♪ francine: president trump repairs -- his controversial order, but markets are unfazed. decision time for the ecb. with ticket inflation and rising protectionism, does mario draghi have reason to play it safe? we are live from the global markets conference in paris. fore dimon joins me shortly a conversation about trade and the future of finance. good morning, everyone this is "bloomberg surveillance." we speak to daniel eduardo pinto in just a few moments, but first

we must talk about the markets. >> stocks rising for the fourth consecutive day. aboutugging off concerns a global trade war. maybe there will be exemptions for other countries. australia being touted, certainly fighting to have an exemption. the stoxx 600 is -- i think that is that s&p 500, so we will ignore that one, but the stoxx -- 4s up for poor can consecutive days. five days of winning the gains coming to a close today. it is all about the ecb, isn't it? how many concessions will the hawks went today? -- win today? if the ecb close to severing the link between the bond buying program and inflation? a lot has happened since january.

the euro has barely changed. we have had the italy election, trumps trade war threats as well. let's get the bloomberg first word news. said it will initially give canada and mexico -- on the -- the two subjects will not be subject to the levies on steel and aluminum if they signed a nafta deal. >> nafta is an old agreement. ng have important tradi relationships with canada and mexico, but the president wants a better deal for american workers and companies. this is about more fair and balanced trade. >> the essential -- the white house went a broad list of contenders to succeed gary cohn. , andan sachs executive

trade advisor -- a potential candidates. tariffs were opposed by cohn and promoted by navarro. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. global markets -- we are at the global markets conference here in paris. joining us is daniel pinto, copresident of jpmorgan and copresident of the corporate and investment bank. thank is so much for joining us. daniel: great to be here. you have first of all,

this promotion, you're not the copresident. how was the job going -- how is the job going? daniel: very good. we are really working together to help jamie. on various issues across the company. it is a great growth and we are all working together very well. francine: is there anything you are focusing now that you're not before? daniel: technology is a big agenda for the company. we are doing prioritization's of the company. about -- things that are common across the different lines of business. francine: i want to get back to technology and artificial intelligence, but first the markets, daniel. we saw the tariffs imposed by donald trump. what does that mean for the markets?

daniel: markets are in good shape. we had it read a volatility -- period of a volatility. are doing well and now a volatility has come down a bit. we are at an interesting time. years, probably, until the end of the cycle. markets are going to be nervous to anything related to inflation. they are going to be nervous about anything related to tariffs. it is something that will concern the markets. francine: what happens at the end of the cycle? is there a correction at the end of the cycle, or will markets adapt and adjust? daniel: normally there is a correction in any cycle and it depends on how high the markets are. there is never just one trader,

and it's always a combination of factors. it could be. cycle, probably the equity market is still together for the next year or two. they could beat cycle, probably the equity market between 24%, depending on the valuation at the time. the most important thing for people like us is just to be prepared. to be prepared is what it is, and that is the most important thing. we know there will be a correction has sometime. francine: we were expecting up to a 40% correction. how do you prepare for your clients? daniel: i think by been disciplined. -- us, because the cycle of -- that we -- as a company.

when it to be careful of how we are positioned in order to be able to the liquidity provision. times,ere are difficult the clients require more, so therefore to be prepared and have since -- to facilitate that, you need to remain effective. francine: what would be the trigger? -- are there risks? daniel: the economy continues growing very strongly globally. the banks are being very prudent in the way they just and normalize -- a just and normalize monetary policy -- adjust and normalize monetary policy. at economiclook

indicators. if they don't show that the economy is driving down, then you want to look at some geopolitical issues that are at play. you want to look at all these things. you want to look at valuations, because any of the issues that maybe have not been an issue in the past, the valuations go higher, and so they become an issue. francine: is this a turning point in 2018? daniel: i think normally what we see in any correction cycle is the interest rates are going up. --.it spreads theyyields are so low, will go higher. when you're getting towards the , they start --.

even when that happens, and normally happens at the end of the cycle as well. it would normally a just after equities -- adjust after equities. probability ofe a recession in the u.s. is very low. francine: we also have the meeting today. is there bigger risk coming from europe, european equities and fixed income than in the u.s.? daniel: the europeans are five years into a cycle. i think that they will be conservative and keep their optionality. outcome of the election in italy, they will want to see what kind of government gets formed. i think that we will be an uneventful announcement.

francine: daniel pinto, the in and day out we talk about bitcoin. it goes up and it goes down. what will bitcoin become. daniel: first think, it goes up and down, that is for sure. when you think about standing ovations, they have to survey. tos -- innovations they have serve a purpose. they cannot be that the purpose of bitcoin is to process transactions that are anonymous, difficult to track, and you do not know if they comply with the law. so that is a challenge. it is the technology, underneath it, absolutely it is going to change a lot of things. there are a lot of initiatives that they are tried to address.

address. to it will not be solved through central banks or other ventures. then it will become important. at the moment as it is, i doubt e will go very far, because of these fundamental issues. francine: what will blockchain become? is that something that will be used sooner? and what form will it take? daniel: yes. i think blockchain itself, it will be important for many industries, but in particular for financial settlements. and anything that relates to settlements or payments, it will be very important. i will give you an example. where rolling out our new payment platform around the urrld -- we are rolling out o

new platform around the world. all of the transitions -- transactions to process payment will be --. we have been working with digital assets and been very involved with the australian stock exchange. will -- ledger. we will have to provide a lot of services to monitor those exchanges. i a lot of challenges ahead. it is really a very powerful technology. francine: how much time do you spend looking at artificial intelligence and cybersecurity? it has been -- the market focuses a lot -- spends a lot on cybersecurity. daniel: and is very important for every company and we will take it very seriously. that --.o make sure

artificial intelligence, robot, machine learning, i think that moree beginning it will be about the capabilities of the employees. improving theut service, the operations. you have plenty of back-and-forth about -- with your clients about improving the process and making it more efficient. as we go deeper and deeper into the and we replace functions that exist today, we will have the responsibility to train the people to do better value services for our time.

if you go back to the market, do we heard about back to have the markets were functioning pre-crisis? we had a lot of volatility at the beginning of the year. do we go back to wild springs in the vix? does it change the trajectory of the market? daniel: we are going to have long periods of very low volatility. what the market ability to -- qualitycolony about the rhythms, it allows us -- algorithms allows us and everyone else to take advantage, and really manage the price and efficiency. time where markets are

functioning, you have big volume and very little volatility. when the time comes when something changes, then we will see the real effects of there is less capital. therefore, it will be a lot of volatility. normal.will go back to i think that this type of market that we see, in my view, they are here to stay. francine: one last question on mifid. what have we learned two months after? daniel: not much, yet. change ort seen any difference in execution. the execution has not changed so much, and i think that overtime we will -- what i really like is overtime it will give us information to know what clients really value.

then we will adjust accordingly. we're not going to make any period of ll for a changetil we so the real -- see the real change. francine: thank you so much. the j.p. morgan chase copresident and ceo speaking us -- to us today. jamie dimon will be joining us for another exclusive conversation. keep it right here on "bloomberg surveillance." this is bloomberg. ♪

♪ francine: economics, finance, politics, this is "bloomberg surveillance." i am francine lacqua here at the j.p. morgan global markets conference in paris. we have been speaking to daniel pinto, the copresident of jpmorgan. later on we will be speaking to jp dimon -- jamie dimon. >> looking forward to that. mario draghi expected to are on on side of caution -- err the side of caution when it comes to the ecb's monetary policy. the exit strategy is likely to stay low, according to bloomberg economics, the next major change to forward guidance will probably not materialize until june. joining us now is janet henry, global chief economist at hsbc bank. becky for joining us. if there were -- thank you for joining us. --,here were to be any

bloomberg economics says it will probably not happen for if you more months. if there were to be a concession today, maybe they could remove the easing bias? yes or no? yes.: there were a few members in january that wanted to remove the easing bias. it should not come as a shock. as people scrutinize the detail, if there was once a price, that would be it. >> what about severing the link between bonds and inflation? i think june is more likely at this stage, but everything is possible. there would not be pre-commitments. there is a lot of uncertainty out there.

