$13 trillion labeled out by the fed.of that went to just three banks -- citigroup, merrill lynch and morgan stanley. nobody knew what the programs were. the law changed the rules to limit the fed possibility to just shovel money out the back door because banks are not incentivized to have enough loss absorbing capacity to withstand a crisis if they know the federal pocketbook is wide open when they get in trouble. that is why it is so important to get him place rules that make it clear that you will in fact go bankrupt and fail. the fed still has full authority to liquefy and protect the system but not to pick and choose single winners among the too big to fail banks. if they are insolvent, they've got to go bankrupt. alix: what would have happened in 2008 if that was the case? banks are lifting up their tier one capital ratio higher than any banks in the world. quantityt's not just but quality of capital. even now, the level of capital banks are required to hold is nowhere near the shortfall they had in 2008 and 2009. t

if the fed doesn't like the data, first thing the fed does is change it. they put a seasonable adjustment on it. this is what they do. traders are great. traders have to make decisions with real money, not academic models. >> you don't believe the gdp numbers, is that what you're saying? >> i don't believe anything the fed puts out. that doesn't change the fact i have to pay attention to it. >> come on keith. come on! >> the fed's data is more cooked than the christmas goose. they have more adjustments in every data stream they've got. what i'm saying is i don't trust it as far as i can throw it. i want to look to traders and see what they're doing with real money. that's what's going to tell you how the market perceives risk and opportunity. >> susan, let's make this meaningful to the individual investors. >> they should start with the employment reports. that's where they should start. >> point well taken. >> susan, let's make this meaning ifle to individual investors. if you're skeptical about the rise in the market right now, what are you doing? aren't

there's 40 days before the next fed meeting. time we get a new round of data a whole round, including a new jobs report more industrial production more productivity and all those things. would it be enough do you think that move the fed in the june meeting? >> well, first of all i'd point out 40 days is the time for the biblical range if i'm not mistaken nor enn for noaa. i wanted it to be clear i knew the answer. i think you're asking the right question, bill. i would start as soon as next week i believe it's wednesday or thursday. we get the retail sales report. i'll remind viewers that dennis lockhart siene lockhart, says it will lead us out of the wilderness by slow growth. he didn't use that phrase. watch that retail sales report. it is technically possible for the data to turn around in time to convince the fed to raise in june. i believe it's a high bar to get over here. but i think june 5th is a very decisive day if i'm not mistaken. that's the day we'll get the may employment report. the report was squishy in the follow

the fed is not having real impact on economy. >> i gotcha. >> fed keeps trying to jiggle these levers and we're still stuck in this 2% growth rut now for six years. melissa: all they're doing is possibly creating a bubble in equities. wage rage from sea to shining sea. los angeles city council giving preliminary approval to $15 minimum wage. on the east coast, new york wage board is considering hiking wages for fast-food workers. meanwhile thousands of mcdonald's workers swarming the company headquarters, that is what you're looking at right here. they are pining for $15 ahead of the chain's shareholder meeting going on tomorrow. john lonski, this is the situation that we've gotten in, with the slow economy, where the jobs that have come back are part-time jobs. people used to have full-time jobs. now they are working part time. that is why we're seeing wage rage and protest, right? >> this proves this is the most pathetic economic recovery ever. the fact we have rallies in support of a minimum wage. people are naive enough to believe that the city of los angeles has the power to guar

if you go back to the last eight fed rate cycles, you find periods where the fed raised rates three times. the misc ifa rate has been up 12 times. if when you look at what working this year, foreign stocks are working, most european markets are up. the taking out a new all-time high as i'm talking and so people get that they need to be diversified and foreign stocks have done a good job in a portfolio. both leading up to and during this historic rate hikes. >> been the tightest range for the dow in 100 years. 100 years. >> that's what usually happened. i don't go back that far, scott. i know what you're going to say next. so just chill out there. >> look. >> look, even my portuguese water dog knows the fed is going to tighten at some point and he's not concerned whether it's september or december. everybody knows it the market is go 0ing to go up instead. if central bank easing continues, that's somewhat deflationary also in terms of pricing. it becomes more competitive with the european countries. let's take that into account right now. i think what you do is you play this like you've be

i am prone to drama but feds may wait until after the election. i think that data is improving enough it will not happen. neil: thank you very much wall street week. sunday 11 a.m., i am glad for his success but i am recent full it has -- so just because he is italian i'm not saying he like a pal, but if is annoying. just saying. anthony thank you. neil: forget when rates go up but how with more liz an saunders saying they might be cautious, chief investment strategy at charles schwab. what happens? >> so, you know, i agree with anthony june is off of table fed minutes said that, but i do believe in -- 4 months between now and september. so i would not write is off as done deal. neil: you say possible? >> it is in data. i think there is a misper misperception by some that fed knows what they're going to do. what i think is likely to happen i think that fed to would like to get off of zero bound, that is not going to look like what it did in last cycle in last cycle in mid 2000, federatefed-- raised rates every quarter circle. but that is not the c

