kriti: stocks selling off on the day, but i still say all of the action is in the bond market. i'm kriti gupta. bloomberg markets starts now. let's dive into the price action, because we are seeing red, but just marginally for the s&p 500. some of the big movers actually turning the index around. we are going to drive through the equity story in a little bit, but to me it is the bond market. we are looking at the two year yield getting closer to that 5% level as we are perhaps seeing a terminal rate in july of perhaps as much as 520%.

this is just the market repricing itself. the fed has not said anything, but it is enough to push the 10 year yield higher. how much higher do you go if you are looking at a 5.8% terminal rate? do we start to consider 6% for the bond market? bond yields higher on the bloomberg dollar index. much of that is reciprocating across the equity market? i want to bring back the bond story, the fed repricing story. for that i want to bring you a terminal chart. the idea is that fed repricing is inching higher. this is important, because we were looking at a peep policy rate of about 5.5% in september. now markets are pricing in 5.8%. that is scarily close to that 6% level that jamie dimon was talking about. that is going to be the macro story. it does, however, drive the equity market. we are going to find out.

in the macro to the micro, because today when the equity market trade is being put under the magnifying glass, it is names like macy's, best buy, some of the retail names that reported today. macy coming out strong with a positive full-year outlook. best buy on the other hand missing estimates. consumers retreating from electronics and other discretionary goods. a mixed picture from -- for the retail space. jon, let's start there. macy's talking about a strong consumer and a bullish outlook for the full year. best buy, not so confident. why the divergence? >> it continues this trend of the high-end holding up well. that is what is supporting macy's. bloomingdale's and blue mercury chains were really the drivers of their same-store sales, and

the mid-level macy's chain was more of a drag for them. for best buy we see there is, it is part of this trend away from discretionary items like electronics mtv's, you know, the core of their market, and more toward things like necessities and services. that is sort of the split we are seeing there. kriti: something the macy's ceo talked about was not leaning into unprofitable sales. i think that is an important part of the story. to what extent is that a factor in best buy? john: best buy really needs to manage, again, with the trend moving against them they need to manage that inventory pretty well him and it is a question of how they are going to balance cutting prices to move product with painting their margins. so, you know, we are going to see them trying to navigate that through the year, and that is

what some of the pessimism is about in that area of retail. kriti: i'm intrigued by the best buy story, because when you look at the analyst recommendations we are looking at five buys, 19 holds, and three cells. the street is very suspicious about what is coming next with best buy. what lychee they really be taking here? is the focus on getting more to the consumer, or perhaps pricing products at a higher point? john: i think given the concerns that consumers are going to be pickier, they are going to be more concerned about buying those discretionary items, i think it is going to lean more on the side of ringing prices down, to sort of move products because, you know, they are stuck in an area that is not the focus of what consumers want at the moment. kriti: that is certainly

something we are going to keep an eye on. best buy shares down 1.5%. macy's rallying by about 10%. always a pleasure to have you on the show. thank you for knocking -- walking us through the nitty-gritty of that story. kroger is reporting its results this morning, beating expectations on wall street. joining us is great in case. always a pleasure -- brendan case. let's start with the grocery store. it felt like a no-brainer for food distributors that their stock was tied to the commodity prices, higher and lower. what are we seeing this time around with kroger? brendan: what we are seeing a -- seeing with kroger is different. you have two things going on. when is their forecast for comparable sales, which puts them in the same ballpark as walmart. just to say slow growth, but growth nonetheless this year. on the other hand you have a

company story, which is that they have made a lot of progress in cutting costs. even though their sales are heading for a slowdown after the boom years of the pandemic they are still pretty confident they can squeeze out more profit. their profit forecast came in as a positive surprise to wall street. kriti: let's talk about the market share. kroger is seen as a high-end grocer relative to walmart. more in the line of target. they are still competing with the likes of albertsons, something amiss on the east coast here. tomorrow as well. where they fall when consumers are saying, maybe we don't need to go to the cheapest goods on the market? brendan: kroger actually made a pretty big point on the conference call of saying that, like walmart, they are making good inroads with the higher-income customers. on the other hand they are also predicting pretty modest inflation by the end of the year.

