when we come back, the message that whole foods ceo mackey gave to employees about the deal and charles evans. premarket coming off those record highs, all three indexes up for the month with nine sessions left in the quarter, s&p on pace for seven quarters up. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. we created the ripple: the doughnut in a doughnut in a doughnut. right away, it was a success. i mean, it really took off. what people don't know is that it all started with points from my chase ink card. i bought the ingredients, utensils, even custom donut cutters. wow! all with 80,000 points. what will you create with your points? learn more about the ink business preferred card. b

presidentago fed charles evans said the central banks officials need to show the commitment that theyl reach their goal line inflation, that has been running below 2%. evans added to current environment supports very gradual rate hikes but the eight year low core inflation is a serious policy outcome miss. core inflation is under run 2%. and often by substantial amounts. this is eight full years below target. this is a serious policy outcome miss. with us, david owens, jefferies international chief economist. we heard from evans last night. slowal rate hikes and preset decreases in the balance sheet. we heard from william dudley. cycleting the tightening would imperil the economy. what are your expectations since you heard from yellen last week? our focus is on balance sheet reduction as we go into december. my colleagues in the u.s. expect another rate rise from the fed in september which will set the mark for this balance sheet shrinkage. janet yellen leaves the fed infirmary. if you could engineer back from when she leaves and she will -- her legacy will want to put into play. but

up next, president charles evans and dudley are sending different messages with evans having the possibilityf policy makers done for this year. which side is the market on? we get analysis next. this is bloomberg. ♪ ♪ the markets and charles we skip september. dudley is not sure. he's opening the tightening would imperil the economy. charlie is still with us. dudley, the markets siding with evans. looking at what is happening in the auctions space, it is clear the market is pricing out september, pushing up by a considerable margin. atop the most important thing to come from charles evans was his comment that inflation is run below target for eight years and this was a serious policy miss. that sounds a lot like the talk we have been hearing about a policy ever or mistake regarding this latest hike. they have some soul-searching to do. are they going to be data -- dependent and wait if the slowdown is transitory, or are they going to go ahead with this plan to normalize whatever happens to the data? as far as treasuries go, i think they have taken a dove case all year. even though the fed ha

robert kaplan, both scheduled so speak and you'll hear exclusively from chicago fed president charles evans:40 a.m. on cnbc. >>> joining us now is thomas lee. good morning >> good morning. >> your new acronym for it's not -- it's not f.a.n.g. anymore. is it m.o.d.y. or w.i.l.f. >> it's cnbc >> that would be a good one. but no, it is -- >> it's not necessarily new. we just -- we've liked f.a.n.g we've been talking about a case for c.r.a.p. -- >> remindus what that is. >> "c" is for chute omputers the resource sector, that's being pulled up by wage inflation leading to inflation "a," for the american based bank, and the flattening yield curve. and the "p" is for phone carriers >> what about the stress tests coming up in a week or so? >> i think the bigger story for banks is the roll back of regulations. it's been a big headwind for r.o.e. and difficult for multiples to rerate because of this overhang. i think the deregulation or lack of increased regulation is the story here >> if the stress test results are favorable, do you think bank also continue to prioritize capital returns? the dividen

matt: later today, we will hear from the chicago fed president charles evans.holas gartside is still with us. what do you expect from fed policy going forward? we were looking for a dovish hike, in then we got a pretty hawkish one in the end. do they stay on task? >> oh, very much so. this year we will get at least one other hike. we get them starting that reduction of the balance sheet. then when that is in play, what we will see in 2018 is rate hikes all the way until we get to a neutral real fed funds rate. if you are thinking inflation is 2%, that is what the fed gets to. anna: so we have to do this one more time. and what does that do to various assets? chart, a is a counterintuitive rate hike reaction. the fed hiking at the same time, the s&p goes higher, the bloomberg dollar spot index comes down. not what you would expect. >> no, it is what you would expect. let's think about the 10 year yield. as the fed starts to lift rates, as you approach that final fed funds rate, the yield curve is typically very flat. that is on its way to inverting. if you assum

we are watching out for appearances by the fed policymakers william dudley and charles evans statesidelet's get to our mliv team in singapore. what are we expecting from the very hawkish, surprisingly week?h fed last what are we expecting to hear from the governor's this week? this will be an opportunity for officials to get the market and fed on the same page which they do not seem to be. there is a bunch of stuff happening in the trade market that you would associate with a period of cutting rates, but they are raising. we had fed president kashkari explaining why it he thought the fed should wait. he thought inflation was moving downward away from the fed target. so the fed and treasury market are not on the same page. to raise rates this year and the treasury market is signaling it will not happen. those two have to come together somehow. matt: there was a lot of chatter after the decision not sweet about a fed error, probably referring to janet yellen's tone. what are you hearing about the markets and what is the outlook for treasuries? guest: this talk of an error or policy mista

