i'm going to fill your alliteration today, the bullard bombshell -- i forgot the third one, the bullardmanus: bullard bond bombshell. dani: this is why i can't do it. i wouldn't remember it. it is the bombshell of a potential 75 basis point hike. let me see if i can regain my footing. i'm going to go to the facts. the numbers will always be there for me. it has been a relentless route in this bond market. is it going to get even worse? 31% drawdown from the top of the tlt, is the 20 plus year bond. huge drawdowns, $2.5 billion going into this fund so far your today. people buying into this -- so far year to date. people buying into this. manus: the japanese coming in -- that sums it all up. february 14, i think it was valentine's day, bullard launched the hundred basis point myth. since then 10-year yields have risen by 100 basis points. mission accomplished, he says. it is an easy lab to just throw it out there, shut out your inner greenspan, resonate to 1994 and laid out, 75, why not? you've got a license. dani: i think that's an excellent point, bullard doing some of the work for the

bullard, i think not, and i don't think bullard said it's an absolute slam dunk that he'd be in for 75e discussion that doesn't mean that he thinks it's likely. so i think the bond market has already done as much as you need to do and then we'll see in the next fed meeting how they'll shake out. >> the chip etf down 20% and nearly every stock in the smh is down double digits and today wolf research says that the semis lack of a support of the key technical level means they could break down even lower. seth, you recently reduced your chip exposure. which names? >> nxpi and lam research and it was just taking profits because i had bought these two years ago and i was up trij ple digits in these names and i'm nervous that as supply chains start to ease and they will eventually and we just don't know the timing, but i think you'll have inventory issues, because we keep seeing double and triple ordering just so that the companies meet demand and they said it on the conference calls i don't know the timing of when it will happen and lam in particular, wafer equipment. it trades on that stat,

james bullard saying the central bank needs to quickly raise interest rates. he's looking for around 3.5% this year with multiple half-point hikes. he also says they should not rule out an even greater rate increase. >> i would point out that the 1994 cycle where we raised policy rates 300 basis points in a year. in that cycle, there was a 75 basis point increase at one point. i would not rule it out, but it is not my base case here. tom: let's get into what this means and for assets with kristine aquino. let's bring you in at this point. we know he is the ober hawk, bullard, pointing to a 75 basis point. how realistic is it? kristine: i think we are not seeing that being born out in pricing in markets at the moment. we are seeing a little bit of -- in terms of how much markets are expecting from the fed for this year. we are closer enough to 200 basis points versus 250 basis points. i think what we are seeing is a little bit of fed fatigue because we have seen policymakers really up the ante repeatedly, markets responding to that initially. but now it feels l

is bullard driving the bond market? let's ask our policy correspondent, as well as grace capital president and ceo, cate faddis. his 70 points realistic or is jim bullard coming out of left field again? >> a little bit of both. it is realistic and bullard made the point that in 1994, the fed raised interest rates 300 basis points over the year, including a 75 basis point move. it has been done before. but does the fed feel that it is necessary and that it would not have a negative effect on the market? what did they know that we don't know? it has that kind of aspect to it. it is also a little bit of math. you are going to go 350 basis points this year. you are going to need 75 or a whole bunch of 50's to get there. but as he said, it is not the base case. it is not likely, but as he said, if necessary. i guess that means if inflation keeps rising significantly. anna: and let's bring in cate faddis into this. [indiscernible] what are you expecting echo -- expecting? >> i think i would be buying at this level. i am sayin

so they are way behind jim bullard. there are a lot of people in his camp, including bill dudley, former president of the new york fed, now bloomberg opinion columnist, senior economic advisor to our bloomberg intelligence team. he said the slower the fed, the harder the landing. the 60's and 70's, inflation was not tackled forcibly and early, and it kept ratcheting up. they are all in favor of a faster move and they say of the fed does not do it we can have a longer-term inflation problem. haslinda: the boj's kuroda trying hard to justify his super stimulus policy, even as the yen weakened to a 20 year low. kathleen: we just saw the yen have weakest move lower in, what, 50 years? 13 straight days. it is that 127. the traders now, the short position is pricing it 130 tht -- to the dollar. he said yes, these rapid yen moves can affect businesses and cause trouble for companies. he thinks it can be a problem. he thinks the boj will have to take into account negative factors like this weakening yen. however, he is not expe