you can tell that they are concerned with not putting off their middle and lower income customers. have made a big point over the last two months of rolling out lower price points, consolidating a lot of their private label offerings in a way to be competitive on price for people who are most conscious of the value. kriti: kroger shares higher by about 4%. again, a similar story to what we were just talking with china read words -- with jon edwards about. wall street split on where this direction goes. nine buys in two cells according to analysts. what is the game changer for kroger in the next quarter? brendan: the game changer for kroger is going to be how their same-store sales do. they are looking for a pretty upbeat number in the next few months, and that will be a big test of whether they can withstand the current economic

environment. looming further down the horizon is the albertsons deal, which is still pending. the ceo of kroger said that the company is working constructively with the ftc, but there is a lot of questions, a lot of doubts about whether that deal gets approval. kriti: and it is almost like antitrust, but on the grocery front. it is a fascinating story. brendan case, thank you. time for first word news with john heilemann. >> antony blinken had a surprise encounter with surrogate lavrov on the sidelines of the g20 meeting. speaking to reporters in new delhi, lincoln warned china against every russian military aid, saying it would be a "serious problem ago ministers failed to agree on language to describe the war in ukraine. the diplomats will release an outcome statement. the same thing happened last week at a meeting of finance ministers. russia and china objected to the

use of the word war. president biden is poised for his first veto. he has promised to take action now that the senate has passed a bill that would block the labor department from allowing retirement plans to allow esg factors. it is the first victory for republicans in their crusade against what they call "while capitalism." biden will go after fraud in coronavirus aid. the washington post reports that the white house is asking for 1.6 billion dollars to empower federal prosecutors to go after people took advantage of pandemic really. lawmakers agreed in trillions of dollars in checks, loans, and funds, but the aid went out so quickly it became an easy target for criminals. sam bankman-fried is asking for leeway regarding his use of internet and mobile apps while out on bail. he has already used encrypted messaging apps and a private network which hides a peters identity.

global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm jon hyland. this is bloomberg. ♪

kriti: this is bloomberg markets. u.s. stocks continue to waver as traders try to make sense of the economic data. the mounting evidence that central banks may stay retrieved -- may stay restrictive. now the focus is on higher rates. and how do you squared together? who better to ask then the head

of a european bank. np paribas ceo jean-yves fillion . always a pleasure to have you on the show. it is really great. higher rates in europe seem to be the base case. a recession is back of mind for investors on both sides of the atlantic. what are your clients telling you about allocating funds to the u.s. versus europe? jean-yves: on the central bank, absolutely there is going to be more to come. the two central banks, the fed and ecb, have to combat a very similar situation, which is a growing economy. accelerating inflation. as you said, we should expect these two central banks to go even deeper, even further. to the point that in the united states the fed might actually cause a recession to combat inflation. on the europeans but -- on the

european side expect the ecb to go deeper. i think we might be reaching terminal rates you and i would not have been contemplating even a few weeks ago. on the client side, clients are eyes open, they expect a mild recession for the reasons we discovered, but they are drivers already linked to investing. they look at the still-positive economy and i see them investing , m&a transactions. so, strong dollar actually makes europe even more attractive to u.s. multinational clients, but conversely in spite of this trend we see european clients still very attracted to this u.s. market, because it remains, no matter what, the most resilient cop -- most resilient economy in the world. kriti: we are seeing a lot of strengthen the dollar today. the euro on the other hand, trading at 1.05 against the

greenback. at the beginning of the year the decline of the dollar was the base case. that has changed, but i have to ask, is 1.05 a scary level for you? jean-yves: i wish you and i had a board on this. if we had met last week i probably would have shared with you that we might be seeing -- economies might see the dollar weakening, but with the recent accelerating of inflation and probably deeper hawkish policy of the fed it might -- going forward. 1.05, the bank i work with has diversified geographical presence. we have an ability to navigate situations with the main objective to advise clients. it is probably more advising to clients. i know the dimension to take into account for the

