the siege -- that refuse vladimir putin's suggestion that bashar assad's opponents were to blame. intelligence and public sources document that syrian planes carried out the april 4 bombing using chemical weapons. than 100 prospective candidates have signed up so far on the first day of registration for iran's presidential elections according to the country's official news agency. registration will remain open until saturday and any iranian national can apply, though the guardian council normally does not approve women for the formal candidate list. termble to run for another , the election will be held in iran on may 19. china is calling on the united states to stick with the paris agreement on climate change, saying it is willing to discuss policies that president trump said he will scrap.

china was joined by south africa, brazil, and india, who all signaled their concern that the president's comments on climate were unsettling the international fight against global warming. former president barack obama will take part in a conference with german chancellor angela merkel in berlin next month. 25, will take place in front of berlin's landmark where mr. obama delivered his speech as president in 2013. organizers say the discussion is democracy, taking responsibility at home and in the world. and that is held every two years. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪

michael: live from bloomberg world headquarters in new york, i michael the key. abigail: the s&p 500 is well on its way for the worst decline in three weeks but off of its lows earlier. joe: the question is, what did you miss? michael: welcome to a new earnings season. growth to be the strongest in two years. the devils are in the details. the removal of that pasture from a flight, the fallout reflected shares, up as's much as 2.5 percent today. president trump meeting with ceo's is today. stephen schwarzman has spoken with bloomberg television today. more highlights -- more highlights later.

let's look at where the major averages stand as we head toward the close. taylor riggs is standing by. taylor: the s&p and the dow were down at one point in the day .6%. coming up, a bright spot in an otherwise red day. really leading things lower, concerns over really taking a drive down on technology stocks. look outside those stocks, it is financials p are we are taking a look at earnings, wells -- financials. we are taking a look at earnings. million club back of bonuses, from that fake account scandal. also to others i am at, citigroup and jpmorgan reporting

earnings on thursday. most analysts are saying they should do better. we are seeing a big reflation and yields. that is not necessarily the case. chart,e a look at this we are looking at yields and we have seen a lot of consolidation around here. if the yields move of us, we could continue to see it move higher. maybe you're looking back at it dipped town lower. a lot of uncertainty taking place here. joe: a u.k. regulator is giving the green light for mastercard to acquire the london-based technology firm which would allow mastercard to expand beyond car payments. the deal is expected to close in the coming weeks. here now with more details, chief product officer, michael. thank you for joining us. know that regulatory issues are out of the way, what does this

allow you to do strategically? michael: a transformational transaction from our perspective. as you were saying, we had been looking at a whole -- for 50 years, we created value in car payment. the reality, happening in the bank account payment space, you we cana payment to me, now play in that reality. that is the first time that has been done in the industry, transformational. ask what it means for people in the united states. this is a british company you required to do business in britain. can you give us the embedded payment system here in the u.s.? absolutely, we will, and it is happening. if you look at what they have been doing, they are the only payment provider in the technology space that have to implement technology

in more than one country. they are delivering this right here in the united states and going live later this year. is coming and will become an with mastercard so we are quite excited about the prospect. abigail: when the deal was first announced, it was expected -- is that still the case? michael: a timeout of the transaction, we have clearly articulated to the investor base, but going forward, we see a tremendous value in this. again, a massive amount of payments that we can take the existing technology on top of. joe: bank account to bank account payments in the united states has been frustration for people. it is slow and not easy, you get all these numbers and go on the website and you don't know what is happening with it. what else needs to happen for that to get smoother in the united states, and how big do you foresee the market

essentially getting? is indeed a market source of frustration but also a massive opportunity around the world. u.s., iook here in the believe with the advent of delivering the system to the clearinghouse in the united states, there is everything you need to really drive ubiquity. american citizens being able to pay everyone else because bank accounts will be connected by one system in the middle and it is exactly what happened in the u.k., which is you have ultimate reach, and you press your button on mobile banking and it does not appear for three days into the ether or it comes with transparencies. theou will be one of companies at the other end of technology as you make payments to other parts of the system. does it bring down the costs for other people in the system, particularly for consumers? michael: what you should expect out of this is here is a whole

