on the positive side, not taking as much off as the atlanta fed does now. it's a model. it's not the perfect model at the atlanta fed. >> what we have seen as you well know, steve, and i'm sure you'll show us in the way you answer this question, is that probabilities for rate cuts have only been increasing, in part because of this slowdown that people are worried about. >> i that is absolutely true. we can show you those probabilities. they went up by like ten percentage points, especially, by the way, for that second cut being all the way forward to september. member scott not too long ago, a week ago, that second cut was maybe and very tentatively priced in for january 2026. now you've got a solid support for one big first cut in june. i think the market is a little ahead of itself. scott, when i think about how the fed could be gaming out these tariffs, these tariffs come through. they create a rise in the price level. but it will be uncertain as to whether or not they create broader inflation. and the way that the tariffs right now look to be playing in the american

the atlanta fed mike mentioned before, i would put that to the side that was heavily influenced by a huge surge in imports we got in january. i'm betting tim seymour took note of that, and that ended up taking 3.7 percentage points off the atlanta fed number. so they got down to -1.5%. other economists i'm looking for are still looking for a slowdown in growth, but more in the, say, 1 to 1.5% positive place. >> steve, i love how you know exactly what i'm thinking, especially during those moments. by the way, steve and i overlapped in russia back in the day. i'd love to talk to you about russia, but maybe we should save that for another venue. i, i want to ask you about jobless claims this week. this was the week we cared about jobless claims when they spiked 24%. it's a very volatile series, but it seems in the context of data more broadly that wasn't supportive to the. and you add in some some spending and some consumption numbers. are you worried about this number? did the market overreact to jobless claims? >> i'm going to take austin's language on that. i'm keeping an eye on it.

at the same time atlanta fed went negative on gdp, the new york fed raised their guidance, so i thinkt's going on is exactly what you said. you've got a lot of angst over tariffs. if we're importing more goods, because other countries are trying to get in front of the tariffs that's a negative. that's a detraction to gdp. it also looks like our exports slowed down this last month, and so that would also be negative because it's usually additive to gdp, so just like when we got those two negative quarters a couple of years back and everyone talked about stagflation and recession, i don't think that is what's going on. amazon tells us the consumers still pretty healthy. walmart said the same thing. they are a little more price-conscious, and in those numbers we got today the savings rate went up which is not necessarily a bad thing so i think you do what peter lynch always says and don't let the markets scare you out of stocks because a lot of this volatility is driven by the short-termers. charles: so but do you remind folks also speaking of the peter lynches of the world about a longe

-- reading out of the states, and then adding on to what powell has said we will hear from the atlanta fed raphael bostic as well. get a roundup of the stories you need to know to get your day going on today's edition of a break. -- daybreak. we have plenty more coming up on the program, not least getting into those abn amro earnings with the cfo. plenty to discuss with him, next. this is bloomberg. ♪ lizzy: welcome back. it is 6:12 in london and we have had earnings out of the dutch bank abn amro reporting operating income for the fourth quarter that beat estimates, net interest income 1.6 7 billion euros, beating the estimate of 1.6 one billion euros so a slight beat but i miss when it comes to the outlook for net interest income, 6.2 billion euros for 2025 compared to 6.4 billion euros. so let's get into it with ferdinand, cfo of abn amro. great to talk to you. >> thank you for having me. lizzy: net interest income trajectory for this year, given we have lower rates from the ecb. >> thank you, first of all i think we had a good finish to the year if you look at our net profit in the fou

atlanta fed's raphael bostic warning that policy changes could lead to a material slowdown. chicago's austan goolsbee saying tariffs could rival the economic shock of covid, he said could. plus, housing set for another soggy spring selling season. we'll talk to the ceo of tripoint homes about that, with shares down 16% since earnings earlier this week. but first, before all of that great news. let's get over to dom chu on today's market front. >> dom. >> all right. so the great. >> news is. >> we did hit a record high in yesterday's session 6147 for the. s&p 500. so i'll put that number right up here right now. for context 6095 is currently where we're at. we're down about maybe three quarters of 1%. that's 50 points to the downside right now. that's tilting towards the low end of the session. >> at the highs. >> we were still down about ten points but down about 60 points at the low. so there is. >> your. >> range so. >> far tilting towards the negative side of things. the dow industrials off 627 points. that's a 1.5% decline 44,000 on the number right now just about the na