the disputes over trade at the moment are just one of them. at the moment, all things considered, the most likely scenario is that the biggest move on communication is most likely to be june. beyond that it will be not just bonds and inflation, but to what extent will they keep interest rates on hold? will it continue to be well past qe? >> francine? francine: janet, good morning from paris. if you look at paris, about -- at a possible trade war. i don't know if that is coupled with possible protectionism, is that the biggest risk to the world economy? janet: i think we are at a very synchronized expansion. we have heard a lot about that over the course of the last few months. interest rates and inflation are still the biggest macro risk, but still we have central banks that are being relatively cautious. in most parts of the world,

inflation is very benign. trade uncertainties are the most immediate concern. different people have different interpretations of them. some think that if we get a 25% increase on still prices, what does that do to inflation? if the inflation picks up, is the fed more aggressive? if we get this impact on s, itorous, -- trade tariff may ultimately be deflationary. it will have market implications. that is where you could get some damage to the economy rather than it being through the inflation front. francine: if there is a full on if you have a trade were between china and the u.s., which economy loses most? janet: a lot depends on how you define a trade war. at the moment it is primarily about steel and aluminum.

we will see what the response is going to be in the u.s. itself. i'll be going to get the deal signed -- are we going to get the deal signed or is congress going to hold it up to some degree? to what extent are the nafta countries excluded from the tari imposed, whilee the nafta negotiations continue? chinaon't impact particularly, because it is a much smaller exporter of still to china.-- steel the immediate impact will be the market implications. what happens to asset markets? what happens to currencies? that will be faced to have any 2 of any -- phase

trade war. >> what are the spillover effects? one, if it isse just about trying to narrow the u.s. trade deficit of the weaker dollar, it should be the weaker dollar against all currencies. get more differentiated factors. you would have the traditional safe havens. it would most likely be the yen, this was frank, the euro -- the swiss franc, the euro. if there was a growth risk you are much more likely to keep interest rates on hold. sweden, you might see some currency weakness coming through their. re. if you look at the

trade and some of these european economies, does a push china to do trade -- does it push -- asian economies, does it push china to do trade with some of its regional partners? janet: i think enter original trade has been a phenomenon for a couple of decades -- intr a-regional trade has been a phenomenon for a couple of decades. anything that impacts chinese export growth would also impact korea. it depends on the individual countries. involved for the most part, if the u.s. becomes less involved in the world trading regime, that does not mean we have an end to closer integration with other turning partners. we are still seeing these trading initiatives around the world express -- progress, and in some cases accelerate.

>> tough question, when is the eurozone's economy strength going to wrap up present pricees -- ramp up pressures? has peaked.nk it we will get some modest and inflation, but i think that mario draghi was still struggle to meet his goal. >> the ecb announces its policy decision. you can watch that live, as ever, here on bloomberg. this is bloomberg. ♪ mom you called?

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dimon in about 10 minutes. jamie pinto -- daniel pinto expects -- says he expects a market correction. let's get straight to the bloomberg first word news. >> the u.s. has said it will initially exclude canada and ffs on from stiff tari aluminum and steel exports. the american allies could use a similar system to ask for abstention. >> nafta is an old agreement. we have really important trading relationships with canada and mexico, but the president wants to look at this agreement, and wants a better deal for american workers and companies. this is about more fair and balanced trade. >> the white house is said to be weighing a long list of contenders to succeed gary cohn. donovan, andjim

trade advisor peter navarro. cohn's departure came as the president decided to move forward with a move to slap t and aluminumel exports. -- in china rose 6.3% imports in china rose 6.3%. that minister has warned it is a justified and necessary response for any efforts ted toed to incite -- inci start a trade war. -- and his daughter were found unconscious in a bench -- on a bench. a police officer is also in the hospital and serious condition -- in serious condition.

global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. bloomberg. -- thanks. concerns over brexit are causing many countries to stockpile goods and fears of --. be offeredal could if theresa may rubs out her red line. janet henry is still here, global chief economist at hsbc. david, if i can start with you. the approach it does not seem to be working. theresa may seems to have two choices, to raise the red lines, or -- that access to your biggest trading partner is going to be reduced. >> she did admit that, at her speech in the mansion house one week ago. the red lines are going to result in some trade

restrictions for the rest of europe, so she is trying to persuade everybody that this is the case. what they set out has been rejected. none of this is particularly surprising. she said that every trade deal cherry picks in some respects. the eu is saying that you cannot do anything that will compromise the, what they call the integrity of the single market. they put this clause in the document, which they are calling the evolution clause, that is giving -- leaving the door ajar but you can to change its mind. either for theresa may to rub out one of those red lines, maybe go back on her red line about freedom of movement, which sounds unlikely, or the biggest change could be a total change of heart by the british public. maybe the whole of brexit does not happen after all. they are saying that what

what your -- with what you are asking for at the moment, the deal is not much better than --. >> we love the daily minutia, don't we? how do you use everything that david has just said and put it into your models to try and gauge how the economy is going months,in the next 18 and even further there after? >> economists are always good at making assumptions. basicallyf england is -- has basically been think that over the next two years -- saying that over the next two years, the speed limit for growth in the economy is going to be 1.2%. they do not think that the economy can run it very far without inflation picking up. this uncertainty is going to

weigh on investment intentions. there is already some signs of a slowdown in employment growth in the u.k.. as the get progress as we might see a modest rise in unemployment. that will be one of the factors that starts to -- on inflation a little more quickly than the bank of england was expecting. that might be the only one we get this year, in the first half of the year. francine: what happens next year, janet? if you look over an 18 month horizon. how many rate hikes can the u.k. economy actually afford? it depends on what is happening to the global economy, and it depends on how the u.k. economy is performing in that can a backdrop. i think it will be very unusual to see a central bank continue to raise rates if unemployment is starting to edge up, because

unemployment is always a lagging indicator. it would depend on the strength of domestic demand. if we are underestimating the pickup in growth coming through, then certainly the banks own conditioning of their outlook perhaps looks quite reasonable. at this stage u.k. economists are not looking for any rate rises in 2019. janet, when you look something --there is there a sweet spot that the u.k. could do some kind of trade deal with the u.s., because the u.s. are more -- when it come to tariffs? janet: i think we have to wait for what is a grid over the course of the next few months,

regarding the implementation period. new trade agreements cannot be embarked upon until we are in the implementation period . companies expectations and their investment in tensions can have an impact on the economy. at this stage it is very hard to quote the exact timing of any nature of trade deals. >> what is the objective from theresa may side? s> she said one of her key test was about protecting jobs. they're trying to make the case to companies to lobby for the trade relationship that they are pitching for. she is hosting this roundtable today. they say things like, that the european companies raise a lot of their capital in the city of london, so to restrict that would be to harm european

businesses. that is a key argument for access to the city of london. those will be among the things that they are pushing for. the british chamber of commerce has also got the conference today. we will hear from john mcnown, -- mcdonald, the shadow chancellor. politics, topsy-turvy you'll want to listen to him. it will be very interesting to hear what he says, whether that is somehow more of a pro-business approach from the labour party. >> looking forward to that. janet, it is international women's day. i want to show off our bloomberg gender equality index. the white line is the bloomberg gei. it has outperformed the broader s&p. one measures --.

it is a wonderful chart. it's inception was january the last year, so that is the date range. in that. , it has outperformed the s&p. janet: i think in clues of growth in any way makes economic sense, particularly when we are at a time in the global economy where the demographics are not improving. there are some parts of the world where it is improvement, but in a large parts of the developing world, it is not grown as quickly as it was -- growth as quickly as was -- growing as quickly as it was.

the more people that you have working, the more the growth potential of the economy is actually going to rise. -- various are some studies done on the kind of work and decision-making of a more diverse workforce. a number of these policies will be undertaken by companies, by governments, and we are already seeing some impact of them. i think that index is interesting. clearly, gender equality is putting -- playing a very big role in companies decisions. >> janet, thanks for joining us. thank you both for joining us today. next, we have on exclusive interview with jamie dimon, the chief executive and chairman of jpmorgan. we will talk trade, trump, and

of course, u.s. growth. this is bloomberg. ♪

♪ >> you are watching "bloomberg surveillance." let's get the bloomberg business flash. >> -- is denying reports that the company is in talks -- to withhold -- in a step towards a possible merger. gains spiked as much as 13%.

