>> today the federal open market committee decided to leave our policy interest rate unchanged. we do not need to be in a hurry to adjust our policy stance. >> this is a fed that is not in a hurry to take further actions. >> the decision was well understood and justifiable. >> leaving all options open for the next couple of meetings seems like the way to go at this stage of the game. >> it would not surprise me if the fed attempted to stay on hold until the summer. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: live from new york city, good morning.

for our audience worldwide, bloomberg surveillance starts right now. equity futures bouncing back, up one third of 1%. two earning stories to watch. encouraging numbers from meta-. a powerful story coming out of tesla. lisa: the story is the right place to start. with tech earnings and all earnings words matter more than the numbers posted. whether they beat or missed it was much more about the spin forward, about the vision of the future that led to the gains. jonathan: and people bought it, particular for tesla. ecb decision later and then apple after the close. lisa: can they spin forward the same kind of idea at a time there is a lot of skepticism? they are the least loved magnificent seven name aside from tesla. can they convince people they do have plans for artificial intelligence? jonathan: five downgrades on

apple over the last few months. lisa: that is unheard of. nobody puts a downgrade on any of the big tech names yet they have the greatest number under their -- the greatest number other than tesla in terms of downgrades. can they turn that around with the same type of optimism we heard from meta? jonathan: we begin this morning with our top story. original american airlines jet colliding with the military helicopter while approaching reagan national airport from kansas last night. the plane carrying 64 people, the helicopter carrying three. >> we want to extend our thoughts and prayers for those individuals impacted by the events tonight. i spoke with president trump and his team in the situation room, had a conversation with secretary pete hegseth and with the kansas delegation and the mayor and others in leadership as well as governor youngkin from virginia and governor kelly

from kansas. the department of transportation and faa perspective we will offer full support to those on the ground, to the mayor, but also to the ntsb, who is going to be conducting investigations in this matter. jonathan: the crash prompting a search and rescue operation for any survivors in the potomac river with an investigation into the cause underway. >> we are actively working with local, state, and federal authorities on response efforts in the american airlines care team has been activated to assist our passengers and their families. we are cooperating fully with the national transportation safety board and will provide all the information we can. jonathan: joining us is bloomberg's annmarie hordern. good morning to you. bring us the latest please. annmarie: we still have the search-and-rescue mission underway. more than 300 individuals.

we should note the river was icy , the weather conditions were rough, it is a muddy river and what we have heard from cbs news is about 18 bodies have been recovered. we have not heard of any survivors. you are listening to some of those officials briefing last night as soon as the plane went down, the midair crash at 9:00 p.m., we heard from a number of of the shuttles throughout the -- we heard from a number of officials throughout the evening. we will also hear from sean duffy yet again at 7:30 a.m., in about 90 minutes. we should have more of an update. the nation is waking up to an incredibly tragic and devastating morning in the nation's capital. lisa: the first potential fatal crash we have seen in this type of plane going back to 2009. what are some of the big questions in this press

conference you expect to be asked? annmarie: there is a ton of questions as people are waking up and obviously as soon as this happened last night. even the president of the united states was asking questions on treat social. how did this happen? how could this black hawk helicopter traveling three u.s. military personnel, we know this was training. how did this helicopter not be able to see this flight? does this have to do with communications? does this have to do with they were on different radio frequencies? does this have to do with the fact that potentially air traffic control was not aware or is this airport just overcapacity, which has been a hot button issue for dcaa at this airport for years. as you know this was a huge issue last year when they added five more round-trip flights when they had the faa reauthorization bill sent to biden's desk. there is a ton of questions

about how this could happen. we'll have to wait to see if we get any of those answers in about an hour and a half. jonathan: they process needs to take place but it involves two very new secretaries, defense secretary pete hegseth only confirmed friday and sean duffy only confirmed tuesday. the challenges for the transportation secretary a lot bigger. we have had a number of calls for tickly over the last couple of years. can you address what we have done to address the shortage of air traffic controllers? annmarie: a number of close calls and that is why you've seen the faa take a ton of heat. the head of the faa has stepped down in december. we are still waiting on a new faa head. it is a great point to bring up that this will be a huge undertaking for a brand-new team and some members of that team are not in place yet.

what we have seen happen is last year when you have the faa reauthorization, it is a 100 billion dollar measure sent to biden's desk. there was bipartisan support for this. what they did do is they added more faa traffic control jobs. they put in a provision that they would need to work for the next five years to get to the highest level of staffing. this money and this bill only happened in the spring of last year. we are still waiting on a lot of that to filter through. in d.c., this is been a huge issue. to get that bill across the finish line, more money for air traffic control, they added five more flights. this airport -- many local congressional representatives would say they did not want to see that happen because they feel like this airport is too oversubscribed. you do not just have commercial

airplanes landing here all the time. we are just south of the pentagon and across the river from the nation's capital. there is a huge presence of military personnel that also operates along this river. that is why this is going to be a serious investigation, not just for the transportation authority and the new secretary sean duffy but also the dod. jonathan: appreciate your time. more from amh throughout the morning. expecting a news conference in about one hour and 20 minutes. i want to share a quote from 2023 from the chair of the national transportation safety board. "our safety system is showing clear signs of strain we cannot ignore." we have had a number of close calls in the country. a process needs to take place but we've had a number of close calls and they are aware of where the strain is and we have to do something about it. lisa: what is the plan? talk about a new administration newly minted.

how will they bolster some of the air-traffic controllers who are clearly operating on a sub staffed operation. we went so long where air travel was thought of as the safest way to travel in the united states. how do we get back to that? it is still very safe on a relative basis but stories like this dent that perception. jonathan: at 7:30 a news conference taking place. we will bring that to you. coming up, will be keeping an eye on the market and catching up with cameron dawson of new age wealth. george on tesla's growth in the pledge to return to growth in 2025 and david tsui of s&p global ratings. in the markets equities are steady. jay powell signals the central bank will hold rates steady. cameron dawson writing "further interest rate cuts would likely need to come with incremental weakness in the economy

transforming further cuts from because they can to because they should." cameron joins us for more. what is your big take away from chairman powell and the news conference? cameron: that the recalibration phase is over. he called it that recalibration phase and not this one which means the interest rates which are getting closer to the idea of neutral is likely behind us. meeting we will have to see an uptick in the unemployment rate, we have to see a weakening in the overall growth rate in order to suggest they could cut rates further. jonathan: -- lisa: is this a good signal that the economy is robust and they are taking a backseat and being as boring as they possibly could? cameron: we think the fed is going to be less consequential than they have been, meaning they will be more reacting to growth, they will be reacting to policy versus driving markets as they have over the last couple of years as they started the

hiking cycle and then the cutting cycle. we think overall the fed has not been nearly as tight as they think they are. we think the evidence of growth remaining resilient, being above trend the entire time the fed has been in a tight situation meeting with the real fed funds rate being above zero suggests we are likely closer to neutral at this point then having those further cuts which suggests this economy is more resilient to interest rates that it was in prior cycles. lisa: i think a lot of people would rather talk about earnings than the fed given that the fed is following rather than leading. what was your take away to not just the earnings of microsoft and tesla and meta but the reaction to them and what gave investors confidence? cameron: investors are still willing to dream the dream and have this blank check mentality when it comes to ain capex spending. what jumped us in microsoft

earnings was this use of the word commoditized. some of this ai will become commoditized, something everybody has. what will the return on invested capital be for a commoditized product? very different than the monopolize business you think of microsoft with in word processing or you think of google within search or meta within social networking. these are near monopolies that deliver huge returns on investment capital come 80% gross margins, 50% operating for meta-. that suggest that maybe ai roic's could be lower. jonathan: it has been a long week for the market. on monday everyone was talking about whether the capex narrative would be challenged. meta doubled down on the whole thing. i did not expect the c-suite to change.

the question is whether investors would lose patient. will investors keep patient with these companies as they spend money on the projects? cameron: as long as they can keep googling the paradox they will keep being patient. what is giving people the ability to give meta the benefit of the doubt on this capex is because the top line is growing so much. they are using ai to drive topline faster. look at the growth in advertising pricing. it was up 14%. that likely is a function of the fact they are using ai to monopolize more of our eyeballs to demand more of our attention. if topline begins to slow and meta is 98% advertising, if topline begins to slow i think you will see less benefit of the doubt on this capex because it will not be able to be absorbed as much given the strong profit growth. jonathan: it is not getting much

of a cyclical test. lisa: on any level, whether it has to do whether the cyclical aspects of the ai cycle or the economic cycle. they can apply some of the ai applications and deficiencies whereas microsoft could be more of a victim to the loss of margin share. jonathan: there having a decent week. the stock was ok on monday. you know it was down yesterday? nvidia. more bad news for nvidia. right before the federal reserve decision news came out they might put extra restrictions on the export of that stock to china. lisa: if you start cutting off their sales to china and more significant capacity how much are they going to be facing some of what other companies have been facing with respect to some of their biggest customers not being able to make purchases. jonathan: the stock is down 1%. cameron dawson will be sticking with us. let's get in update on stories elsewhere.

dani: the latest in the crash in d.c. search efforts are continuing in the potomac river after an american airlines flight carrying 60 passengers and four crew collided with u.s. army helicopter on approach to reagan national airport. the plane took off from kansas last night and had several members of the u.s. figures getting team on board. cbs is reporting at least 19 bodies have been recovered. meta bears are up 2.6% in the premarket. fourth-quarter earnings beat on the top and bottom line. mark zuckerberg said this would be a really big year in ai, forecasting their ai assisted will reach more than one million people. on the other site of things tesla fourth-quarter earnings and revenue fell short of wall street estimates but shares are rising 3% in the premarket. elon musk predicting an epic period of growth for the company. he says tesla will begin robotaxi operations this year. jonathan: tesla up 2.9% in the

premarket. up next, the looming tariff deadline. >> i prefer across-the-board. we are treated horribly by the global trading environment and need to be treated with respect and we can use tariffs to create reciprocity. jonathan: that conversation is just around the corner. live from new york city, good morning. ♪

jonathan: if you are just joining us welcome to the program. building on the news overnight that original jet flown by american airlines collided in a deadly midair crash with a military helicopter on the approach into reagan national in washington, d.c. we will have updates on the ground in the nation's capital and there will be a news

conference at 7:30 local time, about one hour and 12 minutes from now. plenty of updates throughout the morning and we will bring the news conference to later on. markets look like this. we futures up 14%. -- equity futures up .4%. under surveillance going into the weekend the looming tariff deadline. >> i prefer across-the-board. we are treated horribly by the global trade environment. they have hera -- they all have higher tariffs and subsidies. they treat us poorly. we need to be treated better, we need to be treated with respect and we can use tariffs to create reciprocity. products price may go up but all of them is not inflationary. jonathan: global markets bracing for president trump's threat of tariffs against canada, mexico, and china. potentially this saturday. cameron dawson is still with us.