multinational clients we have is, some of them have operations here and outside of the united states, and they have natural hedges against currencies as well. that is something we see more and more. kriti: when i think of bnp specifically for an american audience, this is the jp morgan of europe, essentially. we know that jamie dimon talked about 6% potential terminal rate in the future. certainly something to keep an eye on. bnp in the u.s. has navigated that negative rate environment going back into europe. do you invest, given that now that is no longer the world? jean-yves: really my daily life is pretty simple. supporting clients and making sure the product offering we have, specifically for u.s. clients, fits the needs they have. on the client side we have been investing in supporting our institutional clients, we have been investing in the sector

expertise and expanding the expertise we have. but more specifically domestic sectors add value to the u.s. side, but sectors that have global weight. for instance, tech, media, telecom, which resonates globally. that is something that is important. on the product side we have been investing in equities. while growing our banking size where we can support funding solutions to clients. really, i would be remiss if i did not mention expanding investment where we lead supporting clients around the world. kriti: bnp is known for their derivatives products, which brings me to the go to hedge is it as simple as high a basket of commodities, by a dollar, and call it a day? -- buy the dollar, and call it a

day? jean-yves: i wish i could say we have a simple equation and easy clarity on things. unfortunately not. i would say for us, fortunately because there is so much more advising to provide to clients, i would not say it is one specific hedge, even the volatility, the uncertainty. we are advising clients actively on hedging strategy around commodities, equities, and obviously currency. kriti: those interest rate differentials, is that something that is top of mind for bnp and there is such volatility that the fed could become the more hawkish central bank relative to the ecb? jean-yves: what is top of mind for our clients is to -- is how to manage the curve going for. it is probably top of mine for the institutional clients. what i see is a common thread for them is, again, something we should not undermine in spite of the rising inflation. still benefit from a stronger

economy. labor market is tight, capital markets are functioning, u.s. corporate's are in decent shape, even though you see some corporate profits have been decreasing. the consumer continues to spin, which means we should expect gdp growth. this is what clients are focusing on. kriti: let's talk about businesses and your business specifically. bnp and the market share they have in the united states. where is that market share growth going to come from? jean-yves: supporting domestic clients, but in a targeted way. know where we can be relevant, but supporting their needs in capital raising euros. as i mentioned, targeting the proper sectors where we can globally support them effectively. and on the product side it is around corporate banking, specifically supporting them in their short-term funding,

bridging some of their operations as windows at times might not be the best to raise capital. we have been very active being one of the largest trade banks in the world in navigating, helping clients navigate the supply chain disruption. switching from just-in-time, which is not possible, too just in case. kriti: so it sounds like more -- jean-yves: a corridor for the bank is a very important part. sustainable finance for the bank is in the dna, our low carbon transition strategy is working well, and the train has left the station for clients on this matter. kriti: more deals necessarily then trading volatility? jean-yves: we expect more deals, more transactions, and we are optimistic we can pull market share in one of the most attractive markets in the world. kriti: certainly something we are going to keep an eye on. a pleasure to have you on the show. jean-yves: thank you so much for

having me. kriti: johnny fillon salesforce. we are going to hear from marc benioff. stick around. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

kriti: this is bloomberg markets. i'm kriti gupta. salesforce in the green today after a surprisingly upbeat forecast. and announcing plans to step up stock buybacks. mark and he spoke with emily chang yesterday about the company's outlook. take a listen. marc: we are still just getting started here at salesforce. and we have reignited our performance culture. you are right, we have taken drastic actions and you can see the results are incredible. emily: you're in a very unusual situation. you have five different activist

investors who have taken stakes in the company, and they have big demands. i know it's not fun when you have to lay anyone off, but will there be more layoffs? marc: you are right, we have all of these great new investors. it is certainly an atypical moment in the market last year, when folks had the opportunity to enter equity. i have enjoyed working with so many of them and listening to them and getting their ideas, and, you know, i love learning from everyone. emily: but what about the layoff question? are you expecting more headcount reduction in the future, whether it is because of the activist investors or a very difficult global economic situation that we all find ourselves in? marc: let makes plenty of the real story, which is that in calendar year 2021 the tech industry, including salesforce, and the best year we have ever had. you know that. you covered it really well. everyone had a record performance, including salesforce.

