that's all for this edition of "dateline." i'm andrea canning. [music playing] thank you for watching. very good morning, everyone, welcome to street signs, i'm sylvia, here are your headlines. unicredit lifts the stake to 28%, saying there is value within the german lender that needs to be unlocked. shares accelerate amid a boost from the stake in nissan with shares in the japanese automaker surging on the back

of merging talks with honda. slightly softer than expected as the investors await tomorrow's bank of england decision despite a second straight month of rising headlines, cpi. and the u.s. futures seek higher with the dow on track to break the longest losing streak in almost 50 years, as the federal reserve looks at to deliver the third straight rate cut. very good morning, everyone, what a busy wednesday this far. let's start with the main story, the bank has up its potential stake to 28%. the italian lender holds 9.5% of commerce bank directly and a reminder through derivatives. a 29.9% stake and has applied,

therefore, for the ecb to get there. let's go to milan. with e have claudia this morning. claudia, what i would like to understand is whether there's a sense in italy that perhaps they are on track to approve a higher stake for unicredit, and why we are seeing this announcement this morning. >> well, of course, we don't know for sure what the ecb is going to do. the idea is based on their view and their position in terms of consolidation within the european banking system, it would be surprising should they not. the expectation is they should give approval for that, but you know, we don't know what's going to happen for sure. of course, this call will take time, first of all, the approval, and following that, the switch from the derivatives into actually being stakes of the company. it does take time.

certainly, what this does say from the standpoint of andrea is he intends to keep moving forward on the german front. of course, if this moves forward and he does increase his stake and reach that 28% stake, this is, you know, a step closer to having a stake that is important enough to somehow block anything that he might want to do in defense of this move to take control of commerce bank. what this tells us this morning, this move, again, an intention to keep all of his options open. in the statement, he does say, again, this is an investment. he could pull back from this at any time. and this does not, and this is in the statement also, make any changes to the offer that they have made on bpm.

as you know, it's not just the german side that he is moving on. he is also moving here in italy and btm after its board meeting did come out with a note which they are asking the italian watchdog to move in defense of bpm, that you may remember, the offer that he made on the italian bank is an offer that does not include the value of an offer that bpm made on the manager, and its stake percent stake. so, there is concern that this offer is too low. this, of course, is another move that shows us that he is trying to keep all of his options open in italy. it's a very slow moving situation in which, as we know, option being very strategic, is playing his cards very

carefully. so, it doesn't really change anything this morning, but it is on its road to changing and to keeping all the options open. so it's a very intricate situation and you know, very many moving parts. >> very interesting for sure, claudia. while as you highlighted, while we're watchingunicredit, trying to increase the stake, their position within the domestic market, unicredit is trying to do this cross boarder merger and are the nature of that is very important when you think as well about what european officials are saying. now, let's get a check on how european markets are moving so far this morning, because of course, this is a very important and a very busy day and amid the news from unicredit. let's step back for a moment and understand what the picture is so far across the european equity space. just above the flat line.

we get a better idea of what's happening across the european continent there. i have to take you to italy. made the announcement from unicredit this morning. up by almost .2. looking at the main market in germany, up similar levels at this stage. let's see what else we'll see throughout today's session. investors are trying to understand what the announcement will mean, also more broadly for the banking sector. briefly, we are up $3. very important as well as we await to hear from the bank of england tomorrow. let's take a look at the different sectors. some of the dynamics this morning, at the top, we have oil and gas, media trading quite high. let me take you to the banking space as we highlighted. the big story out of unicredit.

up about .4. in terms of the worst performing sectors, this is the picture at the moment. let's get a check. basic resources down .6. chemicals down similar levels. and in terms of what we are witnessing at this stage, though, investors are looking at the announcements on the banking space, no doubt. they are having to digest the news from the autosector on top of that. it's very heavy in terms of central bank policy, too. today, we're going to hear from the federal reserve. tomorrow, it's very heavy across the european continent as well on monetary policy fronts. let's see how all of that will shape throughout this week. i want to go back to our main story this morning. what i would like to understand here is the impact of the german election. because we have heard andrea in the past saying that they respect the process of the election in germany, and they