he is echoing charles evans from the chicago fed, also rob kaplan from the dallas fed making the sametatement -- can't raise rates if inflation is moving in the wrong direction. now,cb deflator is at 1.7% supposed to be a 2%, moving in the run direction. the rate hike odds have also moved lower. september odds now at 21%, december rate hike odds at about 37%. far from even a 50% that at this point. bond market bulls continue to doubt the fed. betty: adding to this bond ball speak, bull fire so to someone at pimco saying there is a substantial risk for deflation. kathleen: he says the fed has a substantial risk for a hawkish mistake. here are some of the key points about what he has said in his blog posted earlier. he says that right now, the u.s. economy could be just one shock away from a deflationary scare. the fed basing rate hikes on phillips curve, the idea that low unemployment is going to boost inflation is questionable. if it stays on this path, they could submit low inflation expectations, the last thing the fed wants to do. let's take another look at the bloomberg chart, #bt

nina: chicago fed president charles evans says the u.s.conomy is doing quite well, and that is why he did not dissent from last week's rate hike. he also said the idea of unwinding the balance sheet this year is one of the easier, more natural decisions to make. however, he had some criticisms of fed policy, saying the low inflation is a bad miss. underrun 2%,rally and often by substantial amounts. this is 84 years below target. this is a serious policy outcome this. -- outcome miss. nina: i am nina melendez. this is bloomberg. anchor: nina, thank you so much. todayxecutives gathered at the white house for a meeting of the american technology council. working groups, ceo's attending, including the biggest names in silicon valley. also of course, amazon's jeff bezos. jared kushner was running the summit and he says he hopes to unleash the creativity in the private sector. >> we began by analyzing and auditing our current infrastructure. it turns out federal agencies collectively operate 6100 data centers. the vast majority of which can be c

>> well, it's funny you ask that question i happen to go to a speech by charles evans of the chicagohink of this amazon buying whole foods situation and does that create deflationary pressures it was as if it was an ah-ha moment and they said that is something we have to look at maybe we need to be a little bit more accommodative going forward. and it was almost as if the fed had finally realized that inflation targeting when inflation is low may not be the best answer. so, rick, i hear you on all this stuff. i think bonds are simply reflecting the fact that oil prices have peaked on a year over year basis. they were $54 in december. that's deflationary pressure throughout the stim. >> i guess the put that altogether, they're going to look at the metrics. it is knowing what the target is before you aim for it. finally, when it comes to all the issues regarding the economy, all i can leave folks with is that legislation has a better chance today according to many you look at the gop, they're 5-0 in special elections i don't care about politics. larry kudlow seems optimistic. real quic

one hole lets look at his approval rating overall and the economy 37% and 51% disapproving >> charles evans we'll be looking forward for that >> scott ren at wargo. y wells wargo. >> what do you think it means from the market? >> the only thing this market is focused on is what is congress and the new administration is going to do that's going to extend this long expansion tax cuts are important you know infrastructure spending, i don't know if we are going to have a big enough program to clopush an $18 trilln economy ahead. i think of tax cuts. >> if they don't have it >> to be honest with you, we are getting a little of enthusiasm and chasing. evaluations are stretched. you know i don't think the market is going to trade too much higher than we are right now. >> mark, what do you think >> we would agree with what scott said what we like is non u.s. performing better and that's our plate that we call for this year led by europe and emerging markets for 20% for the year of international of 2015. if people want to replay the yearbook so to speak a little bit cheaper stock prices in an econom

we will hear from charles evans. stanley fischer speaks out tomorrow.h us is tobias levkovich. this is my basic question. why doesn't the market believe the fed? the fed keeps talking. the market basically will have none of it. >> the market believes in the short end of the cut. they are worried about the longer end. you have the ecb acting in the market and the fear that maybe this economic growth story is not as robust. the idea of hard data soft data discrepancies. has ledg that i look at the unemployment rate by a year for 45 years. listening to small business done consistently they want to hire more people. the 10 has basically gone down. people matter of basically believe there's going to be money coming in from europe? or is it a matter of dubious about the ability of the trump administration to get up. i think the question is the legislative agenda the republicans want to push. is that going to get delayed by things like russia hearings and other investigations. that's a factor. we don't think there's anything priced in the market anymore for ex

business confidence remains high, as charles evans said if you look at the nifb report that's at multi-year highs and as long as that maintains and we push towards health reform and tax reform over the summer and make that happen, then do i see these markets continuing to trend higher. >> rick, i'm curious what do you think your markets that you follow and talk about, the currency markets and treasury markets, how do you think they will respond assuming that -- that congress does come up with meaningful tax reform and health care reform of some kind >> i think it's going to be like watching a gemini rocket exit a stage and fire up a new stage. i think the equity markets can garner a 5% to 10% appreciation. i do think i'd -- i'd be fascinated to see how the interest rate complex assimilates such a legislative success because i still say one of the deeper channels affecting our yields here are yields overseas when whether you look the at negative short end of many markets overseas or just the dynamics of positions in central banking purchases. i really think that that's what you need to pay a

