in the country. southern california is probably tied for number two with city living in new york city. it is on fire out there. we have great locations and we are really doing well. we have pricing power and we have seen little sales. >> is that because the unemployment rate has been dropping significantly? what are you attributing that too? >> in california, it is really job growth. northern california is driven by technology. the tech boom is real this time around, built by real companies. >> in california, it is really job growth. we are benefiting by having locations in the south bay and san francisco. l.a. county come along the coast, it has been terrific for us.

very strong sales lately. >> has this interest rate environment that enough to get a lot of people off the sidelines, potential buyers expressing concerns they might see a drop in housing prices. is the interest rate environment enough to get them to sign on the line? >> it certainly helps. our clients are not having the time getting a mortgage, they put about 30% down and a mortgage about 70% of the house. mortgage availability and mortgage qualification, it is not that big of a deal for our client, thankfully. in the food chain of houses, back down to the starter home, the low interest rate and the easing with availability has helped the market. >> what about the expansion of growth? the company's position is that the u.s. economy is in a strong and stable enough position to help the housing market overall.

>> we love our city living brand. we have been in high-rise for 10 years, primarily new york city and hoboken, but we are also in philadelphia and we just opened in bethesda, maryland. we are looking to expand our operation too many markets in the country. more and more americans want to live in cities. we are well-positioned with our offices in philadelphia and bethesda. any given time between 5% and 15% of our business and we are looking to grow it. >> how important for foreign buyers, they comprise about 15% of the market here in new york. >> for our high-rise, it is 15%. it is not a large part of our business nationally. in northern california, a tech market, we have buyers,

primarily chinese, and certainly scattered throughout the country, we tend to attract foreign buyers. but it is a relatively small part of our business. >> housing has not recovered as well as she expected. do you share her sentiment? >> i think we all thought it would be further along based on how deep the downturn was. this country from 2007 two 2000 11, went through the deepest and darkest housing depression the country had ever seen. the country typically produces 1.5 million new homes a year and we are producing one third of that. while we are recovering we are still only building one million or slightly less homes per year, nowhere near the 1.5 million normal number. we struck the long way to go -- we still have a long way to go. >> the ceo of toll brothers

joining me from the company's headquarters and gracious enough to help me as i combine conference calls from different quarters. thank you so much for your time. i appreciate it. up next, a bounceback. we will tell you why. we continue in just a moment. ♪

>> there is revived fiscal optimism after a magazine reported the administration's plan to reduce worker benefits will receive support from allies in congress. the magazine reported the first set of those that would trim on implement and pension benefits and save about $6.3 billion will receive support. led by finance minister to narrow deficits. that is her latin america report . coming up, target things outside

the big box. we will look at the new concept retailers are casting next. ♪

>> welcome back. top stories we are following. comedy central is planning companywide job cuts. fire, is still determining the size of the cuts. according to nielsen, the audience is that comedy central and mtv are down 60% this season . viacom has been no -- more successful -- susceptible to a phenomenon because of its targeting of younger audiences. the biggest u.s. cable company posted earnings that missed estimates after signing up fewer tv and internet customers than a year before. a tougher stance on how comcast and other broadband's death broadband survivors raise their networks.

that has raised concerns about the proposed $45 billion takeover. >> we also remain focused for preparation of time warner cable. our ability to add value. our planning is on schedule as we continue to work for regulatory approval. weiss shares of home depot are rising today. the largest home improvement chain in the united states posted a quarterly profit that beat estimates, and rising home prices are prompting americans to spend more to fix up their homes. home depot's board also approved an $18 billion stock buyback program. shares were up as much as 4%. a disappointing holiday season for macy's, the largest department store chain in the u.s. the forecast -- macy's forecasts annual profits that missed estimates. trailing the company's's earlier

forecast to macy's is now relying less on deep discounts which helps profit margins but help -- makes it harder to get customers in the store. as a look at the stories we are following. target is out with earnings on wednesday and the retailers trying new initiatives to boost its numbers. among them, it is testing a new small format store in his home city. julie hyman went to minneapolis to investigate. ♪ >> they are called it boxes for reason. the average truck is -- and then there is the store. >> we will have sandwiches salad, beverages. people can buy one single roll of paper towels. you guys have a big section. a lot of college students, they need a tank top. twice this is target express. 85% smaller than a traditional target, it is about the size of your local pharmacy.