might not be able to move until there's clarity on who is actually leaving germany next. just explain to us how the next government could actually -- what will be their take in seeing unicredit increasing their stake in commerce bank? >> i'm not so sure that it's down to the government to approve this. to be clear, it's the ecb who has the say of banning or not banning that move. of course, if the government is completely against it, you don't want to have a completely hostile environment. i guess just moves swiftly and get the ecb approved. at the end of the day, a business friendly government, at the top of the chancellory, will most likely find a compromise to actually think this is actually a good solution. i guess what you need to do, is to say that we'll have security

for the majority, and he will not take business away. i think that's the narrative. he will most likely already spread among the parties who might be forming the next government. of course, the race is wide open for the next election. the city will currently have some weakness. it's not enough for the cdu and fdp to form the government, at least according to current polls. it most likely will look like a grand coalition, and that is then of course a bit more tricky for his takeover move. seems to be willing to stay on as well. when i spoke to him a couple weeks ago, at a conference here in frankfort, he said it's all about the procedure. they didn't like the procedure and the hostility of the move

from mullan. and the fact there is a combination of the two lenders. it's not about the italian bank buying into germany. it remains to be seen. the rhetoric is still required. one thing that is clear, it's a very -- it's an interesting move to actually come up with that increasing stake before year end, because clearly, that put much more focus on the ecb and when i spoke to the ecb yesterday, they didn't reject the idea that the combination of two banks inside the area is a bad idea. i guess the approval is highly likely. >> let's see what will happen. another episode in this interesting consolidation saga. thank you. in the meantime, i want to take you to new comments from the ig, the union at the moment in conversations with vehicles

wagon. they are saying that negotiations will resume midday after the sides have taken a break following 36 hours of conversations. we continue to monitor what's happening here. volkswagen is under a lot of pressure. we'll see if we have a compromise, and staying with the auto sector. let me bring you up to speed what we heard out of asia.. it is considering a merger with honda. competing with larger rivals and invest more in the growing ev market. the newspaper first reported the possibility, which could see mitsubishi brought into the fold as well. let's get a check on how this is impacting some european names. we are seeing rental shares up more than 5%. we know that renu

a -- let's understand what this means. how important this announcement is with peter wells, director of the center for automotive industry research at the business school. good morning. good to have you on the show. first and foremost, explain how important this announcement from nissan and honda is, and what are the chances they will formalize this merger. >> well, good morning to you, and yes, really important announcement. it has been a lot of speculation about the position of nissan over the last 12 months or so. it's been trying to equalize or balance out the relationship with rena. it's been struggling in the market. it's been struggling at home. it doesn't have the right product lineup. so many warning signs. so many red flags around this at the moment, that something has to happen. whether this is the answer is another question. >> exactly where i was going to go.

do you think this is actually a good solution to tackle the competition that they are both facing from chinese car makers? >> at the moment, you could call it a traditional solution. try to form a bigger group. pull the assets, and that way, save some money on costs and hopefully develop the technologies that they need to compete in the future. i think my concerns would be that perhaps they left it a bit late. they don't have the current technology and setup, the right products to compete in their key market. for nissan in particularly, they are out of step with the u.s. market. that's the major concern. they cannot fix that very quickly. meanwhile, of course, in the background, is the question of what happens with those chinese competitors. >> and what can happen there, if this merger is not enough to face off the growing chinese competition, then what else can they do? >> well, there's a range of

possibilities facing nissan at the moment. one extreme is the possibility of a buyout, hostile takeover. financial interest primarily, who then look to take apart the entire business and send it to interested parties, which would mostly be chinese. that's nightmare scenario, as far as nissan is concerned. alternative to that, something much more like the sort of relationship nissan has with the battery supplier. there's a chinese presence in the company, but not a dominant presence. that's something that might be more politically acceptable both here and europe, but also in america. it's also something that might work better in a purely commercial sense. >> let's bring the conversation to europe for a moment. what do you think this means for rena. are you expecting them to sell any of their position in nissan? >> well, they are looking to rebalance the share of

portfolios. it's been a slow process. i think rena will continue that. the uncertainty that has been surrounding the future of nissan made this whole process rather difficult. in the end, it's a shame they walked away from this relationship, really, because it was in both companies best interest, i believe, to stay together. however, they made this decision and they will now have to work with it. they will continue to have in the end, 15% of each other's business. whether they can turn that into useful products, and useful synergies is key. they have some shared products. they do have some capacity here to develop more synergies, especially in the electric vehicle space, but the relationship is deeply fractured at the moment. i find it difficult to believe that they can continue to work together successfully until the core relationship is resolved. >> tell us about the outlook for the oil sector as well. because obviously, we have also

