scarlet: welcome to bloomberg markets. it is fed day. the fed expected to cut rates with investors focused on the projections for 2025. s&p 500 up a quarter of 1%. the market expecting a 25 basis point rate cut and it is all baked in. 10 year yield not moving at all. crude oil is higher by 1.5%, recovering from a drop.

i wanted to point out the brazilian read. this is a big move today moving to a new low even after steady interventions to sell the u.s. dollars. there are mounting worries in brazil and overseas over that governments fiscal spending and debt levels. we have seen this currency loose 21% of its value versus the dollar. in the meantime i want to go back to the u.s. equity market and checking on midday movers and bring in abigail doolittle. abigail: let's start off with shares of general mills off the lows but still down 2.7% after the reported a good quarter, one analyst saying they were helped out by the way thanksgiving was positioned. however for the guidance, they have now lowered their sales and their profit outlook on price cuts. they are saying consumers are across categories looking for value so they have lower prices as a response or as a result bringing down the guide. investors not loving that.

this stocks down on the year. turning to a mixed picture of the last time i looked at it. microsoft off of its lows. nvidia up 3.7%. the ft is reporting microsoft has bought 385,000 nvidia ai chips, twice as many as its closest libel. -- its closest rival. the relief rally down four days in a row. still in correction territory. dip buyers buying it off its 100 day moving average. speaking of one stock up in the huge weight over the recent time, it has recovered and is now down. tesla now up 93 or 94%. many investors expecting the company to benefit from the incoming trump administration and a piece of that act is they are taking way the tax credit. it was thought that would hurt other eb makers.

-- other ev makers. lucid and rivian down. a mixed bag for electric vehicle makers. scarlet: abigail doolittle with our midday movers. this morning on surveillance julian emanuel said he sees concerns under the hood but the overall market in his view looks pretty good. julian: there are certainly parts of the market that are frothy. crypto anything is frothy. that we know. other aspects of the "trump trade" are frothy. we think about it as you think about the first quarter of 2021 where you had lots of froth in the meme stocks and profitless tech and they crested in that period. it did nothing for the cadence of the overall market. the overall market kept right on going and press close to 10%

earnings growth next year is the thing that continue to propel stocks higher. caroline: -- scarlet: joining us with her outlook on 2025 is liz young thomas, head of investment strategy at sophia. i lost count -- at sofi. i lost count of how many times julian said frothy but that is a key theme. you think the fed meeting will change the trajectory of how we end the year. we are up 27% in 2024. for the nasdaq is up 34%. will today's fed decision change much of anything as we head into the new year? liz: the decision is free much baked in the cake. we have higher than 98% of a 25 basis point cut already in the market. i do not think the decision will move markets. what we pay attention to is the

dot plot and what they are projecting for the following year. at the end of this year we are looking at their 2025 projections. it'll be interesting to see where those dots fall, where do governors think rates will be moved to in 2025? maybe more so the projections for unemployment, for growth, for inflation and what the fed expects next year. also we know we have the decision at 2:00 eastern and the press conference at 2:30. that period between 2:00 and 2:30 is the most dangerous period to trade. once jerome powell starts talking is when markets try to move in figure out what the fed projections are for next year and what they are thinking. scarlet: between 2:00 and 2:30, very dangerous. the s&p 500 made a record high on december 6. since then it hung around that level but has not gotten back to that point. what is preventing the market

from making a new high or maybe the better way to ask is what is keeping us from revisiting those highs and maybe taking figure down giving how extended sentiment is right now? ian: to answer the -- liz: to answer the question of what is keeping the market from making a new high, we had a 26% year in 2023 now we are looking at a 27% or 28 in 2024. two consecutive years of big gains in the index. december is the time investors are looking to reallocate. they are moving their portfolios around. we are seeing a lot of what we would consider factor rotation in december. a lot of the things that led through november of this year have reversed and the things that have not kept up quite a bit are showing a lot of strength in december. there is a rotation period that is always difficult to set your sights on this is what is happening in december and that will continue into the next

year. that is not necessarily the case. we are obviously in between administrations. we have inauguration in late january. i think markets have reacted to the election outcome. now they are waiting to see what types of policies actually get put in place. we have to get a lot of nominations through congress so there are still quite a few questions in the first months of 2025. scarlet: there are a lot of uncertainty so people have to wait for what announcements get made. given all that has been priced in to this 26% rally, what is the prospect for a bit of repricing in expectations in 2025 if perhaps the new wood ministration does not deliver on everything people are so optimistic about at the moment? liz: first and foremost, this is not even that political, sentiment is pretty extended.