that is when 2022 is not like 2021, and the surge in employment and all of the things we did to invest for 2022 that never really showed up. you are right, we have made changes to our company to reflect current market conditions, and to really make sure we not only continue to have great performance, as you can see from this quarter, but that it reflects where the market is today, which is a more measured buying environment, and certainly overall economic conditions we are in right now that salesforce continues to deliver the numbers, as you can see. emily: you disbanded the m&a committee. m&a has been a huge part of your history. does that mean no more m&a? marc: you are right. we have done some great acquisitions in the company. had some incredible success stories. it is while we are the biggest tech employer in indiana. and of course tableau, the

amazing business intelligence platform that is now integrated with our data cloud. and slack, which i know you use every day. these are great acquisitions, but as we focus on our performance, our profitability, on the reaper organization back to being a core crm company, it was time to put the m&a committee on ice and mitigate what we have been doing with m&a and focus on our core. it is part of the transformation i have put into the company in the last 90 days, and one of the reasons why you are seeing these great numbers in the quarter. kriti: marc benioff speaking with emily chang. they did report earnings after the bell yesterday. this is really important, because it was enough to move not just salesforce sales higher, but enough to move the entire dow. a slew of earnings ahead. a lot of tech earnings. broadcom, dell, and vmware all after the bell. it was what to watch. stick with us.

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kriti: -- >> welcome to bloomberg markets. kriti: let's dive into the markets. we are seeing red on screen. there is a selloff here. the s&p 500 lower marginally, but a selloff in the bond market as well. here is where all the action is. as we see the fred repricing to potentially 5.75% terminal rate, or pete terminal rate. that is really important. two year yield getting closer to 5%, and the 10 year yield sustainably higher than 4%.

at what point does that spook equities by a higher margin? plus the move higher fueling the dollar. the dollar index higher by about .5%. amber, that is the macro story. walk us through the micro. amber: salesforce is a big part of keeping the dow from a mic drop quarter. marc benioff showed sustained push toward being profitable. tesla is under pressure following its investor day. and we have an interesting story in retail. macy's bucking the trend we have seen from a lot of retailers, and seeing their stock selloff. not only did macy's best expectations, but they offer a higher outlook as well. kriti: certainly something to keep an eye on. there is definitely more to come after the bell. a lot of it showing up in the tech space. broadcom, dell, and vmware all

reporting after the dell. better to walk us through it than ed ludlow? walk us through what to expect. i want to start with dell. if you like that is the heavy hitter. ed: they are coming from a place where the market has changed. we are looking at top line to drop around 16% year on year. there was a drop in revenues going back to the third quarter. they have been able to protect the bottom line a little better. i think the forecast is for eps to drop about 4% year on year. the headline of recent weeks has been the layoffs. this is a company that actually pete from a headcount perspective even prior to the pandemic. he go back to january 2020 when headcount was at a level of around hundred 65,000 now at -- 106 5000. now after multiple quarters of cutting we are down to 126,000. the point being that the end market for pcs is not like it was in the pandemic era.

what is the outlook going forward? amber: all of these companies reporting are touch points to other businesses. we saw consumer tech, that was soft. what do you think are going to be some of the information that we can glean about businesses right now and how resilient they are? ed: that is why broadcom is interesting. broadcom reporting after the bell, and you will remember in december they gave a bullish outlook for fiscal first quarter there basically evidence that corporate spending was still there. apple is also one of broadcom's biggest customers. it is complicated by that bloomberg group in january that apple is internally working on its own wi-fi bluetooth chip. this the one that broadcom currently provides. there were some long-term question marks, but near term they are looking bullish. then there is vmware, which is going to be a big one. on the last call the ceo did say

that regulators were -- talks with regulators were progressing well. since then we have had the eu saying they have concerns. that chart is interesting because it has been the outperformance of the stock. kriti: in our last 30 seconds or so, connect the dots here. when you are talking about broadcom, broadcom looking to diversify, whereas dell perhaps more dependent on that ship business. where is the hiccup? ed: i think the commonality is how much of a boom and bust cycle is in place for chips? a lot of what broadcom does go into smart -- broadcom does does go into smartphones. the corporate spending is going to be interesting. there is evidence that people are investing to a downturn and spending to protect growth on the others. he will get a good lens globally because both companies offer globally. kriti: bloomberg tech anchor ed ludlow.