been discussing the implications of the reelection of donald trump for the auto sector. is perhaps consolidation what we need to see more of going forward as perhaps they face a higher tariffs from the united states? >> well, i think what we're going to see is restructuring in general. it's really interesting to see at the moment, for example, how quickly chinese vehicle manufactures have been able to switch from pure battery into hybrid vehicles, because all the tar roughs, and all the focus has been on pure battery. they switched product lines into hybrids really quickly and are now sending back to europe, back into those markets that were trying to exclude them. those companies are more capable than we have been giving them credit for, and the ability to compete isn't just about low cost, it's about the capacity to deploy technology successfully very quickly. i think there's real concerns,

therefore, for the future of the european automotive industry, faced with essentially stagnant markets and competitive threats from the chinese and from others, which similarly, more capable, more nimble, and more aggressive than we have given them credit for. >> and peter, to bring the conversation closer to home, just a couple of days ago, we did hear from the chancellor saying that the government is working to protect jobs at the nissan plant. what do you think this merger could see it taking place, what could it mean for the uk and for the plant specific? >> it's a good question. the plant has been a jewel in the crown, in a sense, within the nissan production system. it has really been a strong performer in terms of productivity, and the ability to develop new products and bring them to market and been

very successful in exporting, particularly european markets. and i don't expect that to change radically. the risk again, is whether nissan has the right kind of product lineup in order to compete successfully in this fast changing, european market situation. and whether they can win markets beyond europe. that is also proved to be quite challenging. there is still hope for the nissan plant, within this bigger picture. but nissan has been consolidating the operations in europe already anyway, that they walked away from the barcelona plant, for example, it tells me that nissan's operation will remain key unless something very profound happens. >> i guess we shall find out in the near future. we appreciate your time this morning. thank you for running u

through these latest. and for more on what a potential deal would mean for the japanese auto sector, check out cnbc.com. tesla is moving sharply lower in market trade after the manager of the firm's shanghai plant reportedly left the company. that's according to a letter seen by riters, which did not confirm the reason behind the departure. tesla's plant is the company's largest factory by output and exports to europe as well as southeast asia. coming up on the show, we're counting down to today's decision and policymakers outlook for next year. we'll have more on what to expect after this break.

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welcome back to the show. time now to look at the fed. the central bank is all but certain to cut rates at today's meeting with markets pricing and 96% chance of a move lower. attention, however, will be on the projections from policymakers for 2025. 72 basis points of easing between now and the end of next year, with analysts across wall street split on the pace of those cuts. and the global cio at hsbc wealth is joining us today. good morning. good to have you on the show. look, when i think about what we could hear from the fed today, and what we have heard so far in terms of the consensus for next year, american exception keeps being the slogan really. i would like to understand from your point of view. is that likely to continue in 2025? is this the main market narrative as you think about

u.s. equities for '25? >> yes, it is. continue to see stronger economic growth in the u.s. than elsewhere in the world. we see some revisions in the u.s. being positive. from economists while the rest of the world is mostly negative. the u.s. equity market remains our main overway. when i talk to clients, it's the one that people are interested in. you know, certainly, for example, asian clients that i just came back from on tour there, they look for active diversification in the u.s., and i think that whole question around, you know, evaluations is exaggerated in the u.s. most of it you can explain by sector composition. and frankly evaluations don't drive short-term returns. >> when i look at the performance for the dow and the nasdaq over the last couple of days, we have two completely different stories. i wonder, when you think about that, do you see any sort of room for a potential correction here? are we too focused on big tech

and ai? >> so, people should spread their exposure. that doesn't mean flee away from it, but thinking about what are the other companies that benefit, for example, from ai. i talk about a first derivative of ai. it's not just chips, but companies that use ai to their advantage. so the robotics, cyber security, it is even medical, you know, innovation. and then one step further, it's the infrastructure behind it. it's the data centers, the utilities, the cooling, all those kind of things. when you do that, you get a lot of exposure to ai without the same evaluations. >> would you say that the positioning here is more bullishness on that second level of related ai usiness, rather than the main players going into 2025? >> correct. i think it is, and that's what our clients are trying to do because of that concern around