bullard was the loan center, favoring a half-point increase. has triggered mass unrest in recent days. the central bank lifted its key rate half a percentage point to 4.5% for a ninth straight hike. policymaker jobs are being complicated by the chaos engulfing peru. highway blockades and disrupted food supplies while the government has lifted the minimum wage to help with rising costs. and in pakistan, the supreme court has rejected a parliamentary ruling that canceled a no-confidence vote against the prime minister. the vote will now be held on saturday, which dashes his plan to hold a new election. pakistan's central bank raised rates by 250 basis points in an emergency meeting. the key rate is now at 12.25%. the eu is banning coal imports from russia in concert with the u.s. it blocks most russian ships from entering the eu, puts penalties on russian banks as well as strengthens export controls. sources tell bloomberg eu members have also agreed to start talks on a next round of sanctions, which could include oil. the united nations general

louis fed bullard said steve liesman. hey there. interesting headlines. >> reporter: for sure. this is an event i was moderating but i think, melissa, i'm struck by how kind of cool bullard is about all of this. he says we need to do 50s at almost every meeting, bring the rate up to neutral and see how things are going might do a 75 but he wouldn't rule that out. how cool he is about the impact on the economy i must have asked him eight different ways to sunday about whether all of this would cause a recession. he says quite the opposite he believes the unemployment rate would continue to decline he believes the economy will continue to grow above potential, some of the clearing from inflation will happen naturally. the most important is inflation expectation. he thinks you can have a hot economy and have the fed going up very quickly to neutral he used the 1994 example when the fed raised 300 basis points in a very short period of time in about a year and launched one of the best periods of macroeconomic performance in the history of the country >> so what is his case of the r

bullard 3.5%. your call?aed: right now, we actually went the market overall -- where inflation is, we want -- what the fed is talking about is normalizing rates norman -- relative to the transitory inflation cycle. we are at seven plus right now, the fed eventually targeting at 2%, this is contingent on what plays out in terms of the cycle. if we do see supply chain -- supply constraints that we could see the step back. we think we could go to 2.7%, going back to pre-covid levels and seeing what the transfer looks like. if we see it increasing inflation, that 3.5% number might be the fed's target. we may see the fed move more aggressively. so long as we see -- don't see the inflation running away is of the fed will be comfortable. dani: you are still bullish on u.s. equities, even if we see an aggressive fed. what would you say to those who are less optimistic because we have the fed, who is prioritizing inflation over everything, including growth. they willing to sacrifice that growth story. what you say to

bullard seems to be ahead of the curve.shing the 50 basis point idea before many others were. he made the point that the 75 basis point issue has happened before. it goes to show you where the fed is in terms of its mindset. esther bullard a few months ago was out on his own with the 50 basis point. now others are talking about it. that is all about trying to get the fed rate back up to something neutral. he says 75 is not his face case today but who knows where we will be in a few months especially if inflation continues to accelerate. 75 may be the new 50. >> the latest on that slew of concerns. you can get the stories you need to know to get your day going in today's version of daybreak. we have plenty more ahead. this is bloomberg. ♪ >> we are tracking the fallout of the global supply chain crunch. volkswagen says it has gradually resumed up production at two -- at two of its plants in china. the status of another base in shanghai is still under evaluation. sources say tesla has restarted production at its shanghai fact

being bullard? they'll do 50 in may 50 in the next one, but here's the thing, i think if they look in the summer, scott, i think this is what bullard was saying to give him his due, is that if they turn around and they say, you know what? this is not happening the way we want it to happen. we're not getting a hold of inflat inflat inflation and we don't see the rate coming town and that's when we'll start talking about 75 i don't think it's imminent and it's in the tool box and i hear two people on different sides of the -- what do you want to call it bird spectrum here thinking it's a real possibility and saying, you know what, folks it's out there as a possibility. >> it is interesting, jim lebenthal to what steve showed us before about what the market thinks the fed is going to do whether the fed thinks it or not and that's left then to investors to try to figure out exactly what's going to go down. >> yeah. so to this investor, and this will come as no surprise to steefr because we've had this c

bullard. how does he square the circle here if he thinks inflation might come down at the same time as the economy grows above trend and unemployment is really very low? >> yeah, it doesn't make sense in a classical framework, but what he did, tyler, was pointed out in the interview i did with him yesterday, to this paper by tom sergeant who looked at four hyper inflations in europe in the early part of the 20th century. he says they all four ended pretty quickly when the monetary authority and the fiscal authority changed their regime when it became obvious to the public that they were not going to stop. they were hell bent on ending inflation. that's when inflation went away and did so without massive unemployment in that sense so he says that the paper argues that the perceived cost of ending inflation through recession is well overstated >> ah. very interesting okay, thank you, steve steve liesman. so how do you invest when there are so many questions about the health of the economy? shoul

some comments from jim bullard.the more hawkish end of the spectrum when it comes to what's happening with the outlook for the fed. you were joking about this a moment ago as we were listening to mark. bullard is leaning toward a 50 basis point hike but will not say it at the meeting -- will not prejudice the meeting. he's already gone down that road. a lot of people probably would vote for 50 basis points the last time around. >> bullard actually did, he voted for it in march, and now he says he's unconvinced in may. i wonder if he almost means they should only go 50, because he says 300 basis points off is how far away the fed is from where it needs to be, so maybe he says he wants to go bigger. >> let's say we are at 50. he is saying potentially 3.5%. wonder if it is still underestimating the picture. you wonder whether he will one more later this year. fascinating comments. this is bloomberg. ♪ >> 34 minutes until the european close. as it comes to the close, european stocks down. rolling over the last couple ho

