we will be back with richard clarida and michael mckee in a moment. i think we can go back right now. vice chair clarida: the baseline view for europe, perhaps later in the year, it will begin to pick up. we have cited the fact that global developments we are looking at, that's one of them. michael: the markets seem confidence that 2.5% is a terminal rate in the u.s. are they correct? vice chair clarida: that is one view in markets. the data can break either way. it can surprise on the upside or the downside. we think the u.s. economy and monetary policy is in a good place right now. our focus is on sustaining maximum employment and price sustainability. we don't see a strong case to move rates in either direction. we will be looking for indications on that. michael: in march, jay powell said inflation was one of the major challenges of our time. inflation problems are just transitory. people are confused here. vice chair clarida: for the global economy, whether you look at the euro zone or japan, if you look at the globally economy, inflation is well

kicking off with richard clarida. that is coming up next.his is bloomberg "real yield." ♪ jonathan: i'm jonathan ferro. this is bloomberg "real yield." time for the final spread. next week, a slew of fed speak, featuring richard clarida. tuesday, williams, and then esther george geeking in minnesota. first quarter gdp data. u.s. retail sales. midnight friday, the deadline for president trump to decide with a to move forward with putting tariffs on auto imports. back with us for final thoughts, gershon distenfeld, henry peabody, diana amoa. what would be sufficient to get them to cut rates? that is the question in the minds of many people. do we get the after to that anytime soon? diana: not while financial conditions remain at these levels. you need to see a more aggressive tightening in u.s. financial conditions to make the thaturnaround and see there is more asymmetry and then the next move is likely to be a cut rather than a hike. gershon: we cannot just look at the short term. there is more uncertainty today where fed governors standing

kicking off with richard clarida. that is coming up next.is bloomberg "real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is bloomberg "real yield." it is time now for the final spread. coming up over the next week, a slew of fed speak featuring richard clarida. rosengren, monday. tuesday, williams, and then esther george speaking in minnesota. first quarter gdp data. another read from germany and the eurozone on wednesday along with u.s. retail sales. midnight friday, the deadline for president trump to decide whether to move forward with putting tariffs on auto imports. back with us for some final thoughts, gershon distenfeld, henry peabody, diana amoa. diana, i want to wrap up some things with some thoughts. what would be sufficient to get them to cut rates? that is the question in the minds of many people. do you think we get the answer to that anytime soon? diana: not while financial conditions remain at these levels. i think you would need to see a much more aggressive tightening in u.s. financial conditions to make the fed turnaround

kicking off with richard clarida. that is coming up next.is bloomberg "real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is bloomberg "real yield." it is time now for the final spread. coming up over the next week, a slew of fed speak featuring vice chairman richard clarida. rosengren, monday. tuesday, williams, and then esther george speaking in minnesota. plus, first quarter gdp data. another read from germany and the eurozone on wednesday along with u.s. retail sales. midnight friday, the deadline for president trump to decide whether to move forward with putting tariffs on auto imports. back with us for some final thoughts, gershon distenfeld, henry peabody, and diana amoa. diana, i want to wrap up some things with some thoughts. we wake up monday morning and turn from the trade story immediately back to the fed. what would be sufficient to get them to cut rates? that is the question in the minds of many people. do you think we get the answer to that anytime soon? diana: not while financial conditions remain at these levels. i think yo

let's bring in michael mckee, who himself interviewed richard clarida not long ago. what i took away from the speech was a little more of the same. he did say inflation data has been softer. we talk about it being transitory, but that is something they are watching. toe: he did his best not react to what was happening in the financial markets, laying out the fence case for staying on hold for the time being without the outside influence. d's case for staying on hold for the time being without the outside influence. if that is the case, that means more slack in the economy, more ability for companies to absorb price increases, give out wages. that would be a good thing for the economy. the other is at this point, the fed's may be looking at inflation expectations with a very wary eye. they have come down. at the low end of what he would like to see. if they did below that and stay there for a while, that might prompt the fed to start cutting rates. that is where he and the markets come together. the markets are deciding the world is coming to an end on a disinflationa