ultimately, the fed has to start talking about it in fed context, in meetings with janet yellen sittingre. and when she's not going to be at jackson hole talking about, we're going to have to see stanley fisher talking about, and these have to come more than just blurbs in the headlines on a day-to-day basis. they have to come with real meetings and real consequences. liz: zack, as todd mentions the seriousness of what the fed's doing, there are a lot of people who are ready for summer and play. your picks have sports themes. churchill downs is in it, speedway motor sports and finish line. why? >> yeah, i want investors not to speculate and gamble here just like they do at the track. these are examples of microcap stocks. and if you add them to a globally diversified portfolio of over 12,000 stocks and you rebalance highs and lows, just, for example, microcap stocks are up over 280% since the crash, and most investors don't even have them in their portfolio. david: well, talk about fun, kevin, you like diagio. they make fun stuff. >> yeah. if you like to celebrate, you've had some of th

the fed is dependent on the u.s.nomy and the data to make their move that they're itching to make by the end of the year, yet, the dollar is strengthening on better economic data. we know that's on the fed's radar. >> somebody said to me i can't remember who it was, some economic official said i think we just showed that the u.s. economy is not ready for a stronger dollar. that was -- >> that was david szerba. he was saying this isn't the '90s. we can't absorb this very strong u.s. dollar. >> we just prove something, that you have a better memory than i do, sara among other things. what's interesting here is that it's eased off a little bit and the inflation -- the deflationary impulse has worked its way through. by the time the fed gets around june or july if the stability in the inflation numbers are proven to be still there, then i think you're going to have the fed may be ready to hike maybe july, september, right in there. >> you're betting september. >> september. >> they can't avoid a stronger dollar when they

inflation is still below the fed's target of 2%.ng near , 5.5% or fed had said so. is that enough to move the fed office mark -- off its mark? doug: absolutely. it would really crossed the markets if they did not move around 2015. most of the chatter is about when. where do you come down on the dual mandate? no other central bank has a dual mandate? they stay focused on inflation and that the policymakers worry about the job side of it. doug: there is a lot to be said for an inflation mandate. same thing.ing the looking at inflation below their target, keeping monetary policy roughly where -- mark: define the federal reserve where it stands right now. doug: doves. the more hawkish fed would have started moving already. there is nothing about a target funds rate of 75 basis points that would change was going on right now. mark: how is this economy going to regroup? getis this economy going to the sustained momentum that it needs to get off that meager growth rate? doug: it's not going to do it on monetary policy. monetary policy is p

i think the fed -- two things, the fed would like to tighten to build ammunition for when the u.s.o slow down again. they also want to remind the markets that they want to tighten because they do not want a repeat of the taper tantrum they saw in june 2013. the laborot see -- market, sure, it's improving but i'm not in the camp that believes we will see wage pressures really start to take off here. i think the influences that have kept wages low for a long time been replaced by globalization technology. those have not been outlawed. there will be wages under control. labor is not in the position of strength from that standpoint. from that standpoint. we have a labor market that has gotten better. is this just a new paradigm we have now here and we just have trouble accepting that? new: i do, i think it is a paradigm. when you have been in this business a long time, you tend to be biased towards the old teradyne. just a reminder, the global economy and the u.s. is in that does the rest of the world is in the position where the central banks want to add more liquidity to become more'

it is fed minutes day. scarlet: let's go over to peter cook the breaking news. peter: we have the minutes from the federal reserve's april meeting, and they decided once again to basically maintain their current state of play. the fed will decide on a meeting-by-meeting bases as to when to start raising rates. there is a little bit more of withable in the likelihood june in terms of lift off. a few anticipated that the information that would accrue by the time the june meeting would likely indicate sufficient improvement in the economic outlook to lead the committee to judge that the conditions for beginning policy-firming had been met. that the minutes going to say that many participants thought it unlikely that the data available in june would provide sufficient confirmation of initiatives for raising the target range. they generally are not rule out this possibility. concerns about the first quarter slowdown weighing on policy makers. they debated whether the factors were transitory him a things like the weather, the shutdown of a west coast port. they also d

coming up next, the fed in focus.ur next guest says the april minutes made dollar reading. ♪ making stories headlines, malaysia and indonesia have agreed to offer shelter to muslim boat people fling bangladesh by they agreed to help after talks in which itsland declined to alter rejection policy. they called on the international community to do more. the philippines was the first country to assess the refugees. north korea says it has the ability to mount a nuclear warhead on a missile. the news agency says a military and ister the technology upgrading weaponry. the announcement came after the north claimed it had tested submarine launch missiles. the u.s. casted doubt on the pictures. a japanese grandfather jailed for life in indonesia for drug smuggling. he was arrested in west mantra. found kilos of methamphetamine in his luggage. itsaid he was deceived and was only when he was arrested he realized he was carrying drugs. back on the fed now. stocks were little changed as wasfed signaled a rate hike not coming. mich

