is the fed behind the curve?ly not yet, but they could bp or we are worried about the wrong policy mistake. some are worried about the fed tightening to quickly. level, not tightening at all could have bigger implications going forward. michael: you are confident monetary policy can react quickly enough with whatever inflation threat the market is seeing? ira: fighting inflation is much easier than fighting deflation. withed saying they are ok inflation running above trend for a while, because we know how to stop that. we know we can hike by 50 basis points, we know how to deal with high inflation. but the fear is still inflation being too low. headline inflation will be low for a while because you still reasons oil, a lot of that headline inflation is not the problem. even in places like europe, prices are relatively stable, even though they are at levels that nobody really likes. scarlet: but we cannot vanquish those inflation peers, richard. no, and certainly not a threat in the u.s., in large part due to effe

is the fed boxed in? >> the fed is boxed in at this point. peter put out a note earlier saying the last six months we have seen 235,000 in job gains and this morning's core cpi report, up 2.3% year over year. >> do you think they'll raise rates or is it too late but this put aprils on the table? >> they're not in the business of surprising markets. they won't surprise the markets today, absolutely not. >> when will they react, do you think? >> they're not going to do anything without a press release. so i think -- i would agree with -- >> you mean a press conference? >> i agree with where the markets are now, a june rate hike. >> in case they don't know, they only do a press conference every other meeting. >> i don't get it. >> if they're going to make any moves, they need to communicate it. you'll recall after last september's meeting, jeffrey lacquer dacame out the next day calling on a press conference after every fed meeting to give them more flexibility in their decision-making. >> that's really interesting. you lock it into four or five

plot from the fed. dot plot from the fed. you can see how dovish the fed has continually gotten. at the end of the december meeting, the median expectation for rates was 1.3%. .9%, two raten to hikes. this speaks to the velocity of this move. that red line is the market expectation and the green line is the median dot. the market was right. this goes back to the argument we have been having for many years, is the fed beholding to the markets or the market beholding to the fed. >> in terms of the market action, i'll switch over here, this is wirp on the function. we are looking at a probability of a rate cut. that moved up today. i rate cut expectation for april and june, not very high, but reflects that dovish sentiment in the market. does not dovetail with inflation data, cpi better than anticipated. breakeven rates, with the market believes inflation will be in one year, that take up and inflation expectations over the short term. you have the 10 year and the 30 ,ear, and that has drifted up but not as much as the short-term inflation outlook. this is market-based grid this is

the fed scale back his plan for rate hikes. policymakers not expect to raise the fed funds target by only .5%. i don't need to tell you that is a big change from where we were in december, just three months ago when policymakers anticipated a full point of increases through the end of 2016. i will say this, even the most hawkish members of the fomc have to ratchet back there rate expectations and, clearly, that says a lot. formust be asking why, and that we turn to the statement, where there are some important changes in the language that the policymakers are using. the fed is explicitly pointing to external factors as potential drags on the u.s. economy, and i will quote directly from the statement. economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. however, global economic and financial developments continue to pose risks." that is tom, michael, the immediate reading from the fomc policy state. we can go into more details. scarlet: we are looking at stocks rising in the w

his the fed going to move closer -- is the fed going to move closer to the market expectations?n terms of the plotsdot , the fed showed a median of rate hikes. we think this will come down to three rate hikes from the fed. more importantly, we think the leadership. only showed three -- leadership dots only showed three hikes this year. pricing in a little bit more than one rate hike, so as of this morning there are 35 basis points of hikes priced into the curve for this year. i think what is happening as the market will ratchet a little higher toward the fed but the fed will come down to meet the market. matt: i wonder what you think about the morgan stanley call today at 10 year rates are going to come down to 1.45% by the end of december. i gets very close to an all-time low, at least in my lifetime. doesn't make sense that we would go that low, the demand for treasuries would soar because of negative rates around the world and nobody wants to sell what they have got? joachim: i think traders are more likely to be in a range, my guess is the broad range is somewhere between 17

something we saw in the fed statement during the fed meeting two weeks ago.omething we did thought hear with the fed regional presidents coming out, some of them talking about april being a possibility sooner rather than later which spent the dollar stronger. i would just say pay attention to the core of the fed. williams echoes more the janet yellen views of the fed. she'll be speaking on tuesday at the economic club in new york. bill dudley, the new york president will be speaking on thursday. those are the ones you want to monitor because they matter. >> interestingly, it comes down now to the confusing fed speak we've had over the last couple of weeks as to how much weight they put on the situation. everyone sort of agreed the situation in the u.s. is pretty decent. the data has been okay. the situation internationally is pretty soft and it's how much weight do they want to put on the international situation. those that focus domestically, they're more hawkish and saying hike earlier. and the one with total volatility say let's push it back. >> and it ope

