president tweeted a warning to russia to expect a barrage of missiles. the president has not settled on a plan to retaliate against bashar al-assad. secretary mattis said evidence of what happened in the gas attack in syria is still being studied. richard blumenthal weighed in on president trump's response to that syria gas attack. women fall spoke to bloomberg telogen -- television. >> it has to have some military assad'st to disable ability to use these chemical weapons. the commitments he has made are unreliable. mark: 40 people were killed in the attack. has promised a military attack but has given few details. the president today signed a sexd at curbing

trafficking. >> i want to thank the survivors that join us today. i'm signing this in your honor. we are all together, politicians republican and democrat representing this to you in your honor. you are very brave. added we aresident going to do everything in our power to make sure traffickers are brought to swift and firm justice. the ruling african national congress with which mandela had a rocky relationship over the years has held a memorial event across south africa including ceremony.

global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. this is bloomberg. julia: live, i'm julia chesley. scarlet: i'm scarlet food. joe: i'm joe weisenthal. julia: geopolitics front and center. facebook shares bucked the trend. zuckerberg's congressional grilling ends. what's what'd you miss? scarlet: a stern warning to russia to get ready for a missile strike in syria. a second round of grilling for mark zuckerberg. he acknowledges they collect data on nonusers.

and inflation concerns. julia: president trump met with james mattis today as he continues weighing potential options for action in syria. the president fired off a warning shot telling russia to get ready for a missile strike, but a strike is not expected today. that is according to two people familiar with the matter. marty, great to have you. the tension level has come down from jimsince we heard mattis. the suggestion that we are still assessing the information, who was the perpetrator, and despite the president's tweet, military action is not absolutely imminent. >> the tweet this morning was alarming. panicrkets didn't go into

mode. even though such a strike would create a dangerous situation because of russia. julia: it is theoe: it is pretty crazy president can tweet here come the missiles and the market is like -- >> he threatened to impose 100 billion dollars worth of tariffs on a hundred billion dollars worth of goods, then steps back from the brink. he could do that. my on personal theory is that vladimir putin knows that he has a line into donald trump. you may try to work something out. short of military action by trump. scarlet: it is surprising, he has been critical of previous u.s. leaders who telegraphed what they would do.

that was something he was firm on. if he doesn't do it, he shows how unpredictable he is. scarlet: that is the strategy? >> who knows if there is a strategy. taked trump likes to threats with threats of his own. russia has said we will take aim at the side of such an attack. joe: he blasted leaders for golfing and signing budgets that blew up the deficit. what if you are looking for moral consistency you are not going to find it. julia: the russian angle here, there are many players. we are talking airstrikes on the cerium regime -- syrian regime. the iranians, they have involvement. and turkish forces. it is a bigger situation than just a tweet to get ready for missiles to strike syria.

>> they are our allies as well. pull together a coalition of partners. no indication that has happened. he may be waiting for a commitment which may not happen until we get confirmation it was syrians who gas to these people. julia: a year ago we saw the first strike. that was for many people suggesting, there was a line crossed for the syrian regime and the president responded. how different is this in light of the deterioration we have seen with the russian relationship in particular and the tensions that provides? attempting to punish the syrians, the question is how you go about it. many people have said in all the realnetworks today, the

way to do this is talk about it afterwards. isrlet: my question is why the military option always punitive airstrikes? president obama looked into that. the trump administration already did it. behavior.changed >> i still think there is a value to leading the syrian government no there is a price to be paid. how much we seeing the ball and influence? -- he responsible trump has been considered to be a hardliner. the assumption is he would advise trump to take a hard line on this. let's see. is very strong on iraq.

he thinks they are disruptive in the region. he would not care about any impact on iranian forces. julia: scarlet's point, we have thea quiet time as far as syrian regime is concerned. we solve the use of chemical weapons. the president responded. then this comes and there are ongoing issues. why this happened at this particular time. leverage that the syrian regime was trying to make use of in the region. >> they may be trying to solidify their russian support. there is indication high-level russian officials landed in syria which could be a doubling down of their support. >> walk us through the timeline. >> he met with mattis today. they don't expect anything

today, which we mean through the night. mattis is giving testimony before congress tomorrow. it might be anything we do would be immediately before or after that. i think everything is up in the air. donald trump hasn't decided on what to do. do youhow concerned think they are about russia's response? that we will shoot those missiles out of the sky, we will shoot down whenever provided those aircraft. decisiontely it is a national security people have to , or ais that a threat possibility of escalation? marty, thank you. coming up, a run for the exit, announcing the decision he will not seek reelection. how is his party reacting?