market rate has charges rate the fed for banks to deposit money at the fed, the excess reserves. --returning bad to the fomc in returning back to the fomc and lawmakers are saying they would like to make sure -- the real power of controlling short-term market interest rate -- remains with the body that is supposed to be making that policy, not with just the board of governors as it is at the moment. pimm: thank you, chris condon in washington. up, shares of aol's soaring today after verizon agreed to by the company for $50 a share. a 17% premium over monday's close. we will take a look at what is driving this deal. compensating the families of 100 people killed related to faulty ignition switches. feinberg will join us with details. betty: we will look at the legacy of david boys, -- david sides of the coin. other top stories this morning -- verizon taking over a well, the top story. the wireless giant paid $50 a share for the internet company and this would be verizon's biggest moved to buy new revenue streams beyond calling and data. verizon -- will verizon get what it pays for

again, we get help from the fed. it pushes us over it.our last guest was talking about the data that went wrong the last couple of weeks. the cpi are possibly the most important things. and janet yellen was speaking on friday afternoon when most of the traders may not be at work. that's where we're going from here. we're looking at friday afternoon now. >> friday afternoon, okay. so everybody needs to watch each market moment. at the moment we're in record territory for both the s&p and the dow jones industrials. ira, this is a billboard. it's a flashing signal from the fed to what, go and stay in stocks, at least for now? >> absolutely. what the fed has not been able to do is put together the data they need to raise the rates. they want to. it's clear as can be what they want to do. but they're not getting what they need in the economic data. that keeps the stock market in good shape. then you get something else. the financial stocks are waiting for rates to go up so that the banks can make more money. anyway you turn around here, you're

thehe fed isn't out of woods yet. >> we have a huge amount of data coming out. we've got the revision to the first quarter g.d.p., new home sales. >> probably down. inventory suggests we're going have a lower possibly negative print in first-quarter g.d.p. once again. >> that's what gree greenspan ws earlier this week. >> it's a whole different composition of factors that led to weakness in the first quarter this year versus last year. >> is any of that priced in? >> there's also the whole the season outing. a lot of people questioning whether -- all the first quarter years,, back for a few how accurate they are. so who knows when they'll sort all that out? of seasonality -- the increase we've seen in is seasonal. it's actually been smaller than vs. we've seen in the past the average. yet, there's a story line out there that energy's recovery is helping to drive the inflation especially other in europe. does that matter, when the fed strips out energy in its callus of inflation -- calculus on inflation? of this report that is different than the feds' measure of

>> the fed will act before year end. i don't think she should be talking about valuations, greenspan did that and the market did that considerably. the fed did that a year ago, biotechs and others kept going up. i don't think it hurts equity valuations, bond yields widening, that spooked markets more than anything else. >> interesting because we all remember the famous irrational exuberance, that was in 2006. >> 1996. >> 1996. they were able to knock the market down a month, and then we were irrationally exuberant for the next three to four years, hilary? >> that was interesting, janet yellen did try to back track and said in relation to bonds, equities are fairly valued. she knew she made such a big mistake. >> can she make a mistake? i think she is so well coached, i don't think anything comes out of her mouth that is not deliberate rate. >> she was talking with christine legardere and the problem are the treasury yields starting to rise, the market is spooked and we have the tightening that means everything might slow

economy. >> so the fed moves in june? >> i don't think the fed is going to move in june.hink they're going to wait until september. i think they need more data. but the reality is that these rate levels are too low, if you look at what the market is pricing in, the market is pricing in 1% fed funds. the end of '16. and a 1.5 fed funds the end of 2017. that's too low. the economy is going to pick up steam. we think the front end of the yield curve is vulnerable here. >> paul? >> i'm concerned we're so optimistic on the economy, if he's right about the economy, then his levels are right. but what if the economy, what if something is wrong. what if it wasn't just weather? what if we're back into a 200,000 average in payrolls? is that enough? i would question that someone like yellen would say no. i'm worried, i need more evidence and i'm getting more and more concern that something has gone wrong. maybe it's the dollar. but the consumer is not acting the way i think they should be right now. >> mark you want to respond? >> we look at companies all over the world. if you look