people are optimistic about 2025 due to the election outcome and the expectation of lower regulations, a pro-business environment, may be more cyclicality, activity in capital markets. there was a lot of momentum on the positive side coming into the election. this continues to fuel it. sentiment is at a bit of an extended level. that does not mean it has to fall off a cliff and correct, but the biggest risk is we going to next year with a lot of optimism and a lot of risk appetite that may need to slow down as we start to get more concrete details about what some of those policies are going to look like. we also have to start to get through our first earnings season in 2025 which will be q4 of 2024 and we need that fundamental strength next year to prove why the stock market can continue rising. earnings will be tremendously important to market direction next year. scarlet: really appreciate you

joining us. liz young thomas is head of investment strategy at sofi. let's shift gears from the u.s. to the latin america region. first it was a collapse in the currency, now the rest of brazil's markets also weakening as investors lose faith in the government's ability to contain a deepening fiscal crisis. the main stop falling to a six-month intraday low. we are joined by giovanni acevedo with bloomberg news. thank you so much for joining us. let's start with the currency because it began there, down 21% this year. the central bank has intervened and i'm not sure to what effect. is this a losing battle for the central bank. giovanna: the central bank has an important part to play but it is not the protagonist. investors want to see more from the government, more in terms of the direction of we will cut more. the government presented its spending cut plan in late

november and that is when the mayhem started. together with the spending cuts could presented measures which investors saw as watering down the impact of the cuts and now fiscal credibility is front stage, everyone wants to see the government be more direct about what they are going to do and as we approach 2026 with potentially running for reelection or concerns you might be spending more. i think commitment and any sort of indication in that direction is very important for the market right now. scarlet: you mentioned lula. he is 79 years old. he had emergency brain surgery about a week and a half ago and now he is back in office. he needs to address the budget deficit and enact these spending cuts. what are people saying about whether he and his team have the political will to get this done? giovanna: it remains to be seen. the outlook for the currency is pretty murky so far.

the rhetoric we have seen from the government does not see a lot of space for additional cuts to appear. late night on sunday the president spoke on brazilian television. he criticized the central bank. today we saw the finance ministers says the currency is under speculative attack. we have not seen any strong indication there is political will to get that across the floor. we are seeing congress vote today on two bills which are part of the broader fiscal package and i think there is anticipation to see what happens there. in terms of political will there has not been any strong indication the government will be doing more. caroline: that is the big concern especially as you see the weakness in the real spreading to other assets. are you hearing anything from foreign investors saying brazil is becoming on investable, at least in the short term? giovanna: it is difficult to invest right now.

the local market is very sensitive to fiscal headlines and it will continue to be next year. local investors have trouble keeping up with the news flow and the reactions that happen here so it is harder for them to engage. if you look at the interest rate curve we have heard it is untradable though i think there is a lot of concern. the outlook is murky at it all goes down to rhetoric, to see the government will have the fiscal commitment through their speeches. i think everyone is waiting for that. it does not seem there's a lot of political will at the moment. scarlet: thank you so much. bloomberg news in sao paulo. appreciate you giving a recap of the news in brazil. we are looking at the new stock pickers powered by ai. they might remind you of the old stock pickers. that is the latest thesis from our next guest. bloomberg columnist nir kaissar

the look at the future of ai trading i next. this is bloomberg. ♪

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allowing us to deliver the energy we all need today so everyone can follow their own road. that's energy in progress. scarlet: this is "bloomberg markets." ai was the big theme this year and will likely be a bigger theme in 2025. in his latest column nir kaissar writes about the rise of ai stockpicking that might be innovative but made -- but may not deliver better results than its human predecessors. we are joined by nir kaissar, bloomberg opinion columnist and founder of an asset management firm. you point out that speva scorecards show most active managers over the long term trail their benchmarks, whether

