is it the fed or the economy? right now bank of america and yourselves, plenty of others, have five cuts this year, looking obviously for something to break. kathy: i think the markets are confused and rightly so. the economic data had been confusing. looking back at the pandemic era , it's very different. we never turned off the lights on the global economy and then turned around to say let's find out what happens. what has happened is this resilience in the u.s. relative to the rest of the world and the resilience in the economy, as mark mentioned, the stickiness and inflation says why would we do anything right now but wait and see how things develop? it's hard for me to envision a downturn in the economy given that we have the potential stimulus on the horizon with inflationary pressures and policy. it would be hard to make a case for lower rates from here. we would have to see something really change in the economic data. vonnie: how much are you pricing the possibility into your forecast that we might see ta

matter that matters to the fed. ~ ., . the fed. of the tech aiants the fed. a pot of the tech giants will _ the fed. a pot of the tech giants will be _ the fed. a pot of the tech giants will be releasing i the fed. a pot of the tech i giants will be releasing their numbers. what are you expecting to see? . , ., , ., to see? earnings are starting to see? earnings are starting to slow in — to see? earnings are starting to slow in comparison - to see? earnings are starting to slow in comparison to - to slow in comparison to previous quarters, however, one of those trump playing this we will now see stimulus and so forth which in the long—term improved profitability, not just for text but other companies. should that come out in the earnings that actually with the upside potential for upcoming quarters, text can continue and we have to take into account that tech giants are so big. it is no longer the big five. it is the big seven and soon it will be the big 11 and soon it will be the big 11 and soon it will be the big 11 and so forth.

ken: the fed is data dependent. the bond market moves very violently to all of the incoming monthly data. right now, the fed is in a bind because they do not know what the administration will rollout. i think they will stay on hold this meeting. the market is basically pricing that in and they will wait and watch what happens with inflation and jobs data and we will wait and see what comes from washington. sonali: how many rate cuts could the fed accomplished this year, lindsay? lindsay: as much as they need to if the inflationary labor market changes. what we think is likely is two cuts. we think that happens for the first time in june and it likely again in september. this makes sense based on our view of where inflation is going. we have done a really good job in the economy and the markets understanding inflation is coming down. it won't happen in goods. does that work is done. it won't really happen in services. that box is checked as well. what is remaining is oer, the housing component. we believe if you look

what about the fed auoin good news. what about the fed going forward — good news.ing forward for— good news. what about the fed going forward for 2025? - good news. what about the fed going forward for 2025? i - good news. what about the fed going forward for 2025? i think| going forward for 2025? i think the fed is _ going forward for 2025? i think the fed is watching _ going forward for 2025? i think the fed is watching the - going forward for 2025? i think the fed is watching the trumpl the fed is watching the trump administration. the expectation now is one to two cuts. if we have a very tight labour market moving forward or if we have an inflationary tariff policy, i think the fed will continue to pause. i think it's very unlikely the fed will begin hiking but the fed needs to see conclusive data in respect to the labour market and information before it will feel confident in cutting by more than 25 basis points over the course of the year. us president—elect donald trump is likely to follow through on his promise to impose blanket tariffs says one of his form

we don't want a big surprise from the fed. powell could be on the government's side. the fed could.ere's a lot of uncertainty about what the fed might have to do next year. the fed has an under enviable challenge -- on enviable challenge -- unenviable challenge. mohamed: we spend a lot of time on the what of the policy side. do you think someone in washington is bringing together these elements and seeing what the effects of all these measures would be? meera: the challenge is if you do have a centralized strategic initiative towards all of this when it comes down to legislating and you think about congress there are so many competing interest because of everyone's different constituencies. that is how you end up with things that seem like a bit of a frankenstein, and this is true for any administration with any legislation because you are trying to please a certain number of parties. we are dealing with slim majorities that are going to make some of that negotiation quite fraught. mohamed: i completely agree. we hear quite strong predictions as opposed to embrace volatility. that w

so it is going to force the fed to cut.ust depends on the real question for us all is what kind of pain we have to experience along the path. >> yeah. because you really can look at the december market activity and say this is essentially what the market was suggesting, right? you saw as yields went up, housing related stocks went down, but so did other cyclicals. banks had a big reset lower, industrials as well. so i guess the point is, you alluded to it, what do we have to go through before we get to a point where either the fed capitulates this view or you have, you know, i guess stock prices discounted in advance and can recover. >> yes, 7.5% peak to trough correction on equal weight in the month of december, i think that's a taste of what we have in store for us. it depends on how hawkish the fed wants to be. this is our view, we're bullish on the market. we think the soft landing is in tact, but fed has to cut. we have 100 basis point of fed cuts in our base case projection. and i think that our view is that they're g