evaluations. how can i take exposure without over paying for that? >> let's look at the main points in your outlook for '25. i was interested when i read that you're looking at asia, you argue is the new world order. tell us about that and how is that impacting the outlook for asian equities? >> certainly, we're in a world where there's a lot of global competition, and you know, in particular in manufacturing. so, it is in the new world order around us, and each country and each block is trying to find its feet and its policy. so, it's a lot about which economic blocks will have a strong economic policy. the u.s. has one. europe doesn't, and therefore, we see the problems in the manufacturing and then asia, obviously, china has an industry policy. asia wants to go into the advanced manufacturing. what i think is interesting in asia, what is under appreciated, i think, is every country there is very different. you know, japanese market, the indian market, the chinese

markets are very different in terms of economies, but also in terms of the sector composition who owns it. is it domestic or international market. for now, in the world order, where we're going to get more tariffs, we remain neutral on chinese equities. we think there is going to be more stimulous, but mainly going to be able to offset that head wind rather than lead to acceleration. we need that for equities to have a sustainable rally. >> what about india? so strong. i was just wondering, you know, is perhaps that part of the asian equity space more protected as we look at trump 2.0 presidency. >> so, i think clients are very willing for india to take a longer term perspective. so yes, you had ups and downs in in the short-term, baa the structural story remains very positive. what is also important in india is wealth creation locally

tends to be recycled within local assets. you know, and that then obviously goes into real estate, goes into the public equity market as well. there's the local buyer. that being said, we take exposure, because if there is some pressure on evaluations, it's in the very popular locally. we would rather be in the large cap. >> tell us also about when you think about the outlook for 2025. there's one sector that we haven't discussed a lot in the show. that's real estate. when you think about 2025, you know, any opportunities here, even as we particularly look at further easing from the central banks. >> i think in the investor community, a lot of interesting alternatives. that is mainly hedge funds, private credit, infrastructure. so real estate is sort of at the end of that ranking. i do think you're starting to

see opportunistic, because the fall you had, and obviously, a very local market, supply, demand, the particular building you're interested in. so we are starting to see some marginal nibbling at the asset class. and clearly as well, it's very different, whether you're in the office space versus everything else. offices still have that, you know, the occupancy rates, and the difficulty also to convert, you know, office buildings into other purposes. while, you know, everything that is to do with data centers is a focus also, senior living, those types of things. >> interesting, it goes back to your first point actually, on the second degree of ai businesses. we appreciate your time this morning. let's discuss this again in the new year and see how we're fairing. global ceo. coming up on the show, we'll be taking a look at merger moves in the automotive

sector and banking sectors as well. join us after this break.

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welcome to street signs. here are your headlines. around 28%, saying there is substantial value within the german lender that needs to be unlocked. shares accelerate, with shares in the japanese automaker surging on the back of merger talks with rival, honda. u.s. futures are higher with the dow on track to break the longest losing streak in almost 50 years as the federal reserve looks to deliver the

third straight rate cut. and tesla shares fall as shanghai leaves his role. time now to get a check on how we're moving so far across the equity space. just marginally higher at the moment on this wednesday morning with investors tracking banking news, automaker mergers potentially as well as the all important fed decision later today. let's get a check on the different boards and understand what is the picture across the european continent? when you think about what we heard this morning, important data out of the united kingdom in terms of inflation figures. in the month of november, we

saw prices up 2.6% from a year ago. that though has not changed the expectations in terms of what we might hear from the bank of england tomorrow. with the majority of traders expecting no change in policy for the time being. let's see what will happen. at this stage, up by .4. and then in terms of the breakdowns, this is what we have an hour and a half into the trading session. oil and gas up by more than 1% at the moment. banking stocks also fairing quite well at the moment, up almost .8 of a percent. in terms of the worst performing sectors, this is the picture. let's get a check. we have chemicals at the moment down about half of a percent. food and beverage also similar levels of pressure. now, our top stories today, rena is tracking at the top, after nissan confirmed reports it is forming a bigger entity that could compete with larger rivals and invest more in the

