does the fed care about that? >> of course. the fed has to the care. they make policy for the public good, not for a few select individuals. and if whether you're talking about mortgage rates, credit card rates, auto loan rates for your average working american man and woman, they're still way too high. charles: all right. let's talk about this for a second. wall street thinks that that scare, that spike of the 10-year, that it's over. we can now see buyers are starting to really pick up here. this is jpmorgan, their clients are buying treasuries. >> and they were just a hot minute ago -- charles: selling them. right. >> and now we've seen a major flip in positioning. charles: so is that, to you, does that suggest to you that that maybe the coast is career? >> i -- the is clear? in. >> i wouldn't say that necessarily as much as a there's a lot more uncertainty going forward about where this economy is headed. charles: so but why would wall street be buying? it's a dangerous guessing game -- >> it's not if wall street's starting to price n as waller sai

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

the fed, the actions of the fed.s been true for some time, and it will absolutely be. >> true. >> for this year. it is driven by the data. we do not have the data that will decide when the next fed cut is. we just don't. and powell doesn't have it and he's not going to give it. so trying. to infer that. >> from what. >> he says. is just noise. so we. >> just. >> really need. >> to be careful about you know, we want to hear that information, but that just is not known yet. so be careful. >> yeah. >> claudia. here's and. >> it's brian sullivan here. >> here's the problem. i think the. >> federal reserve. >> has. >> as somebody who has gone. >> across this. >> great land. talking to people. >> the fed. >> has no control over a lot of the inflation that we. >> actually feel. >> i mean, they can't do anything about automobile insurance rates. they can't do anything about home insurance rates. i doubt they can do anything about health insurance or health care costs. right. we know that eggs are soaring because of avian flu

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

the 500 is sliding ahead of fed 77 fed decision 77 fed decision and 77 eyes the fed decision and allbegins. i know they want it, i know how focused they are, and i have no doubts we will perform what we want to do to go you never know.

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

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

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

a fed cutting cycle. usually bonds rally when the fed starts cutting rates. but that didn't. >> happen at all. >> in fact, rates went up. >> so i think. >> that inflation is not going to easily go back. >> down to 2%. >> we're well. above 2%. i mean, we're at 2.9 on the core cpi and you know, or 2.6 or 2.7 on the headline. i mean, we got to get below. two and. >> a. >> half, i think. >> to talk. about putting. >> rate cuts back on the table. and chair. >> powell was quite clear. >> in stating. >> that we don't need to see a 2.00 inflation number. and i think. >> he. >> uses the. pce primarily, but we don't need to see 2% to talk about cutting rates. it's almost like it's the direction of the cpi. and right now the direction of cpi is sideways and he needs it to start. >> coming down. >> i see that the owners equivalent rent can filter through. there is merit to that idea, but i. >> don't really see. >> it from the commodity complex. >> and we'll see what happens with tariffs. >> so there's a lot. >> of un

will then the fed headline be? is not really. >> a headline that. >> we want. >> to have. >> yeah. >> totally fair. and i very. >> much agree with. >> david that. >> we're likely. >> to see. >> hopefully nothing. it should be a quiet meeting if all goes according to plan. for powell. the things that will come up as a potential headline are how the fed is looking at tariffs. are they going to going to see through it like they talked about in the september 2018 book, or are they going to have to react in a more hawkish way, which was a negative one for markets. and then of course, how are they going to be thinking about immigration? now? trump has already announced some policies that are going to be reversing what biden had put in place in terms of immigration. so we're going to have a reduced labor labor supply. so how is the fed going to be thinking about that? is that going to be factoring in a potential for a lower unemployment rate and some upward pressure on wage inflation? >> yeah. so david thinks we could be

fed has to take into consideration?not really. if you hear from jay powell they could have similar broad-based ramifications for the economy, that would be a potential market moving event. jonathan: we don't speculate but we kind of do. some of us do. let's see if our guest speculate this afternoon. coming up, lisa shalett as investors await the fed decision. nicolai tangen weighing in on u.s. tech dominance. former senior white house trade advisor to trump kelly ann shaw. we begin with stocks higher in investors catching their breath before the first fed decision of 2025 and big tech earnings this afternoon. lisa shalett saying the surgeon long-term bond yields has created a headwind for u.s. equities, which if -- have written valuations for the better part of 27 months. the narrative is focused on show me earnings achievement. good morning. achievements over in europe absolutely stunning. we saw how stock investors rewarded them. do you look forward to the big tech players over the next week? lisa: tech is under the s

of course today is fed day so happy fed day. policymakers are set to make their decision in two hours with investors not just focused on jay powell but the first wave of big tech earnings. here are where things stand at midday with the s&p 500 down about .4%. you have technology shares and rates while financials are higher. speaking of, the mag seven losing 1.3%. meta, microsoft and tesla will be reporting at 4:00 p.m. we will break those numbers as a cross. profits are rising faster than the overall market but the rate of growth has slowed down and eased to the slowest pace. that is something to keep in mind. not a whole lot of movement in the bond and currency market and not a lot of people want to get ahead of the fed decision and the press conference at 2:30 p.m. you can see the dollar inching higher, 7% in the for -- in the fourth quarter and down about .5%. let us highlight individual equity movers and bring in isabel for that. >> shares are edging lower and we are seeing in just renewed pressure after yesterday seeing an

