>> we continue to anticipate that ongoing increases will be appropriate. >> this is a fed that has been pushing back on easing of financial market conditions. >> let the markets heard with this issue between financial conditions easing whether or not that would impact the fed's policymaking. >> if price inflation comes down as it has, it opens up a greater pathway soft landing area >> you can have a recession and while it's going on, you don't know you are >>

>> this is bloomberg surveillance. jonathan: from new york city this morning, good morning, we are back, this is bloomberg surveillance on tv and radio. futures are positive again, what a rally post fed and the whole of the news conference yesterday. tom: it was history making yesterday. there it was, up we go and up we go again, thank you mr. zuckerberg and we go into a huge news flow. have you go from that to what we observed yesterday? jonathan: powell will have to confront the data, that's the word at citigroup. i go one step further, there is a ton of research that people

think the fed has done that. they think it's a pause in march. lisa: 50 basis points of rate cuts are being priced into the market by the end of this year so not only is it done but it's also preparing for the easing cycle. did jay powell give enough to support this? how much of this is short covering? on the other hand, the move is undeniable and eases financial conditions further. jonathan: did he make a mistake? will he have to walk it back? he talks with david rubenstein next tuesday. did he mean it? market watch asked the second to last question in the news conference. it was about financial conditions and whether they are worried about and chairman powell said it's something we monitor carefully and financial conditions didn't change much from december. the reaction was everyone's

reaction. lisa: it's just not true, he's just wrong. you're seeing bond yields down in stock prices up. that is by definition easing of financial conditions. financial conditions may not have eased is much as it seems because he sees a deteriorating inflation picture. jonathan: the market is running hard. tom: you really have to look at the text follow-through with the tech derby this afternoon and to central banks want to be involved. the quiet calendar for the next 48 hours. jonathan: looking at meta, of where the 19% in the premarket, it's the year of efficiency. equity futures on the s&p 500 are up 0.4% 0.4%. and the treasury market, yields lower.

going into the ecb, euro-dollar is very close to $1.10. tom: i go to bbdxy, breaking down the new dollar weakness that is 11 percent move in the dollar draw down. that's a phrase i invented this morning. i would suggest that the method news is good. 40 billion dollars share buyback? that extrapolates out to 300 $30 billion for apple. jonathan: we will get numbers from the federal reserve. lisa: yesterday might have been the day of 25 and to date might be the 50 basis point hike at the bank of england and the ecb.

curious to see whether a hawkish tilt causes the pound to strengthen further or the opposite. when do we see this intersection of rate hikes and potential growth trajectory coming together with a message that has been positive for the most part for the pound so far this year versus the dollar but how much is this a dollar weakening any risk on story. we get the ecb rate decision at 8:15 a.m. and the protections for a 50 basis point rate hike. to me what christine lagarde will be the key of giving a sense of how far they are willing to go. will she be as clear as jay powell? if she talks about the concern of the balance of risk, will she say she's worried about inflation and that might give a different response to markets then we get amazon, alphabet and others after the bell. very different picture from meta.

how much is this job cuts and ring able to cut the fat from the last decade. they are focusing more on the message so how much will that cause a pop in other tech names with amazon numbers up in the premarket. google is up about 4% and apple shares up about 1%. this is building a tremendous rally today. tom: a moment of silence -- they nailed it. he got the whole you're wrong but in earnings season it was optimistic. we slept here. it was a little warm in here. jonathan: george saravelos joins us now. what you make of the performance in the news conference yesterday? >> good morning, i think he did

a good job. the first point is he was not dovish were hawkish, i think he was agnostic. he said the market is right then maybe we will hike this much. key thing is that you will get real rates so the real rate reduction -- production is pretty similar. the difference is motivation and i thought it was a humble communication that we will have to wait and see. tom: i think it's important to get to the ramifications of this. if we had a disinflation press conference and if we break through some level like 4%, what does that do to the dollar? do we get the mother of all week dollars if we get a true disinflationary outcome? >> absolutely, we been errors on

the dollar since the end of last year. the last bit that's missing is the so-called head -- fed pivot. vic and a very inverted level. it's not just about the fed, it's also about the rest of the world. i think kevin mccarthy is probably more important than j powell is our is the easing cycle because of the debt ceiling. it's not just the view on inflation, it has to be tied to fiscal tightening. around the debt ceiling, this could cause a recession. all the market is doing is applying probability to fiscal tightening later this year and that's why you see the rate cuts being priced. lisa: i love when jay powell was asked about the debt ceiling and he said i have no interest in talking about this just like the

rest of us. pushing ahead, we get the bank of england rate decision at 7:00 a.m. so if they have a hawkish tilt with 50 basis points, will that be good or bad for the pound? >> the keyword is forceful which is to signal increments and the question is whether they take that out were not if they do, the signal more in the hiking cycle. if you look at sterling this year, the only reason it's going up is because we weaker dollar. the euro has been outperforming and the -- and how much more hawkish can the ecb be? they are in a different place compared to the fed. jonathan: 50 today from the ecb and another 50 and another 50 after that? >> the ecb communication can be extremely dodgy but the european

unemployment rate is at record lows, european core inflation is at record highs, equities are at record highs and wages are accelerating growth is sequentially accelerating. even though the market is pricing a fairly hawkish ecb, the risks are we go even higher, even 4% as possible. last year, it was difficult to convince people european rates would go above 3% and again we are seeing the same concern around how high rates can go. the reality of the economy is very different. jonathan: we will leave it there but great to catch up with you. i did not leave we could get near then 2% at the ecb but were talking about that potential. tom: it's going to be very interesting to watch today.

there was some questions yesterday on quality yesterday. the ecb has a much better question polity and i hope someone talks to christine look hard about the phenomenal gdp overlie -- overlay versus or monetary strategy. jonathan: none of us has slept. tom: lisa was snoring. lisa: it was my fault. jonathan: now were talking about the quality of the questions in the news conference. i like it when they follow-up and build on each other. tom: one of those sterling people in the meeting, i thought they should go for a third question. jonathan: it was fantastic. tom: i said ask a third question. jonathan: colby asked about the question about balanced risk. if you asked the question of chairman powell three months

ago, he would have said this is it, the risk of doing too little outweighs the risk of doing too much. once it starts, it's bye-bye bye. tom: can i suggest that someone never looks at the minutes. jonathan: he promoted them. tom: he dm'ed on twitter. jonathan: in the next hour, equity futures up in the rally continues. lisa: keeping you up-to-date with news from around the world with the first words -- federal reserve chair jerome powell promised that the central bank is not done raising interest rates but markets

rallied anyway. investors chose to hear the message was more up beat on inflation and he said policymakers see a couple of more rate hikes before pausing. not long from now, we will hear from more central banks, the european central bank is set to raise interest rates another half went and investors will be focused on clues about where or when costs are headed next and the bank of england is likely to deliver its 10 street rate hike and may also underscore the risk that inflation will become more persistent. ukraine fears a new russian offense of is underway. russia is assembling hundreds of thousands of troops in ukraine. it's also stepped up artillery attacks. this comes at a time when ukrainian forces are waiting to receive tanks and other weapons systems from the u.s. and european allies. shares of facebook meta are soaring today as mark zuckerberg told them the social media giant will be leaner and more

efficient and more decisive with assistance from artificial intelligence and he said fourth quarter revenue beat expectations. deutsche bank is promising to increase profit and revenue this year after the german lender snapped a long streak of market share gains in the final quarter of a turnaround plan. over the past four years, deutsche bank ceo cut thousands of jobs and relied heavily on his traders for profits. global news powered by more than , 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg. ♪

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>> my role right now is to make sure we have a sensible, responsible ability to raise the debt ceiling but not continue this runaway spending. this is a moment in time that, for all american households, every family does this, every business does this, every state government, every county government. jonathan: the speaker of the house there, live from new york city, good morning. the white house calling it a frank and straightforward dialogue sings their shared duty not to allow a catastrophic

default. jonathan: tom stopped by the meeting. it wasn't reported but there he was. was there even a photo op? there was nothing. what is this? i'm talking about biden and mccarthy. how on a meeting? the speaker of the house and the president of the united states and this should be a celebration. jonathan: did you see the exit? the president still hasn't announced of these running which is interesting. tom: we will continue forward. it's a huge busy day for bloomberg.

we are going to do the bank of england in 40 minutes. anne-marie hordern is with us. she is our bloomberg washington correspondent. it is branded stop woke and it's a florida law, hb7 and it's got a name and this is governor desantis. can you explain what part of the republican party has figured out that education is the way forward? explain that story. annmarie: i think you saw that with the virginia governor who leaned into making sure that when it comes to education in schools that parents are part of that conversation and we saw mr. youngkin lead the charge. now you are seeing governor desantis leaning into a lot of issues that would strike a nerve

within the republican party, the conservatives. this has to go with his stop woke act he's been touting for some time and sets him up to be the leader of 2024 in the sense that he has trump like policies but some say he is -- his delivery is more palatable. tom: what is the federalism of our education policy? does washington have a voice and what's riling up republicans or is it completely devolved to states and localities? annmarie: a lot of what we have an education, there are federal mandates but for the most part, it has to do with states. you have new york state regents exams in new york which is where i grew up. obviously, it's different state-by-state but there are federal mandates on what students should be learning. states certainly have a lot of

power. lisa: we are talking about the debt ceiling and there is an issue whether this means reduced fiscal spending in general as well as a lack of a meeting of the minds. our people in washington surprise that kevin mccarthy has managed to stay in this position and -- as long as he has and continues to negotiate? annmarie: there hasn't been a big bow get on the debt ceiling and he only just had his first sit down with the resin so they are trying to find common ground. these two individuals are pretty magnetic and care about their future political careers in both can be punished if there was a default whether the republican party wants to consolidate power in congress. they both understand they need to get an agreement but kevin mccarthy is walking this tight line because he is beholden in some ways to the ultra right of

his party who he was able to corral in the end to get elected speaker, but they have enough votes that if they don't like the negotiation tactics for the deal he can strike with the white house, then they will vote that down. we are just not there yet. it's very much the beginning stages of these conversations. lisa: what about internationally, is there more of a meeting of the minds between kevin mccarthy and the views he represents and president biden? annmarie: when you look at things like china, this republican party is set up a commission of the purpose of looking how to compete and how to tame china and its influence on the united states. items like these they both agree on. when it comes to ukraine, potentially we are seeing some cracks. kevin mccarthy was the first one who said there would not be a blank check and so far we have not seen the republicans to stop the aid going to ukraine but that could potentially be an

issue down the road. jonathan: thank you as always. still trying to work at when the president announces officially that he's running. tom: i have no pearls of wisdom on this other than what he is waiting for? jonathan: maybe waiting to get cleaned up? jonathan: will he make the announcement while his house is being searched? lisa: i don't understand this. the state of the union is on february 7 so maybe that's a good time. the other theory is he's looking to see how much traction former president trump gets in the election to decide whether to run. it will matter how he angles his run depending on which republican he is facing off with. jonathan: some people might share that view. tom: i think so. jonathan: are we done with that

talk? let's talk about financial conditions and the fed again. we could do that all day. lisa: can we talk about tech? tom: bloomberg financial conditions was never higher. lisa: it sounds like he's miffed about it. tom: i would like to have seen more discussion as we diss in flight and bloomberg had a wonderful manner about disinflation. what does he do and five were two or 3%? they are talking about it. jonathan: he did lean into the disinflation trend that's starting to take hold. it was interesting that he basically told you he was not here to change your mind about the forecaster where you think the economy is going and that spoke to the spread between the fed in the market.