who better to walk us through the stories? you can ask him about any company, he would walk you through the details. coming up, td bank reporting earnings and completing its one point $3 billion acquisition of cowen. we are going to get inside on the stock as well from jeffrey solomon, president of td callen. this is bloomberg. ♪ ♪

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kriti: this is bloomberg markets. i'm katie grouped to alongside amber kanwar. we are getting commentary from raphael bostic.

he is talking about adjusting his rate outlook if the data comes in stronger. he says the fed could be in position to pause by mid to late summer. this is interesting, because it is driving the markets higher. he did see the s&p 500 and dow pop into positive territory. this is important in context, because we know the bond market specifically is pricing in a terminal rate of about 5.5 percent in september, when previously september was the month they were expected to cut. to see that easier stance from the fed atlanta president, raphael bostic, is seen as a positive at a time when people are saying maybe the fed has to go higher for longer. some really interesting moves coming in the bond space. amber: it is not a pivot, but it is a pause. perhaps the market will take it for now, given an ugly february for investors. we will keep an eye on that, just as we are keeping an eye on

shares of td bank. it managed to be profit expectations, but there are concerns about loan loss provisions that are weighing on shares today. let's bring in sonali basak. what jumped out to you? >> a couple of things. one, that interest income is rising. really benefiting here from higher interest rates while higher interest rates also means more paying on savings products. you do seem that interest margins also expanding, meanings earnings are more from loans that is being paid out from deposits. we know also that td has closed its acquisition of cowen. you're also waiting to see what happens with its deal for first horizon. as you said, a lot of questions around the consumer as more provisions are set aside for loan losses with that uncertainty around the macro environment. kriti: certainly something we are keeping an eye on.

sonali basak staying with us as we turn our focus to td bank's acquisition of cowen. joining us for an exclusive interview, jeffrey solomon, president of td cowen. congratulations. sonali: jeff, thank you for joining us. after this deal has closed it is an interesting environment. i'm wondering, now that you are part of another large bank, what are the expansion plans for your part of the firm? jeff: well, it is legal day two. i like to remind everybody it is a marathon, not a sprint. first and foremost, it is business as usual. businesses are like jigsaw puzzles. they fit neatly together. not a lot of business overlap, but a lot of opportunity to cross-sell, and cross-pollinate. first things first, do no harm. make sure that the businesses as they exist continue to do the great things they have been doing. then look for pockets of opportunity where we can work together to maybe solve problems

that either of us could solve on our own for clients. look at markets neither of us could go after on our own that maybe we can go after together. we will be making some decisions as we head into the end of 2023, our fiscal 2023 now is october. kriti: -- sonali: given it is such a volatile market, how are you thinking about the talent story? there are a lot of banks on wall street making a lot of layoffs. do you see yourself picking some of that up or is this just not the time? jeff: we are in an interesting position. right now there is a lot of white space for td securities and td bank. there is space for market share. i think in environments like this you have to be selective about the things you go after. when you go after them you have to go after them with intentionality and high expectations. it is hard to look at -- again,

legal day two, where all the resources are. it is about, where do we think we can gain share, take a long-term view and be in a position where we can use some of the exits other banks have been doing or have already done in some parts of our business in the equity side and where are the places we can pick up share? again, it is legal day two, so it is early to start talking about strategic plans. it is stuff we are already thinking about. kriti: we will get something out of you. which brings me to ipo's. is that something that could be a focus in the coming months? jeff: yeah. the ipo market is a good indicator of the health of the market. with the rally we have seen at least through the middle of february, certainly companies are considering that. we have mandated on a bunch. i know that on a collective basis we are going to get mandated on a bunch more. we have opportunities to cross pollinate. td securities has a lot of