has slumped for a third day, and the fears of a regulatory clampdown on cryptocurrencies in japan and the u.s.. exchangesnk ordered 2 to halt operations for months, and penalize 4 others. this came after warnings of the sec that any cryptocurrencies should register with the agency. virgin ordered the double-decker one decade ago, and now says that the shuttle has no role in its plan. that is a bloomberg business flash. back to you. francine: thank you so much. i am at the j.p. morgan global markets conference. what has been moving the markets lately has been donald trump's

s, which caused gary cohn to resign. what does this mean for investment and for the markets? joining mel is the chief executive and chairman of jpmorgan, jamie dimon. mr. jamie dimon, thank you for joining bloomberg. jamie: thinks for having me. francine: are you worried about tariffs and a full-blown trade war? janet: -- jamie: infrastructure is good. we do not believe in tariffs. i think the president has pointed out that there are serious issues around trade. is the that tariffs wrong way to go about it. there may be more, retaliation, it opens up a box of additional problems. francine: could escalate -- it

escalate? jamie: it could escalate. i think you should expect more. i think the americans are being very pacific -- specific with the chinese, mexico. people cannt and his legitimately say that they don't want this. we would have preferred --. if you don't get it, take action. francine: if it escalates, -- wage growth, right? jamie: i don't think it is going to do anything immediately. do you think most of america is going to worry about this? they are not.

chief executives take a measured approach, similar the next round is, but if it continues and gets worse, yes it will hurt growth. it will hurt not just the united states, maybe elsewhere. it could offset some of the few strides that we got from tax reform. i think it is terrible. i think gary cohn resigning as a strong proponent of economic growth. i think it was good to have him in the white house. he knows how on economy runs, he knows what needs to be done to make it healthier for all americans, and he is not there. it is unfortunate. i called him yesterday and was tim the best. he will be fine, but we will see who they put in the job next. it is very important. i'm sure he will have plenty of opportunities. francine: who do think the president should put in charge? jamie: i don't know.

i have not thought about it very much. i hope it is someone who is knowledgeable, thinks strategy, is strong. the president likes strong people. hopefully they will understand markets, our allies around the world. it is important that we maintain good relations with allies around the world. going?e: how are things jamie: we have accelerated from 2%. i'm hoping it would do 3%. it is amazing to me that people would think, i want uncompetitive tax system, and that is good for the country. i've been confused about that. the public should think of the tax reform as bureaucracy reform. in america it takes 12 years to build a bridge. it is disgraceful.

we have got to get wiser running the economy for the benefit of the people. the economy is accelerating. we have got toconsumers are in . millennials are doing tfine. the whole world seems to have growth, which is good for everyone. -- the fedk the fed is very smart, but they do not control the economy. francine: they tried to, right? jamie: they have to react to it. sometimes it is smooth sailing and easy to react to it sometimes it is tough they cannot predict the future either people make the mistake that they get all this leverage, they cannot do that. francine: talk to me about your expansion plan. you are pretty confident about the future. jamie: yes. we are expanding in every business.

of companies do not want to do some of the things that we do, because it is really hard. countries opening in around the world. we are doing it because of tax reform and regulatory reform. companies are expanding with capital expenditures. 4 billion more in small business lending. those branches are going to give 5000 jobs directly. when we go into a town, we will philanthropy, other mortgages, small business, private banking to help the upcoming grow. i am also raising minimum wage is in major cities to $37 -- $37,000 per year. francine: can anyone in europe compete with you guys? jamie: my view is that there is always competition.

whenever you take a deep breath and say, oh my god, there is not. it is always coming from somewhere. europeanok at the banking system, they need to be allowed to merge and expand. if they don't, it is a huge disadvantage to them for the next 50 years. if i was running europe, i would be cautious about try to create that. francine: banks -- if the banks do merge, do think they will be a tougher contender for you? jamie: yes. socgen and -- are tough competitor right here. in terms of global investment bank and stuff like that, -- the green merger -- bigger in a merger. francine: what role will they play in the u.s.? can they play a role in the future? jamie: 30 years ago they were in one country.

30 years ago they were in one country. now they make more morgan than jpmorgan. their government likes them, and they have a natural bull market. they are already on the playing field. they are ambitious, they should be. compete against them, so help me god. francine: are you entering a new agreement with amazon? jamie: i cannot talk about that. amazon is a great partner of errors. we do the credit card -- of -- amazon is a great partner of ours. we do the credit card. we have real-time --, online money, moreement of and more services, so we are going to do all that stuff.

we just started an online bank, and we already dominate millennials. a huge percentage of our customers are millennials. francine: if you do a deal with amazon, do you worry that you give them the secret sauce to banking? jamie: anytime you have a partner, you should think about, is it fair and equal to both parties, and stuff like that. nobody is going to enter an agreement were at the end of the day you have nothing, and they have everything. francine: of course. jamie: i think they can do whatever they want. atm, thesebaba, things are happening. other large companies will be looking at having -- to be a bank, but a bank, use bank data -- buy a bank, use bank data, so it is a

good deal. nobody knows the future. if we have a couple years of good global growth, which you can postulate is a pretty good possibility, then they are not complacent. up, the0 year bond goes risk will go up, and all that. if you postulate that we have a recession this year, then obviously stocks are overpriced. francine: you're not expecting a recession? jamie: i never guess the future. i don't know what the future is going to be. in my opinion, i think we will be ok for a while, and one day we will have a recession. francine: what will trigger that recession? is it impossible to say? jamie: look at history. overbuilding in real estate, consumer and consumer --

commercial real estate going to the bottom. there are multiple reasons. wages are going up, which is good. all of the things happening today are good and now we are climbing the wall of words. i want the growth. i don't want to say we are growing slowly, now we don't have to worry about inflation. francine: it is international women's day. your metrics are good. --ie: you notice, that you you noticed, didn't you? we have exceptional women. we believe in the women's cause, equal pay, equal job. we just put out a report that we do have that. there are other reports coming .ut what we try to do as a company

is make sure that you are treated fairly and given the same opportunity. and women are on promotion compensation committees, so we support all of that. a lot of our comedies are led by women -- committees are led by women. they set a huge tone to how we are going to help women around the world. francine: jamie dimon, thank you so much. that was the chairman and ceo of jpmorgan joining for me -- conversation. a we will also speak to jean-claude trichet. this is bloomberg. ♪ conversation.

♪ brace for terrorists.

tariffsare -- brace for . markets are unfazed. more on the global markets conference in paris. told bloomberg market correction of two-three years if possible. decision day for the ecb with doesg detection is an, mario draghi have good reason to play it safe? i am francine lacqua in paris. tom keene is in new york. you have jamie dimon, what that has to do for inflation for the feds and animal spirits. the terrific new cycle we are in. your interview with mr. pinto was extraordinary. i cannot convey enough how unusual number is he was looking

at as a market pullback. francine: it was certainly something we need to talk more about. we also need to talk about our conversation with trichet. firstget to bloomberg word news. canada and mexico would initially be excluded from the higher tariffs. extension ifek they failed to update the nafta agreement with the u.s.. other allies could ask for similar deals. with those tariffs, china is dismissing the idea they pose a economy. the u.s. the chinese prime minister criticized the trump decision to designate the country as a strategic competitor. they say that imposing tariffs

on a wide range of goods is to punish china. a couple of years from now, pinto did speak to bloomberg. last month, pinto said that trading revenue jpmorgan is on pace to increase to the mid-to high single digits. that might be financial reasons jong-un'sm talk about the nuclear program. hurting experts has drained its foreign currency reserves and that could limit north korea's ability to pay for essential imports. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. tom: the board equities, bonds, commodities. you can see that instantly. pulls back a little bit

off of yesterday. it is really quiet. calm in17.59 showing the market over where it was 24 hours ago. this chart, if you look at we show thistax, two weeks ago. thes the fiscal deficit and trade deficit. this is the fiscal deficit. i made them quieter. i put them out for bloomberg radio and radio london. this is the rollover of the twin deficit. widely anticipated to widen. out francine lacqua in paris with the important interviews of mr. dimon, and as we await jean-claude trichet, quickly with an update on washington stephanie baker from our london desk who has written with great andrtise on mr. manafort

his affairs. it is tariff thursday. tariff june, december, or 2019 look like? we are expecting these tariffs to come in. peter navarro has said that canada and mexico would additionally -- would initially be exempted, but that would depend on a new agreement with nafta. plays out has yet to be seen. white house officials talking for exemptions -- about exemptions for certain countries, in addition to mexico and canada, perhaps nato allies. there has been talk of corporate exemptions. how that would play out is unclear. with a exempt current contracts?