we will speak with joe barton of texas, next.

julia: time for the bloomberg business flash. looting of the biggest stories now.e news fidelity's wealth management clients will be charged based on how much they have invested with the firm. they say the switch will make it easier for more than 800,000 clients to understand what they are paying for. the businesses been under pressure with new fiduciary rules. millennialsup with of equities.l

they want to use artificial intelligence to match buyers and sellers of stocks, trading different currencies at the same time. they say the algorithm can do the equivalent of 80 workers. u.s. marijuana industry has a new spokesman. john boehner, the republican, has joined anchorage holdings, which cultivates and distributes marijuana in 11 states. nine years ago he said he was unilaterally opposed the legislation. now he says he has changed his mind. that is your bloomberg business flash. the attention on mark zuckerberg and syria, paul ryan said he will not seek reelection in november. we want to welcome joe barton from capitol hill. he is a republican from texas.

thank you for joining us this afternoon. i want to start with speaker ryan's announcement he will retire. are you sorry to see him go? >> i am happy for his family. they will get to see him more. that is a good thing. he has teenaged children. is a good public servant. he has been a good speaker. he is somebody i consider to be a personal friend. he will be missed. >> he had challenges with the diversity of the opinions within the gop. he's had real tensions the president. who do you think is the best person to replace him? >> paul ryan is still speaker. he is going to be speaker the rest of this year.

the next congress will choose a new speaker. hopefully it will be a republican speaker. i know very well. whoever replaces him who will have big shoes to fill. people are saying this is capitulation, that he simply doesn't want to be a minority leader. is that what this is? >> i do not believe so. i think there is every chance we will maintain our majority. we passed this tax cut bill that is improving paychecks. economic growth, not going to be over 3% this year. a lot of companies are reinvesting in america, which is what president trump promised

when he ran for president. we did pass a health care bill through the house. we are beginning to dismantle obamacare. we still have six or seven months love to go. there. be things this congress does and the voters this fall, i will not be on the ballot for the first time in 34 years. choose most voters will to send the republican congressman back to washington. , he is still the speaker, it is going to be a while before the candidates emerge. regardless of who it is a what does the next speaker, assuming it is a republican, have to do to unite your caucus? >> paul ryan has done a good job of reuniting the republican may member of the freedom caucus, the most conservative group. we have worked with the speaker

on the big issues. the next speaker will have to continue that process. .e have to reform we have to address entitlement reform. we have to bring them lower than the rate of growth. that is the number one challenge. >> i want to turn to facebook's mark zuckerberg. asked about facebook, and miners use facebook. i wonder if you get a sense there is any regulation coming in. which ones or what kinds? .> this is the first hearing

it is a fact finding hearing. i am the cofounder with ed markey of massachusetts. i am still the house cochairmen. i think you could put some soft regulations on protecting people's privacy. you can protect your privacy to some extent but you have to work hard and read fine print. it should not be that hard. clarify with the default position is. we could do that in a bipartisan basis. we could protect the privacy of children. that is what i asked specifically.

i don't think our younger generation really understands that they have a right to privacy. we need to reestablish that. julia: they are some of the most vocal. i am not sure if they want all that privacy. the session wrapping up, the suggestion was made other ceos of these tech for media companies should also face congress. which companies do you want to be answering similar questions? decisionill be the chairman walden has to make in conjunction with mr. pallone of new jersey. comeld like to see google before the committee. i would like to see the big telecommunication companies, .t&t, verizon, sprint

some of those, i would like to see. provide aanies that lot of options in terms of entertainment. it is not automatic in my mind that all of that data out there mindere to be dissected, d and sold. make theld determination what cookies are allowed. things like that. like it is going to be a busy spring and summer. thank you. >> thank you. >> we are going to speak with facebook. how did mark zuckerberg do? david kirkpatrick, author of the facebook effect up next. ♪

scarlet: mark zuckerberg made it through testimony to congress. julia: did he come out unscathed? we joined by david patrick, founder and ceo, great to have you with us. to be here. julia: a furious debate about the capacity to have your data seen if you are not logged into facebook, if you're not even a user, whether you shared something beyond that. where is data going? >> i wish i could explain. one of the healthiest things that has come out of these hearings is more average americans are being forced to realize this is all about their data and that is what they should have known all along.

