jay powell speaks from the yellen script ahead of his confirmation hearing. -- 30% discount and goldman sachs and barclays predict the fastest global economic expansion since 2011. the oecd warns next year could be as good as it gets. from new york city, good morning. this is bloomberg daybreak. i'm jonathan ferro alongside david westin and alex deal. a very small pullback from all-time highs in yesterday's session. futures a little bit firmer today. in the treasury markets yields grinding higher by a single basis point and the euro just a little bit softer. broad-based dollar strength coming through. alix: european stocks continue to grind higher. part of that is energy stocks. despite the fact that brent is lower at $63 as some pessimism and downward thinking when it

comes to the opec meeting on thursday. spread coming in at 57 basis points. and bitcoin. is it going to be $10,000 today? time for the morning brief. at 8:00 this morning eastern steven mnuchin, william dudley on the hill of the sec will all be speaking in new york at a conference on the structure of the u.s. treasury market. at 10:00 all eyes will be on capitol hill as senate begins confirmation hearings for jerome powell. and president trump continues to campaign for a tax overhaul. he will be going back to the white house for a meeting with congressional leadership on how to avoid a government shutdown. that's all coming up today. the big story into ec is federal reserve nominee for the chair, jerome powell.

the gap appears to be narrowing between short and long-term interest rate raising concerns on the future of the u.s. economy. joining us now is drew matus, metlife and that achievement -- metlife management chief market manager. are we expecting to see anything different from the confirmation hearing today and the testimony tomorrow from chair yellen? >> i don't think so. differences tend to be on the regulatory side. the fed is very consensus driven and powell hasn't dissented ever so you have to assume he's on board with what they are trying to do. even the fed doesn't know how many rate hikes they are going to do next year. i wouldves an answer take it with as much of a grain of salt as you can find. jonathan: it looks like as you were for the federal reserve. >> you could put janet yellen's

name on it and it would read the same. his goal is not to make any waves. i suppose something good came up and questioning. there are issues about regulation. waspowell in his statement very firm and saying we do believe regulation is needed. we shouldn't roll it back a lot but we could we get some. that is perhaps where a lot of the senators will go. david: will that be enough for the financial district? when theld trump was elected numbers went up in part on the promise of deregulation. is tweaking going to be enough? >> i think it is and it has been for the economy as a whole. everyone ascribes the movement to tax cuts. it shows the regulatory pendulum

doesn't just swing in one direction. sometimes it can swing in the opposite direction and that's what markets have in responding to. the idea that it's not going to be the constant push of more regulation. job sincehas had this several months. as you taken any specific steps that would encourage the banks to think there is deregulation coming? >> he is behind a move to take some of the pressure off corporate boards in terms of what they are supposed to know and do in the financial industry. he has also suggested he supports moves in congress to raise the threshold at which you get extra regulation. it.asn't put a number on there is a bill in the senate that would change it from 50 billion to 250 billion. if i am in the senate i'm going to ask him what do you make of the flat yield curve. what do think he would say? say think he's going to

that they will continue to hike and they have a forecast and the forecast is whatever. the fed has a number of rate hikes next year. i don't think you're going to get three or four next year. i think you might get two. there are enough people on the fed who don't want to compress the yield curve that far so unless the 10 year starts moving it might cap how fast they're willing to move. alix: what's going to be the main street question? my mom definitely does not care about the yield curve. people say, you're an economist. was going to happen to mortgage rates? am i going to have to pay more to buy a car? probably mortgage rates are going to go up but they haven't responded a lot yet to what we have seen in terms of fed tightening.

we don't know what it's going to cost you to buy a house next year. me wonderit makes what we can learn from today. to the start of the year when they had the projections for gdp growth the majority didn't even factor in stimulus.- fiscal >> this is why they call it a confirmation hearing. he's going to confirm what we already know. a washington pun. he has not factored in the stimulus. it's got so many moving parts that it's really hard to know. the one thing you do know is that it's going to increase the whicht significantly should raise interest rates over time and may crowd out a little growth.

he might comment on that. fed chairs have commented on the deficit in the past trying to be as nonpolitical as possible. theerms of its impact on economy may be too early for him to take a position. ifathan: for the next crisis they ask him how he's going to respond and he says with a balance sheet outside go over with republicans? >> i suspect he's going to say that's his last option but he's going to keep it on the table because he has to. the whole idea of moving rates higher was to make that less and less likely. the curious thing from my will be what does he think of the idea of a natural rate of interest which is in my mind most dangerous concept at least as it's being applied by the fed that exists today. natural rate the of interest is now such that the fed funds are going to pick at 2 -- peek at 2. the wide range of estimates of

what the rate is which is a couple percentage points in either direction. i would love for someone to take him to the table on that not because i expect an answer but because i would like to see him squirm a little bit. david: isn't one of the challenges he has convincing the markets that he will be aggressive enough to respond in the next crisis and tell the senators that he will stick close -- senators get nervous when fed chairs say we have a lot that we can do. >> he's got to win over the staff. he really has to defend the federal reserve a little bit and if you're going to defend it in one way or the other you might as well defended keeping your options open rather than letting them get constrained. alix: deals are getting done. porac is buying buffalo wild wings for $2.4 billion.

that's about $157 a share. keep thethey will brand's distinct. they're going to keep the brand's distinct but the arby's ceo will leave that merger. we have been reporting for a while this takeover continuing in the distressed space. david: is there going to be further consolidation in this ?art of the business bac jonathan: the mood music around m&a is improving. are we going to see more of this over the next year? >> yes. rates are moving higher. people are going to try to extend the duration. that means trying to show that you can grow rather than just return as much capital to shareholders as you can. jonathan: drew matus and michael mckee, thank you very much.

on the bond market and the federal reserve event of the everytune into bloomberg friday. 30 minutes dedicated to fixed income. coming up on the program, is it time to get bullish on global growth? credit suisse ceo says yes. will bealerie jarrett coming up. this is bloomberg. ♪

alix: the synchronized global growth story. how long can that continue. when it's reese -- credit suisse figure out to john us earlier.

>> we are very positive about emerging markets. noticeably very positive about ofope which is new because the election of macron and the turn of things in france. enginee a franco german that can power the european economy forward. we have the three major economic zones doing well at the same time. capital expenditures is back. that's a major shift in the world economy and it can create a scenario where you can have high growth with low inflation because productivity gains. if you invest in capital and productivity growth you can get into a very healthy growth scenario.

i was concerned about the exit of qe. it is very slow and the communication around it is very good. when asset prices are as high as they are it is important to take investors by the hand and not surprise him or her. i think so far the central banks have done a really good job at that. we think emerging markets will be all right. qe, m&a. we think the strength of corporate earnings and of cash .itting on the balance sheet you have our industry. the lack of reliability of credit put a damper on growth since the financial crisis. it is starting to shift so we can support our clients and their m&a ambitions.

economists from barclays and goldman sachs tend to agree with him. as good as it gets. still with us is drew matus of metlife. as good as it gets. still with us is drew matus of metlife. if you agree next year is as good as it gets? >> we are starting to see that positive reinforcement of growth across the globe with the u.s. pulling everyone along. now europe has begun to grow. asia is beginning to follow. you begin to get the positive reinforcing growth cycle which one of the reasons we are optimistic that the u.s. economic cycle might be able to extend to a record. alix: what do you see that's different? a matter of how much are they slowing. china in our view is going to .2%.off by

japan also .2% to .3%. in europe about the same. and growth is picking up latin america and the rest of the emerging world seems to be accelerating. offset suggests you are going to see better growth if18 that you saw in 17 and you look at credit in the united states it doesn't seem like bank is somewhat slow. that means there's potential for upside which could further the cycle that much more. tax cuts could further the cycle. i think we should be asking ourselves how much beyond 18 will the economic cycle extent? david: and how much further can with real growth around the world and without further

inflation? >> you will begin to see it pick up within the next year. model for underlying inflation suggests that the bottom of inflation is the second half of this year. higher begin to move basically starting now and going through the first half of next year. you think high rates are going to lead to an acceleration of growth. look me through the. -- walk me through that. where ise in a world all wall street all the time but main street a slightly different ambitions and i think what you see is that the saving rate and the 10 year yield, the relationship is not linear. below a certain level people begin to save more money. it could just be fear. if the 10 is really low then maybe something is wrong with the economy.

we know that's not the case because unemployment is so low so what are they scared of? if they are moving towards retirement and they want to move a for assets how much money do they need if 10-year gilts are as low as they currently are to have us if retirement just using a safer asset and the answer is if 10-year gilts are at 2.3% a lot more than they had to in the past so it encourages rather than discourages savings and david: how elastic or savings to interest rates? because we are talking about pretty low rates. >> really the perfect sweet spot is around 3.5 to four and that's over a long-term history. let's assume the natural rate of interest is maybe a little bit lower. then maybe we can only get up to

3.5 for normal. then the question is what are inflation3.5 for normal. expectations because if people have low expectations then you don't really need to see rates drive that much higher in order for them to get a return that they want. the key issue is are we at a rate that encourages the maximum amount of consumption in the economy that you would want to see and the answer is no we are actually below that rate. you need to move higher to get to a lower level of savings and have more consumption if that's the goal. alix: when do we talk about -- top out? 2020.e 2019, it depends on tax cuts. it depends on the way the rest of the world goes and if there is some sort of foul up in u.s. financial markets. metlife willtus of be sticking with us. coming up, u.k. banks in a messy divorce from the eu.

can the banks with down the fallout -- withstand the fallout from brexit? this is bloomberg. ♪