fed rate hike. the market is not buying it. we're looking at a .3 feds rate. (?) where the fed is looking at .62. we're miles apart from where the fed wants to be and the market says we will be. it's up to 2016. throw in an election year. all bets off the table. >> we've had this discussion so many times. in particular the fact that you have an economy. you have a market. the two do not seem to be insink. but that doesn't change. (?) look at the rallying we have right now. here we go again. potentially pushing new highs on the market. >> i agree. and i think the stock market is telling you exactly what the rates are telling you. there's no fear that the fed will be raising rates any time soon. even if they do, by chance they raise rates, you're talking about 25 basis points. that won't hurt a home buyer. what it will do, it will let the fed pat itself on the back. we had zero rates for so many years, but now we're not. when in reality, they are. >> what are we going to do? that's facing a lot of americans. scottie, we had oil moving higher. we went above 60 bucks

the fed releases minutes. they do that within the fed double. baghdad loses ramani. -- loses ramadi. we are live from our world headquarters in new york. it is wednesday, may 20. i'm tom keene. joining me, brendan greeley, and everything pushed aside by almost the cacophony of news and numbers and tangents. brendan: i was just worried about david letterman leaving. i mean, it is very hard to disentangle because you had a lot more settlement, now you have the four x settlement. i think we lose sight of what actually happened. tom: we will give you clarity on that, important ramifications for the european and american banks. let's get to top headlines with vonnie quinn. brendan:vonnie: more detail on what brendan was just saying. ubs is going to pay more than half $1 billion in penalties to settle two u.s. government investigations. from guilty to fraud -- playing -- pleading guilty to fraud. the bank will pay $342 million in another probe into currency rigging. four other large banks will plead guilty in the foreign exchange case today. jason mor

>> look we can grow at 5% and have the fed raise rates. >> oh, no, 5% and the fed raise rates. >> then you get to the end of the cycle quicker or you can grow 2.5%. >> that is proverse. it's proverse logic to say thank god we're not growing much in this country so that the fed can stay at zero. >> ultimately the cycle ends with successes the fed has to respond to. >> i hope they come in my lifetime and i'm getting up there and so are you. >> if we stay in the sweet spot longer it gives the economy a longer time -- >> sweet for you. it's not sweet for most americans. >> well it is what it is but the economy has been growing about 2.2% since '09 and it's better than the alternative. it's not going to be 5% but it's better than zero. >> the question comes back to is there any down side for the fed keeping rates so low? there's people skeptical of this and none of the bad stuff happened yet but does that mean it won't? >> they have to be prepared for what happens when the cycle ends and right now they aren't. that is one issue but the other issue is that in fact if the rest of the world is

he says, don't fight for the fed.ment where we see a lot of easing on the parts of federal reserve's around the world -- still true in the united states, although we may be going in the opposite direction, that things that are a little cheap look even more attractive as we see on that easing alone -- around the globe. that is the big take away thus far. he says he would not be too long bonds or short stocks. giving a measured performance, in contrast with the only real guns-blazing talk we have heard today, the one you have been referencing from david einhorn. other than that, it has been a little more tame. alix: mother frackers? come on. that was awesome. coming up next, the theme at last year's met gala was "got chic." i will tell you what trend is not allowed this year. some of the most innovative product of 2015 on the other side of this break. ♪ alix: make no mistake -- when it comes to the met gala, it is an wintour' -- anna wintour's world. it has raised millions of dollars for the costume institute. when it c

alix: we had the new york fed president saying today that the fed's first ratings increase will usher in a regime shift that will stir financial markets. you don't want a fed official they that. joe: it is interesting because it coincides with some of the warnings janet yellen gave last week. the fed is not signaling a rate somethat it is using language that could make markets a little more cautious. we have seen tremendous volatility in the bond market to the highest level since that you have tond wonder how that winds up affecting other asked that's. assets. is startingd market and people are trading the currency market as a way to move against the bond market. somethingworthy and we haven't seen, the equity market tick yet. alix: we also have some m&a heating up. we have seen a lot of chatter. we've seen a lot of analysts saying aetna is going to be cigna.humana or some m&a speculation coming there. also that it could be bought -- and i bring that up because it is an industrial bellwether. you have a big bellwether deal and the m&a continuing in these all other sectors. year, we ha

my guess is the fed wants to raise interest rates.aking do not the table as an exercise in abstract thinking is the wrong place for markets to be. there is a risk we had a jobless number coming up this week. there's a risk we had cpi data that is way ahead of where we are -- consensus is that .1% right now. these things can change. they are very temp right now and not priced in the markets. alix: good to get your perspective. we do have breaking news concerning computer sciences. computer sciences saying one company will serve commercial and government clients globally and one will serve public-sector clients here in the united states. this is the same time as they came out with earnings that beat the average estimate. there was a similar report that this would happen last week. we will give you more a detailed and the after hours after the break. ♪ i'mm julie hyman --julie: julie hyman. computer sciences says it is bleeding into two. one will be a global commercial time -- company and the other will be a public sector company. as a p

fed as well. it's a most like we are reading a recap.ays it's ok to merge according to tom wheeler. executives had expressed concern after the ftc scuttled the 45 million dollar merger of time warner cable and comcast. scarlet: regulators on the verge of okaying a big takeover in the cigarette industry. bloomberg news reports reynolds american is about to win 20 $5ust approval for billion takeover. reynolds is best known for its camel brand. to win approval, reynolds has cigarettes sell its e- and cool brand. boston and four of its immediate suburbs added the most residents run july 2013 to july 2014. boston itself gained nearly 6000 residents. the suburbs of cambridge, everett, watertown and chelsea closing out. the reasons for the growth were immigration, an influx of young people drawn by the area. scarlet: matt knows this -- americans will party like it's 2005 this memorial day weekend. aaa says 37 million americans will travel 50 miles or more during the holiday, the most in a decade, and it's a five or cent increase from last year.