same with the fed.itoring policy to be run by referendum, you do not need the federal reserve. every month you have a referendum of the population of where you want the rate to raise. i will tell you. zero. discussion of entitlements, there has been a lot of discussion about globalization. not popular with either democrats or republicans. what happened in the country that a lot of old do not feel the benefits that the leaves say, straight. alan: the growth rate is very slow. in the first quarter, it looks as though we will get a 2% annual rate in more than likely, less than that. it means real incomes are staggering, people getting poorly compensated and they are very dissatisfied, for good reason. and you get consequences. difficult to deal with. david: there are two front runners. what difference would it make if -- doesn't have any effect on the federal reserve? alan: i do not know. all i can say is bill clinton never once argued in public second-guessing the actions of the fed. it has not always bee

fed for thought. stocks rising around the world as the central bank signals fewer rate hikes this year. >>> hedge fund hurt. bill ackman's pershing square posting dismal performance numbers. >>> the race for the white house. donald trump forces the cancellation of the next gop debate and warns if republicans try to block his nomination, there will be riots. it's thursday, march 17th, 2016. happy st. patrick's day. "worldwide exchange" begins right now. >>> good morning and welcome to world world on cnbc. i'm sara eisen. >> and i'm wilfred frost. let's get right to the market action as investors minced fed chair janet yellen's words yesterday. some confidence by markets taken by the fact that fewer rate hikes now expected this year than previously. dow once again pointing to a positive open. s&p by six. the nasdaq by around nine. let's have a look at the u.s. ten year. we saw it spike above 2%. it's now settled back down. just trying to work out which way it wants to move. yes, we'll probably have hike

pete, has the fed lost it's kred? >> the reason i would answer the question yes is because they have given us data that we're supposed to be looking at. we're supposed to interpret that data and figure out if they're going to raise or not. they told us we're going to raise at least three or four times. you don't see the three or four rate hikes. it doesn't seem like a possibility right now and is the data changing in front of us right now because we have no idea. it seems like they hit the various data points. >> job gains, joe continue, unemployment rate at 4.9% and yet we're still near zero interest rate policy. >> they have a dual mandate and part of the dual mandate is financial market stability. i do think they look at the s&p and where global marks are and when everyone went to jackson hole and position themselves to the federal reserve not to taper further, you know, the federal reser reserve. so to pete's point there's too much unknown or too much lack of clarity and positions seem to shift. >> the fed doesn't

the fed is still looking at a hundred. so the fed is way above the market. and to the extent that the market is lower to a certain extent, treasuries are fully priced at the lows. scarlet: the fed sounded very dovish in today's statement, even the fundamentals improve. the lifetime track of the domestic economy shows a sub 2% growth rate right now, which is where it was at the december fomc meeting. certainly an improvement from --uary 27 when the fed had without the news conference. it is interesting that the -- economy views have turned more dovish. mike: we can see the december dots plot and the ois curve below that. the big argument was the fed was out of step with the markets. then let's go ahead now to the the ois curve.nd they are chasing their tail. is the fed at all connected to what is going on in your world? extent.think to some i mean, they are connected to the stock market. put or perhaps the yellen put is still in effect. don't think they are fully responsive to the effects of interest rates that are zero bound or interest-rate in negative terr

today is the former president of the minneapolis fed. he's currently an economics professor at the university of rochester and a columnist for "bloomberg view. scarlet: we saw inflation data creeping higher with cpi numbers getting closer and some would say over but the fed has given the forecast record inflation. we are revised down slightly for 2017. what do you see when it comes to inflation? guest: thank you for having me on. a real leisure to join you. areerceptions on inflation similar to those of the fed. fairmont --o see a a fair amount of slack and i think that slack is going to continue to exert downward pressure on wages. we have seen some wage growth but a low where we were before 2007. the other piece of the puzzle is that corporate profits remain high even as wages go up. what extent will corporations take out profit? i continue to see a lot of slack and some room on the business side to absorb wage increases in the prophet. my outlook is even after the fed's announcement, i see inlation remaining below 2% 22018. alix: you

is the fed on the right track? tim reid discusses his career beginnings and where it all went wrong in malaysia. we are one hour away from the close of trading this wednesday. let's head to the markets desk where julie hyman have the latest. we had a big rally and now we have lost some of it. >> look slick we are hanging onto these gains and are relatively steady. a two of janet yellen reaction in what were right -- widely reviewed before the economic club of new york, which she emphasized would be cautious and measured in raising interest rates. especially in large cast, we are taking a look at 3m, ubs raised $190 based ont, what analysts see as product innovation. shares are rising as well trading on a record today. a big year thus far. after they were upgraded, they say apple is undervalued in a large cap tech peers. financials, one of the few groups to not perform well yesterday. they are bouncing back. shares are rising and contributing to gains. energy, a top performer today. that was a laggard. >> it has bee

