>> good morning, this is "bloomberg daybreak: europe". i'm tom mackenzie in london and

these are the stories that set your agenda. >> i wouldn't see us considering rate cuts until the committee is confident inflation is moving down to 2% in a sustained way. >> jerome powell says rates will climb higher and stay there longer than anticipated after the fomc hikes have a point. wall street drops, asia stocks follow. the bop will probably slow the pace of tightening on concern the u.k. recession will deepen. the ecb is also moderating the size of rate hikes but may outline plans to shrink its balance sheet. plus, documents show ftx executives may have used computer code to mask alameda research's debt. let's check on the data after that press conference from fed chair jay powell. they went ahead with 50 basis points, but it was the pushback when it comes to market

expectations of a rate cut in 2023. the pushback was clear from chair powell. the dot plot has been revised up to 5.1%, that is the view in terms of the terminal rate, above where markets are pricing. we look ahead today to the ecb and bank of england. we talk about 50 basis points from the european central bank, bringing the rate to around 2%, and the focus on that debate around quantitative tightening. at least what to do with that 5 trillion euro ecb balance sheet, particularly with the focus on peripherals, btp's and bunds. spreads have come in, there is comfort to what extent that will allow the ecb to make balance sheet adjustments. even as the size of hikes came down from 75 to 50 basis as expected, the s&p closed lower

.6%. the dow was down .4% and nasdaq ended lower .8%, so the s&p back low for thousand. let's switch it over to the futures with an eye on the china data which was ugly. backward looking, yes, but china now rattling with rapid spread of infections. the data was weaker for retail sales. that took the wind out of sales of asian indexes, combining with hawkish commentary from the federal reserve. down .9% on the msci asia pacific, and futures stateside range bound, not a lot of conviction filtering through to u.s. futures. euro-dollar at 1.06, up .2%. the dollar is back for now. let's get to our reporters around the world. today is all about the central

banks, michelle will talk about the fed and ecb while lizzy burden will preview the boe decision. we have key data from china and jail -- jill disis will break that down. fed chair powell has a lot of work to do when it comes to fighting inflation, signaling that powering costs will head higher than investors expect next year. >> i wouldn't see us considering rate cuts until the committee is confident inflation is moving to 2% in a sustained way. that is the test i would articulate and you are correct, there are not rate cuts for 2023. tom: to unpack the communication from jay powell, let's bring in senior economy report michelle jamrisko, to us through the fomc decision yesterday, what stood out to you from that press conference? >> we have been through it so

many times this year. our strategists protected the markets would be disappointed by the message yesterday and see it as more hawkish than expected. that is what played out even though the markets are sticking their fingers in their ears singing a mary tune -- merry tune as they hear this hawkish message. the fed is not finished, he talked about the labor market being strong and pushing back on the notion that the fed might increase its inflation target of 2%, and the dot plot implies more hikes next year and no cuts even as the fed is seeing a more somber growth forecast, underscoring that the fed is much more concerned about the inflation fight than it is about recession concerns. at the same time, marcus chose to find some dovish and is in his comment that conditions had tightened over the course of the year. they remained skeptical that the fed will keep the pivot off the

cards for next year. they say a much sooner pivot than the fed expects. so still a dangerous game where the markets are fighting the fed, violating that age-old notion that they should not do so and we are in for more bumpy times ahead. tom: fighting the fed, looking for dovish and is with their fingers firmly in their ears, i love that image. when it comes to the ecb then, the focus arguably less on the rate decision and more on the debate around qt. >> that's right. at almost everyone in the survey sees a half point type. a lot of focus on the blueprint about how to start the qt process next year. we can expect them to juggle two complicated balances. they want to reassure markets, be transparent and calling while also remaining serious about their inflation fight. at the same time, they are unleashing qt across 19 academies, which will be a challenge as they look at that

concerns in pockets of the region. lagarde has said they want to be measured and predictable. that may mean they turn to mature debt roelofs, instead of reinvestments. they might also cap reinvestments. there are still tools in case things go wrong and they roil the markets perhaps pushing things from the pandemic bond if things go awry. tom: excellent preview of the fed and ecb, michelle, thank you indeed. now to the make of england, and the boe is likely to slow the pace of interest rate rises today as it balances risks from high inflation with concerns that overly aggressive action by unnecessarily deepen the recession. joining us now is u.k. correspondent lizzy burden, investors are looking at a have point hike. it is a conundrum for the boe. >> that's what we're expecting to follow the fed, taking the key rate to 3.5%, the highest in