>> well we want to be respectful of the fed. want to be respectful of the fed chair. remind them that the fed is a creation of congress dating back to 1913. within our constitutional power is the power of oversight. so we are making a formal request. i would see no reason why the fed chair would not comply. if she doesn't, then we're going to have to cross that bridge when we come to it. >> last question for me at least. i know that you -- i mean you'd rather just see dodd frank go away in its current form. it's way too complex. it's way too far reaching. but yet the climate, anecdotally we hear on wall street hasn't changed a bit. you know you've still got the currency manipulation charges that have been settled. >> a very serious charge. >> fines are being paid there. we just had a survey out yesterday that suggested that people on wall street are still witnessing unethical behavior out there. if regulations can't do it how do you change the climate on wall street? >> well again, i think it goes to the fact that dodd frank on many levels hasn't worked. it's been a h

>> well, a lot of it depends on whered fed goes from here.ut where somewhere in the mid to later cycle. the early cycle, that time has passed. it is time now to move on to mid to later cycle surprise. the strengths of those industries will depend on the bounce-back we get in the commodities, how rapidly the dollar moves and how quickly the fed increases separates going forward. alix: wrapping up the dollar, what is the biggest risk there? >> well, the consensus right now is expecting a 7% game for the dollar through the end of the year. as long as we get something 7% or less, there is very limited risk existing in earnings estimates. if we get more than 7%, it depends on how much more? 9%, not a huge%, 14% or 15% could be damaging to the earnings stream. think about the long-term move in the dollar. from 2011 to date, the dollar has been rising. alix: thank you so much. gina martin adams from wells fargo stutes. much more coming up. ♪ alix: welcome back to "bloomberg markets." i am lick alix. back to one of our top stories. bill gross talks a

at some point, the fed will have to raise interest rates.ccording to every theory book, you cannot have near zero interest rates forever. they will be very cautious as to how to do that. the whole game on wall street is anticipating what the fed is doing and reading all the signals that they sent as janet yellen and her team try to figure out how to get out of this low interest environment that we have been in. host: connect this to the average person out there what this means to their life. guest: the fed is deciding how much money is in the system and what interest rates are for savers in this country. this has been a very tough few years for people who are saving money, living on interest from earnings that they earned earlier in their career. that is a tough spot for people. what the fed is trying to do is stimulate growth and an area where we have not had much economic growth. the balance is how to do that without creating inflation, and potentially disastrous run away, inflation like we have seen in history. what a lot of analysts said

be a fed chair.he reason we are not seen a huge market reaction is that she did not stray from the headline. i think it is fair to say that she has honed their deadline a little bit more precisely and has basically taken june off the table entirely as we have seen from the most recent fed minutes. two things that they will move this year. in case wiggle room things, they can go for the worst. they would like to move them off that zero balance and see what happens. economy in thee first quarter. is doing better and maybe inflation is moving back up to their target. matt: -- set up a quick note, he is gone through the entire testimony and she says, nothing new and then i found very interesting the last line, the fed continues to express a blatant fear of raising rates. what do you think about that? lisa: they don't want the first rate hike to indicate the market, they will quickly raise rates. they will take a very moderate approach. they are looking at the data is could pose a problem because frankly

the fed minutes didn't give us much to trade on did they. let's give you a run down of what to watch this trading day. forecast arrives slightly from the previous week. at 10:00 a.m. april existing home sails and march leading indicators. as for earnings look for results from retailer best buy before the opening bell. after the close we hear from hp gap and aeropostale. >> salesforce.com revenue grossed 23% beating forecasts. also raising it's sales outlook. salesforce's service cloud has this place. past the market leader customer service and support on the conference call and later on mad money he wouldn't directly address reports and rumors that the company is fielding takeover offers. take a listen. >> all i'm doing here in chicago and you know that is i'm meeting with our top customers here. i read the news just like everybody else but my goal is to focus on my customers and make them successful and that's why we deliver these great results. >> and they rose 7% in after hours in germany. currently higher by 6.3. >> now let's talk more a

