is a word of the market. future is suggest a mixed open in the asia-pacific. >> the president is under pressure to clarify his agenda. mayaddress made a -- reveal how he delivers on his promises. bill dudley says the case for a rate hike is ever more compelling. >> the indictment of samsung developed a leader is putting the groups all strategy under stress. >> this is the second hour of

daybreak asia. 7:00 p.m. andpast i am kathleen hays. is discussingne the trump speech. yvonne: absolutely. breaking news coming in through south korea with those trade numbers and it was a beat on all fronts. surging 20 point 2%. the estimate was for 13.6% rise. anotheras well, riding estimate. early indications of this, kathleen, when we had the first numbers in the first 28 days of the month, which did stir some 20 some percent. really showing how resilient it is in the face of this political scandal that we do see rockingham south korea. that coming in at 7.2 billion

won, and it is a big beat there. kathleen: of course we have seen bright as one of the lights for korea's economy. consumer confidence took a big tumble in january, as you know, and there is a concern that people are not immune to what is going on in their country, and there is a scandal that rocked samsung, the biggest, most powerful company in korea, and the presidency. almagro and on. yvonne: you have to add -- a lot going on. yvonne: you have to add household debt. sophie: we are seeing it somewhat weaker. the best performing asian currency for february, and taking a look at what is going on in the equity space, we do have japan coming online and the dollar-yen just below the 113 mark p nikkei 225 up for a second day. 'sta this morning, japan

spending soundly beating estimates. taking a look at what is going on in australia for a fifth day ahead of gdp data, we have telcos, the biggest straggler. the escondido talks enter -- sorry, the strike, enters a 20th day without talks. 6324.al, #btv tuesday is better than forecast. payments have boosted estimates. analysts are expecting an expansion quarter on quarter. likely avoiding a technical recession. that is thanks to the growth in exports, the white lion, and that is on the back of rising modern prices. iron ore, the line in blue. that is the best run animals five years. you can see that on this chart, #btv 6327. therise in iron ore helped

aussie's advance. pmi outperforms estimates, the aussie could challenge that 77 level. kathleen, yvonne. >> thanks for connecting the dots. we saw the economy, the report, and the markets. as investors and voters countdown to president trump's speech to congress, hoping to learn how he proposes to deliver on his bullish campaign promises. our chief washington correspondent kevin cirilli joins us from capitol hill. a busy man today, this evening, and it is just getting started, kevin. some of the top of head of this speech is that -- talk ahead of trump,eech is that he, wants to step up and give an optimistic, unifying speech. is this his own players or does his team just say, president trump, you have got to move in this direction? kevin: first and foremost,

sources i see are hoping he will provide more detail into his policy initiatives that he would like this republican-controlled congress to execute in terms of issuesy on a host of whether it is cap form, repealing parts of the affordable care act, obamacare, health care, or defense plan, immigration plan, he has not gotten specific. he will submit his official budget on march 16. the congress he will be speaking , that has toght pass some sort of budget ahead of march 28 two of her partial government shutdown, so he is laying the partial groundwork -- partial to avert a government shutdown. the bottom line is this. he's facing deep skepticism from several top republicans including people etc. senator john mccain and of course, a democratic party looking to resist him at every turn. >> i feel like there is so much hype behind this.

markets are going to be disappointed somehow. in terms of clarity, you know, talking about china of course, we have seen confusion between what trump has said during his campaign even now with stephen the nation as well. any clarity -- steven mnuchin as well. last week in my interview with secretary mnuchin. they will wait until able to make any decisions when a standard semiannual report comes out about whether or not the are currency manipulators. trade will be part of tonight's ,residential address particularly, bilateral trade agreements. he will make the case you want to lower the corporate tax rate to incentivize businesses, american businesses to stay in the united states as opposed to going overseas. all of that however hinges on whether or not he can unite this