>> i think powell's being given a lot of air cover by bullard. he could do 50 and we can have a sigh of relief when you look at the interest rates that go up pretty much every day. and when i look at what's happening, the consumer, according to brian moynihan who's on "mad money" tonight is so strong, that if you want to slow this thing down, you got to do what bullard's saying this thing's a juggernaut. >> that does lead to stories like the one in the journal today which basically says hot economy, rising inflation. the fed has never successfully fixed the problem. >> that's the armageddon story >> all right, but i mean, janet yellen was quoted as saying it will require skill and also good luck one doesn't always have to rely on good luck >> soft landing. >> oh, no, tit's the u.s. economy. >> and they had bob reuben in '94. remember you crushed the euro, and you crushed the dollar >> yeah right. >> and you've been talking about. there was a time when you thought inflation was going to be transitory. i think at this point we've all given up on th

bullard is not welcome at the st.inals box seats that he has, but this is a guy who wrote about regime change and a modern siri which the fed has almost stumbled into. we are in a regime change, and in his own way, leading the discussion on dudley, but in a different way. jonathan: he showed me some shredded money from the money museum at the saint louis fed. tom: i've been there. very good. jonathan: i'm not sure what the message underpinning that particular message was. are you trying to make a trip? tom: road trip to a cardinals game with mr. bullard. jonathan: i am down for that one. tom: let's move on from 75 basis points to 75 people standing in line at tsa. kriti gupta provides wisdom. kriti: we've got to talk about the mask mandate dropped after a federal judge basically overturned the ruling saying that in public laces, whether it comes to metro lines, airlines, uber rides, you no longer have to wear a mask. that is important when it comes to the airline industry, which has been lobbying more and more for the

jim bullard thinks you need to go much higher than that.nk bill dudley is making the same argument. if that data in that particular part of the economy does not respond in the way that some people anticipate, maybe that is the story still to come. tom: let's get on that with someone who has won a number of trophies for trying to get the economic estimate game correct. gregory daco joins us, chief economist at ernst & young. you are with the consultancy in a meeting with a client, and they go, where are we in a year? where are we in a year? gregory: i think we are at a lower point of economic activity. we are seeing the fed pressing hard on the brakes and wanted to press even harder on the holiday breaks is going to ask enjoyed that. tom: how do you respond to the recession blue man trying to go out 12 months, 24 months? when you are an award winner at this, how do you guesstimate out 18 months with this crazy economy we are in? gregory: first you have to understand where we are in the business cycle. we are in an economy that is still quite

we talked with a bullard and he is looking at 3% from the third quarter. barkin and brainard on the other side of the ledger. that's assess where we stand on inflation. -- let's assess where we stand on inflation. vincent: -- needs to do more looking at the latest inflation print. tom: is 9% too far? vincent: i think inflation is the story. at some point, there is the question of inflation peaking at some ways. we shouldn't slow too much of the economy is in coming months. -- economy in the coming months. we are looking for 50 basis point rate hikes in the coming meeting and it will be dependent for the fed looking at the inflation data. i am convinced that inflation is sticky somewhat and we have seen that already for used cars. we may see hopefully's in the course of the year where we have some form of agreement around the situation in ukraine, we might have less tension on oil and gas prices. to me, it is a matter to look at that. tom: maybe starting to peek in some context. you mentioned the earnings and a kristine, -- and kristine, i want to bring you

fed officials, bullard warns the fed may be behind the curve, call

jim bullard things to percent, not 2.5%. mike: mr. bullard has been pretty hawkish, let's say.r as neutral, it is flexible. the fed announced an average target a couple of years ago. never divide what average meant. neutral being around 2%, i suspect higher than that. i would turn it around a little bit and say, where does the fed declare victory, what is a good result for the fed? 2, 2 .5? is it ok for the cycle? tom: on the construction of the real yield, we have a nominal rate with a second derivative up, some real convexity in the 10-year yield. you get a residual which is the inflation-adjusted yield. which of those three numbers is the most interesting to you right now? mike: real yield, inflation-adjusted yield. that is why if i'm investing for the long run, getting a negative number for the treasury curve tells you that policy is still very accommodative. the bond market is not very attractive for most people. you are putting money to work on an absolute return basis, individual investor filing into bonds, only if you are really risk-averse. as far as the prospect going