we speak exclusively with fed vice chair richard clarida today.ira falls,kish leading to fresh questions about the democratic process. ♪ manus: it is a red headline of a mess, the early easter in china did nothing to help the growth. that is on the first quarter, growth. ibitda they do see strong growth for the full year and a that they will deliver in terms of full-year revenue and adjusted revenue growth. heineken and carlsberg both have a strong start to the year. analysts are saying -- this is a company that cut its dividend in half in october to pay down debt. s&p global arena says in march, it may cut its credit rating. you have some pretty big global challenges for big beer within the index. : adjusted if the -- adjustedp to ibitda was a beat. up 65%,r orders are also they are to propose a dividend of 5.50 euros per share . manus: it was/and burn on the equity side in the markets yesterday. trillions, i should have said billions in terms of the wipeout on china. apologist for that. get a grip of your currency, that is a message will here in

is am: richard clarida first rate global economy and macro economic -- economic -- economist. as doajor you and stanley fischer. gertler-clarida, can those dynamics work for the vice chairman, the chairman, or is this so messed up the clarida papers do not work? academic discourse is different from central-bank discourse. i know that richard clarida is very -- francine: how do you think they are interacting with the market? robert kaplan suggested it does not matter for the economy whether there is a cut or a hike. it does to the markets. our the markets mispricing what the fed is looking at? willem: he said the economy is roughly where it should be. rates are where they should be, near neutral. likely that the next move is up as down. there is no bias, in the fed's view, on which way the rates will go. given the strength of the underlying economy and the under shoot of the inflation target is modest, it seems an entirely appropriate stance. francine: do you feel inflation will pick up or continue to under shoot? willem: inflation will pick up, not massively, but it will pick u

guy: we were hearing from richard clarida about the impact on u.s. economy, describing it as limited. fail, if we don't get a deal on friday, if tariffs go in place, how much does that raise the risk the fed will be forced to cut? watched by the imf, the fed, as one of the outlooks. markets will react right away. businesses, uncertainty for them is a killer for business. they are not planning ahead, adding the jobs they would have had or expanding as they would have because there is uncertainty about the environment. that will weigh on the forecast for u.s. economic growth. that will give the fed more to consider when they start thinking about the next meeting. what does the u.s. think it can get out of china at this point? onah: there is probably hope either side they can get a deal. that is what we can see clearly from china still agreed to come even though they said before they would not negotiate under duress by the trump administration. the top negotiator is still coming this week. underlying some threats, we have to believe there is still some

paul: ok, richard clarida saying things are in a good place.o to the other end of the central bank spectrum, certainly in terms of patience. it will not wait until another round of the trade war will have the economy. kathleen: absolutely. they made it clear they are watching the big risks globally even though they cut their key rate for the first time in nearly three years. let's look at a chart and see what is going on. you can see this is the last cut, july of 2016. they are moving it up last year. now, this cut, about half the people bloomberg talked to expected it, but some thought they might wait. here is what they said in their policy statement. there is down right -- downside risk in the uncertainties of the global environment. trade tensions and commodity related sectors. inflation is barely above zero now. the fed's policy positive opened the door to asian central banks to cut rates if they need to. malaysia the second after india, to cut their key rate this year. we will be getting results from the reserve bank of new zealand. the ph

vice chairman richard clarida is downplaying the u.s.-china trade tensions. g the economic impact is not been great and pushing back against speculation that the fed will cut rates. richard: we had a strong first quarter. looking out throughout the rest of the year, the fed views economic growth this year as coming in somewhere around 2%, perhaps a little above that depending on the data. in terms of inflation, inflation has been running on the soft side recently. we think there are some temporary factors. our baseline view is that inflation will move up towards our 2% objective. we are certainly looking at the data closely. >> where did you see fed funds at the end of this year, next year? richard: i will not get into my individual dot. at the march meeting, you saw most numbers of the committee saw a baseline view of unchanged for this year. that is just one consideration. we don't vote on the dots. there are 17 different opinions. that gives somewhat of an indication of a baseline view, but we had to look at the outlook at the both sides of the baseline. >>

francine: that was the federal reserve vice chair to richard clarida.ter chatwell. we are looking at risk appetite and the start of the yield curve being inverted again. does that mean something ugly is coming? karen: i think the yield curve signaling power is dented by the quantitative easing world we are in. if you think about why the yield curve is supposed to have signaling power, it is supposed to tell us about the start of monetary policy versus neutral, so it is telling us today's policy is tight, above long-term neutral rates. long-term rates are no longer neutral for the u.s. economy. not many people believe long-term nominal growth in the u.s. is less than 2% and for that reason has lost its power. i am more focused on the current economic indicators and ultimately, this big question of whether this low unemployment rate will deliver higher wages and higher core pce. francine: this is my yield chart. curvecked the u.s. yield trending towards inversion. what are you tracking? beer: i think the fed will better to talk a lot less. that would give