the fed decision is at 2 p.m. and then janet yellen host her news conference at 2:30 right here on bloomberg. adisappearing -- alix: disappearing medical implants will get a new look at from the fda this week. clear fating to clogged arteries, legislators are questioning the safety and effectiveness of the device. playstation view has only been available in cities like new york and san francisco. the package now starts at $30 per month but you won't get over the air channels with that. they hope to cash in on the trend where viewers drop traditional tv services sign up with providers like netflix and hbo. that is your business flash for this hour. a big week for central banks. there are three key monetary meetings in the focus. federal reserve on wednesday but the bank of england on thursday. for more perspective on those decisions we are joined by toian jessup, former adviser the u.k. treasury, with me of course here in london. who has the easiest job out of the big for? [laughter] >> i think the fed is in the mo

if you wanted the fed to tighten, you can make a case the fed tightened.this report to break one way or the other because of weakness in the services sector, but it did not. as a result, i don't think it changes the direction of the markets meaningfully. david: i have been watching the wrip function. it has been fascinating. after the announcement, it jumped to 75%. now it has settled back down to around 65%. it is clear the market reacted and then started having second thoughts. erik: david, everybody is trying to get a sense of how this plays out on the fed's dashboard. argue for another rate hike, whether 25 basis points in a couple of weeks or maybe at the next fed meeting when you see wage growth of only 2.2% slipping from 2.5% in january. yesterday, i spoke to ray dalia. ra there are people hike,el as though another even if it is as small as 25 basis points would be a serious mistake. if anything, the fed needs to get on the easing past, not just holding rate study where they are but cutting rates back to zero effectively and embarking on another rou

the answer again and again was the fed.'s so much uncertainty that you are going to see light volumes today. alix: i'm looking at the s&p and volume is down versus the 10 day average. wanting to take a lot of positions into the fed. guest: another artifact of that is the vix. the vix looks calm right now, definitely below historic averages. when my colleagues looks at these other securities that you can trade the vix on, making a bet on whether you think volatility is going to go up or down. the demand is really high which would lend itself to people saying don't get used to it. we have jobless numbers, who knows what the reaction is going to be but ac volatility in the future. alix: in terms of what is moving today, it seems like you have apple which was supporting the dow and on the other hand, you had valiant really bringing down itself. it felt like health care got a bruise from that. health care was the worst performing sector. when you look at that end say what is grabbing headlines, you'd be hard pressed to find some

to game the fed have been wrong. >> betting against the fed has been very successful. the fed has made a lot of mistakes. look at disaster that happened in the housing market because of the fed and there were people who made a lot of money bet being against the fed. >> are you talking about '08? >> yeah, the housing bubble inflated over a number of years and if you bet against the fed and bought gold, look where gold was in 1999-2000. it was under $300 an ounce. the fed one of the main reasons it's now above $1,200 so buying gold is a bet against the fed and that bet has paid off more than stocks. >> i just don't agree with that. first of all, stocks went from 650 or 666. >> straight up. >> went up three and a half times. gold went from a peek and is down. you're in a place where everything the fed has done. you may not like fed policy from a pure economic perspective and it may be something that's a road to ruin. who knows. i don't like the fact that we can't normalize interest rates either but the reality is that has worked for asset prices. >> so what. it hasn't wor

very dovish messages coming from fed speakers. then toward the end of last week you had a hawkish tone. leading people to think i don't know what to do in this market. >> and williams and some of these guys talking about april, back on type of a situation. that's what we're hearing time and time again. is it the gdp and economy? >> global markets and emerging markets, all of this is being thrown in. if you get clarity and a road map going forward saying this is what we're focused on -- >> maybe that it will be. >> it was gdp. >> what are they looking at? they need to tell us. >> hopefully it's not further confusion. we're going to take you live to midtown when the fed chair begins speaking in a few moments. let's first bring in jeffrey of raymond james to help count us down. jeff, welcome back. >> thank you. how much of the direction of the market hinges on what the fed chair says today? >> your panel has it right. in terms of the near term data direction is going to be a lot dependent on what janet yellen says at this meeting in