how is the fed going to react?een saying there's probably not going to be a rate increase in june, july -- august and september seems to be what people are looking for. betty: i think it is far enough so people can feel like they can make that prediction. wait until we get to july or august. mark: is the market pricing it in? betty: exactly. mark crumpton, see you in the next hour. too bell says "no mas" artificial ingredients and pizza hut does the same. will it help the chains win over millenials? ♪ betty: taco bell and pizza hut are the latest fast food chains to announce they will remove artificial ingredients from their food. taco bell will remove artificial colors and flavors, high fixers corn syrup and trans fat from 95% of its menu by the end of the year. pizza hut will remove artificial colors and flavors by the end of july. they are owned by yum! brands. intog to draw millenials their chains. they are making it sound like it is going to be easy to do this. is it? think so. they have been working on it for

fed president william dudley. it sort of feels that the fed is not signaling an imminent rate hike or anything like that, but it is trying to use some language that will make markets a little bit cautious. the samenically, at time we have seen this path, we have seen tremendous volatility, really to the highest level since the last crash, and you have to wonder how that end up affecting other assets when you have a jumble of money and you have liquidity concerns. was an interesting report out today about the bond market starting to affect the currency market, people trading to currency market as a way maneuver against the bond market, but, again, i think it is really noteworthy and surprising that we have not the equity market take yet. has happened there yet despite all of this turmoil yet. alix: and we had verizon that bought aol, but we have seen a lot of chatter, as well. an analyst a look at to talked about biotech companies, saying at the, -- aetnae -- at the coming fromsome m&a a biotech shop there. talking

so we know what the fed is going to do. we're going to get that.re's a lot of data coming out over the next week, we get clarity. right now people are a little scared. i would say one more thing -- 10-year approaching 2.3% represents something we haven't seen since november last year, and that is yield. that's an alternative to stocks that i think investors are looking at right now. >> kenny, you're on the floor, dow down as much as 180. why should equity investors being so concerned with what's happening in the bond market. >> all of those comments are correct. but let's not, let's not bypass the issue -- goldman sachs puts out that report this morning telling you that there's overexuberance, overexpectation in europe. that ignited that fire. because what really changed between yesterday and today? other than the goldman note to come out all of a sudden saying it's overvalued. just like janet yellen did last week she said it was overvalued. you saw the anxiety creep up and causes this all of this action. and so notice what happened. we traded righ

once the fed gets active.hey'll probably settle in and pull back a little bit. >> home equity lines of credit. >> they will follow the fed higher. home equity loans, you'll see them move higher. but i think more in tune with mortgage rates than with the fed themselves. gerri: how about car loans? >> car loans, that's another one that will move higher. particularly once the fed gets active. but minimal impact on monthly payments. don't lose sleep on it. gerri: okay. credit card rates. always important. >> this one will follow the fed. it will stay in step with the federal reserve. gerri: sometimes they get right out in front and lead the way with credit card interest rates. >> for those with poor credit that's exactly what happened. gerri: have a great holiday weekend. great to see you. >> you as well. thank you gerri. gerri: a lot more to come this hour. including the latest on our fox business exclusive investigation into the questionable hiring practices of the faa. and, next, the bird flu outbreak is leavin

are fed chair predict shuns a contrarian indicator?n indicator of two things the fed does target the stock market. anyone who doesn't should remember back to the crisis. their plan was to get unemployment below 10,000. they will never talk about it. >> it seems like a deliberate job. >> this should tell you that the fed is concerned. if you look at the bond market which we've said does a lot of the work for the fed on some level and is getting ahead of the equity market you have to think the fed is at least concerned and to say that no i'm not going to listen to him, it's a contrarian indicator, i'm not even sure. what i do know is the fed does think about the stock market. they said they weren't going to talk about the dollar. they were talking about the dollar over the last six weeks and they were talking it down. >> does anyone on the table think she's correct, she's right? >> let me tell you what they're worried about. if they don't jawbone rates higher if they don't keep zerp in place, it will go higher. so to me that is actually

that's a small risk with what the fed is doing. i want to avoid default risk where you permanently lose capital. >> sure. >> i'd rather go long get the extra yield, be in better quality issues. >> speaking about risks, very few people are talking about greece anymore in these markets. what happens if it were to leave the euro at this point? >> i think if it -- s. thatis that me? >> go ahead, tim. >> you're right. go on. >> i think we talk about the greece situation. it's very contained, very solid. what tim hit on rickster's hit on, its volatility in the ten-year pits in the treasury pits behind me we will see it spill over despite the fact the s&p 500 is at record high. you have to be careful. fix your roof when it's sunny out, kelly, not when it's raining. >> what do you think about that? clearly greece has been doing the dance of the seven veils with the european community\for quite a while. what impact do you think it has in the market if any? >> i think they'll continue to find more veils. the united states of america will hav