new infrastructure coming to the market. a very transparent and open data standard. it will invite a lot more competition and competition will drive even more innovative tech knowledge is. with that is the expectation that economics will change over time for all the players. abigail: what about after the deal closes relative to hiring, firing, what do you see ahead? michael: if you look at the footprint globally, but it does is in 18 countries around the world. there is potential to take the technology, in all the countries we are active in. so from our perspective, this is a growth deal. it has really put us in a different proposition. i only see a positive impact. joe: how do you see yourself competing with new upstarts, whether it is a than multi-thing were a lot of people are using

it for peer-to-peer, technology from square, where do you fit in and who do you see as the competitor? fundamentally, this has not been done before. we are taking car technology and bank account payment technology, putting it out one hand, and what that does is we will be truly differentiated. if you are my customer, i can deal with all of your payment needs. startups, you have many of them with early and consumer experience and solutions that always for a fraction of the payment needs for a bank or a merchant. >> thank you for joining us today. up, what will the trump administration do about tax reform? we will talk to the senior policy advisor, chairman of the house ways and means committee -- ways and means committee. that is next. this is bloomberg.

♪

as far as business in the markets are concerned, there cannot be anything as important as the administration's approach to tax reform. he had to talk about what is involved in what is realistic is the senior policy advisor dave also the former republican chairman of the ways and means committee. he spent years trying to get tax reform to the floor. welcome, congressman. this is hard stuff. we are talking about the tax reform bill these days. do you think given the divisions in the republican party and the fact that democrats are in no mood to work with president trump, that we will actually get something within a year? mr. camp: i am optimistic we

have the potential to, having said that, i am not naive about how difficult it will bp or a lot of work has been done on tax reform. there is a general consensus that our system is broken and some consensus around the fact that we are out of step with the rest of the world and we need to grow our economy and create more jobs and opportunity for america. there is an opportunity to do tax reform and it is important the administration is asphalt as they -- involved as they are. joe: it seems a if you possibilities here. one possibility is nothing happens. another is maybe there is a tax cut that expires after 10 years because they cannot get enough votes. another possibility is the fundamental reshaping of the u.s. tax code. how disappointing would it be if a tax cut thatt expires in a decade, as opposed to viewing this as the opportunity to actually make the code more competitive for businesses? mr. camp: they are starting with

all of the pieces on the table because if you do that, you have the ability to impact the economy and get the growth and jobs and higher wages that we are looking for. if you narrow that down, just having business reform or just, a tax rate relief, you will not have as much impact, but one thing that happens is often times, not all of it expires and congress will extend and maybe even make it permanent as they did with bush tax cuts in 2012. least, to start out at they are smart to look at a copper hence a bill that does all of those things because you can really put the puzzle together with more on the table. we are always thinking about stocks. we have a great chart. in blue, we have the s&p 500 and above, we have companies taxed at the highest rate, and that

sector really outperformed in a huge way here and more recently, it has kind of joined up. what you think about this? mr. camp: you have some sectors at the statutory rate close piere not even 1 thing hopefully tax reform will do is bring more equity to the tax code on the business side. we are really seeing the increasing challenge from the fact we are out of step with the rest of the world with companies for tax or buses, and lower tax companies. think that is something we want to try to have, that growth in those jobs, the high-paying corporate jobs here in the united states. there is a lot of reason to look at tax reform and that is why i am somewhat optimistic. hopefully, they can build on some of the work done by both parties in a number of years. switchman --e stephen schwarzman of black

rock, he was talking about the things he would like to see and tax reform or i will play an interview for you that we did with him after the meeting in which he was asked, what does he think the president and congress will get into the tax reform bill. i think you will probably have something. a handicap of knowing how comprehensive and aggressive that would be as opposed to just a tax cut. we will see when we see. >> so i want to ask you, from your experience, what is the most important thing that needs to be in there? what would you put on the table? most important and unifying thing is rate reduction. that is the one issue that unites all factions, i think at least, to try to get something through. there really is bipartisanship

