>> are they starting to verify some of the signs of weakness. >> they are likely to pick up the inflation numbers. this is really difficult environment for them. >> they will be focusing on growth slowing down and the risks of the markets will be pricing and more cuts at the time. >> you're looking for the fed to come to the rescue of the economy like cutting rates. >> i think it's too early for the federal reserve to make a decision. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: good morning, good morning for audience worldwide. bloomberg surveillance starts now. after snapping it today winning streak, equity softer heading into the fed decision later on this afternoon following a ramp-up in market volatility. leaving investors laser focused on jay powell's news conference and the committee's updated

forecast. bank of america indicating the powell put is not forthcoming. those are likely to reflect stagflation. weaker growth and higher inflation. that could leave the market between a rock and a hard place. lisa: expect a lot of nothing, not giving you any direction at all which raises the question who blinks first. is it the fed put or the trump put and if you have neither what is the ballast to stave off some of the concern that the u.s. exceptionalism story just doesn't have it anymore. jonathan: first week in november we don't guess or speculate and we don't assume. in november there were no policies. they did not have to put out forecasts. this time we have policies and they have to put out some forecasts. annmarie: which is why this meeting might be tougher to jay powell to talk about because he could no longer say we cannot assume. maybe they can't assume from the april 2 rollout of tariffs but there are 25% tariffs on steel and aluminum coming into those imports and 20% tariffs on

china. at some point they love to talk about the policies in place today. jonathan: the fed chair says we are not in a hurry. the more he says we are not in a hurry and the more they show signs of weakness, the more it sounds hawkish. lisa: it's difficult to understand where the balance of risks are. if they say we don't worry and stay on hold, one of the most notable aspect of this market you've picked up on this is as we've seen weakness in the consumer priced into equities you haven't seen bonds especially long-term bonds as the ballast at a time when there is concern about inflation globally and concerned about far away -- borrowing globally. the market is between a rock and a hard place but don't expect fed officials to be a ballast of some sort of clarity. annmarie: neil. a talking about how this will be a very political meeting. if the fed's hawkish markets will weaken further as a result of taking cepeda off the white house.

if they are dovish do they encourage this administration to actually dial it up when it comes to things like trade policies. jonathan: equities bouncing back. coming up we will catch up with sebastien page of t. rowe price and what's behind the selloff. as trump cautions on china russia ties. we begin with stocks steady ahead of the fed decision. sebastien page writing i expect a slowdown but not a recession. president trump was not bluffing on tariffs and the administration has more tolerance than expected for equity selloff sprayed good to see you. let's start with the fed decision preyed what are you looking for. sebastian: i think powell will have to acknowledge unemployment is ok. you have claims in the low 200s and historical averages 350. so that might end up sounding a little bit hawkish.

maybe just saying we are not in a rush might sound hawkish as well. jonathan: where do you find comfort? bond yields have dock. the risk mitigation characteristics of the 10 year treasury have been reduced over the past two weeks pay what gives sprayed sebastien: inflation risk makes bonds less of a diversified. and thank you for thinking about me. we are still underweight duration long cash and long credit because we do not expect a recession. talking about running, if you want to look at your watch while running or inflation data, the last four months annualized to 4% inflation. on top of that we are running massive deficits still. on top of that, once upon a time

tariffs were inflationary. i think there is still room. lisa: i don't want to interrupt the bromance, but i will say -- jonathan: i was very touched. lisa: i think it is wonderful. i wonder what the goal is of this meeting and the political aspect of the federal reserve if they announce they are going to pause quantitative tightening at least until the debt ceiling was resolved. could that be to this administration. we are working with you but also keeping rates where they are and not addressing the weakness in favor of inflationary concerns. sebastien: i'm curious how often the word uncertainty will be mentioned. with surveillance having a drinking game about transitory. and last week i never heard the word uncertainty mentioned so often. it's a little bit of an unsatisfying move.

i think powell will use that. it is true historically that when uncertainty goes up, stock prices go down. i asked state street to run some numbers. they have stats which is how often a word is mentioned in the media. it is fascinating. the word uncertainty was mentioned in the media more often than at any time in their 10 year data sample last week. it might be the theme of the fed discussion. lisa: is that possibly undermining u.s. exceptionalism. human underweight u.s. equities. it sounds are you remain so. sebastien: it's not just the tariff headlines, it is not just the only reason why the markets are selling off. there are signs growth is slowing and maybe this is part of the discussion as well. we got into this with extreme

valuations. valuations at the 5% of the historical range. and then you have uncertainty. but on growth, the consumer data is not good, the last two data points are not good. so there is more going on then the tariff headlines hence this obsession with the word uncertainty. annmarie: do you think jay powell will lean into the uncertainty and potential downside risk of growth or the potential upside shock of inflation because of tariffs. sebastien: that is the line he needs to walk. that is the narrow path he needs to thread in his communications. and it is going to be a little bit of both and i think we are still going to hear like we here very often nowadays notions of data dependence. annmarie: what should history teach jay powell? the fund manager survey said the last time purchase bins were this worried about one single

development it was five years ago when the main concern was covid? do you think that is warranted? 0 i don't -- sebastien: i don't think so paid we are close to neutral and stocks versus bonds. i think you had a bit of a correction here. i am not super bearish on risk assets for the next six to 12 months. i think it is a slowdown not a recession. we are not in panic mode whatsoever. if stocks go down 15, 20% from the peak we will look to be buying. jonathan: gm on the month so far is down about 1%. if you thought that was about trade and it was leading the selloff then gm would be down aggressively and that's not the case so far in march. tesla is down. nvidia is down close to 8%. apple is down by 12%. so far this month and we are only halfway through. when you diagnose the selloff or people, what gives? what is it about? sebastien: growth, valuations

coming in. i call this the tyranny of high expectations. 15% year on year earnings growth expectations. through the roof for the mag seven. my colleagues started calling it the lag seven. and uncertainty, political headlines but also rod geopolitical uncertainty. these are the factors that are driving this selloff but let's not forget but we just got into this with very high valuations by historical standards. this creates fragility. jonathan: i would say sentiment changes towards the mag seven are a bigger impact domestically than the trade headlines even if both matter. lisa: it was the smallest advance ever on the s&p 500 when 90% of the constituents were actually up on the day. its momentum trade at a time when a lot of people are frankly questioning not just whether the u.s. is still exceptional, maybe

the idea of exceptionalism is tied to fiscal spending in europe and china. jonathan: a massive story of the last few months. good to see you as always. the equity market in the big selloff over the last several months. also updating on the geopolitics. there was an important call between the russian and u.s. leaders. vladimir putin and donald trump. a form of truce over heading energy infrastructure. we heard from zelenskyy speaking in finland saying they hit ukraine energy -- russia hit energy overnight. it raises questions as to what was agreed to. annmarie: and the roadmap to get a full 30 day cease fire to stop the halting in full not just on energy infrastructure. also zelenskyy saying he will get on a phone call with president trump and i imagine trump will give him a bit of a readout on what putin said and where do these talks go. it looks like into the weekend

into the kingdom. jonathan: don't miss this one. white house special envoy steven witkoff joining us following that call between the russian and u.s. leaders. that would take place in a couple of hours from now. let's cross over to dani burger. >> the turkish lira trading at its weakest level on record. president erdogan's prominent rival was detained in a widening crackdown on opposition. people also told bloomberg the turkish ledger sold about a billion dollars mid to support the currency, paring some of the losses. morgan stanley plenty to cut 2000 jobs. sources saying the cuts will take place across the firm with the exception of its 15,000 financial advisors. the cuts are tied to performance and the impact of ai and automation paid more cuts are expected in the coming years.

the company's annual developers conference and the concerns about ai computing. unveiling more powerful chips that he said would apply a clear payoff to customers. that's your brief. >> more from dani in 30 minutes. next up, friends and enemies. >> it would've been tough. russia has the advantages you know. i would hate to see who is my enemy. jonathan: terry haines of pangaea policy joins us next. what's been agreed to and what hasn't to in the past few hours. good morning. ♪

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jonathan: a growing list of

banks cutting gdp forecasts on wall street. rbc looking for just 1.6% so far. looking at 12 months. wolf research doing the same thing as well. big revisions in the bond market. the 10 year study. yields totally unchanged going into the federal reserve meeting later this afternoon. equity futures firm or after snapping it today winning streak in yesterday's session. friends and enemies. >> the cease-fire without going further will be tough. russia has the advantages you know. it could be world war iii over this which is so ridiculous. but strange things happen. i think we had a great call and he said if you are my friend i

would hate to see who is my enemy. jonathan: president trump striking a deal with russian president vladimir putin during a phone call yesterday. the russian leader agreeing to hold attacks on ukraine's energy infrastructure but falling short of a 30 day true spring tyler kendall joins us for more. it seems to contradict what was agreed in the past when he four hours. tyler: real big questions as we get this fresh reaction from the ukrainian president speaking moments ago confirming he will have a talk with donald trump later on today but also confirming there appears to have been a russian drone strikes on ukrainian energy assets overnight despite this agreement yesterday that russia would halt such attacks on ukrainian energy infrastructure. up to this point, president trump had been painting this is a step towards progress. it had been considered one of the real tangible concessions from russia since the war

started but remains to be seen if that part of these talks is in place and to be clear those talks did fall way short of the u.s. stated objective which was to get russia on board with that 30 day cease fire plan and administration officials have told us that is critical to moving these talks forward. we got that announcement there would be a pause on infrastructure attacks according to the white house readout the next phase would be negotiating a maritime cease fire on the black sea followed by a full cease-fire and a permanent peace. we are expecting talks to happen in the middle east though we have yet to get a readout on the timing of that or who will be involved. still big roadblocks considering zelenskyy's comments but also the kremlin's readout confirming that bloomberg news reporting that putin made several demands of president trump including he wants to see a halt of western weapon flows into the country. it remains to be seen if that is something the white house will

get behind considering it reversed its own halt on u.s. military intelligence and security assistance to ukraine in order to get them on board with this piece plan. annmarie: that's the recap of what went on with the call for a cease-fire in ukraine but what about normalization between these countries and the bilateral ties between moscow and washington? tyler: that was in that white house readout that both leaders agree they want to see the strengthening ties when it comes to moscow and washington. it is something we know the kremlin is looking at when it seeks further access to western financial markets as an example to counter against sanctions we keep seeing being that main force of deterrence that the u.s. and its allies have taken. solesky saying he wants to see allies ramp-up sanctions in order to get russia to the negotiating table in what he says would be a more serious way. big questions moving forward but goes into this broader