there is a reason why these services are free. you should not go into it unaware. i thought it was interesting how many congresspeople were holding up user agreements and asking him whether he thought people read them. he was acting like people do read them. which is totally wrong. there longer than the u.s. constitution. joe: the general view is that he did fine. his stock is up. there were no major gaps that are going to be replayed. the question, are there going to be areas that this could down the road be a problem? >> he solved more problems than he created. he certainly addressed problems and made progress. he did do and alex and let job on balance. he was generally unflappable expressed with hostile

questions. his willingness to accept regulation, which he repeated , that isover again going to come back and either haunt him or affect him, i don't know. that is going to change the terms under which facebook operates. he was not willing to change the business model of the company. for facebook the easier it takes to opt out, the less profitable it is. to make money on users who have the lowest privacy settings, who make data available to everyone, or does it need the most number of users? >> it makes the most money off the wealthiest users. the ads are more expensive if

they go to affluent women who live in manhattan who work in television. they could target that. that is going to be an expensive ad. you could advertise to one individual. that is still possible. targeting is what it is all about. more data they have with the more they can target you. zuckerberg prisons that as a virtue. he says that allows ads to be relevant which is an inverse. julia: when i first got targeted by advertising, i got over my initial feeling of being caught out great i'm not sure how much uses -- users care. care, i'meally don't afraid. scarlet: as long as it is free.

david kirkpatrick, founder and ceo, thank you. the market closes next. this is bloomberg. ♪ welcome to the xfinity store.

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with xfinity mobile. plus ask how to keep your current phone. visit your local xfinity store today. ♪ julia: geopolitical tensions

rise, stocks in the red, and surges in the highest levels since 2014, and a potential missile strike on syria. if you are twinning in live on twitter we welcome you to our closing bell coverage every weekday from 4:00 to 5:00 eastern. scarlet: let's start with market minutes, closing in the red with the dow as the biggest the geithner and the nasdaq holding on better off only by a third of 1%. and the s&p 500 losing half of 1%. minutes that didn't change the game too much. joe: it mostly confirmed that people thought. president'shad the tweet this morning with regards to a potential strike with syria that got people in a bearish mood at the start of trading.

a lot was focused on capitol hill with mark zuckerberg testified before the house. in terms of the today move for facebook, you see facebook rose and gain five in the last two days, the biggest two-day advanced since october of 2017. it made a lot of ground here, and did not recover from the take tumble following all the cambridge analytica headlines. another big mover we are to begin ion -- it is a french name -- another big mover we are keeping our eye on, they control jones and aircraft, and president trump sink get -- saying get ready for a missile strike. increase after falling in january -- so good

news for those hotel operators. and a quick mention of a decline or, also dragging down peers as well. joe: now a look at the government bond market. not a whole lot of action in the and despite the selloff and minutes. -- thert and reflects short and reflects no move today in the 10 year yield hanging out in this range. the bigger theme is the relentless flattening that we are seeing in the yield curve, and this today we are looking at the 530 spread, which is the lowest level since 2007. over 10 years now, and there's are sink if people this was to invert, it could be a harbinger of recession and it is getting closer and closer

pia. julia: the take away from the minutes is a lean towards greater confidence in growth outlook as far as the minutes are concerned by it tied very little to the price action, which i think geopolitics lean. mentioning the oil very much,ng filtering to what we are seeing in the canadian currency. also tied to the route of the dollar ruble, triggered initially by the u.s. penalties that we have seen, applying sanctions as the south the announcements from the president this morning, for russia to get ready for american missiles in syria. reversing to that, you can see the ruble as at seven tens of 1% versus the u.s. dollar.

and the dollar turkey also weaker relative to the u.s. dollar. turkey very much involved in shenanigans in syria, and the weakest level we have seen. joe: and on commodities let's look at oil and gold, both up on the day. over $67 at it was barrel, it is breaking out here. gold futures on volatility, it was up earlier but getting a bit of anxiety. what five-year chart of you seetermediate -- that bullish trend getting closer to 70 and breaking over the highs we saw in 2015. between supply and demand -- when you get these periods of anxiety, we get the knee-jerk bit into oil anytime it involves

the middle east. bulls.moment for the oil scarlet: let's bring in bob , portfolio manager at blackrock. as joe was telling us earlier, there is the flattening in the yield curve. what does this signal to you? is it an indication will be inverted and recession is around the corner? bob: i don't think so. it is a great topic because we like the front and, and we like the flattening for a long time. we've reversed our opinion and started to change our opinions six or eight months ago. i don't think it is a harbinger of recession because it is flattening for reasons other than the fed pushing financial conditions considerably tighter. scarlet: some technical reasons. bob:'s technical reasons, and