we are talking about the spread between the market and the medium fed projections. i'm not sure chairman powell reflected the medium projections yesterday's news conference. lisa: there are two ways to interpret yesterday, that jay powell just made a mistake and this was a faulty policy meeting. the other way to interpret this is perhaps he is seeing data the chosen greater weakening then perhaps she's letting on. jonathan: secret data? lisa: they're not that just their interpretation may be more in line but more of the potential disinflationary views. jonathan: we always talk about the fed this way that they got this secret pool of data and they know things we don't. there forecaster been badly wrong the last couple of years so do you think they have secret

data? lisa: that's a fair point. tom: somebody had a research note that alluded back to the 1930's and then after world war ii, we went through to bouts of stunning disinflation. we have had guests in this chair modeling sub 3% cpi. is anybody there yet? jonathan: it is refreshing that he sat there and said you are allowed to have your own forecast on things. isn't that the way it should be? lisa: shouldn't markets have their own opinion and not be tied to the apron strings of the feds? ♪ i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com.

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jonathan: let's get you some price action. equities are higher, up by half of 1% on the s&p 500 with futures rallying again. on the nasdaq year to date, this is a month-end change, it's up 13%. the s&p 500 is up a little more than 7%. this was meant to be the first half of the year which was supposed to be terrible in the second half was supposed to be terrible so maybe the second half of the year will be tremendous.

the two year yield is shaping up as follows. we are at 4.1083. a big rally in treasury yields. we are down to about three point 4092. tom: the two year yield is important is that it wasn't a break down for a cup of coffee. there was a sustained 409 or 408 going there and you wonder of the central bank in the fed yesterday, do we need to frame a 3.99 two year yield? jonathan: how far do you want to take it? they said it was always looking like a soft landing instead of a hard landing according to the data. we will find out it's going to be worse than that. lisa: we are pricing in immaculate disinflation, an immaculate soft landing experience that people say is impossible. it's now the base case. at what point are we looking at

something that looks fragile and easily disruptive? jonathan: i think we have done more than that in the last couple of days. yesterday, we priced at the fed call. for a long time over the last year, there is a belief in markets that we rally too far and the fed needed to clamp on that. chairman powell was given the opportunity to execute which he didn't take so i think the psychology around that story has shifted. lisa: the big question is whether or not stocks have priced in higher rates in a meaningful way. are we looking at a market that's truly a market again without the feds thumb on it or are we looking at something that is influenced by the fed? jonathan: it will be all about the data, not to sound like tom. it will be about payrolls and cpi. tom: february 14 is coming,

valentine's day. jonathan: tottenham as well. tom: they lost 14 games in january. jonathan: meta-absolutely flying in the premarket after a revenue beat yesterday, the stock is up i more than 19% but it's all about mark zuckerberg and he's calling this the year of the efficiency. tom: in the heart of earnings season, we will dive into technology now. snap-on is doing better than snap yesterday but in technology, we have our guests

from -- our guest from -- our guests from bloomberg intelligence. there is the state of big tech in america, is it pausing or seeing better days in the past? you aggressively are pushing. what is the american tech superiority now? >> i would say it's over the rest of the world and i don't see that changing. what do you pay for those stocks and that's dictated by the 10 year. one think we have seen with these layoffs is eventually, the margins for these companies will be far better in the long run. the question is how long do you wait for that? tom: what is your terminal value study? what do you do with alphabet or apple? do you go to a longer terminal value or have you write it in? >> for me it's been the long-term but companies like microsoft or apple, data points

move here and there in the stock falls down five or 10%. i think that's where people are focused is on the short-term and not the long-term viability of these business models. jonathan: apple hasn't cut in a big way so do we expect it to stay that way? >> they didn't expand as much but anyone can cut three or 4% of the workforce to either get rid of low performers or trim some fat. to me, that's not a big cut. it's possible they do it today but they didn't expand as much as microsoft salesforce did. lisa: let's talk about what we saw with meta and what could be applicable to today after the bell with amazon and apple. is the theme cost-cutting will be rewarded, streamlining the vision or advertising is more resilient than people thought? >> i think cost-cutting will certainly be a theme.

you so that with meta last night. they cut back there capex and i think that's a near-term positive but for a company like mentor which is trying to pivot to the next version of their product, cutting back is not great for the long-term but the market clearly appreciates the discipline the new cfo is showing. in terms of what alphabet may say, the fact that they are more diversified on the top line should help soothe concerns around the viability of compounding their topline at 12% for the next three years. in the case of meta, i don't spending -- app spending is coming back in the next three quarters of their topline continue to be muted. it's all about cost cuts and discipline they can show in terms of bringing back their free cash flow. lisa: is this justifying the

move in the stock, the fact that it has doubled since november 3 of last year. if you cut all the fat buildup over the last 10 years, that's enough to justify highflying valuations? >> look at how much of the bad news was already discounted. this stock went down almost 70% so even if it's up 70% this year, it still doesn't make up for the losses. i think the real concern is around the top line, what could go in their favor is a tiktok ban. they talked about ads being a $10 million mark. that could be the growth driver. otherwise, is still a one product company relying heavily on digital ads. tom: there is a buyback at meta

and there is an equivalent at apple. is that the secret to profit-making when it gets tense? boy can they deploy cash. >> i am surprised that microsoft didn't buy back more shares. i'm looking forward to apple making a statement, buying back more shares. i am surprised -- we will publish a note today that we will say we want apple to increase their buybacks by 20%. tom: we want them to have a higher dividend so they can be part of the dow jones? >> i'm working on the buybacks given the valuations. the cash flow is large and apple will generate about $100 billion in cash flow this year and i think they should spend all of it if not a little bit more. jonathan: that's how the data works. just get a smaller price. tom: they will develop $100 billion in cash flow?

is this an dem it? >> i wouldn't say that, i think apple did well but not as well as some of the other companies. i think amazon did far better than that. tom: jeff bezos thrown out. >> i'm looking that the motivation of amazon is far stronger than pre-pandemic and that's more important. jonathan: how well does tim cook seem to wash -- to navigate washington, d.c. in other ways the tech companies cannot. they're able to have these margins and buybacks this big and are able to assemble the iphone. it's a fantastic product, overseas and in china in the nearly ever get any political pushback, why? >> it's not just washington but he navigates china better than anyone else. he has to diversify away from china. it's just common sense. i think we are already seeing the rumblings of it.

it will take time but over the next few years, i see more diversification of this light chain outside china. lisa: let's wrap up with the idea of layoffs and where they are being focused. is this just fat that has been developed or is this artificial intelligence coming for our jobs? >> i will give elon musk a little bit of credit in terms of showing how you can cut employees and the twitter app is up and that's the model i feel every tech companies trying to emulate. i think efficiency is where it's coming from. i don't think it will be that profound in terms of impact on the number of people these companies have. i think this is more about that. jonathan: this has been great. thank you both. he actually came to work today. tom: they are so valuable, they

can't be in the same building. jonathan: is that right? lisa: as opposed to us. tom: they cannot be in the same building of the same time. jonathan: this was great, thank you. a big day with tech earnings later. meta is up by 19% in the premarket. that's on top of again year to date of 20%. lisa: it's more than 60% since the low on november 3. jonathan: mark lost his mind and renamed the company and we thought maybe he would stick with it. lisa: getting rid of middle-management is the reason for everyone to come flooding back? tom: maybe it's a mandeep question, did the metaverse die yesterday? lisa: i think he did his

investor conference in the metaverse. i think the focus is on the one product and raises an existential question, what happens if people stop using instagram? tom: i love our guest but i would love to go back and do a chronological string of everyone's gloom. on everything. it's stunning where we are after yesterday. lisa: everything is going away. jonathan: the vix is 17. jonathan: it's bullish stuff. equity futures are up a half of 1% , jennifermckeown will join us ahead. ♪ lisa: keeping you up-to-date with news from around the world -- markets rally at the fed raised interest rates by one quarter point despite fed chair jerome

powell warning that further rate hikes will lie ahead that he acknowledge the u.s. economy is in an you're of disinflation. house speaker kevin mccarthy called it a good first meeting after his one on one with president biden on the debt limit. expectations are low for anything happening quickly. the president has resisted tying spending talks to raising the debt ceiling. republicans want steep budget cuts. north korea has shut the door on talks with the u.s. over its nuclear arsenal. kim jung un's foreign ministry sees threats from the u.s. north korea has been relatively quiet to start 2023 and has only tested one missile so far. israeli warplanes bombed parts of the gaza strip early today. officials describe the target is a chemical plant any weapons manufacturing site for hamas which israel describes as a terrorist organization.

that's after a month of bloody clashes between israelis and palestinians. it's one of the biggest wipeout in history. adani businesses have lost $108 billion in a week after allegations of fraud. the downfall also forced him to pull a $2.4 billion share sale to protect investors but his company denies the claims. global news powered by more than , 2700 journalists and analysts in more than 120 countries. this is bloomberg. i'm lisa mateo. this is bloomberg.♪

>> the u.k. economy has been hit by a big rise in energy prices which is squeezing household incomes and the effect is coming through.

there is also a squeeze on company profits with many firms facing cost pressures in the effect of that plus the monetary tightening is likely to cause the economy to go into recession this year. jonathan: great to hear from michael saunders there. governor carney takes over the job at the bank of england and he goes to the north of the country maybe nottingham. he gave a speech and was meant to speak to a series of local businesses and michael saunders was at a bank in the city of london and he traveled and set in the audience and put his hand up and got to ask a question. carney spotted him and now years later -- i remember at the time and i laughed. i could not stop laughing. this is what some of these economists do, they infiltrate the conferences they are not to be at to ask jens. -- -- to be incognito.