>> informed by the stress test and risk analysis the sec also judges that the banking system can continue to support the real economy even in the unlikely event of a disorderly brexit. was mark carney speaking this morning after all the banks in the u.k. passed the most difficult stress test today. for more on the results we welcome stephen morris in london. through what we actually learned today from the boe. the first time in the four years of the stress test that all of the u.k. banks actually passed. of jubilation was ruined by the fact that the bank of england is asking banks to boost their capital buses in

anticipation of potentially disruptive disorderly brexit so really what should have been a actuallyday for banks looked quite negative in retrospect. jonathan: we've spent a lot of time talking about the cyclical capital buffer in the u.k.. walk me through what that actually is and what the governor can do with it. tool theasically a bank of england uses to force banks to build up higher reserves when times are good, when lending demand is high and allow them to release it when times get a bit worse and they usually will cut lending. this is the bank of england forcing banks to stockpile more money in order to lend should there be a downturn after brexit. now have increased it to 1% which is another 6 billion pounds of capital and they will do another .5% increase in the next six months of next year. will this lead to

material tightening in the u.k. in terms of lending given we have seen the first bank rate hike in a decade from the bank of england. could we see things tighten up? was like a triple hit on the banks. you have a disorderly brexit, and economic crisis and about 40 billion pounds more in misconduct cost. under those circumstances they say there will be a tightening in lending. if you take one of those three things alone the bank of system has said it sinks -- thanks the system will be ok. thinks the system will be ok. morris indavid london. i want to bring back in drew matus of metlife. the situation in the u.k. overwhelmed by brexit at a time all the country is talking about it. is that a direction of travel irelande? the u.k. and

seems to be overwhelmed by a single issue and the rest of the world seems to be moving on. >> because the rest of the world is doing fine. growth globally seems to be accelerating. the u.k. we expect will slow next year. europe will be slowing as well. case where the devil is in the details and a lot of the things that could impact growth most over the next couple of years we just don't know enough yet. we have tax cuts in the u.s., we ind more clarity on these order to get it. it seems like tax cuts are coming. it seems like brexit is going to happen. most people have a relatively benign scenario penciled in and that's why people are talking about the disorderly coming from the bank of england. jonathan: what is the potential spillover?

it's not obvious to me for many people anymore. just the uncertainty and the impact on financial markets. when we think about what could cause the next downturn financialyou think market upheaval causes the next downturn as opposed to the other way around. jonathan: you will be sticking with us. coming up, valerie jarrett. former senior adviser to president obama and lyft board member. we will discuss women in the workplace. futures this morning just a little bit firmer after yesterday's marginal losses. this is bloomberg tv. ♪

jonathan: just a couple hours away from jay powell's confirmation hearing. two hours away from the opening bell in new york and futures up almost 40 points. of 19 industryt

groups in positive territory on the stoxx 600. bond market yields higher by basis point at 233. a bit of broad-based dollar strength against the euro and the pound. around 133 on the cable rate. crude a little bit softer this morning. even with opec coming out and potentially agreeing with russia for a nine-month extension. alix: we have mergers and breakups. emerson electric is withdrawing its $29 billion proposal to buy rockwell automation. rockwell continue to rebuff its efforts. emerson also round of announcing a $1 billion buyback over the next 12 months after it canceled its bid. and then it's the mergers. borat capital -- warwick capital

is acquiring buffalo wild wings. it owns arby's as well as in a button the head of arby's will run the combined company although the bands -- brands will continue to stay separately. jonathan: we will get to taylor riggs. >> jerome powell isn't on a mission to shake things up at the financial reserves to in a statement he signaled to broad support for how the fed operates, regulates and guides the economy. have any expected to problems being confirmed. two republican senators are threatening to hold up passage of the tax bill. johnson bob corker say they may not agree to vote to measure out of committee today.

that would jeopardize plans for a full senate vote this week. they have cited different concerns about the bill. i wish prime minister appears to have averted the threat of a new election. his deputy prime minister is set to resign. she faced a no-confidence vote in parliament over her handling of a whistleblower controversy that could have brought down the government and forced an election next month. global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i'm taylor riggs. this is bloomberg. alix: the fallout from uber's data breach and ransom payoff may be a smaller valuation. companies are offering to buy a stake at a 30% discount. bloomberg newsis global tech reporter. his 30% material? 30% material?

starting point. these negotiations will be going on over the next few weeks and softbank is trying to bring in and investors from uber who are trying to sell so that they can get a sizable stake they want. the price could still go up. it was also for a $1 billion direct investment. it we have any word on what that number might turn out to be? my understanding is that number remains. we are talking about what existing uber investors are willing to sell their shares for. softbank is betting that given all of the controversy around the company over the past year some of it business model questions, it remains immensely unprofitable that perhaps there's enough investors out there who are ready to take some money off the table and softbank can buy those shares from them.

alix: i feel like a week ago the conversation was will there be any sellers to softbank. datato me about how the breach and the cover-up has changed that conversation. big one.ta breach is a especially as lawmakers and regulators come in and ask more and more questions. overall problems the company has. i don't know if it necessarily changes a lot of investors perspectives. this number is coming in quite low for a number of people. i want to emphasize that this is a starting point and softbank can certainly raise the amount the only caveat is all of the investors are going to get the same price so they can't negotiate one price with one group of investors and another with somebody else. alix: thank you.

lyft. we are turning to has taken ontt several roles at ariel financial on the board. what's most interesting right now is her role as the first independent director and the second woman on the board of lyft. welcome back. >> thank you. david: you went on the board of lyft. tell me why. >> what attracted me really is the mission. the mission is to improve the quality of life of people who providing theough absolute best transportation possible. i chaired the board of the chicago transit authority for i know about how transportation fits into the fabric of our urban environment and can improve it. i think their core values and the way they are running their business is going to make people's lives better and the people starting at the very top through their leadership, a

culture that i think is inclusive and reflects my values. has a head start on you and they are awfully big and very successful. how can you compete? what is your comparative advantage? the way we it is serve our customers. trying to make sure safety is first. we also are taking care of our drivers. drivers and they said, we are treated well. we are paid well. we have flexibility. volumes ofhat spoke the company. they have made a lot of progress. it took them for years to reach 100 million customers. that's a pretty big number. now in the last three months that's what they have done. they are growing exponentially. they went from serving about 54% of the american people and now 95% have access. if you look at the track record

and the way they deliver their service, couldn't do better. i'm very pleased with them. the brand has been associated with women from the very beginning. 40% plus of your drivers are female. >> it's growing. five rides in a row i had women. i asked them to you feel safe and they said absolutely. the company has gone to really great lengths to make sure the customers and the drivers are safe. when i worked in the white house i visited and saw their senior management and the diversity and the fact that they had women in key roles with major responsibilities. i think they cut against the text representation because they think they will provide better service that way. david: you had a lot to do with the role of women in the work place.

>> yes. david: a lot has happened in recent months. the stories coming out of not just business but also on capitol hill about men really behaving extremely badly. assaulting women in the workplace. what do you make of that? did you expect this? >> i don't think that behavior is recent. what we see now is a spotlight. best antiseptic is transparency and thanks to extraordinarily brave women who are coming forward and then we are now beginning to see what has been going on all along and that creates an opportunity for change. this is a moment. my recommendation is that in every boardroom across country members are saying to senior staff what are we doing right here to create a culture not just in the handbook but a culture that does not tolerate any form of sexual harassment in the work place. at the same time as we are looking at a whole other basket of issues that create this 21st-century workplace.

issues a whole range of that the 21st century employer needs to be thinking about if they want to be globally competitive and that means attracting and retaining the most inclusive diverse workforce possible. you shouldn't be leaving any talent on the sidelines. david: not only what are we doing right now for what have we done in terms of settlements. there's been a lot of cash paid to try to hush women up to show the board be going through systematically and say what settlements have we done? >> of course they should be answering that question. be askingers need to that question. these nondisclosure agreements are very troubling because the problem with nondisclosure is that the predator continues to act. you just brush it under the carpet. that should be no longer acceptable. corporationshat

should be thinking about. it is certainly political risk for which people are going to be held accountable. behavior and say we are going to end it. you have to create a culture. of zero tolerance. will bealerie jarrett staying with us. you can tune into our colleague tom keene on the radio. bloomberg surveillance can be heard in new york, boston, the bay area, washington, d.c. on sirius xm radio. this is bloomberg. ♪

>> this is bloomberg daybreak. i'm taylor breaks. will discussp ceo

challenges faced by the ad industry and his response to the changing media landscape. now to your bloomberg business flash. emerson has withdrawn its $29 billion offer to buy rockwell automation. emerson cited the board's unwillingness to engage in talks about a possible combination. rockwell had rejected the offer questioning the use of emerson stock in high leverage. the owner of arby's ends in a bun has agreed to buy buffalo wild wings. that represents a premium of 34%. that was just before the first offer was reported. showing it shell is has left the worst of the oil slump behind. it will pay entire dividend in cash. show will also stop the whichled script dividend

gives part of the payout in shares. that's your bloomberg business flash. david: still with us is valerie jarrett who served as eight advisor tonior president obama. you may have noticed there's something going on call tax overhaul. you served president obama for eight years. are there things in this republican proposal that you could support specifically going back to some of the issues like credit for child care. it's like a standardized eduction being increased that help working mothers? >> i support all of the efforts that would be underway that would help working families. what we see in this tax bill is an effort to support the trickle down theory of economics that we know doesn't work. the vast majority of people who would be benefited are the upper class, not the working families in america. what can we do is a challenge i would put to both sides of the aisle. this shouldn't be a partisan issue.