growing ev market. meanwhile, commerce bank is moving higher after unicredit upped its stake to around 28%. unicredit is looking for a 28.9% stake and applied to the ecb to get there. the chair of the ecb supervisory board, claudia, struck a diplomatic tone on bank consolidation, when talking to cnbc on tuesday. >> from an economic point of view, clearly response of banks to change in competitive environment and to not against them, but we also, of course, see the benefits, but we have to consider risk because this is our role, but the decisions need to be taken by the banks themselves. >> and mna has seen recovery this year with north america accounting for nearly half of the global deal making. that's according to merger

market data. and the election of donald trump has also raised expectations for mna to surge as investors lower taxes as well as the regulation. joining us this morning, good to have you on the show. first and foremost, i would like to understand what is happening at the moment. we know so far this year, numbers are quite strong. but when you think about the announcements this morning on the automakers, on the banking space as well, how would you describe the level of interest in terms of mna at the moment? >> so, what we've had so far this year is mna is up around 10%. that's as of yesterday. >> you have to change the numbers now. >> exactly. there are quite a few days left. i had deal makers telling me, is anyone around on the 23rd? we're going to announce something. i'm like, okay. there's a lot more to come. i think what happened is, after donald trump's victory in the

u.s., that caused a shift. everyone is working out now, where their growth is. what's the impact of tariffs? what's the impact of deregulation. that's why we're starting to see emergenciers come through now. i think there will be more to come. some people that will wait further into the next year to see how those policies play out. then they'll make their steps. we're seeing some of the pent up activity. we're seeing companies that had time to consider the shifts and now they are making their plays. >> the report that north america has seen the bulk of it so far this year. i wonder in terms of the geographical breakdown, whether the activity will pick up in 2025. will perhaps north america actually lose a bit of steam in 2025? >> that's an interesting thought. i actually think we're going to see a lot of activity in the u.s. we're going to see a number of players looking at buying assets in had the u.s.,

they can get a made in america manufactures looking at getting a made in america badge. also more u.s. champions being built. we had the interpublic announcement just recently and that was two huge advertising agencies merging to create the world's number one. now, that is seen as a test of what the trump administration's antitrust enforcement will look like next year. >> i want to get your thoughts specifically on what you heard from nissan and honda. we don't know how this is going to unfold. but give us your initial thoughts on potentially seeing a merger here in the autosector, where we have seen a lot of pain in recent times. >> this tieup is not unexpected. obviously, they announced their partnership early this year. nissan has been struggling. some of the reports i've seen claim this came about as a result of foxcon making an approach.

with this particular transaction, i question whether it will be a hard core merger or more of a partnership. honda, if you remember, tested the water with a partnership with gm previously, and decided to walk away. i wonder if that could be something we're looking at. you have to bear in mind, this would have to be, you know, approved by -- it would have to come with the japanese government's blessing. there's potential for work force cuts. how are they going to compete? >> that's going to be my next question for you. when you think about the outlook for 2025, do you see more interest at the moment for potential tieups within the autosector? >> yes. i think we're going to see -- i think there will be some distressed deals. we'll see carveouts. we are already seeing some of those already. it's a sector that is shifting, obviously, electric vehicles didn't pick up as much as everyone was expecting. so, it is a real sort of --

it's a real point where companies have to consider their options. >> let's talk banking, too, because obviously, it seems that we keep getting a new episode every week when we think about the announcements from unicredit. we like to understand how realistic it is to expect a lot more consolidation, moves within the european sector in 2025. this far, it seems the interest is coming from unicredit. >> i think that with unicredit's announcement, fascinating. i think that a lot of people were thinking they would wait until after the election to make a play. and thing it is were going quiet. i actually saw an interview with commerce bank, ceo, talking about the acquisitions rather than giving us hints to a big play that would defend

against unicredit. so public with what he's doing, he had to take the next step, even though he is making another play. so, i'm really watching, andrea, he is the master deal maker. so, i think there's going to be more excitement there. i also think -- >> in what form? >> i think he has to do something with commerzbank. what do you do next? >> what i'm interested here is the fact he is going for the domestic consolidation, and also trying to do it cross border. how do you think this will pan out? the fact he is focused on both really. can he deliver on both given that it's not the same play, it seems more easier to do this in italy rather than cross border. >> i have been puzzled by that, too. to me, the european champion was a really strong case. so, with the bpm, we are scratching our heads a bit. there was talk about this was,