it is the s&p 500 or something else and that ai bots are not necessarily going to be better than their human counterparts. why do you say that? nir: thanks for having me. there's a lot of buzz about what ai could do and it is powerful. maybe it will be a better stock picker than the humans that came before. i think it has three big hurdles. first of all of the aggregate ai cannot beat the market. in the aggregate all of the ai will be the market minus fees. the first thing to know is they cannot all win but the second hurdle is the fees. these files be more innovative than your plain-vanilla index fund. the fees are a real drag. even some that win will not win by enough. i think they have a third and bigger problem. the human stock pickers do not

like to hear this but by and large they've already been replaced. 30 years ago if you wanted to do value or quality you had to hire a stock picker. now there are low-cost etf's will do it for you and that means ai will have to do something novel beyond what is already available in the marketplace. scarlet: indexed funds are the low hanging fruit and smart beta are a twist. they've also absorbed a lot of capital. the other thing you point out is the way people pick who they want to pick their stocks is based on someone's track record. they take a look at their history and their ability to outperform the markets in the past. if you're going to rely on ai and technology to pick your stocks, they don't really have a track record to point to.

nir: let's be generous and assume at least some ai will be wonderful for stock pickers. the question is how you get in. you will have new ai without a track record and it will be difficult to tell the difference. with managers you can listen to them and read the reports, you have some way to gauge. with ai it is largely opaque, how will investors be able to tell? they will have to guess. the winners will emerge but the ones that emerge will have the same problem as real life stock pickers which is there'll be a lot of interest from a lot of investor flow and then you will have composite he issues and they will eventually closed to new investors. even if ai is better investors will play the same games they played with funds forever to try to figure out in advance which one will win and which will lose. this is a very difficult game to play. scarlet: what do you think is

the single best thing ai could do? what benefit could they provide in the process of picking stocks? nir: one thing that comes to mind for me is as index investing has gotten more popular you get a lot of complaints from market efficiency types who say you need active managers in order to keep markets honest, in order to keep prices efficient, in order to keep someone from mispricing stocks. if everyone is in index investor than it would doing that job and you could end up with mispricing. first of all we are very far from that. there are plenty of active managers out there. ai introduces a very interesting idea you can have all of the bots doing the work of pricing and therefore the rest of us can be index investors if we want and not have to worry about market efficiency. that strikes me as a very compelling use case for ai. scarlet: a silver lining for the role we can rely on ai to play. appreciate you joining us.

nir kaissar is a bloomberg opinion columnist. we have more coming up. this week's etf report is next and how one fund is playing to take advantage of an expected big theme in 2025. bitcoin etf one of the stars this year. earlier on bloomberg bitcoin bull spoke about the value of the digital asset. michael: now for the first time in 100 years large public companies have a capital asset that they can consider in lieu of treasury bills and that is bitcoin. it doesn't make sense to consider real estate or gold or paintings or barrels of oil as a treasury asset. it does make sense to consider bitcoin. we are your one of a new era. ♪

scarlet: this is "bloomberg markets."

time for our weekly etf report where we checked in on the latest news flows and trends. into 2025 we are looking at big potential returns and a big potential themes that will be unfolding. those include tariffs as well as power demand. one etf outperforming the overall market has been the tcw transform systems etf. for more on this i want to bring in my etf iq coanchor katie greifeld as well as eli horton, managing director at tcw. katie, there are benefits on of launches this year and almost all of them are tied to active strategies. katie: a record share have been tied to active and it is interesting. tcw is part of that. you think of tcw as a pawn shop but i did but as eli knows well -- you think of tcw as a bond shop.