on that on the business side because of challenges we are facing. they are really beginning the process but i think it is good they are getting opinions from very successful business leaders around the country, and they at least need to start with i think something as comprehensive as possible, and then if you have to adjust as you move through the process, that the -- that comes later. you want to have everything out there at the beginning. book ended what might happen on tax reform, either -- either copper hence it or rate relief, but there is a whole lot in between and certainly more than one way to do a comprehensive tax reform bill. that scuttledhing your bill is that you did something logical and paid for it and had offsets. they are talking now about the possibility of just increasing the deficit. do you think that is a good idea and will that sell with the former tea party colleagues you worked with in the house? mr. camp: the bill i worked on,

hr one, was the first bill to be a realistic, real-world analyses -- analysis of what it might do. now you have got economic modeling and it is required that major -- tax bills be scored that way to what you might do is be revenue new because of the growth in the economy because of more revenue in the government. you have an opportunity to sort of address that issue. ift is really a difference you moved several years away from the work i did on the committee. michael: we hope to have you back as the policy moves forward through congress. dave camp, thank you for being with us today. look at time now for a some of the biggest business stories in the news right now. united airlines ceo oscar muniz has offered his deepest apologies after a passenger was violently dragged off and overbooked plane. it follows a previous him out to

employees accusing the passenger of being disruptive and be ledger and. a vilified on social media. united is launching a review and the result is expected on april 30. goldman sachs got the nod from institutional shareholder services for its executive a plan a year after the advisory firm urged shareholders to vote again. reversed the recommendation in part because of the bank's decision to delineate a long-term cash incentive reward. they also blamed equity rewards inside the company's relative performance. could be the first bank to have executive directors rejected under fatcat loss after institutional shareholder services became the third advisory group to recommend shareholders reject pulls us pay as much as $50 million in bonuses, which is deemed excessive. the shareholder vote is april 28.

that is your bloomberg business flash. joe: coming up tomorrow, a imf managingwith director christine lagarde live from brussels. at 6:30 a.m. new york and 11:30 a.m. london time. this is bloomberg. ♪

miss?l: what did you the japanese conglomerate. the company warning it may not

be able to continue, a growing concern given the huge losses from the nuclear business, to posting an operating loss two 576 -- $5.2 billion. a $92a company with billion market cap. it has negative shareholder equity. the accountants say this is significant. they were not able to get the auditor to approve those figures today. not getting the auditor, going below the zero line, not a good thing. here is something you want to keep your eye on. this is a volatility spread related to the upcoming french election. between one week and one month euro volatility. basically what it is saying is it is pricing in the first round of the french election a little later than april. .ou can see there is not much

it shoots up fast right after that and the big news this week is we are talking about the four-person rate. it is possible and not necessarily the most likely think that we could have a runoff between marine le pen, the nationalist candidate and skeptic, causing a lot of people heartburn throughout the other side, athe guy backed by the communist party, people were expecting ok, we will have le pen versus a mainstream candidate and le pen will lose. that is how everyone assumed it would play out here and what if we don't have that, what if it is someone far left, who would also be an anxiety for everyone else, well that will be the new story. everyone will be watching to see if they could theoretically get into that may runoff. that chart reflects the brewing anxiety and france. last-minute uncertainty

in an already uncertain situation. that spike in volatility in europe, it could play as time goes on. chart hereonger-term at the end of the financial crisis. you can see the market lows. also telling us there were not any left, they were done after the selling. after this went on, we see some investors were getting bearish as the ratio shot up. interesting is the fact we have seen issued after but the bears are tired of not winning here and the quickest call ratio has absolutely plummeted until the last month, we are starting to see it back up with the s&p 500 at record highs, pulling off a little bit and trendline wise, the s&p 500 put -- but the ratio

is starting to make a move for the upside. this is suggesting the bears are becoming more active and it suggests fall till it he could be on the way for the european markets, the u.s. markets, -- >> apply volatility and a vix at its highest in a while. still pretty high up. -- much action >> correlation starting to come back a little bit. we saw the vix calmed down and aerybody thought it would be quiet time, coming back again now. assets today again 1%, six .5%, the biggest since 2010. let's look at the market close. only modest losses and at one point, the dow was down over 120 points. now down just 25 points. mentioned,just

coming into the safe havens, gold and treasuries, the yen, apply volatility and interesting action. this is bloomberg. from new york. ♪

joe: "what'd you miss?" stocks finished in the red. not as bad as it might have been. i am michael mckee. joe: i am joe weisenthal. abigail: i am highly guilty little. joe-- abigail doolittle. joe: let's start with market minutes. punkyl: it was a bit of a -- bumpy day. major averages down. look at the doubt, down less .han 1/10 of 1% the worst decline since march 21. the nasdaq had been down at one point 1%. we have seen a bit of a recovery. the vix having its biggest spike today since the election.