there is a gravitational pull that tracks interest rates in the u.s. from overseas -- but the ecb, even though they are buying lower amount of bonds. it is sufficient the off set. japan -- there's lots of capital in those two regions that continues to look at treasuries as a result they attractive investment. julia: you often talk about this regime change your moving away particularly as far as monetary policy is concerned. and you see shares ramping up and treasuries as well. if you look at the moves we see in the front and -- we have seen shares spike higher and in flattening off, is flattening off what you're expecting from and is it still in opportunity to get at this level? is under aont and

fair amount of pressure for two reasons, one is the heavy people issuance from the treasury and an attempt to rebuild their cash balance. secondly was the repatriation bill that led to a fair amount of selling and corporate bond spread the competition of those two things pushed a number of different front and spreads wider. we think that is now largely peaking. you can see in the chart that a number of the various spreads and bills, libor, etc., to overnight swap rate have at worst plateaued, and two of them have started to recover. julia: at this stage, given the flatness of the curve that you describe -- you don't know the time risk. bob: we make despite the other day, the five-year now

20% of the sensation. thea: until the data shows fed has to pick up the pace of tightening and you are in a sticky position. bob: that creates challenges but there are 80 basis points of tightening in the forward curve so the fed would have to exceed that, which is entirely plausible over the next year and a half, but we don't think it will exit by a lot. and the kerry and roll down is better in the long and. end. -- a repricing in the short and with two-year yields dropping significantly, and since then volatility has continued, but the short and has held up and now we are looking at a fairly substantial disconnect, even on days we have a big selloff in risk assets, you don't see a lot of treasury by. is this a definitional aspect of

the new rigid you're talking about that some of this old relationships are going to work anymore? shocke think in a true scenario -- at the margin the scarcity value is declining. wheree gone from a period the fed was like a substantial portion if not all net issuance, and only recently allowed the balance sheet to unwind. the more important factor is the needs associated with the tax bill and the legislation passed in january and the subtle mental bill has to february. we are going to be running 5.5%.t to gdp at there's a lot of issuance involved back, so the scarcity and treasuries is declining. it is a main they want act as a hedge in the true stress scenario, but the sensitivity to declines in the stock prices is diminishing. julia: what central bank is most

important in terms of activity for the price action that we see in treasuries? you alluded to the ecb and what we see from them, and the interplay between the return you can get in europe and the low levels of yield given the bond buying relative to the united states continues to look more and more attractive, until it doesn't. and it is a great question, most central banks impact the short end of yield curves. or the short end of the juncker is most sensitive reaction from the central banks. efficiency of the currency hedging, you can operate and nondomestic long ends with resemble efficiency. i think the fed is the most important central bank among the developed markets. the bank of china -- really matters. the chinese economy and the

monetary policy impulse in china matters to the global growth trajectory. the boj and ecb matters, but they are in a different part of the region and cycle. we are talking about those two slowing the rate of which they are easing, they are unlikely to be moving policy and the direction of tighter domestic financial conditions anytime soon. julia: interesting that you talk about slowing the pace of easing rather than mixing up the portfolio balance in some way the press leverage. not worried about that? the slower pace is in japan and europe, the people's bank of china -- we think is actually easing a bit at the margin in an thempt to accommodate deceleration and growth and restructuring that is taking place in that economy. scarlet: it will be fascinating to see what happens if there is a trade war. blackrock,of

document much -- thank you very much. scarlet: sarah sanders is saying syria is responsible for the attacks, presumably the chemical attack in that country. she also said a number of options are on the table over the syria attacks and mentioned there is no final decision of a response to what is happening in syria. we know the president met with mattis and warning russia to get ready for a missile strike. we will have more on this as headlights cross. julia: coming up, zuckerberg in the hot seat and we talked the congressman jan schakowsky about facebook ceo mark zuckerberg's testimony. this is bloomberg. ♪

mark: i am mark crumpton with first world news. house speaker paul ryan discussed ongoing tensions between the white house and the department of justice. >> my thoughts haven't changed, they should be allowed to do their job, we have you rule of law in this country. i've no reason to believe that doesn't happen cannot have been talking to people in the white house about it. mark: the president is extremely critical of rosenstein's performance regarding the russia investigation and he has been threatened with impeachment by house intelligence committee devin nuñez. president trump will meet with congressional members tomorrow to gauge the impact of his terror basel's -- tariff proposals. pointing to the rhetoric some say was the beginning of a trade war.