fed's not handcuffed.will act if it sees severe weakness but i think it would be prudent of them to let the situation clarify and i think they will. >> we've discussed the relationship between the fed chair and the president many times in the past. but given everything that you just said, how are you thinking about the possibility of significant discourse between the two? from a president who has made no argument about the fact that he likes low rates. right? that's part of the business that he grew up doing. lower rates are more beneficial to the kind of business he's made his living in. the fed chair, to some extent, has his hands tied by the current situation. a little stick inflation. feels pretty good about where we are, but, you know, this is a president who's not worried about running for re-election, who wants to get specific programs through, and he wants to do it while at the same time keeping the economy really strong. so i just picture a situation that could get dicey from time to time. >> that

what does that mean in regards to the fed?on a dime, we have seen it in the last 24 hours. i think that u.s. is still probably a little bit ahead in the tech race because of all the investment we have put in there, but it looks like the story is china is not as far back as people thought. it leads to some questions and we see that response in the markets today. it also leads to the concern about the u.s. china trade wars, restrictions on ships, could get even more heated which would bring more volatility into the market. jonathan: let's go through the individual market breakdowns, equities, you can share where you might be constructive and where you might be hands off. nvidia gets hammered, how many chips do we need to make this kind of progress? then you have the big spenders on those chips, microsoft, met up. they are declining this morning. then you have the energy names. the whole ecosystem is being questioned. utilities that ran up are getting hit this morning. where are you looking to pick up the pieces, where are you wi

the three -- the fed has to hike.oesn't have a problem you can see inflation over 10%. but, that is why it feel like cash is one of my top five investments for starting. the last time i had that was in 2022 when the market went down 19%. we will see what happens. lisa: i was looking at your 2025 top-five tics. below cash you talked about cisco. you talked about the big chinese tech companies. are you concerned about what is going on with chinese hackers. cisco was named as a companies that the chinese hackers compromised their large network routers. dan: the chinese companies have compromised cisco and the federal reserve, which you might remember got hacked. it goes back to what we talked about earlier which is you need to support the u.s. companies and what they can do to try to make america's defense is better. i think with cisco it is one of our top five picks. they have some good security products that obviously, all security across all companies even though security software companies have gotten hacked, which y

what about the fed going forward for 2025? for what about the fed going forward for 2025?tching _ forward for 2025? for 2025, the fed is watching the _ forward for 2025? for 2025, the fed is watching the proper - fed is watching the proper administration, the expectation now is one — two cuts, if we have a very tight labor market moving forward or if we have an inflationary policy, the fed will continue to pause, it's unlikely that the fed will begin hiking with the fed needs to see conclusive data are both with respect to the labor market and with respect to inflation before it will feel confident by cutting by more than 25 basis points over the course of the year. lie course of the year. us president-elect - course of the year. us president—elect donald trump is likely to follow through on its promise to impose blanket tariffs is, says one of his former economic advisers. he served as deputy director of the national economic council and deputy assistant for international economic affairs during the first trump administration. we told my colleague that the trump could mov

the former fed vice chair. retail sales and jobless claims out. you got a second look, what did you see? mike: we saw a rise in motor vehicle sales and a fall in building materials. gasoline prices were up and you have to take those out to get to that control group. in the control group everything was up. we saw a big rise in grocery store sales and general knowledge -- merchandise sales and sporting goods. the only thing that was down was health and personal care, i guess you skipped your haircut during the month. and then when you looked at jobless claims i know that people will be looking to see what the california impact is. california reported 13,000 extra over last week jobless claims during the week, and that is on a not so easily adjusted basis. that is one reason we saw the number go up because this was -- there were more jobless claims expected that the seasonal factors figured. one last thing, the air passenger fares up 10.6%, which will add to pce. overall. a lot of details under the hood. in genera

the fed in _ inflation? it is interesting. the fed in the _ inflation? it is interesting.the previous i the fed in the previous meetings had really thought that inflation was under control, and putting the focus of the labour market, which would make this week's that are extremely important. in the last meeting we heard from the fed, we are not so sure inflation is completely under control, it has been quite sticky, there are things that could make inflation heat up a little bit more, going forward, with some of the new policies coming from the administration, whether it is tariffs, increasing demands with tax cuts. there is different elements there that could push inflation a little bit higher, so the above sides of that mandate they are going to have to look at. the labour market is going to be very important, it has to hold up in orderfor consumption to hold up, which is the majority of the us economy. it is a very important report that is coming in the next 30 minutes or so, let's see what openings look like. the concern we are seeing is that companies are not hiring.

fed minutes yesterday.pecifically there wasn't anything hawkish from that lawyer speech we heard yesterday afternoon. it was his dovish comments that calmed the bond rout at least in the treasury market, for instance he did say that he believed inflation will continue on its trajectory downwards. he does support for the rate cuts but it was his comments on tariffs that the market found specifically interesting. he said he doesn't expect tariffs to have a significant impact on inflation. he noted the broad uncertainty around that and went on to say that tariffs are unlikely to shift his view on monetary policy. it calmed market down a bit. we are seeing a bit of calm when it comes to the treasury market. it's an early close for jimmy carter's funeral taking place in washington later today at 2:00 p.m. eastern time close. lack of liquidity perhaps we will see a bit of calm when it comes to the treasury market today. eyes on the 30 year old -- 30 year yield. some other markets have not found calm yet. tom: the