geopolitical tactic the administration appears to be taking trying to normalize ties. as a potential counter to china. jonathan: more from tyler kendall later on this morning. just what are the objectives? president trump outlining plans to counsel russia and china. >> as a student of history which i am and i've watched it all, the first thing you learn is you don't want russia and china to get together. there is always a natural enemy situation. they are probably friendly and we will be friendly. i think we will be friendly with both. we have a big imbalance with china. with russia we don't have that much trade and they would like to and we would like to also. jonathan: joining us is terry haines at pangaea policy. what is the ultimate objective in play here? terry: the ultimate objective in ukraine is to stop the war in a

way that allows ukraine to continue to operate as a sovereign nation. that's going to be a very long slog. the president also talks about resetting the relationship with russia as part of a pulling apart with china. i think he has his work cut out for him. i think people underestimate just how much russia is a client state of china frankly and beyond that there is a lot of pressure points that are happening between the u.s. and china right now and a lot of moves being made. i always encourage people to see what the united states is doing in yemen and the red sea as well as the purchase by blackrock of the hutchinson assets around the panama canal. both as part of those things. so there is a game being played that is much broader than ukraine. annmarie: are you buying into this theory that we've seen the

trumpet administration do is engineer reverse kissinger? terry: that is a little bit grand frankly. it's difficult to achieve first of all. i think what they would like to do is have a reset of relationships across the board part annmarie: if it's not to draw a wedge between moscow and beijing what is the point of normalization with russia? terry: the idea i think is to bring russia back in the european direction. russia has a european face and asian face if you will. and the idea i think is -- i'm not sure what the goal is. the idea is to bring russia back into the western orbit, if not a western alliance. lisa: how much is president trump being tested in that desire to normalize relations with russia at a time when we are hearing reports both from

ukraine and over in the wall street journal overnight saying russia did attack energy infrastructure essentially in ukraine after the cease-fire was agreed upon. what are you hearing about that? terry: that is what this is, a test. i am not a fan of trying to be in the mind of these people, but what i can tell you from negotiations is you have to have a common ground in order to proceed. what russia is demonstrating is there isn't a common ground. it can of course write that ship and make it up. going into the negotiations in saudi arabia. but if it doesn't, then both president and the broader wester going to be faced with a choice. what would the west dupre and you prepared to do. we prepared up sanctions more or prepared to deal with the russian frozen -- frozen assets.

all the things the west has in its quiver since the war started three years ago. and hasn't acted upon. that choice will be upon the west pretty soon. lisa: we have a pretty clear sense of what president trump would like to see. normalize relations eventually with the united states and russia or greater trade ties. the way that we get there is difficult and that i think is what's under discussion. trump spoke to the washington examiner yesterday and revealed he had been speaking with president putin on several times over the past month. do we have a sense of whether there is consensus in his cabinet over how to go about doing this and where to push and pull. terry: there is no dissension in his cabinet. i'm sure he's taking advice from secretary of state rubio and others. but this is not a white house that i think that looks at the negotiation strategy or tactics collaboratively.

they certainly all get there opportunities to discuss but at the end of the day, they feel it is necessary to unite around the president and have the president be seen as the principal negotiator. that is both a substance and a style point i think. jonathan: difficult to assess at this point but how close are we to a leaders meeting in person somewhere terry: like the middle east? today i don't think it is real close. until you establish a common ground, i hesitate to say trust, but the idea is that you are back to the whole trust but verify thing. i do say common goals and, the objectives. until russia demonstrates its onboard with the objective here and it has not so far. there is not going to be any hope for that. jonathan: appreciate your time as always.

the president of the moment making a big push. but when you agree not to attack energy infrastructure and then hours later get confirmation from the ukrainians that that is what happened, it raises questions europeans have been asking, can you trust them? annmarie: zelenskyy saying you cannot and there is nothing in that call that europeans felt was tangible for prudent to make a halt on the 30 day cease-fire because he said he won't attack energy and within 24 hours he attacked energy. lisa: it's a test of president trump to see how far he will go against russia at a time when he's exerted a lot of pressure on the ukrainian side. jonathan: big interview later this morning regarding this topic. we will catch up with the white house special envoy so look out for that conversation. up next on the program we turn to the text selloff. dan ives of wedbush as nvidia looks to ease concerns over big

spending on ai. that stock has had a tough run in march. equity futures attempting to bounce a quarter of 1% and it is fed decision day. your bond market unchanged. live from new york city you are watching bloomberg tv. ♪ where ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. our advanced matching helps find talented candidates, so you can connect with them fast. visit indeed.com/hire

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jonathan: equity futures on the s&p firmware. yesterday snapping a two day winning streak. big tech has been ugly. we will talk tesla later. that has been a difficult from the past few weeks. lisa: what is actually behind the selloff? is it just trade uncertainty? is it the word uncertainty we will play a drinking game for? or is it moving away purely on the basis of evaluation and where the put is going to come from? jonathan: tesla got hit from just about all sides. rbc getting the price target. also, byd, i don't think you can overstate developments coming out of china, cutting edge developments. lisa: that might be a bigger

development than some of the uncertainty around sales and full self-driving vehicle equipment. i just wonder how much tesla has the upper hand as the key technological driver and economists and electronic vehicles at a time where byd is coming out with a five minute charger which rivals pumping up with gasoline. jonathan: i would like to turn to the bond market briefly. on the 10 year maturity, and look at how ai was trading. 4.2849. there is a load of tension underneath the yield curve. putting yields down, risk aversion, growth concerns, pulling yields up. this is a supply story out of germany and trade is a big piece of the puzzle. lisa: i would agree. this is fascinating when you are seeing risk aversion and you are not getting the response and treasury yields. the idea that exceptionalism is

moving overseas and if everyone is exceptional, that means bonds are not because that means everybody is borrowing to fund growth. let's say today the fed comes out and says, we are going up because quantitative tightening until we have more clarity over the debt ceiling limit, does that because a rally in long-term treasuries and does the market move it all? does that dictate the direction of the bond market? jonathan: scott bessent imply there was something he would like to see. lisa: we did get a story this morning about one hour ago indicating something of that nature that they were discussing it, so watch this space. jonathan: that position drops at 2:00 p.m. eastern time. equity futures firmer on the session. euro-dollar coming close to 1.10, tracking now it negative by 0.4%. the fed decision is at 2:00 p.m.

eastern time, and the central bank expects rates to hold steady. i touched base with citi and they think that that medium dot shows three cups, not two. the issue is they are downgrading growth and upgrading an upward revision to inflation. lisa: and how accommodative can they feel that the initial rate cut could be if it comes with more slowdown and weakness and potentially higher inflation? our drinking game to put the parameters out there, uncertainty and data dependency and that will be the reason why everybody will be a little lucy this afternoon. annmarie: how scary was that university of michigan survey? 32 year high from inflation expectations, if you are sitting around the fed, that will scare you. i thought maybe this would be an opportunity this year that they could cut, and then on top of that, consumers pulling back.

anxiety about policy and then they are nervous about spending that they might lose their jobs, as well. jonathan: we will see if it scares them later. and we talked about the drinking game with sebastian page, looking for the word transitory. lisa: transitory will not be making an appearance, do not wager drinking game on that. why are we encouraging that, drinkwater. sparkly water with a hint of lime. uncertainty on data dependency and you will be fully hydrated. jonathan: he might be having something different, but we will see. 1:30 for special coverage of the federal reserve. the eu commission president looking to boost defense spending by hundreds of billions of euros, saying the european union needs to defend itself

against russia and its "a reversible path towards a war economy." annmarie: she is going along with what we are hearing out of germany that they need to set their own deterrence, being pushed by this white house to do so. the quote that caught me from ursula von der leyen is if we invest in billions, we need a return investment, a.k.a., is this a new european stimulus program they have when it comes to rebuilding their militaries? lisa: i'm interested in the fact that the euro is weaker today after the spending discussions. i wonder if you could say it is a bit of disappointment because the ukraine situation does not seem closer to being resolved. the practicalities start to come to the floor, who is going to build it? what happens in the meantime? there are so many questions as they try to double down on a long-term existential question when they are facing short-term fundamental strategic shifts they have to grapple with. jonathan: this is a bit of a south of the news moment for

european equities or broadly. lisa: we get another vote on friday germany and maybe that will give more clarity about how much this actually means something. jonathan: the turkish lira, turkish authorities detained errored on's main -- detained -- the lira fell to a record low. cap you now big time off the back of the headlines. annmarie: you have this mayor and it is seen as the most prominent rival. this is very political, which is what it is a crisis of their own making when you look at the foreign exchange market. jonathan: and when you got maritime truce in the black sea, given where turkey is in the chokepoint for global trade who have a major role to play in implementing sanctions for

americans, as well. i would say this is a big issue for probably those who do not want that instability at this point. annmarie: i what we saw was erdogan's office put out a statement that they caught up with president trump and that they would like to make sure they are getting access to some american military power and make sure they have the bilateral relationship. this is going to be challenging now because america is a democracy, they see here's what many critics will say is that erdogan's is going after political rivals. jonathan: i mentioned volatility, let's talk about it. nvidia, failing to impress investors. they announced a new of chips and partnerships with companies including disney, google, and gm. >> time for economist vehicles has arrived, -- autonomous vehicles has arrived, and we are looking forward to building with gm, ai in all three areas. ai for manufacturing to

revolutionize the way they manufacture, ai for enterprise so they can revolutionize the way they work, design and simulate cars, and then also ai for in the car. jonathan: dan ives writing "nvidia's chips remain the new oil or gold in this world for the tech ecosystem is there's only one ship in the world feeling this ai foundation, and it is nvidia." dan, we need to talk about the same and then transition to tesla later but let's start on nvidia. this is failing to impress investors, what do you think the market signal is sending you? dan: i think it is the wrong take because if you can underline it, it is 15:1. and you are seeing demand accelerating, and when you look at laying out physical ai, economists, robotics, this is essentially jensen saying that it is our world and everybody is paying rent when it comes to ai.