cheryl: atlanta's fed president expects the fed will cut rates twice this year and warns officials mustgilant because of the uncertainty that could affect employment and inflation. >> the labor market rarely agrees with bostic's prediction of two rate cuts this year. there's only 51% implied probability of two rate cuts for 2025 when i last looked. we have cross currents and what's going on right now is we have evidence of rising price inflation. we've gotten some recent readings from the federal reserve district banks of new york and philadelphia that are showing us some of the highest readings on prices paid and prices received by regional manufacturers since early 2022. we're seeing the steepest upswing by these indices since the start of 2021 but on the other hand we're getting warnings from walmart of slower consumer spending and on top of that we have that weak reading on jobs growth for the month of january. so the fed might be stuck between a rock and a hard place and the inflationary pressures that are not going away may delay what turn out to have been badly needed rate cuts a

this is the atlanta fed.ing away anytime soon, is it. >> 100%. we've been saying that the equilibrium core pce rate in the u.s. economy is somewhere in the high 2s, low 3sful many in our view, their going to be unsuccessful getting it down to the 2%, and they need to start using their balance sheet to help -- charles: they've resisted that though, kicking and fighting. >> you know why? because they let the inflation genie out of the bottle, and they're playing mop-up duty as to opposed to having a forward-looking, first principles monetary policy -- charles: but they don't have to be wedded to the 2% number. why can't they go to 3 senator? >> does this 2 percent number come from? been saying that since january 20 to 22. charles: today we had walmart's warning, and later we got the leading economic indicators. folks, you can see all the red. they've been negative if for a long are, long time and, you know, there was talk about recessions and all this stuff. people are looking at the data the way they once did,

atlanta fed president raphael bostic, he said this morning that, quote, pervasive ambiguity calls for caution and humility when it comes to making policy. bostic still sees two cuts this year, but he said, hey, there's a pretty significant amount of uncertainty around that call right now. chicago president austan goolsbee, he said the more tariffs look like a covid size shock, the more nervous you should be. he's really worried about the supply side effects there. and then what scott was just talking about saint louis, alberta muslim saying immigration policy and higher tariffs are a potential source of higher inflation. and it could be appropriate for the fed to become more restrictive if inflation from that is sustained, he said. the fed could also look through those higher prices from tariffs, but that the stakes are higher now because inflation is above target. what's clear is that the administration's policy path is now looming large in the fed's thinking about its own monetary policy path. >> well, very, very few people came into this year thinking there was much of any chance o

and we'll hear from several members of the federal reserve, including atlanta fed president raphael bosticof course, as we just mentioned there, it is nvidia's day that traders will be closely watching their numbers from the chip giant. of course, due after the closing bell. in the meantime, a final check on the european bourses. let's see how they're moving. at this stage. we have green across the board. even more upside at this stage for the dax, we're up almost 1.2%. significant moves over in france as well, where we're up about 1% to. all in all though, the momentum for european equities has been dominated the stock performance year to date. let's see whether. that's going to continue for the time being. however that is it for today's show i'm sylvia maria. stay with cnbc. worldwide exchange is. >> coming up next. >> in america. you love. >> alien tape. and now you can get. >> two rolls for free. that's right. >> free. >> introducing alien tape. >> the double sided ultra strong tape that bonds instantly. and holds on tight. just cut alien tape to size. place it where you want it, peel