sometimes the reaction that the fed might have. so i think we are worried in the sense that the market is pushing this theme of less inflation normalization down, quite far, and possibly putting too much probability on fed hikes. if that's the case, if the market really worries and the fed potentially continues fueling that worry that you might get hikes. that's a big worry for the market. we could see bond yields continue to push higher and i think in particular, the concern is the back end, because the back end is to some extent, finding equal librium, no one is comfortable. you go a lot with recent experience. so, the longer the front end rates are higher, the longer the front end rates continue rising, the more you need to put up that neutral rate. that's the process currently. >> it's interesting, even discussing the possibility of a hike seems to some extent a little farfetched, because it is such a change in narrative for the fed. but i would like to understand from you as well, to put all into context. we started with marke

we are not ruling out the possibility fed the fed does cut. we are still in the camp that the next move is more likely to be down than up. sonali: a lot of uncertainty still ahead. we thank you both so very much. have a great weekend. up next we will talk about the auction block because it was a big week in the u.s. big u.s. banks have wasted no time selling debt after earnings. they have been flooding the issuance of schedule. we will bring you details next. this is "real yield" on bloomberg. ♪ sonali: i am sonali basak and this is "bloomberg real yield." it is time for the auction block were issuance surged thanks to the big banks. jp morgan, citigroup, wells fargo and morgan stanley. bank of america also had big debt sales totaling $25 billion. overall issuance pushed to over $46 billion. another notable sale for the week was citadel. it sold $1 billion over two parts to fund a payout to its owners. we end with u.s. leverage loans as that area stays red hot to start 2025. volume around $50 billion with monday seeing the most launches on rec

fed i blame a large part of this. we saw the fed do extended qe for quite some time, and they were way too slow to hike. >> and i think they've. >> damaged their credibility. >> joe, always great to speak with you. thanks. >> thanks everybody. >> joe lavorgna where are we on inflation then? is it still a problem? is it coming down? is it under control? i mean, i. >> think it is a problem. i heard what joe said. it's fascinating, the commentary. tim just addressed it. >> but if. >> inflation is still a problem, lowering rates is not going to help that. now, i think what he's suggesting. >> is if they get. >> inflation under control somehow, then they'll have the. ability to lower it. it's but it's. what is one one leads to the other. >> i'm of the. belief that they should be. >> combating inflation now. >> and i think one of the. >> reasons ten year yields are going higher are because. >> of that. >> so let's just take home building for a second. if we have you talk about, you know, if. >> we have an immigration. polic

that is fed independence. the fed is not a creature of the president.f the fed derives from congress. the president really does not have the ability to meddle in those things. i am well aware of some times in the past whether it be president truman or president nixon where that has happened. i don't think it will happen here. what will happen is should trump try to cross the line, congress will slide at him pretty hard and congress has shown the ability to resist trump on all kinds of things including the pace of nominees so far. he wanted nominees in two months ago and that they should go immediately and we have just talked about many nominees that have not even gotten confirmations yet. dani: to stick on the point of the fed, perhaps not an issue for now but should we look at this as a view into what happens when jay powell's tenure is up, that someone like chris waller comes in for someone is put in place that will be cutting rates, that will be more amenable to the jawboning from trump? terry: i would put it this way, the markets have proven to me a

the fed doesn't have that in its models. each of the fed models are broken.erest rates. the other is on how you use the balance sheet. they have used it very harmfully in terms of the lost money. third, the regulatory policy. the fed has this massive control over lending to small businesses and that hasn't been going well, but that can be repaired and fixed. you get more output, less inflation, you can bring interest rates and bond yields down. jonathan: something you have talked about a few times, david, i'm sure we will have this conversation again in the future. in the bond yup -- bond market, bonds are lower on the front-end of the curve. with an update on stories elsewhere, here's dani burger. danny: joe biden said that he's determined to peacefully hand over power later this month, writing in an op-ed published last month that he is determined to do everything he can to respect the peaceful transfer of power and restore long respected traditions in america, adding that he's invited the incoming president to the white house on january 20 and i will be pr

the real question you might ask is did the fed overdo it by a quarter?s it have to put that quarterback? we are here in the sense that -- there is that three month average. you can see how much it tanked which is exactly what kelly evans was talking about, the two in the middle. >> the data started to turn around right after that cut but this is where fed speak could have kept up with that. okay, yes, we see the stock market taking off. we see the date is getting better but we have been hearing the same thing from them since september. you know, maybe a few more rate cuts are warranted. >> the 50, which i opposed at the time, was a mistake. quarter, quarter, quarter. >> you said would you rather have the jobs or the rates? if the rates were locked in you would rather have the jobs but a lot of people were hoping mortgage rates would come -- they don't care hat the fed's fund rate is! they want to buy a home, so they care about the mortgage rate, i think. no one sits around the table saying -- well, maybe we do. >> the realtors at the time to talk to us a