balance sheet out with companies and sponsors that might be taking companies public. cowen is really good at that any equities market. it is an opportunity to figure out how we can be more relevant in research and trading. i do think there is an opportunity in that market. obviously it is always market-dependent that we have seen the worst of the equity market already. last year was horrendous. it is unlikely we are going to have another year like last year. kriti: i was going to say, it seems a speculative that. our ipo's coming back into fashion? jeff: there were never out of fashion, unless you see the vix spike above 27 or 28 or 30. that is when they are out of fashion. companies only finance themselves. it is not something that goes out of style. the question is whether the market is there. there are always companies that wish they could get access to public capital and they wait for these windows. i definitely think you will see that. it is not the first half of this year. it could be the second half.

one of the reasons is we have to do a lot in the private sector to rebuild duplicative supply chains. you think about semiconductor equipment, the government is going to spend about $50 billion. there will literally be challenged -- trillions of dollars spent to rebuild semiconductor infrastructure in this country, and a chunk of that is going to come from public market investors. sonali: that's interesting. someone view that window as sort of shot. companies are viewing that kind of opportunistically. we have seen a lot of m&a that has come from strategic, other businesses buying other businesses. you expect that to continue or will companies start to have an option if that ipo window opens even a crack? jeff: if it does open a crack they will. we are talking about clients about tracking opportunities to either grow themselves through the use of debt, equity, or like we just did.

our next leg of growth was going to be much better as part of a bigger financial institution with more tools. there is a lot of strategic rationale behind that. a lot of our clients may find their best past forward is to be part of another organization or clients are looking to be able to grow through acquisition as opposed to organically. i think those are all options on the table, and i think as you look at the markets it is great to have options. if you don't and you need to do something there is always something to do. m&a, i expect be picking up again, certainly strategic m&a is already moving along nicely. sonali: you are taking a look at just how clogged this pipeline is. how painful is it out there and how much of a road bike -- were blocked it create for financing? jeff: there is no question that when banks are filled with their leverage lending books it is harder to get things done. we have had meteor great rises,

and maybe the prospect of additional rises. banks are still digesting that and sponsors are trying to digest, how are they going to run their businesses in a higher rate environment? they have to reposition their businesses to be in a position where they have more ebita. what we have seen his activity from direct lenders. we continue to see direct lenders continue to raise money. of course they want to get paid for that, so it is more expensive, but the deals, there is a lot of capital to do sponsor m&a. it has been slower as companies reset on valuation and margins, that is going to get fixed in the next six to nine months, and you will start to see that my sponsor m&a will pick back up. kriti: that is a lot of positivity. jeffrey solomon and sonali basak, we thank you. the future of digital assets symposium kicks off in washington today. we will speak with brad

garlinghouse, ripple labs ceo. stick with us. this is bloomberg. ♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place that you want to keep in the family or passing down the family business or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?

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avalarahhh ahhh kriti: this is bloomberg markets. i'm kriti cooper -- kriti gupta. the digital asset symposium is taking place in washington today. convening to discuss innovation and regulation. one of those is brad garlinghouse, the ceo of ripple. he joins bloomberg's kailey leinz for an exclusive interview. take it away. kailey: it is great to see you here in washington. for some time now you have been locked in this legal battle with the sec. it surrounds xrp.