republican party including an ultraconservative faction within the party that is incredibly skeptical of more government spending. >> kevin cirilli, great stuff. joining us from capitol hill. a reminder that you can watch president trump's speech to congress live right here in full on bloomberg television. our coverage begins at 10:00 a.m. hong kong time and i'm :00 p.m. on the east coast -- and 9:00 p.m. on the east coast. >> a rate hike is looking increasingly likely this month with a string of officials seeming to back arise. san francisco's john williams says the idea will receive serious consideration on march 14 while robert kaplan and patrick parker have expressed confidence. bill dudley says the case for tightening is a lot more compelling. same as president james bullard said the fed is closer to its goal mallet than any time in the past 60 years. the indictment of samsung's

defector leader is threatening the group's ability to make about policyisions and acquisitions be are jay y. lee and other executives are accused of sending millions of dollars to a confidant of president park geun-hye in return for support. the indictment is a new blow for samsung following the burning note 7 debacle last year. india's economy is expected to slow less than forecast in the fiscal year, growing 7.1 percent through march. that is the slowest pace of growth since 2014, but faster than the median estimate. gdp was expected to take a big hit from the prime minister's unprecedented cache ban -- cash ban. >> in respect of many of the companies, we have been quite surprised to see a smart recovery.

people are at most at the pre-denomination stage. by the end of march, we expect to be fine. xi jinping has called for better supervision of financial risk as the country's leaders gather in beijing. china will continue to seek economic progress with stability and calls for less volatile property market and more industrial overcapacity. the national people's congress will set new growth and inflation targets. news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i mean a melendez. this is bloomberg. the data for february will be released. tom mackenzie, joining us from a factory. mixed fortunes.

the headline is one thing to look out for, but how is the economic reality playing out where you are? yvonne, the big retailers in the u.s., a very good chance to come trump this factory behind us and it looks very busy. the furnaces are burning and people are working way, but many others in this province are really feeling the pinch for a number of reasons. up steeply.picked wage hikes, goes have tripled for this factory in the last decade. demand is relatively flat and we have seen the same story repeated in the last day. we visited a plastic factory yesterday and they said the same thing. key problem for them. they may be asked to shut up shop later this year. it is a mixed picture. there are factories that volker's producing things like robotics and electric vehicles that are doing better, so it is

not all grim, but certainly for the factories producing lower end products, it is a tough situation. you might ask about the renminbi. it has weakened. it has only had a marginal impact for them. the officialll -- data out in a little under one hour. it is expected to show a slight decrease an expansion for the third month, but also expecting that private number to come out at 9:30 beijing time. that will give us a clearer picture on the private companies because it is the official manufacturing data that focuses more on the big state owned enterprises. expected to stay above 50 on the chinese manufacturing pmi, which indicates expansion. we know that asia's factory bosses are listening. washington, donald trump's speech a couple of hours from now. we have got the china national people's conference coming up. this growth number is so

important, especially at a time when donald trump is waiting his waving hissabr -- trade war saber at nations. tom: absolutely. we saw the numbers that broke a few minutes ago, that there is a positive picture. the consumer in the u.s. is looking relatively healthy and the south korean export numbers bode well for the picture here in china as well. we are seeing that brought civilization for exports for some manufacturers across the board. yes, the factory bosses here, we sat down with three of them last night, and they are trying to factor in whatever policies he does firm up on. china, they are trying to get a better reading of that as all of us are. they are playing that into their contingency planning and considering moving to southeast industries.

they are looking at vietnam, myanmar, and malaysia as possible places they can move. in terms of the national people's congress, we may see a softening of that growth target. many people would like china to step away from that fixed number. veryosses here are seeing little support to help factories like this, and that feeds into the wider picture. the government's here want the high-tech factories to do well. they are offering them support, the robotic and electric vehicles i thought about earlier. it does not seem they are that worried about the factories behind me producing lower end goods. >> thank you very much, tom mackenzie. ing it to life with that factory. very important gauge to look at manufacturing in the chinese economy broadly. counting down to president trump congressional debut. dartmouth college's danny onnchflower joins us later

what to expect from that speech. >> looking at globalization 2.0. domestic demand will be key as china takes the lead. this is bloomberg. ♪