investors feeling a bit of agenda. let's take a look at the sector situation for the s&p 500. this, we do by looking at the s&p 500 and the returns on the day. at the bottom, tech and financial. that is the story of the 10 year yield. hit by apple, as well as some chip stocks. apple saying they will not take it, not stand for the revenue losses. some weakness there for some of the tech shares. really dragon. not much of a recovery there. speaking of where we did not see much of a recovery, united airlines. look at that big plunge.

of course, what some are calling a pr crisis over the passenger the plane.cibly from people think it is a pr crisis, stocks. joe: ongoing anxiety of the election, now a four-way race, up two basis points. still in negative territory. in the u.s., a lot of action with buying of treasuries. one of the interesting things lots to bid. you can see it right here. really since early december, we .re at the bottom

charts really the key everyone is focused in on when it comes to rates. despite the come back, really a lot of safe haven buying. michael: it is not about the dollar. the dollar index down for a second day. it is interesting because this is a case of the biggest movers down against the dollar. the dollar was strong against them. the euro went up a bit, and that carries bigger weight. you look at the japanese yen. it broke through 110 for the first time since november. gain ind, the biggest almost four weeks. and, the turkish lira dropping ahead of the april 16 vote.

about what more power would mean for the investments in the country. the commodityon front, gold rallying, up over $20 bounds. the yen, treasuries, gold completes the trifecta of safe havens. you can see lots of buying there. very little let-up. crude oil gaining a bit. here is the longer chart of gold. you see gold plunging in the wake of the election. it is having a great year. abouthe highest level in five months. those are today's market minutes. michael: let's take a deep dive into the bloomberg. you can find all of the following charts using the function at the bottom of the screen. trade all the rage

election.ld trump's they are no longer the rage, they are deflating. forbreak even expectations inflation have fallen off. that, even though demand for inflation rising. tenure tips sold at a yield, the lowest since 2013. they are not seeing it there. no obamacare revealed -- repealed, no infrastructure this year. less of a chance of inflation. why? comment suggesting fewer rate increases. chart to watch. i want to dive more into the volatility question. we have established that the vix has been jumping lately. it is a measure of implied volatility. it does not action tell you if markets are volatile. this chart is implied volatility

going forward. the points line is realized volatility. while the white line is jumping with higher and higher volatility, real volatility remains subdued. the spread getting wide between them. people are getting anxious. hardly any real action. it will be interesting to see whether relies volatility takes up court if we go back to the low volatility regime. abigail: good stuff there. i want to take a look at the stocks. otherocks performing on indexes. the chip index down to day. .t has been a monster run this chart in white, the stocks index. right now, about 27.5 times well

above the s&p 500. a lot of analysts saying the monster run for chips will be over. analystsr bloomberg says this is a difficult quarter. it will be adjusting to see if the stocks are normalized. that itl likely mean comes down. michael: you are talking about the chips. springtimeybe as aes on, but i am not much of sports person. toancial and tech forecasted shine. so great to have you here. see thateresting to you are bringing up the banks. they performed poorly in march. what happened there? >> what happened in march was

all about rates, in my opinion. they had been the perfect equity market proxy. rates gods go higher, higher. despite the fact that earnings fact,st remain steady, in expectations hold pretty well. the yield is falling, taking trade with it. earnings arek bank going to come in strong. what drives think earnings? -- bank earnings? here we have a look at who will win and lose. you see tech among the blue bars. what will drive the strong financial performance? bottom-up broad