the ticker there is net see, it is all about the power transition and different energy sources. it has been outperform the s&p 500 and would people say power now they typically think ai and increasingly they are thinking about nuclear. i am curious how you are thinking about that when you think about opportunities. eli: we should spend a minute on power. i think power is only a portion of the opportunity of energy transformation. we are trying to identify massive multi-decade themes and that is the energy transition. we are moving from a fossil fuel system to renewable energy and we think that takes joins of dollars of investment per year and power is only a portion of this. i would say about one quarter of the fund is invested in our thesis that the united states is short power and needs to massively invest in its. . we are electrifying vehicles and bringing manufacturing back and now ai is building data centers that are massively power intensive so we have a problem on our hands.

nuclear plays an important role in this. we own the two largest nuclear power producers in the country. katie: let's take a look at your holdings. 29 holdings in total. your top holdings or republic services, general electric. talk about the size. is 2930 where you want to be or does that speak to the opportunity set, the number of potential targets out there right now? eli: we believe where there is such large system change like there is in the energy transition it pays to be active with your decision-making process and we are not investing in a broad blanket of companies. we go bottom up, fundamental research, very deep in the field to identify the companies we think are winners and invest in them in a concentrated and conviction weighted portfolio. 20 to 30 stocks is what we think is appropriate diversification and that is how you outperform the market.

katie: how are you approaching a noted change in administration? some of these investments the biden administration has made, for tickly it comes to this energy transition, does that effect your portfolio? -- does that affect your portfolio? eli: we believe the opportunity is in brown companies, not so much green businesses. the administration is very much in favor of brown energy. take the power dynamics. demand for electricity has been flat the last two decades. it will double by 2050. we cannot solve at all with wind and solar. national gas -- natural gas is a big opportunity. we own the largest producer of natural gas turbines that utilities used to generate that power. this administration would be favorable to that type of business.

scarlet: fantastic to get your thoughts. tcw's eli horton and bloomberg's katie greifeld. we are coming you down to the fed decision with former fed governor betsy duke. this is bloomberg. ♪ ♪ ♪

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scarlet: welcome to "bloomberg markets." i'm scarlet fu. let's show you where things stand on this fed day, with the s&p 500 up slightly. no move across the treasury curve with a 10-year yield unchanged at 4.39%. we are keeping a very close eye on developments in brazil, where concern over the fiscal budget is weighing on the real as well

as other brazilian assets. you can see it falling to a record low with the dollar climbing 1.33% against it. let's bring in abigail doolittle for a couple of those names. abigail: sometimes we joke that earnings season goes on and on and on. the hardest month is after the quarter ends, but tomorrow we will have micron technology reporting its quarter that was. we have the stock of about 1.4%, off the highs. it had been up more than 2%. they are expected to put up 1.76 in adjusted earnings on a billion dollars in revenue. i'm a little hesitant, this was from bloomberg terminal -- 84% growth, really pretty incredible. some analysts thinking that the guidance could show demand around ai. you know about the bid for broadcom.

turning to the shares of coinbase, down 1.2% off the lows . down more than 3% -- 2%, excuse me. a bit of a down day for bitcoin. it seems like these crypto stocks are following that path. turning to the shares of uber can one stock that is basically flat on the year. up ever so slightly, a bit of a boost come up 3.3%. cantor fitzgerald has reiterated its overweight rating, a $90 price target, getting the stock going a little bit. in the year when the s&p 500 is up more than 25%, uber is underperforming. scarlet: along with a number of other names that are not the magnificent 7000 abigail doolittle. getting back to the story of the day, the fed decision at 2:00 p.m. eastern time, followed by the news conference from chair jay powell. earlier on "bloomberg today,"

citigroup's veronica clark spoke about expectations. >> the market has set a very high bar on how hawkish powell can sound. i think we have had data in the last couple weeks that is going to give the fed more confident that the labor market is slowing, inflation is easing. i think they will see that dynamic as evidence that rates are restrictive and they don't need to be and we can take rates lower. scarlet: i'm pleased to say joining us now with what she into debates -- what she anticipates is betsy duke, a former fed governor and chair wells fargo. always a pleasure speaking with you. the market has priced in a 25-basis-point cut, pretty much a done deal. my question to you first and foremost is should it be a done deal? is there a case to cut rates with the economy where it is at right now? betsy: i think it is a done deal. first of all, if it wasn't, you would've had some signaling from somewhere in the fed, somebody would've started talking about maybe it wasn't.