the uncertainty is real for the fed.was not the time to back away from some of the forward-looking heuristics we have. lisa: mohamed el-erian would agree with you. what patterns are you observing that you think are going to be important and prescriptive for what is to come in the u.s. economy? claudia: i keep all eyes on the labor market. it's such a linchpin to the resilient economy we've had an ongoing recovery, in addition to millions of lives depending on their paychecks. i worry the fed is somewhat complacent. i think they are being hypervigilant on inflation. most of the officials laid out in the last economic projections are pretty optimistic one on the labor market and saying we are back to normal. we are back. mary daly used the term equilibrium. one vacancy for when unemployed worker. they project that is stay with us. we got back to the place. we will stay there. there are other dimensions you can look at, particularly the differences between hiring and the firing. when the hiring does not look good, the firin

officials -- hear from fed officials?y adjust those views. pretty solid, around 160,000 for december. expecting to see unemployment stay around 4.2%. it will be a reminder of u.s. exceptionalism and therefore underscore the views we have been hearing articulated from fed officials but we will see the number and how that transpires if you get significant softness, maybe employment -- maybe unemployment going up. let's flip the board and have a look at inflation expectations and the prints out of the euro zone. pmi data and inflation later this week. markets still pricing in about 98 basis points, almost 100, 1% in terms of cuts from the ecb. you could seep a bit of a move up that she could see a bit of a move up -- you could see a bit of a move up. that's down to fuel. they see that trend continuing. tuesday, we will speak with stefan, the eu's commissioner for prosperity and industrial strategy, on europe's political and economic headwinds. up next, is the opening trade. stay with us. this is bloomberg. ♪ lock in let's go

will continue to pause, it's unlikely that the fed will begin hiking but the fed needs to see conclusivepect needs to see conclusive data, both with respect to the labour market and with respect to inflation before it will feel confident by cutting by more than 25 basis points over the course of the year. us president—elect donald trump is likely to follow through on his promise to impose blanket tariffs says one of his former economic advisers. he served as deputy director of the national economic council and the beauteous influence national economic affairs during the firstjump administration. he first jump administration. he told firstjump administration. he told my colleague michelle fleury that drum could move very fast once he is in office. so, in the first term, was part of these debates, we had a lot of these debates, we had a lot of deliberations about tariffs in whether they should be used, how they should be used, what statues should be used and today, we are in a position where it seems to be determined, they are going to be used so, there's not a lot of deliberation about th

we do have a fed meeting coming up next week. in your mind, what do you expect from the fed? what do you expect the market reaction to be? a lot of this enthusiasm is based on the idea of these trump policies. we know he can't really influence the fed. they're an independent organization, but the tone of the fed does that weaken? does that kind of raise the investor enthusiasm about this so-called trump trade? >> the fed is going to try and play it right down the middle, i think not only this month, but probably for the first six months of the year. i think the futures have it about right, that maybe there will be a cut in june and maybe, maybe there will be another one by the end of the year. the inflation data, the employment data, the strength of the economy is, is all indicating that rates are actually in a fairly good place right now, on average. and, you know, they could they go higher? sure. but the fed isn't going to raise rates unless they absolutely have to. and they see that in inflation, which we're just not seeing yet the employment numbers that we just saw are m

on the fed policy tight rope in 2025. equities yesterday and raising recent tech fueled gains. alicia of b.n.y. wealth. we expect more volatility in 2024 but a positive year because the consumer strong. the fed, though pausing for nowrks still has accounting bias. good morning. how constrained is your view given the most we are seeing in this bond market? alicia: i think the bond market here is pricing for the worst case scenario for what the upcoming administration could or might do. which isn't a bad set up for the rest of the year. in the end the talk about tariffs on everyone and everything, every border we might have, whatever those borders might be -- jonathan: some are imaginary lines, particularly that one in canada. annmarie: the truth of the -- alicia: that is the conversation. the anxiety about that is seeping into the bond market. i think just want to refer back to the fed press conference back in december which jay powell said some of the voting members incorporated future policy which is very rare because we

i think that's really a much better model in the fed should pay attention to that reasoning.one that felt that way there are certain things that people look at and say we're out of fed funds rate that was quite close to where we were when inflation was at 40 year highs we're not there anymore should the rate come down but i'm interested to know which side that you fall on when it comes to the fed's belief and particularly jay powell has been that the fed is apolitical and should not be beholden to any politician or any president that they should be independent do you agree without. >> is not a matter of being beholden i think when the argument gets silly talking about federal reserve independence it is to say would you listen to president trump and i don't people think the fed should be no, no, no i'm not going to listen i'm going to follow the direction indicated by 300 staff economist at the fed some of them newly minted from grad school who have been not only consistently wrong in making predictions but also 10 . i think you might be interested in the opinion of someone th

fed action, fed policy is going to be responsive to data. we got really important news, the cpi came in cold. this is what we were expecting. we talked about this a couple weeks ago. shelter disinflation leading the charge. there was also reduced supercore inflation, so that's positive on the fundamental side. it gave relief on yields. you had waller coming out and kind of reiterate some sanity in the forward outlook for fed policy in my view, and so that kind of calmed yields gown, allowed equities to find their footing. in the background, this sell-off, we have retraced going back to january 13th. we retraced the entire post-election rally. if you look at bread and butter sentiment indicators. you get the spread between bulls and bears had gone from extreme bullishness right after the election to the most extreme pessimism from individual investors since fall of 2023 when the market was making a significant bottom. so yeah, i think it's been a nice sentiment reset, and the near term is going to be pretty constructive for equities. >> i was