aggregated analysis. some of this is easy come. earnings was not so strong a year ago. some of it was thanks performing and performing without excess legal costs. those factors are slowing a bit. in general, banks have experienced some more upward slope in the recent months. you see id's appetite for low growth. that is helping. the broad sector should perform best among sectors. the question, in my mind, is if it can outperform current expectations. that is a different story. expectations are already very high. .aluations are at peak levels we are pricing in a strong landscape. expectations will have to be the expectation to stimulate interest in the stock. that analysts bump up after

the election? >> a little bit. they started to bump up expectations at the end of last year. it was more about growth and performance. michael: here is what i want to know, not earnings per share. everybody is brilliant. you can game the system there. revenue, top line. are people making more money? question. great if you look at the earnings at large, the first quarter should be very strong. phenomenal sales growth. when you look through the rest of the year, the sales growth number starts to slow down. companies will have to guide on the top flight and guide to the top line potentially going a little faster in order to stimulate some interest. you make a great point. earnings is a great -- a tough game to play.

managing the top flight is harder. abigail: the upcoming earning system, what you think is going on there? do you think there is more volatility going through the earnings season? >> i don't know if it is just the upcoming earning system or if it is an accrued event. stocks peaked on march 1. we had a little bit of down trading market since march 1. we have not been able to break out of this sideway box. in my mind, that means the market is gathering up momentum to break down or break higher. the event today was not necessarily that the vix rose, but they traded below the 50 day average. can we sustain that tomorrow? i think that is a huge question for investors. joe: thank you very much. bloomberg intelligence chief

equity strategist. we will be talking more about the vix coming up. volatility may be making a comeback. could this be another side that the postelection trade is losing steam? this is bloomberg.

for firsts time now world news. the u.s. army says that one person is dead and another injured following explosions at missouri city. the plant manufactures small

munitions and operates the test center for nato. say a person was wounded after a bus was carrying soccer players to a game. the scheduled game has been postponed until wednesday. the club says there is no danger in and around the stadium. eight members of extremist cells have been arrested in connection with last week's deadly bombing on the subway in st. petersburg, russia. that is according to the intelligence chief. the suicide bombing killed 13 passengers and injured dozens of others. no one has claimed responsibility by the bombing but russian trains and planes have long been targeted by islamists militants. president trump welcome more than a dozen ceos to the white house again today for further discussions on financial

strategy and policy reform. speaking to members of the strategic counsel, the president outlined the administration strategy. reducent trump: we will taxes, a limited wasteful regulations. you can take a look at dodd-frank. we are really doing a major streamlining and perhaps a limitation and replacing it with something else. mark: global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. iron am mark crumpton. this is bloomberg. joe: "what'd you miss?" six trading at pre-election highs today. it translated into the biggest chunk -- jump of the cbo volatility index since november. sometimes the vix seems to move

in the same range. you have a big selloff and move in the vix but it feels that there is some underlying anxiety that is not being captured in the headline. >> absolutely. one of the backside of the story is what is happening with global volatility. there is a fix for the european -- vix for the european market, for the nikkei. what has struck me is how those various implied volatility metrics are all correlating incredibly tightly with each other. you step back, talk about the election, and the usa is the equity story. the volatility for european equities has been told very recently, pushed right down with it. one of the things that has been

happening is the vix for european equities just doubled. it went from 11 to 22 over the probably or two, having to do with the french elections. the story. facet of i think one of the other facets sixhis is the selling of context would presumably volatility.ow makes further volatility harder. easier path.uch michael: the question is why is

this happening. vix has come-- back. if everything is so good in the this on purpose? >> we have melting geopolitical conditions in the korean peninsula. perhaps, france. in might be the candidate on the far left. there are a whole bunch of factors. what one of your guests was just talking about is the lack of upward momentum in u.s. equities. if you don't have that, you can consolidate for a while. realize volatility has been extremely low.

vixre we get too excited of jumping, let sit back and realize that that is coming from extremely low levels to high levels if you want money in the coming weeks. share a i would like to chart. i tweeted this out a little while ago. in white, the s&p 500. it is not normalize. back in 2000, there was a big divergence between the s&p 500. the two came back together. now, we are looking at the .idest divergence ever it was just that we have a massive spike higher on the fix -- vix.