but you haven't heard anything like that, so i think it is. i think this cut is a fairly easy one, because you still have rates that are about what anybody thinks are neutral. as you go from here, you get closer to the range of estimates for neutral, and it is my belief that mutual is higher than the fed estimates it to be. i think it is closer to 4% than 3. as you get closer to 4, and even below 4, the question whether or not policy is restrictive. scarlet: yeah, and this is a moving target, kind of like people know it when they see it, but we are not there yet. a lot of people have talked about with it is rate cut we are expecting today, that would be the third rate cut in around, but it might be the end of phase one, where the bar was relatively low for a cut. where does the bar stand for further cuts in 2025? betsy: so i think there is going to be a lot of caution, moving cautiously into 2025.

i don't think the fed wants to get ahead of itself. i'll be looking at the projections. i expect most of the estimates to be above trend, above potential growth for the whole forecast period. i expect projection on unemployment to be pretty flat. if you look at the last several months, core pce has been pretty flat. none of that includes any potential changes due to the trump administration. i think the fed today will stay away from any speculation as to what those changes will be and will be going with sort of tax cuts will be continued, that general forecast. the forecast for the environment will be about the same as it has been the last couple weeks. scarlet: ok, sounds like really cautious assumptions and staying clear of any kind of political discussion, and certainly that

was powell's stance at the last fomc. does it make sense for him to continue with that stance when markets have priced in a lot of policy from the incoming administration? betsy: well, you price in a lot, and people are putting their money on the table and have to include that. i think that the fed, we will have certainly some preparation by running different scenarios and testing them on their model. but somebody's stated policies and what actually they implement could be very different. i think they will wait and see exactly how policy evolves and then incorporate that into the forecast. scarlet: so what are you thinking in terms of what we will get in 2025? are we going to get four rate cuts? i've heard as few as one rate cut from different economists. betsy: if i were summoning own projections, i would have two

rate cuts in 2025. scarlet: so that invites an interesting comparison to the 1990's. there was a period of time when the fed quickly cut rates by three quarters of a basis point in aggregate and move to the sidelines before resuming with that campaign. are there -- is that a good comparison to make right now? betsy: i don't think so. i think things were very much different. i went through that time. i don't think -- i don't think the fed -- well, we don't talk in terms of we are going to do it a little bit here and then phase two and that sort of thing. it is more of we knew we were very restrictive, we have come down 100 basis points, certainly less restrictive. now we going to have to feel our way along and see how fiscal policy evolved, how the economy evolves, and if indeed the economy continues to grow faster than potential, unemployment

stay steady, inflation does not come down noticeably, then it's hard to make a case for more cuts. scarlet: ok, so that is one of many things they will be considering. you mentioned employment, and that is part of the fed's dual mandate. what part of the labor picture worries you? i think about the unemployment rate and how it has been creeping higher, and if you go past one decimal point, it should look higher than it is right now. betsy: so if you look at two to four, that is historically low unemployment rates. i don't think that is worrisome. again, it is a supply issue on the employment. since i'm not at the fed, i can consider potential policy come and i think deportation and having potentially no net in migration would really hit the labor supply. and therefore tighten up labor markets again. scarlet: yeah, so that would be

something to keep in mind. what else of the incoming president's policies are you thinking the fed will need to fold in when those announcements are made? is it going to be on the tariff side, the tax-cut side? betsy: on the tax cuts i think once you get as a given that likely they are going to be extended, then i'm not sure right now that anything is going to be added to that that will make a significant difference. if you had huge cost cutting come out of the musk-ramaswamy piece, that would change the deficit spending picture, and that might change things. on the tariffs point, there is a question of whether that is going to be a one time change in prices or a continuing increase in prices. let's say tariffs increase prices by 5% this year, but we are not going to continue to go up so we are not going to continue to increase prices. that would be a one-time shift

in prices, not necessarily change in the overall underlying rate of inflation. does that make sense? scarlet: yeah, it does, and these are unknowable things right now at the end of 2024 and we will wait to see how things unfold. really appreciate you joining us today, betsy. betsy duke is a former fed governor and former chair at wells fargo. coming up on "bloomberg markets ," salesforce unveiling new ai capabilities. we have an interview with ceo marc benioff. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. stock of the hour is micron.

