you mentioned ben bernanke. talking about this since the crisis started, we need a dance partner and congress has not given it to us. the problem is the fed has been enabling them. what they need to do is make it certain. there is only so much the fed can do, we need your help. if congress does not do it, they will be out of a job in two years on both sides of the aisle. mark: on monday, matt maley's phone rings. it is the white house. they say the president wants to speak to you. what do you tell him? [laughter]im -- him, remember it is the first year of your presidency. many times, we see pullbacks in the stock market. do not worry about the stock market. worry about fixing the economy and turning the screws on congress because they will get this done for you. you cannot do it all on your own. he plays the blame game a lot. when he blames congress, it may be accurate. that is what i would advise him to do. mark: matt maley joining us from massachusetts. thanks so much. coming up, we will speak to democratic ca

across the bank of japan consistently buying equities, people thought it was a temper tantrum when ben bernanke said there was a chance that in six to nine months they might increase the rate upon purchases. imagine what will happen to the nikkei when the bank of japan stops buying equities. that's going to create quite a strong reaction. it'll be difficult to get out of fed wants toe be seen. what is the right amount? shouldlates to how much the financial system be running. and obviously, we went in the u.s. with no excess reserves to , nowold increase at least to $3trillion trillion. most banks in the global financial crisis feel that having more cushion of excess reserves is probably worthwhile. the fed now has the interest on reserves, and my guess is we will continue to do use that and the federal funds rate to set weerest rates, and i think will be doing that probably with a much bigger cushion of excess reserves. $2 trillion, probably not, but tens of billions, probably not either. that will be that will be the big debate in 2018-2019. the is the optimal level of balance sheet for runnin

involvalued on -- produced an almost total breakdown until this week eight years ago when then ben bernankehe line in the sand. three declines. even more massive over evaluation and total downturn and specifically housing that spild ov spilled over and 14 trillion at risk that distorted the size of the problem. other than those three moments the canaries haven't been very useful. a lot of angry birds. a lot of games. not a lot of profits. now i'm reading the warning signs again. it is that casting variety. a belief that washington won't hurt us. rate hike cycle about to begin. lynn to all of these and yes, they are wore -- worrisome. in 2011 we had a lot of signs. dow fell from 12,000 to 10,000. it nevertheless turned out to be a perfect buying opportunity. most of the problem had to do with washington, the government shutdown and the government could destroy us been defaulting on obligations. it took us down every time. when the s&p downgraded you got an exquisite moment to buy. you did so well. more important though was the need to stay the course. that's the term i always use, stay the c

if you thought there was a taper tantrum when ben bernanke said there was a chance in six to nine months, they might reduce. imagine what's going to be nikkei. i think that's going to create quite a strong reaction, so it's going to be difficult to get out of those, but i think that's why those kind of things that relates to how much should the financial system be running with resev reses. in the u.s., we went to no reserves to at least a 100 fold increase to now 2 to $3 trillion of excess reseves rves in the system. i think after the scarring of the global financial crisis feel that having more cushion of excess reserves s probably worthwhile. the fed had the interest on reserves. my guess is will continue to use that, plus the federal funds rate to set interest rates for the, set the short-term interest rates and i think they'll be doing that with a much bigger cushion of excess resevrves. tens of billions, probably not either. i think that's going to be the big debate in 2018, 2019. what's the optimal level of the balance sheet for running the economy. how much cushion should we have

if you thought there is a tempered teacher when ben bernanke said the chance in six to nine months it might reduce the bond purchases. when the bank of japan says we are going to stop buying equities. it will keep quiet a strong reaction. that's why the fed wants the things to be plain. but what is the right amount? a sickly, that relate to how much should the financial system be running with excess reserves? obviously went to the u.s. with virtually no excess reserves to a 100 fold increase, at least a 100 fold increase to having now to $3 trillion in assistance. so i think most central banks after the kind of scarring of what happened in the global financial crisis to the mid-to late 2000, having a little more cushion of excess reserves is probably worthwhile. the fed now has the interest on reserves and my guess is we will continue to use that plus the federal funds rate to sort of set interest rate by the short-term interest rates. i think we will be doing that with a much bigger cushion of excess reserves. 2 trillion, probably not. just tens of billions, probably not either. that

so friedman, ben bernanke, on and on, on how a central bank acts -- they accepted the fact, right? they don't get out front, do they? neal: it is hard to know the future. and they have the dots cristobal -- crystal ball. dots -- andave had failed to achieve it. what is more important is where the long-term dot. -- settles. tom: it is right now at 3%. neal: that means gdp is not that high. what is happening is they have not changed the judgment, but they want to get there faster than the earlier expected. it is the path upwards that is steeper, not the endpoint. the endpoint, that is a big statement about soft data. carl: then moving along the path more aggressively of not necessarily recognizing the economy has shifted to a higher gear. gdpatlanta fed's tracking forecast is below 1% based on the latest retail sales data. in my mind, this is telling me that policymakers are very serious about the potential for financial markets getting ahead of themselves. thelet: when they look at financial markets, you mentioned equities being one point they are fixated on. do think the dollar pla

