go to the left-hand side, june 14 is the first fed meeting where traders see the rates of a fed hiket 50%. they are still not on board with this idea of more rate hikes. very important, all the more reason to look at this jobs report. we know that the bloomberg consensus survey psalm 180,000 jobs. after this emphasis on the unemployment rate, as you go down your screen to just about a .hird of the way down unemployment rate is the very bottom. the survey now is looking for a slight uptake of 4% -- 4.7%. i think we're going to pay a lot more attention to unemployment that may have in the past. a lot to watch, including donald trump. he may be driving the fed in the bond market. shery: nearly all of the high denomination notes dan india have been deposited in the banks. that is according to bloomberg service -- sources. 500 and 1000st rupee bills. this is a huge move in order to fight corruption. in order to get that black money out of the market. where does prime minister modi stands now in his anticorruption drive? reporter: let's take a look at the numbers. india has something like

joe: i know we are not supposed talk about the fed. the fed is yesterday's story. mentioned strong data continues to be, another price of the initial claims number, almost no signs of weakness anywhere in the data coming out. does the risk of a faster than expected series of rate hikes threaten the rally at all? what if the fed actually make for 2017 or four as things pick up? >> for the time being, yellen has demonstrated she is very conservative and will not do anything to disrupt growth. line, we get to next year and maybe a faster fed hike , as we get the policies that may become more water down, there will be a lot more of those negatives. next sixen now and the months, there is strong support for this. joe: you mentioned you think the ultimate bill might be worse thinking, people are what could be specifically worse? >> to get stuff done, you have to make car -- compromises. you look at the s&p, if you just thathe lower tax rate, could add 10 or $11 for the s&p. the borderce one of adjustments, if you keep adding on these, it is not that they could of a posit

watch the fed basically. you're the second guest in a row to question the fed's credibility. is the market -- do you think the market believes janet yellen can keep her word, so to speak? well, i -- i think -- people are looking for more fed hikes this year. obviously the market has been so much more dovish than the fed for the past few years. now the market is starting to wake up to the possibility that the fed can be a little bit more aggressive. looking at the composition of the governing council though, if anything, they are more dovish than they were last year. we have got one outliar maybe who is -- forward. guy: we'll wrapette up there. up next, it is "surveillance" with francine lacqua and tom keene. ♪ francine: yellen sees no immediate threat to the u.s. economy but says low productivity and growing inequality are problems to be don't with. scandal spreads. fiat chrysler has been accused of emissions trading. shares are on the up this morning after plunging yesterday. , exportsrade troubles remain te

contests, get so into the fed and fed policies.ctually, the more i think about not put it past them. it's interesting that she's talking about the mission of the med. fed, theture of the responsibilities of the fed. it's interesting at this is a nationwide, is because it seems to me this is part of an outreach. this is part of the fed saying, here's who we are. what we do. here's why we do it, because right now the fed feels like more than ever, are under attack in congress. donald trump has been critical. some people are talking about changing the structure of the fed. quiet janeter yellen way, she and other officials are saying, hey, wait a minute. this is a way to have an outreach to the public. if you put it in that context, that makes it all the more interesting. i think that janet yellen -- i not quiten she was named fed chair and she was competing with somers, the treasury secretary, people from -- who were there at park were coming up, go, janet! they were all for her. she really has, i think, some to people. it is a powerf

your take on looking at the fed is that you should not rely on the fed signals, the fed minute, the fedions for any sign on what they should do next. why is that? >> if he were sitting here one year ago we would be talking about the policy tightening of 2016, but what happened is they found other things to worry about at each meeting until they about ran out of 2016 and had to slip one in in december. why do you think they will do three in 2017? events will probably improve. orther or not markets investors shouldn't, at the end of the day if you look at what has been driving the markets over the last couple of years, are we going to finally be moving past that? strategist saying that maybe it will be too, maybe it will be there's not a lot of volatility around it, it seems. the: that's a standard forecast a vincent: you've got standard forecast if you are assuming no early personnel changes induced from the white house side. if we are fairly certain that will happen, there will be volatility surrounding each of the eight scheduled meetings and we are going to hang on every word of janet

the fed in particular as pointed out on the bloomberg, the fed will be looking at the rate for folks between 25 and 49. are more of the people rejoining? are more going part-time to full-time? we will be looking at those numbers. you all were talking about a donald trump's campaign promise, 25 million jobs in a decade. give perspective, if you look at the numbers, the estimates for today, 2016 total advance could be 2.2 million. that would be job gains more than 2 million hold the longest streak since 1999. in contrast, the forecast for this full-year is 1.9 8 million. we will see if it is a tall order to deliver those 25 million jobs. jonathan: great to have you with us. julie hyman. david, it is remarkable, isn't it? how much exit capacity is it there really we do not expect? trump said his top priority is creating the u.s. jobs. to takeow weighed in action. he tweeted about gm and toyota mexico andobs from ford decided not to build the mexico plant. and investors are trying to figure how to respond to these almost daily tweets. harris putay, david out the pluses and minuses. >> th