40 years, but the smallest hike of 75 now seems like a one-off. we have got 10.7% inflation in november. it is proving persistent even if we are past the peak it seems. there are predictions you could see a four-way split for the first time in the bank's independent history. while you have persistent inflation, at the same time, you will be hiking into recession. so looking out for potential dissent. what is also interesting is this is the first decision since jeremy hunt's fiscal statement. the deputy chancellor has had that will have very little effect on the decision itself but we will get a exchange of letters between the government and the government and then you chancellor, jeremy hunt, you might see a shift in tone from

kwasi kwarteng's letter in september when his emphasis was about growth. tom: the ship on the back of that mini-budget, the mpc as you say very divided, potential four-way split for the first time since 1997. lizzy will be outside the bank of england ahead of that decision. china's economic activity worsened in november, before the government abruptly dropped its covid zero policy. bloomberg's jill disis joins us with a closer look. a challenging set of numbers, backward looking in terms of the data out of china. the retail sales number jumped out to me, a drop of close to 6%, and this was before the relaxation of covid zero. but the challenges on the ground in china remain acute. >> yes, there is really no good news in any of this data.

as he said, retail sales contracted significantly in november. we also to determine to slowdown in industrial production growth. investment really dropped off and the jobless rate is now at the highest since may. this is really not good news for china right now. as you said, this was while covid zero was in effect. the question is now that china appears to have although demanded covid zero is letting covid run like wildfire through the economy, it is going to be a question of how well china's able to cope with unchecked spread of the virus in the months to come. but as of right now, it's not looking good for growth. tom: and that unchecked spread of the virus is real. i've been reaching out to people in beijing, almost everyone i know now has had the virus without coming close to it personally. not even counting the industrial impact as well. but there is a concerning study

out of hong kong in terms of what this aggressive spread may mean? >> so actually what's interesting about the study is first of all it said there could be up to 2 million deaths in china, depending on how well they are able to roll out a vaccine booster campaign. or do any other implementation measures to control the virus. the study was co-authored by a pretty well known health professor in hong kong, who just recently traveled to beijing last month to advise chinese officials on what would happen if the virus were to get out of control. one other thing that was interesting about that study too was that it raised the question of whether there could be new variants out of china depending on what happens here. we don't know how much the virus is replicating in china, in part because the data is just so fuzzy. we're not getting the test

result out of china that we used to, as people are now testing at home in the government is not collecting that data. tom: bloomberg's jill disis on that study around death rates and hospitalizations in china as the virus let's rip across the country really for the first time. let's look at key things markets are watching out for today, it is a big day for central bank rate decisions. the snb kicks off at 8:30 and u.k. time, we will bring that life, followed by norge's bank. then that will be followed by the bank of england policy decision, it is expected to hike 50 basis points. shortly after 1:00 p.m. u.k. time, the ecb with its rate decision. from 1:30 p.m. u.k. time, in the u.s. we expect initial jobless claims. retail sales manufacturing and

industrial production data as well rounding out the health of the world's largest economy. coming up, the monetary policy action continuing across europe, they boe and ecb, we will focus on those decisions later today. plus, a norwegian energy company kicking off its annual capital markets today in london. don't miss our exclusive interview with the ceo at 6:30 a.m. london time. we'll talk about demand for aluminum in this recessionary environment. this is bloomberg. ♪ ship

>> the full effects are yet to be felt. today the fomc raised our policy interest rate half a percentage point. we continue to anticipate ongoing increases will be appropriate. inflation remains well above our goal of 2%. changing our inflation goal is something we're not thinking of, it is not something we are going to think about. we have a 2% inflation goal, and we will use our tools to get inflation back to 2%. we are getting close to that level of sufficiently restrictive. with today's action, we have raised interest rates a full four percentage points this year. i wouldn't see is considering rate cuts until the committee is confident inflation is moving down to 2% in a sustained way. tom: fed chairman jerome powell