we have a thread of 25% on mexico and canada. 10% on china. you have a working assumption going into the weekend? cameron: we think this notion that tariffs are not inflationary or disruptive because of what happened in 2018 is limited in the sense that 2018 tariffs were so targeted they were on certain items and things within supply chains that eventually did not get all the way through to consumers which means that if you are talking about blanket tariffs across the board we think this could be highly disruptive to supply chains, potentially inflationary because of that disruption as people are trying to move things around which suggests this could weigh on growth and inflation in a more meaningful way. jonathan: that sounds like stagflation. is that what we would be expecting? cameron: it is definitely a risk. when you throw on top of that the potential for labor force growth to slow down because of immigration, both of these

things suggest upward pressure on inflation, downward pressure on growth. the question is how far they push these through? terrace for negotiating purposes are different than tariffs that are pay fors. tariffs that are pay fors the offset tax cuts would have to be for more sweeping and for more static. meeting once you put them in place, it just means there is that risk that we have upward pressure on inflation and downward pressure on growth. lisa: i am glad you mentioned what the purpose of some of the tariffs are. how realistic it is that they will be deployed. we talked about -- we saw the testimony from howard lutnick and a said there are tariffs on mexico and canada. he said this is a separate tariff to create action. he said if they comply there will be no tariff. how do you take different

signals from different places and understand whether to price in some of these potential levees? cameron: the way to approach it as an investor is how you think businesses will be able to operate in this environment. if a business does not know what tariffs will be and if they will last for two weeks because then you see a response from mexico and canada it is hard to be able to plan in that environment. the question would be our business is trying to get a have this come are consumers trying to get ahead of this? you could see disruption to supply chains even if the tariffs do not stick around. lisa: which is the point jonathan was making yesterday. i will steal from him. he was asking if we have reached a point where the auto manufacturers other than tessler are on investable because of the pipeline from mexico and how many imports they have been controlling from that region? jonathan: auto manufacturers have not been the most investable companies even

without tariffs, but it does add that layer of uncertainty and it is interesting that tesla calls out tariffs being in uncertainty for them and their earnings report but at the end of the day tesla is not a car company, it is a state of mind. jonathan: i agree with that. i am a seller of any guidance dependent on tariffs. this market was a seller of guidance from gm, the bank of canada did not provide any. anyone providing guidance when they are dependent on what happens over the weekend, i think you have to take with a big grain of salt. lisa: which is what we are seeing in the market. at a certain point, if you see the threat of tariffs on a prolonged level could you see those disruptions to supply chains, disruptions to profitability by virtue of the specter of that happening? jonathan: this is a difficult moment the goods parts of the market -- because parts of the market -- some of the automated

factors, the likes of gm, then certain parts of the equity market exposed to the ai story. there is a sense the perceived value has shifted away from the energy place. you think valuations are capped? cameron: digital over physical. that is what the market is coming around to. you have had this surgeon optimism that the digital world would drive a lot of physical investment but even microsoft said yesterday that they would be moderating capex in 2026. if you are starting to see that slow down it would mean your power providers in your infrastructure providers are also going to see growth slowed down. it continues to be this world where there is very little margin for error in the multiple. that leaves no room for negative news. it does not mean you cannot go higher. you would have to see a spark of speculative fervor to get there. jonathan: you think we did go into bubble territory? cameron: we were getting close

and we still have that potential. if the fed cuts interest rates a bunch of times and financial conditions ease further and liquidity becomes more abundant and you see this continued surge in things like meme stocks and a zero date to expiration options, i think we are on the verge of that being an for 2025 because any higher in the multiple come any higher than 23 times has only been achieved in true bubbles. jonathan: before you go, do you think the tariffs go on or do you think we avoid them this weekend? i will not hold you to this. i want to gauge how people think and feel. lisa: we will just put it on repeat after we get the decision. [laughter] cameron: i think they might go on for a time and get walked back. jonathan: a period of time being? cameron: a week. jonathan: cameron dawson. sorry to put you on the spot. i just want to see where this market is. lisa: the head of mexico came

out and said she does not believe this will go in place but there is a plan in place for reciprocity. howard lutnick himself basically dismissing these. how do you price in something the administration is saying we are just trying to get a certain kind about drum and hopefully we will get it? jonathan: i don't think we are most up futures up .4%. coming up earnings from tesla which apparently is a state of mind. from new york city, good morning. you are watching bloomberg tv. ♪

jonathan: here is a snapshot of financial markets stateside. equity futures up .4% on the nasdaq come up .6. outperformance on the russell saved by the news conference. in the bond market yields were higher and then they paired those moves higher. we are sitting right on top of 4.50 on the 10 year yield. it felt like there was a hawkish bias. then the news conference chairman powell had a little bit of cleanup. lisa: it was a language cleanup. that was the hawkish tilt people were talking about and people said ok and they walked back the

hawkish tone it initially had. this was about removing the idea of a labor market facing weakening, the idea of a labor market that is solid and they took out the idea that inflation was on a steady progress to 2%, not a hawkish tilt, just language cleanup. jonathan: perkins in london said this "preemptive easing, cutting to prevent bad things." that was the old playbook. now it cutting when bad things happen. going on to say the fed is not a reason to be bullish anymore. the framing makes a lot of sense. lisa: it was similar to what cameron dawson was talking about. that is the reason people are seeing the fed as not as consequential. there's not a lot of agreement about the direction of the economy. if we start to get truly deteriorating economic data, does that change?

jonathan: euro-dollar 1.0 396. you hear from the fed, you hear from the other side of the trade later on this morning, the ecb in a few hours. lisa: you said something i thought was poignant about how other places are talking about how you cannot have forward guidance and a lot depends on tariffs from the united states. how much does the threat of tariffs give the ecb a pastor cut rates even if they have not reached the 2% target. can they say we are facing downward growth shops due to things out of our control but do not mind the inflation target? jonathan: it could possibly be a disinflationary shop for the continent, not just the tariffs on europe but the tariffs on china which means the overcapacity on china gets delivered wear? that problem is multidimensional. lisa: we heard a hint of that from the bank of canada. does the ecb walk into this open-door to allow them to cut rates at a time where growth is

flagging and a lot of people say if they have a dual mandate they would be cutting rates today? jonathan: the euro is very close to 1.04. under surveillance, regional american airlines jet colliding with the military helicopter as it flew into reagan national last night. the military launching an investigation into the cause of the crash with the search and rescue any survivors. nbc now reporting at least 30 bodies have been recovered. lisa: what a tragedy. we are going to be looking into what is going on with air traffic control, how they can potentially support it. there were a lot of figure skaters and coaches and their families on board heading to a competition or heading home from a competition in wichita. our feelings go out to their families. jonathan: is absolutely devastating. we are still in the process of search and rescue and then we need to figure out what happened. the two individuals that will

help lead that effort have only been in their jobs for a few days. defense secretary pete hegseth only confirmed on friday at the new transportation secretary sean duffy only confirmed tuesday. the first full day for transportation secretary sean duffy and he has to confront this. lisa: this is going to be the first and a big test for nearly confirmed members of the trump administration. how they deal with a comprehensive look at the current faa, what needs to get changed and how they address an ongoing crisis that is deeply emotional for a lot of people? jonathan: aviation traditionally is very safe. more recently a lot of people will be struck by the tragedies that have taken place internationally. two in the last couple of months and then domestically, even before this a number of close calls. the former transportation secretary pete buttigieg talked about repeatedly. it is well documented we are 3000 air traffic controller

short in this country and we will have to address those issues pretty fast. lisa: how does this administration do that at a time they want to increase efficiency of a government? how do they do that in short order when these people have to be experienced and vetted and how do you deal with this post-pandemic when a lot of experienced people left the workforce and we have seen that not just with air traffic control but also the airplane manufacturers themselves? jonathan: i mentioned a quote from the chair of the national transportation safety board in 2023 when she said our safety system is showing clear signs of strain we cannot ignore. i went through a long list of issues as what was happening with aviation that air traffic and staffing shortages have gone up since the pandemic. you have been on top of the story. a lack of meaningful training. the regular work schedules. this is clearly not going to build any confidence into people as a look at the shortage we have with air traffic controllers. lisa: it goes to this idea of a

massive test in just a day or two into administration, the nominated and confirmed members of an administration, how do they lay out a plan for how to make it better at a time where there is increasing erosion of confidence from the public in the air traffic control system? jonathan: just under an hour we are scheduled to have a news conference on the ground, about 55 minutes from now. we will get the latest from annmarie in the next 30 minutes and then we will bring the news conference to you when it begins. that is the latest on our top story. for financial markets a big focus on big tech earnings picking up tesla, meta, and microsoft. microsoft predict and slow growth in its cloud computing business as it struggles to build enough data centers to handle ai demand. it is worth pointing out that that sounds like a capacity issue and not a demand issue. lisa: that is what my thought was.

there should be the right kind of miss where demand is so great outstripping their potential services and that is a real hamper to their ability to outperform or meet expectations. they said demand remains strong, commercial booking is rising 67% , far ahead of what microsoft had been expecting. this goes to the question of a state of mind and a lot of these tech earnings will be what state of mind can you spin the story forward to deal with the adoption and the software and the practice of ai in normal life rather than just simply building out the chips and the data centers. jonathan: not all companies have the luxury of selling a story the market will by but elon musk and tesla seem to have the luxury of doing that. gm tried to do the same thing earlier this week, came out with a decent outlook, the market did not buy it. what is the difference between those companies? lisa: elon musk has been selling the story for a long time.

he talked about full-service driving, he talked about unrolling a pilot program in austin in five months. he said this is not fiction, this is not fantastical. he also said it will be amazing. he also has the ear of the president. this is someone who has hinged his company on the idea of the future. it is a completely different type of conditioning for his investors. lisa: nvidia -- jonathan: nvidia is down .5%. the trump administration exploring tighter curbs on nvidia's chip sales. that's part of the selloff. lisa: at a time people are wondering you have incredible demands for the chips dented by deepseek and then you throw on top the allegations of howard lutnick who is in his confirmation hearings for commerce secretary said they stole the technology. nvidia chips allow them to do

some of the deepseek technology that now has people on the back foot in the united states. there need to be tighter restrictions and then we heard the ministration from out with something similar. if you start to restrict the potential sales you could get the same kind of situation you see with the netherlands where you saw the incredible dive of those shares because china could no longer purchase chips in the same way. jonathan: the administration have called this a wake-up call but i do not think they buy this is the success story been sold on monday. lisa: i don't think microsoft does either. there been investigations into how much deepseek replicated a lot of what openai and chatgpt had accomplished. that will be ongoing. jonathan: tesla earnings falling short of expectations but elon musk reassuring investors with plans to launch its robotaxi business in june. musk predicting an epic period of growth ahead. george writing "do not rerate

the 20% to 30% delivery growth guidance uttered by musk on the last call." maybe you are not buying the guidance but why is the market? george: a great question. i think you kind of nailed it. we agree with elon musk and we appreciate his bullishness on autonomy and robotics. it should be very exciting to get those robotaxis in austin in june and potentially new vehicles. that is a great story and really exciting stuff. objectively speaking the results were less than nourishing. the deliveries reported a few weeks ago missed 2024 guidance and did not reiterate the 20% to 30% delivery growth this year. margins were week. we think we heard a delay of full self-driving rollouts in europe and china. we have to be objective. as much as we love the long-term