fed, the't think -- >> it depends more than anything where the economy is. if interest rates are rising because the economy is growing that's good news. >> this is where i think it's interesting. the economy is fine. we've seen growth come around 2%. retail sales slipped a little bit. you have this interesting combination where the economy is fine yet inflation expectations are keeping the fed cautious and on hold and that's a nice combination. >> can't be fine given the politics of what's going on in the world. >> the politics are challenging. >> meaning the whole country seems very angry. they don't believe the economy is fine at all. >> here's an interesting take. fed is a non-issue this cycle. that was different in 2012. in 2010 rick perry was threatening ben bernanke coming to texas. in 2012 when the economy was fronts and center the unemployment was at 8:00. the message from the federal reserve if you want to say out of political cross-hairs focus on your dual mandate. >> what about the

julie: i will say happy fed data john because it's his first fed day as well. fed day in the united states come in new york. president obama on a collision course with senate republicans. later this morning, the president will announce his pick for the supreme court. he called his nominee eminently qualified. watfordgarland and paul under consideration. senate republicans say the vacancy should be filled by the next president. we will have the announcement live at 11:00 a.m. eastern. knockedrump has not -- marco rubio out of the republican presidential race. rubio lost badly in his home state of florida and suspended his campaign. john kasich won in his home state. he says he will stay in the race until the convention. 621 delegates. ted cruz has 396 and john kasich has 138. hillary clinton won four of five states. 1561 of the 2382 delegates needed to become the nominee. of --itish chancellor osborne needs to cut billions the balanced budget he promised by 2020. he will try to swing the pill of austerity by calling for sweeping education reforms that include a

happy fed day. among today's top stories, the race for the white house. the results are now in from yesterday's key primary races. call it super tuesday 2.0. on the gop side, donald trump winning four of the five states, but ohio governor john kasich pulled out a victory in the buckeye state, capturing 66 delegates in that pridze, winne take all contest. meanwhile, senator marco rubio announcing he will exit the gop race after losing him hoe ininge of florida. on the democratic side, hillary clinton marching closer to her party's nomination, sweeping bernie sanders in all five of yesterday's contests. much more on the race for the white house, where we go from here, including the possibility of a contested gop convention. we'll tell you what it means, get you up to speed, go back to the history books on what happens in that scenario if, in fact, the chances are increased this morning. >> much more debate on the political side to come. first, today's top market story. the central bank is seen holding

how come the fed doesn't under janet yellen?to they are follow a little closer to what's considered best practice in monetary policy, transparent, communicate what you're trying to do, and not have each meeting be a big event. if they can tell the market what they're trying to do, the market should do most of the work for them. ideally inngs should a perfect world be a non-event. we can always read what the fed is thinking. alix: what is the number one question you have for janet yellen tomorrow? isday comes back to what giving them confidence on the inflation outlook. they have been saying it is about labor markets improving. is that still the case or are inflation expectations coming down and they need to see something more than just that? alix: thank you very much. you can catch our special coverage of the fed decision at 1:00 p.m. new york time tomorrow, coverage across all platforms. with miss our interview the former fed president on thursday. scarlet: the races on for the gop candidates and five state primaries. next, we

we will talk fed in our next conversation. that conversation here at how it is moving asian equity markets. -- on that conversation. how it is moving asian equity markets. moves we are saying and asia. in asia. ♪ nows: fed officials expected to keep rates on hold as global pressures mount. asian shares up to the most in two weeks. and the slide of more than 8% after concerns it is facing a u.s. robe over accounting practices. >> welcome to "countdown. let's have a look at what is going on in the futures market. 0.4%. in london we are up is about a less hawkish fed than the market had anticipated. higher all of these risks on assets. anna: we're still not on the same page. that's the function that sir manus is expired -- excited about. and that exactly on the same page. manus: the south korean you on this is the best asian fx trade out there and indeed it is the best of the year. is there more to go on the aussie dollar? .e're this differential what else have we got? a 15 month fell to low. the increase in the central bank spec

the fed created? are they afraid of their own monster? >> i don't know. that's for the whole world. >> yeah. >> since the credit crisis -- since the crisis 60 trillion, since the crisis. >> that's what it's grown by. >> no. >> hang on. >> right, since the crisis. >> you've got -- you've got to be careful with that, because there was a big drop. >> don't want to talk about the debt. >> some of that expansion -- >> all i hear from anybody i talk to is global debt, global debt. and suddenly we're saying global debt is not a problem. >> talking to the wrong people. austan goalsby, back me up on there. when economic growth is sub par for many years as it has been, what happens? budget deficits go up everywhere around the world. >> right. >> and that's -- >> why is it sub par? why? why? why? that's the only question that matters. >> different countries. >> it's the policy! it's obamacare. they are the enemy. >> i agree. the policies are terrible. >> let me applaud rick for giving the c-minus. you saw the re