then we look at the narrative from bargains to bullard and from brainerd. wonder, are we getting ready for a time where we don't have just one 50 basis point hike but a series of multi--- a series of 50 basis point hikes. let's get to neutral rapidly. bullard thinks it's fantasy to talk about modest rate rises. are you ready? is the market ready for multiple 50 babs? tatjana: the market is not ready for that. from my point of view, they underestimate the risk of inflation being so persistent. what seems to be a peak might -- now might be a plateau and it will stay for some time. i am much more cautious. i would expect that the rate hikes be much more aggressive than what we anticipate or what markets anticipate. dani: let me play dead will -- devils advocate for you. you get this decision to hike 50 basis points. most economists didn't think that would be the scenario. the market reaction was pretty muted. the game in the kiwi dollar came back. some of the rise in bond yields in new zealand also came back as well. is there not a degree where markets are pre

breaking right now the market continues to go from the one-two punch remember jay powell and james bullard both spoke in their tough talk has investors scrambling to reimagine fed policy and of course, its execution in the impact on these markets. we're going to dive into all that over the next hour and share adjustments you may want to make in this period of uncertainty. plus, a big time money manager warning that the world is being hit with war, famine and the plague, so do the fours horsemen of the apocalypse signal the days or the end of the past, and cathie wood'sa fund has taken on water but meet the man who says there's more downside, in fact he created the anti-wood eft and guess what it's up big time all that and so much more on "making money." another brutal day for the market, which had actually given some signs of life this week. in fact, coming into today's session, the s&p 500, the new york stock exchange, the dow jones industrial average, even the russel 2000 were higher for the week. the upside moves came on light volume but otherwise, even improving internals and yesterday

and that underscores i love the bullard steve liesman segment.thank goodness the market isn't too lazy to take that on joe, back to you >> thanks, rick. diana oleck joins us now what do you think? >> i just want to say the mortgage rates are definitely having an effect on the builders when you break out single starts in permits versus multifamily the big gains are on all the multifamily said that are not affecting by multifamily single family permits down about 2% for a single family starts. and that's because we saw the 30-year fixed start the month of march at 3.9%, end it at 4.67% now we're at 5.25% you're looking at a change of $250 more on a monthly payment for a $400,000 home, which is the median price of a newly built home the builders are seeing that i spoke to a builder yesterday he said buyers in our backlog are having trouble qualifying at these latest rates so that's what builders are looking at going forward on the single family side obviously still very bullish on the multifamily side, and that's why why you're seeing this big discr

jim bullard said a 75-base raise is not the base case evans said 50 but may have to go above neutral. san francisco fed president yesterday daly said the fed would deliberate and not rule out a 75 either. december funds rate contract added 40 basis points. nearly two quarter-point hikes trading at 2.70 for december all of that leading the market to believe that maybe the fed floating a trial balloon of 75 hikes. the august yield of 1.92 suggest a 34% probability of one 75-basis hike. the fed seen hiking to 3.4%. august of next year or so. the market may be ahead of itself the hike would come after two or more 50s andself inflation reports that show what they are looking isn't working. i don't think they'll be quick to ratchet up to another one guys >> let's talk a little bit about what we expect by the end of this year. where do you think the fed funds rate will be we were talking with someone yesterday. it occurred to me we haven't begun the raising of interest rates. >> no. and that's -- two parts to that answer there which is obviously a great question i take the fed or most of the

louis fed president jim bullard earlier. exactly.be enough. walk us through whether we are going to continue to see a fed that's already hawkish become more hawkish when you think about bullard has been first out of the gate as of late with some of this commentary >> i think you like to run, right? you know that there is pace in distance, right? so i think the fed right now is at the pace that it can go i don't think that it can push the market much further. this is towards the upper end of the quantitative tightening estimates that were out there. i don't think it wants to go much faster on the qt, and now that it's talking about 50 basis point hikes,i don't think it wants to go much faster on rates. so the extent to which the fed is going to do more is going do more in distance than it is in terms of hurrying up the pace. i think they put that together david, can i give a perm observation? i think it's interesting all this qt sounds like it's a huge mess. if it's so hard getting out, why get in last night is emceeing the council fo

liz: bullard wants 300 basis points by the start of july. before we go, john, the housing market -- so i've been hearing chatter -- home builders are down at this hour. not by much, but what are you seeing when it comes to the flows in and out of home billion dollarer -- builder stocks and the related sectors. >> you're seeing interest rates going higher, first-time and second-time home buyers have been paying top prices, and they're now getting scared of those price advances. we're going to see that trickle down into that sector. just a matter of time before it all snaps, and we're not at that inflection point yet, but we're getting close. continue to get rates above 5% for an extended period of time, and you will see it. liz: did you score an invite to the cyber rodeo? >> no, i was kind of hoping to piggyback off of you. [laughter] liz: yeah. you can't depend on me, i'm never invited to anything. i'm so uncool. john, andy, thank you very, very much. >> thank you. liz: president biden gearing up to nominate two candidates to the security an