story, 2025 does not sound great and 2024 do not end well. lisa: one portfolio managers said the market is behaving as if tesla results do not matter that may catch investors flask -- investors flat-footed in the case of a large shock. what would a large shock be? george: that is a great question. some sort of issue with 2025 deliveries first and foremost, if the removal of tv incentives in -- if the removal of ev incentives has a larger than expected impact. if they're not able to additional vehicles, that is quite unlikely. the margins continue to be weak. they have to put in financing incentives based on the fact that interest rates went up. that impacts their near-term, that impacts their margins. we have to see light at the end of the tunnel from a profitability perspective to

give people confidence the next few years we concede increase in those margins. lisa: what did you make of the fact that elon musk had been on x talking about different political discussions with donald trump and then took a break and did not talk about politics at all on this press conference and if anything is cfo talked about tariffs as being a potential headwind for profitability did not mention the ev tax credits taken off the table. what you make of the fact that it will be increasingly awkward for elon musk and tesla to dovetail their future success with policies that might run counter to that? george: i appreciate the fact that politics were not discussed on last night's call. the point he made that we agree with his regardless of ev tax incentives, ultimately the car market mobility will be electrified. ev's are just better than ice

vehicles. we are seeing a cost issue. we have to bring the costs down relative to ice vehicles. we have to get more models in the united states. right now in the $30,000 to $50,000 price range there not a lot of vehicles that are compelling. there is tesla. we think rivian's r2 in 2026 change that narrative. as soon as people have more choices we think growth can re-accelerate. jonathan: can we achieve that without state subsidies? george: yes. right now we are trying to bring the costs down in the united states of those ev's and that will happen as we have more vehicles proliferate. what has happened in china is proof of that. they have vehicles that are in that range and a lot of choice

because they have a lot of ev companies that are incredibly innovative and that market has taken off. jonathan: appreciate your time and your input. earlier on cameron dawson calling tesla state of mind. lisa: i think a lot of people would agree because if you take a look at the valuations, between $500 billion and $600 billion of tesla's market cap is based on ncb and energy business. over at data track 90% of tesla shareprice is tied with the company might do in the future and not what it does today. jonathan: based on the last way for hours it is hard to disagree. the stock is higher by 2.5%. with your bloomberg brief, here is dani burger. dani: an update on the tragedy in d.c.. defense secretary pete hegseth has announced the military has launched an investigation into the cause of a deadly midair collision between a passenger

jet and a black hawk helicopter near ronald reagan airport. the investigational focus on determining the cause of the tragedy. nbc news reporting at least 30 bodies have been recovered. elsewhere ups shares are following 11% in the premarket trade. it tempered expectations for long-awaited rebound. the company's core delivery operations are suffering from a long-lasting slump in demand. average package volumes remain below pandemic era peaks. nvidia shares are off more than half a percent. the trump administration exploring more curbs on the video chip sales to china. sources tell us officials are focused on expanding restrictions for chips in ai development. nvidia argued restrictions pushed china to become independent of u.s. tech which will hurt u.s. companies. that is your brief. jonathan: up next, big tech earnings underway. >> ultimately anything that drives the cost of generative

ai, inferencing, fine tuning, down is good for software because you get greater volume and lower barriers for entry and create a flywheel effect. jonathan: the latest on microsoft and meta in just a moment and ups getting hammered in the premarket. we will bring you the why in just a moment. ♪

jonathan: two names to watch going into the opening bell. ups is down more than 10%. caterpillar down more than 4%. not a great outlook from caterpillar, could get worse if we get tariffs from the new administration. ups, show us the why of that move of 10% lower. lisa: they a forecast that they expect sales of $89 billion

which is below the 94 billion dollars wall street was expecting. the why is because they are reducing volume with amazon by 50% after long-running tensions with ups building out its own logistics empire and both of them mutually agreed to separate with ups looking for higher margins. what is fascinating is in the past ups was a bellwether for global growth in the u.s. consumer. can it still be considered that given this has to do with the shift in market share away from ups and towards amazon? jonathan: that stock is down more than 11%. big tech earnings underway. >> overall the cost curve coming down is a good thing for microsoft. there is the element of the openai relationship. ultimately anything that drives the cost of gen ai down is good for software because it means you have greater volume, you lower barriers to entry and you

create a flywheel effect where the more people use these gen ai offerings the more the net new use cases come about. jonathan: microsoft, meta, tesla picking off ai earnings. investors expecting a record performance despite headwinds from china and the company's slope ai rollout. bloomberg's mandeep singh joins us for more. the big takeaway from meta and microsoft yesterday? mandeep: i think ai is still the story and meta ai is saying they will have one billion users even though the monetization is an ad pricing, that sounds like music for everyone who is bullish on social media. they control the market. from that perspective everything looks great. they also called out reality labs and how this'll be the make or break year. we know they continue to lose 20

billion every year but if they will decide whether they will continue or not that is a positive sentiment in terms of this will not be a recurring loss. lisa: you scrutinize these companies and watch their earnings calls and listen to them. as it always been like this where the numbers matter last than the vibes some of the executives put out there? mandeep: with a long-term story like ai which everyone believes this is transformational, i think your plan of action and division matters and in this case the hyper scalars are the ones that have invested the most, that have shown a change in business. meta topline is 20% plus. this is an impressive growth number. there is no doubt the company is delivering in terms of topline growth. jonathan: meta and microsoft.

meta doing ok, microsoft a little softer. apple is up next. david tsui joins us. you have had five downgrades in the last couple of months. it is obvious there's not enough here to trickle a super cycle of upgrades. you take a different view of things? are you encouraged by what is on offer? david: i am. i look at apple differently, they are very stable unlike other companies where growth is double digits and apple growth has been steady. if i look at the current quarter , the iphone 16 has not been stellar. it is to come as more apple intelligence features get rolled out across the world. we expect a big upgrade cycle in 2025. lisa: is the bar really low for apple at a time they have the greatest number of doubters on

the street? david: i don't think the bar is low. i think they have a lot of partnerships and they do not have to invest so much. they are not always on top of mind in terms of the next big ai evasion but they have partnerships with openai and googles gemini. it is not because their products are lacking features. lisa: tim cook has been the big ambassador between the u.s. and china. it comes at a time where there is a complicated relationship between both nations and a new administration. what you expect them to say and what you want them to say in terms of their presence in china in terms of a manufacturing perspective and a sales one? david: it is tough to handicapped what they will say but if you look back since last trump administration, what they have done is diversified their manufacturing base away from china.

it is a long process. we are seeing progress. they understand that the manufacturing base being so concentrated in china is not going to be good for business, especially in the current geopolitical environment. they are making progress but at the same time they are exposed. i do not know what they will say but i think their actions speak to further diversification away from china being the major hub. jonathan: is tricky to understand how to value apple when the core hardware business is not seeing growth in the multiple is elevated. i understand there's been a shift toward services and higher-margin businesses but how do you explain how this company should be valued? david: how it should be valued is outside of my expertise. this is a very stable company. they have iphones that are very sticky in every three or four years you will see the customers upgrade. the market share is not very five from a global perspective.

there are many opportunities for them to grow in emerging markets and continued of two share and the prices and the rollout in the iphone features they have, it is very abundant, there are many price levels and they can continue to sell more phones at higher prices in emerging markets and i expect the revenue growth to continue. it is not just about iphones. this year they will have iphone se, they will have mac, they will have the ipad refresh. every year with new products they will continue to grow rapidly. you mentioned services as well. that is a high-margin business. jonathan: those numbers drop later. david tsui of s&p global ratings. coming up, mike wilson of morgan stanley and the former st. louis fed president. all of that and more just around the corner.

the second hour of bloomberg surveillance is up next. ♪

>> i am not going to have any response or comment whatsoever on what the president said. it is >> not appropriate for me to do so. they are going to react to see how fiscal policy plays out. >> fiscal policy is immense here. >> what the fed cannot do is they cannot front run policy. until we know the sequence of policy, the fed cannot front run that. >> how is the fed going to manage through this environment of heightened policy

uncertainty? there is no real good answers for that. >> this is bloomberg surveillance with jonathan ferro , lisa abramowicz, and annmarie hordern. jonathan: apple earnings come after the closing bell. we get a bit of economic data in about one hour and 30 minutes. and ecb rate decisions, so a fairly stacked day ahead for financial markets. >> my focus is on earnings right now because it signals a shift that we have seen increasingly in the ai cycle and in the dispersion between winners and losers and why reactions in markets have been the way they have. lisa: it is interesting we have faith in some outlooks and no faith in others. tesla comes out and says it is going to be an epic year ahead

and the market laps it up. >> this is a storytelling market and the story people want to hear is that ai adoption is here and we are all going to work better and have better lives because of how much ai is adding to what we do every day and they do not want to hear about huge data centers. they do not want to hear about energy and nuts and bolts of caterpillar or ups getting packages to places or even building cars that we are talking about. jonathan: ups down 10%, equity futures positive by .2%. we begin with our top story, a regional american airlines flight colliding with a military helicopter near reagan international airport. the helicopter carrying three people. the transportation secretary, only sworn in tuesday, offering full cooperation. >> we want to extend our thoughts and prayers to those

individuals impacted by the events tonight. i spoke with president trump and his team in the situation room. i had a conversation with secretary pete hegseth and the kansas delegation and others in leadership as well as governor youngkin from virginia and governor kelly from kansas. the department of transportation perspective, we are going to offer full support to the mayor but also to the ntsb, who is going to be conducting the investigation in this matter. >> the crash prompting a search and rescue operation for any survivors with the cause investigation still underway. >> we are working with local, state, and federal authorities on emergency response efforts

and the american airlines care team has been activated to assist passengers and families. we are cooperating with the national transportation safety board and his investigation. jonathan: a news conference 26 minutes away. joining us on the ground, bloomberg's and marie. -- and reordering -- annmarie hordern. katie: nbc local news is reporting more than 30 bodies have been recovered. we do still have the search and rescue mission at play here in the potomac river just behind me. following this fatal crash last night, around 9:00 p.m. here at dcaa, so there is a tremendous amount of uncertainty and questions that still need to be answered this morning. you listen to airline experts and a lot of questions are starting to bring to the forefront, what was the communication like between the

aircraft and between the aircraft and air traffic control? it is a difficult situation now and hopefully in less than 30 minutes you will get answers. >> can you paint the scene and terms of dcaa being one of the most congestion -- congested airports in the country given you have traffic close to downtown washington, d.c.? is there a sense of what kind of staffing and aircraft control and whether there have been other incidents that have raised concern in the past? annmarie: this has been a hot topic in d.c. for years. when they got through the last reauthorization last year, part of that cut more money to the faa to make sure there is more air traffic controllers, make sure there is an upgrade of the aviation industry, modernization of the airports.