kathleen: this is daybreak asia. i'm kathleen hays in new york. yvonne: i'm yvonne man in hong kong. marketss for emerging look very different with president trump in the white house. the potential for further strengthening of the u.s. dollar, and impact of a more aggressive protectionism, especially against china, will be the main risks. it is great to have you here in hong kong. will and foremost, what you be watching the most during donald trump's speech today? guest: i think it will be details. when he was sworn in, we have not seen much detail

that fiscal policy and we have to remember all the value we got after the elections was based on a massive fiscal plan. how much detail to give today is a critical part. though?of what, what is it you will be looking for the most? guest: there is a pecking order in place. tax reform is the first one the market will be looking for, and third will be trade. tax reform isof something republicans agree on pure the second one is a more controversial one. they are not happy with increasing spending and debt financing. that is what the market will be looking for. >> you mentioned trade as well. we spoke with kevin's a really about potentially, he might bring up china during his speech. we have done quite a bit of research about china taking the lead, as you say, and globalization 2.0. how likely is it that we can see china filling the void if the u.s. does turn inwards? what indications should we see on the is a side of things?

what we saw, the rise that started early, we would say that would get [indiscernible] china is in a prime position to fill that void. that is critical to the globalization 2.0 narrative to take all your that is why the focus on china has been the risk factor instead of the u.s.. >> there has been a lot of discussion about donald trump and wanting to renegotiate trade deals. he does not want to be in these multilateral trade deals anymore. he wants bilateral trade deals. there seems to be an assumption that you going to start a war with china and china will retaliate, but if you are a big exporting nation like china, and you have a big surplus, if you do not have a deal with a big, big consumer like the u.s., isn't that a problem for you? isn't there also some leverage on the u.s. side when it comes to china? salman: i think you're right

through the relationship between china and the u.s. in our view and thatalanced is why china will refrain from going very aggressively on models.economic that is why it will be more from the u.s. and goal focused on populism driven sectors, but you are right. in the u.s.,e moving away from multilateral deals. there are those that are supposed to impact trade growth in the future, not right now. what we are seeing is that china will have to connect other emerging markets and find new markets for its economic [indiscernible] thenother big thing since election has been the reflation trade. dollar reflation. we have seen the markets retrace that to a certain extent. the dollar has pulled back from its highs. is that one of the things you think is going to continue? if donald trump is promising stuff, but it will take a while to get it done because congress

is divided on some things like tax reform, does that mean this trend is over for a while? this trend will have to take a breather because i think we have moved very fast after the elections, and without much details. that is why the pricing is so strong now that we need actual implementation plans to come on the table sooner rather than later for this trend to continue, and that is a reason to focus on this stage. going forward, what happens in the congress. congress will take a lot of ilitical life and that is why think the pricing of which we are price for perfection right now in a variety of markets, that is where the risk factors come through. >> you think you could still have a chance to come down? salman: the flattening of the curve for us is a more important trend, that the fed moves towards a hike cycle. the exact, it is shape and form of fiscal policy that will drive the long end,

and that is where uncertainty is certain to come through. >> we do see in terms of the emerging market space i think $1 billion worth that has been flown into fixed income. where do you see opportunity for yield and potential pushing? salman: we still see the valuation of profit to come through because remember, inflation in emerging markets is quite low, and in fact, this is where -- the real rates are still quite high. the underlying potential is rising, and that is where support comes through. if the risk factor is as we were discussing before, the u.s. goes strongly on china, and that is where i think the pricing will be vulnerable. >> if you could give us one idea, what is it? salman: i think it is em equities. focusing on sectors, remember, in a world of protectionism, there are winners and losers. we have to be very careful of which sectors will lose out, and some said gary -- and some

countries as well. india, china recovering, to istinue, and i think that where we are focused on trade him equities very much on -- with a lens of protectionism on. >> thank you very much, salman ahmed. hear from india's biggest bank as bad loans continued to pile up. our interview with the bank's chairman, coming up next. this is bloomberg. ♪

kathleen: this is daybreak is a. i'm kathleen hays in new york. i'm yvonne man and hong kong. bad loans, a major problem especially in asia. the asset ratio is the highest among major economies. the country's biggest bank say things could get worse.