this is a stock that will have a two in front of it over the next 9, 12 months and that continues to be the buying opportunity. i think they are misinterpreting what i believe is so bullish in terms of long-term outlook. jonathan: right out has a one in front of it, and i think for many people out there, it still has not recovered from the deepseek revelation of the last two months or so. what did the ceo do to counter those concerns in his address yesterday? dan: i think what he's talking about is that every large company, whether it is gm to across enterprises, as they are looking to build out, there's only one ship doing that, and it is nvidia. i agree there is still scarring from deepseek and that is bullish as the models get cheaper for the longer-term revolutionary pieces, but if you

are seeing capex accelerate, it is not diminishing, and that is something that we see plays out over earnings, but investors just need more and more confidence that there are not >> and that -- cracks in the ai thesis. lisa: we have been talking about something else going on when you look neat the surface of the s&p 500 or the nasdaq, it is the high flyers of last year that are leading the way lower and have not been able to recover, even with positive news. we talk about nvidia and yesterday's surprising reaction to the conference but also tesla and how the shares have been pummeled. can you understand what is behind some of the shift to a from big tech and why certain names have gotten so disproportionately beaten up? dan: three things, first, it is a perfect storm. first, you don't know the rules of the game, in terms of geopolitical tariffs, you are

seeing a risk off and that is something that we are seeing plate out because investors are worried that you will see some sort of cracks when it comes to tariffs related to chips. two, you are seeing more play, like the china-tech trade, more diversification, worrying about the growth concerns and the third is you are not going to have true valuation support here. you need to show the actual growth, and as a getting to the next few quarters, that is the aha moment. but we are in the sort of gap here, where it could be used negatively and i think it is just as nervous as i've seen tech investors. lisa: i hear you about nvidia, especially because the use cases wide and they talk about how

demand outstrips supply, but tesla's story is a little bit different, talking about the doge involvement of elon musk, and we talked earlier, which is byd presenting competitive edge to tesla and showing their dominance in the region. how much is chinese technological advancement the main competitive reason why tesla shares could stay here and then go lower? dan: is that the biggest competition? clearly. in terms of what byd is doing, it has been super successful, but this is not a zero-sum game. and when i think about autonomous robotics and physical ai, it is tesla. and that is why the medium and long-term outlook is so bright from a technology perspective and where they are headed. the near term, it is not just a

moment of truth, this is something where for musk and tesla, it is a mini crisis that they are going through because of musk does not pull back and start to show more as the ceo of tesla, that will continue to be pressure on the stock. we need to see a balancing act, the clock struck midnight. annmarie: i'm getting messages from friend in london showing me posters that are anti-elon musk and tesla across london. how concerned are you that this branding problem could become bigger than you are expecting? dan: if he pulls back and balances it, and you don't have to see him everyday at mar-a-lago in the white house, i think a lot of this is it is a scar, but i think it is concave. i don't think it changes the

longer-term or medium-term outlook, that as we talked about, the reason it is a moment of truth, you cannot have brand issues spread. i believe the future is the best instructor world -- disruptive in the world, along with nvidia, but this is the moment where musk needs to read the room. we have seen it before when it comes to twitter. we have seen other times over the last 8, 9 years, and we are at one of those moments, stock is weight oversold for what is a true triller -- $2 trillion valuation. jonathan: i'm worried your flight might have gotten called, so one more question. how long do you think he's called before the story gets away from him at tesla? the stock is down by 23% this month alone. dan: i think he basically has four to six weeks. on their conference call or between now and early may that musk doesn't sort of take a step

back and just dives into the deep end of the pool, then it comes down to the last thing you would like to see tesla become is a political symbol. that is a negative. that is why the clock started. jonathan: thank you for making time, dan ives. that stock is up by a few protect -- percentage points, and some people might say it is already too late. annmarie: it already is a political symbol. you had a number of tesla models, and the biden administration was union led and the trump ministrations tesla, and when you look around the world, people equally tesla and elon musk to maga. jonathan: let's get you an update with news elsewhere with dani burger. dani: a lot of mere zelenskyy says he will speak to donald

trump today. zelenskyy told reporters in finland ukraine will not recognize occupied areas as russian land. finland's president called for europe to be involved in ukrainian talks. exclusive reporting from annmarie hordern, donald trump posted a senior uae official as the gulf nation pushes to ease access to u.s. technology by ramping up investments. sources telling bloomberg that the uae's national security advisor spoke with trump about increasing iranian investment in u.s. technology and energy. and the two nasa astronauts who were stuck in space for nine months returned to earth last night. they returned in a spacex capsule that splashed down off of florida around 6:00 p.m. eastern time, 2.4 million people tuned into the live stream to watch the return. that is your brief. jonathan: i would like to pick up on the last story, elon musk is under a lot of pressure but we have to acknowledge that this

does not happen without elon musk and spacex. lisa: they rescue these astronauts that previously could not come back because of a nasa spacecraft that malfunctioned. welcome home and good luck with rehabilitation. jonathan: i congratulations to spacex, phenomenal. up next, waiting on powell. >> they have been pretty clear there on hold. it is mostly sentiment data concern. you can dismiss one survey or another, but as they grind higher, i think they do worry about a de-anchoring of their commitment to 2%. jonathan: we will catch up with gennadiy goldberg. this is bloomberg. ♪

jonathan:jonathan: the fed decision dropping later this afternoon. they are not in a hurry to get worried. equity futures positive by .20%. under surveillance, we are waiting on chairman powell. >> they have been pretty clear they are on hold. the data they have gotten since, even subject to uncertainty, i think they think this is a good level to stay at, given that the labor market appears pretty firm. it has mostly been a sentiment data concern, inflation expectations are shifting. you can dismiss one survey or another, but as they gradually grind higher, they worry about a de-anchoring of their commitments to 2%. jonathan: investors await the fed decision and economic projections. gennadiy goldberg of td writes

"market sentiment moved from euphoria to dispersal past is given investors whiplash. while the data has become concerning, the economy is still doing ok and show signs of moderating." we are joined now with more. if he says that today, is that hawkish? gennadiy: i think so, you looked at that 10 year rate around 40 and said how stuck it is, if we got right to 4%, he sounds dovish, if he sounds hawkish, we could backup quickly. if he comes out and says nothing, i think we go back up to 4.40, 4.60. lisa: shortened are long and? gennadiy: long end. lisa: you have debt issuance, etc., you are saying if they sound not dovish, you could get a backup on the long end, how does that make sense? gennadiy: the market is so much

more worried about growth. we are talking aesthetically and air impulses. if the fed faces a growth slowdown, they will be quick to act, but at this point, they will pour cold water on the market expectation that they will come in effectively tomorrow and start cutting interest rates. they are still and wait and see mode and that could push the curve higher. lisa: four they do, not what they say. that is when people have a drinking game around uncertainty. cheers. there is a question about how much they give signaling with quantitative tightening. ultimately we have heard about that because scott bessent, we heard potentially they could start to pause allowance of their balance sheet to rolloff and their lack of reinvestment as a way to ameliorate uncertainty around the debt scene. what do you take of that type of movie that comes? gennadiy: i think they will take it as it is technical, don't

read into it, but the markets will have trouble divorcing that from interest rate policy. the fed has always said there are two different programs but are you a state of have to actually cut here, they could wait until the next meeting or the meeting after. we actually think it will run until september before the end with a little bit of a risk and i think that discussion has already gotten the markets optimistic. scott bessent would love to have qt m today because that is 300 billion less a year the treasury has to fund. i would say it is more likely than not but it still stays in place for now. they have plenty of time until that august x date and i don't think they need to rush. they could do it june, july, or september. jonathan: the lead treasury secretary alluded to that. medium dot shows two cuts, three or two? gennadiy: i think the risk as it

goes to three. we still have it showing two. i think that conversation around inflation versus growth is what everyone is nervous about, and i would not be surprised to see some dots of higher, not lower. i think the expectation is the dots shift universally lower because of the worry of growth and there have been some fed officials worried about inflation, and there is a good chance that it stays around two, some shipped lower and higher, and we don't get a lot of movement. jonathan: the biggest market movement -- moves for markets today, if you get a forecast that looks days and confused, that helps nobody. lisa: it helps nobody who would like a fed put, but i feel like the bond market may be has moved away from the idea of a fed put. stockmarkets hold out hope. jonathan: do you think he's worried about what is developing in markets or it is not big enough yet? gennadiy: i think they are

watching it closely. i think scope and timeline matter. over the course of a couple of weeks or months, that is concerning. if that happens over the couple of months or quarter, that something to keep an eye on. what we are watching is the impact of these equities on higher income consumers. they have been the driving force of the economy the last years. the other reason the economy has outperformed all expectations. if they snap pocketbooks shut, that is what markets are trading right now. we have talked before, don't bet against the american consumer, not yet. i think there is a lot of nervousness, but the data isn't there yet. jonathan: that would be a major change. gennadiy goldberg of td. next, mohamed el-erian and a whole lot more. from new york city, this is bloomberg. ♪ where ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us.

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things are not as bad as the last few months. >> we are in the weight and see mode, waiting to see with the chips fall. >> i think we could go into recession far faster than people think it may be we are at that stage. >> the next few months are up for grabs. >> don't wait for the narrative to shift. the markets will respond first and investors will catch up to where markets are going. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: the second hour of " bloomberg surveillance" starts now. equity futures on the s&p 500 firmer by .20%. domestic 100 .30% yesterday

session snapped a two day winning streak, going up to the big one later, your date ahead looks like this. the main event, 2:00 p.m. eastern time, it is a three-part act, the forecast, we are expecting a lot of change, and then dirty minutes later, a news conference with chairman powell. lisa: what can you say that can get the market comfort? does that give the equity market, the bond market, what happens when you have stagflation or a environments coming on the pipe? there are no good decisions, so it is difficult to know how the market will take what we are going here, which is a certainty in data dependency. jonathan: they have new policies to deal with, new policies to build forecasts around and to react to. annmarie: they do, there are tariffs in place, additional ones given under trump 2.0, 25%

on steel and aluminum, and then there is the uncertainty on what tariffs are coming down april 2, and not only that, called ottoman talks about it is not just april 2 tariffs, it is the breath and scale of the tariffs, the second effects, the consumer reactions and the retaliation. that is why it makes the fed's decision so much harder. jonathan: if you follow all the speeches from various committee officials on the fomc, not in a hurry is something that comes up repeatedly. they are not in a hurry. what are they waiting for? lisa: assignment that the u.s. economy has slowed down. the bigger concern is if you get a recession, you could get rate cuts that could be significant and that could alleviate pressure. if you get a slowdown, it becomes a difficult moment, how to really respond to a slowdown of the economy that is not a full contraction? inflation is still stickier, potentially picking up, and

because the u.s. economy is slowing down, it becomes more challenging to repay all of the debt when inflation is high. stagflation are like environments difficult for federal reserves. jonathan: the fed is not in a hurry and there have been real signs of a slowdown that they are not in a rush. the administration is not concerned about what we've seen in equities. that is a new regime for a lot of people in the market. lisa: where the put going to come from? the market without a put is unconditioned for this environment over the past 15 years when it is driven by monetary and fiscal policy. you have to look to real growth. right now, the signs are mixed. annmarie: the administration is calling this a detox and transition, struggling to say we are on the course potentially for a recession but it puts them in a difficult place because what if jay powell talks about not cutting this year? what kind of statements will we

get from this president? jonathan: coming into it, equity futures firmer by .20%. we will catch up with mohamed el-erian on u.s. exceptionalism, roule, and esther george. we begin this hour with stock study headed decision at 2:00 p.m. eastern, mohamed el-erian writing -- "the federal reserve's ability to significantly cut interest rates due to employment and growth worries may be constrained by unfavorable inflation data, it is too early to be confident about u.s. economy destination." good morning. that is to important quote, really, really important, downside risk to growth now, do they have to confront upside risk to inflation? how constrained are they? mohamed: it is constrained. the fed, like others, are