five flight paths were added to the airport. this is an airport that is overcapacity, not just the airport itself but we are just south of the pentagon. this is where you see a tremendous amount of military aircraft fly. you have dignitaries using the airspace that go under the radar and something like last night when we heard from the new defense secretary that this was a training blackrock if those three u.s. military personnel on it, so this is an airport, even though it is very tiny, the airspace and airport is oversubscribed. we heard from a senator last night from kansas, representing the state where this flight originated from, talking about how this is so personal to him not just because of course he is representing constituents and

was heartbroken and devastated yesterday but he personally lobbied american air to bring that flight here to washington, d.c.. that flight was only one year happening and he has been on that flight, so that is the scene of what dcaa is like and why it is such a difficult airport to really operate and control, because this airspace is oversubscribed. jonathan: we are getting pictures of the search and rescue effort. can you share how difficult things actually are? annmarie: incredibly difficult, especially last week we had unprecedented weather. there was ice on the top of the river. it is not a very deep river, but it is muddy and the ice is making this even more difficult for divers and search and rescue mission professionals. what we know is the helicopter

was found upside down. reports last night that it was just bobbing around, so really making it even more difficult for these individuals to try to understand where bodies are and what kind of conditions these aircraft are in and the plane itself was split in two, so this is an incredibly difficult situation for these individuals who have been working since the crash happened at 9:00 p.m. last night. jonathan: that news conference taking place at 7:30 local time, about 22 minutes away. plenty of questions. i am not sure how many answers they can provide. lisa: let's see at 7:30. my heart goes out to all the families. we will await the answers. jonathan: 7:30 eastern for that news conference to take place. for those of you just running at us -- just joining us, equity

futures look ok with stocks relatively higher as we get results from meta. in the near term, the best outcome for equities is rates continue to decline. in the longer term, the best outlook is a rick seller and in earnings growth and macro indicators. let's try to put those points together. yields need to come down but the longer term needs economic growth to perform as well. does that come with higher yields? >> this is the game. we are right at it as we speak, which is interesting. if rates go higher, even if growth is better, that is going to restrain multiples, so we need that sweet spot where growth is not falling off a cliff, the fed is doing their thing. the fed cut 100 basis points and rates went up, so that -- now we

are in earnings season. it is all about idiosyncratic behavior in the short term. lisa: you say earnings. they need to show and deliver. what does that mean at a time when storytelling is so important? it is not just the actual numbers. it is what you say about them, your tone. >> there has been a lot of storytelling going on and i think we are seeing a separation of winners and losers even last night and that is good. that creates opportunity. one thing we have had is a doctors versus enablers. that is basically software over semi conductors and that has been working not just since monday. that has been working for three to six months. there will be themes that pop up this year. >> can you say that the tipping point in the market zeitgeist was monday, where really the

adopters are now going to absolutely rip while nvidia and microsoft are going to take a leg behind? >> it has happened. does it persist? what we are excited about is not even that trade but when the technology gets diffused into the broader economy. we are not there yet because we do not have the solutions. the application layer is where solutions are going to be built, so that could take a year or two. in our view, that is a second-story -- a second-half story so that is why our view on the index has been we are probably going to be choppy for three to six months. still uncertainty around the application of these policies globally and domestically, so we will take a break here. lisa: tesla warned about the potential for tariffs and for that you hamper revenues.

gm talked about it. that was at. the basically delivered but their shares tanked. what did you learn from that? >> it confirmed what we knew, which is the retail community is active now and we see it in our data and you can name a bunch of stocks that they just buy every day, not just because they do not know what they are doing. they are buying into these themes and that creates command -- demand. i do not think it teaches anything new. that is a continuation of something going on. >> it is very consistent. you come in every day and i do not see that changing unless there is a real event, so if rates go to 5% i think that would change. if we were to get some sort of

indication that recession risk and back to the table, in the absence of something, i do not see the demand for those stocks winning in the short term. jonathan: whenever a chinese ai lab comes out and says we can do something. >> what happened is some stocks got punished and then the money move back into the fan favorites and this is the theme for 2025. i think this is good. we will see this capital concentration. that money can no -- can now go to other places. there seems to be a perpetual bid -- software is a new area. consumer services has done well. even areas like media and entertainment. there are some thumb addicts there as well. >> do you think you have seen enough to say the equal weight

will perform market cap weight this year? >> not yet. typically when you go from market cap outperformance, you usually get relative performance , so if you get the s&p market cap down, then you can see that spreading of wealth to other areas. i don't want to compare it to 2000 completely, but that is the most similar period. a lot of the tech stocks came off in the s&p was basically flat. some indices were actually up, so that is what we are looking for. the first half of this year's the best chance for that to happen since 2022. 2022, everybody thinks it was a terrible year for market. a lot of stocks were up in 2022. so it is a similar set up where

if the index can give it up that capital can allocate to other areas. jonathan: good to see you as always. mike wilson of morgan stanley. with your bloomberg brief, here is dani burger. >> reagan international airport is closed until at least 11:00 a.m. this morning after american airlines plane collided with a military helicopter last night. there were 60 passengers and four crew on board the plane and three airmen aboard the helicopter. nbc news reports at least 30 bodies have been recovered from the potomac river. caterpillar shares are trading lower in the premarket trade. fourth-quarter earnings beat analyst estimates but caterpillar warned sales and revenue be lower in 2025. the picture could change quickly given expected tariffs from president trump. softbank is said to be in talks

to invest as much as 25 billion dollars in openai. people familiar say this will be on top of the $15 billion the ceo has already committed to the american stargate venture. it would make softbank openai's biggest backer. jonathan: up next on the program, tariffs and coming. >> we are your biggest trading partner. shut your border. this is a separate tariff to create action from mexico and action from canada. as far as i know, they are acting swiftly. jonathan: the deadline fast approaching this weekend. coverage of next. ♪ jonathan: equity futures

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positive by .8%. we are down three basis points. under surveillance this morning, tariffs incoming. >> we are your biggest trading partner. show us the respect. shut your border. this is a separate tariff to create action from mexico and action from canada and as far as i know they are acting swiftly. if they execute it, there will be no tariff. if they do not, there will be. jonathan: the commerce secretary nominee defending president trump's proposed tariffs before they are set to go into effect saturday. joining us now to discuss is scott of the cato institute. the threat of tariffs, even if they do not implement them, what is the price we will have to pay? >> the price we pay is with uncertainty. when you have trump tweeting

about tariff threats and prime minister trudell responding with potential retaliation, that affects the real economy. fed economists during our last trump period saw -- by tens of billions of dollars because trade policy uncertainty was the highest it has ever been dating back to the 1960's, so that means a little less output, fewer jobs, less growth overall. >> this is why people have not been buying into the gm story or auto manufacturers that were dependent on mexico because they expect this to persist. is it going to be bifurcated this time around given there are specific countries being targeted and specific products or is this going to be more wholesale than in 2018? >> it depends on who you ask. there have been reports that the trump administration is looking

at more targeted tariffs, like semi conductors. on the other hand, you have donald trump saying he wants a global tariff and he repeated those claims a couple days ago while at the same time he is posting on truth social about columbia or canada or mexico or china. it is hard to get a handle on where the administration intends to go. right now it seems they just have a dictionary of options and they are letting the president try a lot of it. lisa: you see the implication from policies having to do with a growth shock negatively because of the uncertainty. what are your other presiding assumptions based on what we now? there are still questions, but we do know so far about the trump administration's plans. >> beyond the uncertainty, i think we can guarantee some level of new tariffs in the next six months or so.

it gets murkier when we talk about what kind. my base case is tariffs from china due to failures to implement the phase i deal from his previous term. the canada and mexico situation -- i would be amazed if we are putting tariffs on avocados right before the super bowl or blowing up the north american supply chain. instead, you could see core components of autos, whether batteries or engines or looking at the usmca rules of origin and then steel and aluminum i think are another big area because trump removed those national security tariffs in 2019 because the canadians and mexicans retaliated but then imports have surged and the steel industry is complaining, saying it is a backdoor to chinese steel so we could see something there. jonathan: we have to talk about

food. you mentioned avocados. how do we make food prices cheaper? what can they actually do? scott: the big one is tariffs. we impose a lot of tariffs and antidumping duties and other restrictions on importation of safe foods from around the world. and we are trying to add more, not just from donald trump for our trade remedies regime. lowering those could us a nice decline or slow food price inflation. another area is renewable energy. we spend billions of dollars subsidizing biofuels, basically putting food into gas tanks and other things and that has been shown to increase food prices. it is not going to stop eggs from being expensive but could give us a break at the grocery store.

those are politically popular things i mentioned and i think the chances of getting that kind of real relief are slim. jonathan: appreciate your input, as always. what we can do to make things cheaper but will not do any time soon. lisa: i love that you are not necessarily going to put tariffs on mexican avocados before the super bowl. speaks to the controls out there. i think it is notable, what he is saying about slower growth as a result uncertainty given that this is an ongoing threat. jonathan: there is a price for the uncertainty and might be a benefit. we talked about the bringing forward of orders that we could see. lisa: there are big questions and it does not have to do just with tariffs. this is what economists are looking at as well, which is there has been this immigration

and labor shock to the supply-side that has offset some of the potential inflationary aspects of the recovery. does that shift? so far, not clear. a lot of signaling, but not necessarily the same carry through. jonathan: a lot of economists believe this federal reserve was bowed out by big supply side shock, which was very loose immigration from the previous administration enabled labor market to rebalance and allow the economy to grow without having the inflationary pulse we would have had and the disinflation we saw as a consequence was less about the interest rate hikes from the federal reserve. >> more about the fact you had a supply of workers excepting relatively low wages relative to what people had in the market. if that stops, does that become an inflationary headwind? a goes to the idea that there uncertainty with respect to trump policy but uncertainty as to where we are and how we got

here to begin with and whether we will see some of the drift off of those trends. jonathan: if you are just joining us, welcome to the program. our top story this morning, a regional jet flown from american airlines colliding in a deadly crash with a military helicopter last night on the approach to reagan international airport in washington, d.c. in four minutes, a news conference that will be heard across the nation from washington, d.c. we will bring it to you live in just a moment. ♪

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jonathan: momentsjonathan: from now a news conference in the nation's capital in washington, d.c. led by mayor bowser in washington off the back of the deadly crash taking place overnight. when that begins, we will bring it to you. equity futures right now on the s&p 500, just about positive on the s&p with some morning movers here is manus cranny. >> is all about the coagulation around big tech. you have just been promised a really big year. the record fourth-quarter but no four year guidance. revenue growth this quarter is going to be the lowest in two years after promises that they

will deliver return on equity on $60 billion to $65 billion of capex. i get the sense the market is trying to justify this capex relative to those kind of numbers are the question you need to ask this morning ai spending, does it look relative? is it visionary? have a look at ups. we know there is a bifurcated economy out there. nobody is calling for a dramatic slowdown but this is a global canary in terms of stagnant demand. the company is already in remedial action. they have closed 45 centers. it is a question of how you shipped the narrative in a business which is bloated and that takes us to pharmacy benefit manager cigna. they have tried to set a floor in terms of what they will earn this year, but they offer a product -- think of it this way. you are a big employer. you have costs in health care.

if it trickles over a certain ceiling, they step in and cover the cost. that is bruising to them at the moment. this is where they have to do remedial action and the actual loss ratio we look at is called the medical loss ratio and that is rising above estimates, almost 88%. quite a dramatic turnaround. this is about control of costs and product. it is global. jonathan: some of the movers to look out for this morning, our top story across this nation, regional american airlines flight colliding with a ministry -- with a military helicopter. the plane carried 64 people, the helicopter carrying three. nbc news reporting 30 bodies have been recovered. any moment from now -- any moment now cut we will have a news conference from washington, d.c.. joining us in new york, one of our aviation experts.

your early take on what has happened overnight? >> it is still early to say. the american airlines plane was in the process of lending. it was on that short final approach and it is still early days to see what happened. we will have to see what the ntsb comes up with in terms of why the helicopter was the way it was because the aircraft was in position and that was basically where it was. lisa: there are questions about air traffic control and what has gone on since the pandemic in terms of a lack of staffing or training and some of the close calls to keep hearing about your and where are we in our understanding of how understaffed and with the issues are in the federal administration of aviation? dani: -- siddharth: this is the first deadly incident since 2009. there have been a series of near misses and the government in previous administration talked

about the need to hire air traffic controllers. they were talking about how they need to modernize and so i think for the incoming administration they will have to examine those plans because it takes a long time to hire air traffic controllers and make sure they are ready for the job and that is where they will have to work on it. >> if this is a known problem, what has been the obstacle to remedying it? we have been talking about this for years. jonathan: hopefully we get some answers in a moment. that news conference begins right now.