this should be what are we going to do to make our economy grow and support working families? the plan does not do that. david: republicans are saying that will help working families because if the economy grows that will create more jobs and better wages and help everyone. recently there was a conference held by the wall street journal and they asked the ceos how many of you will actually add jobs in the event this tax bill goes through. no hands went up in the room. correlationa direct with giving tax benefits to corporations and those at the top of the income strata and actually growing the economy. a child care tax credit so people can get back to work, make college more affordable. make community college is free. expand the earned income tax rate so working families can afford to work and support their families. there is lots we can do to grow the economy. this is not it. david: let's talk about cutting rates.

wouldn't that put more money back in the profit -- pocket of people you are most concerned about? >> i'm also pouring more money in their pocket. let me back up a bit. when president obama was in let's redo the corporate tax rate. let's put money into infrastructure which would create jobs immediately from day one under the recovery act he was committed to an infusion of money into infrastructure. askquestion you have to yourself is when you look at the overall package who comes out ahead? in this bill is not the working family. david: valerie jarrett, thank you for being with us. of theoming up, the ceo world's largest advertising willy, sir martin sorrell be joining us. we will discuss how activist investors are affecting the ad industry. if you have a bloomberg terminal, check out tv . interact with us directly. it's a fun function.

rewatch anything you may have missed. this is bloomberg. ♪

david: the advertising business is having a tough year with the leading firms down more than they have been for several years. joining us in london is the dean of advertising executives, sir martin sorrell. welcome back. >> nice to be described as a dean. david: i think it's accurate. past a lotid in the of the problems you are having at wpp is because of packaged goods being really down substantially. back if itt come will? >> generally it's a long explanation. you look at disruption generally there's disruption in production, robotics, 3-d

printing, the media, google, facebook. distribution, amazon, alibaba. have three things going on in our particular world. people are very focused on the impact of google and facebook. i would say google and facebook have become our biggest investors on behalf of our clients. our biggest media investor now is google. facebook this year will probably be the second around 2.1, 2.2. second issue, consultants are coming into the digital business. i don't think that is as important as consultants looking at the costs that our clients we canused on and saying reduce costs and charge you on a contingency basis. we can reduce costs and take a free. i think that's partial.

it's that competition on cost. everybody wants to be fitter. there is the issue of the activists and there is no have putut this pressure on package good companies. other categories as well. we are seeing it in pharmaceuticals. we are seeing it pretty much their the board to putting pressure on companies. the critical issue is whether this can drive volumes. if reducing spending on innovation or branding reduces volumes. particularly when amazon and alibaba are coming at you and you need to get your voice and your brand in front of the consumer even more. david: it sounds like the press for crosscutting is not going to go away anytime soon. the ceo says it's time to stop

paying -- blaming the client for not paying more money. >> he's got it wrong. we are not blaming anybody. we are trying to explain what's going on. if you understand what's going on you can try and do something about it. somethingand doing about it the first thing is -- you described us in the intro as an agency. we are a group. we have several verticals and the big issue is how do we integrate. here i am in this magnificent building that the x mayor has built. what is the central theme of this building? if you look at the parts that the been built and opportunities for people to cooperate i wish we could have a building like this for every wpp we are trying to do the poor man's version of this in shanghai and madrid and amsterdam.

inathan: i want to jump because we are pushed for time. --ctor and gamble >> you have to look at it a little bit more detail. that is not so. they talked about nonworking costs. they talked about $140 million of digital spend. in the context of their overall spend. to conflate that to cutting spending the way you just said is simply wrong. what they said was they reduced their digital spend, didn't notice the impact of that slightly reduced -- 140 out of their total budget is not tiny but it's not significant in the overall context. you can conflate it and make the claim that that -- the real issue is in the long-term.

if you are not getting volume growth how do you get volume growth in any category particularly when brands are under attack. the fearsome five tech companies which are all over half a billion market cap already who will be the first to a trillion, the chinese tencent and alibaba also over half a billion. when they are trying to develop voice-activated devices and ai and putting pressure on brands the response cannot be to reduce their prominence and reduce their spending. they had to invest in innovation and brand. in the see what happens long-term. jonathan: i do want to get to the share price. 28.5% at this point. it used to be that wpp stock was very aligned with global growth and that has broken down this

year. what is your message to investors now given the dreadful performance of the stock so far this year? >> there four things we are doing. focusing on making sure the company functions as one bringing what we call horizontal holiday together. the next billion consumers are not going to come from the u.s. or western europe. 40% of ourlready business. it will be higher as we improve our digital penetration. digitale penetration of is about 30%. and through data which is about 20% of our business. last 2532e at the years rather than the last 12 months. we will see changes. fundamental issue is what is going to happen in the end

long-term to brands who are trying to build their volume in increasingly competitive digital environment. if you don't innovate and you don't invest in brands, you don't win. in all of the brand surveys we top 100e with the brands in the u.k. what comes through markedly is those in brand that invest and innovation deliver best total shareholder return. if we set up a portfolio of bloomberg investment we would outperform the s&p 500 and the msci by four times. jonathan: sir martin sorrell of wpp. this is bloomberg tv. ♪

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♪ jonathan: the new fed chair

sounds a lot like the old fed chair, he sticks to the script. softbank thinks uber is overvalued and said to wanting to buy stake at a 30% discount and goldman sachs have barclays predict economic expansion. the warning next year could be as good as it gets. from new york city, good morning, this is bloomberg daybreak, i am jonathan ferro with alix steel and david westin. firmer a little bit after a marginal retreat from an all-time high yesterday with the s&p 500 up a 10th of 1%. dollar strength coming through against the euro and elsewhere. some stability in the bond market. 2.33. stockseurope, european around the highest with energy stocks helping met, despite breakdown 7/10 of 1%, questions

over russia will agree to extend an opec deal on thursday and we are watching brent carefully and the spread between two years and tenures, 57 basis points. points.ars, 57 basis david: time for the morning brief. steve mnuchin and the new york fed president and the sec schedule to be speaking in this hour in new york at a conference on the structure of the u.s. treasury market and 10:00 we go to capitol hill where the senate will begin confirmation hearings for fed chair nominee jerome powell. and a president continues his campaign for a tax overhaul at capitol hill at 1:00 for a meeting with republican senators and he goes back to the white house with a meeting on congressional leadership's on how to avoid a government shutdown. hours, fednd two chair nominee jerome powell will face the senate banking committee for his hearing.

he said yesterday "our aim is to sustain a strong jobs market with an nation moving to our target and we expect interest rates to rise further and the size of the balance sheet to gradually shrink." we are joined by the author of the paradox of risk, leading the monetary policy. great to have you with us. does not feel like we are leaving the comfort zone. >> not yet. if you are going to be willing to forecast inflation, willing to move inflation expectations back to target, they do not seem to be there. jonathan: will that change? >> we hope it will. they are doing a policy path that is gradual. unemployment rate the lowest in a long time. they should be doing that more. there is no limit to how low it

can go perhaps inflation -- and we hope they go on that path. david: are they -- jonathan: should they be running this hot? at the moment, inflation may be too low. they should be testing the limits of the unemployment rate to move inflation back to target. >> should they raise inflation targets or not talk about it, let the employment -- unemployment rate go to 3%? >> used by forecasting an overshooting of inflation, something the fed has not done. >> specifically they want to overshoot? >> you try to overshoot, they have not forecast. the first step should be to adopt a policy that shows the overshooting. once you get to the overshooting , to do what i recommend in the book, optimistic reflation. you accommodate the overshoot

rather than trying to blowing -- bring inflation down and take it to another step. it may take a couple of cycles. the 1980's commented to or three cycles to get where they wanted. david: are some of the members of the fed inclining in your direction? there may be some divisions on the fomc with some saying maybe we should slow down on the rate hikes and let it run hotter. will jerome powell get unanimity? >> we do not know is thinking. he has been learning the job. one question we have is -- he may be less concerned about the rapid decline in unemployment. we do know, he was concerned about financial markets in 2013. one of the dissenters that led to the process of the taper tantrum.

they need to let unemployment go as low as needed to get inflation higher. at the same time, controlling the financial markets. david: if you were in his seat today, what would you say to the question -- are you paying attention do markets as you make your decisions because i bet it comes up. >> they are paying attention, if you read the minutes, it is in the minutes in the last year, every single speech. they are watching it and there is a view that macro policy -- monetary policy should be with inflation. options, stop two raising rates now and site let's get the economy.going or go slowly i think -- the process of gradually raising rates slowly until you get to neutral is their way of trying to accomplish of both and manage both wrists, inflation too low and making the recovery as long as possible without -- jonathan: are we not close to

full employment? >> we do not know. look at japan, the lowest unemployment rate in decades. firms, with the japanese they are trying everything to boost productivity before they get to boosting wages. it is possible the amount of slack we have is less quality. you have a labor market today, feelver you want, workers less sure about demanding wage increases. you need a lower level of unemployment to get to that moment where inflation picks up. jonathan: this is your framework for the global economy. how do you express the framework and make money and put money to work in the bond market? >> the bond market -- we like to say that the front end of the bond market is driven by the fed. boj bringing down the

tenure rate 20, anchoring the long end of the bond market. we know where the front-end will be and that is why the cart has been flattening and the fed will continue to slowly raise rates. the long end will depend on the moment the ecb ends qe and the boj raises rates. that could happen or -- in the second half of next year. yield curve the gets, the harder it will be the fed to raise rates the argument is, do you think that happens, if so, when? yielday a total flat curve by the third quarter, what do you say? >> the shape of the yield curve does not matter these days. the threat of -- we still have qe from the ecb and this new policy from the boj bringing down the 10 year rate. it is not the same message we used to get in the past cycles.