and we think growth won't be 2.3%, which is what fed gdp says now at the atlanta fed for the federal think it will come in this year closer to 1 to 1 and a half. so it'll be a hit and growth. but the back end of this year you'll get through that because you'll be through that pain we believe. and the fed will be easing. and that's when the stock market starts to rock or trade higher. so we think the first half is going to be difficult. expect a lot of volatility. but the most amazing thing is no recession. and the reason why i'm calling for no recession despite rates being down 40 basis points for treasuries. and it's kind of telling you a little bit, be aware of it is because the credit markets are so stable. look at the credit markets. for now. for now. and i think that they're rock solid the credit markets because we don't see credit risk increasing. actually we see some credit risk coming out of the markets. >> but you're a believer. and you posted this i saw on linkedin one step back two steps forward. right. so that's how you are processing what's happening in washington. also

raphael bostic, the atlanta fed president, said very succinctly. pervasive ambiguity calls for caution and humility. while the effects of uncertainty haven't shown up in any data, it is tracked in several indices. here's one the economic policy uncertainty index. it shot up after the election, came back down, and now is the highest it's been since the pandemic. in fact, it's higher than at any time during the biden or first trump administrations outside of the pandemic. and you can see it's back about 60% of that uncertainty level from the pandemic level there. the trade policy uncertainty index, it has never been higher, far surpassing the levels from when president trump put tariffs in place in 2018 and might be at peace in crashing or declining consumer sentiment, increasing inflation fears. professor steven davis he created the economic policy uncertainty index with others. he tells me high levels of policy uncertainty encourage businesses to cut or postpone investments in hiring as they wait for the operating environment to become less risky a

. >> stayers and the atlanta fed. wage series, that's negative. that's very rare. that only happened during the depths. of the global financial crisis. >> and you have the spread. >> between the lowest income quartile and highest income. >> quartile also negative. >> something that. >> happened a little bit in. >> the early 20 tens when the labor market was struggling with. >> you know, household deleveraging. >> also negative. >> which implies. >> demand for labor. >> is really weak. >> so for me the labor market is in a very precarious spot. i'm not saying that we shouldn't be diminishing or trying to reduce government employment. i absolutely believe we should. we had government employment growing a percent faster than the private sector, and wages. >> growing. >> up percent faster than the private sector through. >> much of last. >> year, something that's only supposed to happen during recessions. but that could put downward pressure on the labor market. as well. so the fed's narrative that the labor market is fine and inflation is a. >> problem. >> i think is

two, 2.3%, the atlanta fed tracker. >> and i. >> have said. >> that i think. >> this year we are going to see about. 2% growth. >> versus three, 3.4% that we saw over the last. two years. >> and we're. >> not going. to see. >> 20% gains in the s&p 500. >> we're going to see maybe more like normal like 7. >> to 10%. >> a lot. >> of that is because. >> we. >> just don't have the fiscal stimulus that has been put, has been put in place over the last five years. >> we're not going. >> to have it this year. >> the trump administration is pro growth. >> but. >> they're not. >> going to. >> they're not going to drive that growth. >> by issuing a. >> lot of money and putting money. >> into the economy. >> they're going to. >> they're going to hopefully figure out. >> how. >> to lower taxes and do more deregulation. and that is positive. but it's just. not the juice that. >> we have had. that's number one. >> number two. yes. >> the momentum. >> trade absolutely is rolling over these stocks. this part of the. >> market has had an. >> enormous run. >> over. >> the last. >> several years. >> and

and the atlanta fed at 3.9 or something.on worries and what looks like a strong consumer you just showed and a strong economy. well it's hard to understand. >> it's. >> well i think the. >> one interpretation is that the long term, you know, the long end of the treasury curve is a little bit more sensitive to growth risks in the short term from whether it's from tariffs or elsewhere, than they than it is to some kind of long term increase in inflation expectations. you did also have some relief in the bond market when the treasury secretary set out the schedule for debt issuance, and it was not very skewed toward the long end. some of the market was kind of bracing for that. he's basically keeping more or less the mix that that janet yellen was, was going for. and as i mentioned, i mean housing has has struggled a little bit. and global yields have have really come down. so i think all that stuff together i mean let's be honest, we're in this kind of range here. it's not as if it's been dramatic moves. the high was like 4.8.