the bottom line is there's inflation everywhere except where the fed is looking traders, if the fed is backed in the corners, it's the policies of its own doing. neil: lindsey he is saying that we never got serious about this, we never attempted to get on top of this washington is failing on the fiscal side, the fed on the monetary side we're all oblivious and the chickens are coming home to roost. what say you? >> well the fed can only raise interest rates if the economy begins to gain momentment and you economy is only begin to gain momentum if we see pro business policies out of the government. we're seeing rising health care costs increased regulation tax uncertainty, and that's stunting investments and growth and forcing the fed to keep interest rates at the near zero level. until we see the growth we're continued to sit here well beyond 2015 well into 016. neil: keith thinking back in history and i think of the trillions of debt leader is it too late? >> well, here's the thing, neil, is it too late as a politician? you can answer, yes, there is no adult supervision in washington

we will get an insider's look at the fed's rate decision with the st. louis fed president. you can watch that live at 3:00 right here on bloomberg television and listen to it on bloomberg radio will stop -- bloomberg radio. tom: coming up, we are going google's development day and find out where are the big products and services. and more on the fierce battle between fitness trackers. that's next. ♪ betty: welcome back to the bloomberg market day. pimm: let's go to julie hyman with a look at what's happening in the markets right now. julie: we have been talking about the huge deal in technology today with avago agreeing to buy broadcom. because it falling spiked to above the offer price yesterday after there was a report to deal was imminent. if you look at other semi conductor makers, there's speculation about whether there will be dealmaking in the rest of the sector. there has been talk about intel making a deal for all terra. bloombergk at my terminal and you can see the proxy for that, the philadelphia semiconductor index. aboutn see it has climbed eight point 5% for t

the last time the fed tightened -- 2004 two 2006.l 1% to five point 75%. -- 5.75%. they are uncertain without a predictable pattern so you have people who have never done this and who do not know what the fed is going to do next. you saw what happened with the tapered tantrum. there was concern we might see that repeat. -- lack ofe mike experience a plus or minus? kevin: what is really happening is everyone got their training wheels taken off in 2013 when the taper tantrum happened and the fed did not do anything. it was only verbal. we saw rates rise 100 basis. a lot of people are understanding liquidity is the key and that is big issue going into that. you saw the flash crash october 15 of last year. one of the deepest, most liquid markets came to its knees. we'll have to see what plays out. imf has warned about it it is in the back of people's minds with liquidity and regulation. are calling it the class of 2009 and the average age is about 29 or 30 right now. they do not have the experience. is this a paradigm shift for them? to

when you're are considering what it means for fed policy and thinking about what it means for the fed funds rate relative to the movement of other central banks, i think the key story is that the central bank might be easing but the fed can be approaching a hiking cycle. they could take a step toward normalization. with the tone of the u.s. data, we are all wondering whether the fed will have the ability to start normalizing before the end of the year. it still our baseline forecast that the federal start to hike in september of and better data but we need to see the improvement to begin vents. erik: the first quarter gdp report on wednesday was kind of hideous and the fed later that they attributed that to transitory factors. do you disagree? michelle: i think you can argue that there were special factors. you can say maybe weather conditions in february, the port shutdown probably impacted the data flow. is the stronger dollar hitting trade flows can? could that be transitory? i suppose of the dollar reverses and we start to see stabilization are weakening, you can also argue the dr

courtesy of the fed. >> no. i disagree. again, i think -- and i think bernanke has actually been kind of up front about the limitations of monetary policy. if you're looking for someone to blame i blame washington. the fact we have this antibusiness environment. we should be incentivizing the corporate sector. neil: i agree with you on that. >> that's true. why does the fed put out optimistic growth numbers that they have to acknowledge they were wrong. actions speak louder than words. if they were committed -- >> we're going to stop now. it's up to the politicians to fix the problems that we have on the tax and regulatory end. neil: i think it's a little disingenuous for ben to say his role was small or limit. given the trillions that was pumped into the economy, that wasn't exactly a passive role. >> and i agree. it's just -- >> jack could you answer that. jack: i think the fed had an instrumental role. they were forced to be in that role. you go back to sort of 1937, you know, we know the fed tightened after eight years

s. >> this fed is afraid of everything. i'm not sure the fed is going in september.it on paper going. i don't have faith in it. if it bounces back they'll say what about q 3? >> we only have about 8% of the -- we only had 8% of the known data for q-2. we don't know anything about the quarter yet. gdp could be 1% it could be 4%. >> we had a historic almost unprecedented surge in the u.s. dollar. people are trying to figure out how that is impacting growth. >> it's not that you reject the weakness in the data but the dollar. simon's question is a good one. it's a bad way to run a railroad and it's very difficult to invest. for investors, the reason why they have to react to the data is because it's the best available they have for what's going to happen in the economy. yet they know there is a problem in the data. they know there will be a second quarter rebound. what that tells investors is get a view of the world and stick to it unless there is overwhelming evidence the other way. >> just to be clear here. we focus on the employment reports which had been poor. >> an