navigating a regime change. we are seeing fundamentals, valuations, and the regime change involves three things. postpone rate cuts and then communicate in a way that convinces people that eu will have the possibility of rate cuts, not because inflation is coming down, but because growth is problematic. bad news cuts, and then the third one is do so without feeling inflation expectation, which are already worse. jonathan: today is a three-part act, it is expected to be a nondecision, a lot of people will go straight to the forecast. what were you look for in the forecast today? do you see a stagflationary mix to the decisions we saw in december? mohamed: the first thing that would worry me is it suddenly they do what they have done in the past, which is start changing definitions. the past have told us that they

really don't care about the serving inflation, and then they go to market-based, so if you see the goalpost moving yet again on the data, you know they are not confident as to what they do. the second, they can no longer maintain that we don't speculate, we don't guess our policies really have got to take a view. and i suspect that they will be tempted to be data-dependent and the risk of a policy mistake is much higher. lisa: data dependency gets thrown out a lot, but it is becoming less and less clear as to what that means. is it the data as far as u.s. economy are fiscal spending overseas and how much that might pressure the global market in terms of where the demand goes and how that leads u.s. treasury yields? i wonder how much they are constrained by the borrowing plans of china and germany when

everybody is engaging in physical spending. mohamed: that is why we have three regime changes, have gone from u.s. exceptionalism to data exceptionalism. we have gone from huge confidence to fade put to pressuring it. and the valuations we have gone from u.s. dominating all states of the world to the u.s. no longer dominating. we saw three massive regime changes. you mentioned uncertainty, no wonder there was uncertainty. because these are fundamental changes to have people think about economic outlook and how people think of investing. lisa: i was looking last night at where the markets were the last time the fed met in the last time they announced their decision on january 29, and the 10 year yield was a little bit higher, the euro has surged and gold has surged, and i wonder much that speaks to a shift in the idea that the fed has these jobs or the privilege to act recklessly with borrowing in the

fed would not have to address that, but that has to become something, what the fed thinks about. mohamed: you have heard me argue here, people cannot escape the dollar as currency, but they can start slowly building pipes around it and, two, changing the asset allocation to include other things, and gold is one of the other things. this should be flashing yellow in washington, if gold continues to go up, regardless of what is broken down with historical regulations, there is something going on about the dollar internationally, and that something may have to take seriously. annmarie: when you say they should have things other than just gold, what else? mohamed: you see the shift, crypto has become more acceptable institutionally, which was unthinkable two years ago. you see the dollar, you see investors diversifying away from the u.s., so whether it is the

household or corporate sector or the sovereign wealth funds, they are all looking for an alternative. the good news for the u.s. is they have to replace something with nothing, so there is no other currency that steps in, and that is why that shift is going slowly, but we don't know where the critical point is. jonathan: you have written about this before, what started the process was to mark what is the biggest consequence of? mohamed: 2008, it was a crisis manufacturing in the u.s., and it undermined the contract between u.s. and the rest of the world. we give the u.s. enormous privileges, reserve currency, and we give you goods and services. we transform -- transfer the savings to you because we have the most predictable markets, give you veto power on critical decisions, but in return, the rest of the world expects the

u.s. to manage the system responsibly, and what has been eroded is the notion that the u.s. manages the system responsibly. it started 2008 and accelerated 2016, and now with the further weaponization of trade and investment, regulations or sanction, it is exhilarating again. jonathan: that is the part of the sanctions, that they are trying to punish people who have been responsible than people question the responsibility of u.s. policy. secretary scott bessent talked about that he would like to see a different approach and that the president would like to engage in a different approach with sanctions policy, what would be more helpful and what needs to change customer -- needs to change? mohamed: what i like it to be cooperative or not cooperative question mark second, how long

will my relative strength persist? and, third, how many rounds are we playing? the difference between 2017 and now, the rest of the world. the u.s. was plane one round, and now the u.s. and the rest of the world, this is a multi-round, and that is why the u.s. has to be really careful about the longer-term costs. annmarie: scott bessent talked about, at least when it comes to russia, president trump is willing to let it go to a 10 if it means getting president clinton to the table, but do you think a 10 would work? do sanctions actually work? mohamed: first of all, why do we have 10 already? annmarie: because the biden administration did not want higher energy prices. mohamed: right, and the problem with that is now russia has an alternative trading system that involves four other countries, and it is working. it is not efficient and they pay

huge premium to use it, but they have an alternative system, and the problem was not going to attend quickly because you do not want to incur the cost of 10 is that other countries get to adjust, and now when i go around the world, people asked me, how do they avoid the impact of sanctions? that is not the question you would like to be asked when you go around the world. jonathan: mohamed el-erian will be sticking with this. the fed decision later this afternoon. speaking of gold, close to all-time highs, north of three k. schedule an update on stories elsewhere with dani burger. dani: general mills falling .30% . the food manufacturing cut the full year sales forecast after continued uncertainty surrounding import tariffs and potential retaliatory tariffs that could be incremented by other countries.

bank of america strategists are warning that china's stock rally macy meaningful correction soon. the hang seng and the msci china and except surged at least 30% from january lows, showing a boom and bust cycle. the fbi is investigating incidents where tesla charging stations, dealerships and cars were damaged, including an incident in las vegas where cars were seemingly shot at and then set on fire, this after president trump suggested he would designate acts of violence against tesla as domestic terrorism. that is your brief. jonathan: this is really sad to see this. you are free to purchase or not purchase whatever you would like, it is a free market and economy, but to damage things in the way things have been damaged, the active vandalism should over the last few days has been unthinkable regarding tesla and elon musk. lisa: vandalizing anything is

illegal, it should not be celebrated in any way, and, frankly, it is an unacceptable way of speech. jonathan: tesla just about firmer and the premarket, following an aggressive sale. next, a cease fire out of reach. >> for cease-fire without going a little bit further would be tough. russia has the advantage in putin said to me, my friend, i would hate to see you as my enemy. jonathan: norman roule joins us next. this is bloomberg. ♪

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jonathan: equities firmer, up by

0.30% on the s&p 500. 4.29 for the 10 year. 1.0898 really euro-dollar. cease fire out of reach. >> the cease-fire without going further would have been tough. russia has the advantage, and it could end up we end up in world war iii over this which is ridiculous, but these things happen, and he said to me, if you are my friend, i would hate to see you as my enemy. jonathan: president trump and vladimir putin failing to reach a cease fire deal, in a 90-minute phone call. zelenskyy said he would speak to trump later today. we are joined no for more from washington with tyler. what is the plan now? tyler: zelenskyy announced the call, new this morning, saying that he will ask the u.s. and

allies to exert pressure on russia in order to get them to the negotiating table. for example, zelenskyy floated he would like to see a tightening of sanctions, something that the u.s. has not ruled out, as you heard si trump say this call was a positive step and we also got a new headline from the kremlin that says the u.s. agreed to "gradual normalization of ties with russia," something that russia has looked forward to, but there are questions on what was agreed upon in the call after zelenskyy confirmed it appears russian drones had hate craney and civilian and energy for structure overnight which was not supposed to happen and it is the only tangible deliverable we did get from that call yesterday. what happens next, solesky and trump will help on the phone call and we will see with the readout says, but at this moment , we expect negotiations to move ahead as planned.

steven witkoff confirmed yesterday that those talks are expected to take place this sunday, as we wait for further details on what could be discussed, quickly, i would like to add that zelenskyy said he was hopeful that a peace deal could be reached later on this year, but he said he needs to know what was firmer security guarantees will be. the kremlin this morning saying potential peacekeepers were not discussed between vladimir putin and donald trump. it remains to be seen, the questions on what the white house will commit to when it comes to firmer guarantees. jonathan: tyler kendall with the latest. let's extend the conversation with former u.s. senior, norman roule. is this a push to normalize u.s.-russia relationships? norman: we have seen a first

step in each direction. we have seen beginning by the russians to test the trump administration, we have seen the trump administration to test the russians. and this will likely be a long, long series of talks that russians are going to try to see sanction relief, they will put forward maximalist demands regarding ukraine. the trump demonstration will pressure the russians for a first of -- efforts against iran and look for cooperation on china or even north korea. in the long-term, we do need to have arms talks with the russians on missiles, space, even talks on dealing with the military situation. so there are reasons for negotiations that -- with a relationship with russia but the russians will play the long game. annmarie: when it comes to what was agreed yesterday, we are talking on cease fire on russia

attacking energy infrastructure, but less than 24 hours from when the statement went out from, and on the white house, we sell russia hit energy and other infrastructure like a railroad station in ukraine. does this give more credence to the europeans who are telling the administration, be careful, you cannot trust president clinton question -- president clinton? norman: russia, -- president putin? norman: russia would likely say when the agreement begins is not the question, but i'm not sure russia ever agreed to stop firing on infrastructure, but they did agree to cease fire on energy and they would like to see the ukrainians to see similar issues because the ukrainians have been successful in striking significant portions of russia's energy infrastructure. this said, i don't think the russians have broken a number of agreements in the past. the trump administration would be reluctant to impose significant sections on russia but will do so with russia

compels this, and i think russia does not want to see that happen, so russia has a balancing act and they would like this relationship with the united states and they need to make sure that america is not pushed to that direction. annmarie: when it comes to the timeline, talking about how steven witkoff said yesterday that the negotiations will begin sunday, when you think we could see president putin and trump sitting down together? norman: no idea. and it is because no side will want to play such a meeting. russia is already ensuring that its propaganda machine shows that any encounter with the u.s. is seen as a win for russia, as a significant improvement in russia and u.s. relations, and they hope that the world parents this and repeating -- parents this and repeats the dialogue, but they have to come something more than a temporary agreement on a strong portion of a cease fire. lisa: you said russia is testing

trump and trump is testing russia, house trump testing russia? norman: president trump has fantasy leaking gain a genuine and to the conflict. to begin a process that would move in that direction. this is going to be difficult and heartbreaking for many, including likely russian control of ukrainian territory, it will include likely sanctions on russia ending, and russia's return to about a relationship with the u.s. that will be opposed by many. the president is going to look for some way for russia to prove that that price is worth it, and we did see after the first talks to david russian foreign minister go to iran and press them on the nuclear power. the iranians do not accept much russian push in that regard, but it is an example of the u.s.

pushing russia in the direction of something that we seek them to do against our adversaries. mohamed el-erian: we have heard russia be referred to as a client state of china, how should the white house think about that, and to what scope is that you link between china and russia right now? norman: i'm not sure there is significant scope for that to happen. the relations are economic, as you know, the relations are deep. the political engagement that the u.s. would seek and the pressure on regarding iran and i'm really not sure with china in the near term, it is more likely could see progress on talks restarting, some sort of symbolic pressure on iran or north korea, some symbolic

questions on the arctic, some symbolic talks on energy, but china will be a long game. jonathan: appreciate your assessment, norman roule of csis. on that last point, the president alluded to a conversation yesterday. annmarie: he said you do not want to see russia and china get together. russia and china are already together, china treats russia as a penal colony and gas station, they have talked about no limits to their friendship. how do you drive a wedge into that? which is what a lot of individuals think what trump is trying to an -- engineer is a reverse kissinger, draw a wedge between moscow and beijing but it will take years. jonathan: how difficult is that going to be? lisa: especially if you have economic independence. president trump is testing vladimir putin and i would like to know how, where the asks? right now i don't have a lot of

clarity. jonathan: we can ask that question about one hour from now with steven witkoff, live on "bloomberg surveillance." equity futures further than three point just 0.30%. we will talk about the stock market later this afternoon. feel cap rail -- phil camporeale joins us next. ♪ ere ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research.

ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management

jonathan: the opening bell two hours away. s&p former by 0.30%. on the nasdaq 100, difficult the last few months. up by 0.36%. with two hours until the cash open, here is yahaira jacquez. yahaira: tesla getting a boost, up more than 2.7%, putting them on track to snap a two day losing streak. this is after it was approved for a permit in california that could put it closer to launching a ride-hailing service, and that is important because it could pave the way for tesla to launch for its ultimate goal of launching a taxi service. next, their shares of gilead sciences falling 2%, and this is a wall street journal report that the u.s. health department is weighing plans to cut spending for hiv here in the

u.s. killian is a major --gilead is a major hiv medicine maker, and lastly, venture rising after it is reported the trump administration is set to brenda company approval to export natural gas remain client facility in louisiana. this was a problem solved under president biden, but with the new president determined to drill, baby, drill, the approval would be trump's biggest move on lng yet. jonathan: appreciate the update. later this morning, top stories, the trump administration fired two democratic ftc commissioners from the five person agency. they were nominated i president trump, defending the decision. annmarie: the are embracing the legal theory that the

constitutional gives the president unconditional authority when it comes to managing the executive branch. on ftc and commissions like this are set up, it is in a bipartisan way. now what you have at the commission is republicans when it is supposed to be balanced. the issue becomes here, if this is successful, this might become a president that can challenge political independence of something he cares about, the federal reserve. jonathan: what does this mean for the federal reserve? do you remember that news conference with chairman powell and if you would be fired? he said, no, it was so blunt, raising questions on whether that is true. lisa: right now it doesn't seem it is up for grabs given effect scott bessent talked about how they have lunches together and they seem to cordially be working together but there are political questions. do we have a clear sense of what that means or what they will allow or not? let's put aside politics, does that leave us with a clearer sense of what the ftc is going for? jonathan: my turn to say no, no.

what we saw yesterday was a speculation about a deal not taken place because of the antitrust concerns of people coming from the party. annmarie: we have seen it time and time again, in eight weeks of the trump administration, there are synergies when it comes to antitrust between democrats and republicans, especially the likes of former senator jd vance, who is now the vice psident. jonathan: morgan stanley planning to cut 2000 jobs later this month, sources telling us that the plan was set in motion before recent market turmoil, this is citi, cutting payouts to hundreds of the banks turnaround plans. lisa: citigroup, the consequence of an $81 trillion and that perhaps it remits progress they're making towards compliance issues and regulators. for morgan stanley, one line stood out to me, a small portion affected the impact of

artificial intelligence to automation inside the firm, expecting to increase over time. how much is that going to drive some of the efficiencies of the financial markets? jonathan: that feeds anxiety, and we have seen that collide. there was a sentiment survey on friday, as well. look at the headline numbers, things look steady. to go to the surveys, and things look weak. what is the difference between the two? phil: time. -- mohamed: time. but this is consequential because the lower parts of the household income sector have been under pressure with overgrowth that has been supported by the rest of the distribution. now if we can get secured among the rest of the distribution, that has a potential good effect. jonathan: this economy has been resilient in a lot of ways people underestimated, and one

of the reasons, high income consumers in america have kept on spending and they keep on spending. lisa: especially if the wealth effect takes hold, i would add the other reason why consumer spending has held up is because people got checks from the government they could go out and spend, and as that gets pulled back, you wonder what that leaves behind in terms of scars that had been addressed. jonathan: jobless claims are one day away. let's squeeze intact, nvidia failing to impress, even with the ceo making several big announcements. they unveiled a successor to its ultra processor, in partnership with gm and more, and the stock was still weaker. lisa: the magic of the godfather a leather jacket of artificial intelligence seems to be waning, and the concern is bleeding out just beyond the godfather himself with nvidia shares that fell after the announcement which was not to be positive. also, companies mentioned

nvidia, it used to be the secret sauce but now it isn't working, and even gm, when they talked about a partnership with them, did not allow those shares to rise, even though suddenly you have the promise of robotaxis that once upon a time was a story that the market loved, so this is the reason why you have to wonder what is behind this? is it a true questioning of ai or momentum driven and market-based? jonathan: this company has been on the defense since deepseek and it was not on the offense. that stock is down for the month of march. most of the mag seven is down pretty hard. rockets looking for the fed's read on the economy, with jp morgan writing, we acknowledge the downside risk to growth but are stopping short of her session. tariff policy and uncertainty was a clearest, and we would be ignoring the potential upside to the administration in delivering procyclical regulation and fiscal policy. phil, welcome to the program. we have heard is so many times

that the strategic anchor, when they take a step back and think of the overall policy mix, they think it is pro-growth and pro-risk, where does that faith come from? phil: i always look starting my morning with you guys but i really like to start the morning with the multi-asset diversification story. i have to tell you, this is unbelievable. jonathan: did you were her start? [laughter] phil: the hallway -- the whole weight in, so let's break this down. first off, yes, the shine has come off the u.s. exceptionalism story. you think about u.s. growth outpacing the rest of the world, rates in this country moving higher or chair powell be more patient cutting rates and then more fiscal. when they got the new information this year, we have certainly changed that, you have

heard me talk a lot about u.s. exceptionalism. we heard scott bessent in february say the administration is focused on lower rates, code for the tariff uncertainty is coming and that's the biggest issue, not really tariffs, it has been more evaluation story than tariffs, it has been the uncertainty of it, like when jamie dimon says he can deal with financial regulations when he knows what it is, i just knowing what tariffs are, but, yes, the shine of u.s. exceptionalism comes off. i feel like jay powell and christine lagarde have swapped scripts. i feel like christine lagarde was talking about having easier policy and jay powell talked about patients, and then in the fiscal, that is the one that caught our attention. u.s. exceptionalism and fiscal policy, up until germany breaking the constitution a couple of weeks ago, just looking at the plan into perspective, it is 11% of gdp,

500 billion euros, do you realize that is the same percent gdp as the u.s. coronavirus response? so they are responding fiscally in the same size and scope as we did to pandemic but the key is we are certainly stopping short of recession. it is operating from a position of strength, your growing at 3% most of last year, the labor market claims the unemployment rate, a 4.1%, very, very strong, so, however, we have taken down our growth, from 2.1 to 1.9% or 1.7%, and the probability of recession to 20%, and, again, i multi-asset investor, lisa's least favorite, bonds, are finally working to protect. lisa: there is a lot to unpack, and whatever you are drinking, fantastic on that.

phil: just coffee, to be clear. lisa: glad to hear that. there is a question on whether the u.s. is losing exceptionalism and the rest of the world is gaining it, and the diversifier against slow down as you look at growth expectations, how concerning is that to you that going forward the u.s. bond market will be stressed, not just by a question of u.s. dynamics and inflation but global debt issuance and exceptionalism with everyone trying to get on that train? phil: we believe bonds go from 4.8 to 4.3 is meaningful. that is 50 basis points and the bond market gain higher this year with the equity market lower, that's meaningful. and don't believe in a fed put here, if the federal reserve were to accelerate their action, be careful what you wish for, i think that is a world of deteriorating labor market and deteriorating growth along with

a 1.7 we predict, and that is when bonds would kick in, but 4.3 for us, about 3% on inflation, that brings you to 4.7%, and it is not particularly enticing but the move for 4.8 and 4.3 is clearly a risk. offsetting there is, that inflation is not the problem. it is growth. mohamed: i'm impressed by your high level of conviction. i just wonder if this will match the high level of foundation. a revision from 2.1 to 1.9 -- phil: on .7, yeah. mohamed: at the beginning of the year is relatively small given all the things you cited about uncertainty, second, the phrase we will certainly stop short of a recession, that is a strong statement. phil: so 20% probability of recession, the lows to could get

his 15% in terms of law of averages. when we look at things like exuberance, and the consumer, we talked about the consumer couple of minutes ago, they are still paying 4%. the effective number is 4% and that's the biggest reason why we did not go into recession in 2023 and why there wasn't one of policy, and as long as the labor market continues to show strength, which i think we are seeing, and that debt service cost stays low, i think the consumer is ok. we have reduced allocation to equities. we came in 10% to avoid equities in the u.s., and now we are 4%, so we are focused much, much more on non-us, only 1% right now, and the other piece is high-yield credit, and to have an asset class building between seven to 7.5 versus our core

index yielding lower than that i think is critical. there is a 20% probability of recession, but to make the leap of taking the shine off u.s. exceptionalism i think is pretty cool good. mohamed: my probability is 25 to 30, so not far away, what do with the survey data? do you dismiss it? you say it is a hiccup? how you treat the survey data? survey data is pretty worse. phil: soft data versus hard data, and the michigan confidence number on friday was awful. not only with the confidence number but also the inflation expectations. it is almost like they cross the bridge from detroit to canada and started asking people about -- [laughter] lisa: they could have been. phil: we think there is a fair amount when it comes to that particular survey data. the retail sales number that we saw this week i think offsets

this often, so we are not dismissing it, not about the risk, but the hard data continues to show an economy that may be a slightly below trend. mohamed: and from soft to hard is typically three to six months. phil: we will see if it plays out, but we cut equity risk because of these risks, and it is not really tariffs that are the problem. why would you pay 28 times on the top stocks in the u.s. when you can get 13 times on everything else when the u.s. exceptionalism shines? jonathan: you mentioned germany. germany seems to be a game changer for a number of reasons, including the argument you made regarding european equities. lisa mentioned the bond market, does it change the income story? i don't think enough people are talking about when we have downdrafts and equity market, the bond markets stop responding, and it looks like

for some people there reassessing the risk of treasuries because of additional supply coming out of germany. we have had a regime shift in german fiscal policy, and for a long time, the german debt market was the anger along the global debt market, is the opposite starting to occur? phil: unless it becomes inflationary in that part of the world, so when we see 5% and you have the wrong way correlation, that is when it becomes an issue, but i don't think you could say germany just created an environment of fiscal dominance and growth and say, what about the bond markets? i think we are looking at the positive side it this point which is the effect on growth, which is going to be positive, which then affects the early story and everything else in the low multiples. so we are not going to say that stock bond correlation is broken because of german fiscal -- jonathan: but the decision

between treasuries and booms, it is not just multiple stories, if you look at multiple stories, would you have done, why doesn't the same apply for fixed income? phil: the treasury market for usphil: is still the quality story, so we were never really looking at bund to protect portfolio, it was always the treasury side, so if we decided between them, there is no information on the bu siden, but we are using the treasury market. jonathan: philip camporeale of j.p. morgan with his views on financial markets right now, and a multi-asset portfolio. let's get you an update elsewhere, here's your bloomberg brief with dani burger. dani: gold has touched a record high, above thousand $39 an ounce as geopolitical tensions and growth concerns drive demand. russia's metals now 15% this year.