it may flatten more, fine, but no message about the health of the economy. david: you said the short end -- is that right? is the treasury increasing playing a role? they issue more short-term u.s. treasury's, is that affecting shorting the yield curve? >> what will drive the front end is the expectation of fed rate hikes. 2004-2007, we are never fully priced in the -- the market the dots, has never price them. that will drive -- the same process -- jonathan: the consensus view into next year is a flatter yield curve. at the back end of next year, thinking about what happens with the ecb and potentially rate hikes. when do you advise people to

position for a steeper yield curve in the treasury market? >> a key target will be inflation, will we get to inflation strength before march? if everything goes as we expect in the last couple of readings of inflation on a month-to-month basis back to close to 2% inflation trend, that will happen in the second quarter of next year which would be the moment markets will have to decide whether if the long end of the curve will move up. jonathan: angel ubide will be sticking with is an full coverage of the confirmation hearing of jerome powell at 10:00 a.m. in new york on bloomberg tv. coming up, the senate tax reform bill in limbo, why the budget committee vote is crucial. from new york, this is bloomberg . ♪

♪ >> i am taylor riggs with your bloomberg business flash. emerson has withdrawn its $29 billion offer to buy rockwell automation, they cited the rockwell board's unwillingness to engage in talks about a combination. rockwell had rejected the offer, questioning the use of these stocks and high leverage. the owner of rvs and sent a bunch has agreed to buy buffalo wild wings, they will pay $2.9 billion for the chains which represents a premium of 34% above buffalo wild wings closing price on november 13 just before the first opera was reported. shell showing the worst of the oil slump is behind, they will pay its entire

dividend in cash for the first time since 2015. they will stop the so-called scrip dividend which gives part of the payout insurers. -- in shares. david: as the senate moves to as a possible vote on a tax overhaul, each twist and turn brings new bumps. the senate budget committee today may be facing a bump in the road today, explaining it is our colleague. we got through senate finance and onto the senate but they have to do a detour through budget, what is it about and is a danger? >> yes, a danger because only 12 republicans on the budget senate committee with 11 democrats and you have to have all of the republicans on board because no democrats will go it does not look like. two republicans on the committee, bob corker, ron johnson who have expressed concern. senator johnson says he is a no. he needs changes to help small businesses and have parity

between the large corporations and the smaller businesses before he can vote yes. they will need to make changes that have concessions for some of the senators that have concerns to get it through the budget committee and onto the floor where you face other challenges and other republican senators who are concerned about things like the debt and the impact on health care, and even the process. a long way to go before you get 50 votes. david: senator johnson may be a no but he would like to get to yes and the president says we can take care of the pass-through but senator bob corker and other considers that senators concerned about deficits and say we should have triggers to -- if we do not get the growth to pay for it, they will take them back. >> >> a new wrinkle in the last few days. senator langford of oklahoma and senator corker of tennessee saying that they want assurances this will not blow up the deficit and you will not start with rosy projections about

growth and when the growth does not materialized, you have a bunch of debt. trigger mechanism so, if the growth does not materialize as currently projected by the administration, you scale back tax cuts and maybe have tax increases down the road to not end up blowing up the debt. that is something introduced. we do not know what leadership thinks about the ideas but to get these crucial votes, they may need to incorporate some of it is g. david: just what we need, another wrinkle. ,lix: market watching this yesterday stocks failed to hold on to gain that set the benchmark to all-time highs and futures indicate the mark does market maybe going to the risk on mode. here with angel ubide. reform -- in the senate, does it lead to growth in the u.s.? >> let's see what the final

content is. alix: pretend it is what it is now. >> the consensus is the growth impact will be small. current numbers are around 1/10 controversy to gdp growth -- contribution to gdp growth. we need to find out the final bill. what the response of the fed will be. in principle, it will not be a big game changer from the point of the growth forecast. alix: you want to -- if you are a company, do you spend more on, more buybacks and dividends, issue more wages? specificends on your situation. it is important to eliminate the uncertainty about the tax, something that may be holding down growth this year is the fact that we do not know what taxes will look like in the next several years. the content is important. once we have clarity, i can see comes up demand for investments

that could appear next year which could have upside risks to growth but upside risk. not necessarily be base of investors -- david: what risk is there with the deficit? withenate is comfortable $1.5 trillion, could that affect the bond market at some point if we borrow that much more money? >> at the end of the day, that will affect the margins, increasing in loans in real race this year -- real rates this year. it depends on inflation at the end of the day. if we have an environment where inflation does not take up, an increase in the deficit will not let bond yields be like it was in 1994. it depends on the macro environment. david: talk about the effect on inflation. never have we injected $1.5 trillion in fiscal stimulus into what may be approaching full employment. >> the point is the impact of

growth. at the end of the day if the impact of growth is small, 2/10 we are talking about, not a big deal. what happens in 10 years? are we going to have a nation in 10 years where there are scenarios in which the debt may have increased and the deficits have increased. it may be the opposite. think about a situation and what real rates remain low. the difference in the case between the rate of growth in the economy and the interest rate we pay on the debt is not that big and you can sustain this. there is uncertainty but the key is to focus on the potential impact of growth and the priority -- it is not that big but positive. we like to say that this is the least loved bull market in recent history. that is a concern. people look at the bull market and the recovery, the recovery

-- recover his do not die of old age. this is not the typical over sitting you see when a recovery is not about to end. we are forecasting a couple of years of the growth. in that environment, i think asset prices should continue to do well. david: are you underinvested? >> there is a bit of everything. a lot of people are under invested in equities. jonathan: the client you have, are they underinvested when you tell them to take more risks because the future is ok, are they reluctant to put on the risk and where are you encouraging them to go? >> we tell them to remain investments -- invested, if you are not forecasting a recession in the next 12-18 months, stay invested. alix: taking on more or less risk? >> the right amount. [laughter] alix: just perfect. angel ubide, great spending time

with you. alix: everything you do is good. coming up, the opec gathering this week, white oil about $60 could be a concern for a key player in the meeting concerning russia. this is bloomberg. ♪ ♪

alix: thursday is oil super bowl with the next opec meeting with non-opec members and an extension of the cuts is not a done deal and markets agree that oil prices falling from two-year highs, goldman says risks are skewed to the downside and a $2.5 premium of a nine-month cut bacon into brent prices. joined by will kennedy from london, i thought it was a done deal and they would extend. the quota was the question. >> expectations are we will get a deal on thursday to what we reported this morning is that the opec members are in

alignment and will agree the cuts need to go for another nine months. stage, the sticking point is russia which has concerned about how to end the deal if they extend, they're worried about the oil companies and ramping up production next winter. , the approach the meeting main negotiations between saudi arabia and other countries and the russians and the best a scenario is they will reach an agreement to roll over the cuts alix: we talk only about u.s. exploration production companies , the response time from u.s. shale, will the question be big oil? shell said they will end their script dividends and paid dividends in full not through equity. why is that a game changer? >> the shell news shows have a big oil makers are returning to health. they feel confident enough to return money to investors and ending the scrip dividend and promising to pay everything in cash which will cost a next her $4 billion per year and

promising to buy up to $25 billion of stock back over the next three years. these big numbers talks about how how lean they are and can generate cash and $50, $60 per barrel and it illustrates confidence and underlying oil markets where the glut is clearing, economic growth is raising demand may feel more confident about oil prices over the next few years. alix: shell boosted its guidance 30, does to $25 -- 25, opec really want oil at $60 a barrel? >> it seems probably about right for opec. it is taking a lot of the pressure off some members, pressure can balance the budget, less economic pressures for saudi arabia. a fear that if prices go far ayond $60, it will be listed large response from shale in terms of production and up and the market.

shale is the great unknown in this opec meeting and they are marching into a day picture with analysts saying ranges of shell production in the u.s. 300,000 euros per day to 1.8 million barrels per day. that remains the wild card. alix: that is the opec cut, that range. all of a sudden, the u.s. can make up. want me forward to what they may do on thursday. will they extend but not know the quote is until later until they factor in the response from shale? >> they will probably extend the existing quotas. where the detail may live in giving themselves some sort of monitoring mechanism through next year to allow them to ease off the cuts, if the market they may alsoed, talk about how they exit the quote is at the end of next year when they roll off. and a mechanism for introducing

oil back into the market generally. alix: good stuff, thank you. it reminds me of somebody else central banker, like a fed. you can do it if others carry on. that is the problem with opec, they are in it together to coming up, is it time to get bullish on global growth with the credit suisse ceo says yes and the oh ecb says not so fast. we will discuss that next. and eight straight month again. -- of gains. ♪ is this a phone?

or a little internet machine? [ phone rings ] it makes you wonder. shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. so all you pay for is data.

choose by the gig or unlimited. and ask how to get a $200 prepaid card when you buy any new samsung device with xfinity mobile. a new kind of network designed to save you money. click, call or visit today. jonathan: 60 minutes away from the opening bell in new york city and close to the confirmation hearing of potential chair jerome powell. features positive.

towards another month of gains in the s&p and potentially the eighth straight month of gains. that is the longest monthly winning streak since january 2007. the story in the bond market looks something like this -- yields unchanged. the fx market, largely a day for dollar strength with cable at 1 1.32. let's get you to the headlines outside of the business world. a missionpowell is on to shake things up at the federal reserve with president trump's choice to lead the central bank will be questioned by the senate banking committee. he signaled broad support for how the fed operates, regulates, and guides the economy and is not expected to have any problems being confirmed. at thete house choice consumer financial protection bureau says he will freeze regulations for 30 days.

he is locked in a struggle with an obama era hold out for control of the agency. he says he will spend three days a week there and three days a week as white house budget chief. a judge may decide who will end up in charge. and ireland, their prime and is -- prime minister has avoided a new election, the deputy prime minister is set to resign -- she faced a no-confidence vote in parliament over a controversy that could've brought down the government and forced an election next month. global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. jonathan: hearing about synchronized global growth and the credit suisse ceo is bullish on economy and spoke with francine lacqua. >> we are positive about the world economy. positive about the u.s. and emerging markets and china.