shares are hired to date know that the chip maker is scheduled to report first-quarter results and analysts will be looking for trends in the high-bandwidth memory products used in ai service joining us to discuss it is jake silverman with bloomberg intelligence. what do you know about the high-bandwidth memory products business? micron does not break it out from the other numbers, does it? jake: no, they don't. we think they have generated a billion or so in revenue in 2024 from hbm. we don't know precisely. scarlet: we don't know precisely, but there is a lot of talk of how this is the most exciting secular story for this industry, but because we don't know holland, it is difficult to project out the ramp-up. what are you thinking in terms of how to approach it? jake: what we do is we take a comprehensive approach of looking at gpu demand from companies like broadcom. we are able to triangulate that

a little bit based on what ai infrastructure demand is. scarlet: and how big a part of this -- micron's overall revenue pie is this high-bandwidth memory compared to its traditional chips? jake: it's still pretty small. next year we will see it become about maybe 10% or so of the revenue. it is still a nascent story, but growing rapidly. scarlet: is it 2%, 8%%? jake: probably five or so percent -- well, maybe two or 3% and then expand by 4x. scarlet: that is the thing everyone knows, it will expand, just not exactly what rate. talk about the dram memory cells. there is concern that there is excess inventory that could weigh on prices. jake: pc and smartphone markets aren't looking as strong as ai, which i don't think is any surprise. western digital recently was talking about for their

business, some adequate inventory levels right now for smartphone demand isn't necessarily particularly strong. it's overall stable but not necessarily growing. we could see some weakness because, as you pointed out, there is excess inventory in the market, primarily from china. if we look at micron and their peers in south korea, they've been a little better -- they have been more discipline on the amount of supply they have been adding to the market. scarlet: fantastic. jake, really appreciate your joining us today. jake silverman with a preview of micron, which reports after the close. let's stay with the tech sector, because yesterday salesforce announced an update to its ai asia platform. ceo marc benioff expressed optimism about the changes for he spoke about " time" magazine's person of the year, donald trump. benioff has owned the publication since 2018.

he begins with ai. marc: this is the most exciting thing i've ever worked on in my career, the idea that humans with agents are driving customer success together. we started talking about this at our dream force conference a couple months ago. now our salesforce -- our coo just told me in the event that we have signed more than 1000 contracts with customers to deploy, probably the most exciting appointment area is that salesforce has this up and running for our customers. help.salesforce.com is live as of today. we have thousands of agents working with thousands of customers working hand-in-hand with human support agents resolving customer success. and we have dramatically reduced of the number of cases that we have to escalate to humans. >> you have a number of

customers in vastly different industries using this technology. how are they each adapting it to their business use case? marc: you're right, companies and every single industry have started to deploy this technology because, look, the human workforce is quite stagnant and everybody wants growth. by providing digital labor, we are able to grow these companies in entirely new ways. this is a big thought, and you're right, a company like deco or disney or rbc bank, all of these companies have the ability now to augment their human employees with digital workers. this is an incredible moment where we can begin to see a partnership between human labor and digital labor. it is going to deliver a much lower cost and much easier to use and much higher levels of accuracy and very low hallucinogenic in the ai layer.

annmarie: you said in a recent piece in "time" magazine that "technology itself is neither good nor bad, what matters is how we use it." you know the concerns around ai and how it could displace workers obviously it would be very efficient, but it could displace workers. to aiding adversaries, morning various actions. how do you envision regulators, policymakers making sure that it is used for good, and good use cases? marc: you're right, technology has never been good or bad, it is how you use the technology that matters. this is not the first time a technology to has made human beings more productive. but it is one that seems to dramatically impact human productivity almost immediately. you can see in the third quarter gdp grew, but the human workforce did not grow, and economists are saying that the dramatic advancements the last two years and ai have given us