at the fomc press conference after that 50 basis point hike. the dot plot revised up for 2023, projected be great to 5.1%. joining us today is jeffrey cleveland, chief economist at payden & rygel. the cynic in me is drawn to the argument that maybe this is a fed chair who is using his communication to give him at the fomc cover to move lower in terms of the size and scope of interest rate hikes, from 75 to 50, maybe 25 in february. coming out with hawkish commentary to give themselves cover to ensure financial conditions do not ease too much as they stepped down the pace of hikes. is there anything in that? jeffrey: i think it is an interesting theory. can morning from los angeles. they clearly wanted to send a sh

read if you look at this statement, very few changes in the wording of the statement which is a rarity. there are very few. they have seen two cpi reports, the market has moved a lot, we haven't changed our view. that was the point of the statement. the other big thing chair powell highlighted, 17 of the 19 members of the committee penciled in 5% or higher for the rate at the end of next year. clearly, he was trying to send a message that they don't think they are done. they are going to move higher and keep rates higher longer. whether it is 50 or 205i don't think is a big deal. the bond market thinks we are close to terminal, and there will be cuts relatively soon and are trying to push back against that pricing. tom: how do you explain that very clear disconnect between the markets and the fed at this

point? jeffrey: the market thinks they know more about the future. this is pretty common. we get into these situations this year. there has been two or three pivotal moments where the market thought the fed is going to relent and focus more on growth and give up on the inflation fight, and that just didn't happen. you can think back to summer and jackson hole again in the fall. it is not unusual that the market differs. when i talk to bond traders now, there is a high degree of confidence inflation will come down and quickly. the reasons for that very. you talk to some people they say goods prices are falling and housing will roll over soon. and we are probably in recession and inflation will come down quickly. there are different reasons but by and large a lot of bond investors think inflation is cooling very quickly. and that the fed's job is done. we are a bit more skeptical at payden & rygel.

we think there's a bit more persistence in this inflation, it is very services driven. and frankly, in the next year, i think it is a tall order to get back anywhere near 2%. that clip you showed earlier said the fed is intent on getting there. if we are talking this time next year and are three, 4% on core inflation their job is not done. the markets will be disappointed if that is the outcome. tom: the forecasts from the fed a little over 3% by next year on inflation. when it comes to the question --the other take away what they are becoming more comfortable with inflation, what is your sense? do they flinch in the face of recession or push on through? jeffrey: i don't think they flinch. that was another clear message. you look at the sep's, you see a 4.6% unemployment rate projected next year with no cuts. 4.6% unemployment, we are at

3.7% right now in the states. 4.6 would be recession. historically you need only a half percent uplift to be in recession. they are telling you we think recession it and growth slowdown is needed, we are not going to flinch. we welcome that because we'd much rather have 2% inflation. even if it causes us to have recession in the interim. that is the preferred outcome here. tom: where do you and the teams the u.s. rate speaking? jeffrey: rates tend to peak historically, the last seven or eight cycles, they tend to peak near the time when the fed peaks. so if we think terminal has more room to go, they are going to keep liking, let's say they get up to 5.5% by q2, generally around that vicinity is when you would expect to see 2-year yield's and 10-year yield speak. for my money, i don't think we have seen the peak. that doesn't mean to year and 10-year yield's have to go as

high as the fed funds rate. they could still have a pretty deeply inverted yield curve. but generally history tells us we are not at the peak until we are nearer to the fed topping out. i don't have confidence we are there yet. that ties back to the view on inflation. tom: no peak in rates yet. that ties into the dollar, the dollar up, we have had a number of fx strategist saying we think we can cool peak dollar ahead of this meeting yesterday. [laughter] and it was premature to wring the death knell on this dollar surge, is that a clear take? jeffrey: the death of the dollar has been exaggerated for years. the question i would ask is what would turn the dollar tied around? -- tide around? you need the fed to back off which are not convinced of. they were hawkish today. they are going to continue to hike.

i think also the dollar tends to be countercyclical, so you need to european and u.k. growth to rebound. you need chinese growth rebound. that's possible in 2023. i still think it's a lower probability scenario, that's not my base case given the data out of europe and china right now. you need the fed -- for the fed to back off you need the rest of the world to catch up. tom: the ecb later today, arguably more about the discussion around qt. relative calm in the spreads between bunds and btp's, does that last? jeffrey: they are behind the curve on inflation. we like to look at me measures of inflation to give us a sense of how broad it is.