very positive about europe. macron and the return in france. area that cann power the european economy. we have the three major economics -- economies doing well at the same time. is back. both high growth with low inflation because productivity fills the gap. if you invest in capital and productivity grows, you can have a healthy growth scenario. about qe.erned an exit.

it is being well-managed. >> it is slow. >> and the communication is good to drive market expectations so we do not have an accident when asset prices are as high as they are, it is important to take the investor by the hand and not surprise him or her. so far, the central banks have done a good job at that. we think emerging markets will be all right. m&a, the strength of corporate earnings, and the cash sitting on the balance sheets and the availability of credit. the lack of availability of credit was hurting growth. since the financial crisis which is starting to shift. we can support our clients and their m&a ambitions.

jonathan: economists from barclays and goldman sachs agree with a positive outlook from the credit suisse ceo and see global growth hitting 4% next year. isning us in new york bricklin dwyer. is it as good as it gets next year? is that the big? -- peak? >> that is the way we could see it. we could end up with not another tax break and a slowdown in months to come. jonathan: what is unsustainable about it? if i gave you a kate grace, or michael -- a pay raise, it would happen once, and if you did not get it next year, your increase in spending would be as much, we care about it every year and if you do not get more

money next year you will spend what you did last year, we need to see growth in spending and an income which will drive economic activity. david: how will it end? you are saying it will taper off the rate of growth, it will still grow but not as fast or will there be a downturn? >> it would be great to just taper off, a rosy scenario. it is sustainable and gradual correction or a soft landing, that is what everybody hopes for. the idea of an average growth rate is that you grow -- grow above trend or below trend. and we grow below trend or below what is normal, we snap down quite a bit because people are concerned about where things are going and where the economy is going and people pullback on investment and increase savings. that hits stocks and feeds back into a loop. david: one of the things i have heard the most is that these cycles do not die of old age, something has to kill them, typical central-bank

misjudgment, do you see that or could this die of old age? >> i believe that cycles can die of old age. that could be a result of what we see. if we see investments petering out and the same with savings, we have seen consumers draw down their savings to an extraordinary extent because of an inflated asset bubble on equity markets. how long does that go on? and how confident do consumers remain? do they keep spending? once they pull back on the spending, we see cycle die of old age or the breakdown in assets. -- they said that investors -- because engine investors that asset prices are too high for a global economy and it is set to peak next year and a market downturn could put the expansion at risk. calls from big banks. >> i guess they are wrong. jonathan: they have been for a

long time. >> i agree with the oecd. it is clear, firms are getting money very cheap. is that sustainable? we have low interest coverage ratios for high levels of debt and cash balances start to come down. how does this end? if interest rates go higher, they will be in trouble which will have an impact on things like equity markets. that is a key story of what is a way and seems inevitable. if you give people free money, they will make bad investment decisions and a matter of time before us is a. moving away from capital returns to capital spending, late cycle to start really investing big-time in -- are you anticipating bad decision-making in a big way? >> when money is cheaper, you

make bad decisions. that is what an economic cycle is, good investments, bad investments, and you need to flesh out the bad investments, what we call a recession. that is what we will happen as a result of giving people cheap money to make investments that the return is not as great. if things deteriorate, the investments will not look so good. jonathan: the experience over the last few years is that when things get soft and the central bank, they take a step back and think stabilize again. my question is -- what does it take for that cycle to break? if things get soft and the central bank cannot take a step back and has to carry on. >> one question is whether the central bank has the ability to step back. whether they have enough ammunition left. right now, i am not sure they do. if interest rates are at 1%, 2% and we have a recession, they will not have much room as they

usually need 500 basis point or 5% of interest rate cuts and they are only a 2% for that funds. -- fed funds. these marketshow respond to the environment, do they believe the central bank and does jerome powell as the new fed chair, does he respond aggressively and think that unwinding the fed balance sheet is having a market impact on markets? and whether he dials the program back? whether they admit they have a problem is the question. david: we hear this is one of the least loved bull equity markets we have seen, is that a part of its protection? are you seeing the hyper enthusiasm typically we see before a market turns around? or the fact that people are hesitant protecting the market? >> this is an interesting point. investors talk about not missing out on the last 2%, 3% of the market rally.

they are trying to play it close to the chest but do not want to lose out and often the question i get is -- what are you doing with your money? are you thinking about pulling back in equities or these credit markets? are you that worried you are worried about your self? or will this go on longer and we should be worried later? >> bricklin dwyer, thank you forming with us. , weng up, oliver wriedt will discuss with them the repricing picking up in the clo market. tune into tom keene on the radio. merck surveillance can be heard in new york, boston, washington, d.c., the bay area. -- bloomberg surveillance ♪

>> this is bloomberg daybreak: europe. coming up in the mix hour, david zervos. alix: points on credit feeding to all of 2018. gradually bring back global credit make sense. >> we think capital preservation is always important for this current environment. we have seen risk assets perform very well this year. more cautious on credit makes

sense. alix: mike wilson of morgan stanley said that credit markets may be topping now which is a good 6-12 month indicator for stocks. joining us is the asset management co-ceo, we want to -- they do broader credit investing. good to see you. >> thank you. alix: trying to get you on four years. if the cause are right in the credit market is rolling over, what does that mean for the play of the high-yield versus the leverage loan world? >> a great time to be defensive. it has been a fantastic run and we think high yields are priced for perfection and it is a good time to start to play defense. alix: how sticky is the money, how much money -- >> high-yield is easily

accessible, $1.5 trillion market and well known around the world. there are no barriers to entry. compare that to the long market at $900 billion it is a harder market to assess -- access. in a floating rate seems secure position we think is a far superior posture to be taking at this point in the credit rally. jonathan: clo cannibalizing the high-yield space? >> i do not think so, it is underpinning the stability in the loan market with 50%, 60% of the loans being brought into clo and ending 12 is closed and funds but a source of stability for the long market. whereas, in prior years, high yield can be volatile. most recently with the oil and gas collapse and the effect it had on high yields. loans were relatively stable throughout the time. jonathan: is it different this time? in previous credit cycles the

rate has been for the good. is it different giving how many things are coming to market, especially in the space? >> we are late cycle. and a lot of respect, a loan today is a secured floating rate bond alternative. in the longer cap real protections, and we recognize that. beingtely, it is about secured and floating rate versus fixed-rate. alix: the chart shows the 100 billion clo's. so far, not the number since 2014 at what is your expectation for this year and next year? >> it has been fantastic this year, we have low defaults, a areng economy, and clos cheap to loans and loans are cheap to bonds, not surprising that the market has been really strong. in addition to the new issuance, $170 billion every financing and reset. if you added up, $270 billion of

activity in the loan market, in the clo market. an all-time high. we have no reason to believe it will not continue in two 2018. alix: what is the catalyst for spreads widening and issuance to stop? >> traditionally, the fault. to the extent we see the economy turning and defaults picking up, that would be a traditional indicator for things to slow down. we have no indication of that. defaults are at 1.5%, roughly half of the 30 year historical average and we do not think there is a near-term catalyst for default to pick up any meaningful way. traditional credit concerns in the near-term are not going to derail this rally we are seeing. -- ifgeopolitical risk there is a major risk off of it, our markets will be affected. jonathan: looking up in a man in

this market, can you drive this section between the global pension funds are after and what foreign investors are looking for? >> everyone is looking for yield ultimately. within the fixed income asset class, loans are a great source of yield. , youefensive asset class would not take interest rate risk and seeing secured in the capital structure and yields are still on an index basis more than 6%. the asset classes is under owned and more capital is coming in. the fundamentals are very constructive. jonathan: some concerns around investors that typically, if you sit on the capital structure in loans you are ok, but when things are underneath you and of high-yield debt has not been issued, maybe you are on the hook in a way you did not think you were. are you seeing that story playing out with some companies? >> you raise an excellent point. at the end of the day, it is about the amount of leverage you are putting on the company, is a

sustainable and can the company service the debt and repay the debt? and capital structures without high-yield, relying entirely on a bank loan capital structure which is a consideration. ultimately, we think fundamentals are healthy. leverage, while comparable to 2007, is manageable. rates and companies can service their debt with relative ease. alix: who is vying? ying>u ? >> everyone. it is diversified. we have the international investor community from europe, across asia, pension fund buyers come insurance company buyers, real money asset managers, everyone is looking for yield and in the u.s., we think this market compares favorably to high-yield. on a global comparison, a lot more yield in the u.s. than in

europe and asia. how is thewer says non-debit deductibility of interest going to play with free cash flow shortfall with these kinds of loans? >> not. . -- not clear yet. until we have tax reform, not a question we can answer. a lot of uncertainty and that has played into why the activity has been subdued. not a lot of new loan creation. not a lot of new deal activity. everyone is waiting on the tax plan. alix: top investment strategy for next year? >> defense is the way to go. going to larger capital structures, get as much liquidity as you can and generate a respectable yield and the opportunistic. , do not let wriedt it be three years until i see you again. coming up, softbank and search of an uber discounts.

if you have a bloomberg terminal, check out tv , look at our charts and graphs. this is bloomberg. ♪

david: $20 million is what uber may have to pay, softbank and a group of other investors are offering to pay stake at a 30% discount to its last violation. has come all the way from san francisco to be with us. >> this is an interesting deal. thee has never -- possible largest investment in the history of time in a private business of about $7 billion.