jonathan: richard clarida weighing in. this is what he had to say. >> we are a two to potential risks in the outlook. if we saw a downside risk to the outlook, then that would be a factor that could call for more accommodative policy. that is definitely something in the risk management area that we would think about. jonathan: i don't know if we are clutching at straws, but some thought that was the window opening slowly toward the idea of a rate cut. your thoughts on that? to me, that is a very incremental moving that story. >> i agree. he also emphasized data. data does not suggest that. will thought the winds of the equity markets -- we are just down 5%. let's take this into perspective. just 5%. jonathan: jpmorgan. another one in december. this is not the first time we have seen a decent spread between what the market is looking for and what the fed is implying through the munication. what i'm trying to get -- communication. what i'm trying to get my head around is, is it better data that drives us there? >> we will se

was richard clarida speaking exclusively to mike mckee.ll with us, the head of investment strategy at rbc wealth management. from the companies you look at in the us, how much evidence do you see that we could see a pass-through in inflation, some pennies raising prices to deal with wage growth but also the risk of tariffs and increasing commodity costs? areot many companies commenting on that. they are commenting on the underlying environment which is better than expected. they are commenting on buybacks, one of the [indiscernible] to have a buyback program and they are talking about cost initiative. wages,r to upset inflation, the material. it seems to be an cost-cutting but there are price increases the bulk of companies are reacting. manus: it is always easy and hindsight, we have great hindsight, valuations were stretched, we were do a catharsis. what our team have put together of -- 500n the s&p are racing against that. multiples are hitting levels that we saw 20 years ago. to that end, do you think that a drawdown, do you think ther

fed vice chairman richard clarida says the bank is prepared to ease monetary policy if it sees mountingto u.s. growth. however, he stresses the economy is in a very good place with on employment low and inflation muted. and notrisk assessment just data could be a trigger for the fed to cut rates. >> the are attuned to potential risks to the outlook and if we saw a downside risk to the outlook, then that would be a factor that could call for a more accommodative policy, so that is definitely something in the risk management area is that we would think about. itsorth korea has executed top negotiator involved in the february summit with president trump according to a report in south korea. personspaper says the who led working level negotiations for the summit in hanoi was executed in march with four other officials. the newspaper says kim jong-un's top aide is doing hard labor. king salman says the international community needs to use all means to counter what he calls the "subversive actions of the iranian regime." speaking to an arab summit, king someone said he wants -- king some on s

richard clarida and robert kaplan., highlights from a busy week of earnings reports. >> the first quarter salt tailwinds as opposed to headwinds. >> we had no assets that did not make a contribution to the bottom line. >> it has turned from a nightmare to reality. >> this is bloomberg. ♪ ♪ >> this is "bloomberg best." earnings and focus this week. our roundup starts with commerzbank. commerzbank net estimates. it added customers, better results for net interest income. the numbers should give a boost after the breakdown of merger talks with deutsche bank. difficult,ronment is as it has been for the last five years. expect forward, we don't it to get easier. >> you have negative rates to contend with. how long does that happen? is this a permanent situation? >> it has turned from a nightmare to just reality. what was said about rates going up and down for the upcoming years, i think there is little to no believe that we will see rates rising in the next two years at least. >> walt disney rose in late trade after earning

we will see quite a bit of what the fed thinks tonight with the speeches from jerome powell, richard clarida our thanks to bobby a iaccino at the cme with futures and focus. emma chandra is here. our stock of the hour is sprint. emma: they filed for a merger back in june. there were fears about reduced competition in the u.s. we've got a chart showing the at&t, share of verizon, t-mobile, and sprint. today they scored some major concessions that are key to approval. we can show but those were. sprint's boostm, mobile, a prepaid service, would be divested. they would commit to not raising prices during the 5g rollout, and that would include rural areas. where do things go from here? emma: there are a member of things to overcome. the sec needs a majority to approve the merger. the commissioner leads the republican majority. the justice department is also looking into the deal in the u.s. they have not indicated where they stand, but there's a number i spokestreet analysts to today saying that the fact that the sec has indicated they will approve it is good news that the doj will, too. they ha