they are extending their .24 performance, price targets were raised on the commodity. capital is set to return 25 times for the investor capital on the sale of cybersecurity, and a person familiar telling us that the deal goes through, sequoia will reap around $3 billion from its 10% stake in wiz. also but agreed to buy wi. the trumpz administration released classified documents related to the assassination of john f. kennedy, consisting of 80,000 pages published without reductions. with more documents to be unsealed and released in the future. that is your brief. jonathan: next on the program, awaiting the fed. >> people are looking for the fed to come to the rescue of the economy by cutting rates. >> they have been pretty clear they are on hold. >> i would count more on the

trump put in the fed put. jonathan: more to come from the former kansas city fed president esther george. ♪

jonathan: no drama, equities firm or by .80% and bond yields higher by single basis point, in and around 4.30. under surveillance, awaiting the fed. >> people are looking for the fed to come to the rescue of the economy by cutting rates. >> they have been pretty clear they are on hold. >> this is a difficult environment for them. >> the fed put is something we will not see. >> i would count more on the trump puts than the fed puts. >> the administration or the central bank first?

>> i lean towards the central bank. jonathan: tariff uncertainty and rising growth concerns, why do you expect the fed to hold rates steady? esther george joins us for more. welcome back to the program. we would like to lean on your experience, how would you approach putting together a forecast in a moment like this one? esther: good morning. a tough environment, for sure, but there have been many and which policymakers depended on a forecast and think about what the future might look like. in this environment, there are so many crosscurrents right now that i think the tendency, and i would probably would have been one of those is to stick with what you saw in the data coming in at the end of the year and keeping this wait-and-see mode. so while i don't expect it will paralyze them in terms of moving some of the dots around, i do

think in terms of making many commitments about the path of policy, it is probably one they are going to be stepping back on at this point. lisa: if you were still on the fed, where you more than inflation or the growth? esther: you have to worry about both. i call this an engine warning light, you don't know if it is something that is about to cause the car to stop or whether it is a malfunction, and i think that kind of uncertainty really continues to put my own focus on inflation right now. that has continued to push back, and i think the risk is you watch inflation expectations, you hope those remaining current , but this is an environment of uncertainty and we have already seen in some surveys and other measures that those are beginning to take up, so we think the caution light is one that would cause me to really think carefully about the

embedded inflation here and particularly at a time when you thought growth was going to be stepping back. mohamed: there is -- there is a big debate as to how quickly and to what extent will the softness and the height inflation expectation in the soft data translate into the hard data because it has been pretty striking what has happened with inflation expectations, how much information content is there from these surveys? esther: it would take a lot of signal, and the timing of when that might play out to your hard data is the challenge that policymakers face, so when you see the household survey coming out of the university of michigan, plunging the way it did, even looking through the beige book, which was generally

positive for the february data they were looking at, it began to bring up more questions of uncertainty. in one place, they use the term nervousness. in that environment, you generally see pullback and consumers holding back, you see businesses holding back, and depending on how long that lasts, that can feed through into the economy, so i think it is something that was always an important aspect of the data, even though it might be soft, it does not mean they can easily be ignored. jonathan: i would love to understand whether you discuss strategy with the chairman before he goes into a news conference ahead of time. we agreed whether we would tackle something head-on or is it something he makes up as he goes along? what is the strategy later esther:? there's always a conversation about -- what is the strategy later? esther: there's always a

conversation about what went into your own forecast and then head of the meeting is trying to reconcile and come to an understanding, not just for this meeting, but what are we setting in motion for meetings coming ahead? in this case, that is something that will stop short of forward guidance and something that they are thinking about in terms of what happens next. jonathan: you are one of the best, we appreciate your time. thank you. the former kansas city fed president esther george. next, blackrock, rbc, and the latest talks between russia and the united states with steven witkoff. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon.

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>> we want to see where the fed is falling. are they starting to identify some of the signs of weakness. >> they are likely to take up inflation numbers so it's a difficult environment. >> the risks are that markets will be pricing and more cuts at the time. >> people will be looking for the fed to come to the rescue of the economy by cutting rates. >> it is too early for the fed

to make a decision based on policy. jonathan: the third hour of bloomberg surveillance starts now. equity futures the firm or by .3%. the opening bell 90 minutes away and federal reserve decision around the corner. that drops afternoon and that comes with a meeting with chairman powell. lisa: clear is the emphasis, slowing growth, higher inflation? how do they do both when this is the most difficult situation for a central bank to find themselves in. this is not a central bank that wants to dominate the conversation that is not dominated, so how do they remain on the sidelines? jonathan: we don't guess or assume. they have the policy.

katie: that have the -- annmarie: they have the tariffs in the uncertainty is what do we get on april 2. when trump tariffs in 2019, there wasn't a concern there would be a price shock when it comes to inflation and the fed was able to cut rates. it is different this time around. jonathan: mohammed said it earlier and this is the meeting they have to take you. lisa: what are they going to say, we are waiting until april 2. then we will understand how we will proceed from there. they have to address the elephant in the room that all of the wall street firms are addressing which is growth is going down from initial projections. that is what everyone seems to be saying and inflation is ticking up. they have to get a sense of which data they are looking at peer data dependency itself no longer has the same kind of credence as which data takes on

the most importance. jonathan: we have seen a big cut on growth from jp with deutsche bank and the list goes on and on. when they get together, you assume the growth forecast will drop? mohammed: the question is does it drop below 2% are not. jonathan: it seems to be around 1.5 and if you get there, do they then have to raise the forecast for inflation? that is the ugly mix going into the news conference with, a news conference where you put out forecasts and downgraded growth and upgraded inflation. lisa: has an investor, you have to wonder what it means. if you have growth it is decelerating and the same time inflation is sticky and upward. what does that mean repayment of debts and the fiscal trajectory of a country that is trying to grab with that on a massive scale. mohammed. that is when you are forced into

the difficult question, if this is a reagan moment where you rewire the economy a certain way and emerge from that stronger with the dynamics under control and fear are trading relationships that is option a. option b is this is more like a carter moment where your policy decisions lead to stagflation and that stagflation persists. i say this because i put it to a room on monday of people that we respect and someone said it is an 80-20 and somebody also just 20-80 and that is critical if you are asking the longer term issues important for the market. jonathan: equities on the s&p positive 5.2%. coming up, gargi pal chaudhuri. and on the price target from tom

narayan and steven witkoff on what is next for the russia talks. sucks steady as he rate the fomc . it was written, there is no single smoking gun but we look to a mosaic of data and indicators that have welcomed -- contributed to the pullback in risk. good to see you. a lot of times we get people sing just trade uncertainty, policy volatility. and then we see names that. that -- what you think explains the full picture? gargi: i would characterize it as four different things driving the markets. the first is as we were discussing earlier, there has been a significant expectation of slowdown progrowth for q1 and

the entirety of the year. and is coming from consumption or expectations of consumers slowing down. for the longest time that has been the linchpin of the economy. if you are going to see consumer swing down, we have seen that in the soft data so far. we haven't necessarily seen it in the harder data but as that comes about, there will be a real concern. we have heard that from corporate commentary. we have seen that from delta, kohl's, walmart, target. and also there is policy uncertainty that has been there all along but alongside the policy uncertainty and the questions about tariffs and immigration, there is now the very real slowing down. and finally we have to give a nod a little to some of the valuations we already had coming into this year. we all admitted and new valuations in the u.s. market were stretched.

you are seeing the pullback happen. it is a bunch of things happening coming together. lisa: are we trying to create a narrative for momentum play. in the tech trade has been the one that has gotten most beaten up and it comes at a time where people are questioning whether maybe there money would be better treated in other places. you are seeing flows rapidly shift. how much it is underpinning and exemplifying the biggest losers? gargi: what -- it is a part of the story. a lot of finger-pointing of what was the positioning and the hedge fund names and what were they doing. and that plays a role, yes, but if that was happening in vacuum without the macro picture decelerating and if that was happening in vacuum it wouldn't have been 10% and wouldn't have lasted. i think it was a combination and it was a combination and that was my point earlier that it is

a lot of things coming together while at the same time, china and europe going the other way in terms of fiscal expansion. this is a great opportunity for investors to recognize, especially u.s. investors, to recognize the need for adding hedges and for diversification. to the extent you haven't had non-us in your portfolio haven't had inflation linked bonds in your portfolio or anything other than tech in your portfolio, we think this a good time to think about adding those hedges. mohammed, dani burger earlier today shared an interesting fact that since the start of last year, the return on the mag seven is the same as the dax. going forward, what does that relationship look like? gargi: a lot depends. yesterday we got the approval of the fiscal policies that are going to take place. that depends on what will

ultimately happen and at what pace. if i had to bat for the next 10 years, i would still put my money in american innovation and ai, some of that is just quality u.s. companies. over the next few once or next year, i think there is more to the story but what is the timeframe. what i sit back and think about how clients are positioned, especially in the u.s., and i think a lot of people are recognizing the fact that they haven't had the right diversification in their portfolio. you've had too much of large-cap stocks in the u.s. only. you haven't had europe, emerging markets. i think this is a time when investors while this should always be diversified but certainly in the near term, you want to think about ways to add that. mohammed: a recent survey showed

the biggest ever from u.s. equities and showed the biggest ever outflow from the u.s. to the rest of the world. some people view this as signaling the end of the technicals and now we can look to at least neutral technicals. do you by that? gargi: i follow the survey and it is a good one to follow if you are a market participant. i look at, we do our own and we had a client call with over 2000 people that answered similar poll questions and what they talked about was looking to buy, looking for an opportunity to buy a pullback in u.s. risk. i don't know if that survey by it self is the end-all and be-all in the terms of technicals. this is an opportunity to educate. this is our opportunity to go out and tell investors that there are other options. they used to be just one and there was no alternative. but now there are other options