it is brought in the u.s. but we are not seeing the breadth in europe. i don't see those in the trend mean measures. wage growth has picked up in europe and maybe more widespread. i think the ecb has really dragged their feet. can they hike without upsetting the bond market? that is a whole other question. probably not. we saw the fed hike 4.25 this year and they upset the bond market, we saw much wider mortgage spreads, for example. your spread between italy and germany is your version of that across the pond. it's not an easy situation but they are behind the curve and i think they need to go ahead and hike. tom: ecb needs to hike, do not fight the fed, two clear messages from jeffrey cleveland, chief economist at payden & rygel out of los angeles. we will bring you the latest on the ftx fallout, but first as we had to break, listen to what the bank of england governor andrew bailey thinks of crypto.

>> it doesn't have intrinsic value. the people who wish to invest in it must be prepared to lose their money. when you invest people buy things because their extrinsic value, but we have to be clear what is. ♪

>> this is all about what we need to do right now. and we need to stop the money laundering. we need to stop the cheating that's going on in crypto. that means just getting a set of rules in place, same kind of transaction, same risk, means we have to have the same rules. it also means we've got to have a cop on the beat who is well enough finance to be out there and enforce the rules making sure these guys are not the law.

tom: democratic senator elizabeth warren speaking before the latest hearings on the ftx collapse, saying there needs to be a, on the beat in this space. more details from the indictment of sam bankman-fried and the ongoing investigations a former co-ceo ticked off authorities in the bahamas about possible misuse of funds. more details on allegations that the company held or covered up some of its debt. some of its debt. lo202 pounds on golo.n thi hi,t so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life.

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tom: good morning, this is bloomberg "daybreak: europe." these are the stories that set

your agenda. fed chair powell says rights will climb higher and stay there longer than markets anticipated after the fomc hikes, wall street drops and asian stocks follow. concern the u.k. reception -- recession will deepen. the ecb may outline plans to shrink its balance sheet. plus, ftx executives may have used computer code on alameda research looming debt. ending most of the restrictions in iphone city as it is known. closed-loop is a system implemented by a number of manufacturers and factories in china during covid zero.

foxconn is ending that closed loop restrictions and that led to a lot of friction among the labor force. this is an update in terms of the production of iphone 14 affecting tens of thousands of employees. rate decisions are due later today, most central-bank's poise to slow the recent pace of interest rate hikes. investors and economists expecting a half-point height, we talked about how challenging this is for the boe, less clear-cut than for many other central banks. >> and you've got numeral, bank of america and jp morgan all worried about the possibility of a split today because you've got the recession risk looming large. the doves on the committee don't

want to have an aggressive hike now in the eye of a recession. it could say a lot about the future path for rates. remember at the last meeting that really pushed back hard on the market curve, the future path for rates. will they do that again today? if they drop it it could look like an endorsement of the curve, so they need to be careful about how they speak about it. tom: given they do have the statement from the new chancellor, how much is that going to factor in? >> frankly, probably not that much. the deputy director said it might impact the future inflation outlook. the thing is that most of the measures taken beyond the boe three year horizon, what is interesting is the exchange

between the chancellor and governor because that will probably be a big shift in tone from september. his emphasis was on growth that might be dropped in this letter today. tom: one of the video sinker sees of monetary policy in the u.k.. over in frankfurt, the hike well telegraphed for the ecb. how much uncertainty is there around the size, what are you hearing? >> we know they are going to hike and i can tell you it is absolutely freezing today in frankfurt, which is not just me complaining, but it's almost a macro statement will be about the weather and the recession that may or may not take place this year in europe. to answer your question, at one point there was a debate. would it be 50 or would it be 75?

we cannot ignore that this is coming off the back of a fed decision, 50 basis points in the animal spirits even here in frankfurt have been inclined to go over 50 basis points. if that happens, you see the deposit rate now at 2%. the other issue that is closely connected to this decision are the economic projections at the ecb will update today. we know they have been off the mark. we know the ecb has been criticized for getting this wrong, but nonetheless they are relevant. remember the head of the central bank has said it would not shy from hiking into a recession if that is what it takes to bring down inflation. there's always the perennial question about a recession, yes or no, what type of recession. and the key projections, inflation, where they see inflation in the medium-term when it comes to the ecb? tom: some of the data suggesting