which of the two are you watching more closely, data or fed speak? >> actually, wilfred, fed speak.l be at the luncheon today. so it'll be interesting to see what janet has to say. i agree, i think she will try and walk back some of the more hawkish comments that some of the voting and non-voting members have been talking about over the past week. we do think that april is off the table. as a matter of fact, we think the federal reserve probably only raises rates once this year and not twice as the fed is currently indicating. >> wonder what you're making of the volumes this week. very low. yesterday the lowest of the year. some of the other interesting factors at work. for instance, transports have been down five days in a row after a strong stretch. if you put some of these pieces together, what message are you getting from the stock market right now? >> actually, i think the stock market has been stuck in neutral here for a little bit of time, waiting for better economic data. unfortunately, the consumer data we saw yesterday and the durable goods on manufacturing weren't particu

the fed gave a fairly upbeat assessment of the u.s. economy and jobs but was clearly concerned about recent global economic weakness. >> you have seen a shift this time in most participants' assessments of the appropriate path for policy. and as i tried to indicate, i think that largely reflects a somewhat slower projected path for global growth. >> reporter: yellen did not rule the chance of future rate hikes underscoring fed officials forecast two more rate rises this year and said every meeting including the one in april is locked. >> most participants do continue to envision that if economic developments unfold as they expect, that further increases in the federal funds rate will prove appropriate over time and that the pace will be gradual. >> of course, yellen could not escape a question on the heated presidential election and whether it had any influence on the fed and federal reserve interest rate policy. >> we are a nonpartisan independent institution devoted to pursuing our congressionally mandated objectives and i have never

fed reserve policymakers next meet in april. >>> and just like the fed, investors pay a lot of attention to economic data. but one of the most important gauges of economic growth has come into question. steve leishman was first to report on the persistent errors in the calculation of gross domestic product. >> reporter: instead of calling it gross domestic product, call it gross domestic problems. in-depth analysis of government's reports on gdp suggests large and persistent errors that should give investors, business executives and policymakers pause in relying on the data for key decisions. cnbc went back to 1990 and found an average error rate of 1.3 percentage point in the initial gdp reports compared to where it will eventually be revised to in later years when there's more complete data. so in a report of 2% growth on average will be later revised to be 3.3% or 0.7%. >> it's a big number. 1.3 percentage points is large. especially more recently when the economy's going about 2% or so. you're talking about a big chunk of that overall gdp number. >> reporter: the research does not sh

fed funds future. we should look at those this is a tool used to predict probability of future rate hikes, pricing in 51% probability of a june hike, july? july, interesting. we have a june meeting as well. 51% probability for july. looking at what is happening in april, that is still a possibility too. so we need to get to this fact. ex the fed and all that just happened, edge of your seat news day. missouri is still in limbo at this hour, folks. still too close to call on both sides of the aisle after last night's super tuesday 2.0 primarily failed to crown a clear winner in show-me state. second any clarification or announcement after winner, fox business will drop everything, let you know. happens in this hour you can depend on me, i will get it to you. not so much, not so far. developing this hour reaction after president obama announced his pick this afternoon judge merrick garland as his supreme court nominee. set chief judge for the federal circuit court of appeals for the first district. withi

the fed calls it deflation.ent clair in our letter, and the new york policymaking. >> yeah, but inflation perhaps being still the theme we come back to, whether it's how many times you're going to raise interest rates this year, it sounds like they're trying to get out of the way, so to pell. >> i think they're pulling back certainly from the muted four times this year, to -- they don't know -- i don't know -- what i will observe is sometimes inflation comes on little cats' feet. it doesn't ring a bell, it doesn't issue a press release. it is there are and the fed will have to deal. more than once in our recent economic past the fed has been behind the times. in fake it makes a -- >> it's a delightful image. you always have a way with words. thank you for joining us. >> you're welcome. >>> precision laser weapons? it's new technology out of the defense giant lockheed martin. our jane wells is here. there she is, making some trades. she's going to bring us all the details about this new -- what are they calling?