and they come in gold as diversifiers in some of the volatility parts of the u.s. market and it comes in europe and non-us. lisa: i love the idea that essentially if you want to talk about why europe might make sense, now is your moment to talk to people. jonathan: it is easy to talk about now and we had people coming on the program for years and nothing was happening. lisa: now they can say there is hope there. i wonder when we get a structural shift to mohammed's point earlier about the idea that are we looking at a long-term shift in flows and potential and how do you price that in and it seems like investors are not really suggesting that just yet. jonathan: we appreciate your time. equity futures from or by .2 5%. with your bloomberg brief, here is dani burger. dani: chief justice john roberts says impeaching federal judges

is not an appropriate response to disagreements with the rulings. president trump head for the removal of a judge who try to cause the deportation of hundreds of alleged venezuelan game members. citigroup has cut bonuses for hundreds of top executives in the final round of a three year special program. program tied the compensation to the bank progress on risk and regulatory matters. the transformation bonus program paid out 68% to the target for 2024 to 250 senior employees compared with 80% from a year ago. purdue pharma has filed for a new chapter 11 plan with a u.s. bankruptcy court pledging to give creditors more than 7.4 billion dollars in cash to compensate but we are crisis victims. a new public benefit company will be created after the new is resolved and assets transferred. a court hearing to amp -- approve the disclosure statement is accepted -- expected in may. jonathan: up next, morning calls

and also tom narayan on his cut to tesla. he will join us next. from new york, this is bloomberg. ♪

jonathan: one hour and 15 minutes away from the bell. equity futures firm or by .2%. the nasdaq up by point 3%. with the opening bell around the corner, morning calls. outperforming on nvidia saying weakness is a buying opportunity. the stock is up by 1.2 percent. morgan stanley cutting the price on lululemon. the stock unchanged in early trading.

and cantor fitzgerald upgrading tesla to overweight sing the recent selloff represents an attractive entry point. the stock is bouncing around and up by 3% in early trading. tesla, shares for the ninth straight week in decline as intensifying competition and sales way on the stock. the price target being cut stating that robotaxi penetration assumptions. he joins us now. tom: -- the elephant in the room is none of those things, burning cars and bullets and shocking to see tesla and what is happening to the brand. is it hurting the stock? tom: i do think and i met with a lot of very large institutional investors last week and i do think that if this was any other carmaker and you look at the january and february data, you will come to the conclusion that it may be different and this is

what is happening. you have a new affordable car coming in each one. you have a model reflash -- refresh that looks compelling. it is europe and china. the analogy i got from investors was, buying a car is different than buying a can of beer in the grocery store. you can boycott a beer brand in the grocery store easily. buying a car is a big purchase you are making. you are going to buy what is best for your family. it is half the u.s. market is this one company with arguably one of the best range relative to price. other people protesting the same ones that are in the market for the product? and what is the alternative product that they would buy? i don't disagree it could be branded damage and hurting the stock but i wonder what investors are wondering is, are we maybe looking too much into

this and not enough into just generally. jonathan: the unfortunate part of all of this is there are people who have wanting to buy tesla and if they are a family that is maybe not what they want to buy. -- that elon musk has a month to lean out of what is happening in washington and into what is happening in tesla. do you have the same timeline? tom: i don't think we know yet here this affordable car that is coming out is significant. with the credits, $30,000 car is a tesla potentially with autopilot. what other product is as compelling as this? and you have the refresh. there is this thing called the osborne effect where consumers wait until a new product is

coming instead of buying an old one. maybe that is what is happening. i think we need to see the march and april numbers and see how consumers react before we start coming to conclusions. you may be right and dan may be right but as an auto analyst, i look at numbers. let's just see at the numbers are maybe at first. mohammed: you said likely it is about china in europe on the numbers. react to the images we get from ports in europe where chinese ev's have flooded the place and secondly the byd news about the battery. what does that do to tesla's competitive? tom: i agree and that is where you take the political conversation and switch it to a competitive conversation. they are in china. it is not just tesla, mercedes, bmw is all facing stiff competition and that is their biggest market. to me that is the pain point. but the new models are coming as

well so maybe that could help. we have to monitor it. europe, and i think we talked about this last time i was here, i think the focus is on the growth rate, down 45% in january, but it went from 18,002 like 8000. you saw 1.7 million units, again too early to tell. i would agree there is more competition from the chinese coming in but europe is not the biggest market. it is about china and the u.s.. lisa: we use to talk about sales and we used to not talk about potential competition with china. we talked about the dream, the full self driving vehicles and the robotaxi industry would transform the way we engage with transportation. is this the air were that dream top ties -- dies and we talk about the reality of the ground about every single quarter? tom: it could be the opposite of

what you said. in june we will see this robotaxis service in austin. what if it is unsupervised fsd? camera only system. remember others have radar. what if it doesn't have a safety driver and i know it may be ring fenced but where they can get a robotaxis service unsupervised? that is a big deal and people could latch on to that autonomy. lisa: tesla used to be the driver of the stream, all these dreams, uv, the idea of self-driving and china is plowing in a massive way and not just in the united states but around the world and engaging with lower prices and potentially technology that could rival tesla. at what point are they to it to dominate this field in the way they used to be believed to do? tom: and that is part of the

reason why i lower my price target significantly. i cut my robotaxi penetration in china and in europe. i had a 20% market share in both regions. looking back that was probably too high. feedback i got from investors was that is too high. [laughter] it was 20% and i dropped it to 10%. we don't know who is really the powerhouse and motivated to get into autonomy. right now we know in the u.s. it is waymo and tesla in china has its own players. it is successful, it is a huge deal. i don't know anyone in china who has anything similar. mohammed, your point about the battery point. what i would say to that is, we don't know if that can really be done at scale, the five-minute charging.

there are some safety issues there. if they are able to get that, it would be significant. byd dashboard tesla is a customer of byd on batteries so they could potentially take advantage of that. i don't disagree with you. ultimately, china and europe, very competitive and lower my price target as a reason but i still think autonomy is a massive opportunity a rising tide that lifts all boats and tesla is a big player read -- player. annmarie: what are you hearing? tom: investors realize that the terms are such a huge negative situation. the argument i used was the negative infinity at 1% weighted average. when you do that math, 99 percent at status quo, you get negative infinity but how useful it that to investors what is the real relation of the

administration. is it to penalize the auto industry in the u.s.? i think most investors we speak with are not baking in tariffs, including the reciprocal tariffs which are u.s. jobs. suvs made in the u.s.. annmarie: why are they so confident? tom: they look at what happened in 2018 and they also see what it would mean when they run the scenario to u.s. companies and the supplier base and everything and they realize it's a cooler heads would prevail type of argument and they just don't see why it would happen and who it would necessarily help. jonathan: so much to talk about regarding this company. so good to catch up with you. something is happening regarding business and it is not the first time we have seen boycotts from policy point, political

preferences. much more recently we are seeing more of it. what is terrible and we have seen on occasion with other companies is attempting to intimidate consumers about a purchase they might make in the future because you disagree with someone's political preferences is scandalous, regardless of what side of the isle you stand on in washington, d.c. lisa: did you see the videos of people driving behind tesla cybertruck's and projecting images of elon musk? i think there is a larger question here about illegal behavior. but i would also argue it highlights the liability for tesla to be so closely associated with elon musk who is a lightning rod for a lot of political spheres. i'm not saying this is ok. it is actually not ok and everybody should understand that. i think it highlights the risk we have been talking about. jonathan: the stock higher by 2.8% in the premarket.

equity futures firm or up next, an important conversation, the white house special envoy to the middle east, steven witkoff. from new york city this morning. ♪ -- new york city this morning, good morning. ♪

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jonathan: the last 24 hours, an important conversation with two of the biggest leaders on the planet, the president of the united states donald trump and on the phone, with the russian president vladimir putin pushing for a 30 day cease fire. we are joined by steven witkoff, the special envoy to the middle east. fantastic to get some time with you. i know how much time you put in with the russian president to make this call happened. it is not the first time you have spoken to him and not the first time the president of the united states has spoken to him either. how different was this call? steven witkoff i thought --steven: i thought the call was epic transformational. those are the sorts of adjectives i used about this call. the president trump and

president putin were in sync with one another. the call was outcome oriented and they were talking about how to save lives, how to stop the carnage and for me i was proud to be an american listening to it. jonathan: let's talk about the outcomes. we are hopeful that we end up with a 30 day cease fire but we are working towards a prisoner swap, a mere time in the black sea. there was also a conversation -- a maritime and the black sea. we heard that overnight russia hit ukrainian energy with drones. what was actually agreed and did rush across the line overnight? steve: what was agreed between the two presidents, and it was at president trump's suggestion

that there be a cessation of the tax on energy infrastructure from both sides and civilian infrastructure for that matter. also working towards a black sea moratorium on hits on naval vessels and freighters carrying green and things of that sort and ultimately that would evolve into a full on cease fire which is more complicated because there is a 2000 kilometer border , and there are a lot of details that go into that. with regard to your question on some of the reporting with regard to the russian drones last night, i have it on good information from a telephone call i had before i went on this show that president putin issued an order within 10 minutes of this call with the president directing russian forces not to

be attacking any ukrainian energy infrastructure. in any attacks that happened last night would have happened before the order was given. the russians tell me this morning that seven of their drones were on their way when president putin issued fist orders and they were shot down by russian forces. i tend to believe that president putin is operating in good faith. he said he was going to be operating in good faith to the president yesterday and i take him at his word. annmarie: it sure is understanding that as of today energy infrastructure will be off-limits? steve: that's my understanding. annmarie: do you think the next stage potentially as we get the roadmap toward a 30 date full cease fire potentially geography should be off-limits like drones hitting kiev? lisa: i can't speak to that.

we made more progress yesterday than has been made in the last three and a half years. the two leaders talked and committed to cessation of a tax on energy infrastructure and civilian infrastructure. they talked about reviving the black sea maritime agreement that had then negotiated several years ago and never implemented. those are monumental things and our trust building things as well. beyond that, they also went into how you would put the finishing touches on a full on cease fire. that full on cease fire has a lot to do with this 2000 kilometer line where the ukrainians are lined up against the russians. it is complicated. there are different battlefield conditions in different spots. that is for the technical teams to finish out.