billion is paying $1 for a $59 billion violation and trying to buy $6 billion more to $40 billion violation. they would not be allowed, the in -- the shareholders, venture investors or employees would not be able to sell the shares and softbank could not buy them unless softbank were approved to buy them and together the approval, they had to pay $1 billion. if current shareholders will sell at the discounted price come any sense they will? >> discussions with the bigger shareholders who want to get out. if you do get about the standpoint from a benchmark, when it was worth less than $1 billion, they are sitting on tens of billions of dollars of gains. and watching all of these problems. scandal about hacking and sexual harassment allegations. froming the lawsuits come

municipalities small and large over the world. watching competitors you the way of market share. ay of market share and watching their games disappear. --athan: what a best investors and public markets waiting and these companies are getting older and more mature. you know that the average age of these tech companies before the go public is a lot older than they were's -- 15, 17 years ago, what is left on the table for when they go public? >> the notion of an ipo, if i can ignore your question, -- jonathan: typical of reporters that don't want to answer questions. >> the interest is the notion of an ipo, we have seen other companies that have preferences in the late rounds of investing. ask yourself why would softbank do this? they know they're $6 billion of stock available and why would they pay a higher valuation whether first, the official trying at $69 billion reserves

the last offering of valuations for this company. investors in the last round may have been promised -- if there was a down round for the company selling stock, they would get issued more shares. softbank coming in at the same valuation, it does not trigger the ratchet or massive issuance of more shares to the earlier investors. the specialserve notion of a $69 billion valuation when the company is not worth that anymore. jonathan: send me your own questions next time and i will ask them. joins us, david zervos to discuss the market. this is bloomberg. ♪

♪ jonathan: the new fed chair sounds a lot like the old fed

chair baird jerome powell ahead of his confirmation in hearing. softbank thinks uber is overvalued baird they are trying discountstake at a 30% and barclays predict the fastest global economic expansion since 2011. warning next year could be as good as it gets. from new york, the opening bell 30 minutes away. this is "bloomberg daybreak: americas". hello i'm jonathan ferro, along with david and alix. after yesterday's small pullback, an all-time high, the fx market earlier in the day, dollar strength, we raise that against the euro, south of 119 at the moment. in the bond market, yields lower. marginal bid comes through, that gives you a cross asset fix. movers. alix: talking about mergers, paying $2.4 billion to buy buffalo wild wings.

1.57 a share. premium to the closing price. the ceo will be the current ceo, of arby's, it will do both companies but stay separate within the structure. this is all about private equity consolidation within the struggling food it one deal that is not going to happen, emerson and rockwell. bid,on finally pulling the three times not a charm as three proposals, a final of 2.25 a share. rockwell still says it is undervalued. up with industries having a killer day, 12% increase, huge earnings, this makes. rv's. camping grows among millennials as they are afraid to travel to some destinations because of terrorism. 3.6order backlog reached

billion dollars and the ceo says demand remains strong and will grow for the foreseeable future. i have never been in and rv but i want a fancy wanted jonathan: i'm not going camping and that is the strangest reason to see a stock up. seriously. ok. if you can't afford it, but blaming terrorism for not going away? david: i don't think that is happening. jonathan: there are nice narrative's around the stock, that one takes the pic. event, fed, the big chair nominee jerome powell will face the senate banking committee for confirmation. in a statement released yesterday he said, "sustaining a jobs market with inflation moving toward the target, we expect interest rates to rise further any balance sheet to gradually shrank."

side-by-side with the fed statement, i wonder are we going to do a side-by-side today and tomorrow with chair yellen? >> meet the new boss, same as the old boss. except for the fact, that song was about, we don't like either boss in this case wall street likes the fact that we will get continuity, not much change between the two. name offake powell's the testimony and put janet yellen on their and no one could tell the difference. jonathan: before we get into the kind of questions that he will confront today, is this a nonstory through 2017, the fears around what the president might do to the federal reserve? >> i don't think it is a nonstory. jonathan: given the pic so far, the mainstream. quarles wasay randy a big change on the regulatory side. that is a pretty major change. jerome powell is a steady as she

goes candidate. the john taylor scare in the markets, a bit of a run around with kevin. there is still plenty of room for trump to make interesting picks inside of the federal reserve. certainly powell, it is a vanilla candidate. i don't think it is meet the new boss, same as the old boss. there are differences. he is taking the script from her but he is definitely not her. economist, a model guy, he is much more of a practitioner. much more of a thinker about business as opposed to the sort ess youomic model wonnkin get from janet yellen. it will be different when he gets up there, through time. he be the initial -- david: for right now.

>> i think as time goes on, you will see a very different type of chair. even very different from ben bernanke. something harkening back to alan greenspan. david: he does sort of push back against the idea of trump changing the fed or going after the structure of the fed, saying he believes in the structure of the federal reserve right now. don't audit the fed, don't do other stuff like that. our two different messages. one is for wall street and the other is for congress. be on president trump's side because president trump doesn't want congress deciding things. congress is saying, we should have audit rights, restructure. he has aligned with the president in saying, we don't want congress messing with this. >> for right now. we will see what happens, if they get the tax bill through,

if the economy produces conditions the fed needs to react to, will donald jumping on the same side? that will be an interesting question. alix: then of course, how hot will he let the economy run at the end of the day? managingto the director at goldman sachs and here is what he had to say about the inflation debates. to try tohip, willing move for expectations back to target, they don't seem to be very afraid alix: what do you think? overshoot? >> i think he would be willing to do it and most likely the committee will be are more toward that and i think trump's picks will be very supportive of the idea that inflation forecasts that are overshoots or under shoots are pretty much not to be trusted. in general, the airing will be on the side of keeping things

more of accommodative for business. it is the way he wants the fed to be structured. so that he can get the most out of this economy going into the next set of elections whether it is 2018 or 2020. >> i think they would be happy to get inflation. jonathan: that doesn't sound too different from the federal reserve we arty have -- we already have. >> is it symmetric? the fed it says yes, we will react and put the brakes on if we get about 2% but if it is 2.3%, probably not. the other argument, something has to be settled, do we mess with the target? do we change it, or do inflation targeting and deliberately let the economy run hot for a wild to boost growth? let inflation run above the 2% level? that is an argument some economists are making but powell does not at this point seem to have signed onto that. explored one thing we

on bloomberg radio yesterday wasn't the change in absolute policy but communication that could introduce volatility. could we get rid of the dots? >> maybe. that would be a good question to ask him. when a new chairman comes in that is an opportunity to do that. ,hat officials don't like it wall street doesn't like it, they get misinterpreted. would they do that? possibly. it is something under consideration. how much i don't know. arethan: david, if you sitting opposite jerome powell, what would your question be today? david: that is a good question. my first question would be, probably involve, his views on deregulation. what does he, with randy quarles, c as the path forward -- see is the path forward? jonathan: not monetary policy> ? david: i think that is pretty unexciting. steady as she goes, probably a

rate hike in december, contingent on the economy and the s&p going up. i think the fed storyline for rates is a gradual flattening and a gradual rate rise. our personal view, what i have been looking at a lot this year are disinflationary pressures. the second question after regulation would be, what are the risks we actually see much more persistent disinflation then inflation going forward? there are a lot of sources of disinflation out there. jonathan: you will be sticking with us. michael mckee, thank you very much. full coverage of that hearing, in front of the senate confirmation hearing, 10:00 a.m., new york times right bloomberg tv. coming up, within the next hour, morgan stanley global auto analyst, we will discuss a rocky road ahead for the company next year. from new york, 20 minutes until the opening bell. a slight pullback from yesterday. a very small one. we are still futures positive,

2/10 of 1%. this is bloomberg. ♪

♪ >> republican senators have set a deadline of this week to try to get their version of tax overhaul passed. each hour there seems to be a new twist return. here to go over the latest is our bloomberg colleague. even on the air today, we had senator corker go on fox and said, i have a new approach. instead of getting the tax cuts and taking them back, why don't we stage it in and get growth and see if we get more. this is a moving target? >> the white house and the

number of these holdout senators are trying to work out a compromise on a short period of time to assuage concerns. senator corker is concerned about the debt, he is saying there should be a trigger. see if you get the growth and if you don't, scale back the size of the tax cuts. that will behing probably damaging to the effort on tv. he said these projections are sort of made up. something the democrats will use to attack the bill, saying, they are using rosy projections of growth to counter the idea that this will create a whole in the deficit -- a hole in the deficit and they are not speaking to projections about what this might mean for growth. there are a number of concerns that still need to be dealt with before this can pass out of the budget committee and on the senate floor. david: whatever questions there may be, looking back historically to figure out why

an economy is growing, the economy the size of the u.s. is devilishly difficult to do. how would you know the growth became because of the tax cuts? >> that is something the senators have not fully fleshed out. thisve been trying to push bill through for political reasons, they have not been able to pass majors legislation this year. you are right. this is a complex economy, we are almost at full employment, the growth projections have a lot to do with demographics, investments by various companies, the tax piece is a small part. it is not clear how these republican senators will come to the conclusion that the tax bill created the spark to create growth or whether or not we would even have the level of growth needed to pay for these tax cuts. complexe a lot of things, not a lot of time. david: they have a good three days to sort it out. the entire year's economy.

alix: we'll tax reform grow the economy and reduce -- and boost hiring? if current momentum, inflation could take up. >> the u.s. economy by any standards is full employment, i would imagine therefore, if we carry on with a cyclical momentum we have which is the strongest it has been for some while, it would not be a complete surprise if there was some pickup in inflation. alix: jim is a former goldman sachs asset management head. you mentioned disinflation before? you do not agree with jim? >> i don't. he was the first guy to hire me in the markets back in the early 90's, he was my first boss at swiss bank corporation which later merged. i love jim that totally disagree. this tax plan is disinflationary.