>> there is a key difference today which is the bond market yields are incredibly lower. we are talking about the transition off of that, the fiscal stimulus, and what that transition really looks like. get aer words, if you risk off, can the market rallied back. ultimately a vix suppressive context. say for example, others don't want to buy the treasuries. thingsu mentioned some that may be causing people some heartburn, like korea.

the france election. all kinds of reason for people to buy protection, to be nervous. 120 points. we're basically in the black. days, the a number of trump trade won't work. >> we have talked about trump trading fading. fedill see whether the comes back in the money in the process. that's not forget that globally synchronized growth has been robust over the past three months. we will get a better view as the trading season unfolds. to the point of correlation, there has been a real -- correlation is very low. it goes down when correlation is

low. the vix is still extremely low. that is one of the factors that feeds into why you don't really get this massive move higher in the vix. onchael: coming up tomorrow bloomberg surveillance, a conversation with imf managing director, christina lagarde, live from brussels. this is bloomberg.

michael: i am michael mckee. let's take a deep dive into the bloomberg. you can find all the charts using the features at the bottom of this green.

australia's weather bureau says we are once again on el niño is a w which means there 50% of -- chance of el niño developing in 2017 or 2018. what happens? usually big rains. that brings big risk for crops like sugar, cocoa, and palm oil. this shows the impact on palm oil futures. they have spiked in five of the last six el niño events. you don't know for sure what will happen. you do want to pay attention. joe: should i put all my money in, oil or not check go michael: i didn't do coffee because people get depressed if

coffee prices go up. joe: we don't want to tell people that. one of my favorite things to xiv, reversed the vix, a huge moneymaker. uglyn see, three pretty days in a row. the worst days of the year. this can't lose trade has been losing lately. a real pain for these people think it is -- thinking it is free money. abigail: up next, blackstone a group ofd ceo lead ceos who met with president today. we look at his assessment of how the meeting went and u.s. trade. this is bloomberg. ♪

mark: i am mark crumpton. it is time now for first word news. white house press secretary sean spicer drawing criticism and vertical -- ridicule for his .hoice of comparison secretary spicer: we did not use chemical weapons and world war ii. as had someone as despicable hitler's who did not sink to using chemical weapons. if you are russia, you have to ask yourself, is this ever she that you want to align yourself with.

you previously signed on to international agreements rightfully acknowledging that chemical weapons should be out of bounds for every country. to not stop at your own word is troubling. later spicer letters -- said that he was trying to draw a distinction between the use of airplanes to drop chemical weapons on population centers. alabama's new governor is spending her first full day in office. kay ivey was sworn in as only the second woman to hold the job. she replaces robert bentley who pleads guilty to campaign finance charges and reside on monday. jeff sessions toward the border of mexico during a visit to arizona today. he misted what is mostly rough terrain, 70 miles south of tucson. he says he will speed up

whortations of immigrants are convicted of federal crimes. the u.s. and south korea conduct militaryst over exercises on the peninsula since the start of their alliance. the assembly usually meets once or twice a year. experts say pyongyang could be preparing the six nuclear launch. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am mark crumpton. this is bloomberg. abigail: thank you so much. let's get a recap of today's market action. it turned out to be a bit of a bumpy day. finishing fractionally low. speaking of volatility, the vix

had its biggest romp up since the election. the yen rallied by more than 1%. certainly some nerves coming out there. joe: "what'd you miss?" back to president trump's meeting with more than a dozen ceos of american companies, the the blacks led by -- steve schwarzman on tax reform. >> to a cobbler something in that area, there has to be something taken away from other people to have their revenue to finance the tax cuts. there are a lot of different ideas, different people on capitol hill, as well as in the

white house. they are all thinking about what the trade-offs are. i expect a much more deliberate, logical approach than trying to pass health care in 17 days. happen, which is good for everyone. aalso think there will be circle back on health care. is dead and gone, and certain andas difficulty being dead gone. how long will that take, i don't know. ultimately, they should be able to get something out of the house, whether it goes through the senate, that is your call. >> what about the sequencing? tax reform up?