the light if it is at 2.8% -- the atlanta fed is at 2.8%. ger than anticipated. people say the fed is on hold. that is priced into the marketplace. the market is pricing in 30 to 35 basis point cuts are 2025 --for 2025. lisa: think against what we are seeing in the market. you say the market is a little incorrect with its pricing in of policy staying where it is. there a belief in the short term, two-year and five-year time frames you will see inflation move up because of tariffs and policy. in the longer term, inflation will come back down and you will see a sense of slower growth. do you reject that narrative? leslie: i don't. i think the market is doing what we expected it to do. the steepener will not come until the fed actually cuts. that's given the terrace we are seeing --tariffs we are seeing. the breakevens are what we saw from trump 1.0. you have inflation expectations. they take the cuts out. two-year goes up, the curve flattens. when you see the growth impact, the fed cuts and we will steepen . the path is exactly what we would ex

. >> it has to be because look we did you see the atlanta fed guided down yesterday. >> it was gdp. > glad because i am just at the point where i'm thinking that. imagine if jay powell is like, look, i don't care at all about the president. i made a mistake. rates have to go higher. i mean, no, we need to see a break. but i've got to tell you if you're going to deport a huge number of people, we're going to be at a loss. >> on jobs. >> oh, yeah. jeez. >> i thought it was notable what treasury secretary scott said yesterday on rates because he was asked about interest rates. i mean, this is a guy who clearly knows the market because when. >> he said what i was saying earlier, you. >> focused on the ten year, not on the fed. and he's right to do that because ever since the fed has been lowering rates, the ten year has been higher, right. so that's what they're focused on. and the good news for him is that, i don't know, the mid-january peak in the ten year was around 4.8. and now we're at about four. >> no one talked about it. it's come back down. it's kind of happy days are here again.

atlanta fed, gdp, now the survey data.confidence when uncertainty goes up. uncertainty is not volatility. uncertainty in the real world means people sit on their hands and they don't do stuff. it means investments already made. decisions aren't made. that is not good for growth. uncertainty in markets normally means a big dispersion in opinion about what is going to happen. in the real world is consistent with the survey softening ahead of the real data. jonathan: completely against the grain compared to where we were at the end of last year. that is what is intriguing for us. last year when donald trump won the presidency we saw a curve steepen and yields push higher at the long end of the curve. people were talking about tax cuts, issuance, heavier supply to come. have we parked that story? steve: positioning is important. we came in the year with a consensus position and position being a bear steepening of the curve. i did an interview with manus at the start of the year. i'm not meeting any bond wars. there weren't any

barkin: if you go back to november and december, the richmond fed and the atlanta fed did a survey ofimism on the economy went up significantly. optimism about your company flatlined. people are dealing with this uncertainty. we think this will be good but i don't know how it will play out in my business. small business uncertainty had the biggest jump -- optimism had the biggest jump in its 40-year history. it went up again last month. small businesses are saying they do the hiring, big business does big investment. it is possible we may see another year like 2019 where consumers are spending at people are hiring. investment sentiment is still a question mark. michael: what is your baseline for how you will judge the economy given all of the uncertainty going in a march 19? you have to make a decision one way or the other. the default would be to do nothing. where you see the economy ending up in the next six months while this cloud is over us? pres. barkin: the case for wait and see is you want to wait and see. i start with the baseline economy that the data is favorable. we had a p

that emerge from yesterday's hearing and the fed rhetoric, chicago fed president austin goolsby, atlanta fedraphael bostic talking about one month of data, two months of data, they can dismiss that. we are getting three months of data that is significantly hotter. it represents something else that is more of a trend and have to address in the forecast. jonathan: the hottest month of her month print going back to august 2023. it was a very different story elsewhere. after we got the headline that we had talks between putin and trump, the euro stronger, crude lower. you're a stronger 1%. brent crude down 74.32. lisa: it was kit jukes who said he could see the euro-dollar cross 1.15 if you did get an agreement between ukraine and russia. this has to do not only with cheaper oil prices for the or region, it also has to do with the supply chain of workers that came from ukraine as well as sentiment. if that happens, how does that bolster the idea europe is placed to invest at a time earlier this year everyone had left it for debt. jonathan: we are already at all-time highs. germany is rallying at