tom: i have a great mervyn king story i will tell sometime. it's really funny. jonathan: i've got ones as well. we will save that for the camp fire. tom: we will have to see. we are coming up here on bank of england and john will bring in our esteemed guest. capital economics does terrific, thoughtful research and they go deeper and it's always in a joint from day one. what the backdrop here is when you speak to jennifermckeown, you have to ask her, did you take the train today? how did you get to work today? this is not like the presser yesterday. the bank of england is a central bank with a labor crisis of some sort that others don't face. jonathan: chairman powell talked

about two-sided risks. there are multiple risks in the u.k. right now. fantastic to catch up with you. can you tell us the multiple risks this governor at the bank of england has to face down today and what they will ultimately decide to do? >> that's right and what's interesting about these strikes, we've had many strikes. they are weighing on activity so they make the near term outlook for the u.k. economy look even worse but on the other hand, there is further evidence of the tightness of labor markets in the u.s. in a push for stronger wage growth and labor markets feel tighter than they are in the ukase of the bank of england has a dilemma on its hands. we think he will go for another 50 basis points today. the peak might not be too far off given how weak the economy looks. tom: what is business investment

in the united kingdom? the tone that i get out of the united kingdom is if you are not 47 blocks outside london is there is a dearth of business investment, is that true? >> definitely it has been weak in the u.k. that partly relates to brexit but all sorts of headwinds u.k. e-commerce have been -- the economy has been facing including the energy crisis. there are a lot of good reasons to hold back on investment and with interest rates rising, that obviously adds to that and that something businesses are very much aware of they have a careful tight rope to walk. rates are not going to go sky high and stimulate investment that was supposed to be forthcoming. tom: explain the governor bailey/chairman powell distinction.

rates move around with inflation in the u.k. much more rapidly than they do in the united states. how does that constrain him and the bank of england? >> that's true and historically, it makes mortgages in particular had variable interest rates so u.k. households are weakly feeling the effect of higher interest rates and bends -- and there's been a real risk of housing slumps which is change slightly. we have shifted toward two-year fixes but it's still not as long as the situation in the u.s. were mortgages in particular tend to be on longer fixes. it may be a bit slower so that banks have got the housing market on its mind and the house prices are already falling here so it will need to be very much aware of how it is affecting people's interest rate costs lisa: lisa:. about six months ago, but were talking a central banks hiking into week's nest additions weakness and the ecb is hiking

into more strength in the bank of england is very alone in hiking into true weakness. the imf predicts an ongoing recession there. how does that complicate how far they can raise rates considering inflation has continued to surprise to the upside? >> it definitely complicates the story further. the picture in the u.k. is more clearly one of a weak economy, and economy that is already in recession. i don't think that's far in the dish far off in the u.s. or the euro zone. there are plenty of indications that the u.s. economy will still suffer a recession and i think the euro zone has had a temporary reprieve. the q4 numbers were bit better but the extent of the squeeze comes from the energy crisis we have had and the policy tightening and a recession is coming in the euro zone as well so i think all central banks will be in a similar position. it's the extent to which the

price pressures are coming off and it's clear that's happening in the u.s. lisa: you think economists are overestimating for underestimating how deep the recession in britain will be? >> the bank of england's forecast has been very pessimistic until recently. it had recession lasting about eight workers, encompassing like 3% peak in gdp but i don't think it will be quite that bad. the forecast will probably show that in the new forecast. recession will probably be shallower than previously field -- feared because the date is not as bad as we thought but markets and a pricing in a much lower path for interest rates than they were given that the bank of england's forecasts are predicated on market interest rates. i think we might see some relief in those terms. perhaps the ecb forecast is relatively gloomy now given the data we have had.

jonathan: wonderful to get your insight as always. the decision from the boe is seven minutes away. tom: your dinner you had alone in mayfair will keep the u.k. out of recession, right? you were there and all i'm saying is gloom and not as bad as we thought and i believe i just heard that. jonathan: you say i was there celeste talk about where i was. i was in between a hotel and the office and i had not seen the rest of the country or experience what people were going through. tom: i'm an authority on that. jonathan: there is a lot of people really struggling now in the u.k. to pay their bills and the real fear that once the two-year fixed mortgages, once you have to remortgage and you were looking at a 4% bank rate emma the bank of england is a problem for a lot of people.

tom: it might become 5%? jonathan: it could be lower than that so i'm not sure how long the fix was. the difference here is that the floating rate mortgage, the variable-rate mortgage tract bank rate and not the market and bank rate is what the bank of england decides the rate is and that's where you get your adjustment. the other issue is the proportion of the gil market whicht is indexed to inflation which is a little bit better over the last couple of months and we are not facing down inflation in the u.k. and some banks were saying close to 20%. it's not good but it certainly better than it was a few months ago. lisa: the tail risk is the energy prices. it's really wonderful to see the economic data is coming in stronger than people expected. if there is a colder about not just for a couple of days but a bigger disruption, does that

change the whole narrative around this optimism? tom: i'm waiting for john to answer. what's important here and i had the honor of talking to governor carney about this, there is london which is our perception and there is everything else. the everything else, there is a real distinction there. jonathan: there was a news conference i think maybe 2014 and there was a problem with house prices in london. they were surging by 20 or 30% and governor carney said this great line -- he said i don't sit policy for inside the circle line and it goes around the center of london that was his message. isn't that a great line? the bank of england rate

decision is up next. ♪

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>> we continue to estimate -- anticipate ongoing increases will be appropriate. >> pushing back on the easing the financial market conditions. >> the markets heard this conflict between financial conditions easing and whether or not that would impact the fed cozy policymaking. -- fed's policymaking. >> it opens up a greater path to a soft landing. >> while it is going on you do

not know you are in it. announcer: this is "bloomberg surveillance." jonathan: this show is such a mess this morning. tom: hr called and said please. jonathan: owing's -- boeing's last 747. i thought that was special. this is "bloomberg surveillance" on television and radio. guy johnson with us here in new york as the bank of england makes the decision to hike interest rates went more -- once more. guy: the commentary feels more hawkish than people are anticipating. they have gone by 50. inflation risks skewed to the upside. they are saying they will require further tightening. the expectation was we could get 50, maybe 25 after that. further tightening maybe you could put 25 in but the sounds more hawkish to me. the pound gaining on the back of it.

tom: the screen is lighting up with a candle. it is assumed, guy johnson, the fed speakers will walk back some of the tone we heard from chairman powell. in united kingdom, do the various people at the bank of inland walk back with the government may say today or with the statement says? guy: the vote is split 7-2. it was a three-way split last time. lisa: did you just bark? guy: it sounded like it. tom: it's like "game of thrones." guy: you never do this with the fed. the disrespect. i'm assuming you have got them still voting for 25. sorry, they are unchanged. maybe they voted for 25. they both went unchanged. that mean mann has come down to 75. it feels like a coalesced bank of england.

it still feels more hawkish than i think we were anticipating. jonathan: talk to us about the data. the backdrop for the data in the u.k. what are they confronting and the difference between the u.k. and what is happening here in the states. guy: i think there are similarities. it's about the labor market. that is where the problem lies for the bank of vineland. you have people over 50 that left the labor market and do not want to come back. you have a tight labor market as a result. that is probably one of the primary focuses of the bank of england right now. they are talking about a shorter recession than the november outlook. if you are getting a shorter recession, in theory you are getting more demand. that pushed the inflation a little harder than originally would have gone and that would have gone and that would've curtailed the inflation. there is more of a demand push -pull stories within the inflation outlook. this is a bank of england that

wants to do more, need to do more judging by the numbers they are pushing out today. lisa: how much were they giving a pass -- given a pass to do this because of energy prices and china reopening? everyone is suggesting a shorter recession. a lot of that hinges on those factors. guy: energy, yes. china, less so. it is less of a factor for the bank of england. they have an industrialized economy that germany and the hinterland represent. i think the bank of england will look at the energy story. that story will allow people to spend more, lisa. that, in theory, should be pushing the inflation narrative harder. it brings down headline inflation but core stays a little stickier. lisa: we were talking about dovish versus hawkish. we are parsing throughout all of these minutia. the pound was briefly gaining,

then losing, then gaining. it is fluctuating and it is down a little versus the dollar. catherine man, tom much that she hold the keys to the interpretation? she dropped her go down to 50 with the most -- the core the group. guy: she is signaling a reality of the economy slowing down. i think that is the practicality of the situation. they have dropped a little language out of the statement. they have dropped "forcibly," which the market was paying attention to in the way we should interpret what they said today. in terms of how the language is changing around this and the interpretation they put on it they have taken down the emphasis on the need to hike a little further. this felt a little more hawkish than anticipated. the fact they dropped "forcefully" the tracks a little from that. i think it is a reflection of reality. she is coming back to the consensus. the core of the group is still around 50. you only have two outliers at

the moment. tom: the nominal gdp story. the ecb coming up, they don't have the power come the economic power for a higher rate regime. in the attic kingdom, is the umph there to withstand these rates? guy: jon was talking about the impact on the mortgage market. it will be offset by lower energy costs. it will be interesting to see what wages look like. there's a balancing factor that can come through here and the bank will be watching wage growth. you have a real income squeeze so people are going to be hit by these higher costs. in some ways that is what you need. that is the objective here. you have a fast transmission through the mortgage market to the real economy. jonathan: we should do this every month, got. this was great. lisa: anton burks. jonathan: was that a growl? that was a dissent.

tom: cash flow once to do something. jonathan: are you growling at your own dogs? tom: at my children. jonathan: i have no idea how we are getting through to the ecb news conference at 8:45. it begins with --kit juckles coins is now. your response to that decision this morning from the boe? kit: yeah. it is not a massive surprise. we are looking for another 50 after that. it does sound more upbeat. one of the big surprises at the back end of last year across europe was when energy subsidies came in people did not move their growth forecast up. the consumer got protected from the worst of the energy crisis. figure trade deficits in the u.k.. -- figure trade deficits in the u.k. coming -- bigger trade deficits

in the u.k. what surprises me is how well the european industry is doing weaning itself off gas. it probably means the u.k. has a longer but shallower recession that anyone else -- than anyone else. what is it leave the bank of england? more to do but with the recession and maybe the only thing for the currency that's important is that everyone is so bearish that it has a cushion. lisa: we are talking about long and variable lags. when it comes to the u.k., when will the full thrust of what we see with rate hikes hit the economy and away that it has not yet full even seen? kit: it feeds through faster than other countries because we have a floating mortgage market. it feeds through the currency quite quickly. for the rest of it we have the same fundamental issue. guy mentioned it.