president xi has promised his government will significantly lower tariffs on vehicle imports and allow more foreign companies access into china. president trump that the to impose new tariffs on wondered $50 billion worth of chinese goods in a trade dispute between the world's two largest economies. british prime minister theresa may says the u.k. is a step closer to committee lee terry action against syria, saying all indications are that syrian president assaults forces were behind the weekend chemical weapons attack. >> last night at the un security council, there was a resolution to enable investigations to take place. russia vetoed that resolution, i was appalled, because it narrows and they did last year chemical weapons attack, and it makes there is no wrong in doing investigations. says prime minister may

the government has been working with allies to understand what is happening and added that the continued use of chemical weapons cannot go unchallenged. as israel mark its holocaust remembrance day, regiment but in benjamin netanyahu warned iran at the test chemical iran at the test chemical weapons. he said to respond to an airstrike at the syrian military base on monday that the syrian government, russia, and iran in on israel. over a dozen people were killed in that strike. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. julia: facebook ceo mark zuckerberg wrapping up two days of grilling on capitol hill. let's get more from chief washington correspondent, kevin cirilli. kevin, take it away. >> we are here with

congresswoman jan schakowsky who challenged mark zuckerberg today when he testified. what do you make of his response to your question? first, i wanty: to point out the many times mark zuckerberg has had to apologize. that,ke away from me is we can't rely on self-regulation via facebook is not going to regulate itself, and we have to pass some laws. but i certainly want to know, why don't we have the same ishts and rules as europe about the have on may 25? cap we adopt the protocol? don't our citizens deserve the same? and that was emblematic of the kinds of answers he gave today. kevin: with regards to other regulations in addition to what

the europeans are implementing, terms of agreement has been another contentious point of facebook isn't suggesting to users to sign up how their data is collected. what is the timetable for legislation to get accomplished? what i heardky: today from republicans is they don't want that. it was kind of a circus, there cameras and wall young ceos sitting there. was a great performance. saw --e others, like we we bring them in, and equifax -- and nothing happens. kevin: in terms of regulations that might happen or might continue on -- there is no pocket timetable for anything regulatory to get on?

rep. schakowsky: i don't see it. i have a simple bill to protect and secure americans data. it is pretty modest, that there ought to be enforceable standards for them to set for privacy. even that was considered radical today i some of the republicans in the hearing. i don't even know what the purpose of that hearing was. they were swimming over swooning over zuckerberg. sayinghouse speaker ryan he is not seeking reelection, what you think the impact it could have? rep. schakowsky: part of his announcement of his farewell from congress was that he is going to do everything he can between now and when he has to go to cut social security, medicare, and medicaid. there is a part of me that says, make my day.

,here are a lot of trump voters and how it argue most trump voters who say -- i, like you, donald trump, i do not want my medicare or social security or medicaid cut. kevin: we will leave it to their. thank you for your time. progress woman, thank you for coming on bloomberg. julia: thank you very much, kevin cirilli. she was not down for mark zuckerberg's performance. suck onp, the indices volatility in the last two months. investors.om from new york, this is bloomberg. ♪

scarlet: time for our weekly segments chart or we begin the top technicians to look at and that charts and bloomberg functions. joining me today is coding, and the last time you are here late last year, yet interesting call, you are expecting a correction, and we didn't get at the time, but this year has been the year of volatility. what is next, you think will go below february slow to get a real correction? think as you can see from the chart, we have an explosion of volatility this year. the last time in early february when we tested the 200 day, we got an immediate rally on the 200 day moving average.

we got a double top at the end of february and middle of march, back down to the 200 day. we have taken some time here to consolidate at this range. but is worrisome to me is that we have not bounced off of the support level yet. momentum is clearly negative, and the longer we take some time here, it makes me concerned we could see a break of the 200 day and potentially another leg lower. abigail: can you see a drop lower if the entire area of consolidation were to create to fall below? cody: i think that is extreme right now, and if you get to the 2300 level, we're looking at the 20% correction. that is a level people might step back and. best year was about growth, but what about 2018, will we see a return to value? this growth is a leader in market, and the growth chart is the white line, and value has

underperformed recently. but i do think that could be changing. we see the ratio is starting to improve and the value ratio is a little bit more of a support range. i do think that over 2018, we will see a revitalization in value. i believe that hopefully presents good opportunities for value investors. abigail: is that a move to possibly can from a decline in the s&p 500? cody: completely agree, very much like 2000 when we saw early peek in your led by growth, it ended up doing a great time to invest in value stocks, and they led the way later in the year. the dollar,ally lots of dollar bears out there, and you happen to be one of them. cody: the dollar index is in a long downtrend for a while, we consolidated a little bit, and i