richard clarida, federal reserve vice chairman, no need for rate cuts unless the economy weakens moree. we have seen stocks come back a bit. we're up 70 on the dow. what do you make of that and are we headed for a rate cut or maybe we stand pat for a while? >> i think we're going to stand pat for a little while, maybe six months but i tell you the markets, the fed funds futures markets which ends up being a good predictor of fed moves is the opposite. it says the fed needs to cut several times by the end of 2020. we have data guys an gals in our shop. we look and economic data. the data, 200,000 jobs added per month, wage growth is accelerating, gdp over 3%, maybe not as high in the second quarter here, still gdp positive doesn't necessitate a rate cut until later this year. connell: weakening from here based on out look that changed on the trade war front or something else? >> yeah. i think that obviously influences rates as well. because we've seen the trade talks cool off, certainly even with usmsca you guys are talking about coming to the table now, that has been delayed. we've se

perspective on policy from richard clarida and robert kaplan.next, highlights from a busy week of earnings reports. >> the first quarter saw tailwinds as opposed to headwinds. >> we had no assets that did not make a contribution to the bottom line. >> it has turned from a nightmare to reality. >> this is bloomberg. ♪ >> this is "bloomberg best." earnings were in focus for investors this week. our roundup starts with commerzbank. >> commerzbank has met estimates for revenues in the first three months. it added customers, better results for net interest income. the numbers should give a boost to the chief executive after the breakdown of merger talks with deutsche bank. >> the environment is difficult, as it has been for the last five years. looking forward, we don't expect it to get easier. >> you have negative rates to contend with. that is a bankers nightmare. how long does that happen? is this a permanent situation? >> it has turned from a nightmare to just reality. if we examine a little bit what the ecb has said about rates going up and down

that richard clarida will be speaking shortly at the hoover event. find that at 11:30 eastern on live go. bit.ro is trading up a brent crude trading absolutely flat today. we are seeing a much more. stable conversation during the session today for the oil market. vonnie: on the u.s. does report, let's get straight to the context with credit suisse u.s. equity strategist, my next guest. what do you make of all the data? we have data that looks pretty strong but nevertheless, there are some holes in the data, if you ask me. the hourly earnings, the weekly hours, productivity yesterday looked really strong, but there were some problems with that data as well. what is going on? >> it would be nice if everything lined up perfectly. my favorite place to go for a sense of the economy is c, whichg's ecf basically shows what the consensus is for the economy. the wall street economists 2.9%ve the economy was last year, go to 2.4% this year and 1.9% next year as we roll off a stimulus we have had. an economy that is kind of sluggish, slowing, but stable. if you

he will be having soup at the economic club of new york today with richard clarida.ris rupkey is perfect to talk with. what do you interpret of the bond move we have seen, price up, yield down? chris: i don't really like the bond market rally. tom: in what way? chris: i know when a big rally gets going it is great and stuff. i feel the short-term outlook people are trading down yields and depressing yields for longer-term investors and bonds. a lot of your bond returns over years, it is30 based on reinvestment risk, what yield can you get to reinvest the coupon interest? when they drive the rates down, it makes me afraid that what happened to europe and japan will happen here, where yields go down close to zero across the curve. i don't like it. a lot of the rating agencies, we did work with them. a lot of the sovereign debt risk among countries is if you have a higher interest rate in the country, that is good for the country -- the rating. you need some sort of interest rate. i feel rates here, 2.25% for the 10 year feels too low. francine: what would need to happe

and perspective on policy from , richard clarida and robert kaplan.xt, highlights from a busy week of earnings reports. >> the first quarter saw tailwinds as opposed to headwinds. >> we had no assets that did not make a contribution to the bottom line. >> it has turned from a nightmare to reality. kailey: this is bloomberg. ♪ ♪ kailey: this is "bloomberg best." i'm kailey leinz. earnings were in focus for investors this week. our roundup starts with commerzbank. >> commerzbank has met estimates for revenue in the first three months. the german lender added 123,000 new retail customers, fueling better-than-expected results for net interest income. the numbers should give a boost to the chief executive after the breakdown of merger talks with deutsche bank. >> in general, the environment is difficult, as it has been for the last five years. looking forward, we don't expect it to get easier. >> you've got negative rates to contend with. that is a bankers nightmare. -- banker's nightmare. how long does that happen? is this a permanent situation? >> it has