>> classifications of those eq accountsnts -- eqr will happen. there could be a few more accounts that start showing risk mainly because the growth in demand we were talking about does not come back, so to that extent, there might be more accounts that my insurer little stress, but what will make the difference is our starting resolution process, which we had hoped would be, you know, quite advanced by the time. we had worked on resolution in many ways, but we have not been able to bring closure to many of these issues, mainly because some of the provisions currently available to us, they are not sufficient for us to do the kind need toutions that we do, so we have been talking to

the government about it, we have been talking to the regulator about it, and had it not been for the demonetization, i think you know by now, those provisions would have been available to us, so we have gone back by about three or four months, during which time, much of our energy was spent on the deal monetization, so we believe in -- demonetization. if that happens, then definitely, the cleanup process, we can declare it has done its purpose, and more or less, the cleanup process would be over. yvonne: we still see that the distressed asset ratio is among the highest. is that concerning to you? do you think the banking sector is doing enough to tackle this? >> actually, i think only the banking sector doing something is not sufficient. in every place we have found that the government, the regulator and the banks get together and do the resolution. that is important, so i think india, that has to happen.

it cannot be something the banks have to do all on their own. not only that, in india, much of the banking sector is in the public sector, and as you know, in the public sector, all decisions are subject to a lot of scrutiny, and therefore, it is difficult for the public sector to take very hard decisions unless there is some amount of backing from the government and regulators to give comfort that decisions are being taken and they are the right ones, being taken for the right reasons. yvonne: that was our conversation with the representative from the state bank of india. the nikkei 225, the leading winner here on the board this morning, up 1% with that dollar-yen, breaking above 113 handles right now. dollar strength ahead of donald trump's speech, 90 minutes away now, kathleen, and pressure in

sydney and the aussie dollar. kathleen: the latest gdp figures such across the bloomberg. this is bloomberg. ♪

>> 8:30 a.m. in the hong kong. take a live look out of the sydney opera house. pretty gloomy out there. 7659. gdp figures coming through in the bloomberg. we are going to take a look at how things are looking here. gdp rising 1.1%, which was a beat. paul allen in sydney with the details. paul: coming in much better than expected. 1.1% for the quarter. .5% contraction we saw in the third quarter, so australia once again escaping

technical recession. that is a long 25 years unbroken . we have a year on your figure of 2.4%. perhaps, none of us was terribly surprised, mainly because of the huge rebound we have seen in commodity prices over the past few months. iron or above 90 dollars per ton. about $90 per ton. call prices up strongly. we got a hint something was in the works as well on tuesday when the current account deficit narrowed to its lowest since 1979 with just $3.9 billion in the trade circles. strong, a record of 3.5 billion. household consumption was also strong. housing construction up, as protected. the gdp numbers for the fourth quarter are looking very good 31.1%, beating estimates. back to you. >> looks like the household spending consumer helping to drive that better than expected

australia gdp number, just like in the u.s. today. let us get the first word news. president trump is putting the final touches on his address to congress with lawmakers hoping he will clarify his agenda. trump is under increasing pressure to say how he will bring fundamental change to job creation, health care, the tax system, and immigration. jpmorgan's boss jamie dimon says he wants government regulations that are much more collaborative. he said he's helping the trump administration because the u.s. needs better policy. he sees some essential problems in subprime auto lending but does not think -- >> around bank regulation, i you lookis high time at it. no one in the rational mind can say what we do is completely

consistent, rational, perfect. we are not fanatics about it. we know there was a crisis. inbrokers and south korea -- south korea want to limit losses. exchange has received three applications to list a new etn this month. it will be similar to exchange traded funds but carry the default risk of the issuing company. a high-level north korean malaysia, is in seeking the body of leader kim kim jong un's body. they opposed an autopsy while malaysia has resisted giving up the body without confirmation from next of kin. day,l news, 24 hours a