is saying about the fed is, we do not understand it. fed by design was a nontransparent entity and was designed to be that way. the real issue to me is not as a -- is not if a great person like janet yellen is political. she is doing the best job she can. it is that the process is not opaque or transparent and that makes it difficult to understand. emily: how do you think trump versus clinton would impact the growth in general? >> i think where it impacts us -- when you have a president -- let's say trump wins -- and you do not know what he will say next, that is the ultimate uncertainty. he has not been able to control himself this close to the presidency, he is not going to change. david: some of the last polls to come out before the u.s. elections tomorrow show hillary clinton maintaining a moderate lead over donald trump. >> the dow gained 350 points. u.s. stocks overall gaining 2% with every major interest group and the s&p 500 up. by the way, for the s&p 500 and dow, this is the best one-day performance since march 1. >> financial

let's read what the fed said.ted the upside risks to their forecast for growth had increased as result of prospects for more expansionary fiscal policies in coming years, a clear reference to donald trump's vision of what he wants to do for the u.s. economy. to talk minutes go on about a possible undershoot of unemployment, labor markets getting tighter, some kind of attention accelerating inflation concern, so let's jump into the bloomberg and see why they may be looking at it this way. unemployment, 4.6% going into the recession when the economy was running strong, 10% of the top, the peak in 2009. far right hand side, that is where we are now, back to 4.6%. in terms of what the fed is looking for, that's just about what they are looking for, so maybe we can see why they are watching this with a little more concern. what does it mean? potentially the fed will have to hike rates faster. this is not what they were signaling. they said many adjustments judge the risk of a sizable undershoot had increased somewhat a

one of the big events was the fed minutes.n though we didn't see a huge market reaction as a result of the minutes, which basically rehash the last fed meeting which did happen after the outcome of the presidential election, it was interesting to see that the fed's expected pace of interest rate hikes is actually a little bit uncertain. after the original meeting in december, it seems that we were looking at three hikes. now there is a little bit of a question. let's bring in our next guest, etf trends ceo time lied den and former rich manned fed senior economist ward mccarthy. welcome to both you gentlemen i should say. >> thank you. lori: ward, you're an economist let me get your take on the fed minutes and pace of rate hikes this year. >> both december 14th and fomc releases and the minutes reflect a bit of a reawakening a the fed there is such a thing as upside risk to growth and also upside risk to inflation. right now policymakers are rethinking their approach to a gradual normalization process, acknowledging that they m

the drag on rates will limit the fed. david: the fed believes we'll have slow growth for the next three years. i think the fed is dead wrong like they have been wrong before. >> they didn't even change their economic forecast. the market was saying better days ahead. and yellen and company didn't change that. gary: the last two weeks of the year doesn't relate to the bond market. the -- in terms of yield, the stock market got way ahead of itself in terms of the trump victory. the bond market is taking us back to reality. yes, there is a lot of optimism and confidence. >> income managers are reversing some of those they put on treasuries. gary: confidence can create growth, but you won't have 3% growth in the first quarters. >> i want a yell on raise rates a lot in the new year and have trump tweet -- i want yellen to raise rates a lot in the new year and have trump tweet about her. sandra: expectations are high going into 2017. "wall street week" will be right back. >> announcer: the biggest story in 2016 was donald trump

line in hollywood something gets done. >> the feds are here. >> oh crap. >> fbi. >> feds, huh? >> yeah. >> the feds. >> you got it. >> trevor: that's what trump feels is going to what, trump thinks that will happen, you will send in the feds and all the black people are just going to scatter. or, or maybe another reason trump thinks the feds are a solution to every problem is because they definitely saved his ass. so i mean that could be another reason. to me, to me though, one of the scare yetion things about trump's tweets is not the idea, but where he got it from. you see t wasn't from some classified briefing on urban violence but trump's tweets came just an hour after bill o reilly showed an exact same stat on his show. and coincidentally bill o'reilly also suggested sending in the feds. >> the question is can president trump override local illinois and chicago thortds and stop the murder. can the feds go in and stop this? >> trevor: that is insane. the commander in chief gets his intelligence from the same place your racist grandpa does. (laughter) and don't get me wrong,