. >> atlanta fed tracker show.use it's. >> real time analysis. >> so you're running at about 2.3%. and it's really driven by the consumer. >> and it's because of. >> labor, the labor market. >> initial claims. >> and wages, even retail sales. by the way, last. >> week i know it got a negative. >> headline read, but you're still running at about 4% growth year over year. and inflation, it's sticky, but it's. >> come down. >> and the. >> consumer can can handle it. and so you add it all up. yeah it. >> is about earnings. and even. if interest. >> rates stay higher you're running at about 15%. earnings growth which is way higher than. >> i expected. >> and it's. >> not just revenue growth it's margins. and i think that's really the surprise so. far for me. so i think. >> we'll have to see how it goes. >> in terms of the. >> economic data points. >> but so far so good. >> and it's also. interesting that we. >> are seeing a pretty big broadening out. if i told. >> you at the beginning of the. >> year that europe. >> wou

atlanta fed gdp is tracking to 2.9%. small caps to historically do well from an earnings perspective. you look at something around two and a half. so we're trending better than that. and some of those headwinds to earnings we believe are starting to abate. if you look at borrowing costs. >> they are actually coming down. >> i know that's been a headwind to flows. but you are seeing that if you. >> look at the. >> secure overnight financing rate that's come down about 100 basis points. >> so we're seeing we're. >> definitely seeing some opportunity inside of all of those pressures are abating. and we think that's going to lead to better earnings growth which should lead to better performance. >> given where. >> valuations sit today. >> i'll just mention a couple. you guys like 89 bio ticker etn and ttm technologies tmi. so if people want to go check it out there if they're persuaded by your arguments stacy they can they can look into that. thanks so much for joining us this morning. really appreciate it. okay. >> thank yo

fed. officials yesterday, raphael bostic from. >> atlanta. >> susan collins from boston, saying that. >> uncertainty policy, along. >> with above target inflation. >> supported the fed's. >> decision to pause. while collins. >> told cnbc yesterday she sees eventual rate hikes, rate hikes. >> rate cuts, she. >> wouldn't commit to reductions this year. >> part of the complication. >> is just how complicated it is to figure out the inflationary effects of tariffs. so let's see if we can show that to you. if the fed could count on the complete tariffs. passing through to the consumer, it could figure out how much price would rise. there you go. >> you're 25% tariff. direct pass through becomes. >> a 25% tax price increase. but then. >> a. >> whole bunch of other factors. take a look. now stand in the way, all of which matter a lot for investors and consumers. okay. you have the foreign producer exporter could take a hit on their profits, as could the us importer exchange rates. in this case, a strong dollar can offset some of the impact for the consumer. in the us, retailers could take a hit. that expla

western rushers being fed constant to charleston, north driven plain towards the british owls and it's cold anyway, across much the plane. if you're and then if you bring in atlanta, can, you can produce a huge amount of smoke, not the moment that encroaching atlanta care is particularly active. as you can see, there's are breaks of light is framed through farms is no significant wind blowing . it will in on the shelves and the central metal disappeared about time. we get to the end of monday, so it's just a persistent code that breaks up. so i'm gonna start with mrs. lee in both are going to be overcast skies. brussels is a case in point 4 or 5 degrees over costs for next 2 or 3 days, some snow, but most of these just gray. and this one that's typical. take it down to the mediterranean or i barrier where things are all the better. but the shower, was it all around the central bank? would it be affecting libya and possibly on the 70? no. in egypt now, i'm sure we'll breeze the rest of north africa is dr. calls the seasonal windows full of dust. the shot was a trying to make their way into gonna ivory coats, southern nigeria though making much progress to be hones