-- with a exempt current contracts? what would be applied to corporate exemptions has yet to be seen. a number of uncertainties in terms of timing and scope. is no friend of the trump administration. one of america's great economic historians. has essentially proposed a new tax on consumers and industries, the cost of which will be born largely by his own supporters in the -- rustd and rest belt. navarro has yet to explain how creating a larger domestic steel willtry through tariffs the u.s.et benefit for

economy. he is says creditors often discover they are the prey. stephanie, who will go after the president? had business leaders express concern about the tariffs and how they will play out. the u.s. chambers of commerce said they are concerned about a trade war that might result. you have had more than 100 republicans in the house urge trump to at least limit the scope of the tariffs, concerned over how it could impact the economy and curtail the benefits of the tax cut that was passed. i think you are getting pressure from all quarters. the u.s. oil and gas industry could be impacted because it would impact the cost of steel used for infrastructure. there will be pressure applied from all different points. whether or not he listens remains to be seen. francine: depending on who the

president picks to replace gary cohn, will that be taken by the markets to signify how much further he will go, or would we be reading too much into it? some might view a ao-trade pick for the spot as possible good sign that perhaps there will be more debate in the white house. at the moment it looks like the economic nationalists, the anti-globalist's, in the form of navarro and wilbur ross have the upper hand. navarro dominated the sunday talk shows, for instance. we would perhaps be reading too much into it. trump seems focused on fulfilling his campaign promises. talking about trade

and unfair practices, particularly high china, since he was -- particularly by china, since he was on the campaign trail. we are joined in paris by jean-claude trichet, who served as the president of the european central bank from 2003-2011 and is now president of the bloomberg economic think tank. what do you make of these? threat to global growth? it seems like growth is in a sweet spot can it be reversed? jean-claude: it is a very dangerous move. obviously, we will see where it goes. it is more complex with the start of the negotiation with nafta countries, but this move is counterproductive from the economic standpoint in the opinion of a large majority of the economists. in my opinion, certainly,

against the overall interests of the u.s., other countries, and the global economy as a whole. theill see, but signal something that is obviously bad. potentialdoes it have to move central banks off of their trajectory of increasing interest rates? jean-claude: i don't think it should move central banks unless there is real facts and figures in their own observation. ont is clear is that it puts a global economy and additional element of risk which we did not i have to say. more or less come the global observers thought after the tpp interruption by the u.s. and after some science -- after some

igns nothing dramatic was to be expected. this violent move on tariffs was unexpected and is very bad. i'm not surprised that gary cohn resigned. difficult for a person like him to accept that being the advisor of the president. francine: tom? good morning. thrilled in new york, to have you with us. let me show you the first chart that he knows well. this is a huge success of the valuation of the euro in 1998-1999. it is amazing the brutal success of the euro. fairly valued where

it is right now at 115-120? you-claude: i would not say have a fair valuation at any particular point. it goes up and down. the dollar,ccount, the euro, the yen, the major currencies should oscillate around a level that should be something that would be considered the equilibrium rate in the medium long run. depending on their overall situation. at the present level, we are marginsthe fluctuation that do not seem to me to trigger any kind of reaction. as you know, i am very attached g4, you name it

to continue to look at the major floating currencies with great make sure the markets continue to go in a not aligned with fundamentals some signals could be given. i don't think that is the case right now. tom: we will continue with jean-claude trichet and important comments from jamie dimon. in the next hour we bring in abby joseph cohen. it will be good to get an update. stay with us. from paris and new york, this is bloomberg. ♪

taylor: this is "bloomberg surveillance."

i am taylor riggs. there is a report that signifies close to a deal to buy express script. according to the wall street journal a deal could be announced today. express script has a market value of $41 billion. they are losing anthem, which is setting up the pharmacy unit. buying the french government's stake in run no. it would be a step in the two companies merging. that is your bloomberg business flash. thank you so much. china has delivered its most forceful response yet to president trump's tariffs threat. vowed ance minister response to any efforts to fight a trade war. mandarin]

>> a trade war is never the right solution. will harm the initiator and the target country. in the events of a trade war china will make justified and necessary response. francine: that was the chinese foreign minister wang yi. when you look at the threats of willfs, do you think china have a measured response, and if there is a full-blown trade war who would lose the most, the u.s. or china? jean-claude: it is necessary that all partners are measured in their response, because nothing is easier than escalating and escalating and having a war. then it is a catastrophe for everyone. for theery abnormal u.s. to take that move.

it is a blunder, obviously. even looking at the interests of the united states of america. partners, at the top of the list the u.s. government havef, i hope we would not a trade war. it is the worst possible thing to happen. francine: if you have a scenario where the u.s. and china are no longer solid trading partners, with some chinese investments flow to europe? some of the trade lost between the two countries flow to other parts of the world? mostclaude: and makes the sense to say the u.s. and china could interrupt their trade. it is an essential part of the economy in china and in the united states of america. it would be a total catastrophe. i don't think that the is totally apparent.

it is not china which has is the unitedit states of america. in nafta and in europe, we will see what happens. make an assumption that the worst is sure or designed by anybody. maybe i am optimistic, but a hope very much and make the working assumption that we will avoid the drama. tom: we have had a huge focus on america on the tpp. i believe we have a multi-atlantic trade discussion. what is the likelihood that france, the rest of europe, mobile come to some multilateral

trade agreement with the united states? have in favor, of course. i consider such agreements a really positive sum game. , it is a problem in the united states of america and europe on the public opinion standpoint. in france it is not that surprising, but in germany it is more surprising. it captures part of the frustration of our people in general in all advanced economies. i hope weekend that we will be able, at least europe, to work out some kind of consensus. we would see what happens.

i would say that the u.s. is not creating the conditions for a nice agreement and consensus, obviously. help us with international economics. francine and i cannot get a straight answer out of public officials. they are talking their book. tos italy need a weaker euro prosper and provide economic stability? does italy need a weak euro to do better? , we are in aagain system which is a floating system. thes very unhappy when minister of finance of the united states of america suggested that he would go for a dollar, of course for domestic reasons. he corrected that.

the president also corrected that, rightly so. it seems of rhetoric, like what is important is we all do what is necessary for our own country. a lot of hard work needs to be done in europe, my own country, all countries in europe and the u.s. that hard work is what counts. we are in a floating currency system and are aiming at having in spite ofhere there is something wrong in where theundamentals currency is much too high or much to where we have the capacity to give a signal. i do not think we are in a present episode where we would need such a collective signaling to the markets. again, at the present moment i no particular country, no

central bank, no minister of finance should talk down its currency. francine: we'll get back to the former ecb president and ask him include thefs could weak dollar policy. coming up is julia coronado. that interview at 6:00 a.m. in new york and 11:00 a.m. in london. this is bloomberg. ♪

francine: i am francine lacqua in paris, tom keene is in new

york. this appetite has improved with markets of finding their feet a little bit. time of central bank tightening. pinto inn with daniel paris. i asked where he sees volatility in markets going. are doing well. volatility has come down a bit. we are at an interesting time. two to three years to the end of are going and markets to be nervous. nervous to anything that relates to inflation and growth. i think tariffs goes beyond what has been announced. it is something that will concern the markets about future growth. francine: what happens at the end of the cycle? is there a correction or will markets adapt and adjust? normally there is a

correction in any cycle. it is never just one trigger. it is a combination of factors. i mentioned normally in this market has some way to go for the next year or two. 2 percente between to 4%. the most important thing for someone like us is to be prepared. when times are the times declines get you. we prepare, and that is the most important thing. we know there will be a correction at some point. francine: you are expecting a 40% correction, how do you prepare for your client? >> it is the size of the

run.theip we amount of risks we take as a for the client. we need to be aware how we are positioned to maintain the liquidity position. so toients require more, have proven positions to facilitate that is the main objective. francine: what would be the trigger? mainly monetary policy? are there risks for hiking too soon or too late? , globally, is very strong. the fed is being prudent in the way they are just and normalize monetary policy. uplation has been on the way , but reasonable.