inflation starting to ease at the edges when it comes to europe. and what to do with the euro balance sheet, seems like there's a bit of calm there. what are you hearing in terms of that debate? >> that's a good one. what i hear often is that this is about the good behavior more than anything else. she promised there would be an outline and the market is salivating to hear the details of that. to be fair to the central bank, they have done the prep work for it. we've seen this complete change in the rate cycle, 200 basis points, the fastest on record, and that is without the one that is coming today. a lot of this designed to drain liquidity from the system, so the obvious step is qt. for me in the press conference, there are two crucial questions. one is the timeline, is it an

early situation and secondly, the design and format of it. tom: crucial questions, no doubt. you'll be on the ground throughout the day for that ecb decision, looking ahead to the boe. thank you very much indeed. i want to pivot back to the boe. given the squeeze on consumers, retail sentiment, shakiness of the housing market, and inflation now coming down, is it a case that the boe just stands pat and doesn't do anything today? >> i think we will have a full house, will have 50 in the u.s., 50 in you up and not think we will get 50 -- 50 in europe and

i think we will get 50 in the united kingdom. it was a good day to point against a negative backdrop. the number one enemy is inflation, and you need to deal with that. so i'm looking for 50 basis points. most interestingly, if we look at the last move, we saw two members of the committee talk for 25 and 50 basis points. i wouldn't want to see a split there. i think we need to remain focused on the enemy, which is inflation. tom: as you look to 2023, how do you see that inflationary picture evolving? >> i'm hawkish on inflation. i think it is taking years to build this. we've had rates which in my opinion have been too low. i think inflation will prove to be more than you think. tom: in terms of the end rate

for the boe, what does that do in terms of the recessionary impact? >> i think there's two parts to your question. i think it may prove to be conservative. on the whole inflationary environment, if you look at what i call the key health statistics in the u.k., budget deficit, cpi, those are very challenging. i think the bank of england and the governor and the whole committee have a very difficult task and the way i view this is basically threading the needle between slowing inflation without crushing the economy and the consumer. it is extremely challenging. one of my big risk which i think is policy failure. tom: i was going to get to the housing market, but policy failure, unpacked that for us.

chancellor and the new prime minister have made an effort to reassure the markets. but you think there is risk there still? >> i think there is. i want to use the word configuring. it's basically about threading the needle. this is a very challenging task to do, when you have inflation at 10 and a budget deficit of seven, you know you need to bring that inflation because that is the thing that really impacts people. it is how you thread that needle, and it is challenging. tom: on the question of the housing market, how concerned are you about the pressure, if you're looking at above 6% for the end rate for the boe, is that a central risk for this economy? >> if you think about the people in the united kingdom and the reliance on houses, it is an

absolute key for consumer sentiment. so therefore i think when you saw it earlier in the week the house price stats, that didn't look particularly good. i think that will be front and center for a lot of people to think about. there is a lot of negative news out there and they gave some forthright views on how they see 2023. tom: of course you have that international exposure, obviously in outperformer compared to the european index, the benchmark, down 16% year to date. do you expect that relative outperformance to continue into next year? >> the way i approach that, a key premise to me is managerial risk. if you had not listen to bloomberg at all and you on the ftse 100, then a lot of this would pass you by.

as i think about our clients which are retail investors, if you're fully loaded in the ftse 100 and you have outperformed, i think it is worth thinking about that, do you have the right balance? how do you want to manager risk? tom: our valuations looking attractive? >> i have a more negative view toward the 250 and that's purely about the united kingdom. i think i am more cautious about the 250 and i more cautious about sterling. tom: where else do you find shelter in this environment? >> the biggest question i am getting now is bonds. the whole time we get asked about bonds. for years there has been no yield, and now you have yield. investors think about things like tina, there is no alternative. now there is alternative.

if i think about a multi-asset local financial instruments, we get significant interest in bonds and currencies as well as equities. at the moment i'm talking about blue-chip and government bonds. tom: maybe stay away from the ftse 350 for the moment. you are cautious and concerned about inflation. on a different note, i should make the point that we did finally get a memo on the outfit. because you were coming in, you are very special guest. i hope it aligns with your impeccable fashion sense. have a great christmas and have a great holiday. we will look ahead to that boe decision and 50 basis is what is

expected. coming up, do not miss our exclusive interview with the ceo. we will talk about inflation, demand, and we will talk about the shift to a cleaner aluminum. stay with us. this is bloomberg. ♪ and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number.