you know, a defensive move against the credit talks. i feel it would be difficult to execute on both. however, he knows more than me. >> interesting. just a final thought, with all of the conversations across europe, the report and so on, do you expect a lot more deals in european banking in 2025, if you forget unicredit and what they are trying to do? >> i think that we are in a difficult place, because without a european deposit scheme, where if you -- if a bank fails, it's usual the national taxpayers that have to pick up the pieces for that national bank. i think without that, it's really hard to see how you can have a european banking champion, but the banks have to do something, because the difference in scale for the banks in the u.s. versus

european banks is incredible. and with the new rules coming in, you have to think about that push for scale. i do think there will be more. i don't know if we're going to get the european banking champion, but i think there's more to watch there. financial services was the second most active sector. >> let's see, because also depend on what the politicians will say and potentially do here. we thank you for your time this morning. lucinda, the head of marger market. and microstrategy closed in the red on tuesday. the second losing day in a row despite retail investors pouring nearly $11 million into the stock on monday alone. three times the firm's daily average this year. that's according to vendor research and comes after the company holds $44 billion worth of bitcoin, around 2% of the world's total supply was approved to join the nasdaq, 100 index. microstrategist surged more

than 500% this year, 500. chairman told cnbc monday, he'll buy the top of the cryptocurrency for ever. bitcoin holds above the 1 ,000 mark. the crypto touched 100,000 earlier this week, after president-elect rated that he plans to create a u.s. bitcoin reserve. continues to look at what's happening in this space. it seems every day now, we talk about crypto. it's about hitting new highs and new highs. how far are we going to go? >> my colleague and i, ryan brown, we've begun to compile our annual outlook for 2025, we speak to sort of multiple people in the industry, analysts, those who are invested. those who aren't invested. we're getting a lot of calls for a $200,000 prize mark for bitcoin in 2025. that includes from banks like standard chartered, for example, we have a guest on

this morning who reiterated a similar view as well. now, a lot of this is still being driven at this point by enthusiasm over president-elect donald trump and what me may do for the currency. he will be pro crypto. and talk of some sort of bitcoin strategic reserve, however that may look like as well. on top of that, we've seen already announced changes at the securities and exchange commission. the chair, gary gensler, was a villain in the crypto industry for a long time. many in the industry accused him by using enforcement to regulate rather than coming up with thoughtful regulation. of course, he is stepping down. there will be a new chair who many believe will be friendlier to crypto companies. what will happen? will there be a reserve? will there be regulation in the industry that actually allows innovation and at the same time, makes the industry safer

for participants. that's going to be the big question. or will it continue to be an unregulated sector? there's a lot of questions. all of this that we have seen, and the calls around it are predicating on these ideas of a pro crypto administration. which has been lacking the last few years. >> this is one of the topics in your last episode of beyond the valley, looking at the predictions for 2025. cryptocurrency is part of the discussion. check out that episode. thank you. meanwhile, i want to take you to the weather, he'll be having a stern, telling the company to get brewing. the shortages of guinness. in july showed 15% growth in global sales for the irish stout, and the demand for the nonalcoholic variant. the ceo has previously credited

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welcome back to the show. british inflation hit its highest level in eight months. coming in 4.6% higher. two months after the measure fell below 2% for the first time in three and a half years. the move was in line with expectations and core cbi came in slightly below expectations. meanwhile, let's turn our

attention to what's happening in united states. retail sales rose greater than expected 0.7% on the month in november. fueled by an acceleration in motor vehicle sales and online sales. economists had expected a monthly rise of 0.5%. that data comes ahead of today's fed decision kicking off a key week of central bank action. the bank of america ceo told cnbc, he is more confident in the strength of the u.s. consumer. >> the consumer is fundamental. what happened in the middle of summer, we are talking various things. the consumer slowed down. i was getting concerned that the fed would get behind on cutting rates. saw consumer enthusiasm. you saw more activity, because they realized in the future, the rates are coming down. that started happening in september time frame. so you started spending picking back up. right now, for the two weeks around thanksgiving, it's 5%

plus of all kinds of spending over last year. that's stronger than it would have been last year or the year prior to that. let's discuss the outlook here with global fix income manager. good morning. good to have you on the show. i would like to understand here how you will be looking at the plot later today. perhaps with a pinch of salt. >> as we have seen over the last few months, that the data and the u.s. continue to surprise on the upside. so, the question for the fed is how is that going to evolve in terms of the communications in terms of, are they going to in terms of the language. so, pretty clear that at least from a growth perspective, we know that for this year, growth is going to be revised upwards. next year, probably something similar as well. we'll see that in the core pce inflation measures of the feds projecting going forward.