>> good morning. i am muriel bowser, mayor of washington, d.c.. we are here at reagan international airport to provide an update on the tragedy last night. i'm joined by u.s. transportation secretary sean duffy, d.c. fire chief john donnelly, american airlines ceo, the washington metropolitan airport authority ceo, the united states senator mark warner, united states senator tim kaine, u.s. representative don buyer, as well as the chief of the metropolitan police department and we are joined by first responders from across the metropolitan washington region. i speak for all of us when i say

come and certainly all washingtonians, how very sad we are for american airlines, for the united state department of defense, and for all americans for the loss of life that happened with the coalition of these aircraft. we know that includes families from across our region as well as in kansas and across the country. this morning, we all share a profound sense of grief. i do want to thank the first responders who acted quickly last night and ran toward danger , went into a very frigid river, and have worked throughout the night. chief donnelly reported last night that we have a strong mutual aid agreement in our region and those teams have worked together throughout the night in tough and heartbreaking conditions. we should all thank them for

their heroic efforts. we will have several updates today. first i want to turn to the secretary, sean duffy, and then you will hear directly from chief john donnelly with the situation update. >> sean duffy here, secretary of transportation. we wish we were gathering for different purposes today. the department of transportation and faa along with the white house and president trump, local state and federal partners, all came together on this incident in unison. i could not be prouder of the team assembled, working tirelessly. mayor, i think you specifically for your work. if you details to give all of you and some of you have reported this, but last night, if you live in the d.c. area, you know this was a clear night

last night. the helicopter was in a standard pattern. if you live in the d.c. area, he will see helicopters up and down the river. this flight pattern is seen all the time. this was a standard flight pattern last night as well. the american airline flight coming in to land was in a standard flight pattern as it was coming in, so this was not unusual with military aircraft and aircraft landing at dca. if you live in the area, you will see that frequently with those two aircraft working together. as many have reported, we have located the two aircraft, the fuselage of the american airline plane was inverted. it has been located in three

different sections. it is in about waist deep water so that recovery will go on today. as the recovery takes place of the fuselage of the aircraft, ntsb will start to analyze the aircraft, partnering with the faa with all the information we have to get the best results possible for the american people. i will say that safety is our expectation. everyone who flies in american skies expect that we fly safely, that when you depart in airport you get to your destination. that did not happen last night. i know that president trump, his administration, the faa, and dod will not rest until we have answers for the families and the flying public. we should be sure that when you are flying you are safe. thank you.

>> i'm joined today with the fire chief from the metropolitan washington airport authority and the chief of the district of columbia fire and ems department or last night at 8:48, the control tower sounded an alert which alerts responders to respond to a report of an aircraft crash near the airport that sets off immediate response from the airport authority fire department, from the district of columbia, and harbor patrol fire boats in order to support that type of operation. this call escalated and responders realized they had a plane crash. immediately escalated to a response that ultimately included about 300 people last night. these responders found extremely

frigid conditions. they found heavy wind and ice on the water and operated all night in those conditions. i would like to take a moment to knowledge the agencies that respondent in addition to d.c. fire and ems. my gummer county fire department , prince georges county fire department charles county fire department, baltimore county police department, anne arundel county fire department, alexandria fire department, arlington county fire department, prince william fire department, baltimore city police department, maryland state police, maryland natural resources police, the department of defense, the joint base fire department, and the staff there, the u.s. army and u.s. coast guard united states park police, the fbi, and the ntsb. despite all those efforts, we

are now at a point where we are switching from a rescue operation to a recovery operation. at this point, we do not believe there are any survivors and we have recovered 27 people from the plane and one from the helicopter. the district office of the medical examiner has lead on reuniting these bodies and these people with their loved ones and we will continue to work to find all the bodies and collect them and reunite them with their loved ones. we should also knowledge the virginia medical examiner and army medical examiner are involved in this operation and in important part of getting people identified. >> our hearts are certainly with american airlines and we will

hear from the ceo. >> thank current mayor. good morning. i am the ceo of american airlines. i want to express my sincere condolences for the accident last night. we are heartbroken for the family and loved ones of the passengers and crew members and also for those that were on the military aircraft. our focus now is doing everything we can to support all of involved and the airlines team. this is devastating. it is -- we are all hurting incredibly. we urge any family and friends looking for information about their loved ones to call our designated helpline. that is at one 800-679-8215. 1-8 hundred-679-8215.

american eagle flight 5342 operated by psa airlines traveled from wichita, kansas to reagan national airport and was involved in an accident just before 9:00 p.m. local time on final approach into reagan national. it collided with a military aircraft on an otherwise normal approach. at this time, we do not know why the military aircraft came into the path of the aircraft. the flight was under the command of four crewmembers. they carried 60 passengers for a total of 64 people on board. in addition to local resources in d.c., american airlines has activated our care team, a group of specialists trained to support these types of responses. these team members are on-site

or arriving soon and we have members of argo team on the ground here in d.c. being deployed with resources to do everything we can to take care of the needs of the families and loved ones of passengers and crew members and that is our sole focus. we are so grateful for the first responders who have been working through the night, courageous efforts. we are actively working with local state and federal authorities on emergency response efforts in closely coordinating with psa airlines as they cooperate fully with the ntsb on the investigation. i know there are many questions. at this stage, we will not be able to answer many but we will provide additional information as it comes. thank you. >> i want to introduce the

metropolitan washington airport authority ceo. the authority manages washington national and dulles international. >> good morning and thank you. let me begin by expressing our condolences for the victims of this flight and their families. there is a lot of grieving going on. we are very sympathetic to that. i want to echo what was said about the first responders. there is a problem in this area, everything drops everything and rushed to where the problem is. i want to thank the chief and entire team from washington, d.c. but just as important the folks that the chief described the federal authorities who have been here, so a lot of effort was brought to bear. unfortunately, we were not able to rescue anyone, but we are in recovery right now and i want to

-- last night i expressed that we hoped to open at 11:00 today. that is still the case. we are going to open the airport at 11:00 and again condolences to the families and thanks to the many who are still out there working hard to complete this recovery. thank you. >> i want to acknowledge the virginia transportation secretary is here in addition to the alexandria mayor and i will like to ask members of the virginia congressional delegation to the podium next. u.s. senator mark warner followed by tim kaine. >> i want to join with everyone else and expressing my condolences for the victims. for folks who do not live in the

dmv, we are made of a lot of jurisdictions, three airports in virginia. across the river, we have maryland. as indicated by the chief, when tragedy happens all those distinctions between various druze addictions and federal partners disappear and i want to thank all the first responders. on a personal note, i now know i was coming back from the district from a dinner to my home in old town alexandria. while i did not see the collision, i wondered -- i had never seen this many red lights streaming toward the airport across the river in maryland. i realize this accident took place.

ntsb will have a briefing later in the day, but to the victims, our condolences. to the first responders, our thanks. >> sorrow, thanks, and questions. sorrow is always to the crew, passengers, soldiers much of their families, friends, loved ones, people who are struggling to get information and unsure whether their loved ones have been lost. we offer our profound condolences to them and are sorrow for this tragedy. i will echo, mayor, what we began with. when you see a challenge like this and people from so many different agencies with different uniforms, different badges working in such a corner needed way even in the midst of a tragedy, it does give you a sense of appreciation and pride in people's willingness to come to the danger and work together.

i started to see that as a local official 30 years ago in richmond and definitely have seen it here. finally, questions. there will be a lot of questions. that is with the ntsb's job is cut to be an independent investigative incidents like this. we were in dialogue with them early today. they have been here since they got the alert and they will be playing lead in answering the many questions we have. that is as it should be. it is not a time to speculate. it is a time to investigate and get answers to questions. that will be done. thank you. >> grief, thanks, and service. with millions of americans traveling every year, we are all grieving knowing it could have been our loved ones. it could have been us. our hearts go out to all those folks.

in the most partisan place, i am thankful democrats and republicans have come together to try to make sure that people are served. i want the families to know our office is available to serve you in any way we can through this time of grief and transition and loss. also note that we are deeply grateful for the people who risk their lives last night on a moment's notice in the ice and wind, serving us, and finally as senator kaine noted, we have to make sure that at the federal level, with the support of virginia, maryland, and d.c. we are doing everything we can to make sure this does not happen again. >> with that, it has been said

already that the national transportation safety board becomes the lead agency in the investigation. our jurisdiction in d.c. where the crash occurred over the river is -- concludes as we -- in a leadership role of unified command as we shift to a recovery effort. expect the national transportation safety board to provide briefings to the press later in the day must so at this point we can take a few questions. yes. >> can you say without a shadow of a doubt that people are safe to fly? >> what we can talk about today is what happened here with the collision of these vehicles. we said what we know and that the national transportation safety board continues to investigate. i do not know that any of us

have been briefed on anything that would suggest any other aircraft were implicated. >> you are still missing 30 plus people in the water. what are the challenges now? >> the rescue operation or recovery operation and the different parts of the plane and helicopter and the creche areas -- we have some work to do. i think it is a pretty normal type of situation. >> how spread out is the debris field? >> wind started blowing last night, so we have had debris travel. less than a mile. >> this is a question for the ceo. you are going to open the airport at 11:00 this morning. how are you going to do that and what impact will that have on

operations, passengers, anxiety? how are we going to do this? >> we are going to open the airport at 11:00. it is safe. we have worked with federal agencies and it has been determined we can open the airport safely. the recovery effort is on the waterfront. our primary runway will be open. it is away from any activity. we have a secure area around that so we can get back to operations. each airline will announce or communicate to their passengers what their operations are going to be. the networks were disrupted overnight, so we might have a slower recovery. we will begin to have aircraft moving out of the airport at 11:00.