>> areas where people live work, or where they go to school. >> just blocks from the university of minnesota campus target express caters to college students. >> when we have a home section, to outfit your home or that first department. in food, make meals, the grab and go options. we really try to tailor what we offered to the students we have here. classes is not just about size. >> it is important we set the tone from a moment you walk in whether it is the university of minnesota product, the sign in the mural designed by the alum in university, we want the guests to get that right away. >> test stores, target express keeps changing its approach. >> another adjustment we made for students is that we have a lot more of our own brand spirit up and up is a brand that target owns.

students specifically asked for that because they thought it was a way to stretch their budget farther. >> can students save target? the retailer needs to regain customers trust after a data breach affected tens of millions of customers. >> the reason we should do a lot more small boxes is because they under penetrated their core graphic -- demographic, women .5-34. -- 25-34. >> in the same time approving the larger stores. >> the first thing they have to do is fix target. job number one is fixing food, and getting frequency up to request compared to competitors like walmart, target falls far behind in sales per square foot. target express could help change that with eight more stores set to open this year. >> julie joins me now from minneapolis how different did this one feel?

>> enormously different. this target express is 15% the size of the target supercenter we go into. it has all the stuff pretty much, different varieties of it. a lot smaller than the enormous towel section. it was interesting how they have tried to localize it with a sign made from the university of minnesota graduate design. there were little touches like that that it is trying. >> when are these touches going to be felt on the bottom line? when will they see resolve? is it will take a while. you're talking about 1800 locations nationwide. opening eight target express stores, it is very small to begin with. it is not clear how many more of these will open up. also has city targets, a larger

format store also an urban area. there are two does more set to open in the next couple of years, including one in berlin -- in brooklyn. it brings more stores in the urban areas but will take a while before being felt more broadly. >> in the intro to your piece, they have tried out new long-term initiatives. what does their horizon look like? >> it is unclear at this point under the ceo target, before he came in, seemed to move slowly with the exception of canada. corn know moved quite quickly to shut down canadian operations and once he came over, he came on in august and the company this year announced it would be shutting down canadian operations. he has been revamping some of the department spirit he has been trying to move a little more quickly. other initiatives will be happening. quite as you have covered

before other retailers have tried to go small. >> some have gone well and some not so well. tesco tried to come into the u.s. -- is in the u.s. and try to open smaller format stores in particular. that did not work the walmart opened a variety of different sizes. neighborhood markets have worked quite well. they have experienced more rapid growth. walmart opened express stores initially that were very small and have rebranded those markets. it is not clear exactly how this will work for target. you have to keep in mind many of these stores will have higher per square foot rent. they might have to pay the employees more and a lot of things going to the economics of these small stores. >> julie hyman with a look at target. thank you so much. stay with us. scarlet fu will have a check on

the market movers on the other side of the break. stay with us. bottom line continues in a moment. ♪

>> that does it for this edition of "bottom line" on bloomberg television. thank you so much for joining us. ♪ >> it is 56 minutes past the

hour. we are approaching the final hour of the u.s. trading day. the dow s&p near -- at record highs. the dollar giving up early gains. against that backdrop. toll brothers are rallying. seeing the biggest gain in over a year. even the highest analyst estimates compiled in our survey. the credit goes to sales at more properties at higher prices. touching fresh, eight year high spirit also flying high is the x hb, a spider s&p home phone -- homeowners exchange. are the builders on solid ground and is there more room to run? here if debt here with answers, peter. janet yellen's testimony seems to fit very well.

low rates. how solid is this backdrop for builders? >> it seems good. good jobs for numbers. the fed thinks -- we should be keeping rates low care the other thing we are watching his credit remains very good. credits rallying. look at jan k, a high-yield etf. that is rallying. you would think that means buyers of homes should also get it over time. also, maybe it is that first time a new and first-time buyer coming back and see real growth. at sign glad you brought that up. toll brothers is a luxury builder. a kind of customer. to what extent do they face different dynamics in the macro backdrop? >> the toll brothers had an easier time of it at the higher end. more income that they could get the mortgages. it will really be whether the household creation comes

through, whether we really start seeing them hold from renting. whether we will really see the turn. for a lot of questions their fear do mortgage rates need to stay at or below the national 30 or's exceed eight -- or six year rate? >> i think we need to keep low and that will be important now. the recent fear we have had may get people on the sidelines who have not really gotten motivated. they said hey, rates were up and i'm scared and let me lock in rates and by house and season the going on. we see it closely tied to the economy. homebuilders are still well off their 2006 highs. people are looking to rotate into that and look away from factors that have done well in the area that potentially hits off their 2006 highs. the next wave, homebuilders are interested to play from the long side to request how big a part

should builders be? >> we keep that very small right now. we've probably prefer energy, which i think we talked about last time where there is more value there. it will take time to play out. there has in a big run. you have got that pullback. >> all right. peter, thank you for joining us. street smart is up next. ♪

>> we have 60 minutes until the close. street smart investors. a simple timetable for raising -- chair yellen says the fed will change before freezing rates. we are counting down to earnings . watch for those. it will divide its assets when it splits into two companies later this year. "street smart" starts right now. ♪