do think given the weakening momentum profile and the inability of the dollar index to get above resistance -- i think we could see another like lower -- leg lower and the u.s. dollar index. abigail: is a to believe that area could create a move to the upside, or are we going lower? cody: a lot of smart traders i talked to our bullish on the dollar, and i think there are smart people that see that rally could happen. i am going to stick to the trend and will continue lower. abigail: overall a cautious tone. thank you very much, cody. julia: president trump hasn't settled on a plan to retaliate against the syrian president over an alleged chemical weapons attack over the weekend. will have the latest. this is bloomberg. ♪

mark: i am mark first world news. ryan is notr paul seeking we election and the focus turns to other republicans will run for his seat. the leader of rights campaign can says he has no plans to make an endorsement if there is a republican i married in the race to replace him. he says speaker ryan is committed to keeping the seat that he held for 20 years in republican hands. connecticut senator richard blumenthal says the u.s. should crackdown on foreign money being pumped to the u.s. from russia. spoke today on bloomberg television. >> the sanctions have to be strictly enforced and tightened

so that assets in this country that are headed in real estate or bank accounts are exposed. the funding of money from russia by putin and his inner circle has to be stopped. senator blumenthal also weighed in president trump start to launch missiles into syria in the wake of the suspect chemical weapons attack. blumenthal added a u.s. military response must disable president assad's ability to use chemical weapons. french president emmanuel macron says his country will decide soon on a response to back that's attack in syria. >> we will continue the exchange of technical and strategic permission with partners, especially with british and american partners. in the coming days will announce a decision. in no case will the decisions we take will hit allies in the regime or anybody else, but what

target chemical weapons on by the regime, should the position be taken. mark: he was the first foreign leader copy president trump after the syria attacks. macron will arrive to the u.s. for a full visit this month. a plane carrying soldiers and families and some refugees crossed soon after takeoff today and northern algeria, killing at least 257 people. the plane carrying soldiers from a flight from a military base outside of algiers when it crashed in a farm field. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton. this is bloomberg. let's get a recap of today's market action with u.s. stocks finishing in the red, with the nasdaq down only three kinds of 1%. the dow industrials losing 218 points. we did have the fed minutes come

which i guess into it at a more hawkish fed if you had to come out with any direction. julia: optimism about the growth and which outlook, hitting inflation. targets if you are on the side of the potential for four rate hikes this year, a little ammunition of their. re. president trump is still weighing options with military action against syria and met with james mattis, warning russia on twitter to expect a missile barrage. is at church and -- ed, joined us now from houston, fantastic to have you with us. the president as enraged and engaged. what should the engagement look

like and should include military strikes in your view? edward: obviously the president wants to respond to the use of chemical weapons. he has done this a year ago with the tomahawk strikes that was really a one-time military action. i think what he needs to determine now is, what would assad fromdeterring continuing to use chemical agents against his own people and targets in syria. the strike would have to be more consequential than the one last be sustainedshould military actions over a certain period of time that will do great his capabilities to the point where he is really deterred from using chemical weapons. joe: you think that is a plausible strategy, specifically

that there could be a run of attacks that is finite but longer than a one day of attacks that meaningfully the assad's ability to continue his actions? edward: the safest and most risk-averse action would be a consequential one strike. once you go into sustained or more prolonged strikes -- not only missiles but perhaps aircraft -- then the once you gd or more prolonged risks are highly -- are much higher. therefore you have to think about the day after. this is one of the big challenges that the pentagon has in advising the president on what to do. problem -- if we can step back on this -- what happens after whatever military

action may be taken? is there a strategy? is that in american strategy that is a coherent one that will allow united states -- after taking military action -- to have a voice in what the future of syria can be? interests andur the syrian people, by that i mean we are in the eastern part of syria. . that special operations forces there. they have to thousand military personnel there. is an important part of syria were most of the oil wells are. we have political leverage by just being there. are we going to use the political leverage in determining the future of syria? and at least to have some cards in our hands vis-a-vis other key actors, russia, iran, hezbollah, and others. scarlet: the rest is up against a formidable group of countries

there -- is there a strategy that would get allies involved that would allow the u.s. to build a coalition? what might that strategy be? edward: i think you have the beginnings of a coalition with the french, u.k., certain arab partners i think would be with us in some sort of military action. again, it is the day after. what happens the day after? the strikes have to be carefully calibrated in terms of the confliction from russian forces. the objective here is not russia, the objective is syria and the sod and his regime and use of chemical weapons. that is the objective. when i use the phrase that the president's to an rage and engage, he is very transactional as a president. he likes to disrupt things before he engages in negotiations. is part of his dna.