if your labor market is so tight are more jobs or people available than there are people looking for them, your economy cannot fall off the edge of a cliff like that. it is the combination of a rising mortgage rate and losing your job that people of my generation can remember from the end of the 1980's, beginning of the 1990's as being utterly devastating. we will have half of that from people. it is when the labor market breaks we really struggle. so far that is not us what's happening. tom: kit juckles, the velocity of what we observe yesterday? your thoughts at 2:45 p.m. yesterday wall street time when the markets seized and moved. kit: to my mind -- we could talk about it a lot but the -- i was surprised at the scale of the reaction to a fed decision that was so close to expected as makes no odds. the minor tone chair powell did

not push back aggressively at some of the questions about the dovish bias questions about whether the labor market is going to be ok with wage growth easing off at lower on employment. the aircraft told of all that. it seemed quite euphoric to me. the decision itself was not a big surprise. tom: bbd xy is down 11%. the dollar down 11% from its peak, the drawdown from the strong dollar moment that kit juckles nailed. does this signal a renewed confidence in you of a weaker dollar? kit: no. i'm so confident. the dollar reached levels that had not reached since 1985. if you asked me if we would get back to 1985 levels i would have said we are not doing star wars and vulgar again -- vulker

again. i think february is where we are supposed to pause. the big things that drove it, long-term interest rates in the u.s., the good news on the energy crisis, the japanese pivot, the china reopening, they are all sort of in the price. what is the next big dollar driver from here? i'm not sure yesterday's fomc was. i think it will pause for february and then weaken after that. lisa: how did the tone differ from what we saw from the bank of england and from the federal reserve yesterday? kit: i think it is bound to be hawkish, focused on inflation. the ecb has an inflation mandate. i think it is likely to reinforce that pretty clearly. they are still worried about inflation at this point. they think they need the economy to slow. they don't have a weakened

economy like the u.k. but it is bigger than the ecb. i think it will be pretty straightforwardly hawkish coming from christine lagarde. laying out the details for the plans for quantitative tightening and things like that. this is a central bank with a rulebook run by a french lawyer with rules. that will get them focused on that. tom: the juckesian snark is legendary. jonathan: david rubenstein, what do spec to hear from him? kit: pushback on the interpretation of what he felt pushed in the press conference about things people had said. his defense was to say you will see the forecast next month's

because we don't have any or dot plots on. i think he has a chance to prep himself to try to talk the market back a little bit to where the dot plot was or talk away the idea of it before christmas again. jonathan: great to catch up with you as always. kit juckes. 50 basis points. in an hour we will hear from the ecb, also inspected to be hiking 50 basis points. in about 17 minutes you will hear from the governor at the bank of england. we will be taking the news conference with president lagarde later this morning. tom: dumb question. do they dissent at the ecb? jonathan: it's a little more interesting. it is not as transparent but you will get a question to news conference. the ecb journalists do their job. you'll get some clarity.

a couple of in his later, sometimes in the news conference to get a report from sources saying whether they were happy with the decision or not. this one plays out a little more different in europe. lisa: usually they say it was miserable and terrible and the next day she comes out and wanted back. perhaps we will see the same playbook. i wonder if jay powell will push back. he risks ability if he just says you guys has should -- hash it out. jonathan: either he wasn't good at his job yesterday and messed up has to walk back. door number two, he does not hear about financial conditions the way you see them as much as you would like him to were thought he did. that is basically it. from new york, this is bloomberg. ♪

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>> i will try to keep this brief but i cannot promise that would not be some tears. this is the best job i've ever had. as i did in 1988 and 2008 and 2020, i look forward to being on your side when you run for president in 2024. jonathan: you cannot laugh at that. lisa: i was not the only one laughing. jonathan: i did not think he was crying. i thought he was laughing. lisa: then you realize he was crying and you cry with him. tom: so confident on both sides

of the aisle that they respect him. they hate him or disagree with him, but they adore him because of his policy competency and his gentlemanness. jonathan: the outgoing white house chief of staff. 2024. as i did in 1988, 2008 and 2020, i look forward to being on your side when you run for president in 2020 for. -- 2024. not if, when. lisa: can you read that much into it? this is like a collegial i will support you to the end of matter what, you are going to be the leader. jonathan: jon loves our never-ending campaigns. [laughter] lisa: and then another eight days right after. tom: we will switch gears with annmarie hordern. the european dream for ukraine. it's a really important idea

about how the continent deals with the year two of the ukraine. annmarie hordern joins us now. i will cut to the chase. i guess there is an american dream out there for ukraine, for eastern europe, etc. what is the american dream? you have been so good in london and here. what is our american dream for ukraine? annmarie: i think the first step really is with the u.s. wants to see is russia leave the territories they are occupying and illegally annexed from ukraine. there was some serious -- tom: crimea? annmarie: crimea is this interesting place. many russian people really do see crimea as russian. but there has been more talk. a new york times article about a month or two ago that the u.s. is considering and warming up to

the idea of ukrainians attacking crimea and taking crimea back. 100%, that is the u.s. during. crimea included. the first step is to make sure they can push russia back in the worst fighting areas, which is these are parts. that the eastern parts. tom: the american dream, doesn't mean thousands of american soldiers across the eastern front of russia from finland through the baltic states, germany, then down to the black sea? annmarie: this president definitely does not want to send u.s. troops into ukraine. he made that pretty clear. neither do the other supporting allies. you have seen over the course of the past year -- we are approaching the one-year mark of russia's invasion of ukraine at the end of this month, that they have been bolstering the eastern flank with u.s. military personnel and armor as well. lisa: in the fog of war with

russia and ukraine how much focus in washington on what is going on with iran and israel, which seems to be escalating? annmarie: this is a huge focus for individuals following foreign policy, especially since he had secretary blinken in israel. he was in the palestinian territories meeting with mr. abud. this is on the heels of this morning you had israeli warplanes in gaza in the army going after ammunition plants and military depots for hamas. we are off the heels of one month of probably one of the deadliest months we have seen between palestinians and israelis in years. secretary blinken left officials behind to try to make sure they can restore peace. this will be a major topic today in washington. the president will be having lunch and a big discussion with king abdullah of jordan.

he was at the hill thinking lawmakers for the aid they have been sending the jordan. for him, paramount is stability in the middle east. lisa: there is humanitarian questions around what this could lead to in terms of devastation. there's a question around crude with iran. this questions about opening it up to the international market. now that is further off the table given the recent conflict. what are people saying about the widening of that conflict to crude output on top of what is happening with russia and ukraine? annmarie: concerns about any instability in the region has to do in the crude market with the strait of hormuz, which 20 million barrels go through a day. when it comes to what iran is doing in terms of oil exports, we see an uptick. a lot of this happens in the black market. sometimes ship to ship. these tankers will shut down their tracking. the u.s. administration has made clear they are going to go after

this. even though they want to see as much oil on the market, they want to make sure they are crushing iran when it comes to not wanting any sort of leeway or any avenue where iran could be exporting when they should not be. obviously, most of this crude is ending up in china. jonathan: i want to wrap up this one. on the outgoing white house chief of staff says i look forward to being by your side when you run for resident, how much weight should be put on that? annmarie: a lot. he said when, not if. it's true. he said when you run, not if you run. the president has not announced but one claim has announced it may be -- ron klain has announced it two or three times. jonathan: still early days, tk. what if he doesn't? then it gets really interesting,

doesn't it? lisa: i think correcting. if you both put weight on this -- i think both of you are correct. is he saying get on it? we talked about this. you are known for taking time with decisions. jonathan: you think it is a rush to make the announcement? lisa: not when to come to the actual race. perhaps when it comes to his political clout in the party in terms of his leadership role to not be a lame-duck president. that is how people will view his announcement of a run more than any thing else. jonathan: if he's not going to run, he needs to give people time to think about who should be running. lisa: he needs to indicate he will run even if he doesn't plan on it. tom: i just wish we were british. we get to may of 2024. lisa: you tried with the pie. tom: can we bring up a bond issue? aggregate treasury futures, net

spec positioning. we talked about equity shorts covered yesterday. the bond market short position is stunning. stunning. way beyond equities. lisa: there were reports that hedge fund short bets on treasuries had reached record highs. it is unclear what they were hedging against. it is not necessarily a naked short and that kind of weight. however, that does indicate what we are looking at in terms of the violent move and perhaps that is overstating the interpretation of jay powell's remarks. jonathan: there is one hell of a pain trade. this is so, so painful for 70 people. they came into -- so many people. so many people sat in that chair and set it. the first half will be dreadful. the second half is going to be about the recovery. we have ripped through last month and it continued. nine out of 10 people we spoke

to all expected chairman powell to face off with easy financial conditions and pushback. he would not even characterize the as easy. that is what is ridiculous about it. you know the clue was? right before the decision. the former vice chair, we asked how he would approach it. he just kind of shrugged and said i think it is a little more nuanced. lisa: how much of what we are seeing in price action is a direct relation to the pain trade and not a true statement? tom: that is where i am. in bonds, too. jonathan: wei li coming up from blackrock. this is bloomberg. ♪

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jonathan: as of the close yesterday, up 13% on the nasdaq. s&p 500 up 7.3%. what a rally. we had some weight to it this morning. nasdaq 100 helped by meta. up one third of 1%. lisa will run you through the meta earnings in a moment. the two-year yield lower by a couple of points.

jobless claims a little later this morning. looking for a 50 basis point hike from the ecb after the boe 's 50 basis point. euro-dollar close to 110. positive 1/10 of 1%. for those of you football fans -- you understand the joke. the bank of england, the january transfer window in desperation, not underlying demand for labor. if you have been with chelsea's cancer spending, they spent a fortune over the last month. tom: how did newcastle come on so well? they beat southhampton. it is not like beating arsenal. is that outside money? jonathan: there is some savvy money. the strategy in the transfer market has been very different from when chelsea first got hold of money and when manchester city got hold of money. they are not throwing hundreds of millions here, there and

everywhere. the l.a. daughters spent serious money -- dodgers spent serious money. 100 million sterling just like that. tom: lisa is going, why am i here? tottenham. serious illness. jonathan: i never thought you and i would be talking about this but we are. tom: how did they move forward and compete with newcastle and the rest of it? jonathan: they will have to spend a lot of money. tom: lisa has one foot out the door. jonathan: we have a ton of earnings coming up later. we started with meta and the victory this afternoon. lisa: alphabet, amazon and apple coming out. we are seeing this years gaining on the heels of what we saw yesterday from meta. i'm interested in the underperformance of apple, which is interesting. they have not performed as well today as the others. this is possibly because there was a lot of froth built in. a lot of strength hilton ther