guy: is the fed -- how have significant of a part will be fed play in that?arkets inging particular, had a lot of u.s. dollar debt. that means the raising of the interest rates would have destabilized a large part of the world. that would have gone back into the u.s. and we would have had again, consequences and terms of the exchange rate on the back of the interest rate cycle. i think the fed has rightly acknowledged the expansion of risk. can get very multiply. it eventually comes back to the u.s. in times of lower commodity prices. companies are trying to avoid default by trying to export more at lower prices. i think it is all tied in. this gives us a chance to recover and to stabilize and the recoveryecoverin down the line. guy: ashok, is going to stay with us. up next, what do you think was the fed's decision -- the dollar or treasuries? that is next on "on the move." ♪ guy: it is all about the fed. you could make money betting on the fed this week. let's get more now with nejra cehic. what have we got? nejra: it is this chart we have tracking the bloom

is the fed leading the markets anymore? fouor are the markets raising te fed? they can talk about raising rates. >> the markets have certainly been leading the fed, haven't they? if you go back one year ago when it looked like there are going to begin the normalization process, they didn't. they did not do it in june because the dollar had appreciated and that was a big head went to corporate earnings. they did not do it in september because of the august volatility. they backed away from raising rates this march because of the volatility we saw in the capital markets. they talk about foreign financial conditions a lot. i think they are responding to what is going on in the markets. it makes sense to me. what head of the fed once a crisis on their watch? >> they can't ignore it because of the impact it can have domestically. ,t can't be this old reason moving or not moving. what about the stronger dollar and trade? how much will the fed be taking that into account in march? be taking they will into consideration a considerable amount because they are looking at

why does this matter for the fed?ly as the yield suppresses it could point to a weakening global economy. that may be a recessionary risk. the reason that we care about this today -- why is this happening? there are two particular options. one, it's foreign. the fed can go ahead and raise rates because of other reasons. if it is domestic, if it is because of global slowing in the u.s., the fed is going to have a very difficult time raising rates when this spread is at 99 basis points. potentiality in those charts. mark, i'm giving it to you today. alix: nooo. david: keeping the game interesting. done, you can't win forever. i love this chart. maybe you will win tomorrow. alix: you're dead to me. [laughter] well done, mark. you: i think i'm leaving now. finishing the session little changed today. stay with us. ♪ alix: -- julie: this is "bloomberg markets." taking one last check out bloomberg stocks heading into the fed meeting. taking a look at the overall for what we are's in today, a mixed picture of the movers. -- f

a fed divided. yellen's comments solidify the division between fed members, but the markets don't seem confused. >>> 2016 high stocks at home and abroad rallying as janet yellen strikes a cautious tone. >>> impeachment nears. the head of brazil, the world east seventh largest economy, is one step closer to being ousted. it's wednesday, march 30th, 2016. "worldwide exchange" begins right now. >>> good morning and welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfred frost. let's get straight to the top story. fed chair janet yel hn the floor yesterday, and she made it clear she isn't on the same page as her hawkish colleagues. she's moving ahead carefully with the central bank's decision on future rate hikes. >> in particular, developments abroad imply that meeting our objectives for employment and inflation will likely require a somewhat lower path to the federal funds rate than was anticipated in december. given the risk to the outlook, i consider it appropriate for the commit

the fed is part of the process.global inter-linkages in their statements now. tom: that is the heart of the debate. 10ncine: it is, but again, le months ago we were saying we will mobilize.how scary will that be ? we got into negative territory as central banks around the world cut and cut. the normalization process is being pushed away and will be much more different when it comes. steven: it was the 28th of january what effect stress tests -- when the fed stress tests were published. minorenario included the 40 basis points. a 6% treasury yield. that is the result of stress testing the system in america taking on all kinds of scenarios with the global economy, global markets, all kinds of things. i struggle with the fact that it has taken people so long to realize the fed has been analyzing thing in a different framework and only now is everyone realizing that in fact everything is connected. tom: you see that awfully bloomberg screen there on television. eight of 13 economists, that shows you how surprising these

my main point about helicopter , and is that for the fed the fed's mandate is narrow and much more precise than many central banks. they are going to have to check with lawyers first before you send out some kind of helicopter drop and think it is going to work. aboutf fed legislation fees, interest rates, other legislation. they have to clear and serve having the fed operate at market races and avoiding the implicit or explicit rates in the banking system. these rates that start to look like helicopter drops are dubious in the defense mandate. maybe folks can figure it out, maybe they cannot. it can still provide meaningful support but that is modest support. you might try some of the stuff that has not been tried yet but there is a reason it has not been tried yet because folks thought it would not be as good as what they were doing. [applause] right tok we should go the panel because we are behind. i want to mention while people are coming up that larry bernstein of the center -- the books co-authored -- is going to take his place so you get the benefit of two tall people from the cente

the fed calls qe.you buy long-term bonds and increase the demand that pushes up price which is the same thing as driving down the yield. you drive yield on long-term securities and hopefully then that stimulates the economy. so you can ask if there's still capacity to do that and there's various ways you could look at the capacity question. you could say if there's still a quantity stock to buy and there's only so many securities out there, there's only so many security governments out there and so there are limits there but there's still plenty capacity in that sense. in another sense, it's not clear that the capacity is quite as large and it's the same point of interest rates that we have been talking about. qe, so qe2, the famous qe2 program was adopted at the end of 2010, rates were around 3 and a half. then a sequence of programs including the maturity extension program and qe3 and some people called it qe infinity, those were adopted in rapid succession and pushed rates down to one and a half whe