very different from bullard talking about 75 basis point hikes not taking that off the table. >> yeah, i mean, there's clearly two sides to this story. and i think the reality is we're kind of in this wait and see mode, where we're trying to determine which way growth goes. and the fed is going to play a very critical role in making that determination, right? so it was encouraging to hear that he's saying that they're reiterating that they're going to be data dependent, they're going to follow and wait and see what happens to the growth trajectory from here it also, you know, is probably comforting to some degree to investors that potentially he's taking off that 75 basis point hike at the next meeting but -- >> not on the radar, he said >> right right. but the market is already pricing in several rate hikes this year. we're looking to get to the end of the year with 2% to 2.75% on the fed funds, which according to him is the neutral rate that's a very swift pace to get to that level. and there's going to be market implications there you have already seen a lot of volatility i

. >> harry bullard no asistiÓ de forma presencial, fue representado por su abogado el la audiencia.ue pese a los cargos su cliente es inocente. >> creo que estas personas deben entender que una persona es inocente hasta que se le declare culpable. causaron indignaciÓn entre los amigos de caÍn velÁsquez. >> por qu Él — quÉ Él no fue? Él no sabe. >> que los abusadores realmente paguen por lo que hacen. >> el caso continÚa bajo investigaciÓn. el movimiento liberen a caÍn adquiriÓ mÁs fuerza las redes sociales. entre ayer y hoy llegaron mÁs de 40 personas. >> con consignas este grupo de personas lo esperaba fuera de la corte. >> me contacte con la oficina y me dijeron que hasta el momento han entrevistado a 20 padres de familia. le piden a la comunidad que si tienen informaciÓn sobre el caso se contacten de inmediato con el telÉfono de emergencias. [disparos] ramÓn: estas imÁgenes responden a la balacera que se desatÓ entre cuatro personas. el hecho armado se registrÓ el viernes 8 de abril en la ciudad de oakland. paola: las autoridades quieren encontrar a los sujetos que ven en pantall

jim bullock -- jim bullard coming out saying he expects the rate to be around 3% to 3.2 5% in the second half of 2022 after the 50% -- 50 point hike in may. the concern right now is how hawkish the fed will turn and what the market applications are. we have seen the fed minutes yesterday talking about reducing the bond holdings by as much as $95 billion per month and we saw the reaction across global markets. haidi: the inflation picture remains to be seen as to what happens with eu and u.s. energy sanctions to russia. at the moment, you look at the data that bloomberg has access to. it looks like russia is managing to sidestep the fact that it is still finding buyers for energy. we have seen several chinese firms using local currency to buy russian coal in the month of march and cargoes of russian crude from the far east have sold out for the next month. bloomberg economics is expecting that russia will earn $320 billion from energy exports this year which is up one third from last year. we saw a remarkable rebound in the ruble. shery: let's discuss the latest developments. the war in u

the most vocal we have heard our jim bullard and chris waller, and he has talked about his own reality of selling his home in saint louis, but cannot buy anything in washington because the market is crazy, as he put it. they are having these real-life experiences that everyone else is. two people incidentally -- jim bullard talking about a three quarters of a percent like, those are the ones that are most aggressive on a rate hike. interesting to see esther george and charlie evans talking about the need to get rates up, on board with a half percent hike, but also worried about the measured pace. markets have moved up, but they don't want to get too far ahead and trigger a bigger credit down. we are starting to see tensions with japan and their exchange rate. tensions with the living economies and their exchange rate. every time we think about raising rates, those other economies have to defend their currencies, and that is a house of cards for the federal reserve to balance on that tight rope. tom: what is business investment doing? you have a unique view on that. is the confidence st

the fixed rate mortgage, but over the next couple of years, if the fed follows tom barkan and jim bullard'sdvice and we end up at 4%, is this a bit by the american people that the fed will be able to bring inflation down and will be cutting rates before things reset? tom: there will be a third inflation series that he will dive in on as well. a change perspective on the american economy. kathy bostjancic joins us now. thank you for joining us from oxford economics. what has changed for you on the duration of high inflation in the last 24 hours? kathy: happy to be with you. the numbers just confirm our views that we have had for a while now. inflation is intolerably high, and you are hearing that from fed officials. that is why they are saying we need to get to neutral quickly and move to restrictive. we will debate whether the peak in consumer prices is in, whether that is march or may, we think april, but the real issue is how quickly does it decelerate. there, most believe it will be much more gradual than previously thought. we still see a headline inflation is still above 5% by the end