-- built-in there. alphabet, 4.6%. we talked about meta. yeah, the shares are climbing. surging. but since november 3, the shares are up more than 70%. before even the gains that we are seeing intraday. they could have doubled since they are low on november 3. easy come, easy go. what we pricing anymore? how do you gain what is being priced in and whether it is all tied to sentiment? jonathan: the fears a number of month ago around the direction of this company. the control of one man at meta and it is one man with a ton of control to spend a ton of money. there was a fear he would just run away with this. lisa: the existential risk of l instagram be the social platform does your in two years is still there. it is not like they are materially changing their prospects. they are more hinged to the two platforms they have.

again, i don't know what we are pricing in here. tom: did he identify with the meta versus? -- metaverse is? a $40 billion buyback, i can handle it. to me it is almost childish. i don't get it. i feel for. jonathan: do you want my view? i think social media has caused so much harm in society, and to then sit here and say we need to live virtually and that is the future, i find that deeply, deeply upsetting. not to get too serious about it but i do. this company has been criticized for so many different things. hurting the psychology of young people. you want to push back against that? lisa: i will. totally agree with that. in the spirit of science fiction and the spirit of exploration of all the new technologies, there should be a platform to explore the potential for things.

the problem is the dominance and the complete subsuming of all competitors and the influence of some of these platforms. two different issues. you want to encourage innovation. that is my two cents. jonathan: cool. tom: never have three people had a showstopping we just did. there is a group effort. an important conversation with wei li. jonathan: i will take a pass. tom: wei li is with us now from blackrock. she knows laurence fink will lock back the chairman's comments yesterday. but what you thinking it to 40 5 p.m. yesterday? -- at 2:45 p.m. yesterday? wei: quite an incredible day going into the meeting. without the focus would be around the disconnect between market pricing in terms of future rate cuts and with the fed is going to say. what we ended up having was a disconnect between jay powell and himself. in his prepared remarks he was

very clear that they would stay until the job is done. parts of the market service inflation all core service they have yet to see signs of disinflation. in the unscripted part, the press conference, he was not clear in pushing back against a financial condition. he was distancing a little bit from the december forecast. but without giving a clue as to what he thinks he could be. that is why markets did not just jump. tom: you have an institutional call of a shorter duration on higher yield strategy. we are all conversant inequities and shorting -- in equities and shorting. there's a massive short bet in the bond market as well. do you worry about a junk condition where you get a bond short cover and you get priced up as a general statement and yields shockingly lower? is that part of your structure?

wei: what we have seen so far this year is the everything rally. jon talked about an equity rally. it's been an incredible rally in the bond market. that was driven, precisely as you said, the short covering short squeeze and the fear of missing out. everybody finishing 2020 deeply traumatic your across equities and bonds. at the start of 2023, sentiment seems to be taking a turn of people just want to jump in without assessing how much of the damages being priced in at this juncture, none of it is being priced in. is it going to be recession? is it going to be soft landing? markets are pricing and takeoff here. it's a huge amount of animal spirit boosted by cash being deployed into the market. this is the momentum we are seeing. lisa: if jay powell does not push back against the market as

he did not yesterday, what will trigger some sort of reversal from what we are seeing right now? wei: when it becomes clear that part of the inflation complex is still persistent, still sticky. we are talking about core service shelter. goods, service rotation, leading to disinflation. that is a trend that has been many months in the making. shelter, expecting that to come down over time. the core service x shelter linked to wage dynamics as well. the labor market is still very tight. the jury is still out there that we can be comfortable and complacent that inflation is on the way down all the way to target. lisa: what is your conviction level? is it time to lean against the tech rally, sell everything, cash out and hide out until we see the downfall? wei: this is the time to stay invested. we don't want to chase the tech

rally because of the incredible momentum you yourself described. more broadly looking at the equities,. positive outcome is priced for perfection. it is hard for us to chase that. we have a preference for emerging markets that have been doing really well. we had a preference for short duration bonds and ig credit and agency back mortgages. that has been holding up well. staying invested is important. jonathan: we talked a long time about the end of the fed, the introduction of the fed call. did not get done away with yesterday that news conference? wei: he was not very consistent with himself. i think the markets are reading into it what it wants to read into it, which is to jump and build momentum and chase this rally. it is too early to say do we

have a fed turning to affect core to affect put? we don't have a consistent fed at the moment. jonathan: we will hear from chair powell next week. tom: i think i have to admit i may read the minutes. all of a sudden, particularly from the vice chairman, from brainerd, i'm sorry. wei li nailed it in her first response. this idea that there were two towels yesterday. --powells yesterday. jonathan: it implies they discussed the pause. why the hesitancy? lisa: he didn't want the unk of egot anyway. this is what he has the pushback. if you got conviction it did not want to send a different message, why not just a we talked about everything?

it was like read the minutes. jonathan: we talked about this. the closer you get to 5%, and we are getting closer if you look at the range of the dots in the dot plot from the summary of economic projections at the last meeting, the one before, but couple of individuals will say enough is enough. other individuals, neel kashkari, who will say i want to go to 540. unless the data changes convincingly. tom: to his credit, powell circled back routinely to an ex post strategy by central bank which is not an original thought. can you translate for me? may of 1940, churchill. it is victory. victory at all costs. victory in spite of all terror. the british love the word victory. churchill had a most serious time for the nation.

lisa: is this your effort to be british? tom: i can't be british. jonathan: he was growling earlier. what is going on this morning? tom: daily says it is too early to declare victory over inflation. jonathan: it is. chairman powell basically said the same thing. you will hear the same thing from president lagarde in an hour from now. tom: it will not be as news fas -- snooze fest. lisa: thank you so much. jonathan: thank you for tolerating us. tom: after every fed meeting, wei li. wei: i love this. tom: bring larry fink next time. ♪ >> keeping you up-to-date with news around the world, i'm lisa mateo. markets rallied up to the fed raised interest rates by a quarter-point despite fair chairman jerome powell morning

for the rate hikes are ahead. he warned the u.s. economy is at an era where price pressures are cooling. kim jong-un's foreign ministry pledged to respond to what it sees as threats from the u.s. after firing off a record number of ballistic missiles last year. north korea has been relatively quiet to start 22 any three. it has only tested one missile so far. asa president biden and india's prime minister are discussing a possible state visit to washington. the president has only hosted france's emmanuel macron for a visit. the u.s. and india are working to share defense and computing technology. israeli warplanes bombed the gaza strip early today. officials describe the targets as a chemical plant and a weapons manufacturing site for hamas, which israel describes as a terrorist organization. that comes after a month of

bloody clashes between israelis and palestinians. shares of carvana are on the rise as the used car dealer is on course for its sixth session of straight gains. it comes amid a rally in riskier assets. shares are said to hit their highest level in over three months. they are up 186% this year. global news powered by 2700 journalists and analysts and overwinter 20 countries, i'm lisa mateo and this is bloomberg. ♪

the first time you connected your website and your store was also the first time you realized... we can do anything. cheesecake cookies? [together] the chookie! manage all your sales from one place with a partner that always puts you first. godaddy. tools and support for every small business first. >> they are feeling their way along. they are in a new phase in many respects. they believe they are going meeting by meeting. they probably need more

restrictive stamps of policy. in march, we will learn a lot about how they actually see this play ending. jonathan: we have to wait until march. that was the former fed atlantic president. equity futures now positive about for tens of 1% on the s&p 500. yields lower by four or five basis points. euro-dollar totally unchanged. 109.85. had a look at 110 going into the ecb. we are looking for 50 basis point. if you remember december, a news conference with chairman powell. then-president lagarde came out and said everything lower. look out for ecb later. hsbc making that point early this morning. i will bring up their point. with the february that event risk gone, you might be tempted to go all in on equities.

the potentially bigger hawk is lurking just around the corner. tom: i want to say within the central bank overly, and i'm not kidding folks. i'm enthused by how christine lagarde handles this moment. i am looking at nasdaq 100 up 1.4%. i'm looking at the chart, the chart they got me hired a bloomberg. it is too much information. it is on a classified, need to know basis. i'm looking at the nasdaq 100, log convex, there is an acceleration this which is tangible. you can see it on the screen. jonathan: there is a meta factor. it is up 19% in the premarket. helping out the nasdaq a little bit. it's a big afternoon for earnings later. lisa: i wonder how much you get that loosening of financial conditions. the frustration i feel in the notes parsing the speak

yesterday is telling. this is andrew hallanhorse failed to push on financial conditions which led to further loosening. we are pushing back against the narrative we will get this perfect landing in every thing will be great because we will get a hot jobs report and everything will be back on track in terms of inflation. tom: we are among friends. good morning everyone. i had a beverage of my choice in my hand after an 18-hour day yesterday. can you imagine the conversation of mike wilson and ellen zentner at morgan stanley? they published today wherever she is below the hollanhorse line. mike wilson has to re-justify a cautious stance. that must've been a hell of a conversation. jonathan: one, don't fight the fed was the message. his words. two, his call is about earnings and they have not been great.