more than 120 countries. i'm nina melendez. this is bloomberg. it is time to see how asian markets are shaping up. lots to keep up with. best to our sophie kamaruddin. sophie: we have lots of data to digest today, and sticking with what is going on in australia with estimates for gp being beat today. versusrter quarter gain the 8% estimate. we did see the aussie spike before the number dropped to 7666, but a softening of that gain 27656 there. take a look at the yen as well given that some of the data we saw this morning, we do see it climbing above the 113 level. hikeis all due to the rate above 70%, so markets are inspecting the momentum will

pick up after this level was crossed. the currency has fallen since late 2012, driven by the boj's easing, and no the rising treasury yield. the drop is positive for growth and inflation, but keep in mind, haven rises in volatile times and that has strengthened since mid-2015 and plenty of risks. the resurgent yen, that is bad news for the boj, which could tip the central bank that towards stimulus. we did get an update from the boj regarding its march bond buying program. taking a look at how jgb the playing out today, -- jgb's are playing out today. maintainingf course the target. taking a look at that, we have what is going on with the jgb. just at about .06 after being below that level following the boj's announcements on tuesday.

guys. , sophie. samsung's defensive leader may have to wait month before standing trial for corruption three jay y. lee has been indicted on charges including -- wait months while standing trial for corruption. . jay y. lee has been indicted on charges. what more do we know? must make its first ruling on this within three month although it can take as long as 18 months. jay y. lee could actually seek bail, so he might be free to run the company. in the meantime, we know he is the vice president of samsung electronics. when it comes to the electronics chairman, he says they will do their best. it was really the management of the electronics. lee.r than jay y. it is likely to be more major

strategic decisions like acquisitions, big management shuffles, changes to corporate structure. those are the kind of things that will likely take a backseat for now, at least for a while. the foot may come to the pedal when it comes to jay y. lee's modernization drive for the company. something was directly linked to the influence peddling scandal that led to the president being impeached. samsung has denied wrongdoing. >> how do you run corporate strategy at atomic this? this is also an issue for the company now, isn't it? >> samsung on the group level strategynded its office. this is a high loving decision-making unit that coordinates the businesses, overseas long-term planning and liaises with government offices. have been linked to the corruption investigation. the president and vice chairman were indicted yesterday and they

have resigned. now, the symptom group says -- samsung group will make its own decisions led by the board of directors ceo. the practice has come under fire. samsung central strategy office has been dismantled before back lee's., after father. ofyou look at the history table leaders being indicted, behind bars, has not necessarily stopped them helming their conglomerates. shares up by more than 60% in the last year and in the last six months or so, even as this scandal has been unfolding. chairs plowed even higher to record highs. if you look at what analysts , one, you see 41 buys hold, and one sail. islysts thinking the company as they would think they would

be seeing. sort itdent trump will out. he is addressing congress and a couple of hours, expected to say just how he's going to boost u.s. growth at a time when productivity is low and wages are stuck in low gear. can you achieve that to tax cuts and infrastructure spending? ramy inocencio with the latest economic reports. came ine baseline at 1.i'm percent, a revised reading. there is still another reading out there. this is where we stand as we go into mr. trump's first address to join members of congress here. this 1.9% reading is followed by points of thege third quarter of 3.5 percent. this is because of a drag from slower investment by businesses. ofthe past three months

2016, we were seeing a lot of instability because of the white house campaign. now that we have come out of that, it will be interesting to see what comes out in the first quarter of this year. the only lift we got was stronger household purchases. consumer spending is 70% of u.s. economy and it is interesting to see how that contributed on a percentage point basis. let us stop into the bloomberg terminal. look at that read/magenta line at the top -- that red/magenta line at the top. all the other lines, government as well as other investments. those are along the flat line if not negative. me, netrts -- excuse exports for example were negative by 1.7 percentage point, but with all of that said , consumer sentiment is also on since, up its highest july of 2001, so that is why

americans are on the buying on the riseed line since late 2015 or so. the forecast for this was for fall. highest in 16 years. want to show you something else we just got. this is the delinquency rate for u.s. bank loans. look how low that is. this is near an all-time low, only lower in the past year or so, and because of this, it means u.s. consumers are paying off their loans. they have their money, flush with money, and jpmorgan chases jamie dimon himself. credit in the u.s. "has never been better, ever, ever, ever." 14 of them, he pounded his desk when he said this. the question is when they will turn his confidence into consumerism. >> and if donald trump can live up to the consumer optimism. ramy: exactly.