the fed's base case. there is speculation out there that that could come again as soon march. it's going to put to bed the fears that the fed would raise rates this year, at least for now. it ignited a rally in the treasury market as well. those yields coming down near double-digit basis point moving the treasury market. that bond rout is over at the moment. it did ignite a further rally in the gilt market as fears about u.k. government being put to bed for now. looking ahead at least for the treasury market, we have u.s. retail sales numbers coming in at 130. we heard the treasury secretary picking up from trump. he has his senate confirmation hearing later today. we did get his statement where he said that trump has a generational opportunity to unleash a new economical the names for the u.s.. he warned that the u.s. should protect its critical international supply chains. he did critically back up u.s. needs to protect -- needs to ensure that the u.s. dollar remains the world's reserve currency. tom: we also have the bloomberg scoop around the boj thinking ahead of its deci

as the fed is sniveling today, you are seeing skittishness, confusion. look at the s&p 500.e have seen the s&p 500 go positive, negative, over a dozen times. there is no leadership, little bit of confusion. for the first time, as we get closer to this 5% level on the 10 year, people are considering massive profit-taking or rebalancing, because 2023 and 2024 were historic equity gains back to back. at this moment in time, it seems like the 10 year note may go to 5%, and that will have a little bit of an acute reaction to these high flyers or top 10 holdings on the s&p 500, which you can easily argue our way over concentrated. >> david, what would ou say to that? >> i agree. i think something you have to factor in, what do higher rates mean for the equity market? i think the problem today is that somebody people are yearning for the ultra low rate environment we saw in the last cycle. but they don't understand is that to go back to that ultra low rate environment means the economy has to collapse. we don't want that. what we want is normal. it's not going to be an overnight se

do you think all of this has to do with the fed and people having less confidence in the fed cutting one time this year and definitely having less confidence in them cutting two times this year? >> as you said, the bond yields is all about the bond yields. the ten year, we were on with you in december and saying we could get to 5%. i think that's still our baseline that we get from 5% to 5.5% at the high end. now it would be a normal and healthy economy. it is possible we have the yield curve uninverted, but the ten-year is around 50 or 55 basis points higher. the normal is 00 to 120. that would be another 50 basis points hawaiier higher from he. that does put more competition. the earnings yield is less than the ten-year treasury compared to tips. there is more competition. >> you are saying the bond market is creating competition. not necessarily the bond yields have a fundamental reason to selloff. i do want to ask, we see so much mania in the markets. we see the a.i. trade. are you seeing sentiment has shifted so much that people thought there was no alternative to anything but e

the fed's target is 2. then, taking out food and energy which is stupid, but for so-called core that is 3.2 for last 12 months above fed's 2% targets, three month dhairve changes are worse. i am arguing that fed should take winter off, spring off, go south, go fishing, whatever they do, don't go to california. and wait until mr. trump's big beautiful single tax cut energy border bill goes through. before the fed does anything. whatever the fed will do, they will screw it up, i mean that sincerely. >> you are right, their preemptive strike cuts rate was a disaster, inflation is not coming town, cleave cleveland fed. they have not moved. the trimmed means 3.3, been there forever. those are not coming down, those are signs of underlying inflation. there is no decline in underlying inflation, we get month-to-month up down this and to but not 2% or near there fed will realize it. and they will created this false expectation they cut rates two times. >> so taylor. i operate under the rigorous analytic principle w

traders now betting the fed won't cut rates before july. we will get minutes from the central bank later today. samsung gains after a vote of confidence from nvidia's ceo. that's despite a profit mystery jensen huang tells us he is ready to meet u.s. president-elect donald trump. and, trump let's loose on foreign affairs threatening to absorb canada, sees the panama canal and take control of greenland. tom: after the tech-led gains of one day, it was the tech-led losses of yesterday fueled by stronger data into pushback in terms of market expectations as to where the fed lands with its next cut. as we said in the headlines, now not fully priced that next cut until july of this year the second half. european futures pointing lower 0.2%, taking the baton from a miserable session in asia and the weakness in the u.s. with the drop of well over one and a half percent for nasdaq and hundred and was 100 futures are currently flat rate s&p futures looking to gain 0.3%. nasdaq 100 futures looking to add 67 points, up 0.3%. big losses from nvidia in

the fed, the market.ls of the data you can look at and tell a different story. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: an important two hours coming up. cpi at 8:30 eastern time. numbers from goldman sachs in about 30 minutes time. after that, numbers from citi. following number some j.p. morgan and wells fargo. equity futures up by .4% on the s&p 500. similar on the nasdaq. yields are lower. giving a helping hand to risk. following eight days without a single day of falling years on the 10-year that yields on the 10-year -- yields on the 10-year . the outlook from jamie dimon pretty good. dani: for interest income in particular very good. that might be attributable to the fact of what the market is grappling with. rates are going to be coming out as much as we thought. as lisa would say, it is not a toxic cocktail. she's not here. it is the perfect cocktail. a delicious cocktail of rates higher, volatility in markets because of president tr