the question i have asked and i spoke to mike about this, you can learn something from the incoming information about the way the market responds to the incoming information. he took note of that but ultimately he thinks in the next couple of quarters you will get a drip feeling from this of bad earnings, better earnings and we will bump into week data -- weak data. basically saying the same thing. you will hit in your pocket of weak data in the next couple of quarters. that is why the bears, this is incredibly painful. you are trying to short it, that's incredibly expensive. this hurts. the call still stands for them. the weak data is coming. lisa: the short squeeze and the maximum pain of january, you put that together, is this the great flush on the opposite direction before people understand the earnings and what we are seeing? tom: i am data dependent. i will go with julian emanuel

with their modeling out 3% inflation. maybe 3.5%. i will let mr. hyman tell me what the responses, the disinflation tone and check. maybe not in oil where china and the pacific rim may come out of a very difficult covid environment and there is some modeling of higher oil prices yet to occur. $80.19. will kennedy joins us now from london. there is a feverish tone in the united states about profits of oil companies and windfall profits and the rest of it. if they are minting money now at $80 a barrel, how much are they going to mint at $110 a barrel? will: that will be good for them but i would point out a lot of this year's profits are based on that -- natural gas profits. shell clearly made an enormous amount of money from selling

their energy portfolio into europe. gas prices are markedly lower, especially in the u.s. where they have fallen. yes, a bullish outlook for oil is good for energy companies. we expect them to keep making a lot of money. i would urge people to think about the gas side of the equation as well. tom: you have a terrific perspective of our reporters in north america and europe on the debate of profitability. what is the major divide or distinction of the governments of europe regulation of europe if you will, and of the united states? will: in europe we have had windfall taxes. can the u.s. there has been discussions but they are likely -- unlikely for political reasons to get off the ground. there's a big difference in strategy which is partly clinical between europe and the u.s. this is interesting right now. in the u.s. there has been investment by the big companies, chevron and exxon, and new

energy. they concentrated on making money and giving it back to shareholders. in europe, they tried to do some of that. some investing in new energy and it not proved as popular. the american model is winning here. if we look at the returns for investors on chevron and exxon far outstripped returns for shell. the noises from the new shell leadership, they will focus on those returns which means more money back to shareholders and less focus on the energy transition which has more political purchase in europe and some parts of the united states. i think the u.s. energy companies are winning. lisa: why are prices still falling on crude? will: i think that we should probably look at the amount of oil coming from russia. russia continues to do a good

job exporting a huge amount of oil. they are finding customers in india and china at discounted prices. if you look at overall production, it is close to 11 million barrels per day. pretty much what it was before the war. people continue to be surprised on the upside by russian production and exports. as long as i continues at that pace the market may remain soft. lisa: will that offset a reopening from china and dampen that inflationary impulse? will: it seems to be for the time being i don't know. demand for crude tends to rise of the driving season in the u.s. refining margins suggest there is demand for fuel around the world and eventually that will draw and more crude. not clear yet i would say. jonathan: thank you, will kennedy, on the energy situation. tournament away from the ecb decision.

christine lagarde will deliver that 8:15 eastern time. 30 minutes after that, a news conference with the ecb president. are we looking for another hawk's turn for the ecb after what she delivered back in december? tom: she will not declare victory as governor bailey was alluding to. you have first-order experience with this as well. explain the boiling was right now that as someone mentioned the lawyer from paris explaining the body lang which she has to straddle between the core of europe, the netherlands, the bundesbank and others that are saying be kinder. jonathan: we have a really different backdrop. if you think about the battle president draghi had to have with the core of europe, with the bundesbank, inflation was way too low. inflation is too high. it's a single mandate central bank. it is clear what they have to do, get interest rates up, financial conditions tight and inflation lower at a time where for the first time in a long time they are concerned about tight labor markets and away they have not been before.

if that is the case, guess what? you are not fighting the core of europe. after that news conference in december i had the feeling many people did too, that was like the bundesbank meeting over in frankfurt at ecb headquarters. they are in the driving seat big time. tom: again, that is the divide and the politics. they do not have a fiscal policy to play off of. the new book is entirely physical, linking into monetary. i don't think you can do that in europe. tom: we touched on the china issue yesterday. far more pertinent for the ecb. how are they thinking about china reopening? what does it mean for growth and inflation? lisa: we're hearing about that from bailey as well. exterior pressures easing. jonathan: geoffrey yu coming up. your ecb rate decision around 15 minute away. ♪

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>> we continue to anticipate that ongoing increases will be appropriate. >> this is a fed that has been pushing back on the financial

conditions. >> the market heard the issue of the conflict of financial issues easing and whether not that would impact the policy making. >> if it continues to come down as it has it opens a greater path to soft landing area >> you can have a recession and while you are in it you don't know you are in it. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it's a marathon of huge information flow. jon ferro on the ecb with his decades of experience and the three hour launch afterwards. [laughter] jonathan: covering frankfurt, germany. 50 basis points set to go again. this will keep going have a bit of pushback in a couple of

stories may be some fed officials unhappy with the trajectory of things but ultimately cpi still too high. the ecb has more work to do what's interesting about today and this is a footnote baby. -- maybe we had this downside surprise so maybe we will get something. tom: stay with this global wall street this will be fun but we are going full-circle here back to another time. the governor of the bank of england is saying we can't declare victory. we are going back to a time when many cost something. there was inflation, discipline is back. jonathan: mark zuckerberg going out there saying this is the year of efficiency. it's the year of 4% interest rates and, lisa, maybe five. lisa: he will see this kind of rationalization many layoffs over the longer period. the cumulative lags, remember

that? we are not talking about that anymore. perhaps people are saying it's not a victory lap, or not done. but that's not what he was doing he was kind of indicating we are getting into this disinflationary place. tom: rate the morning ecb, the press conference will be important. even i'm saying that and then we go to the earning soirée. can we go back to 1981? jonathan: would you like to do that now? tom: i listening deep studying and goldman sachs went out because salomon brothers was big in commodities. they bought into it from j aaron, a guy named planck fund and commodities are coming full circle. bloomberg reports this morning they made 3 billion large revenue in commodities this year

and i'm sorry, like the rate market, like china reopening i feel very full-circle this morning. jonathan: recorded the biggest gain since 2009. tom: don't start rumors. jonathan: let's tie some stories together. i don't think it's over. it's not over. it's weekly about that. look at they were in ukraine the uncertainty isn't over, let me be more specific. the uncertainty is not over and what it means for europe. the central bake still faces some uncertainty. the war on one side china reopening on the other i have no idea what the data will be for the next 12 months. lisa: traders usually do well in volatile times. how do you rearrange that and that, to me, is really the highlight of what we saw

yesterday from the fed press conference. we are entering an era but they are not trying to control the market in the same way they used to. this is one of price discovery. tom: exactly if it is price discovery we clear the markets. do we get clarity, a be we got that yesterday i will let john the site. and then do we get a lesser volatility once we clear ourselves out of these pandemic volatile times? jonathan: i don't think you wanted to commit to anything yesterday. we got some dated to come over the next couple of months and we will reconvene in march, tom, towards the back end of march. if there belief when we get those forecasts, gdp might get pushed higher a little bit. i keep going back to what don said to us yesterday. just by definition, if it's a

hard landing, at first it will likely be a soft one it takes time to play out. as always the labor market to be an indicator it's coincidental, i get all that. look at the ism it doesn't look like things are very good for right now. and starting just for to services and we will see how the trend develops. if you are the chairman i think from that standpoint, he did the right thing. tom: quick data check to get to. i'm looking at the 10 year and think about the jonathan: 1%. normal yield is 339. euro-dollar unchanged. 10 9.89 and equity features once again i half of 1%. tom: you can synthesize the moment. senior market strategist,

jeffrey, give us the sum of all of these fed boe and ecb parts. what is the distillate that you will write about come friday or into monday? >> i still think it's about the real rates situation. you were mentioning the cost of money in terms of corporate's. that's a nominal cost right now. we need to look at the real cost if you deflate everything. by the problems of the labor market, conditions are loose. you can make the case for credit and comebacks. i think all in all central banks will have a case that may be things are looking to turn the corner and financial conditions are where they want them to be the market should take notice. jonathan: let's pick up on that. the chairman didn't exactly say financial conditions aren't where they want them to be, where did you make of that? >> it's where do you think can

the financial conditions, where growth is going to start us off in a way. it's a dynamic process. you only find where you want to be when you get there. i know a lot of it you may have enough confidence that conditions are restrictive. with a lot of excess liquidity you can't use it against gdp ratios. even in the u.s. the decline has been quite strong. ecb for all the hawkish talk they haven't even started. by that measure of him there is potential from these financial conditions and that's what they need to be wary of. lisa: let's talk about the path and the long and variable likes that no one seems to be talking about. when we we see the brunt of the actions of all the central banks have taken? >> the proof is i would say to

come in and highlight half an hour ago this going to be an accelerated decline in inflation the second half of the year. those figures when they start to come in will surprised took a downside. maybe they have done enough, maybe they have done too much. until then, they need to retain the optionality going back to what governor daley said that upside in terms of inflation so when you have those kind of upside risks you add up to say we can pivot now. i think it's retaining the optionality at the moment they can confirm that things are among expectations. it is clear that they could leave immediately. lisa: we saw a move up for equities, down for bond yields in the month of 2023 what aspect

would you push against? >> one reason why you are seeing this trade if you look at the cost there was record outflow through emerging markets sunna people are getting into those markets. other areas he look at the ici data, worry about flows and mutual funds. the pushback is anticipated that have done well they will continue to do well. we are seeing an of the in data. yield areas related to -- people are being selected but we need to be cautious about symmetry. what worked in 2021 may not work. jonathan: i would love your thoughts on this because you touched on some elements of this you guys were talking about earnings and valuations the

stirrings -- stories and and issuances how would you respond to that? >> i look at euro positioning the data at a 20 year high right now. it would take a money outcome to say we want to add two euros at these levels. it is overstretched, it has been two vital evaluations not attractive yet. jonathan: wonderful. euro-dollar early run, 11033. tom: it's not like it was yesterday. yesterday it was absolutely stunning but even with meta-i'm sorry there's a lift. nasdaq 100 with meta-1.4, that's not a dell stock is it? i don't think so.

up 1.4 of a percent as well but there is an undercurrent here going on linking together bonds and currencies and even commodities. we don't have the oil lift that maybe we will get. jonathan: we just didn't get the pushback. we didn't get the pushback. tom: i would strongly agree with that. jonathan: looking for the pause in march. morgan stanley looking for the pause in march i wonder how big that club grows as we get more data going into that decision. lisa: did you talk about the pause? read the minutes. jonathan: you, yesterday put that on 20 or -- twitter. the 10 second summary. did you miss it? that was it. the ecb moments away. ♪ >> keeping you up-to-date with

news from around the world i'm lisa mateo the bank of england has raised interest rates another .5% there would be further tightening if inflation persists. policymakers also see a shorter shower recession than they did in november. we hear from the european central bank in just a few minutes. it was one of the biggest hauls ever for commodity traders. bloomberg learned they brought in more than $3 billion in revenue last year. the key profit at a time when the net income was cut in half to 10.8 million. ukraine fear is a new russian offensive is underway. according to the new york times, russia is assembling hundreds of thousands of troops in ukraine. it has also stepped up artillery attacks. ukrainian forces are waiting to receive tanks and other weapon systems from the u.s. and european allies. israeli warplanes bombed parts of the gaza strip early today.