rest up for tomorrow, the day we'll finally get something done. ( ♪ ) charles: fed vice-chair richard claridaing the door open yesterday when it comes to a rate hike. while tariffs dominate the headlines and slam this market, the u.s. economic strength continues to really go underreported, which is the question now, which one will outlast the other? i want to bring in heritage foundation chief economist, economic advisor to president trump, steve moore. steve, it is interesting to me, you know, on may 1st is when the market really started to sell off. that was because jay powell didn't tell wall street what they wanted to hear of about a potential rate cut. he is saying you know what? all these things making inflation low are transitory? that they're temporary. we learn in the first quarter that prices went even lower than anticipated. the fed chair now seems like maybe they will lower rates. could the federal reserve get back into this act and start to lower rates? >> charles, i don't want the fed to be looking at the growth rate of economy. the growth rate of economy -- charles: i'm talking

economic outlook worsens, according to fed vice chair richard clarida.t for the central bank to stay nimble and take into account any shortfall in inflation or material rise in global risk. his comments come as traders price in a more than 80% chance of at least one fed rate cut by the end of the year and a 40% chance of two according to the cme's fed watch. lets get wak to the executive vp and sovereign credit analyst from pimco ha do you think of the importance of the yield curve inversion? should we be looking at this as an reliable as indicator as it's been in the past of an impending recession? >> i think we should be respectful of the signal of the yield curve. it has been a fairly accurate predictor of recession in the past having said that, i think there are some special conditions right now that mean it's probably not as reliable an indicator as it used to be most importantly the unconventional monetary policy easing, quantitative easing, forward guidance, long-term liquidity operations have all led to a reduction in the term premium, and theref

propelling the markets higher earlier before they came down again, federal reserve vice chair richard clarida gave a thumbs-up on the u.s. economy but that wasn't what moved the markets higher. he said the federal reserve is ready to adjust policy, read cut rates, if global growth factors start to wane. if they present a risk or inflation stays too low because it's pretty low right now. immediately you saw a spike in the markets. you can see that investors are getting a bang for their buck at least at this stock. dollar general after the discount store chain topped estimates for same store sales and profit, the discount retailer splurging on store remodeling as customers spent their dollars, yes, on groceries, seasonal products and home goods. this stock is blasting higher by 7%. we should take a look at cross-town rival dollar tree. it is trading also higher. we've got it up 3% after it reported better than expected same store sales growth but also managed to turn around the struggling family dollar brand. dollar tree and family dollar are one company. investors seem to be discounting dollar

at 7:00 p.m., the federal reserve vice chairman richard clarida speaks at the economic club of new yorktch out for any reaction to that data and any dovish signs from the central banker. let's get the bloomberg business flash with olivia in london. olivia: thanks. headlines --king the proposal would dilute the control over renault and directly over nissan. if he's is a key concern the japanese carmaker has had for years. after a meeting in tokyo, the alliance restates -- said they had an open and transparent discussion. the financial times reports a loan is being discussed with goldman sachs. capital tohunt for use in tech companies. ferrari has released its plug-in hybrid. it is aiming to keep pace with tightening emissions regulations. and also satisfy its power-hungry customers. it will begin shipping in the first half of next year. ferrari did not disclose its price. that is your bloomberg business flash. matt: i think it will be around $400,000 u.s. dollars. it is not going to be as expensive as their first hybrid. they only made about 700 of those and it went for over $1 million.

we speak with a fed vice chair richard clarida today. bmw's profit slump.lion euro revised antitrust provision sees the german carmakers first-quarter profit fall 78%. shares dip in frankfurt this morning. welcome to "bloomberg markets: the european open." i'm matt miller in berlin alongside i am anna edwards -- anna edwards. 300 51 stocks go higher on the stoxx 600 so a little undecided on where we had. some of the london stocks playing catch-up because we were closed for a holiday in london yesterday but this is the upside. infrastructure changing hands in spain. from iliad, up 6%. in spain up. interesting one in terms of infrastructure and telecoms. that is having its impact felt on markets. on the other side, we've got interesting stories moving on the downside. g4s, down by 4%. no offer forthcoming for the whole g4s as they've had the security support business has had an offer. chemicals company talking about being hit with various factors hitting the business this morning. that's get a first word news update. rates don't need to be lowered, but we can