all just a little bit more productivity, and it showed up in the third quarter gdp. that idea that we could use agents and ai to extend our workforces with not just human workers, but digital workers, this is an incredible opportunity. yes, you're right, there is going to have to be guardrails, and that is built into our platform so that u.s. and employer, you have to build the trust into the agent because that agent is working with your customer. all of those aspects of that interaction are going to have to be governed, that is also built directly into our platform. annmarie: i know the incoming administration thing about this, the biden administration was thinking about this, they have a task force. "time" recently named trump person of the year. have you spoken or met yet with the president-elect? marc: well, i think you know that when i bought "time" magazine, i said i wouldn't endorse any political candidate, and i stopped all funding of

political candidates. but you also know that this week "time" magazine did say that president trump is our person of the year, and i couldn't be more excited about that. everything you have seen from the story, from the cover, to the story itself, it is the biggest story we have ever done in the history of "time." this really speaks to a moment, i believe, in the political landscape where we really have to have a beginner's mind, that every possibility is ahead of us. i think it is only in the expert's mind that we realize we might have the constraints that we have to put aside. i'm excited for the future and i hope that agents and ai are a critical part of achieving the next level of efficiency and capability inside only our government, but every government. and i believe very strongly that we need to use these kind of technologies to achieve a balanced budget, which i think is a bipartisan issue that all of us can agree on. scarlet: that was annmarie

hordern speaking with marc benioff, ceo of salesforce. we take a look, a live look, excuse me, from inside the federal reserve in washington as we can you down to the for decision at 2:00 p.m. this is bloomberg. ♪

scarlet: this is "bloomberg markets." i'm scarlet fu. we are watching the federal reserve because it is set to decide whether to keep cutting rates for a third time this year. investors on monitoring fed chair jay powell's remarks, due to begin at 2:30 p.m. eastern time. let's go to washington and michael mckee at the federal reserve. everyone is talking about this hawkish cut. what does our hawkish cut look like? michael: [laughter] well, scarlet, what they want to

do is convince people they are serious about inflation. even if they are going to puase, they want to let -- pause, they want to let the markets know they are still on the job. hawkish cut would look like a 25-basis-point cut, would be very surprised if that is not what i'm telling you what to :00. we will see changes to the statement that has to acknowledge that inflation is higher than they anticipated. they may change the wording of the statement to suggest a pause is ahead, which they will justify in the summary of economic projections by saying inflation and unemployment forecasts are going up, and then of course we get the dot plot and the dot plot will tell us, because as of today they think they will make next year. all forecasts valid until january 20. scarlet: that's an important point, there is an expiration date for these forecast. what will likely be the criteria for continuing to cut rates in 2025? it feels like the bar was fairly low for 2025. maybe the bar moves up a little

bit in 2025. michael: that is a question for jay powell when he holds his news conference, because if they do pause, is it because they think the economy is weakening, or stronger than thought, or do they think that inflation is stronger than thought? are they so convinced it is coming down? will be interesting to see what guidance they give on how they will make a decision on what they do in january. i would not expect him to come out and say we are going to pause in january. they won't tell us that immediately, but they will hint at it, maybe. what is it we are supposed to read into it as we get closer to that date? scarlet: i'm sure there will be a ton of questions about incoming president trump that jay powell will decline to answer as well. i know that you are prepared to ask something other than that. michael mckee reporting live from the federal reserve at washington, d.c. you want to keep it here on bloomberg because he will be there at the fed reporting on the fed's decision at 2:00 p.m. eastern time. i'm scarlet fu, and that does it for "bloomberg markets."

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>> from the world of politics to the world of business, this is balance of power.

live from washington, d.c.. >> they say you know you have a deal when nobody is happy. maybe that is the case with government funding. welcome to balance of power on bloomberg tv and radio. live in washington we finally received the text of a continuing resolution to keep the lights on for the federal government past friday. it is jampacked with other matters that have members of congress upset and we will get into the details with jack fitzpatrick of bloomberg government and our signature political paddle -- panel. and we are one hour from the final fed rate decision of the year and we will have more with the former chief economist for the national economic council in the first trump white house. let's check the fed day market. charlie pettit has a look. charlotte -- charlie: good day from new york