tom: welcome back. let's get the first word news from home:. >> china's economic activity worsen in november amid widespread virus outbreaks and restrictions. retail sales contracted from a year ago. the jobless rate climbed to the highest level since may while industry output grew re-at more

disruption is likely in december as the government continues the exit from covid zero. and the first step toward the most widespread rebound of stock trading in more than a decade. it's aimed at securing better prices for investors and directing or business to traditional exchanges. the sec laid out four proposals to boost transparency and competition. employment in australia surged i more than three times economist estimates last month as unemployment held at a 48 year low. the economy added 64,000 jobs in november, suggesting the economy is so far weathering the sharpest monetary tightening in more than 30 years. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than

2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you very much indeed. expecting 20% annual demand growth for aluminum in the coming year. they also announced a new partnership with mercedes benz on its road to carbon neutrality. the norwegian company will supply aluminum to reduce the carbon footprint of its vehicle fleet. joining us is the ceo. thank you very much for being with us here on a busy day. i want to start on the broader demand picture as we look to 2023. what is it telling you about the demand picture into you next year? >> aluminum is helping to make

more energy-efficient buildings. also in terms of building solar cell panels and windmills and what is needed for energy. but the demand picture is very much influenced by china in terms of china being the driver for the global economy. and also the supply situation with extreme power prices particularly in europe. a lot of uncertainty. tom: we are talking about central banks today, we had the fed decision, that focuses our attention on recession risk which ties into what you're saying about china and energy.

what kind of recession are you bracing for? >> what we are focusing on is to position ourselves in the aluminum segment. first of all we are in the market because we also produced based on renewable energy. we have long-term contracts so in the short-term were also more robust than some of our creditors because we have contracts made any years ago. we are focusing on segmenting the market and going for the customers that are looking for low carbon aluminum. low carbon aluminum is in the sector where car manufacturers are focusing on the carbon foot bit -- footprint and are not

willing to pay a premium for low carbon aluminum. it will be interesting in terms of their mission to reduce their carbon footprint in their fleet, while we have the technology path to go to zero in terms of producing aluminum. tom: you talk about the different segments, water is of course essential to that. how does it break down in terms of the demand picture across sectors? >> the 20% is very much in the automotive sector and also the electrical market. tom: you talked about energy, in terms of inflation on your capex spending plans. how is that playing out? >> we have a strong sourcing of energy. we have our own power plants as well as power contracts.

we are focusing on being an active developer of more renewable energy because the world needs more renewable energy. we see the crisis in europe which has been dependent on russia. now we can feed more renewable energy into the market. here's where we can take an active developer role in developing more renewable energy in both wind and solar. tom: capex spending, already reducing it are stepping up in face of these inflationary pressures? >> we have established a separate company which will be capitalized in the sense that we will invite other owners to develop that renewable energy project. in that sense, the cost will not be that high. tom: as you expand this

footprint, what are you hearing from the e.u. in terms of their likelihood of signing off on this? what are the constraints, what is blocking this deal from going forward? >> we are in phase two of the competition clearance. it is a market that is developing. the market is really developing and we are strengthening our position in terms of bringing aluminum use back in the loop. that's what the e.u. is trying to understand how that market will develop and we hope to see that get that clearance. tom: by next year that happens? >> hopefully. tom: a big day for you and the team. coming up, the ecb is poised to

slow the recent pace of hikes and outline plans to shrink its balance sheet. we will discuss that next. this is bloomberg. ♪

tom: welcome back to bloomberg "daybreak: europe." a huge step for central banks. the fed coming through with its decision on 50 basis points. jay powell reiterating his determination to hold rights higher for longer in that fight against inflation, looking -- pushing back against market expectations. who better to speak to it, let's start with this disconnect between the markets and the fed, the fomc. what is underscoring that and

does that continue? >> there was clearly a rate hike, we knew that was coming. but the market isn't pricing in that. there were not shown above 5% for 2023 and there is a lot of confusion. i will tell you why. there clearly distracted by the discretion in 2020 four. the economic projections i gave out, unemployment is rising nearly a percent and the growth forecast was slashed. tom: stay with us. this is bloomberg. ♪

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