that is according to richard clarida. he told the economic club of new york the fed was in a good place with low unemployment and muted inflation. >> we're attuned to potential risks to the outlook and it saw -- if we saw a downside risk to the outlook, that would be a factor that could call for a more accommodative policy so that is definitely something in the risk management area that we would think about. olivia: the philippine central bank governor has pledged to cut interest rates further and lower the reserve ratio to support the nation's economy as inflation pressures ease. since taking office in march, he has cut the benchmark rate by 25 basis points, reversing some of last year's monetary tightening. >> we will be looking at the data, at how fast inflation has receded, maybe look at the capacity. olivia: the bank of korea left its key rate unchanged at 1.75% in the face of growing risk to the nation's economy including tumbling exports and rising u.s.-china trade tensions. the policy decision was unanimous, with

we heard from vice chairman richard clarida in the last few hours talking about how inflation is transitorynd the fed is monitoring for a persistent shortfall inflation part of what is anchoring these yields. that leads me to my next point, if you come to my terminal angie tv . it is about positive real rates in right -- in white. break-even, the inflation gauge in yellow. you are seeing positive real rights is real rates in times of stress. if there is any sort of indication of calm in what seems like panic in the bond market, it is that we are still getting positive real rates. emma? emma: i'm looking at media companies cbs and viacom, both getting a pop on talks that they are are due to start merger talks next month. they were part of the same company and number of years ago. shari redstone, who oversees her family's controlling stake in both cavities and is push -- in both companies and has first just them combined, and les moonves oppose that. he left last year. showing how chart they performed. cbs is credited with minimalist because it does not have a cable bundle. but should it

that is according to the vice chairman richard clarida. he told the economic love the u.s.e with low unemployment and muted inflation. we're attuned to potential risks to the outlook and it saw downside risk to the outlook, that would be a factor that could call for a more accommodative policy so that is definitely something in the risk management area that we would about -- think about. olivia: the philippine central bank governor has pledged to cut interest rates further and lower the reserve ratio to support the nation's economy as inflation pressures ease. since march, he has cut the benchmark rate i 25 basis points, reversing some of last year's monetary tightening. >> we will be looking at the data, at how fast inflation has receded, maybe look at the capacity. korea left bank of its key rate unchanged at 1.75% in the face of glowing risk to the nation's economy including tumbling exports and rising u.s.-china trade tensions. the decision wasn't unanimous with one member calling for increased. the central banks governor raised concerns the trade war may be prolonged.

today, weing up later are going to hear from fed chair jay powell, as well as vice chair richard clarida. on tuesday, home depot reports earnings. the federal reserve releases its minutes from the meeting earlier this month. thursday, european parliament told -- european parliamentary elections begin. that is all coming up this week. right now we turn to bloomberg first take. we are joined by marty schenker and lisa abramowicz. trade, now they say national security. we will put up a list of companies now they cannot do business with huawei. marty: it was a fascinating development this week when google, and particular, said it would not offer certain aspects of its products to huawei, which means the bones ch meansof -- whi those phones will not have access. trump, talking to fox, saying i'm happy with how this is going. lisa: he seems to be doubling down on this, but so are democrats. i think this is really important. bipartisan coalition of senators have been having briefings with tech companies, potentialem of espionage by chinese companies like huawei. this indicates that even if in 2

coming up later, federal reserve vice chairman ricard tired of -- richard tyler -- vice chairman richard claridaill sit down with michael mckee. coming up, the fed escalates warnings on leveraged lending yet again. if you have the bloomberg .nal, check out gtv ask us a question. this is bloomberg. ♪ david: the fed keeps warning about leverage lending, and interest did grow 20% last year according to the latest financial stability report. taylor riggs has more on the market growth. taylor: that's exactly right. leverage loans are growing the most since 1997 on average, at 16%.nual rate of almost everyone else is only gaining about 7% to 8%. come into the terminal at gtv . you had a very slow start, and then look what happened in 2017 2018. you are ensuring hundreds of billions in debt. it all comes down to the total return of these indices since the fed issued their first report in november, 2018. the consumer price index really taking off after credit standards have slipped since november. the market has ballooned. so has prices. as you know, it all comes down to spreads. you have the le