if you are going to be disruptive, but you need a plan after disruption that makes sense. julia: is working with russia part of that plan? if we look at the eight airbilities -- capabilities, the russians have helped them reinforce those to better withstand further attacks from the united states or whoever. here, givenrospect the pressure vladimir putin is under as a result of the latest sanctions, that he picks up the phone president trump and goes, how can we focus on a deal here or arrangement? whatever the objective is for the future of syria, you've got iran and russia who want a solid to stay where he is. edward: you put your finger on something important, assad would not survive this long without iranian support.

the iranian support is on the ground, they have military fighters and others on the ground, and malicious on the ground in syria. they have the highest stake in in power,g assad because for them is instrumental. it is not a band bridge as the media talks about, it is an iranian bridge of influence from tehran to back at to damascus to lebanon and hezbollah. they are skillful in what they have done in establishing and expanding this political corridor -- this political. military court or of influence the russians are there because they have military bases in syria. they have a transactional relationship and arms relationship with them. that assad iss the best option other than the islamist extremist groups.

and then you have hezbollah. what we forget in this equation is they are building up quite a training capacity and fighting in syria and becoming more and more of a potential threat to israel on serious southern border. the point i am making is if we want a hand in the game -- we are there in the east of the euphrates. how can we maximize deposition and how can any military action the president decides to take now be translated into political leverage? scarlet: all good questions. baker institute for private policy, thank you. up, former chairman of morgan stanley discusses china opening its markets to foreign investment. joe: and a reminder to subscribe

to our weekly podcast on itunes. eachfind the best content friday and enjoy it over the weekend. some of our favorite interviews from the wake if you didn't catch it on the show. scarlet: kirkpatrick should be on it. joe: this is bloomberg. ♪

julia: chinese officials discuss opening markets to foreign investments at the china forum. stephen roach, former chairman of morgan stanley asia was neither surprised nor impressed. he joined david westin and alix steel on daybreak america's. something thats

we stated clearly several months ago by president xi and his senior adviser that china is going to move ahead aggressively and lifting the ownership requirements on financial services. the news last night may have added more clarity to that commitment, but it was not new news. >> i enjoyed the piece you wrote on bloomberg, and he said the west beats china more than china needs the u.s., in part because we buy stuff. i wanted to highlight that point. you let at the blueline of u.s. trade balance versus the white line, which is the u.s. personal savings rate and percentage of disposable income. can you walk us through? stephen: what a country doesn't say, i look at personal saving and government saving combined, all adjusted for depreciation. on that basis it was 1.3% of

national income in the fourth quarter of last year. that is ridiculously low for a leading country. we have to borrow savings and we run this big cap and multilateral trade deficits, with 102 countries last year. china is the biggest supply chain, and it impacts the magnitude of china shares as well. we don't like trade deficits. how about saving and budget deficits? compass that yet another way, and our trade deficit is going to get bigger. that is the point i'm trying to make, at a time when trade deficits are getting bigger, it is absolutely ludicrous. david: a critical point, is it possible to run a bigger budget deficit and reduce your trade deficit at the same time? clearly we are running a bigger budget deficit. stephen: if consumers decide they want to increase personal savings to compensate for the massive government budget

deficits, then that might be possible. the odds of that are close to zero. >> what is the solution? for the the solution is rest about its own saving and going the other way on fiscal policy. we also need to do a much better motive --ablishing a a mode of communication with the chinese. the id. we have once a year summits and we come with a grand party doesn't cut it and doesn't work. market to focus on access both in china and the chinese want the focus on access to our markets with a lateral treaty. it is long overdue, and we have to deal with the issue of intellectual property rights and technology transfer. the key allegation that the u.s. has made towards china, and one i would say is a case that has 182 pagely made by the report issued in late march.

david: is there a better case to be made? china is bullied for the future in technology by taking western intellectual property. stephen: that is the u.s. centric view that china has this horrible program called made in china 2025 that will establish ofir supremacy in a number leading edge industries. we do industrial policy to, so this japan and germany. china isn't the only one doing this, that is ridiculous. we do it through the defense department. presidentied by eisenhower in his farewell address in 1961, leading the edge in all of these government sponsored innovation r&d programs that have enormous to thes from nasa to gps internet and the like.

the idea that china alone has the right to focus its government on innovation and r&d , and we don't do that because we are a market-based economy? that is flat out wrong. julia: that was stephen roach, former chairman of morgan stanley asia, this morning on bloomberg. next will look at the other important aspects of the u.s. cpi inflation numbers. this is bloomberg. ♪

scarlet: u.s. cpi numbers get a bump in march, and cpi rose the most in a year.