can you shed any light on whether you have had ongoing conversations with the sec? are you expecting a result from this in this first half of the year? brad: it has been almost 2.5 years since that began. we have tried to move as quickly as we possibly could. the litigation is briefed in front of the federal court and we expect a decision in 2023. the question is in the first half, the nature of that is we don't get to control that. i think it is clear the judge is aware of how seminal this issue is and how important this case is. on one hand i think that is good, but on the other hand we want to get it right. if that takes time, that is ok. kailey: you allude to the fact that this could have implications for the industry as a whole. what conversations are you having with your fellow industry leaders surrounding this? how worried are they about the ultimate decision here? kailey: i think people --

brad: i think people have come to realize the sec bringing the case to ripple was not about ripple or xrp. it is about how the sec is attacking the whole industry. i'm not sure everyone fully digested that, and now is that -- and now that is why they understood. this is going to be pivotal for the industry. if the sec is able to prevail i think there is a lot of other cases, and some of them, just in the last four weeks they brought five cases. this is not a healthy way to regulate an industry. regulation through enforcement as opposed to what we are seeing in other where they are doing the work, codifying, creating a framework that allows an industry to grow while protecting consumers, think that is what the u.s. is lagging. i'm here in washington to continue to try to evangelize and exit -- and educate, here's how these technologies can benefit consumers, benefit industry. kailey: is what i'm hearing from

you, if the u.s. doesn't get its act together and move more quickly all of this is going offshore, going elsewhere? brad: it already is. the u.s. is already behind. this is not behind countries we haven't necessarily heard of. this is behind australia, behind the u.k., japan, singapore, switzerland. there is a lot of countries that have taken the time and thoughtfulness to create that clear rules of the road. by contrast when i first got involved in the tech industry some were saying the internet should be banned. they were saying, here is how the internet is being used for illicit purposes. the government said, we are going to create a framework. that allowed investors to look at the benefits to the united states on a geopolitical basis, to have the amazons in googles based in the united states. we are at severe risk of having that not happen in this next evolution of technology around blockchain and crypto. it has already started moving

outside the united states. and also consumers are suffering because of that, because you don't have the same protections that the frameworks can provide. kailey: what would a good framework look like, in your view? brad: what you are seeing is the securities and exchange commission, if you are a hammer, everything looks like a nail. not here is a nail. any framework has to start with clear protections for consumers, but then thoughtfully understand that these are not always going to be securities. some of them are used as currencies. that is, having an efficient process to trade, exchange, move those things would be much harder in a world if they were regulated as a securities. kailey: the sec has pursued similar cases to the one concerning ripple. how do you see your case in particular as differentiated from those? brad: the ones the sec has won have really been very clearly

icos, initial coin offerings, where the company issued a token to raise the business. ripple uses xrp to solve a cross-border payments problem. to send money overseas tends to be expensive and error-prone. we are using those technologies to make that real time. why is that i can send an email to anywhere in the world? you don't have a cross-border email. we think the future will be you are not going to have cross-border transactions in the same way. i think this case is unique. i think it is important to setting the stage for how crypto is regulated in the united states. i'm optimistic. i think the laws on our side. i think the facts are on our side. and i think history is going to be on our side. these are not technologies where you can put the genie back in the bottle. kailey: why not just avoid the nettle and register xrp as a security? brad: if the sec had done the work to create a framework to do that -- there is no framework to register a digital asset.

there is nowhere for it to trade. if it is a digital asset that is a security you cannot trade on coinbase, you cannot traded on crack and, you cannot traded on nasdaq. they are putting the cart before the horse. if the sec had done the work to say, here is how this is going to exist in the united states, that's great, that sec has gone beyond what the law says and i was really trying to expand, for power and politics they are putting that ahead of sound policy. kailey: we have to leave it on that note. brad garlinghouse, ripple ceo, thank you for joining me in washington. kriti: kailey leinz, like she said, brad garlinghouse, thank you. you can catch more of the interview on bloomberg though. let's get a check on these markets. green on the screen. the s&p 500 higher by .2%. the bond market, selling off, though. pulling the dollar along, stronger by about .4%.

when crude trading with an 84 handle. or markets coverage ahead. for amber kanwar, i'm kriti gupta. this is bloomberg. ♪

romaine: 4% across-the-board, longer-term yields joining shorter-term brethren, the down truck we saw in equities being tempered a little bit. it may be giving the market some respite. we are kicking you off to the close. scarlet: we see all equity indexes higher, the nasdaq has popped into the green. the yield curve from the tuesday the threes above 4% from the-- from the twos to the