>> i remember listening to ben bernanke.mber ben bernanke would give speeches and talk about monetary policy. neil: i never understood a word he said. >> i know you understood every word. he would say it all the time. he would throw in washington or fiscal policy wasn't on point and now you have the idea here that it will be. i will say there is a little bit of tone here. scott redler of t-3 trading, people are short a little bit and long at the same time. this is the 1101st neither the s&p or the dow has not fallen 1%. big deal or not big deal? you scent seen that 20 years. people talking about a little bit of a pullback, maybe it's due. neil: thank you, guys, very, very much. blake burman, elon musk. i want you to think about that. we connect, you decide. right after this. neil: continuing what is regular event the president meeting with more business leaders. this time to talk infrastructure. blake burman who is in attendance? reporter: hi, neil. it has been a grab bag of meetings here at white house and will continue thr

i think janet yellen and ben bernanke before her did awful job running the fed. quantitative easing was wrong. they're eliminating that process. that will be wonderful. i think tax cuts trump is proposing deregulation, all of that, i think you're in for a very, very large rise in asset values. and a huge economy go to. sorry, melissa. melissa: speaking of all that, house speaker paul ryan standing firm on the original timeline on tax reform in 2017 and citing art laffer as his reason. >> we all know we have to get tax reform if we want economic growth. if we want to be out of the shrug we're in with the lowest smallest peacetime expansion since world war ii. we must do tax reform. you read books about reagan, art laffer told me the story a million times, when you delay tax reduction, you're delaying economic growth and decision making. melissa: everyone knows you're right. will they be able to do it, do you think? >> i don't know, they never have before. i think there is a really good chance this time they will. they didn't do it with harding, coolidge and didn't

i mention in the book that ben bernanke mentioned that he had no clue of the crisis because he was notre of the toxic -- toxic papers that were in there. brian: you have a law degree? sandra: i have a law degree in germany and here. and i'm admitted in both countries to practice. brian: where are you from? sandra: germany. brian: when did you come to the u.s.? sandra: for a job offer. brian: did you grow up learning english? sandra: i got english later. i started with latin. my parents made me start with latin. i had english when i was 13. brian: what did your parents do? ran his ownather country. he was from iran and came to germany to study. my mother was a housewife. brian: when did you get interested in money? sandra: i have never been interested in money. i would say more generally business. brian: why? what got you interested in it? sandra: business is entrepreneurial. it is international. you interact with interesting people. brian: go back to what you do for a living. if i say i'm going to hire you, what is the first thing you do for somebody when you walk into a large company?

no.ross perhaps during the days in which lower interest rates were required in weekly, during ben bernankehe bernanke period, perhaps. i think it is a slamdunk. there is no doubt the fed is going to raise interest rates. it is in the market, and stocks are doing well, which is a significant indicator for them, so i think they will raise interest rates. what they do going forward depends on economic growth in the strength of the dollar. they don't want the dollar to strengthen too much, or it presents problems. tell us the fed will raise rates again in june and again in december. what do you expect? mr. gross: that's the key. two more interest rate hikes after this one would be three for the year, and it approaches 3%. i think the fed believes that the natural interest rate in nominal terms is around 2%. that suggests that at inflation is 2%, then short-term interest rates should be close to zero in its natural state. inflation today is perhaps a little above neutral in terms of its heat. i think three interest rate hikes during this period of the year is what we should expect, absent some

ben bernanke's searing indictment of dodd-frank, no, it's too complicated. >> i want to get to this news, too. there's a giant oil discovery on the north slope of alaska, i think that's the correct way of putting it, the north slope of alaska, i believe in the neighborhood of 1.2 billion barrels. scott shellady, you trade this stuff. i believe that's the biggest domestic find in 30 years. >> it's absolutely huge and remember, we had a shale discovery in west texas which was massive as well. so, those types of things are going to weigh on oil. here is my only concern and i'm not going to be debby downer, but i don't like to see oil start to slide, we know it traded hand in hand a lot with the equities markets. if anything's going to disrupt the feel-good factor it could be the oil market. you have to keep an eye on that. stuart: it's five years before we get the oil flowing from the new discovery, that's a long, long way, let's keep that in mind. check the big board, 60 points, that's where we are, 20,918. again, facebook, that stock hitting an all-time high.