you think the fed would raise rates? it might have been something you said before that, but he said the fed would lose their credibility if they raise rates. do you see that as a real possibility going forward? >> i do see it as plausible. this is not about a choice. if any of us had a choice, we would prefer for rates to stay lower and we would prefer for the cutting program to continue. i think if it is to become a reality, the fed simply won't have a choice. we start to get into mass deportation, trade wars and tariffs, deficits, cuts on taxes. i think you're going to see a very acute inflation and the fed won't have a choice. you have seen two governors come out and say that they decent from even last month's cut. so, you know, i think at the very least, we're going to see a pause. i'm going to refrain from saying it's likely that we see a raise, because by the time that becomes evident, it become accepted that the feds have no choice. >> i want to ask you about a red hot sector on the markets over the last couple of

the fed gets its latest test on its rate path this morning with cpi. the "worldwide exchange." i'm frank holland, coming up this half hour we're going tee up the critical data point and what it could mean for the fed. >>> but first we kick off the half hour with a check of u.s. stock futures with the s&p and dow on two day win streaks. the nasdaq however, that's on a five divide a look at futurings right now green across the board. the s&p up fractionally just about eight points and dow up as well 75 points and moving a tick higher. the nasdaq the best performer up just about a quarter of percent or 45 points. and we want to look at the nasdaq 100 gainers right now. take a look right here the top list. cdw up over 1%. followed by warner bros. discovery and pdd holdings all rounding out the top five. speaking of gainers. quantum stocks here on "worldwide exchange" coming off a massive rally on tuesday and some jumping as much as 48%. but they are still well off their recent highs and let's take a look at the premarket action and you can see a lot of gre

that's the point that you are making for certain. >> yeah. >> what happens if the fed, if the fed doesn'tmore this year, however outlandish that may be, maybe once, maybe none, is that a problem? or does it not matter as long as the economy remains strong? >> i think it will happen because the economy remains strong. for the past three years, there has been talk of a recession. that is largely behind us. it could come back of course. but i think interest rates have normalized. i think 4.5% on the 10 year bond yield is maybe plus minus 25 or 50 basis points. it is kind of the range we will see for the next few years. that's what we had for the great financial crisis. the economy is resilient and it is growing at a decent base. i think it will grow at a faster pace. i'm bullish on productivity. you put it together and you get an economy that is strong with low, moderate inflation and the stock market moves higher on earnings, not valuation. >> what part of the market do you like the best right now? if we are talking about earnings, getting into tomorrow with the banks for example, what doia

revolution is still going strong. >> let's talk about the fed.ng tools for 2025. one is bull market and the other is the long game of the artificial intelligence. we just hit on that. the pace of interest rate cuts. we heard from kugler and daly and that's what they're saying. how should it change the view people have on the market and investments? does that make you more nervous or should investors stay an narrow, maybe not on the mag seven for the mega cap tech names? >> the path is lower. we are expecting 50 basis points in rate cuts this year as opposed to 100 basis points of rate cuts we were expecting back in september. we get another 50 basis point cuts in 2026 and perhaps lower in 2027. if the path forward is lower short-term interest rates accompanied by moderating levels of inflation, that provides tailwinds for stocks and bonds. again, don't limit yourselves to the seven large cap technology stocks. look at other areas like bio-tech and aerospace and defense and others that have not participated yet in the rally. >> i want to get to yo

the overnight fed funds rate will stay steady. the back end will move higher and it will be more positively sloamped time. sloped over time. cheryl: yesterday, president trump made a deplanned on interest -- demand on interest rates and inflation watch. >> over the past four years the government racked up $8 trillion in deficit spending and crippled regulations and hidden taxes like never before. the result is the worst inflation crisis in modern history and sky high interest rates for our citizens and even throughout the world. food prices and the price of almost every other thing known to mankind went through the roof. i'll demand that interest rates drop immediately and likewise they should be dropping all over the world. cheryl: all right. dennis, not to be captain obvious here, but the fed controls interest rates. that is seen and i believe that was the first shot at jerome powell. >> that was his first shot. he will have more shots at mr. powell over the course of the next several months, no question. the president has very

lisa: we didn't talk about the fed yesterday. the fed decision is tomorrow. no one is particularly excited for it. they expect it to be no change and not a lot of insight. there was a move in the bond market yesterday on the heels of what we saw on the tech space, which was i bonds, yields lower, expectations of growth lower. do think that that has legs? is that telling us something about what the ramifications of the tech developments are? peter: it is telling us a little about that. we are seeing a lot of chatter that the rent is coming down. that has probably been the last outlier of cpi. what will they be looking at on the jobs front? i think some data has overstated the health of the jobs front. the put rate is like a crowd source where people actually decide if they want to put or not. you look at the impact of immigration, i don't think that it's a problem because the lower paying jobs are not that robust. does powell stick with the official data and not talk about cutting come or does he hint that the labor market is soft and that puts cuts back on th