talks begin monday and tuesday. lots of progress happened yesterday and it happened in large part because of president trump. jonathan: let's talk about the meeting in saudi arabia and the next week or so. the team will be led by it i believe secretary rubio. what needs to happen at that meeting before the two leaders end up in the same room to get to the end deal we want to see? what needs to happen in the next week? steve: the secretary of state has done an amazing job as has the national security advisor. they were both at the last meeting and it went well. lots of trust building happened. on monday we had the technical teams going because that is what we are down to. we don't need to have the larger overarching discussions. that has been had and completed yesterday between the two leaders. they agreed on a pathway to some cease fire conditions today into a full on cease fire that will

be negotiated over the coming days. i actually think in a couple of weeks we are going to get to it. lots of good things. now it is for the technical tease -- teams to cross the tease and out the eyes. annmarie: would we see a meeting between president trump and president putin in the kingdom? steve: i can't speak for them but my best bet would be it is likely to happen. they have a great report together and they had a great report in the first trump administration. it was on display at yesterday and this was really a positive, very proactive, outcome oriented call and that is who president trump is. he is there to get to the goal line and we went a long wait yesterday to doing that. jonathan: you've known the president a long time, going back decades and very few who know him better than you. there are a lot of people

speculating about what the motives and end objectives are. does the push for p's in ukraine run parallel with a push to normalize u.s.-russia relations or are they separate issues? steve: i don't think there is any doubt that the two are important. russia is a critical relationship for us, it affects all of the things out there, china, iran, the middle east. these two leaders coming together and having conversations about nuclear proliferation which they did it yesterday and was inordinately -- enormously positive, it is beneficial for the world at large. the president believes in peace and engaging and using peace through strength to create a better world for everybody. with that could come a drop in defense budgets. take all that money and spend it on things that mattered more than a raging war all of the

time. this is his policy. he is to be commended for that. yesterday was literally transformational as far as i am concerned. annmarie: is the idea of its normalization to draw a wedge between russia and china and russia and iran as well to further isolate america's adversaries like tehran and beijing? steve: i think normalization is about having a real conversation. president biden, according to president putin, did not speak to president putin for three and a half years. that is not a proper way to run a policy. president trump in a short eight weeks has spoken to president putin twice. very positive and constructive conversations. he has directed me on his behalf to go to moscow. i've had close to eight hours of conversations with president putin and met with other key

people on his team, and he has directed the national security advisor, the secretary of state, the cia director, secretary of defense, everyone is engaged in this process. it is really wonderful to see. i think that people ought to be uplifted and i think you will see very positive results in the near term. jonathan: and the lengthy conversations with the russian leader you had, did restrictions on energy,? steve: when you see restrictions on russian energy, what are you asking? jonathan: restriction on deals that restrict the russian energy, the price cap the biden administration pushed and a variety of restrictions that make it difficult for russian energy to compete with energy elsewhere. steve: we did not discuss or pardon me, the president did not discuss specifically sanctions yesterday if that is what you

are referring to. that is obviously a conversation the two leaders are going to have an everybody is open to it. but first and foremost, we want a solution that means an end to the fighting and we wanted it to the cease fire and that is the president's policy and we are going to get to the cease fire. and after that, everything else will be a detail. sentient relief and all of the other things that go with a full on peace treaty. annmarie: trump said economic power at last night in an interview and this has been against the likes of nord stream and you know that. but can you see the world were russian energy comes back online like pipelines like nord stream? steve: let me give you an understanding about why we need to get to a solution. russian oil today is being sold

cheap to china. i'm not sure that is a wonderful benefit. annmarie: and india. steve: so you are underscoring my point. there are all of this deleterious things that can come from this. i think the beginning is a conversation. it is unacceptable for two world leaders of the statue of a russian and american president who haven't talked for three and a half years. that is an unacceptable policy program for the president. he wants to get things done and you get things done by getting on a telephone or meeting personally and instructing your staff to do that, which is what he has done. annmarie: it is the conversation we have had a lot in the fact that sanctions when it comes to russia, did it change put in a's face of motives and they were able to fund the war by selling a lot of this energy. it created new markets for russia to be willing to trade. the treasury secretary said that we will go to attend and bring

sanctions if we have to on russia to bring putin to the table. do you see president trump getting to that point, lifting sanctions in order to control putin to the table for the cease fire? steve: scott bessent is a great secretary of the treasury. i will not speak to what he said. i will speak that i've had two meetings at the direction of president trump with president putin in the last several weeks that have collectively aggregated to almost eight hours. many other people, senior people in the administration are having meetings with their colleagues and counterparts there. the president has directed all of this. there was amazing progress being made. yesterday in one telephone call, we've talked about an immediate cease-fire on energy infrastructure. that is game changing. and also the black sea moratorium, game changing. and the contours of how we get to a 30 date cease fire, game

changing. enormous progress as compared to where we were because we are communicating, we are talking in a collegial, constructive manner and everybody is outcome oriented and outcome being the end of fighting in the end of the killing there. jonathan: if we could just finish on europe, something we have not discussed, the europeans, germany and the eu are pushing to rearm and set to spend hundreds of billions of euros on defense. and that is something president trump has been pushing for for quite a while. does he welcome that and does it complicate talks or antagonistic russia? steve: the present has a policy that europe should pay more for their own defense. i think to the extent that is what is happening, that is a good thing. rearming and the other stuff that leads to or undermines a

peace process, i would say that is not such a good thing. we are here to get a deal in russia and ukraine and we are well on the way to getting it done and i think you will hear some really positive things happening as these talks continue. annmarie: you are a successful businessman who is at the height of diplomacy around the world. european strong economic ties with russia did not prevent putin for his full-scale invasion of ukraine in 2021. do you think it could prevent hostilities in the future if we were to see a cease-fire and businesses and trade were back to come into the four? steve: i don't think there is a doubt. it is to get everybody focused on not war but making their countries better and spending their money on their people and

ukraine on rebuilding and doing good things for their people. that is how you get to a better place and that is president trump's agenda throughout the world and we see it being very effective. people buy into it. i was on the phone with president macron last night giving them a download of what happened and we had a very positive conversation about the outcome. there is a lot of buy into president trump's leadership, the way he is leading the world today, not just the united states. it is exceptional for me to watch. jonathan: and a common -- an important comment to make is invalid relation to europe. they are endorsing the stance the president is taking. are they endorsing this approach privately? steve: i am a lot of endorsement. jonathan: i wanted to finish on you personally prefer the people internationally, you are widely

regarded as a negotiator making a fortune in real estate before taking on these responsibilities, and you seem to be having an instant impact in the role and it started in january before trump got into the white house with the agreement and hostage exchange between israel and hamas. can we go through how different it is for you to go from the will of real estate to this, life and death in ukraine. steve: i went into the real estate business, i was a young lawyer and i went in because i wanted to be donald trump, to tell you the truth, and that really is the truth. i have talked about it in the past. he was a great real estate guy and to a large extent, i follow his example when it comes to negotiating. the president is all about clearing up misconceptions, miscommunication, figuring out how to get a good deal for all stakeholders, constituents is part of the deal and deciding before hand the outcome he wants is.

that is how deals get structured and they are not all that dissimilar in the political realm and that is how we have done it in the middle east. we follow his direction in that way and it is highly effective. jonathan: you have been generous with your time and we appreciate it here on bloomberg surveillance. we have to do it again. thank you for being with us. let's get to the commercial break quickly and then we will get talking about the rest of the day. up next, your trading diary and a conversation with david rubenstein. from new york city, this is bloomberg. ♪

jonathan: up with his firm .2%. the countdown to the opening bell, a fed rate decision at 2:00 p.m. eastern followed by a chairman powell press

conference. then job looks claims and then nike and fedex. next monday, more economic data including on tuesday consumer confidence. the consumer front and center. david rubenstein of the carlyle group joins us. good to see you. david: thank you for having me. jonathan: we want your thoughts an individual view and where we are in this economy and what -- where you think things are headed. david: obviously the economy depends on certainty and there is some lack of certainty in what is going to happen with taxes and tariffs paired when there is raider certainty we can better predict where the economy is going to go, mohammed knows that so well. i had a chance at an event over the weekend to interview the chairman of house ways and means committee. and he is pretty bullish on his ability to get the tax cuts through the market wants to see

and what will happen in the senate. we have to see whether the tariffs will go through and at what level. there is some uncertainty but the market is not as disappointed as where we are as i would have thought. the market is not collapsing as some people thought it might. maybe some things president trump is doing are having some impact on the market favorably. lisa: how much is the fed part of this conversation? david: i think the fed's view is the fed doesn't surprise people. under jay powell the fed tells you what it is going to do and explains what it has done after he does it. today there have been no signals out of the fed there will be a rate cut that i can see. i think it is unlikely you will get a fed rate cut today and therefore the market would be shocked and would be happy if it did but i don't think it will happen today. mohammed: where are we at on

private equity. there is a ton of money on the sidelines waiting to come in and dissipation is still very slow. dani: -- distribution is still very slow. david: a lot of private equity firms were ready to sell and were hoping as the new administration cave in that there would be looser regulatory controls, ipo's would be better and so forth. that has not yet happened. it may happen but hasn't happened yet. there is money on the sidelines for sure and i think some of the deals probably will get done but the market is waiting to see, a lot of the -- if a lot of the deals will be approved and it is not clear. the deal that was going to be announced is not clear it will be approved. it did not get approved under biden and today i don't know where that deal is aware it will be approved. if the market would be very

happy if it got approved. mohammed talked about resolving the uncertainty and that is the upside. what is the downside, the thing that keeps you up at night? clearly markets want to know. just tell us what the rules are and we will move one way or the other. there is uncertainty as to whether president trump can get to the tax cuts he wants at the level and can it get to the senate. with the doge people get the spending cuts they want? with the judges stop some of that? there is uncertainty and until there is more certainty no one can know whether or not we will have the economic boom we want to have. annmarie: you have spoke to the president and do you believe something like a trump put still in play? david: president trump came into office with big expectations from the market that he would do a lot of things that president biden didn't do. so far president trump has tried to do a lot of these inks and they have not come to reality that they may.

i don't know yet. he is -- he is fairly bullish about getting through congress and he is frustrated from time to time on what the judges are doing. jonathan: the last question from a subscriber, does ruben's debt -- does mr. rubenstein think the orioles will win? david: we deserve to because they have a great owner. the ownership is the most important criteria, we should and we have a good team and amazingly they can project how many games we will win in advance of the season and they are accurate but i won't say how many they predict. jonathan: i agree with that. it is always great to catch up with you. david rubenstein of the carlyle group. do not miss david a process conversation with steven mnuchin tonight on peer to peer conversations on bloomberg. special thanks to hamed al arian for joining us over the last -- mohamed el-erian for joining us. later on, the fed decides.

we will be joined by amanda line of a flat rock and -- amanda lyn man of blackrock and others. this is bloomberg. ♪ ♪ where ya headed?

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matt: it is fed day and futures are higher. 30 minutes to trading. sonali: bloomberg open interest starts right now. matt: tesla leading gains among the magnificent seven stocks after elon musk's ev maker won a license to carry passengers in california, a bid to challenge uber and waymo. jensen huang announced partnerships with disney, deep mind and at but failed to wow investors and morgan stanley, who is planning to fire 2000 people in the first major workforce reduction under the chief executive