add in the tariff issue with mexico coming out of the blue, and it gives new meaning to what richard claridad yesterday with the requirements for a rate move. this is what he had to say. >> if the incoming data were to show a persistent shortfall in inflation below our 2% objective or were to indicate the global economic and financial developments present material downside risk to our baseline outlook, then these are develop its the committee would take into account in assessing the appropriate stance for monetary policy. do we seef and when consumer confidence fall? when did we see unemployment rise? adam: that is a good question. i think vice chair clara to -- vice chair clarida has it right. up at aneeds inflation reasonable level to have room to deal with the next crisis. the fed needs inflation up. we all need inflation up because that is more conducive to wage growth and a good market. nice point for the fed.- a knifepoint for the seehope is that you employment continue to rise. if you throw a lot of fiscal isicy at the economy, it just not going to work for the long term. the fed is a

nomineesk the previous that the president brought to ,he board, richard clarida randal quarles, thesethis white house bringing forward solid nominees. people are of these fine nominees. profits history of working within this white house -- process working within this white house and i would encourage them to go back to that. tom: the rate cut game got a lot of cover yesterday, but with stephen moore we talked about the twin deficits. who really president enjoys boosting deficits. for the next fed governor and chairman powell, will be rehabbing a twin deficit discussion -- will we be having a twin deficit discussion because of president trump's policies? narayana: for the fed, its main indicators employment and inflation, deficit spending is positive on the employment front. my concern is that you will start to see pressures on wages on a very tight labor market, and that is when the fed will raise rates. i can imagine the president will be unhappy, that is why you have an independence of -- central bank. francine: is the fed 100% independent? the consummate attacks from the president,

tom: richard clarida to with a precise speech yesterday. of his speech and the difference hearing from vice chairman fisher. the markets are on the move and deteriorated in the last 20 minutes. we are thrilled to bring you worldwide andrew sheets, who synthesizes this in a wonderful way. i want to go to what it means for our viewers and listeners. this is the 10 year yield which is plunging, and then we take away the cleveland cpi which you know is somewhat like dallas trim, chairman powell's favorite level, and the yield has disappeared. real yield is gone. what i find remarkable is the real yield of the 10 year cleveland is lower than the lehman low. how much stress is there in the system for vice chairman clari da? andrew: this highlights a big challenge the fed is facing. you have a bond market highlighting very low real yields, a yield curve increasingly inverting. things you usually get around times of severe stress or signs the bond market is really worried about the economic cycle , and yet the incoming data, the u.s. unemployment i

closing bell wp we'll start with what's driving the action right now federal reserve vice chairman richard clarida says a rate cut is possible if economic outlook worsens. treasuries and the dollar are holding steady some pressure points there for investors. oil is plunging on those growth fears. joining us for the hour to break down the market action stephanie link is back, cnbc contributor from tiaa a nuveen company what stands out to you amid the action today and the sort of loss of momentum we saw from the early morning and the open >> two things. oil totally collapsed again. and it just seems to be on a spiral downward. and secondly, not great earnings from some of the software companies, some of the security companies. we aw palo alto. last week we had network appliance, hewlett-packard enterprise spending is clearly slowing. it's not declining in a big way. thank you it is slowing. and that the multiples of these stocks trading at and the leadership this group has bin think people are take a pause. >> feeds into the slowdown fears. let's get into the stories driving the market kayla tausche

are very interested to what the fed has to say i will point out, no mention of trade by richard collar idia clarida. >> wait until his next speech. don't worry, it will be in there. steve, thanks. >>> stocks in the green as you know and they've been teetering a little bit bond yields bouncing from their lowest level in some 20 months over concerns about slowing growth those concerns remain front and center let's welcome in liz ann saunders, schaub chief investment stratus, along with tom lee. great to see you what do you make of the market this week, as low as bond yields got and stocks, trying to get a bounce today, but it's not much of one. >> yeah, we're in another one with of these pullback phases, 5% at the worse, whether it turns into a full fledge correction, i don't have any greater sense of that than anybody else but i think it reflects obviously some of the escalation in trade and i think more meat being put on the bones of the impact this is going to have, companies actually coming out and talking about whether they're likely to absorb is in the profit margins or past costs on to the con