it is all about the fed day.t will yellen take into consideration when planning the coming of the next hike. that she says the global economy -- he says the global economy looks like it is attracting japanese style inflation. we've had steven major on. i am beginning to understand why now. >> he always gives us the strong impression of optimism. guy: you call it realism. why the take this slightly different take? >> we got down there but it is bad. when you look at what is happened to growth and inflation , not just in the u.s. but across the whole western world. the kind of them would surprise has been remarkably smoother than what we have seen in japan. the benefits of hindsight, we all know what happens to japan. it was blindingly obvious. if you look the forecasting community at the time, the consensus is clay said at the time don't worry, go back to normal. inflation will return to normal. it never did. eraou look the error that's -- era and italy and spain. both growth and inflation have come in lower than

janet yellen, stanley fischer, and new york fed president dudl dudley. that's the core of the fed. ultimately, that's who's making policy. >> more comments from bullard today as well. >> now to the latest from brussels following this week's deadly terrorist attacks. our very own michelle caruso-cabrera joins us from the belgian capital. good morning, michelle. >> reporter: good morning, sara. the key development overnight is that the authorities believe there is a definitive connection between the attacks here in brussels and the attacks in paris back in november. the two brothers who died as suicide bombers here, one in the subway, one at the airport, are believed to have been accomplices, facilitators of the paris attacks, providing safe houses and/or transportation. this is raising the level of criticism of the security officials here. the argument is you have this belgian terrorist cell. you have terrorists working across borders, but intelligence services not necessarily cooperating or working across borders. so this is already becoming a political discussion here. does this s

expectations for the fed hikes have been a lot lower than what the fed has indicated throughout the year and when you look at what has happened in terms of just the past 48 hours here, you basically have the fed funds expectations for june going way down from 40 to 20 and the market getting a nice boost. i think that signals to have a market that is very much reliant -- very much like the news, whether or not it has been the source of all the gains in the past month, again, you can make the case either way here but it is clear that when you see the big moves and the way spreads across, it tells me the market likes having those lower rates and they have been in line with what the fed is saying. alix: yellen's dovish this was predicated on a lot of potential risks to the u.s. economy. all we got to the old marketplace where bad is good news? oliver:. sleep bad news was we missed their jobs number or the wages are creeping up more than expected but if the bad news is the bad news we are looking at with the global economy really slowing down and earnings just collapsing, then i think that is

the fed will want to see?n thing is about control here. an fed wants to see that equity investor is not exerting a controlling interest over the bank. they will be looking for assurances along those lines. investors can go a long way to make that just by pledging and actually having a legal agreement to say that they are going to be passive. vonnie: does he come close with any other stocks? any other financials at the moment? noah: he still owns quite a bit of goldman sachs. he owns u.s. bank. e owns m&t bank corp. historically has had insurance holdings as well. really none of them are financial institutions quite as large as wells fargo. the positions are not quite as big. betty: thank you so much, noah. from -- something of him as a superhero, warren buffett. also superheroes on the screen this weekend. warner bros. posting its biggest domestic opening weekend ever raking in $170 million with its new movie "batman versus superman: dawn of justice o." this is despite the majority of negative reviews from cri

to fight the fed. u.s.e last 12-18 months, equities have gone nowhere despite a continually easy fed. to us, this looks like a topping process than consolidation. equity valuations look so high. this is not an environment where equities would normally be performing well, but they still get periods of support from central banks. if that support is taken away, the downside would be pretty big in particular for u.s. equities. it's about trying to play the risk-reward. the risk on the downside looks pretty large. guy: asymmetric risks. draghi is going to be buying more dummies on friday. up next, japan suffers a big drop in industrial production. just a blip, or is it a sign of weakness? we are live in tokyo to find out what is behind the decline. ♪ guy: hans: welcome back to "on the move." i am hans nichols in berlin. japan's industrial production slumped 6.2% in february.it's the biggest drop in output since the earthquake in march 2011. let's get more with jodi schneider who is in tokyo. thank you for j