what does that mean? we think that will be priced up maybe 20, 25 basis points. for next year, you can see the plot moving up to 3.6%. question marks about the rate currently at 2.6%. we've seen that drifting up. that will probably also be moved up to 3%. a lot of questions in the market about what is a neutral rate in the u.s., and certainly it is higher than what the fed is currently projecting. so, we do expect some uplift in the projections across growth, inflation, and obviously post the expectations. >> the reason i mention a punch of salt. a lot of uncertainties going into 2025. jerome powell said, when it comes to tariffs, they don't know how much, who will be targeted, and so on. how are you preparing potentially for that uncertainty when you think about what the fed might do in 2025. how do you price in this

uncertainty? >> you have to ask what is the political setting going into next year? move policy toward some perceived neutral rate, and policy will be expansionl. there are tail winds for the u.s. economy next year. the big question, obviously, is around tariffs and there has been a lot of concern in the markets, particularly in relation to the downside risks outside the u.s., in the back of u.s. tariffs. for the u.s. itself, the question is going to be the potential inflation impact of that. and just before the first trump presidency in december 2016, we did see the feds start to reflect some of that in their projections going forward in terms of expecting. a little more inflation. so, that will certainly be, we think, reflected. going forward, for the u.s. consumer, underlying

fundamentals remain sound. if we do see more universal tariffs, that will certainly present some challenges for the u.s. consumer next year and if you think about market pricing right now, market priced with a lot of rate cuts, if we start to see tariff measures coming through and start to impact consumer demand, maybe some of those, more two-way risk on the fed funds rate. >> i wonder if there has been lesson learned this year. when you think about the conversations we were having around this time last year, expectations for monetary policy were very different for what ended up happening. i would like to understand how do you take that into the planning for 2025? >> yeah, i think what you have to understand is, what kind of economic cycle that we're in, is very much income driven and what we see evidence of, is is the financial conditions remain relatively loose in the u.s.,

see loan demands pick up as well. you could see an elongated u.s. cycle, which means that the economy continues to grow around 2% or slightly more. but given the fed has now really shifted in terms of its reaction function, a lot of focus on the employment part of the steel mandate. any signs of softening in the labor market in the next few months, markets could easily reprice the fed again. but for now, u.s. economy going into next year. >> what is the right positioning going into 2025, where you think about treasuries versus european bonds. >> you can see some under performance in u.s. treasuries in the near term relative to european rates. i think there's some interesting stories in europe, if you look at the uk in particular, for example, where again, rate cutting cycle is being priced, but underlying dynamics are softening. you look at evaluations looking

attractive. so, all of a sudden more value opportunities in europe relative to the u.s. at the current junction. >> let's see what the new year will bring. we appreciate your time this morning. global fix inside manager. meanwhile, final check on european bourses. we have green across the board. we're up .3. over here in the uk, up by about .4. this as we prepare to hear from the bank of england tomorrow. meanwhile, i want to take you to u.s. futures as well. futures point to a slight positive start today on state side. this though, we know that investors are very much focused on what the fed is going to do. see how that could impact the markets, but no doubt, it's been interesting the performance of the dow versus

the nasdaq. and on our top stories today, rena is tracking the higher after nissan confirmed it is former a bigger entity that can compete with larger rivals and invest more in the ev market. commerce bank is moving higher after to around 28% through new derivatives, looking for a 29.9% stake, and applied to get there. that is it for today's show. stay with cnbc. world exchange is coming up next.

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it is 5:00 a.m. here at cnbc worldwide headquarters. the bounce back from the longest losing streak in four decades. this morning, futures are higher. nearly 100% of investors say the fed will cut today. a large number think they should not. lawmakers unveil a new plan to avoid another government shutdown with just days to go. plus, why the global government shakeups matter to the markets and to your money. breaking down united health groups slide, and why investors may be able to get insight. we'll explain that one. it's wednesday,