those are things you want to watch, that inflation does not go up too fast, central banks to go a little faster than they are doing now. you want to look at economic indicators that don't show the economy is driving down. look at some geopolitical issues playing out. you want to look at all of these things. you want to look at valuations. could become a trigger. that was the jp morgan copresident daniel pinto speaking to me earlier. jean-claude trichet, the former ecb president. geopolitics that the markets keep raising? jean-claude: the markets have corrected a little bit. i share the view that the correction was probably in the cards. that wast the level

very high. if i put aside the bubble of com we had the highest level of the last 60-70 years. be, putting aside the bubble i mentioned, it was more or less 70% higher in terms of over thehe average former 60 years. when you are in that position, a correction looks in the cards, as i say. we will see where it goes. ares certain that markets ormanently either complacent going in the reverse direction.

a correction is probably in the cards. francine: what should the relationship be between central banks and markets? are central banks there to guide them? should they look at volatility and corrections, or should central banks go about their business ignoring them? central banks cannot ignore markets, they are important indicators. central banks, we just left a period of high turbulence and we need to anchor expectation as well as possible. present, the main function of central banks is to anchor as well as possible expectations in terms of stability of the currencies, stability of prices, and create conditions for growth

stability. not only through monetary policy but other means, in particular -- in particular -- tom: jean-claude trichet a with us from paris. comments from james dimon coming .p in a bit right now we have comments and first word news. the trump administration says that there is a way for american allies to avoid proposed tariffs on steel and aluminum. 10 a day will be exempted from but will lose that if they cannot agree on nafta. see a similarould exemption. wall street getting shut out in the u.s. senate's latest rewrite to ease financial regulations.

speculations are that barclays and foreign banks will not benefit from benefits to help regional lenders. thanks will not have a reprieve from a post capital requirement. governor brown says jeff sessions is trying to get back on his bosses good side. sessions have sued california over state laws to protect the largest population of undocumented immigrants. president trump has repeatedly questioned sessions' competence. president xi jinping says proposed changes to the constitution reflect the will of the people. wonder appeals the ban on the president serving for more than two terms. that is the only barrier to him staying in office. powered by global 120ysts in more than

countries, this is bloomberg. francine: mario draghi is expected to air on the side of caution. and the global economy against a potential trade war, the exit strategy is liable to stay solo. .- stay low joining us is matt miller with the latest. good morning. how many questions will mr. draghi field on the elections and on trade wars? he is certainly going to feild dozens of questions on a possible trade war and tariffs . 50re will probably be 40 or journalists in this building and everyone is allowed to ask a question. you will get a lot on that and the italian elections. because it is international

women's day, he might get questions on the makeup of the governing council. there's only one woman on memberse board out of 6 . there are only two governing council members that are women. it comes down to for mario draghi is inflation. he cannot get it up to the level he wants, the 2% target. it doesn't look like there is more efficacy for monetary policy. i look at where we are now with the ecb and mr. draghi will tread carefully today. been a change in the timeline that you have seen in the german press of how draghi will act over the coming quarters? matt: i don't think so. ofare expecting an end

quantitative easing in december, and that has been the expectation since last september. he has until november of 2019 before his term runs out. he wants out of quantitative easing and to start raising rates before he leaves the head of the european central bank. that bloomberg economics looks at super court inflation. it is 1.1% and is on the decline. it needs to get back up. for getting out front of the difference equation that matters on inflation. he knows the difference equations. jean-claude trichet with us is trichet-- jean-claude is with us, the former ecb president. inflation now versus the expectation of higher inflation.

said look at the data and the clear and present now. you always said look at the data and the clear and present now. i we too far ahead of where expectations will be? jean-claude: again, we have a measure of inflation expectation , five years and other indicators. demonstrating that the efforts all centralould say banks, particularly both sides , ishe atlantic progressively restoring the kind of expectations that are necessary. the problem of europe, the ecb is responsible for the euro and inflation in the level of all countries. all 340 million people. that does not mean that all countries should behave in the

same fashion. it is clear that the countries that are over competitive with fantastic current surplus should have debit cost and national inflation higher than average. when the others that have to catch up with their lost competitiveness have to get they should have inflation lower than average. that should be given by the commission to all countries is not the same. it is not appropriate to have the same recommendation for all. for the central bank what is is to anchor inflation expectations in line with the definition. it seems to me in the medium-term the job that has been done is a good one. brutal mentioned earlier , the other phrase is diffuse. diffusing the benefits of productivity.

to the dilemmaat of quantitative easing moving to normal or a restrictive central-bank policy. how do we diffuse quantitative easing and how do we diffuse the pain of that over time? what should mr. draghi, mr. powell, and mr. kuroda do to diffuse quantitative easing? jean-claude: it seems to me that a good way of looking at it is to consider that the cycle in the u.s. is in advance of the cycle in europe for a simple reason. we had sovereign risk crisis that the u.s. has not. we were hit by the financial crisis starting in the u.s., then hit by our own specific sovereign risk crisis. years.delayed by 2.5-3

when you look at the u.s. you see the sequence, the amount of tapering, the tapering, and the stabilization of the net purchases of securities, and then the start of the diminishing of the overall portfolio. it is where the u.s. fed stands and it seems to me it is the diffusion you were mentioning. the progressive diminishing, progression going back to normal. economyg on the real and inflation. it would be, in my opinion, the same in europe. phase ofready in the the implementation of tapering. we went from 60 to 30. we will see what happens. to save at the

governing council will decide, but in the u.s. you have an idea of what could happen in europe. central banks,ll making the working assumption that the real economy in advanced economy countries theld be back to normal, monetary policy should also be progressively back to normal that waseriod extraordinarily dramatic on both sides of the atlantic. as we know in japan. thecine: what do you see as biggest risk to the european economy at the moment? euro levels or the italian , dependinghat could on the government that forms, veer europe off-track? wen-claude: it seems that knew in advance we would not an italyse for

referendum with the euro participation at stake or the eu participation at stake. the five-star movement said they wouldn't like that at all. that is something that eliminated, in my opinion, the dramatic system. we have a lot of difficulty for the government to be set up. we will see what happens. that should not hamper europe as a whole. i hope very much that the new government in italy will embark on the central reforms that are necessary for growth to pick up and productivity progress to pick up. thereal economy in europe, start of the year was quite good. ae pmi that we had signaling first quarter that could be quite exceptional.

some are even saying that it could be up 2.7% on the quarter-quarter basis -- quarter to quarter basis. i do not want to suggest it is thesure, but clearly dynamism is impressive. tom: john claude trichet with paris thiscqua in morning. we will look east to frankfurt timeslot.5 then mario draghi's press conference will have complete coverage of the policy decision this morning in an important press conference. this is bloomberg. ♪

taylor: this is "bloomberg surveillance." 'st's get to bloomberg business flash. smokers is considering it -- smuckers is considering a sale of those very and it's baking business. as $700 fetch as much million. it looks like steve wynn will get some severance. wynn boosted revenue by 50% which means an extra $12 million for wynn. it was said that he would not after allegations that he pressured employees for sex. francine: as tensions over the whiteil over in

house the european union is setting up options for retaliation. ongeting 2.8 billion euros u.s. goods including motorcycles and u.s. whiskey. here's the french deputy finance minister joining me. thank you, deputy minister, for joining us. what can europe actually do? no winners in the trade war. long-term, everyone will lose. europe due to can defend themselves? delphine: we have to discuss.

the european commission has proposed concrete steps. we are ready to discuss them. when you look at the european central bank and italian elections where do you see the main concern for france? delphine: i think the main concern for france at the moment is the trade war issue. it withoing to address our partners in europe. role can france play in all of this? do the italian elections and the upheaval in germany, taking so long to find a government, make france one of the strongest countries in the european union? delphine: i think that france is indy to create a large role what we need to do in europe to make europe stronger, to provide answers to citizens in europe. in italy, we need to be more

tackle thehen we migration crisis, for example. we need in the eurozone to build something stronger. france has ideas and a very complete proposal and is ready to play his role. effect isthe macron being felt. we heard he brought new energy to europe. when you look at the reforms, including the reform on labor, when you expect to see it tangibly in the figures? delphine: you are right. the president and the whole ,overnment is very energized has a very strong program, transformation program. we started with the labor market and taxation system. we will work on business and training. deeplyeally addressing

the weaknesses of the french economy. it could take some time to ,eliver very durable results but we are ready to continue to work and address everything that is important. francine: the french finance minister was in london a few days ago saying that when it and negotiating, they will not be a special play for financial services. does that mean you can attract jobs from london to paris? huge assets,is has offerrdinary assets, to to financial businesses. i think in terms of taxation we have improved our situation. expatriate the package, we have a good package. we have business schools. can have a good