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

he was politicizing the fed.out tariffs, they asked him -- will you talk about d.e.i., no he would not, talk about deporting people. >> no. and h he i think got rereligion overnight, trying to g bit back to fed's lane where he should be. larry: i don't believe the tariff, whatever j. powell may or may not have said, yoibi don't believe that the tariff fire is over, i think -- tariff fear is over, i think you have a lot economists whispering in his ear. colombia, the trump threatening colombia on accepting deported criminals, back to colombia, we didn't get the 25 or 50% tariff, because of trump's tariff d diplomacy, i think, from the stress room said -- press secretary said yesterday, sounds like canada and mexico are helping us sufficiently, u.s. government, on the border, so we won't get those 25% tariffs either. so interesting, people who are crazed about tariffs they don't understand trump, they don't understand his negotiation, they don'tn 't tariff diplomacy because he is so good at it, we don't get the kin

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

i want to ask you about fed employment. i know that tax money is not used here, but elon musk says that the fed is overstaffed. we've seen the executive branch push to reduce the work force. >> we run a very careful budget process. we're fully aware that we owe that to the public and we believe we do that. i've got no further comment than that, thanks. >> chris at associated press. president trump says he will lower inflation by reducing gas and energy costs. do you see such costs as a particular driver of inflation and would lowering them have a dramatic effect? >> chris, i'm not going to react or discuss anything that any elected politician say so i'll give you a mulligan. >> thank you. nearly two weeks ago the fed said it was withdrawing from the network for greening the fm system even as we have significant wildfires in los angeles doing billions of dollars in damage of course ngsf is a group to talk about how the financial system could address climate change and many see the timing. and why did you leave that organizat

the fed's hawkish cut.pretty much at the same level moving just a few basis points again after that hawkish cut in december. we're going to talk about roger ferguson about all that coming up in just a second. and we've been talking a lot about tech and valuations in tech this week following deep sea. but another trade that's been very quietly bubbling up. it's the value trade since the fed's hawkish cut again back on december 18th. and since then we've seen a lot less optimism about the number of rate cuts this year. take a look here at the chart. the value trades actually outperformed growth. if you look at these two russell etfs the iwd and the iwm. you can see here the value trade outperforming up about two and almost a half a percent. since that hawkish cut. the growth trade however down over 1%. taking a look at those moves again tip of the hat to craig johnson of piper sandler. we also want to look at energy, those markets that continue to digest the potential impact of trump tariff and trade policies

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

it was a fed day and not much happened and left rates unchanged.tariff thing, they've got to figure it out. i'm kudlow, we'll be right back. turning into their parents , the neighborhood is their life. wonder who's visiting the burkes. that's not their car. hey, guys. who's winning? [ giggles ] now most of the neighborhood uses progressive -for their cars and house. -okay. she didn't ask. ohhhh! [ sighs ] progressive can't save you from becoming your parents. but we can save you money when you bundle home and auto with us. here he comes...like clockwork. [ giggles ] hey, grab more delectables. you know, that lickable cat treat? de-lick-able delectables? yes, just hurry. hmm. it must be delicious. delectables lickable treat. is strong enamel. nothing beats it. i recommend pronamel active shield because it actively shields the enamel to defend against erosion and cavities. i think that this product is a game changer for my patients. try pronamel mouthwash. larra rhode islander the fed is more worried about trump tariffs than interest rates and money

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

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

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

it's not in the fed's interest.hat to be addressed pretty quickly. >> jonny, some sorry excuse me. something i keep an eye on acquisition financing. it moves out of your investment grade area more into high yield, but spreads are very tight. so even though rates are high, spreads are very tight. and so high yield financing still may be not bad in terms of, you know, is that going to continue in your opinion? >> so it's actually. >> a fixture not only in the. >> leveraged finance markets, but it is a big fixture in the investment. >> grade market as well. >> as well. decent backlog in ig. there's a couple more that have been on the tape this morning. i would expect that to continue to be a fixture. and you're. >> right. even with elevated. >> input costs in terms of cost of capital, i think companies that we speak to around the world, whether. >> they. >> be ig rated or high yield rated, are finding investment options either in their own businesses or they're finding acquisition opportunities external to their busine

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

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

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

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

reporter: i want to ask about fed employment. i know tax money is not used here, but elon musk alleges the fed is "absurdly overstaffed." we've seen the executive branch push to reduce the federal workforce. i want to get your reaction. chair powell: we run a very careful budget process. we're fully aware that we owe that to the public, and we believe we do that. i've got no further comment than that, thanks. reporter: i'm from associated press. president trump has said he will lower inflation by reducing gas and energy costs. do you see such costs assist a particular driver of inflation and would lowering them have a dramatic effect? chair powell: i'm not going to react or discuss anything any elected official would say, so give me a mulligan. reporter: two weeks ago the fed said it was withdrawing in the network for the financial system, even as we had significant wildfires in los angeles. of course, this is a group to talk about how the financial system could address climate change. many commentators did see the timing as poli

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