when the fed says it's data dependent, you believe what the fed says.e fed was willing to run hot for a couple of quarters and not raise rates. which is kind of what you are saying. i don't know where jeffrey got it from. i would be fascinated to know where you got it from. >> i think it makes sense when you think you still may have quite a bit of additional labor market slack. there are some indicators that suggest that. the underemployment rate is almost 11%. that's a couple percentage points above what would you normally expect in a full year labor market. you're seeing price inflation is lower than the target. you see wage growth is below the normal range. >> that is not the rhetoric from them, is it? you've got to look at decisions they are likely to make. what they are telling you is they'll wait till the end of the year. >> right. my forecast is september. i am saying there is a strong argument for waiting longer. i would say i look at both. i look at way think the economic information would suggest in terms of appropriate policy. that obviously

the atlanta fed the economy is on tract to expand .8%. whoop-de-do, up from 7% from the prior forecast. >>> and the dallas fed reports the factory activity in texas fell this month to the worst level in six year. and several business leaders in that survey say the state is still feeling the impact of declining oil prices. which has spread now to other industries. and they remain pessimistic. today oil prices fell 3% to $58.03 a barrel. >> concerns over greece surfaces. the cou in talks with creditors over a series of payment cocking due, the next one in early june. but as michelle caruso-cabre explains it is not just greece investors need to watch, but also spain. >> once again a new round of meetings and teleconferences scheduled this week to hammer out a deal between greece and creditors to lead to a disbursement of euros to greece can pay bills. but over all the two sides remain far apart. now, however, may not be the time to worry about greece. consider june to be the cold war phase of greece's negotiations with the creditors. sniping

the fed is focused on the core measures.art of what contributed to the rise in the core was an aspect of [indiscernible] different to the fed's preferred measure of inflation. this was a different situation. with energy prices plunging so much at the beginning of the year, there was a concern they were going into freefall. there was a feeling of a lack of stability. betty: you mentioned first-quarter gdp revision. some of the other numbers, new home sales, durable goods, university of make it -- michigan consumer sentiment. all eyes will be on gdp at the end of the week. that is the number one question, how deep was it in the first quarter and what is the composition? it's really about the details this year, to figure out what was the mix of growth. new home sales will get a lot of attention. existing home sales were week this week. >> in housing starts, it was a 20% increase? >> yes. mention the composition of growth. housing has been stronger this year. there are high hopes, and new home sales could be proof of that. scarl

>> well the fed is already audited now. i think a lot of people would like to do away with the federal reserve. i don't want to do that we need a central bank but we need more oversight. i don't believe members of congress should be making monetary policy but we should know what the fed's doing with our monetary policy because we created the fed. ultimately the american people are looking to the congress. so this would bring the fed before us more often. we would be able to, they would have to explain some of their monetary policy which a lot of it has been opaque. >> all right. senator richard shelby. chairman of the senate banking committee. thanks for joining us on fox business. the markup of this bill starts thursday, if i'm correct. >> next thursday. >> next thursday. melissa, back to you. melissa: peter thanks for the interview. >>> talk about a blind side. tom brady suspended four games over "deflategate." fox news's rick leventhal is at nfl headquarters in new york city. rick this is a big one. much more than expect

not the fed.d it interesting when people say if the fed changes and raises rates, somehow the economy is going to crater. if we are that bad, we have deeper problems. erik: whether it is issues like trade or banking is hillary clinton going to have to attack from the left to fend off people like elizabeth warren? bill: the fact is america is in the middle. whoever is the nominee of the republican and democratic party they will have to appeal to the people in the middle. they both started off with 47 and are fighting over 6% of the american people. it is crazy, when you think about it. stephanie: is there a potential candidate with a plan you will support? bill: i think hillary clinton will come forward over time. the status -- the statement the secretary made, that is part of the economic plan. most people in believe we need immigration reform. it will be interesting to see how the other candidates stand on immigration. stephanie: i never interviewed you before. what an honor. erik: bill daley, th

europe is rallying hard and no one from the fed said a word. silence from these guys is indeed golden. so that's why they didn't fire the s&p 500 and buyers came out of their bunker. to pick up the bargains created by yesterday's sell off. in other words once again the s&p futures gave you the total wrong signal because the sellers were as usual violating what i call from the god father they went to college to get stupid and boy are they stupid. it's funny. if the market were rational on any given day as opposed to just a battlefield that on certain days draws a truce to clear out the wounded then today's a day where i argue we could have been down. just to prove that i'm willing to see the side of the trade all the time let me give you some reasons why i could have said we should have gone lower today. first we got a quarter from work day. a terrific company with an incredibly disappointing stock. workday gave an outlook with a definite slow down and worse there was actual competition, mainly from oracle which has gotten it's act together. ouc