louis fed president james bullard getting bearish. a rate hike over 50 basis points, that's .50% to you and i, is not his case he would not rule out a bigger hike at one meeting this year. >> i would point out that the 1994 cycle where we raised policy rates 300 basis points in a year -- first of all, that one was successful and set up the u.s. economy for a stellar second half of the 1990s in that, there was a 765 basis point hike i would not rule that out. >> joining us to talk about that is erin gibbs. erin, good morning i don't know if you are a baltimore ravens fan i'll make a football analogy here is how the federal reserve feels to me, erin. the ravens are behind 47-2 or 42-7 or whatever it is the coaches are finally deciding that they need to ramp up the offense with about 4:00 left to go in the game that feels like what the fed is doing right now. got way behind the inflation curve and now talking about making deep passes or hail mary plays to come back do you feel like the fed is just so far behind the curve at this point it

louis fed chairman or fed president james bullard mentioned with the need for 75 basis point hike and this is something they are pricing in but it had to go there almost immediately and that's never good when it has to move that fast. the survey of the big-money poll, a lot of neutral, half the respondents. it doesn't happen often but might not be scared enough at this point. jack: it shows they are not sure what to make of this market. one more question. can earnings save us? >> we hope to, apple, microsoft and the rest of them. if the numbers are good they can arrest the drop. look at the charts on these stocks, keep your fingers crossed and hope for the best because it is not looking good. jack: it is not looking good for netflix. if you didn't sign up for netflix during a lockdown pandemic you were never going to sign up and looking ahead to earnings it could be a big move and it sure was. jack: i wasn't sure which direction but we found out quickly, first subscriber decline in a decade and there could be a bigger subscriber decline this quarter. investors, the stock lost 35% day.

and so you're seeing that at 75 basis points comes to pass as bullard suggested, that the financials are going to be the biggest beneficiary, and the valuation levels are great they are a sector that hasn't had these huge run yu7s like tech i think financials based on the valuation is a good place to be. >> i see energy, you like here as well. thinner ji, that's the shorthand they call it in the market mark. h are you concerned the trades are crowded? if not, why not? >> i don't think the energy trade is crowded guess what one of the largest countries in the world owed billions of people -- on lockdown right now. once that comes out, this is going to create a tremendous amount of demand, and so energy has to go up if people are spending it. the lockdowns are keeping energy prices at bay for the time being. china is not staying locked down forever. >> and maybe this is a place where you guys differ the most, ava. i sensed your enthusiasm for financials and energy is much smaller and maybe you would even say it's a place to avoid right now. >> well, energy is pricing elastic. we think

so you have james bullard, who wants to go very, very fast, and you have others who want to take a more measured approach, and i don't think in this environment it will be easy to predict where inflation will land by december. we will just have to wait until we see the numbers and they will react to them as they come along. jonathan: bob, what is your read -- matt, what is your read on this? matt: i agree with bob and kathy. those month over month prints will be key. also paying close attention to the trend mean measures of month over month inflation, which have already peaked at the pce index level, the core pce index level, so that is important, and also, just on the 50 basis point versus 75 basis point issue kathy alluded to earlier, i mean, look, a 50 basis point pace of rate hikes is plenty. 705i think would send a message that the fed is scared and that is not what the central bank wants to make everybody believe at this point. jonathan: matt, we get to what we think is neutral quickly. that is what the consensus is. let's get there. 225, 250. once we are there, in the fomc, what

so talk to me because you also had james bullard, st. louis fed, invoke ising the 75 basis point hike if necessary. i believe that's what he said. 75 basis points, we were just getting around to being comfortable with 50 basis points s. that a possibility? >> i don't think it's going to happen on may 4th. i think james bullard has been a bit of an outlier, actually, on both sides of fed policy in recent years. but i don't think the federal reserve should do it. they should gradually increase interest rates because the key thing is that there are a lot of long-term disinflationary force toes which will actually kick in later on, you know, in 2023 and 2024. they can't really kill flakes right now. they could kill -- inflation right now. they could kill the economy. so i think the federal reserve has to gradually increase. i think 75 basis points is too strong, and the great danger is today raise rates too much at the end of the just when the economy is weakening, and that increases recession. we don't want them to be too aggressive here. l

by making it -- by digesting a 75 basis point hike without proper conditioning i don't think the bullardnd bailey story, if he didn't speak about it for the record. >> the point you make, i think, is so great and it's the idea the current going, you know, with the people who are going to be spending all of this money on travel you hear it from kishy and ed bastion of delta and you see what's happening in airline stocks they're selling out business class. you can't get a business class on these that current feels stronger than the current created by 50. >> in the meantime, you have the supply chain that takes the edge off inflation and you take out the oil supplies in russia and wheat supplies from ukraine and russia >> the point, though, too is that you think the market has gotten away and too far. thank you, steve liesman >> i just want to say one caveat i think what happened is the market's gotten angry here and said, you know what? the fed keeps moving the ball on us here and now we'll get out in front of it and that's where the market is right now. we're going price in even the remot