officials describe targets as a chemical plant and weapons site. israel describes as a terrorist organization. it comes after a month of bloody clashes between the israelis and palestinians. the u.s. has one expanded access to bases in the philippines. after visiting military bases and meetings, the philippine counterpart it will clear the way for greater american presence as tension with china persists. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo, this is bloomberg. ♪ >> sometimes it's passing of these events people realize there was no new information

that should change my view on stocks which should be based on the following, that earnings are disappointing everywhere. this is one of the worst streaks we have seen quite a while. jonathan: that's michelson of morgan stanley. moments away from an ecb decision. sometimes you get adrift and it takes a while we are looking for 50 basis point hike from the ecb going into equities looking like this. the euro had a look at 110 earlier in the session. backed away just a little bit. tom: michelson is dead on. you know what, a honeywell and the rest of them a little sake to say the least. jonathan: he compared the investor reactions to a tornado going through your house and waking up and saying ok it's only the room the got destroyed. lisa: some people are saying it's better than expected. jonathan: the main refinancing rate goes from 250 23 point

sent. in the deeply rate goes from 2% to 2.5. i never thought we would get here but here we are. and we break back through 110 on euro-dollar. the headlines will keep coming out. i will bring up the statement and we will work through this together. lisa: i'm looking at a meeting to meeting approach and i find it interesting the talk about continuing to roll off the app portfolio starting to fall for march so we will have to dig into what they say about balance sheet types of action. also saying that rates so have to rise significantly and at a steady pace. this is a hawkish kind of tilt that people were looking for even as they reiterate some of the other rhetoric from the last meeting. jonathan: here is the statement. raising rates significantly and keeping them at levels that are restrictive to ensure a timely

return to inflation at the 2%. raising the interest rates by 50 basis points and expects to raise them further in view of the underlying -- it's not policy in march. never mind the guidance that's basically a commitment to go 50 basis points in march. they keep the interest rates in restrictive levels. dampening demand and we will also guard against the risk of a persistent public shift in any event the governor cancels will be data-dependent and follow a meeting by meeting approach apparently just not the march meeting because -- everything after that is meet after me. lisa: i wonder how much guidance they got from powell. the sickly saying don't even pretend that were going to step down for not stepping down.

let's go and how much is this basically the guidance they are giving to really shake the market into acquiescence. jonathan: looking at bond yields down by seven basis points on a 10 year lower by about 10 or 11 basis points baron mind yesterday a big rally in the bond market. they stay lower in germany. where are we with that euro-dollar i will bring that quickly for you. backing away at 109. about a few minutes time. tom: yields came in as well i don't know too much about it the spread, italy is compared to germany it comes in a little bit as well is the same thing we saw with powell it's a lower rate regime. translates as price out is more important then yields down. money moving and buying into the paper because a trend that's in there. lisa: i don't understand this.

this is unabashedly pretty hawkish basically saying we are going to raise rates for another 50 basis points, hundred basis point increase after people said they were never going to get off of zero or negative. you have boggs rallying yields lower and muted moves i'm just try to wrap my head around what the positioning was heading into this if it is viewed as dovish. tom: it's significantly thursday is what this is. the bank of england we have significantly and that is the rate of change that, to me, central bank talk for some form of rate of change. we are going to stay on the factor and again the data, we are going to watch aveva significantly is not an important word. jonathan: it will go to 50 and then we will see. do the markets pick it up? i don't want to define the statement by what happens in that market. i always say that it's 50 and 50

is what we expected at the next meeting as well. lisa: i understand that and one fewer rates why not just to the extra two basis point rate hike right now? there is this question and at the same time is this just a market that wants to feel dovish and a matter what the central banks say? jonathan: i find it funny when they say it's data dependent but that meeting in march, we have 50 basis points. out of fragrant -- out of frankfurt, maria, what do you make of this on? >> my question is a question to you i have been standing here in the cold and everything has been revealed. 50 basis points were super baked in. the only question within the meat that's interesting was i'm not going to pivot angle higher in march and it has been revealed in the statement. so i spent 10 hours in the cold. [laughter]

very quickly here, 50 today, 50 in march and then everything again they also say after that is data dependent. it's what the market was expecting. downshifted 25 basis points. my work here in many ways is done here today guys. tom: maria, what are they doing? they are going to headline 3:00 frankfurt time. jonathan: the programming. tom: i think she set herself up for three upper lunch. jonathan: i'm with maria, is there any point showing up at the next meeting? they have already agreed to 50 basis points. maria, after that, can you talk to us about qt how this stage is set? >> i mean, remember they had said this was the early qt to appease some of the hawks in the governing council uber saint inflation, we have to tackle this had on that means hikes but also drain some of the extra liquidity.

she may go into that in the press conference. what i want to know having said that, it's clear were not going back to back 50 basis points puppets the rationale for it? this week we had a string of data and to me the best way to describe it is cloudy. we had headline inflation go down but that's back to energy. core inflation is sticky. the debate or procession is still out. in many ways, the statement, everything is out. you want to play the past conference i can stay late. jonathan: maria, thank you. i will take the news conference. we will take it in about 20 minutes time. chief currency truck strategist at city it's amazing that the ecb telling us the data dependent but at the same time tell us another 50, but you make of this? >> i think the march meeting is going to be interesting.

it was chair powell that made it interesting. when you look at the market reaction today i think what they're telling us is the string of bank meetings is over. the market will surprised very much yesterday so what we see today is telling us we will be surprised by a similar, i think people call it pivot by the ecb in march. i will be very curious to see what we hear from president lagarde. i would strongly advise her to be more like powell and stop guiding to strongly about contentions. the ecb has come a long way and as your color just said the data is becoming cloudy. lisa: are we coming up with a narrative to fit the flows? >> i think what we have seen since the beginning of the year is flow driven. a lot of things have fallen into place. the degree of disinflation, when it comes to the performance of

risk assets particularly the riskiest, that's really because there is so much on the sidelines and under positioning. there is a big flow element. really throughout this. tom: what is the dollar going to do on this? markets clear, we get clarity, we move on to a lesser volatility does that put new legs to an ever weaker dollar? >> we do think the string of dollar weakness has a further to go. we think that's particularly evidence still in the areas of the market that benefit from lower rates. so that's carry trade's, e.m., areas that have seen large outflows over the last few years. it's probably the yen, then the mexican peso that tends to be strongly related to u.s. rates. you put these things together and it does tell you it probably still adds a little further to go but i would also mention

chair powell used to say be humble and nimble. we are still going to be in a very challenging environment this year though i don't think we princi the dollar in a straight line it will go down from here and we will reality -- reevaluate over the next couple of months. jonathan: this was great and i'm sorry this was short as we work through the ecb decision. just to see these two lines in the same statement from the ecb the company canceling to raise interest rates and a few lines later the company cancels jokes with they will lean on tom is the word intense. it will still be data-dependent but no one is going to buy that. they are same 50 in march. tom: for our american audience i will cut them some slack. it dates back to the 50's and william chesley the bank of

england does not. this is not the first crisis. they are making it up as they go. i would suggest lagarde is really making it up as she goes. lisa: i would suggest markets are making it up as they go. they see the incoming data as inflationary but, you know, other people might say it's kind of neutral. they are just kind of not taking a strong stance. jonathan: let's wait for the news conference. up next another meeting and a little bit of data. from new york, equities, back -- that continues. this is bloomberg. ♪ from a dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. godaddy. tools and support for every small business first. girls... the chess club has gained an edge on our bake sales.

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jonathan: equity features up on the snp the rally continues we had some more weights on the nasdaq more than 1% an hour away from the opening bell looking for data and jobless claims just seconds away. we just have the ecb hike 50 basis points the bank of england as well and these central banks starting to look a little bit exhausted the news conference starts in about 15 minutes we will get to that in a moment. a whole lot more here is mike mckee good morning john the

conundrum that is jobless claims continues as last week only 183,000 were registered. that's down from 186,000 the initial print last month. our last week rather. significantly lower than what was forecast by the markets. continuing claims that are also lower 1,655,000 last month, so it doesn't look like the layoff side like the economy is slowing down at all. it's going to be interesting to see tomorrow when we get the payrolls report whether companies are still trying to add or hoard workers or whether all of this is pushing up average hourly earnings. unit labor costs to come down significantly, 2% in the third quarter 1.1% in the fourth quarter. so that also plays into the narrative that executive better productivity up percent after a

revised 1.4% in the third quarter and this is if you ask any about the inflation and the way things could improve this is the best way, through increased product to video. you are getting more per worker if that holds the fed may be on the way to a soft landing. jonathan: i guess the key phrase is if that holds. up by three quarters of 1% on the snp and the on market rally continues. six basis points just about holding on to 4%. tom: canister the toxic brew? did powell know these numbers? lisa: if he did his message makes even less sense. everyone is saying look at the data to showing weakness. tom: is a really important numbers of -- these are really important numbers. productivity is a stunner with

the revision of one point percent and the labor cost is more important than claims. jonathan: let's get back into it. mike, how would the fed think about the 193 and how does it influence your thinking about what we might get tomorrow morning on payrolls? >> it slightly adds to the idea that the payrolls are a little stronger than we anticipated or at least that the market is anticipating. it is hard to tell because we don't know whether any kind of weakness is because of companies not hiring, they filled all the jobs, or whether it's because they can't find employees. it's restaurants and bars are still having a lot of trouble finding people. so that's going to be something to tease out tomorrow but it is the average hourly earnings that are we to matter. our companies having to pay more to get people to come to work? the fed did not of these numbers in advance. tom: it was a good script.