>> has the -- has it been recovered, black box and all? >> i do not think we can say anything in the ntsb purview. >> there's a lot of helicopter traffic from the military. will helicopters be flying here beyond the recovery efforts? >> i do not know the answer to that. >> secretary duffy, can you reassure americans the u.s. still has the safest airspace? >> can i guarantee the american flying public that the united states has the most safe and secure airspace in the world? the answer to that is absolutely we do. we have early indicators of what happened here and i will tell you with confidence we have the safest airspace in the world. >> when it comes to families who

tragically lost loved ones, what does that look like so far? the flight manifest -- is there any detail you can provide on that? >> all i can say is we have a one 800 number. we have family assistance centers set up here at dcaa and in wichita. i am not at liberty to give the number of families that have used those services, but we are making use -- we have over 100 team members here or on their way that are specially trained to work with family members with travel arrangements to make sure we are taking care of people in any way they can. our teams are hurting and suffering, as are our passengers

. when families need assistance, we are doing everything we can. i do not have more information on that now. >> can i ask you to describe the next stage of the investigation? how confident are you that you will be able to recover all 67 of these bodies? can you speak to what has been pulled out from the river? i would like to ask anyone here, perhaps the transportation secretary, if we know anything about these victims, age ranges, nationalities, anything of that nature. >> the next phase of the operation -- all of us are working together to search the area and i'm confident we will do that and that will take us a little bit of time. as far as things been collected

we have been collecting debris you would expect to see. >> anything about the victims? >> the ntsb is going to lead that portion of contact with victims. so will the faa and department of transportation. >> for secretary duffy, the flight path the helicopter was on, is that a common flight path and is it normal for helicopters to get clearance to cut across dizzy paths? >> i don't know if you could hear the question. it is about the flight path of the helicopter. i don't want to go into much detail about information we have from the faa, but obviously it is not standard to have aircraft collide. let me be clear on that.

prior to the collision, the flight paths being flown from the military and american that was not unusual for what happens in d.c. airspace. as the investigation moves forward, we will provide more information to you about the details of that statement. >> to follow up on that question regarding the flight path, can you speak to conversations with aircraft control? >> where their blind spots with air traffic control? i don't want to make statement about that. but again i think air traffic control, everything was standard in the lead up to the crash.

obviously something happened here. we will get more information and details as the investigation moves forward. we will learn what happened. in the d.c. area, we see military helicopters fly the standard path they fly. we are used to aircraft landing at dcaa and there is a procedure in place because this happens every day. something went wrong here. i look forward to when we can give you that information but i do not want to comment on that now. >> senator kaine, senator warner, you have been vocal about busy runways here, aircraft traffic. i'm curious, are there any steps you plan to take to address that? step o'kane -- sen. warner: have

raise that issue. families are still being notified. we are trying to find out what happen. there will be time for those discussions. sen. kaine: we have faith that the end has -- ntsb will provide the answers. >> three, after this young man. >> chief, it must be traumatic for first responders to have to deal with this. our they doing right now and are you going to be offering services to help them? >> thank you for the question. our first responders are people, but yes, this call will be hard for them. our support teams are already engaged with responders and we will be following up on that to make sure they are ok, but i think the concern is [indiscernible] >> what kind of communication was there between the helicopter and the tower, the plane in the tower, and the helicopter in the

plane? >> i want to say too much on the communication, but i will say this. it was communication. it was obviously standard communication, so there was not a break down, if that is your question, in communication between the military helicopter and the american airline flight. it was communication between the aircraft and the tower. >> was the plane aware there was a helicopter in the area? sec. duffy: i would say the helicopter was aware there was a plane in the area. >> the president, you said yesterday, he was called into the briefing room. as he returned to the briefing room? since then, have you spoken? also the national security advisor is saying there have been any bodies recovered.

he just said that at the white house. i know you are in this press right now so it is hard for you to update. >> in terms about a recovery, we -- as we recover bodies we have a process and we are not counting anybody until they are in possession of [indiscernible] there may be fluctuating in numbers of what other people are reporting, but our numbers are from the medical examiner. sec. duffy: in regards to the president in the briefing room, i've been with this team for the last hour-plus as we have worked through the details of information we wanted to give you. it is my understanding that either this morning he's going to be in the situation room or situation room is going to be briefing the president. he is in full appraisal of what has taken place. >> last two. sec. duffy: you mentioned the

aircraft were on a standard flight platter -- flight pattern. the airport opens today will planes be on that flight pattern? are they being directed to fly a different way? >> safety is paramount, and i don't have that information quite yet from the faa, so i don't want to provide an answer or inaccurate information. on what routes will be flown out of dcaa. >> last one. >> with dino about the history of the pilots -- what do you know about the history of the pilots? last night the president said this would have been prevented and questioned why air traffic control didn't tell the helicopter what to do. that something investigators determined should have happened?

>> just quickly, i don't have a lot of information to release, but these were experienced pilots. i know that the captain had six years with psa, and the first officer almost two years. again, standard route. thank you. sec. duffy: i don't have information in regard to the experience of the military pilots. i would note this is classified as a training mission. sometimes people could think a training mission is someone who is inexperienced in the cockpit. we call these missions flown in the d.c. area as our pilots are getting ours and experience training missions. don't read into that that we had -- how many hours the pilots on the military aircraft had. you had another question for me? >> last night the president this -- said this could have been

prevented, questioning why they may not have communicated with the helicopter, telling them what to do. sec. duffy: we are going to wait for all of the information to come in from this vantage point, but to back up what the president said, what i have seen so far, do i think this was preventable? absolutely. >> is there an acting faa director? jonathan: officials wrapping up a press conference after a deadly collision last night between a regional american airlines plane and military helicopter. we don't believe there are any survivors. we are switching from a rescue operation to a recovery operation. those headlines coming from the d.c. fire chief, who briefly described the conditions that the search and had to confront. frigid conditions, heavy wind, and ice on the water. as for how this happened, very few answers. lisa: they are looking into it. the early indications of what

happened, they basically said everyone was kind of on a standard path. these were experienced pilots. it was a clear night. was this preventable, you just heard. absolutely. jonathan: joining us now, and re-holdren, who was on the ground at reagan national airport. the next phase of the investigation, what do we know about what that is going to look like? annmarie: the ntsb is going to be the ones that handle the next phase of this investigation, but i think whether it was the new transportation secretary sean duffy or the mayor or the d.c. fire and ems chief, what we learned here is that you see a number of institutions wanting to work together to get to these answers. they are clearly moving in, as we heard from the d.c. chief. they are clearly moving into a recovery phase from a rescue phase. they say the airport will be opened at 11:00 a.m. it has been shot, and at this moment they do not believe there

are any survivors. that is why moving into that recovering stage. i think there is a few interesting to its to pick out. one, sean duffy did say, the transportation secretary did say the helicopter and aircraft were in a standard flight pattern. and he did say those early indicators -- they did have early indicators of what went wrong. he wanted to also really assuage american concerns that it is still safe to fly in american airspace today. an interesting, you heard from the american airlines seco who made his way to washington d.c. overnight and he said at this point we don't know why the military aircraft came into the flight of the psa aircraft. this is going to be a serious investigation that the ntsb will be having to deal with, but also the dod and pentagon at some point today hopefully will hear from pete hegseth, the defense secretary. lisa: there were questions about assuring people it was safe,

given that dcaa is reopening at 11:00 a.m. do we have a sense of when we will learn exactly where the break down in communication happened given the fact that one of the flight patterns were safe and sean duffy just said this was preventable? annmarie: they did not offer a timeline, so everyone is going to wake up with a ton of students and there is going to be this huge review underway. they did not offer a timeline of when we could get those answers. is it a matter of days or is this going to be weeks, or potentially months until we actually find out what went wrong? they are going to want to assuage americans' concerns about safety, and overall aviation in america is very safe. we did, though, have issues the past few years that have been quite concerning with close calls when it comes to the airline industry. there has been a lot of calls to

beef up air traffic control. we saw a huge fight last year in congress about that, but they did not offer any timeline just yet. but of course they did say they will continue these briefings, so potentially we will get more updates on when we will get those answers later today. jonathan: appreciate it. joining us around the table is sid philip, our resident rate -- resident aviation expert. what did you learn? >> everyone is uncertain about what wrong because everyone was talking about how everything was on standard pattern and nothing was unusual. still something went wrong and i think that is what regulators and investigators will be looking into to figure out what happened and why did the military helicopter come in the path of the american airlines plane? and what can be done in the future to prevent incidents like that? obviously there has been a lot of talk about close calls the last year and there was the fighting congress where president biden was fighting for

2080 hires in 2025. with the administration coming in it will be important to see how they beef up and also what really, was it an air traffic control issue at all? lisa: could it be anything else other than an air traffic control issue, given they took out the pathways, the potential for flight error, given that this is experienced people and everything was common. what else could it be? siddharth: it is just sometimes swiss cheese, with a holes line up badly and you've got sort of an incident where everything suddenly goes wrong where you have got a plane that is in its final approach into an airport, you have a military aircraft in the flight path, and sometimes things happen. that is where regulators will look into see where they can prevent incidents from happening him in the future. jonathan: sid philip of

bloomberg. just moments ago a headline none of us wanted to read. jon donnelly saying, we do not believe there are any survivors. they are switching from a rescue operation to a recovery operation. for an update on that here is dani burger with more. dani: just to reiterate what we heard over the past 30 minutes, more details emerging around the deadly collision of an american airlines plane and the military helicopter near reagan international airport last night. officials said in that press conference that 27 bodies have been recovered and authorities do not believe there are any survivors. u.s. secretary of transportation sean duffy said the crash was absolutely preventable. elsewhere in these markets tesla fourth-quarter earnings fell short of wall street estimates, but as you can see shares up four point 1% in premarket. elon musk predicted an epic period of growth for the company and said it will begin robotaxi operations this year. precious for super bowl ads have

risen to over $8 million. it is up from last year's record of $7 million. the game is set to air on fox and it's free streaming service. fox received a steady interest from a variety of companies and this years ad will feature more humor, celebrities, and nostalgia, and fewer movie trailers. jonathan: more from dani in about 30 minutes time. next, an ecb rate decision. from bloomberg -- from new york, this is bloomberg. ♪

jonathan: equities just about positive here by .3% on the s&p 500. attention turning toward monetary policy ruefully. over the european central bank come as expected, an interest rate reduction of 25 basis points on the deposit rate. this was widely anticipated and

expected. widely indicated from the governing council over the last few weeks. a rate cut from the ecb of 25 basis points. lisa: the ecb is determined to ensure inflation stabilizes at 2%. they are not pre-committing to any rate path. this basically is in line with expectations. curious to see how they basically frame the risks ahead, whether it is a downside risk to growth, whether it is the potential for sticky inflation, that they talk about tariffs at a time where that seemed to be preeminent among the bank of canada officials. jonathan: the first decision from the ecb in 2025 is a rate cut of 25 cases point. we can catch up with lizzy burden. i'm sure you are reading through the details going into this news conference. what stands out for you? lizzy: as you say, united --

nana mislead expected by economists, fully priced in by markets because the focus has been turning from too-high inflation to too-low growth. had the reeds on gdp in the euro zone and we saw contractions in france and germany. we solve total stagnation across the euro area. politics really weighing on confidence here. this is before we even know how donald's tariffs on europe are going to play out. economists were seeing another cut in march already. what we are seeing today is hints about april. interesting to see that, you know, they are all saying that this is well on track. they are going to follow a data-dependent approach. very much expected. in terms of market reaction, barely any movement in the euro. we are on the watch for euro-dollar parity at the moment given powell had said he is not in a rush to ease policy. if you start to see more of a