but then jim bullard is saying it should be 3% to 3.5%.e will see whether the markets are on track to front run the fed. kriti: that is in addition to balance sheet reduction, right? which we know has been chairman powell's playbook, that he combines rate hikes with balance sheet reduction. if you are already looking at 50 basis point hikes, that is a hawkish move. >> the fed -- nobody else, really -- has an idea what is the impact going to be. they can quantify better the idea of adding to the balance sheet and how it pushes down on long rates but they are not sure the dynamics when you go the other direction. there are estimates from 25 basis points to 150 basis points. the fed is going to put it on automatic pilot and just watch what happens. just to see how much movement we get. if they get a lot, they may cut back on some of the quarter-point, 50 basis point moves that are right now being priced in. kriti: a lot of this has to do with the jobs market, right? recession odds at 35% over the next few years. a lot of it is based on the ga

we have talked about this for so long when about bullard throw out there the possibility of 75 basis points when he threw that out there, he led the fed down the path toward hawkishness since -- >> he's hawk heavy >> right here we are and nobody wanted to -- >> i think the stock market has been behind the fed curve. the bond market is pricing it in we looked at that chart last night. hyg continuing to go down. if the stock market is behind the current trajectory projected, if the fed were to hike intermeeting, it would throw up -- >> i don't think the relationship statistically to the market is what matters it is fit fund futures and the perception of rates. that was strongly associated for months i think it is about the perception i think can they get incrementally hawk frisish from. i don't think they will. >> i don't think we have seen an environment where companies had a chance to tell you what their business is like, in a world where rates are 50 or 75 basis points higher and in a world where apple -- i don't think they have to drop a bomb on us, but the pull forward in so many

of bets so the question i think we ought to be asking ourselves is, if you are in the camp that bullardsshe put it three and three and quarter are in scope that would put tlt back at the levels we saw in the fourth quarter of 2018, question is down around that 115 to 118 level, what can you do now well, options premiums are pretty elevated in this thing. that's not surprising given the big move that we've seen the other thing we may say, we may be closer to the end in the near term of the move lower than we have been in a little while, finally, i would suggest it's probably, therefore, going to make some sense to try to minimize how much you rick by making a bearish bet also to pick your levels i am, in fact, targeting that downside level that we did see in the fourth quarter and i was looking up to june at a 120/114 one by two-foot spread the idea is i am trying to tell two down side puts on my downside target in the event it does continue lower. i am trying to put this trade on in a way where i am essentially going to layout little or no premium. the idea being that if it actually sort

look for laboratory city on the other day on that is usa scope or to remove the protocol with bullard law chrome. it was a war again that we couldn't use. what a pathetic variable crane you, chrissy, but it only him, but she gave lips bureaus. pretty me creams, could you mortgage? can you harass your mortgage screen to her out of order some syndrome, but your social cilia will you are not currently to, to thought im, so could you present on the either go to her actually even the blue, the you of you see both her, you never office in my meeting, which is pretty mini booklet relinquish girl. her luca year, a year left on us know when you it was $94.00. he shook his through even that he has moody city. catherine. so could you ruth lazy territorial crane leader. she walk across, you pay me theme in the tier family authorities. this include e, we visit they to stand as a rubbish. just as then you, vic, acquainted them? villages, korea cars through c, william. but again the mortar and so his fossil, the sucrose for sonya a, him in the is a 3 anteaus movie so that you would have been in your

do demolish, and the radio station, europe one, europe, once journalists knew that in 2015, when bullard a took over italy, a t v news channel, and e to lays employees, then went on strike their union lost that battle, and italy became seniors. europe once journalists tried the same tactics and got a similar result. nearly $100.00 of them have since either quit or been fighting, including pascal clock in his shoulder. did it ill? i was invited on to a t. v program last year to celebrate 100 years of radio. it wasn't premeditated, but i ended up warning about the danger at valerie, who, at the time, was preparing to take control of europe one set of kenya. but the cwa behavior, you want them to something but delectable away, until about a few weeks later, i was fired. but i assure you i would not have stayed in bed with a devil shenice. because buller aid is an interventionist boss. he placed his men and a few women in key positions to establish his power. and all of a sudden the channel has a new editorial line, lena, 80 delilah, it seems like it is old while we are. the pop is true that