the fed is still not really giving up on their fed pivot and a lot of these interest rate cuts have beenotential for , you know, a buy the news-type reaction in tlt if inflation data come in a little bit softer than expected or the labor market softens a little bit more. it's just right now, we really have an extremely hawkish situation pricing the bond markets. i'm looking to maybe catch a bounce. we'll see if it happens. charles: well, we get the jobs report friday so that could help clarify. hopefully it will help clarify stuff. adam see you soon, my man. >> thank you, charles. charles: folks in the last few weeks, we have seen just a complete reversal of the woke world and corporate america. last week jpmorgan joined all these wall street firms saying forget about the climate alliance and look what's happening on social media. the business world getting on board with president trump. i've got rebecca walser to tell us what it means to for your portfolio, next. from starting out... whatever you need you guys give me a call! ...to saving up... ...to income in retirement. you got this.

not if the fed keeps raising interest rates.al bank, that monetary policy ought to be independent from the politicians. because politicians always abuse it. the problem is the the federal reserve has become politicians. and if you with look at the staff of the federal reserve, they have people focused on climate change, community organizing, community activism. the chicago federal reserve is focused on lead water pipes. now, i don't want lead water pipes -- [laughter] charles: right. >> but we have an epa. we have an environmental -- why is the fed doing this? so i think doge and trump ought to to go after the fed. but i, i would be careful having politicians set interest rates. charles: right. >> but the problem is that's what the fed's doing today, and they have turned into politicians. charles: right. and i think on the behalf of the american people just this thing called accountability. brian, thank you so much. always appreciate our conversations. >> thanks, charles. charles: my next guest timed her 2025 outlook -- titled h

the fed cut interest rates three times in 202a. then, growth has remained very resilient in the united states, far ahead of its developed fears. —— peers. gdp for 2024 was expected to be 2%. the reality is closer to 2.5%. so, we could argue that lower interest rate policy has provided the medicine the economy needed to kickstart which we cannot say for the european union, or the united kingdom, so the fed has done a good job. however, what i think we can talk about is that after the blowout us monthly job support earlier this month, more than 250,000 jobs raided in december, markets completely dialled down their height on fed expectations this year. should these tariffs come into play, should they impact consumer spending in the us economy, which is the highest contributor of gdp growth that impacts the everyday person on the street, and should that lead to a downside risk on economic growth this year, then yes, the fed may cut more than once in 2025. everyone is looking at inflation but not reality which is the direct impact on th

the fed will cut rates. one more thing is the fed will cut rates. they are a good friend for the market, but not as good of a friend you thought they would be. they will cut rates, but less than expected. why do we say that? the fed funds rate is 2% over inflation. it is pretty restrictive. also, you look at the fact that uncertainty with economic growth pushing growth higher. take all of this together and inflation and economic growth, there's uncertainty. the fed will still cut rates. the fed needs to cut rates in 2025. >> worry about market concentration. that was the issue raised in the final trading days. the magnificent seven is 95% of the gains give or take. that's a lot of concentration and narrowness in the market. does that concern you as we go forward? >> definitely. we talked about this before. one of my biggest new year's resolution is fomo to jomo. the joy of missing out. looking at stocks beat on the magnificent seven and large cap growth. last year, the s&p 500 had 57 record closing highs. if you think about the trading days we had l

and the fed's decision-making process this year.— and the fed's decision-making process this year.e uk now — because the government has been defending its handling of the economy amid growing unease on financial markets. that's seen the pound drop to its lowest level in more than a year — and government borrowing costs surge to a 16—year high. uk assets have been among the hardest hit amid worries the new trump administration will mean higher inflation and less global trade. chancellor of the exchequer rachel reeves is on her way to china for talks. she hopes to build closer business ties with beijing as part of the government's quest for economic growth. but investors are not looking positively at the uk as veteran market expert michael hewson told us earlier. it's a crisis of confidence, i think in the uk as an investment destination. it's not really been helped by the recent budget from the uk government, which has clobbered businesses. and while it has been a global phenomenon with respect to concerns about sticky inflation, and obviously the us economy is in focus today becaus

charles: fed going to hike rate s? cuts till the third quarter at earliest, too early to predict rate hikes and i wouldn't dismiss that possibility. after all, never before in history have we had the fed cut rates bay full percentage point while at the same time the 10 year treasury yield rises by more than a percentage point. the bond market disagrees with the fed as far as the risk of higher inflation and where the economy is headed. charles: bonds are a central portion of people's portfolio and a lot of viewer haves 60/40 portfolio and easy money for many years and it's been straight down and unmitigated disaster. but, now that it's yielding 5%, people are saying it is attractive and it's come down a lot. you can lock in 5% and this might be a better bet than buying the stock market right now. your thoughts on just tlt as investment here? >> going up -- out more than one year, it's a good investment but not ruling out higher possibility of even higher treasury bond yield and corporate bond yields over the next six m