position in terms of finances in the future. francine: how much time does the financial industry spend on brexit and how much on domestic policies? delphine: we focus on both, and also on european issues. i think it is important. have a fullwe program of reforms for france. have brexit and europe as high subjects we also need to work on. francine: you are a business woman into the finance ministry and politics. this is international women's day. you think there will be more of a movement to get women into the go beyond the

glass ceiling to become chief executives? wholene: this morning the french government was working on women's rights issues. in every field we have a full agenda. mr. macron has in his program, even before the me too movement, we have been preparing for inths to have strong action terms of companies and what is happening in companies. gapant to tackle the pay between men and women with very concrete solutions like allsparency and having companies tackle this. to have women create companies. francine: does that have to come from the private sector, from has to or a government

impose it on private companies? delphine: the government will push for things to be addressed, because otherwise it is not moving fast enough. francine: is it tough being a businesswoman in france? delphine: i do not think that it is tough, but it is something that needs to be encouraged. is more restricted with women than men. live up tohelp women their ambitions. is itne: how difficult for a woman to enter politics? delphine: i try to be very

direct. probably more informal than a and to hear from torybody, to be very open what is coming from the private sector as well as my own in the ministry. it is a balance. it is a good spirit to work in this direction. for speakingnk you to bloomberg tv. that was the french deputy finance minister. more throughout the day here in paris. tom: really looking forward to the comments from james dimon. as well as abby joseph cohen will join us. this is mr. pinto in his conversation with francine that made global wall street headlines in the last 90 minutes. i never made this chart.

i will put this out across all .edia for bloomberg radio good morning, radio london. the market in the left corner, i have shown that many times, the pullback in 1980 seven is the red circle. the pullback in 1929 is the yellow circle. mr. pinto, from where we are 25,000, it isn down 40%. i put it in the lonely blue circle. it is squishy. i do not want to pin down pinto too much, but it is scope in scale to where we are right now. two years as well. let me do a data check to get you into the next hour. equities, bonds, currencies, commodities. our jennifer jacobs in the white house really shows the ambiguity

. we don't know when the president will announce tariffs. today.t be the battle over canada, mexico, and our nato allies, it might be further. coming up, abby joseph cohen joins us. joins us with real caution on equity valuations. back to paris. francine with important conversations at the jp morgan conference. it is spring, it is gorgeous in new york this morning. run paris, new york, worldwide, this is bloomberg. ♪

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tom: canada, mexico, and our trading allies and adversaries await trump tariffs. are ang that tariffs attack on american capitalism. a conversation with james dimon on to 70 park avenue and the view from fortress dimon. this is "bloomberg surveillance." live from our world headquarters in new york. in paris, francine lacqua at mr. dimon's conference. what has been a surprise to you? that did not theme surprise me was tariffs, trade, europe, what china will do next, possible retaliation, and possible global growth. what surprised me was the interview with dan pinto where

he was straightforward and charismatic telling me into-three years the market could correct by 40%. i have not -- telling me in numeral 2-3 years, the market could correct by 40%. i have not heard that yet. tom: right now a 100% chance of a smart first word news. the trump administration has taken they carried and stick and sticko -- carrot approach to mexico and canada when it comes to tariffs. they would lose an exemption if they fail to reach an updated nafta agreement with the u.s. is dismissing the idea that it poses a threat to the u.s. economy. the chinese foreign minister criticized the decision to designate the company as a strategic competitor.

the u.s. will consider clamping down on chinese investments and goods totariffs on punish china for alleged unfair property theft. there might be a financial reason behind kim jong-un's in these esm for talks on the north korean nuclear program. sanctions that hurt the north's economy by limiting exports has drained is foreign-currency reserves and to limit north korea's ability to pay for essential imports. daniel pinto sees stocks performing well this year, but in a couple of years watch out. , thermally, in this cycle market has some way to go for the next year or two. eventually, there could be a correction between 20% to 40% depending on the valuation. you have to watch. the most important thing for us is to prepare.

month, trading revenue and jpmorgan is on pace to increase to mid to high single digits. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. tom: we have a transaction widely anticipated as one of many transactions that we will see in the pharmaceutical battle. i do not mean the big drug companies, they are dinosaurs from another time and place. take out express scripts of st. louis as express goes 27,000 employees as well. valuation, an all in valuation of debt as well. i would suggest of great interest here is how this will

be taken in seattle, washington with amazon as they look at the battle over how we purchase our drugs. a quick data check with the vix at 17.45. not much going on here. all in all, a quiet day for data. it wasn't yesterday in washington. speaking with the secretary of treasury. here is mr. mnuchin. we arery mnuchin: concerned about the deficit and president xi acknowledged that saying it is in our interest to have a more balanced trade relationship. >> a trade war is never the right solution. in a globalized world this is particularly unhelpful as it will harm the initiator as well as the target country. secretary mnuchin: we have on

have unfair trade deals in the president is determined we renegotiate these so they are good for american business. justified andmake a necessary response in the event of a trade war. book, both parties, the dialogue on tariffs. ivin cirilli in washington, did not hear a single original thing from the secretary of treasury. hillsit brady on the e, are you guys nuts? kevin: the administration is thinking kevin who at this point. despite the intense opposition on capitol hill, the secretary telling me the announcement could come as soon as today or tomorrow. i looked at president trump's public schedule and it is nowhere on there.

tom: jennifer jacobs reporting on this in the 4:00 a.m. hour as well. help our viewers, what is the schedule, and why the delay? kevin: according to the schedule, there is nothing on it that would have him announce this. as for the delay, there is intense criticism on capitol hill. every person that i spoke with yesterday all saying that the white house is hearing the criticism. when i asked the question point-blank to secretary mnuchin if the republicans on capitol hill who criticized this will be satisfied when it is released, he said it will be an "in between policy." francine: good morning from paris. to go back, you think they are delaying it because the trump administration is suddenly listening to criticism? kevin: no.

administration and cabinet level officials are saying on the record that this announcement could come today or tomorrow. the reason it is not on the schedule is because they're putting it together. that is what has led to optimism on capitol hill, that they would be listening to some carve out or exempt certain businesses from having to follow the tariffs. tom: carving out the reading and literature going on, with whatever your politics, a tour de force in the washington post on how silly some of this is. wills' essay.r. aluminumovides more imports then the next 11 countries combined. effectively, the administration is cutting the defense budget with the tax dynamics. the constant in the jumbo of

quarter-baked and his court and prejudices that pass for the president's ideas has been hostility for free trade. how alone is the president this morning? that alone with his economic team. secretary ross and secretary mnuchin and standing by the proposal on the trade issue. they feel that when he goes to pennsylvania on saturday and southwestern pennsylvania to campaign ahead of the special election outside of pittsburgh, they feel the message will resonate with those voters. tom: it will be an eventful day on tariffs and taxes in washington. julia coronado, we will come to her in a moment. right now, and well-timed as joins, abby joseph cohen us. we had headlines out of jp

morgan for mr. pinto this morning when he suggests not a correction or a bear market, but a evaluation of equities down 30% and 40% over the next 2-4 years. can you support the idea of a revaluation of equities 3-4 years out? is quite a question to open with. i have not had a chance to look at the analysis that would underlie it. there are 2 streams of thought in the market. the first is the straight arithmetic. what is current gdp this year, next year? interest rates? everyone is running the data in their valuation models. that is how goldman sachs comes up with the idea that fair value

is 28.50 for the s&p 500. ,ith the arithmetic is ignoring and we see this in the vix and is uncertainty. what we have a hard time coming to terms with is what will the impact be beyond 2018 and 2019 with regard to the deficit? what with that mean in terms of interest rates and inflation? we have what i would describe as theld pitch from administration on foreign trade policy. one thing i point out is that while we are thinking about what will the government announce here in regard to tariffs, today is the day that the transpacific heart worship is being signed. this is still the group -- transpacific partnership is being signed. this is the group that has

borders on the pacific. this was the anti-china trade group. states, the first trade action taken by the administration was to withdraw the united states from it. we seelook at the data, 50% of chinese exports go to these nations. come fromnese imports these other nations. a key theme the high-end the tpp was the united states would help form a bulwark against chinese over influence against the other trading nations. by withdrawing, that was perhaps one of the most important i would say trade mistakes made by this administration. , thei will not mince words plaque of the door would only need an e replacement. you don't have the stars of a