the reason is, it is mainly a corporate tax cut, not an individual tax cut. up individual side is mucked with state and local duction spirit -- state and local deductions. from my home state of florida, pretty good. nevertheless, if you think about a corporate tax cut, how that can be delivered back, the gains can be delivered back to the economy, it can either come to higher share prices, higher wages, or through lower prices. that is the benefit. those are the only three ways it can come back to benefit the economy. the big debate has been, will it go directly to shareholders or wage earners? that is the liberal versus conservative debate but there is another part, businesses may take this windfall and use it as an opportunity to lower prices and gain market share and be more competitive.

especially in a world where deregulation will reduce barriers to entry and force more competitiveness. me, there is a storyline this corporate tax cut that actually, you could see quite a lot of disinflationary pressure because businesses will use the windfall to land grab and do what many businesses have been doing now for a while which is, use lower prices to get more customers. alix: that is the amazon playbook. you can see it happening in retail. grocery, health care, drug services, banking. services people cut their fees, they want more people to buy mutual funds. people will do it indefinitely and health care, retail. for me, a corporate tax cut is very different from an individual. you go to your macro 101 playbook, an individual tax cut stimulus aggregate demand. prices go up, output goes up. that was what jim was talking about. that is not the corporate tax playbook.

that is very different. corporate taxes cutting, i stimulate businesses to engage in more activity. they can do that by hiring better workers and paying higher wages. by capital deepening and investing. they can pay their shareholders if they want or they could lower prices and try to get market share. it is an accounting identity. capital labor and goods prices, as john cochrane recently pointed out in a wonderful blog piece. i've been using that to discuss with our clients why, in fact, there is a myth and misconception that this tax plan is necessarily inflationary great it sounds textbook but it should be, because you're cutting taxes, they will spend more. that is not true necessarily, if it is a tax increase on individuals to fund a tax-cut on businesses. jonathan: we could have a debate around this for a while. let's assume that's true. plug that view into the treasury market. what is your strategy?

>> i think it is a modest flattening of the curve and the fed will keep going each year, not a ton. like it is pricing is already so there is not much to do because it is in the forwards. in the next couple year, a flattening yield curve, call it 2.5 as midmarket. here,here, 10-year note an inversion before it is all said and out and once we get that inversion which may not be for two years or even 2.5 years, that will be the signal that within nine to 12 months we will get a recession, which is typical of almost every business cycle. -- not anraight overly exciting rate. -- theses disinflationary forces are making it unlikely the fed will move quickly. seerisk is, we start to other forces of disinflation come in, whether the regulation

is, technological advances, demographics, there is a lot going on on the disinflation side. i sound like a broken record. jonathan: you do. we could carry on. you will be sticking with us. the world's biggest tech investor wants a piece of the world's most valuable unicorn. softbank and uber, a potential 30% discount. this is bloomberg. ♪

♪ >> big deal moves breaking. buying buffalo wild wings for $2.4 billion and emerson withdrew its bid to buy rockwell. still with us is david. buffalo wild wings, wife? -- why? >> they have been wanting to get

into this for a while, earlier this year emerson made a bid to buy a chicken company, the owners of burger king. friedant to expand in the chicken business, this was a great fit for them. had its problems going back for some time, they had an outgoing ceo and no obvious replacement. this was a good time. , as far as we know, three offers, small bugs each time. david: is there more to come in restaurants generally? >> it is a hot it private equity loves it. you can buy these public companies, maybe shares are doing so great. inre is a lot you can do terms of changing operations, franchising. david: something you are

interested in, does this make it an opportunity to buy? >> i would have thought going back to my macro theme, i am not a sector guy, deregulation environments through whatever's happening at the department of labor will make it interesting for businesses in the hospitality and restaurant businesses to engage in more risky behavior in terms of deals. david: what about wage pressure? >> they have been sensitive to wage pressure but where are we saying this? ,t is it not in the lower end they are still able to find that fit and we have not seen the pressure there is much. maybe it will develop as we probe a 3.9 or 3.7 percent unemployment rate. at the moment, not having to thatwith all the hoops

were necessary before from a regulatory standpoint to do these deals, this is a kind of classic set of moves that would come after deregulation. david: emerson finally got the message from rockwell. thatis is a painful dance has finally reached a conclusion. they said they would walk away, , rockwell said from the start it didn't seem like a good idea, it didn't fit culturally. they didn't like the emerson stock. they thought this would be bad for their shareholders. emerson got the message, i was morning,he call this david farley, the emerson ceo said, they need to move on. they will focus on small acquisitions. david: they're still in the market? >> yes. off, theyy kicked it wanted to do smaller deals in

the $1 billion range. they want to bulk up and automation and he said in the next 40 days they hope to announce a one million dollar deal. my domestic indicator in the united states -- well, -- jonathan: great to catch up with you. the market open is four minutes away, futures, up 3/10 of 1% after yesterday's small pullback from an all-time high. this is bloomberg. ♪

♪ jonathan: heading straight toward and eight -- eight straight month of gains. that monthlyead of close, here's the situation ahead of the open.

this tuesday, futures up, 55 points on the dow, by about four points on the s&p 500. firmerer a 10th of 1%, after yesterday's marginal pullback from an all-time high on the s&p 500. elsewhere as well. switching up, look at the 10 year yield. traded in a four week range of 11 basis points. that is how tight it has been over the last month. inthe u.s. 10 year, that line with the average of 2017 so far. fx markets, dollar strength building up, a little bit, 93 handle on the dollar index. talkeds in crude as a;ix lix talked -- as a us through. alix: we seeing good buying here in early trading. the s&p up by 2/10 of 1%, the nasdaq up 12 rid not a ton of movement.

raising s&p forecasts for the first quarter of 2018, 2700, that now feels on the bearish side. the dow hitting a record high following the s&p and nasdaq over the last few days. into the deeper players. amazon up by 6/10 of 1%, goldman upgrading price target, a high $1450. 1%,on is up by 7/10 of there is raising a price target of 60. overstock.com up by 3%. shares, shortof covering involved in that, falling by 9% yesterday, bitcoin,'s conversations, your seeing rebounding there. john mentioned oil being softer. oil equities in europe holding band scriptr shell

dividends. they will pay dividends in cash and not through shares. they are not done that in a few years. a big improvement in cash flow. let's take a look at how that stacks up for the energy sector. this top panel deals with oil prices and cash low. purple line is wti and the blue line is u.s. oil companies free cash flow per share. it is really interesting because you can see cash flow jumping since the beginning of the year. oil prices held a steady. there is a gap after the two followed each other for many years. do you see cash flow come down or the oil price continue to rise as companies get leaner and better at using what they have? the bottom panel, dividends per share over 12 months, the gross dividends per share for the u.s. energy sector. you can see, this huge jump in terms of dividend payouts as the oil price continues to decline and is cash flow continues to climb as well.

the theme.e buybacks, dividends, the energy sector getting healthier. even at $60 a barrel for oil. jonathan: really interesting chart. here with us in new york, shell moving back to full cash dividend. >> no doubt. they have done everything they needed to do during the cycle to be prepared for this boom. two to three-year cycle tour the boom side, cash flow is fantastic. oil is back. this is the time to be replaying some of those names. jonathan: it makes you wonder what they were up to five years? how wasteful they were? >> i don't want to go there. i wonder about that a lot myself. apparently all of the profits, those $500 billion years that exxon was having, i don't know

what kind of years they could have been. jonathan: how do you apply that forward? >> i guess, all companies need into theirf bust structures in order to make themselves more efficient. at some point it can be helpful in terms of capitalism if companies have a hard time for a few years. alix: a few years ago, not you but someone wanted to -- what you want to buy now? >> specifically, those that will take advantage of a very high price for oil and don't have the kind of leverage walking into it that will not allow them to take advantage of that kind of boom in oil prices. it leaves out a lot of the shale players but not all. those specific shale players who are in the specific places that have specific break evens with specific bond structures and debt structures, those are the ones you want. big oil is always good across the board. i'm assuming you are

looking at eng? >> that's one of them. overhyped. not at the top. we talked about, the king of oil, recently came out, like i spoke with you guys, about the deficit incorporates which is left out there. centennial,ance, that is a good play. there are a couple others who have tremendous advantages, maybe one or two players come in. it is time for another special. alix: i'm on it. what is the energy call? a strong one.e in general, i think the dollar will be supported by fed rate hikes, december going forward, i don't see a crack in the dollar. to say i like the euro better as one offshoot

of that because of political recovery in europe this past year. in a world with the dollar is holding its own and reasonably strong and the fed is lifting rates and the curve is flattening, it is not a great environment for commodities. i wouldn't say it is bad but i don't see real exciting flash to the upside in commodities here. i think it is much more, real rates are return, u.s. is headed higher, that is not the best backdrop for commodities but if growth is stronger, demand should be fine. i think there is not a lot to do in the space. call attentionto to the fact, did you see the anti-terrorism meeting on sunday? changing the middle east, this is the real arab spring that is taking place from the top down. the financial story of the decade going forward because

everything that he is trying to do in the middle east centers around oil at a $40 per barrel price, none of his work in terms of changing the social and cultural attitudes in the middle east will have any effect but if oil can get back up to an area where they can move away from oil, take some of that diversification outside of that space and become a real financial, western player, we have talked over and over. that is how important this meeting is, that is how slaman is in the middle east. the internet will drive it. the oil price. you have to keep an eye on that. the saudi poll is back in a big way. i don't know why the russians don't do the same. if i am opec. >> he is skating a fine line with the russians and the iranians. he has been able to find a line

and skate of for the past 12 months and it is my belief he will continue to find that line no matter what it takes. this is a guy, 32 years old, amazingly energetic, he has a plan in mind, a 30 year plan in mind, he is moving fast. jonathan: very inexperienced and you wonder what mistakes he could make. >> true. alix: racking up billions from the rich guys. jonathan: that might plug a hole for a little bit. >> this will affect everything in the entire middle east. oil is the basis for it all. jonathan: is incredibly complex. i wonder what he is up to. and if he knows what he is doing. the west is giving him so much credit, how long is he been on the job? >> he has removed all the problems from a family standpoint. >> time will tell. >> it is too early to call? he is making enemies. power, heonsolidated

is been putting clerics into jail. this antiterrorism move toward the west, clearly, it is all sunni leaders meeting there. this is a first are. the connection between israel and saudi arabia, there are a lot of onions to be field. the basis under it all, is all about oil. alix: i say that all the time. jonathan: we have got away from the markets. we can talk about lebanon as well. thank you. market, the s&p 500 today, a marginal pullback yesterday. 2600, sixidly above points, up to 10th of 1%. this is bloomberg. ♪