hooper, to get this started, the idea of ben bernanke, anna schwartz, milton freeman, did you ever seed history or is this original territory that chair yellen is on? a we are coming out of historical. for the fed. zero interest at the zero bound. a vastly expanded balance sheet. this is an unusual situation, no question. growth is at a historic low from a supply-side standpoint but they are seeing potential growth dropping this low so the challenge is getting things going. yesterday,entioned this depends on more than just what the fed is doing. it depends on getting some policies through congress, getting the administration going on policies that are going to raise the supply side of the economy, getting growth back to normal. if we get back to you -- i know we were watching the fed coverage yesterday, did fed chair yellen strike the right tone? >> she did, although a little bit too much fed speak. for the average person to comprehend why the fed was raising rates, it is basically what they are saying is we have reached a level of economic activity that is sustainable and we could rai

it is less of a case of when it happens, and as we know from ben bernanke's statement, it's more aboutnto the market. of timethat is a matter come and the second half of the year is a good bet. to the when it comes fed, we did not get the projected number of hikes change. the market was hoping for four, possibly more than that. what does that mean when it comes to this market for risk? does it stole now? fed has not done much actually. the only thing that has really changed in the last 3-4 months is that the fed has made a more concerted marketing effort to express they are all behind this three hike of view. the market relies will maybe there is consensus at the fed. then the market moved. the that has never really budged from that, so soon they continue the policies stability, that alone is unlikely to affect markets one way or the other. yvonne: when it comes to your positioning, looking at defensive assets, where do you see the opportunity in a share? >> a lot of the typical defensive names like utilities , defensiveg, japan markets in southeast asia like indonesia, philippines, an

do you think let's puzzle over this for a second, did they come up with a eye drug -- did say ben bernankeas given me permission to come up with eylia a few times a year than what it was 52 times, no, let's stop it already. >> all right. >> did not create because of bernanke. >> oil wells went in the ground because there was liquidity that otherwise wouldn't have been there. >> saying the bull market is not going to end. i mean, that was the question. >> yes. i was actually going with more of a kind of metaphor kal way. >> okay. >> kind of like a post impressionist view. >> i like the post impressionist. >> do you want me to go with a r rembrandt? he's worth like nothing versus aroscoe. >> yeah. >> roscoe didn't end well, as you recall. >> that's true. neither did picasso. >> or van gogh. >> we're going to talk about the market anniversary all day long. meanwhile, gop did clear a hurdle in its effort to replace and repeal obamacare. in the wee hours of the morning republicans approve legislation through house ways and means that would repeal the tax penalties on people who don't buy insura

mike, if you look at ben bernanke, if you look at allan meltzer at carnegie mellon or if you look atfed literature, they have to wait don't they? they've got to wait for the hard data. mike: any central banker has a challenge in it will flag things up before the hard data. we see post crisis that the soft data can be more volatile than the hard data. the hard data has been more sluggish. i think the fed's right to be relatively cautious on the speed of rate hikes even if things look pretty good read many of us what -- good. many of us would've said wage growth would've been the sluggish this long. you need to see the hard data before you pull the trigger. francine: thank you so much. up later today, we hear from janet yellen as she delivers her economic outlook speech and look for that at 1:00 in new york. that is 6:00 in london. we will go to european markets next. this is bloomberg. ♪ taylor: let's get to the business flash. the maker is buying general motors open unit. there could be an agreement early next week and acquisition could create europe's second-largest automaker. among

isx: ben bernanke says it $2.5 trillion to $4 trillion. you feel confident that is the window?a. that feels large to me. i think we could get away with the smaller balance sheet than that. i read his blog on that topic and he makes some good points. i think there are policy trade-offs to be made, and reasonable opinions could differ. matt: if you look at the dot for 27 that there are dots clustered near the bottom and not a lot of rate hikes, but 2018 and 2019, all move up significantly, so do see this clause as a 2017 story before getting back to our normal pace next year and the year after that? ,eel: one of the big surprises if you look at our models and forecast, the mean reversion is the religion of the fed. we all assume in a year or two that things will revert back to the way they are supposed to be, and that is embedded in the dot plot. i'm hoping in a couple of years that things will return to normal and we can get to a normal interest rate environment , but i'm hoping the data supports that. if the data does not support that, we should respond to what the data provide