general on your epaulet, would you be a designated internationalist in the trump administration. n's office be ehn'sd with madame co presents? administrations -- in past administrations, there has been a good friday of ideas and themes. we are seeing only a few themes being focused on by the administration to the detriment of all. presidentefer if the and his team would listen more carefully to some of the current concerns being expressed on capitol hill this week. abby joseph cohen,

good morning from paris. i am tom's sidekick. do you think the markets are too complacent about the risks given what you just said about trade and tariffs? abby: investors are focusing on the arithmetic. the arithmetic now of the underlying u.s. economy is good. old expression, the us economy is like a supertanker, large with good momentum. it might not be moving as rapidly as we both like, but it is hard to knock off balance and off course. when investors are saying at is the economy is still on course as we look at gdpbean counting approach looks ok and industrial production looks ok. there has been a boost this year on corporate profits from the

tax cut. that is what investors are looking at. one thing that tom opened with is what are the bigger uncertainties out there? i think investors should be looking at them. when i speak with investors, what they are saying is they have time to worry about that and time to reflect it in their portfolios. we are concerned that no one rings that bell. knowing the timing of the concerns and everyone is awaiting the policy out of washington and elsewhere. they look for example at europe. many assumed that political aability in europe would be foregone conclusion. there are concerns about that in terms of the italian election. with you based in europe, i'm

sure you're hearing the ongoing concerns about how will brexit be structured and how robust will mrs. merkel's new government coalition be? coronado, macro policy perspectives. years with bmt para bond and one of our great international's programs, along with the pacific franchises on international economics. if you are any study at all that -- ist's the president there any study out there at all that supports the president's approach? julia: to be fair, there have been unfair trading practices in china, it is the chaotic approach of going at it on our own without forming coalitions with our allies. there is a lot of risk.

i think that the issue he has identified is fair and real. he has tapped into voter angst over trade. in terms of achieving the objective of leveling the playing field on trade it is a dangerous approach he is taking. work, though?d it it is dangerous, but could it make trading allies think about the policy? julia: it can work. playing hardball and using the and stick approach could achieve certain objectives in terms of leveling the playing field, but could have unintended consequences. stimulus a lot of designed to encourage capital investment. with the uncertainty about the medium-term outlook and how the chips will fall, there is a

danger that these policies will offset that stimulus. crowd it out or leave corporations to have the boost rather than putting it into the economy, which is what the administration intended. it is potentially true that we could achieve better trading agreements bilaterally, but what is the macro economic impact writ large? there could be unintended consequences on this not only go it alone but chaotic approach. moving forward methodically. there is a lot of and certainty with where we are going. tom: julia coronado with us this morning. and abbyg up later joseph cohen with goldman sachs. jamie dimon will join francine

lacqua in paris. breaking news express scripts up 15%, 16%. this is a large transaction and ties into the distribution of our pharmaceuticals. the amazon effect. cigna to buy express scripts. 67 billion dollars, including $57 billion of debt. abby josephore with cohen and julia coronado. this is bloomberg. ♪

taylor: this is "bloomberg surveillance." let's get to the bloomberg business flash. breaking in the last few minutes, a blockbuster deal in pharmacy. cigna will buy express scripts. the acquisition includes $15 billion in debt. it benefits managers like express scripts who negotiate prices with drug makers for insurers and employees. thank you, so much. happy international women's day from the bloomberg team. this is something we need to focus on today. we featured 2 women who are in economics. abby joseph cohen gain her reputation as one of the most acura's strategists.

also, julia coronado who founded her own firm. abby joseph cohen, let me touch on what we were saying before about a possible correction in the market. given what we have heard politically from the united states over the last couple of quarters, do you think that europe is powering ahead and does that mean the markets will follow? question.ry important let me add that like julia i began my career at the federal reserve board in washington, a great training place for economists overall. with regard to europe, it is not only europe. 2018 is the first year and many in which there is no major growing.hat is not even brazil is out of its recession. we are seeing good economic momentum around the planet.

it might not be exactly what we would like in terms of employment improvement and so on , but the gains in europe and japan are very helpful. it is one reason why our expectation is that there will be a reduction in the amount of monetary policy stimulus that will be provided to the global economy. we are seeing that in the united states. it raises the question as to the timing of the most recent fiscal policy stimulus. that is not only the tax cut implemented, but the budget deal which raised spending in the united states. normally you expect deficit increasing measures to be taken when an economy is weak, not when it is strong. francine: do you think we need to talk about the next financial crisis, or the next crisis, and

where would it come from? abby: we should always look at where the next crisis could be coming from so we have benchmarks and milestones. we are not yet seeing the sort of excesses we would normally look at. we would look at the economy. thereample, is out-of-control inflation? certainly not. begun to rise? that is good in terms of rising wages. excesses in the prices of assets? another thing to look at. so much. not but they are pricing in is a good economic and corporate performance outlook for 2018 into 2019. where we see mispricing is fixed income. we have the expectation that the fed will be raising rates probably 4 times

in 2018. the yield curve has already begun to steepen and shift upwards. the rises innk rates will be sufficiently large economic growth. the fed will be taking away stimulus. the concern is that as we look at the rest of the world, there is so many developed economies where interest rates are negative. this is not long-term sustainable. abby joseph cohen with goldman sachs joining us. julia coronado later on academics, women, and economics. this is bloomberg. ♪ retail.

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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. top good morning. -- tom: good morning. "bloomberg surveillance" surveillance.

taylor: the trump administration says there is a way for american allies to avoid tariffs. canada and mexico will be exempted for now but they will be losing that exemption if they cannot agree on a rewritten nafta treaty. navarro says other allies can seek a similar exception. wall street -- to ease financial regulation. last-minute changes said that banks will not benefit from legislation. plus citigroup and other big names will not win a reprieve from a post crisis capital requirement. jerry brown says jeff sessions is trying to get back on his boss positive side. he is in california that she has sued california. president trump has repeatedly questioned sessions competence.

president xi jinping says the coming this parties changes reflects the will of the people. barrierthe only formal past 2023. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. francine: thank you so much. donald trump's plan to impose the tariffs has been moving the markets lately. the president could sign the order as early as this afternoon. there has been a little bit of doubt that may be has toned. -- that may be postponed. >> if it continues and it gets worse, it will hurt. it will hurt investment.

hugeuld offset some outcomes of competitive tax reforms. google what does gary cohn's resignation mean? >> i think he is a very strong component on growth. i think he was good to have in the white house. he knows an economy runs and he knows what needs to be done to make it healthy for all americans. i called him yesterday and wished him the best. we will see who they put in a job next. >> what does jerry do next just gary do next? -- what does gary do next? >> who would you put in charge? >> i don't know. i haven't thought on that very much. i hope it is someone that is knowledgeable, strategy is strong.

hopefully he will understand markets, global or allies around the world. maintain good relationships with our allies. francine: [indiscernible] >> united states has been excellent rating from 2% to 2.5%. -- has been a celebrating from 2% to 2.5%. somehow you can say i want in a competitive tax system. i think the regulatory reform, the public should think of it as bureaucracy reform. it is so crippling. it could take 12 years to get a permit to build a bridge. it is just graceful. we got get wiser to benefit all people. the emphasis of stuff will hopefully be good. the economy is in great shape. millennials are doing fine.

the whole world -- it is good for america and everybody else. the fed is very smart. they do not control the economy. sometimes they are just writing the bronco. they have to react to it. it is easy for them to react to it. you can always assume. they cannot predict the future. people make mistakes that they get all this leverage. they cannot do that. they tried. we will see. francine: talking about your plan. >> we are expanding. organic growth is heart. -- growth is hard. signing releases hard. a lot of companies don't want to do it. in it we areot

doing it because of tax reform and regulatory reform. it did hold back america because now companies are expanding. $4 billion more in small business planning. 5 million jobs directly. and we area town going to have philanthropy and other mortgages, small business, private banking. it helps the economy grow. francine: it was hard to hear with the chatter their paris. worried about tariffs and possible trade wars but the fundamentals are pretty strong. that is why you're not seeing that much of reaction on markets. remain a little more resilient. tom: let me bring up a chart. it says it all. a speaks to how you can build 75 story skyscraper on park

avenue. these of the four major american grosslyth jpmorgan outdistancing citibank and even wells fargo falling behind. really showing that jpmorgan distinction. francine: tom, coming up later we speak with the saudi arabia energy minister. we will talk him about the tax with russia and what that means for production cuts. this is bloomberg. ♪

tom: good morning. tom keene in new york. francine lacqua in paris.