looking ahead, that is a big question of course. we will know in the next two but his promises have pushed the markets to record highs, at least earlier this week, but mr. [indiscernible] things weaid a few should look out for. take a listen. >> markets would rather have the latter, david, which is confidence this is a process, not a one-off thing. this is a process we will work on first taxes, infrastructure, deregulation, and then, let us not forget, labor market reform. education. there's lots of issues holding back that activity. the market would like to see a gradual approach. ramy: very quickly, these are the sectors to watch as we head into mr. trump's speech. hospitals up 32% or so ever since he took the presidency. investors don't think obamacare

will be rolled back, at least in the near term. the decline of dodd-frank and lower taxes. >> all right, ramy inocencio. we are looking ahead to president trump speech to congress in the company of dartmouth college's david blanchflower, a.k.a., danny b. this is bloomberg. ♪

>> this is they break. i'm yvonne man in hong kong. kathleen: and i'm kathleen hays in new york. president trump address to congress. they wanted clarity on how he will deliver on his campaign promises. the word from one of his aides is he may concentrate on immigration. let us look ahead to be speech formery blanchflower, bank of england policymaker. you watch anything in the world, but right now, in new york, this

morning in hong kong, everyone is listening to hear what donald trump has to say about his plan to stimulate the economy. what are you expecting from this speech? >> the same kind of hyperbole but i'm way -- that what i am hoping for something practical and doable that the congress can actually pass. we have not actually on the for tax cuts, a plan for repeal and replace obamacare. we have not got a plan for infrastructure spend, so i think we have to get past the nice lines and trade whatever, and start to practically look at reality. mohammed say that it will be gradual. he is right. i do not think we will see anything take affect for quite a long time, so what we have got tonight is not the rope, but i want to listen for reality of

what can happen and you talked about immigration reform. are we going to see something that people on the hill can actually pass? i have not heard anything, so lots of words, but practically, what can actually be done? are we going to see tax cuts? are going to see the structural reform? are you going to see education reform? the question is not just words. will it be done in the next nine months? that is really the big question. i expect we will get to the end of it and say, probably not a lot. >> you know, danny, during the crisis, youbt have been a big proponent of government stepping back. fiscal austerity does not work. here comes donald trump cutting taxes, getting ready to promote spending. at least, that's what he says. many people have criticized him for wanting to cut corporate taxes. they say his tax plan will favor the wealthy. broadly speaking, do you support the path that donald trump is

going down, if he comes through with the details to make it happen, if you say, sometime this year? know what id to support until i see the details. i have argued for a really on-time that austerity has been a mistake, an attempt to balance the budget has been a mistake, now with the economy still not really recovered from recession. obviously, there are disturbed things we have talked about, so yes, you can boost the economy, but do you actually help the people who really voted for trump? are you going to help the working folks in the rest belt -- rust belt? the question is, is this really going to happen? danny: i think you would get lots of support from the democrats as well for a big stimulus on what is actually important. what shovel ready projects are there? is more than just saying i'm going to do a stimulus on the if

the info structured which bit of infrastructure is planned to get limited? the devil is in the details. >> yeah, he has been quite bold on a possible price tag, too. nextillion over the decade, talking about upgrading roads, bridges, airports. there is a bit of a sticker shock in terms of the price tag for this. what is the payout going to be for this type of spending on infrastructure? danny: $1 trillion is not that much when you think of the size of the fed's balance sheet and you spread that over a decade. i mean, talking today about a raise in spending on defense of 65 billion. let us market carried away. it sounds like a large number, but this is an enormous economy. what you spend it on is going to matter. is this going to be a net addition or is this going to be credit? it is not absolutely clear, so