. >> and fed anticipation day. john williams urging the central bank to stay on track with rate hikes. janet yellen speaks this afternoon. how hawkish will she be? >> and reports out that jetblue and alaska air planning to bid on virgin american. >>> the hijacker of an egyptairplane has been arrested and taken into custody. nancy holgrave has the latest. >> reporter: about five hours after this unfolded, the alleged hijacker on board the aircraft has been taken into custody. officials are working to determine his exact identity and motives. sources have said that during the negotiation period with the alleged hijacker, he appeared unstable and for about the first three hours of the negotiations he had asked to see a woman who they believed could be his ex-wife. now, we have not been able to confirm that specifically as other sources said he went on to talk about the removal of freeing some female prisoners in egypt as well. nevertheless, sources telling nbc that he did seem unstable. some authorities have named him

that fed meeting along with the news conference with fed chair janet yellen, we're going to be talking more about her message. in the meantime, take a look at wti. it is up by just over 2% to $39.28 a barrel. getting closer to the $40 level. also, if you take a look at the currencies, the dollar is down against the euro, which is all the way up at 1.1308. the yen is trading at 111.36. >> dovish federal reserve keeping interest rates unchanged, suggesting it will be very cautious about future rate hikes. a pretty upbeat assessment of the economy. yellen had this to say at the news conference. >> you have seen a shift this time in most participants' assessments of the appropriate path for policy. as i tried to indicate, i think that largely reflects a somewhat slower projected path for global growth, for growth in the global economy outside the united states and for some tightening in credit conditions in the form of an increase in spreads. those changes in financial conditions and in the path of the global economy have induced changes in the assessment of individual participants. >> yel

the fed is to looking at 100. the fed is still way above the market.arket is lower, to a certain extent treasuries are fully priced at these levels. the big argument was the fed was out of step with the markets. let's go to the current plot and curve. they are chasing their tail. ois is going down because everyone is selling treasuries. is the fed at all connected to what is going on in your world? >> i think to some extent. they are connected to the stock market. the old bernanke put so to speak. perhaps the yellen put is still in effect. if the stock market went down by 5% or 10% tomorrow, the fed would respond. they affect pension funds, insurance companies, bank net interest margins. basically, finance companies today in terms of the market are doing poorly because they sense interest rates will go up less fast than previously. it is a negative for the finance industry, for pensions, and savers. going forward, they cannot earn as much as they should. >> the first time since the asian and russian crises of the late 1990's, u.s. monetary policy is a

the fed came out fairly dovish.ium dot was lower for next year, which was in line with expectations. they came out giving a sense that their more conscious of global rishaad: offense. the getting more and more international outlook, aren't they? to the currency because they know the ecb is cutting deeper into negative territory, bank of japan did that, and their conscious how much they can take to the fx route. if ecb and doj go deeper into negative territory, the fed might be more dovish. it is a difficult task for them. you have core inflation going up. the latest print is 2% encore. core they are also conscious of the fact that a potential hear is potentiallyally -- there. china has been stable, has been trying to keep growth at 6.5%. rishaad: china represents a fraction of what the u.s. exports. 2015, thelook at slowdown in global trade became an issue because of emerging markets weakness. well, commodity side as in the emerging market world, capital expenditure cuts have been announced there. what are the impli

this is our function that allows you to see the fed members projections of where the fed funds target be. as of december 16, the yellow dot wrote likes with these -- reflects what they believe. the red line is what the market actually expects them to be. is a big gap. joe: that is one of the main areas people will be watching. week the ecb cut into negative territory, but the thrust of what they did was more on the asset purchase side as opposed to rates. mario draghi said there might not be that much more on the right side. thinking, that the jews is not from assets -- that the real juice is not from assets? from 60 billion euros to 18 billion euros a month. i think that is the right direction. the other thing if you realize is that asset purchases by central banks are global, and when the bank of england stopped its asset purchases, i was talking to people at the time, we think the fed stepping in and carrying out these asset personages is a good substitute for what we are doing . maybe it is the heart of the sc -- sec to step in. the creative part was where they the rate they are p

the fed keeps having to ratchet down its expectations. as the fed have a credibility problem?> i don't think they have a credibility problem. they look at what is going on. market expectations can also move up and down. it will be data dependent. we need to see how the labor market develops. we've seen some mixed data earlier this year. if the labor market continues to perform well, we might see some improvement in market expectations. the other thing that was confusing to me, her comments on the dollar and oil. wasn't low oil price supposed to be awesome for growth in the u.s.? >> it's good for the consumer, but bad for oil businesses come especially those in the oil-producing industries. when oil goes down, it really matters for those companies. globally, if oil goes down a good rate, there's financial jitters. that would affect the u.s. the goodoffsetting consuming -- the good coming from the consumer side. alix: we've seen the market preparing for more rate hikes this year. what do you think the markets will do now? how do they reassess a more dovish fed going forward? >>