the fed can only have power over the short end. to your point, the economy's growing -- >> doesn't matter. >> term premium. that's what we're going to see. the fed has no control of whatever the ten-year is going to do. >> in regard to powell, your point, guy, about, he's made mistakes, of course he's made mistakes, but he does say what he's thinking. even when he made mistake, he said, you know, this is going to happen, it's transitioning, it's all those things. but at the end of the day, he's telling you what he's really thinking he's going to do, and then unless he gets a whole series of different data to change his perspective, that's what he's delivered on. the market's been wrong the last two, three years. >> they were finishing hiking but they didn't cut all last year, and the market did fine. >> right. that's the point there. >> is that because they anticipated cutting? >> some what, but yet, still, a lot of businesses were doing fine. >> yeah. >> well, joe has been very bullish on the market since the election. just days a

so if that was to be passed on to consumers, it would have fed into inflation. many economists have been sending concerns about how mr trump's tariffs could make their cost—of—living crisis worse. their cost-of-living crisis worse. . ., worse. thanks for get -- getting _ worse. thanks for get -- getting us _ worse. thanks for get -- getting us up _ worse. thanks for get -- getting us up to - worse. thanks for get -- getting us up to speed i worse. thanks for get -- i getting us up to speed with that situation. staying with with the us: tiktok�*s china—based owner, bytedance, would retain a stake in the company, but data collection and updates would be overseen by oracle. it is a big week for markets, with of course, into inflation. and, of course, many economists have been sending concerns about how mr trump's tariffs could make their cost—of—living crisis worse. their cost-of-living crisis worse. ., their cost-of-living crisis worse. . ., worse. thanks for get -- getting _ worse. thanks for get -- getting us _ worse. thanks for get -- getting us up _ worse. tha

now everyone is focused on what the fed is going to do. sonali: if you think about the fed's moves and where it could hit policy implications in the near term, and you have an issue where you have janet yellen writing to congress, saying the new debt limit right be hit around the time of inauguration, you have a speak about happening as we sit here now, how do you really parse through those critical moments when policy can start to up and the bond market a bit? ed: with respect to the debt ceiling, the treasury buys itself a little bit of time through these extraordinary cash management operations. i think they still have, perhaps well into the second order, to manage that. where it is going to impact us on the right side is with respect to the fed's balance sheet. we are going to start to see tensions in terms of excess liquidity, the lack of t-bill supply starting to attack the front end of the curve. when we think about further out on the curve i think the good news for now is we are going to have to wait for the ticket items. most impo

part of that is down to reassessing how far the fed will go.e cuts this year, even suggesting the next move could be a hike. part of the risks around tariffs of course as well and this additional debt and deficit concerns and here you can see the russell 2000, one of the biggest beneficiaries on expectations of tax cuts from the incoming trump administration has unwound those gains and is now a negative territory. the s&p is not far off so that trade has deeply unwound. does that have further to go given the yield you could now be ticking up on a 10 year treasury versus the earnings yield of the s&p, which is about 1% below that 5% level and do you march higher above 5% and start targeting six? big question for the markets as you look at the pressure on u.s. stocks. further pressure on sterling today. markets and traders increasingly bet you could get below 120 on pound versus dollar, about 2% below where we ended friday, some putting on bets that maybe you get below 112, which would be a move lower of about 8%. rachel reeves hopes to address t

what we learned this week in fed minutes was that the fed in their last meeting was very much on hold. what we heard from the st. louis fed, since september, his view is the world has changed. this is a new member and it's very clear within the fed that is so data-dependent, if anything, we're now out to march, at best, on a cut. yes, that's what the market is digesting. it's been a lose-lose market for equities and bonds over the last five weeks. we haven't done this since back to 2023. but it feels a lot like the early stages of when the fed was telegraphing that they were hiking. we're not getting anything close to that. that was historic in terms of what they did in '21, into '22 and '23. but markets came into all of this with cash levels for professionals at lowest levels we've seen in a long time, complacency, bitcoin going through the moon. we came into this period of rising rates, set up for volatility. volatility not comfortable, not always bad. >> so an excuse to lighten up positions, or is the pace of this rise in rates, is that actually scary? does that actually factor int

we are joined by former kansas city fed president. he was chair of the fdic and also played a supervisory role for banking while he was at the kansas fed. thanks for joining. does today cpi data put a cut or multiple cuts back in the cards? tom: different people take different interpretations but i thought the cpi was up 2.9%. core was slightly down. overall inflation is not coming down. that is the message i got from it. as i look at the economy more broadly i think we are in what i will call a modest inflationary boom. we are coming off a strong 2024. you saw the bank earnings. strong earnings there. i think our investment in the fiscal side is stimulative. i am all convinced that inflation will come down. you look at interest rates. the inflation rate -- let's give them the benefit, 2.5%. if we want to take that number with the policy rate of 4.1 he 5%. real interest rates are not substantially high. that does not strike me as a tight monetary policy. given the recent cuts it is more of an accommodative monetary policy. there is a