francine: we heard from charles evans, thing the central bank officials need to show a commitment to reaching their goal on u.s. inflation. speaking in new york yesterday, the office described eight years of low core inflation as a serious policy miss. >> core inflation is generally underrun 2%. l years below ful target and this is a serious policy miss. francine: let's get more now with mike bell. mike, is the difference between what he is saying, and what john janet yellen is saying? mike: i think janet yellen is right. both in the bank of england and in the fed, you see a divergence of views. he falls in the dovish camp. now that the labor market is tight, she is always been focused on the labor market, now that unemployment has fallen dramatically, now it is the low the fed's estimate, it suggests to her, and to us, that will lead over the next one or two years to an increased wage pressure, and therefore, they should be putting wages up. francine: we are looking improve financial conditions in the u.s. that is to be off sitting the reason inflation growth, which brings me to my

their businesses and they hate that, but amazon is so big, even fed president of the chicago fed charles evansng the an amazon because it's keeping inflation though in groceries and retail. we're talking about deflation. the fed, remember, they want to hit the 2% target of inflation in order to raise rates. if amazon is that big and powerful force to keep rates low, inflation low and then rates low, interest rates low by the fed. stuart: that's fascinating. liz: a big deal. stuart: a fed president mentioned amazon as a way of keeping prices down and that factors into interest rates? >> i'm going to add one more thing and i know we have to go. it's great for small businesses. no better way to get your product out there than to amazon than a huge audience. i think it's a win-win. stuart: where we're going to open the market in four and a half minutes time. down a fraction on the dow industrials and on the other indicators as well. the price of oil is going to be important this morning. still around $42 per barrel. not great for stocks. it would be terrible if it dropped further. but we will open

making headlines chicago fed president charles evans says it may be a good idea for the central bank t until the end of the year before considering any further interest rate moves evans who is a voting member of the fomc points to softening inflation data as a key reason we'll hear more when he speaks to steve liesman live at 10:40 eastern time >>> crude oil is touching fresh seven-month lows this morning. oversupply concerns continue to weigh on the market with news of increased libyan production. the latest to worsen those concerns wti crude touched its lowest since november november 14th in this morning's trade. oil down 1.7%. this morning check in on shares of home builder leonard. the company reported quarterly profits, 13 cents above estimates from the forecast. shares up 0.1% off this news >>> the head of the bank of england says now is not the time to raise interest rates speaking to london's financial community this morning mark carney warned of weak wage growth and potential hit to incomes as britain begins talks to leave the eu >> before long we will all begin to find out t

from raymond chandler, and charles bukowski, and all those charles bukowski, and all those los angeles wasn't the sunny eagles. sunny eagles. - [evan] beach boys, right? - nothing to do with that, it was all the dark side and (chuckling) we found it. - well, for a lot of people, at that moment who did what you came to do pretty quickly, the choice was not la but it was new york. - [john] right. so, distinguish between the two for me. why did you not make your way to new york, but instead made your way to la, what was it? (sighing) you made the affirmative case for la. was it something about new york you didn't like? - the weather. - it was just a weather issue? - totally. - good, i like the fact that it was mundane. - yeah. - that's good. - i'm very simple in many ways. no, i was just sick of the east coast. from second grade through college i lived in baltimore. and it's like they're ghosts. - [evan] gets old after a while. - and it's all closed in, and it's all. - and it's all closed in, and it's all. the west is open and the east is closed. the west is open and the east is closed. i was so sick and tired of people saying, oh, be

charles smith ringing the closing bell here at the stock exchange. stay tuned for the second hour of the closing bell. >>> thank you, bill and welcome to the closing bell, i'm kelly evans just under 21,200. that's a new round number level. if you will, that it reached during the session today, a gain of a quarter% there,ed s&p 500 up a third of a% to 2438. that's a new high for the s&p as well. the nasdaq composite adding nearly 1%, to 6305, that's not only a record, it's the first time the nasdaq has closed above 6300. the russell 2000 is making up for some lost time. it's the only average of the majors we're showing you there, which is not at record levels. still about 14 points shy of the record level set back in '06. yesterday president trump announced plans to pull the u.s. out of the paris climate accord, coming up, we'll talk exclusively to the ceo of laredo petroleum, how it could impact oil prices which are down 4% this week. joining me on the panel, cnbc senior markets contributor, michael santoli. and managing director and portfolio manager for sneed capital management. you call this a believable breakout? >> i think a lot of people believe it, that there wa