julia coronado, we spoke to her about economics. another $67 billion merger. oecd and mann of the now it is citigroup. she has really lead the charge on saying when do we let these combinations go? when do we let demand. desolate them and. -- let them end. when does government step in? >> that is a tricky question. we have been living in a world of increasing concentration. amazon is the primary example. when they start worrying about bad spillover effects for the consumer and pricing -- too much pricing power. the irony in this world is with technology, firms like amazon haven't been raising prices, they have been putting downward pressure on prices.

tom: is in the call competition? julia: amazon is getting bigger and bigger and yet it is not reducing inflation. tom: this is fascinating because the forms of business, i don't think this is what you learn in the industry. julia: it is a mature industry. one where you could see technology be brought in to produce greater efficiency. in terms of information management, distribution, so i think the traditional economic model of monopoly and pricing power is a bit turned on its head. tom: well said and i agree with this. growth is an interesting extra of technological process. jason learned about all this of course with bloomberg intelligence. he is the joy of following the pharmaceutical and distribution business. wonderful to have you here on short notice. toply expected with a 16%

and expressed grip. jason, is this all about amazon? is this the jeff bezos affect? ison cohen i think -- justin: think investors felt like signet it have to do a deal. their revenue growing in the low single digits. they have a high single to low teens earnings target. they were looking to do a large acquisition after the anthem bill fell through -- anthem deal fell through. we felt that with united health buying optimum in this business and cbs buying edna, do the --ort -- by aetna, do the this is not going to be the last deal. are we all going to one drug distribution guy: where is the -- distribution? where is the police officer of all these people?

it?h is how profitable is this business? jason: it is profitable but these contracts are kept out of the other domain. i think they are going to be kept -- they are going to give desk it acquired because of all that political concern. to your point, amazon and this partnership is look to bring in competition. our convention is it is going to take a few years and they and warren buffett has meant that. we don't necessarily feel this will today be enough by itself to fully offset that competition. even though that will be within a few years, it is a big step. tom: the idea of in a few years. give us some of the other names scripts likeress

aggregation before we get to where the government wakes up or where mr. bezos ask -- acts. care is oned health of the other insurers. they did this deal. they are now starting to buy into the provider sort of hospital and outpatient space. if you start to see cvs and that not talk about doing this sort of standalone outpatient centers. you start to see the insurers go more into that dynamic because we are seeing high deductible health plans, and maybe we'll see more concern among relators as we are starting to blur those lines -- among regulators because we are starting to blur those lines. we will start to see more alarm bells going off. today, it is not too much of a concern. there is a not a lot of overlap. tom: do we know how profitable these countries -- these

companies are. i know they are audited but come on, the articles tell me, we don't know the markups within the income statement. is that true? jason: you can see some of the markups. it is not nearly as drastic, i don't think, as is mentioned in the press. to that point, i think amazon coming in is going to take out some of these inefficiencies within health care. i think cigna buying express scripts will be able to marry their conservatism and their relationship with doctors to generate some of those energies. this deal makes a lot of sense. there is some room to take out some of those margins. amazon is going to do that within the next two years. tom: we are going to see more in the next few years. jason is killing it for bloomberg intelligence in this crazy industry.

there is no other way to put it. let me tell you how to get briefed on the morning. you've got a conference call with julia coronado and all that is to come down is you need tv to get smarter because your hands of a to be like this. you are going to be nervous when you're talking to julia coronado. you bring it up, you drag over the chart and you can take that chart to your reading with julia coronado. tv , don't leave home without it. ♪

taylor: this is bloomberg surveillance. let's get to bloomberg business flash. smokers considering the sale of elsberry and its other baking brands according to people familiar. smokers weighing options for the unit. could catch as much as $700 million. looks like casino mobile will get some sort of separate after all just severance after all.

that means the next are $12 million over the course of a year. thatompany said last month he would not get a severance pressuredter he employees for sex. -- anytime since 2006. according to solutions, more than 207 single-family homes and condos were bought and sold within the space of 12 months. the average -- 50%. the nissan and renault alliances -- a buyout would be a step toward the two companies merging. a spokesman for the alliance called the report "your speculation." that is your bloomberg business flash. is the real deal, julia coronado is out of texas.

then went right to the fed and it better than good in washington, onto bnp paribas. she was flat out early and theued gdp coming out of financial crisis. we are honored your with us. there is also some angles here. what i see with my own international women, the women of the keen family, what i see students is we are honored to have cap and man and joseph:. -- to have catherine mann and joseph:. yet to sustain the academics. we can talk about out an industry but at the university level, how do we get more for women just day the grind. in texas, bring up the banner. coronado killed this course. sequences series and multi variable calculus. how do we get more women to

sustain the stem grind? julia: and a lot of other fields have been successful getting women into the pipeline. economics and finance have struggled and followed behind. that is an area of focus right now in the economic profession. how do we get the undergraduate majors we need? tom: that is where it starts. julia: you need to build the pipeline. justs like algae and other others like biology and other sciences have done much better. we are still lagging behind. tom: i see it occurring and i see the improvement, but to me, it is a timeline evolution where society is saying, we don't want to wait for the evolution. we want it now. julia: there is a chicken and egg problem. in order to bring people into the pipeline, students have to

be up to see the prospects for advancement, for success, for compensation. inare still lagging behind getting women into senior roles and hang them equally. -- and paying them equally. tom: here's the real world. i thought of this chart figure ready. . am not going to go into it in the xyz space, this is a volatility expectation of dollar yen. all you've got to know is the single best chart is there is a call for strong yen out one year. a lot of people agree with that. julia coronado, you glanced at the chart and you nailed it. he said the surface was a global surface. that takes a fundamental skill that everybody desires. his ago, killing it at sanford bernstein. how do we get to more julia

coronado's. julia: what you are pointing out is we are capable of these types of quantitative skills. answer.have the magic i know it is an area that would change every to focus on. a lot of academic departments are turning their focus to this. i think we need to think about ?s it a cultural issue are woman welcome in finance? are they given the advancement opportunities they deserve? any papersre there on risk-taking? i know they're been studies on women in economics in japan? can you point to similar studies or do we need to do more studies? or is that just useless? risk-taking,ou see there are studies that look at differential risk-taking approaches between women and men

. their studies that have shown that when you have a more diverse management, those companies do tend to perform better. it is not just about women's approach but having a diverse just a diversity of perspective when you're attacking a problem is going to result in better outcome. that is part of the issue, that it has been in balanced. that is white representation does matter. -- why representation does matter. francine: is there a country that does this better than others because of finance? julia: i don't know the date on that. people often point to the scandinavian countries, the countries where women professionally are on par with men across sectors. part of that is women have more support for child care and being able to maintain a family and a professional career. areasnly those are one

where the u.s. and other european countries fall behind. area ofthat is one key policy support that can change. tom: april of 2007. what was it like for julia coronado the day that susan a c one the john bates clark medal. i am on the phone with susan etsy and she said i have never done this. she was so nervous. what was it like when susan eight the of harvard won the award? julia: she is an inspiration. not only did she win the award but she has continued to be at the forefront of the most field ine aspect economics. big data, technology, how it is transforming businesses and

industrial organization. susan etsy still pioneering in pushing forward. she is an inspiration. tom: francine, just brilliant in paris, the interview was just extraordinary and mr. dimon. we've got much more coming up at all of our bloomberg cap forms test platforms. -- platforms. megan greene coming up. stay with us. this is bloomberg. ♪

david: draghi takes center stage

. the issues its monetary policy statement for the five minutes from right now with new forecast for growth and president draghi expected to stay the course. the devil is in the details as president trump is to details on the tariffs initiative, conflicted. ensuring your health. cigna is buying express scripts as health care integration picks up speed. welcome to bloomberg daybreak. i am david westin. welcome lisa. alix steel is out today. lisa: we hope you are all hanging in there on the east coast. let's get you caught up with the market action ahead of the u.s. open. you can see a little bit of a mixed teacher, the dax down about a quarter of a percent. as to be futures picking up into the green. the euro weakening against the dollar head of the ecb announcement in about 45 minutes. two-year yields up just a touch. david.