>> what would be better, from a scoring perspective, if they can do that, i think that is in the land of the unknown. is a hugehappen, it bonus and makes life easier for tax reform. >> from what you said, the president is looking at a comprehensive approach, real tax reform, not just tax cuts. the president. i assume you would want to have competence of tax reform even if it takes longer. dealing in are months, that is not long. that is only long gone television. it is not long in the context of the kind of legislation and other issues. taxes isust reducing sort of a fallback, as opposed

to reform. reform part of the package that you, as head of blackstone, consider essential. >> one, i'm not in charge of that world. i don't know that anyone is exactly in charge of that world. we work with what comes out of the system. if individuals are somewhat powerless to affect that outcome. >> you have spent time with the president more than once. you come out of the meeting with a sense of optimism? to have a sense of optimism by the end of the calendar year that we could have something from congress on tax reform? >> i think you will have something. it is just a handicap of knowing how competence of an aggressive that would be instead of just a

tax cut. we will see when we see. enough.is fair that certainly is true. let's turn to trade. concern, and seems to be less of one now. he mentioned after opening remarks that something seems to be coming. to think trade is less of a threat? >> i think what they are looking quality,mething of the whereof rappers prosody -- repricocity. it is hard to make the argument on the other side. you can get that by other people

producing, or if you are increasing. just compete and the best country wins. you have to have a level playing field. right now the playing field is not necessary level in every case. wilbur ross who is spending a lot of time not sleeping much to get to all of the different areas, different countries and issues, just to have reciprocity and equality. you can have trade, which hopefully, from my perspective, will expand. the world does better when trade is expanding. it has to be equally balanced in terms of what it takes to get into your country than my country.

into a different , starting after world war ii, the united states with 75% of gdp. one of the areas uber they know , did you come away with a sense of how things xi, and dopresident sh have a sense of the outcome on saturday? meetings inhe florida at mar-a-lago work good meetings. i was there for some of it. president she and president trump seem to establish a pretty good relationship.

that is important because it will be a lot of issues that but not be easily decided need to be decided by both parties. i think the chinese have a perspective on this that they are aware this is important, it is important to the night states. there are other important things like north korea. the two countries are inextricably bound and they have to come to good outcomes. they ultimately need to be tiebreakers. that is delegated to the .resident of those countries if the two individuals have a sense of trust and understand each other better, that is important. in our system, as we have learned, it is also important.

blackstone founder and ceo, steve schwarzman at the white house today. michael: coming up, janet yellen says the fed is healthy. charts onree must-see her comments next. this is bloomberg. ♪

joe: "what'd you miss?" speaking yesterday at the university of michigan, fed chair janet yellen says the fed has shifted to try to sustain progress that has been made. shift sort of a germanic

when you look at one of the things she said. a, we have not heard from a fed chair on inflation in some time. have a listen. economy rises well above our target, we don't want to be in a position where we have to raise rates rapidly that could conceivably cause another recession. we want to be a head of the curve, and not behind it. since the last two years the fed started raising rates, they have dealt with a lot of market volatility along the way. a lot of concerns. it makes sense that they want to be positioned behind the curve. now we are seeing this shift since the election. markets are much,. we are feeling like the better policy chance to be in is ahead

of the curve instead of behind the curve. michael: take a look at this chart here. janet yellen saying yesterday curve. are below the i think this is a striking chart. it goes back to 2012. see, that entire time, they saw the risk tilted to the downside. now, for the first time this year, really this entire cycle, they seek risk shifted to the upside. we are shifting from a policy stance of being purposely behind the curve to being a little ahead of the curve. we talk about the fed talking about how many times we will hikeshikes -- have rate

this year, they talk about three, but maybe more. joe: yet, you have this chart that you brought us that action shows there is a little bit of decline in expected fed tightening. what is going on here? >> this is the flip side of the coin. it looks like the fed is still sensitive to market volatility, which we have not seen a lot of lately, especially in recent days with the geopolitics flaring up, and everything. it has really not gone down much. expected fed tightening for next year has gone down a little more than maybe you would think. there is clearly this feedback loop that is still intact. joe: it is funny because we are seeing anxiety everywhere but equities. we see it in goals, treasury, yen. literally the only place we do not see it is the blue line