♪ alix: this is bloomberg daybreak. up, the democrat from ohio and ranking member of the senate banking committee. david: when we talk autos and especially tesla, adam of morgan stanley is the one person we want to hear from. last time we talked to them he explained how tesla and four can have different valuations even though ford has made far more automobiles. $20f i could give elon musk

billion to invest or the ceo of ford, who will create more value? think about that and you might have a different answer. it is where things are going. the entire business model is changing. the type of talent, the software component, from that perspective the market is dying to have something different. that is why teslas valuation is what it is. >> there's a lot of water under the tesla bridge and a lot of cash has gone out the door since then. weight cautious rating on the price tag. adam, welcome back. let me ask the same question. would you still take that money and give it to elon musk over the ceo of ford or gm? position, longer-term, with that horizon, is unchanged. david: take us through, there has been a lot, they of -- they

have had a lot of difficulties with the model three, coming close to what they said they would do. there are issues with the batteries. there hemorrhaging cash. where are you on the future over the next 18 months of tesla? >> we expect a lot of volatility. the current production at the factory in nevada, are working assumption is they will resolve that with enough technical resources, manpower and money. that by q1 they may not be making 5000 units a week but maybe 2000 and week. that will solve a few problems. bring in cash from the negative working capital they run because they collect from the dealers within a day or two. they pay their suppliers over 60 to 90 days. there are been a lot of problems in terms of liquidity, sentiment, and having the special product on the marketplace, that will happen at the same time. we think that can drive the

stock as high as $400 or more. later in the year next year, we think it will become more challenging as the market starts to pay more attention to business models, ipo carveouts, ipo activity. other tech players that are crowding into the space, highly contested. we think there is more room for discovery of how crowded it is. it may take until 2019 to figure out. david: we also talked to david einhorn, he is invested in general motors. we asked him about what he thought of tesla. he had a different take. what we is, many things have in the bubble basket, stocks we things are mispriced by huge amounts. they are sized in a way that gives us an ability to be proven right or wrong. the mood of the market will eventually change, the company

will be called into account to demonstrate that ability. the company will be called into account to demonstrate his profitability. david: you would think there is a big over and under on this. whatever the number is. think that david einhorn's comments and the logic of what he said there, it makes sense. if tesla is just an auto company, if its core mission is just to make electric cars that wealthy people want to enjoy and it doesn't make money in doing that, then it will, then he will be very successful in being short on that stock. what we challenge, a different perspective, they are becoming a transportation company. they are providing a transportation service that , manyes human time, data hundreds of millions of miles,

billions of consumer hours that can be monetized, not in a way of taking you to laguardia airport but monetized in adjacent ways in terms of content opportunities, data mapping, logistics, other services. you need to expand your definition of what the market is involving data in order to justify this valuation. limited to it is just cars, einhorn is right. david: when you go to mobility, there are other big players. general motors, they have been able to persuade -- they are much more -- are they a real rival for tesla? >> they are. not in their current form. i will go back to your first question. -- would ier give rather give elon musk $20 million?

i would rather give it to tesla. however, general motors is challenging and introducing into the market the auto 2.0 tech carveout. to take the talent and capital into a separate entity and potentially, that can be used for talent acquisition. imagine that you had a son or daughter out of school with a orice working for tesla amazon or a traditional automaker. that would be a challenge. if i told you there was another option of having a carveout, minority owned by the auto company but also owned by a tech company separately traded with a currency that can be used to compensate the talent and focus the mission, that is a potential game changer. that is what i will put an sk, that is how companies can become a rival to tesla. david: fascinating.

thank you, adam. jonathan: let's get you up to speed on breaking news. the nominee to be the next federal reserve chair, jerome ell, has just taken his seat in the senate banking hearing. we will bring you this hearing and full when it begins in about 10 minutes. right here on bloomberg tv. alix: if i was on there, i might ask about bitcoin. coin?about a fed i david of jeffries is here to help us. what is your take on bitcoin? us went through different phases of skepticism. i've come to grips with the idea that bitcoin is a structure that people are going to embrace. i don't know whether it will be

in bitcoin or ethereum. david westincoin or whatever. the idea that you can have private transactions take place in a simplistic way over your phone, it is just such an easy way to do things. it will be the future. is the know if owning it way to capitalize on that future or not. i've seen a lot of smart people get involved and the only reason i got involved was because i saw other smart people get involved. that is a silly reason but i have seen -- when you see smart people doing something you get involved. that is what is happening. alix: we could be looking at some kind of currency that is on influenced by fed monetary policy. >> yeah. alix: what does that mean? >> you will still have to pay our taxes in dollars. in the u k, pounds.

you will need to get back to dollars. they won't let you pay in bitcoin. if they did it would change everything. being a monopoly provider of the currency in use is something very valuable to a country. every country has a central bank, a currency, we don't have each state having a currency any longer. i think it will become clear to governments that if this thing takes off in the way it likely does, they will have to figure out a way to curtail it so it doesn't compete so aggressively with the existing currency structure. david: it is not just competing, it is a way of doing illicit transaction secretly. it is a threat to governments in a different way besides competition. oryou are money laundering if you are the islamic state using bitcoin to mask funds, that is a threat. >> even a simple, i pay you in bitcoin and no one knows, there is no tax, no sales tax, no income tax. there is a lot of tax avoidance

that goes with it. bitcoin has to grow up and decide whether it wants to be legitimate or not. legitimate means making the transactions transparent and open and play by the rules. that will probably be the definition of whether it can succeed or not because otherwise the government will say there is too much illegal. theyust isis and that but are arty trying to get the data on everyone's transactions. jonathan: we are about to see the federal reserve chairman confirmation hearing, presumably jerome powell and we are talking about bitcoin. for many people it is because, this could be boring. beenconomic data has incredibly stable. that is polite. for some people it has been boring because it has not induced any volatility. these things have been predictable. is not -- isn't that why people

are talking about bitcoin? something really significant is about the play out. we have sucked a lot of volatility out of this market with bank transactions over the last eight years. the volatility everyone expected to be associated with the trump administration got people closer to home. they didn't take the metrics, they sat closer to the benchmarks. that expectation of instability actually created stability. everyone was prepared for the worst and you don't have to react because he can say a crazy thing and you don't have to do anything good. a lot of that has played out in idea, we don't have stability that is breeding instability. we don't have a lot of leverage coming in creating the next crisis. to get to your bitcoin point, there is really nothing stopping

bitcoin from going to 5000 or $15,000 in the next week. it could do it. there's something exciting about that for people who like to trade. you've seen a gravitation of traders will understand, this is a potential means for transactions in the future, trying to get their heads around a valuation. they are moving it. it is probably fund. -- fun. david: we are watching a live shot of the room where the senate banking committee will take place. timing this together, in this sense, as you look at this and what they are doing here, what is the role of central banks to issue their own form a block chain currency. ? even the vis has written about responsibility. >> countries like sweden have been at the forefront of discussing it. i wouldn't be surprised if you take a trip to stockholm in five years, you can't get krone, you can only get electronic.

jonathan: they are already pretty much there. many of the scandinavian countries. >> i think that storyline will develop. the thing about bitcoin and private currencies, people don't want the government seeing every transaction in it. there has to be some delineation the right and doing thing with your transactions when you are supposed to like pay taxes when you buy something from someone. that will be the hard part about private versus public. i agree. central banks will issue block chain currencies. jonathan: let's go to the main event. what are we looking for? >> about two hours. jerome powell has been confirmed twice in the last couple years. once to a shorter term and then to his own 14 year term recently. the is had experience with this. the senate knows him. we pretty much know all about him. there will not be a lot of drama today.

the only question is, how far talkinggo in terms of about monetary policy in the future and can they get something out of him about the regulatory side? jonathan: good to see. looking good. minutes into the session, let's wrap up the market action for you as we await jerome powell's confirmation hearing. teachers are firmer, stocks are too. all-time highs for the s&p 500, five points and up one third of 1% on the doubt. this is bloomberg. ♪

vonnie: this is a news alert, in moments, jerome powell and he's 16thg to become the

chairman of the federal reserve. good day. i am vonnie quinn. mark: and from the european headquarters in london, i am mark barton. we will bring you coverage of powell's confirmation hearing. first, some economic data ahead of the hearing. julie has the details from new york. julie: we are looking at consumer confidence measure for november, at 129.5, above the 124 estimated, also above the prior reading of 125.9. we continue to see a strong reading on this consumer confidence. sinceigure, the highest 2000, and it looks like the present conditions index up at ,51.1, the highest since 2001 expectation that a seven-month high. we continue to see strength on the measures. thit