diversion -- diversions between the ecb and fed that could feedback into the inflation picture, especially if you combine it with high oil prices and that will create headaches for christine lagarde. if that rate it's raised in the press conference i'm sure she will say we are data dependent, not that dependent. lisa: i'm glad you went there. data dependency seems to be the phrase does your. that is what they go back to yet again. i'm interested what is most important for the ecb that is a single-mandate central bank unlike the federal reserve? lizzy: as i say, they seem to have brushed aside that 2.4 percent inflation print for december. the uptick. they have talked about the concerns for services inflation, yet if this is anything to go buy a cut today and a cut expected in march, the focus seems to be on growth. you say data dependence. well, it is hard to deny that

all around the world central bankers have an eye on the white house and donald trump's trade policy. jonathan: lizzy burden on the latest in frankfurt, germany following a 25 basis point reduction in the ecb. there is too paragraphs -- two paragraphs that jump out at me. the disinflation process is well on track. disinflation has developed in-line with staff projections and is set to return to the 2% medium-term target in the course of this year. that sounds great. which of that mean for policy? this line on policy. finance conditions continue to be tight also because monetary policy remains restrictive and past hikes are still transmission -- transmitting to credit, with loans being rolled over at higher interest rates. are they making an argument to lower interest rates even more in the second paragraph and in the dirt acknowledging that monetary policy is too tight? which is odd for me at the moment. that they have not been more aggressive with a much more dovish stance given the

disinflation reprocessed they have confidence in. lisa: this is long and variable lags. this is saying the variable lags are constraining growth. this speaks to some of the dissent that maybe there is on the ecb governing council. some people looking at that 2% target as gospel, saying we are not there yet. others saying there is real downside potential for growth. sort of creeping into that dual mandate-type of position. jonathan: gargi chaudhuri of blackrock joins us in the studio. let's just talk about the ecb. very sad day to be talking about markets, but here we are. the central bank decision is about five minutes old. you heard from lizzy burden. they are not fed-dependent. are they tariff-dependent? how many of us are? gargi: i think the entire market is paying close attention to what we are going to hear in terms of fiscal policy. we saw the fed do a nice dance around that yesterday. i think what was important to me

is the bank of canada statement. they talked about how tariffs might affect them, and i think many of the central banks will probably at some point, when we have more clarity, have to pull that into their forecasts. lisa: it is curious to see other central banks can talk more openly about tariffs then u.s. central bankers. is this an excuse that central banks like the ecb can use at a time when they are a single mandate central bank but are facing a real downside growth -- shock to growth? gargi: i think the fed, as well as the ecb, this just goes to show there is a really tricky point. you cannot make policy did -- policy decisions based on fiscal policy measures that have yet to come through. don't know the details. you don't know how much the pastor is going to be. don't know what the demand effects are going to be. i think it puts the fed in a

tricky position. i did hear some comforting words yesterday from chair powell which we can talk about, but i think we are hearing -- we are seeing that from the ecb as well. that despite somewhat lingering inflation, they have to end -- and their single mandate, they have to focus on the poor gdp print we saw this morning. lisa: the comforting words. you heard something yesterday that just was not a lot of words. what were those? gargi: the comforting words i would say, number one, the hawkishness that appeared in the fomc statement was a cleanup operation. one could argue whether that needs to be the case, at least that was not a hawkish direction. number two, i think he made a point around going forward for further rate cuts. inflation does not need to be at 2%. i thought that was an interesting distinction. they have made that before, but that was before rates were at 3.75%. hearing that again was a reassurance.

the other thing they talked about was around the 2%. they are seeing that. talked about how the last two prints on pce have been friendly to the markets, but it is not quite there yet. i thought those were all good signs for the fed, at least for the second half of the year, to maybe continue their rate cutting cycle. jonathan: we have a challenge to u.s. exceptionalism on monday. how strong do you think that challenge was? gargi: i think it was one headline. we think about this ai trade, this was the first sort of wrinkle that came through on the ai trade. obviously it is very early. as of right now even when we heard from some of the companies that reported earnings this is not something that immediately stops any kind of capex related to ai. not as of yet. so, i'm not questioning u.s. growth based on this. obviously we get gdp in a few minutes. there might be some revisions

because of other reasons, straight facets, etc.. but the ai story is much more around broader adaptability now and very good for adopters of ai for software companies, perhaps. i do not view this yet -- and we don't know enough about broad-based end of ai, which is what the market was pricing in on monday. jonathan: you saw some of the moves on monday went beyond video -- jan nvidia. would you go as far as saying maybe the energy side of this trade might be done for now? gargi: i don't think i would say that quite yet. we don't have enough of the details yet. what i would take away from everything we learned about deepseek was it's incredible to have this kind of efficiency, it is so much better to have models being trained. but the conference will still require a lot. i think this broadens out the ai trade to perhaps other parts of the market.

i think it is a healthy sign for what we saw on monday, with 70% of the s&p up. i think that is a good thing. i think investors will probably continue to look for ways to hedge their debt exposure, and we have seen that the good news is there is earnings coming through in other parts of the market. this is a good time to think about these other diversifying hedges. lisa: u.s. exceptionalism still intact. what else have we learned over the past couple of days? we are going in days right now. gargi: i think what we have learned is the fed is not in a rush to do anything with rates, which means an opportunity to clip coupons. i think we learned we need hedges to our portfolios. it is not just about those five big stocks, right? so, thinking about other hedges and other diversifiers, whether that be in large-cap value, either that be in buffer strategies -- so, protecting your downside a little bit. and whether that be in things

like gold, which we have talked about since the beginning of the year and has been doing well. jonathan: thanks for making time for us this money. gargi chaudhuri from blackrock. about 10 minutes ago an ecb rate cut of 25 basis points. you will hear from christine lagarde. i news conference in frankfurt, germany. before we get there we will have some economic data in america. another read on gdp. then we will get a look at initial jobless claims. claims the one to watch at the moment for this bond market. what happens next with the federal reserve? sonal desai from franklin templeton here to react. this is bloomberg. ♪

jonathan: some economic data in just a moment. a read on fourth-quarter gdp in the united states. look out for jobless claims as well. mike mckee will make that data in just a moment. futures on the s&p positive by .3%. on the nasdaq, up by .5%. on the russell, up by .75%. yields lower here by four basis points on tins. with that economic data, let's cross over to mike mckee. mike: the fourth quarter gdp numbers are coming in, and as anticipated by economists after yesterday's trade report it is lower than anticipated.

two point 3% for the fourth quarter. a lot of this, of course, is going to be due to the trade report we got yesterday. big trade deficit. personal consumption up 4.2 percent, however. americans were spending money during the month. probably would have had a 3% or better gdp number if not for the trade figure. gdp price index, 2.2% on the quarter, comes in higher than last month. higher than the third quarter, rather, but lower than anticipated. the core attitude .5%, comes in as anticipated. we see is for the three-month average the fed yesterday backed out those numbers and said tomorrow we should see 2.6% on the headline for the december figures and 2.8% for the core. jobless claims, of course everyone keeping an eye on and you will be happy to know, 207,000, a big drop from the

223,000 reported last week and it is 1,858,000 down, so clearly it may be that the california fires had a short-term effect and that has worn off. still, very low jobless claims numbers. strong labor market and growth with the exception of trade, and we can look up the exact numbers. still strong. so, you can understand why jay powell is saying maybe the fed can take time and wait. jonathan: i'm with you. great to see jobless claims dropping back to 207,000. as expected, gdp softer than expected. personal consumption pretty strong, so that is good to see as well. in the bond market yields were lower by 4, 5 basis points across the curve. at the moment we are down just two or three now on a 10 year.

and equity futures, still positive by .3%. lisa: not a huge reaction. cameron dawson saying for the fed the calibration phase is over. you are seeing markets not responding because it doesn't seem like anything warrants a federal reserve response. otherwise it confirms what we have known. the economy is strong. the market is not necessarily weakening in some massive way. it is a nonstory for markets at least at the moment. jonathan: one of the best in fixed income joins us now. so now the site of franklin templeton. -- so now the site of franklin templeton. you believe we are now in the neutral range. what is the difference between the two of you at the moment? sonal: the policy has not been restrictive for a while now. when he said it was hard to figure out what neutral is, you know, facts matter.

over a period of time we have been in extremely restrictive territory. clearly we were not that restrictive because economy shows us. i would say that i think a part of the reason the fed cannot say that, you know, we are all from -- that we are far from being in the neutral rate range is in the next step it would be, why aren't you raising rates? i don't think they need to, but they are going to keep them high for a long period of time. lisa: you are someone who raised the prospect of longer-end yields rising. does this dampen that risk if there is a fed that might not be saying exactly what you see to be the reality but is not moving, is not really raising rates, but is not lowering rates either? sonal: well, no, because i think a large part of the reason i think long end rates are going to sell off is actually to do with the fact that i think there

are going to be a host of policies -- and i don't think tariffs are one of them, but i do think the school policy risks over the next 60 to 90 days, we will see what happens. but i think those are factors that could feed into inflation. potential he how immigration gets executed in terms of deportations, etc. that could have negative consequences as well. i mourn -- i'm more concerned on the inflation front. lisa: we have been focusing on tariffs as a potential economic headwind. you are saying that is the wrong place to look? which policies in particular are most potentially inflationary that you are watching out for? sonal: i am watching very much at what happens with the budget. it is really about the fiscal. it really is. we are running $2 trillion budget deficits in an -- in an

economy that is growing above potential at this point. that is one i am following closely. it looks like this republican caucus is fairly disciplined, so there is hope that we cannot expand the budget deficit as much as making good on all of the promises that have put out that would result in a massive expansion, and i do think that would have a negative consequence. immigration. look, if you could actually throw out 4 million people overnight, that would be disruptive and it would have inflationary consequences, because if you are a restaurant owner and half of your workforce doesn't show up certainly need to hire more people and you are going to bid up wages. that is inflationary. lisa: based on the early indications from the administration have you changed your view that the bigger risk is to the upside of inflation, to then say a deterioration in growth? sonal: i think something which is not considered very much is

the fact that the regulation actually really is going to result in -- it's going to have a positive impact because in the end small business owners' confidence has skyrocketed. i know they are typically more republican. it is a bigger republican base, but ultimately that confidence determines whether they want to hire more, spend more on capex. all of these things are positive on growth. finally, i really don't think tariffs necessarily have a negative growth impact on this country. of course the ecb is going to respond. it is a large exporting group. as today's ddp showed, we are large importers. tariffs are not going to hurt our growth. jonathan: certainly going to hurt europe and china. can we get the bond market call? i'm sensing maybe you think we see 5% before we see 4%? sonal: i would definitely say 5% before 4%, because i do not see the rationale. right now i need to see that