which hardly moves at all. >> it is an interesting question, to what extent the fed tightening supports risky assets at the end of the day. it kind of works in both directions. this is what janet yellen talked about last year when there was so much volatility, interest rates can go down in response to automatic stabilizers. it could be something we end up discussing more if we get this kind of volatility. abigail: thank you. curve isthe yield flattening. we will hear from dan fuss on how many rate hikes the fed needs to enact. his insight next. this is bloomberg. ♪ michael

abigail: dan fuss says the yield curve is flattening. the 10 year yield make reach 3%. now, it is at the lower end of the range, following janet yellen's comments that she is allowing the economy to coast. it may go to 3% or beyond by the end of the year. mark barton and vonnie quinn asked how many hikes it could intel. >> from this point, it would require to hikes minimum, probably three is the 10-year is going to break 3%. what is happening is the yield curve is flattening a bit. the fed raised. the 10 year went flat to slightly down. actually at 110 basis points. the spread has been flattening,

fighting and we are at the lowest point since last november. degree that that continues, and you say, how do we get to three, we probably don't. with the normal action of markets going along, let's juste that the hike, as it did, passed at the meeting, pass , and hike again, that is 75 basis points more at the shorter end. so many other things are impacting here outside of the fed. >> when the chair says we have been on the gas pedal, accelerating quickly, and now we are keeping our foot on the gusto, but not accelerating the

pressure, does that mean we should expect three rate hikes this year? >> it depends on how you interpret it. certainly two times. maybe we will run down the balance sheet towards the end of the year. that could be. hike?hat substitute for a economically, it doesn't. let me rephrase that. economically, to a degree, it does. it does not substitute for a for the banks. the process could very well be underway by the end of the year. >> cautiously. if you look at it from a monetary policy viewpoint, you think, what is this really doing?

negative -- t that slight net negative. if you raise rates, that should theoretically help to reduce liquidity in the market. not really, not from this level. another factor that i'm learning to pay more and more attention to. level ofr what the breaks, tensions around the , and money to the dollar increases. measure.ard to >> a question from our viewer, therere the chances that are hikes with greater than 25 basis point increments.

good question. >> i just don't think so. if they do that, that since a signal that they stop worrying about if the yield curve is flattening. abigail: that was dan fox with mark barton and vonnie quinn. michael: it is time now for the bloomberg business flash. a billionaire saying it is a surprise for the premature rejection of a proposal to overhaul the world's biggest miner. and once stake in bhp the company says been off -- s the company to spin off assets. proposalof the

outweighs the benefits. butays that -- altice suddenly in recent years. bidsal attracting up to 15 , according to people familiar with the matter, saying that bidders will be shortlisted this week. l'oreal said last month that it was exploring all strategic options. azulrazilian airline phrase more than 9% after a trading debut today that had been delayed several times. it raised $520 million in the sale as confidence in brazil shortly right -- slowly rises.

that is your business flash update. joe: coming up, what you need to know for tomorrow's trading day. this is numbered. -- bloomberg.

>> and live a bit of a volatile session for stocks. this.miss chinese might inflation data out at 9:30 p.m. eastern. " coming up tomorrow on bloomberg surveillance", a conversation with christine lagarde. look for that at 11:30 a.m. in london. a joint press briefing in washington, tomorrow 4:30 p.m. eastern. that is all.

mark: i'm mark crumpton. you are watching "bloomberg technology." u.s. officials said today evidence clearly shows syria was behind last week's chemical weapons attack.

that refutes suggestions by russian president vladimir putin. bashar's opponents were to blame. the officials who briefed reporters at the white house said intelligence sources documented that syrian planes carried out the april 4 coming. white house press secretary sean spicer is drawing criticism and reticle for -- ridiculed for comparing bashar al-assad to adolf hitler. he was criticized for failing to a knowledge the systemic in gasnation of jews chambers at concentration camps. it's nice or later said he was not trying to lessen the nature of the holocaust. the san bernardino school at the center of a murder suicide yesterday is closed for the time being. the closure comes a day after a man walks into it -- his estranged wife's classroom and opens fire, after