back inflation, calling for rates to rise to a point where they actively curtail growth and brian bullard says the fed's credibility is on the line if it does not take appropriate action they're already behind the curve. >> i would go one step further, bertha i would love any journalist to ask fed chiefs what did you do to cause inflation how about what did you do to actually create it, but i guess that's a different topic bertha, thank you. >> that's a whole different conversation. >> oh, yes it is we're going to fight what we helped create. interesting. let's stick with inflation as markets brace for another refund on yesterday's consumer price index at a 40-eer high today comes out what manufacturers, not consumers, are face it's also expected to show a jump but there is some growing belief in the markets that just maybe inflation may have started to peak, and if so, what does that mean for your money? let's bring in malcolm etheridge. he is the executive vp and cic wealth good to have you back on the program. do you think inflation maybe is peaking right now, that is the max? >> i saw

is notable over the past week or so is that we are not just hearing from your traditional hawks, bullard and a couple of governors at the ecb. also for more centrist policymakers that had been previously more measured in their comments are now saying they really need to act and deliver those rate hikes, perhaps more hate right -- more rate hikes than the government -- the market is expecting. francine: when you look at the markets what they're doing, the central banks are much more hawkish than we thought two weeks ago. what happened? ludovic: it is interesting, this started in january, what is happening now, [indiscernible] there are more worries about inflation than to cause a recession, which is the new thing. francine: i concur. ludovic: they're totally behind the curve. i'm surprised they don't use the full tool. you can use trade policy to lower, and europe there are many things that could be done to avoid having to hike too fast. this change of heart is because, i think there is the idea that the cost of using -- the policymakers will be in a difficult position. tom: that's the co

jim bullard wanted that 50 basis point hike now. he wanted to start the balance sheet runoff right away. it is the balance sheet runoff that is making its name like, they are going at all to the metal when it comes to hawkishness because they are going to do $95 billion a month, they are going to let rolloff as they mature. they are going to phase in these caps in three months, maybe a the longer, depending on market conditions. in the 2017-2019 balance sheets runoff, the securities caps were set at a total of $50 billion a month. this is almost double that. the balance sheet is not drilling dollars instead of $5 trillion, -- $9 trillion instead of $5 trillion. they want to move policy towards neutral, where there rate is so low -- is no longer so low that they stimulate the economy. the inflation to the upside they say, strong consumer demand, supply chains are not functioning fully. bloomberg intelligence says we do not think the fed can get much more hawkish, especially if it delivers on what seems like a message of several basis

louis fed president james bullard is factoring -- backing a 50 basis points hike in may.he fed may be behind the curve and he favors raising rates sharply to between three and a quarter percent. in the second half of the year. the fomc raised its benchmark by 25 basis points. fuller was the lone dissenter favoring a half-point increase. u.s. treasury secretary janet yellen it says the digital dollar would take years to develop as a country decides to proceed with one. regulators are engaged in a six-month review and coming up with recommendations on linked digital assets including a digital version of the u.s. dollar currency. the initiative was launched during executive order by president biden. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. shery: chinese president xi jinping is facing one of his biggest challenges since taking office. growing public frustration over shortages of essentials. as the covid lockdown continues, let's bring our chief n

he also cautioned, quote now, not to be outdone, his comments were offset by jim bullard, who said he wants to get the rate up to 3 or 3.25 by year end, which is on the hawkish side so the debate is going to 2.4 by yearened oar 3% or higher, which is as you say, the message has been shockingly consistent i think that's a great question i think we have a couple bad ones in front of us. it's supposed to be up near mid 8% range, but i think toward the end of the year, we start rolling off the balance sheet, i think that's when the debate will become more pronounced. that's where i think the -- >> either way neutral means well above 2%, so still a ways to go from here. >> right, exactly. >> thank you, steve. >>> our next guest has a strategy for everything you just heard steve talking about. he says there's still plenty of opportunity despite rising rates and short-term volatility. for more welcome in david katz, chief investment officer at matrix asset advisers. the one question i have, if you want to think like a member of the fed, what daughters might you be looking at we think what yo

after bullard came out that 75 basis point.xplained that on the table, and helsinki, as the country debates ditching neutrality and joining the nato alliance. what does it mean for russia? this is bloomberg. ♪ francine: welcome back to the open. 30 minutes into the european trading day. here are top stories. turning profits on tenure treasury yields for the first time in two years. will -- the end snaps the losing streak. cancel cultures of netflix plunges 25% after hours after losing customers for the first time in the decade. plus, profit warning, credit suisse posting a loss. we are looking at the markets. real yields rising. tom: particularly the technology sector. we are looking at netflix anyway , overt subscribers being produced, the loss of subscribers. the read more cross -- brought across the tech sector as yields rise, real yields edging into positive territory. let's have a look at how things are shaping up 30 minutes into the session. the benchmark is .4%. we continue to watch what is happening in ukraine and russi