i welcome mat poser to go through the key charts come up the fmo see minutes as we discussed, tilted a little hawkish if you pick a direction. minutes this afternoon, so we should work backwards and start with that. there was one data point i wanted to call to your attention from the minutes. every quarter that fomc puts out new projections for the economy. in addition to that, when the minutes for those meetings come out like we got today, they put that it risked assessment of the bounce of risk around those forecasts. this is very interesting because in march, zero people on the fomc so the risk to their inflation forecasts to the to the downside. you can see the first time that none of them have been worried about downside risk to inflation since the data started being published in 2011. in a sense you can see there are no more doves at the fed. scarlet: let's go to the cpi report, what does the data show?

matt: inflation is picking up, and the big thing is that the cell phone data that fell a lot last year got out of the calculation and boosted the headline, and the core inflation rates. i want to focus on the -- the probeates, cyclical. and you can see in february was falling off, and the blue line shows tce equivalent which was back further. that also felt a bunch in february. we are basically back to the levels we are in january. there hasn't been much exploration here, but the key here is this correlates with the unemployment rate. if you think tight labor markets are going to lift inflation comedies of the categories of inflation that is supposed to show up. you can see it moving in different directions lately, so that is something interesting to watch. joe: i can't believe we are back

to january levels. , mostlyry exciting flat. if there is one sort of indicator that is rate consistently a signal of inflation over all, it is read prices. -- whata chart of here are we seeing with these lines? matt: rent is the biggest component of pro-cyclical baskets, and this is a chart that shows the yellow is the and employment rate, and flip up second you can see the correlation. this is what we are talking about the phillips curve. they key thing to note is the white line shows the owners equivalent rent measure. that balanced in march and that prohy the process merkel -- cyclical went up in march. another azure has a big weight measurendex -- another

has a big weight, and is interesting to watch in the months ahead. on the oer measure that bounced in march, there was questions of how utilities might have affected that. aroundre noisy and swing from month-to-month, and some of the composition when you look at different cities, there were an usually large jumps in various cities that to some observers don't look incredibly durable. julia: what is the difference between the two measures? matt: there is a lot of difference in terms of how the details are cap related. the main difference is the owners price is aced on people who own houses, what they say they could rent the house for, or as primary rent is a pure play on if you are a renter what you are actually paying. joe: big picture, every month i look at the eco page on the bloomberg, and it is another 0.2 month over month, the numbers always liked the same to me and

i never see the big inflation pick up people tend to see. is anything different now? matt: i don't think so. even the fed narrative is still the same. we see transitory factors for the inflation down, and we are back where we should be at 2%, but there is no feeling from anyone on either side of the debate that inflation is on to go up to 2.5%. scarlet: and the mention of a trade war and if it might show up and prices, did you get anything from the minutes -- before we get that they are waiting to see how everything shakes out -- but if there is impact from a trade war, where would we see that first? is it in expectations for inflation? matt: i think on the inflation side, everybody is looking at the potential effects of a trade war as a one-time increase, so that want lead to sustainable inflation. you can see the trade war, the primary effect as stocks go

down, that causes people to bet on a slower pace of rate hikes as opposed to a faster one. the downside effects seems to predominate we talk about that particular issue. julia: and consumer confidence and business investment as well. matt, always great to talk to you. what you need to know for tomorrow's trading day. this is bloomberg. ♪

♪ >> a down day for u.s. stocks although facebook booked a trend. will be speaking with nobel prize-winning economist tomorrow at 3:40 p.m. >> u.s. job claims are out at 8:30 a.m. tomorrow. >> earnings season already. >> earnings season already. >> have a great evening. retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ mark: here is a check of first word news. house speaker paul ryan will not seek reelection this fall. he made the announcement today and said he is leaving with no regrets. >> i am proud of what this

congress has achieved and i believe its future is bright. we have ay is strong, given americans greater confidence in the lives, and i have every confidence i will be handing this gavel onto the next republican speaker of the house next year. mark: president trump is still considering possible u.s. military options against syria. he met with defense secretary james mattis on the matter today. that meeting comes after the president tweeted a warning to russia to expect a barrage of missiles. the president is scheduled to meet with state governors and congressional members tomorrow to gauge the impact of his tariff proposals. the meeting comes after the china'st praised president xi jinping for toning down the rhetoric on what some say was the beginning of a trade war. as israel marked its holocaust remembrance day, prime minister benjamin netanyahu warned iran not to test israel. israel is on high alert after iran,