>> the numbers, of course, your have bloomberg surveillance we have the motto there is no math. at the fed there is a lot of math and they can parse out the productivity numbers. i think they probably have a pretty good idea that things looked good on that. i think overall it continues the narrative that it's important to the fed in terms of what the policy is going to be. it is an indicator that it is not flashing red at this point read jonathan: think you sir as always. the data this morning payroll is tomorrow. equity futures up 7/10 of 1%. count on by the ecb may be i'm going to throw may be out there it is a wonderful phrase, it pains me this message on the i.b. on the bloomberg. i've asked permission to share it.

here it is to me it seems that the fomc has shifted for a conditional hawkish nest to conditional hawkish nest. i think he the same phrase applies to the ecb this morning. they shifted from unconditional hawkish and us to conditional hawkishness. tom: never really believed in epic this is important the idea of conditionality. they are going to get in and look at the data. lisa: but they were looking at the data performed. i mean, yes, we know there is some order of disinflation. the market is responding to the unit labor costs more than continuing claims or jobless claims. is this enough to can credit -- indicate incredible strength. tom: i would like to talk to william dudley right now i would really, really like to know his

thoughts and what we observe from these three banks. jonathan: markets care about change. the central bank has changed. bottom line. ultimately once you shift past that, we can start thinking about the data and all those things but this has shifted. the fed has gone from a protocol and yesterday they did away with it. we've gone away from unconditional hawkishness. i don't care what you think or what your forecasts are we can't deal with cpi where it is where conditions need to be tied. this started with a conversation a couple months ago. things are starting to come into balance for the. we are going to find out in about nine minutes. lisa: i think you framed that really well there has been a shift in the market is

reflecting that rated tom: i'm going to frame this data screen. it wasn't true two hours ago but with these two banks it is continuing. jonathan: leases point is really important. you had the change, now it's about the data. payroll, cpi, let's see if the labor market and set looking tom: we are really going to hustle here and we are so thrilled to bring someone truly expert on political economics. chief economist, i'm going to go to one brilliant sentence in your note, thank you france, thank you spain. you made real clear the lift that provides comfort to institutions in europe as france and spain are leading the way away from recession. does that have legs, can it continue? >> yes, i do think it has legs.

we see europe as a whole is not falling into a recession but what you would call a winter stagnation, germany most exposed to russia is having to contract's gdp. some of the other countries especially france and spain are making up for that. they are not as exposed to russia and not as exposed to downturn her weakness. at the moment, this is good news that the region which really wasn't the focus of all of the bad news, or in europe, energy, the shock that europe is actually outperforming expectations. madame lagarde, she pushed back on the market activity perhaps more excessively -- aggressively thin jay powell did yesterday.

i've got to do in other 50 basis points in march. it leaves the door wide open to go up 25 basis points in may and beyond that we have to see the press conference they provide some truth the probably the ecb has not made up its mind yet on what happens at their. lagarde probable the will probably have guided relative to the fed. having started later still has some more room to go to the upside then the fed. jonathan: sufficient restrictive with this phrase we heard a lot of in december. do you think we are now? >> we are sufficiently restricted but i'm fairly certain this is not the ecb's majority. the majority of the council will want to go further, 50 basis points in march and at least 25 in me. as we have seen, for instance,

for the january data in more good news in the market it probably doesn't take the ecb much further ticket inflation back under control. jonathan: what happened to german cpi this week and how much can we actually read into the cpi data? >> the euro and cpi data revised for can leave because there was a change in the methodology this was not ready and is not ready. it could be raising. jonathan: what happened to efficiency? >> very good question. you probably have a stock in many places. lisa: [laughter] this is -- >> for a change in in methodology?

lisa: put this out there. tom: it's gone. [laughter] i mean come on, lisa,. by happen with your mercedes? lisa: the trains were completely efficient. everything is working. tom: we are going to pause before we get to christine lagarde. i will not mince words with out of respect to bridgewater i'm baffled by their third co-chief investment officer. tell us about it. >> it is a great story. now this is the post era it is a 37-year-old first woman to lead this post. kos cio at the largest hedge

fund. it is a pretty remarkable rise it is at a very challenging time. tom: she's out of princeton and i get it she a co-chief investment officer like is compared to rebecca patterson. what is her investment ability? >> she needed more data. this is a big win for a research across wall street. she came in in 2006 and worked closely with ranson and ray dalio within two years of college. she was most recently that several she took over in 2021 and launched a new fund to capitalize on the energy transition. she doesn't just focus on sustainability and her and her co-cios have been hinging on this idea that the 1970's era world let's see how it helps

navigate this. jonathan: three kos cios it >> sounds a bit unique. it does so my ghost crowded room but i want to reiterate jensen is the one that recruited her out of princeton so it's not like a new to each other. she worked there her entire career under the tutelage -- >> squeezing out of princeton sis. >> bob prince once i read had told her that he can see her taking his job monday rated this is kind of a post he held to. lisa: we have a couple of minutes until the press conference. we are talking about a 1970's kind of scenario how are they shifting their meth a lot in jesus question -- really on a run on the historic tier of the first nine months of last year the first couple of months really started to meet some of

their performance. 9.5%. remember the competitive hedge fund world i just got back from hedge fund week. it is not as fun as the ecb in many was, chase -- trust me. they are all preparing for doomsday everyone from paul singer. it is a different view than what you are hearing from a lot of this optimism that i walked into today. this idea of a dovish fed saving the market. jonathan: it sounds like she has been hanging out with tallow. lisa: everybody singing said songs out there. perhaps the said songs is the reason why you're seeing such a rip roaring rally. [laughter] tom: bridgewater moving to florida, lisa: that's all i want to know. i wouldn't be shocked if they started putting outposts out

there. it turns out, it kind of is. lots of companies from blackstone, people were very excited about the presence down there. lots of people moving down. there is not enough room for the demand. they have to raise pay to bring people down there because the prices are so high. jonathan: is miami real? tom: some say it israel and some say not. lisa: is that a figure restatement? jonathan: thank you. do you think the beaches? >> it's truly a destination. jonathan: they register there and not living there? >> exactly. jonathan: i was on the truman show when i was down there. this feels like it sometimes. tom: seriously, john miller is

great on this but there is something big going on here whether it's texas or florida. the migration. it's tangible. it's different this time i remember when air conditioning clicked in the self it was a long time ago. i remember when it was not like that. and then it happened and this is a conversation they had at the ecb. we should take hq down to the south of france we should we should do in counts and then you have to say no, no, no. every coast. lisa: i think you're just talking about your vacation plans. tom: for the ecb, does the fed need to do this? jonathan: what i think about this, you're going to see, if i press it it's alongside her.

i think the chief economist could be up there too. usually it's the bp. i like this. i like having the vp there. i like this tradition of the bank of england. what you think of the podiums? i like them. tom: it looks like tv 24, whatever is in paris. lisa: i love that. i like the color scheme. tom: that's very french. jonathan: the ecb president about to speak. he was growling. lisa: what we did yesterday was -- i think we are respect for of the decisions they have to make

jonathan: who used to be president -- here is president christine lagarde. >> the vice president and i welcome you all to the press conference and we would like to begin by congratulating croatia on showing -- joining the area on january 21, 2023. we also will come the governor of the national central bank of croatia. we will report on the outcome of today's meeting. the governing council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to our 2% median turn target.

the governing council today decided to raise the three key ecb interest rates by 50 basis points. we are expected to raise them further. in hugh of the overlying inflation pressures we intend to raise interest rates by another 50 basis points and our next meeting in march and who will then evaluate the subsequent path of our monitoring. keeping interest rates at restrictive levels will, over time, reduce inflation by dampening demand and will guard against the risk of a shift. in any event, our future policy decisions will continue to be data-dependent and follow meeting by meeting approach.

the governing council today also decided on the reducing of euro systems holdings of securities in the upset purchase program. as communicated in december, the program portfolio will decline from the beginning of march until the end of june 23. at the subsequence pace of production will be over time partial reinvestments would be conducted broadly in line with current practices. in particular, the remaining reinvestment amounts will be allocated, proportionately to the share off across each constituent program and under

the public sector approaches program to the chair of each jurisdiction and across national and other issues. for our bond perp -- purchases the main reinvestments will lend towards issues with the better climate performance. without prejudice to price stability objective this approach will support the decarbonization of the euro systems corporate bond holdings in line with the goals of the paris agreement. decision taken today are set in press release available on our website. the detailed modalities are described in a separate press release which will be published

in 3:45 local time. i will outline in more details how we see the economy and inflation developing and will explain our assessment of financial and monetary conditions. looking at the economic activity first, according to stats preliminary estimate the euro area economy grew by 0.1% in the fourth quarter of 2022. while above the system projections this outcome means economic activity has slowed remarkably since mid-22 and we are expected to stay weak in the and term. sue global activity and some will call it certainty especially open to russia

unjustified for against ukraine and its people. together we -- hi inflation this headwinds dampens spending and production. especially in the manufacturing sector. however, supply bottlenecks are gradually easing the supply of gas as has become more secure. firms are still working on art order backlogs and confidences improving. moreover, output in the services sector has been holding up supported by continuing reopening effects and stronger demand for leisure activities. rising wages and the recent decline in energy pricing are also set to appease the purchasing power that many have

experienced due to high inflation. this will support consumption. overall, the economy has proved resilient and expected and should recover over the coming quarters. the unemployment rate remains at its historical low of 6.6% in december 2022. over the rate at which jobs are being created unemployment could rise over the coming quarters. government support measures to shield the economy from the impact of high energy prices should be temporary, targeted, and tailored to preserving incentives to consume less energy. in particular, as the energy crisis becomes less acute, it is

important to now start rolling these measures back promptly in plane with the fall in energy prices and in a conservative manner. any such measures falling short of these principles are likely to drive up medium-term inflationary pressures which we call for a stronger monetary policy response. moreover in line with the governance framework fiscal policies should be oriented towards making our economy more productive and gradually bringing down public debt. policies to enhance the supply capacity, especially in the energy sector, can help reduce price pressures. to that end, governments should swiftly implement their investment reform plans.

the reform of the eu's framework should be concluded rapidly. turning now to inflation. according to preliminary flesh estimates which has been calculated using estimates for germany, 8.5% in january. this would be 0.7% explored. with the decline owing mainly to a re-nude shop for energy prices. market data suggests prices will be significantly lower then at the time of our last meeting. food price inflation edged higher to 14.1%.

other inputs is still feeding through to consumer prices. price pressures remain strong partly because a high energy costs are spreading throughout the economy. inflation remained at 5.2% in january with inflation for nonindustrial groups rising to 6.9% in services declining to 2.4%. other indicators are also still high. government measures to compensate households for high energy prices will dampen inflation in 23 but are expected to raise inflation once they explore. at the same time this scale of some of these measures depend on

the evolution of energy prices and they expected contribution. all the supplies -- still pushing up goods price inflation. the same holds true for the listing of pandemic related restrictions. i'll weakening the effect of pent-up demands is still driving up prices especially in the services sector. wages, wages are growing faster supported by robust labor markets with some catch up to high inflation becoming the main aim in which negotiations. at the same time, recent data on wage dynamics have been in-line with the euro system staff projections.

most measures of longer-term inflation expectations currently stand at around 2% and these will continue monitoring. turning to our risk assessment. the risks to the outlook for economic growth have come more balanced. russia's unjustified war against ukraine and its people continues to be of significant downside risk to the economy and could again push up the costs of energy and food. there could also be an additional drag on euro area growth if the world economy weekend more sharply than expected. the recovery would face obstacles if the pandemic would greet intensify and cause more disruptions.

the energy shock could fade away faster than anticipated. in euro area companies could adopt -- adept more quickly to the environment. this would support higher growth than currently expected. the risks to the inflation outlook have also become more balanced especially in the near term. on the upside, existing pipeline pressures could still send retail prices higher in the near term. in addition, a stronger-than-expected economy rebound in china could give a fresh boost to commodity prices. domestic factors such as persistent rise in inflation expectations above our target were higher than anticipated wage rises could drive inflation