we will see, but the question is, if you are going to start building a huge project, $1 trillion, over a long period, that does not do that much. it is an enormous u.s. economy. >> what about for trade issues, danny? there is a lot of talk about whether he will bring china into the conversation during his address to congress. there seems a bit of confusion on what steven mnuchin said about labeling china a currency manipulatives are you continue to hear rhetoric from donald trump talking about china being the grand champion of currency manipulation. you have to start to ask for reality here. you have had donald trump saying all sorts of stuff about trade, about nato, about other things, and then his cabinet members pulling back and contradicting. that is generating uncertainty and we should step back to the things we stepped about earlier -- talked about earlier.

we still see business investment being very soft because firms just do not know what is going on. here isneed to see certainty, certainty about the relationship with europe, relationship with china, russia, and elsewhere. bigink there is a uncertainty thing that is the problem despite the fact that one of the fed governors said we can look to the uncertainties and raise rates today. i think that is a foolish mistake. what trump needs to do, calm nerves, make it clear what is going on, instead of the panic mode we have been in the last five weeks. >> we will talk more about the fed later on. blanchflower. stay with us. ♪

>> let's get to our conversation formernny blanchflower, bank of england policymakers. danny, we ended the conversation just now on the fed. i want to get your take on it. how many comments coming out from john williams and bill dudley, saying, look, the case for tightening is looking more compelling. march is on the table. why all of a sudden are we seeing this chorus of said president talking about march ? it is above 75%. danny: we certainly heard today kaplan,ious, four,

william, dudley, powell, i have no evidence what they have seen to suggest they should go and taken. the only evidence is that -- go and tighten. the u.s. economy looks weaker today than it did at the last meeting. slower growth than was predicted. be an employment rates pick up. two percentage points. wage growth slowing and investments flat, so i have no idea what it is they are doing. looks like they are making the same mistakes they made in 2008, and i was just reading a recent paper by john williams, one of the people on the fed, who said there was no great recession at all and the u.s. economy is booming and it is time to tighten. i think it reminds me of the oscars, "la la land." >> you wake up and find out the wrong entity got the award, danny.

so, what is the risk here, because if i want to argue their side, i said we have jobs growing, consumers spending was pretty strong in the fourth quarter, inflation heading towards its target, why not make another move? this: you and i have had conversation many times over the last several years. donald trump has talked about the fact that you want to get to a 4% growth rate. 1.9, no expectation really that that is going to pick up. inflation has picked up starting and wages are to fall, so that is going to fall back to the consumer. i mean, in the context of this uncertainty, what they should be doing is wasting -- waiting and watching. lettingand watching and this uncertainty resolve, but the fed has not explained to us why it really thinks the u.s. is anywhere close to full employment, and wife estimates are so wildly different from the

congressional budget office and estimates areit's so wildly different from the congressional budget office and others. i have no clue. they have not explained to us why they think things have changed in the last few months, so i think they have credibility problems. >> one of the things was arguing the reason they might want to wait is that they will be in the middle of the elections and france. already, a lot of market uncertainty. what do you see right now in france? into whatant is this happens to that you and the fed? -- the e.u. and the fed? danny: a strong wave towards le pen, the populist movements in the netherlands, and things going on in germany, this is obviously a really important here, and we will see these populist risings,, but it is hard to argue you should raise rates.

that is about to happen. that adds to the uncertainty. you should sit and watch and wait consider making an error. why not raise rates by little bit? my response is always, i suppose it is better to make a big ever been a big one, but i prefer you than a big one -- better to make a small error than a big one. >> david blanchflower, joining us from dartmouth college. in the nextst that hour. this is bloomberg. ♪

>> it is 9:00 a.m. and hong kong, 12:00 p.m. in sydney. i am haidi lun. this is bloomberg markets asia. ♪ haidi: investors are counting down to president trump's speech congress. we're hoping to get more detail. . >> we have a very special guest,