trigger for significant economically as. i can't say it won't happen. i think what we saw on monday with deepseek is the canary in the coal mine. i really don't think so, but we don't know. on this i do agree with fed chair powell. the uncertainty we are seeing today is not commensurate with the uncertainty we saw around covid before we had vaccines. we are not looking at that. if it was something like that you could call it. jonathan: what do you make of this stance regarding uncertainty to policy? sonal: i think powell showed his origins as a lawyer. [laughter] i think that was a good thing. overall i would say that what he said was, you know, there was not very much there, but he is being honest. there is not very much he can say at this point. i thought he actually moderated some of the questions with respect to tariffs in a very reasonable way. tariffs are relative prices,

guys. it is not going to take us back to 9% inflation. jonathan: sonal desai of frank and templeton. the latest on the federal reserve and markets as well. let's get the latest on our top story and head back to reagan national airport in washington, d.c., where annemarie is standing by. what is the latest? annmarie: good morning. the latest is that this rescue mission that has been taking place for hours overnight since that midair collision from the passenger jet and that black hawk helicopter around 9:00 p.m. last night is moving to a recovery phase. they do not think there are any survivors. we were briefed here, the press was briefed in the last hour about what exactly the next steps that are taking place. it will be an independent investigation from the national transportation safety board, and then from there there is just so many questions we are waiting to hear potentially when they have this opening brief today. we will get some of those

answers, but we did learn from the transportation secretary sean duffy that both of these aircrafts were in standard flight paths and the american airline ceo said it is unclear why the helicopter came into the flight path of the passenger airline. a ton of questions still remain at dca. in the nation's capital, a very intense airspace, a ton of capacity here. we should note that anyone traveling today, this airport will reopen at 11:00 a.m. jonathan: that question was asked in the news conference. how difficult would it be to reopen this airport at 11:00 a.m. what was the answer? annmarie: it's going to be a little bit difficult, obviously, because things are backed up. i'm supposed to fly out of here at 11:10, 11:30 am, and i just got an alert that my flight is on track to go. they're trying to move people

along and make sure they meet their flights. obviously it is a tense situation here at the airport. there is a tremendous amount of police, a tremendous amount of official figures. i know governor glenn youngkin is at the airport right now. you have to deal with some potential delays, but they do plan to still reopen this at 11:00 a.m. meanwhile, the recovery effort is still happening behind me in the potomac river. lisa: there is a question around who is leading the faa. we have a sense of who the potential nominee could be to take the helm of that organization? annmarie: yeah, we are still waiting to hear about who is going to lead the faa. whitaker stepped down in december. it comes at a precarious and difficult time because we had a transition of power here just last week and the trump administration is still getting their feet wet. they are making sure they have all of their cabinet secretary

is in place. sean duffy was confirmed earlier this week, but he was only sworn in yesterday. today really feels like his first full day on the job he said when he took to that podium in the last hour that this is not the circumstances he wanted to be speaking with everyone. so, we do know they are still working on making sure they have the appropriate staff in place. of course, there is a number of civil servants, career servants who are part of these organizations that can help make sure things are going through, but we also need to talk about we are here south of the pentagon. the defense secretary. there is going to be an investigation from the dod. and what happened with this helicopter that we learned was on a training route last night. we do see a lot of helicopters in washington, d.c. there is a ton of commercial aircraft. there is also military aircraft here. it is the nature of this city. jonathan: annmarie from the nation's capital, at reagan

national this money. let's get you an update with your bloomberg reef. dani: caterpillar shares are down nearly 5% in the premarket trade. fourth-quarter earnings did beat estimates, but caterpillar warned that sales and revenue will be lower in 2025. those results could quickly change for all global manufacturers, given expected tariffs from president trump. nvidia shares are also lower this morning, down by just under 1%. the trump administration is reportedly exploring more curbs on ship sales to china. officials are focused on expanding restrictions for chips used for ai development. nvidia argued restrictions pushed china to become independent of u.s. tech, which will hurt u.s. companies. elsewhere softbank is said to be in talks to invest as much as 25 only dollars in openai. people familiar say this would be on top of the $15 billion mush ao she sun has already committed to the ai

infrastructure venture. the move could make softbank openai's biggest backer. openai declined to comment. that is your bloomberg reef. jonathan: thank you. up next we will set you up for the day ahead and count you down to a news conference with ecb president, christine lagarde. all of that in just a moment from new york. this is bloomberg. ♪

jonathan: the opening bell about 43 minutes away. equities positive by .2%. jobless claims, encouraging. the right kind of downside surprise. yields are lower by about it basis point. -- i about a basis point. i want to bring you the week ahead. later on this afternoon earnings from apple and intel. on friday pce.

on saturday, a big one, president donald trump's self-imposed tariff deadline. look out for that one. as for the ecb, earlier this hour cutting interest rates by 25 basis points. some encouraging words on disinflation. the disinflation process is well on track. deutsche bank and the chief european economist with this to say. this is the fifth cutting total and the fourth in quick succession. there is no reason to think the ecb will not continue to cut interest rates, at least to a neutral level, and we think below neutral by year end. i think that gives you a flavor of how different the conversation is at the ecb compared to what we heard from the federal reserve yesterday afternoon. lisa: no one is challenging why they are cutting rates. even if the inflation rate is not down to a total of 2%, as the ecb said, the economy is still facing headwinds. they still in for a long invariable lag, saying the interest rate hikes from the past are trickling through to

the economy. they have negative growth in certain sectors. the u.s. is growing rapidly. the story is much less clear, even though they are a single-mandate bank. jonathan: finance conditions continue to be tight at the time where maybe you can make the argument they should not be at the european central bank. this is the complete opposite of what we heard from the federal reserve yesterday. lisa: you cannot say conditions are tight in the u.s. by any measure given the fact that spreads are so tight. at the same time when you look at bank lending in the european region you see constraints there. you see a reluctance to lend, overlook and's task for loans. it is a different picture. are they being given a pass as well to potentially cut rates much more quickly in the face of the risk of tariffs? jonathan: the first news conference of 2025 with the ecb president christine lagarde. let's take a listen. pres. lagarde: the governing council today decided to lower the three key interest rates by

25 basis points. in particular, the deposit facility rate through which we steer the monetary policy stance is based on our updated assessment of the inflation outlook. the dynamics of underlying inflation. and the strength of monetary policy transmission. the disinflation process is well on track. inflation has continued to develop broadly in line with the staff projections and is set to return to our 2% medium-term target in the course of this year. most measures of underlying inflation suggest that inflation will settle at around our target on a sustained basis. domestic inflation remains high. mostly because wages and prices in certain set errors are still adjusting to the past inflation

surge with a substantial delay. but wage growth is moderating as expected. and profits are partially buffering the impact on inflation. recent interest rate cuts are gradually making new or wingless expensive for firms and households. at the same time, financing conditions continue to be tight, also because our monetary policy remains restrictive and past interest rate hikes are still transmitting to the stock of credit, with some maturing loans being rolled over at higher rates. the economy is still facing headwinds, but rising real incomes and the gradually-fading effects of restrictive monetary policy should support a pickup in demand over time. we are determined to ensure that inflation stabilizes sustainably

at our 2% medium-term target. we will follow a data-dependent and a data-dependent and meeting by meeting approach to determining the appropriate monetary policy stance. in particular our interest-rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. we are not pre-committing to a particular rate path. the decisions taken today are set out in a press release available on our website. i will now outline in detail how we see the economy and inflation developing and will explain our assessment of a the financial and monetary conditions. looking at the economic activity, the economy stagnated

in the fourth quarter, according to eurostat's preliminary estimate. it is set to remain weak in the near term surveys indicate that manufacturing continues to contract, while services activity is expanding. consumer confidence is fragile and households have not yet drawn sufficient encouragement from rising real incomes to significantly increase their spending. nevertheless, the conditions for a recovery remain in place. while the labor market has softened over the recent months, it continues to be robust, with the unemployment rate staying low at 6.3% in december. a solid job market and higher incomes should strengthen consumer confidence and allow spending to rise.

more affordable credit should also boost consumption and investment over time. provided trade tensions do not escalate, exports should support the recovery as global demand rises. fiscal and structural policies should, competitive, and resilient. we welcome the european commission's competitiveness compass, which provides a concrete roadmap. it is crucial to follow up with further concrete and ambitious structural policies on mario draghi's proposals on enhancing european competitiveness and on enrico letta's proposals for empowering the single market. governments should implement their commitments under the eu's epic -- economic governance

framework fully and without delay. this will help bring down budget deficits and debt ratios on a sustained basis while in -- while prioritizing reforms and investment. looking at inflation, annual inflation increased to two point 4% in december, up from 2.2% in november. as in the previous months the increase was expected and primarily reflected past sharp drops in energy prices falling out of the calculation. along with a month on month increase in december this led energy prices slightly higher on an annual basis after four consecutive declines. food price inflation edged down to 2.6% and goods inflation to 0.5%.

services inflation edged up to 4%. most underlying indicators have been developing in-line with a sustained return of inflation to our medium-term target. domestic inflation, which closely tracks services inflation, has remained high, as wages and some services prices are still adjusting to the past inflation surge with a substantial delay. at the same time, recent signals .2 continued moderation in wage pressures and to the buffering role of profits. we expect inflation to fluctuate around its current level in the near term. it should then settle sustainably at around the 2% medium-term target. easing labor cost pressures and

the continuing impact of our past monetary policy tightening on consumer prices should help this process. while market-based indicators of inflation compensation have largely reversed the declines observed in the autumn, most measures of longer-term inflation expect haitians continue to stand at around 2%. looking at the risk assessment now, the risks to economic growth remained tilted to the downside. greater friction in global trade could weigh on euro area growth by dampening exports and weakening the global economy. lower confidence could prevent consumption and investment from recovering as fast as expected. this could be amplified by geopolitical risks such as russia's unjustified war against ukraine and the tragic conflict

in the middle east, which could disrupt energy supplies and further weigh on global trade. growth could also be lower if the lagged effects of monetary policy tightening last longer than expected. it could be higher if easier financing conditions and falling inflation allow domestic consumption and investment to rebound faster. inflation could turn out higher if wages or profits increased by more than expected. upside risks to inflation also stem from the heightened geopolitical tensions which could push energy prices and freight costs higher in the near term and disrupt global trade. moreover, extreme weather events and the unfolding climate crisis more broadly could drive up food

prices by more than expected. by contrast, inflation may surprise on the downside airflow confidence and concerns about geopolitical events prevent consumption and investment from recovering as fast as expect it if monetary policy dampens demand by more than expected or if the economic environment in the rest of the world worsens unexpectedly. greater friction in global trade would make the euro area inflation outlook more uncertain. looking at the financial and monetary conditions now, market interest rates in the euro area have risen since our december meeting, partly mirroring higher rates in global financial markets. while financing conditions remain tight, her interest rate cuts are gradually making it less expensive for firms and

households to borrow. the average interest rate on new loans to firms declined to 4.5% in november. while the costs of issuing market-based debt remained at 3.6%. the average rate on new mortgages edged down to 3.5%. growth in bank lending to firms rose to 1.5% in december, up from 1% in november amid a strong monthly flow. growth in debt securities issued by firms moderated to 3.2% in annual terms. mortgage lending continue to rise gradually but remained muted overall with an annual growth rate of 1.1%. credit