>> no. >> not an entirely new fed but, what, one-third new fed. >> new players that -- >> what do younow about the new players and what they're likely to do. >> rookies. >> exactly. kashkari. how do we know what he's going to do? >> harker came out recently and said we could be at the precipous. i don't know that anybody could tell you what the new guy in dallas that replaced richard fisher is going to do. so balanced in his comments. i don't think anybody could tell you how they're going to vote. trump can move swiftly to fill those two vacancies as well. >> we also don't know, guys, how -- on balance, i think the committee gets more dovish. you have mechlt ster and george leaving the voting ranks and somebody like charlie evans coming in. two new appointees from the new president. the question i have and what i'm hearing when i listen to these minutes. it could be folks who were doves in the face of greater expansionary fiscal policy could become more centrist and maybe even hawkish if the gas pedal is firmly placed down on the fiscal side. >> the chair says she's going to stay for

it's a changing mood from the fed. what a difference a few months makes. cover story, the feds fresh concern over faster growth at the december meeting. the focus on the possibility of fiscal stimulus under the trump administration and what it may mean for the economy. anna: the next story is theresa may, she has named tim barrow as the new u.k. ambassador to the european union, 24 hours after ivan rogers surprise exit. survey of u.k. business and inflation is a hot topic. moles itstsche bank options in its options in subprime mortgage settlement with the u.s. government. it may lend money to private equity firms instead of using its balance sheet to buy down mortgages. this is according to a person with knowledge of the matter. perhaps a little less litigious and contentious. anna: the yen extending gains as we get a quick check of the market. a lot going on in currency markets this morning. >> good morning, you say the yen strengthening for a second day, this is the picture, the korean won has jumped the most since september. yesterday was the euro's fir

. >>> the fed -- the fed -- the fed? we still have a fed?he fed is kicking off a two-day meeting this morning. also a busy day for earnings. three dow components are set to report. let's talk more about the markets with kathy woods, ceo at character invest, and jim o'sullivan, chief u.s. economist at high frequency economics. somewhere along the line there was a son of a sullivan. do you know how far back that goes? >> many, many, many, many, many generations. >> many generations ago. when did you come over first? which? grandfather? great grandfather? >> i personally was born here. >> you were born here. >> i moved back and came back again. >> just checking. you know -- >> i'm a citizen. i'm a citizen. >> you may need -- just, any way. want to start with you, kathy. you said it makes sense for the markets to have gone up to where they are based on the prospect for regulatory relief, tax cuts. >> yes. >> you think 20,000 is not the end, it probably has further to go. you have parts of the market that will do better. a type of company that wi

you served at a very independent fed, relatively independent fed, 25 years on.e want to drive that, everyone agrees with you, we want an independent fed. are the checks and balances to push back the mood of so much support of the president? abby: i think it's important that it not be just the president, but also the congress that acknowledge that the fed should be independent. you know, when the federal reserve chair comes and gives testimony before congress, it's important that that be an open dialogue, rather than the chair being berated for things that may or may not come under fed control. tom: you asked piercing questions at the economic club of new york this year, and as always, there was a motion of vice chairman fisher coining that phrase "ultra accommodative." as we go into 2017, not just the part where we get how many rate rises will be get, how distant are we from neutral or even, heaven for bid, how distant are we from a restrictive fed? abby: i think we still have quite a ways to go before we have restrictive monetary policy. keep in mind that the u

tom: this is certainly a show me fed at this point. that they highlighted the fact that they could see a better economic profile on the back of the trump election, they didn't quite use those words, but to us that was in that they are now conceding a potentially better profile from an economic perspective. for us it is not something that you changer numbers on at this point. if you were looking for 2.5% growth in the coming year, you should still expect it, but i do think that there is obviously a number of catalysts that could propel growth much higher, something that we are acutely aware of. like the fed we are also in a show me mode. >> as you know, the federal reserve has wanted to hold the hands of the markets and they try to do that with forward guidance. the guidance from the fed for years has that hikes will be slow and gradual. if that changes, how do they communicate that? already did, that was one of the things they highlighted yesterday, the fact that they may have to go faster because of the undershoot on the unemployment

fed chair. dovish consensus for 2017. this is the kind of analysis we will be doing, looking at the minutes and sing with a signal about 2017. shery: no wonder markets are pricing in more than two rate hikes. thank you for joining us. let's head over to tie one, it's china ares ties with becoming increasingly tense as beijing uses what she calls course of and divisive tactics. in her new year's eve address, president tsai ing-wen said china had hurt the feelings of the taiwanese people and destabilize cross strait relations. >> i did not wish for confrontation with china. give in to will not pressure. there are still important principles when dealing with cross strait issues. shery: our taipei bureau chief joins us now. the rhetoric has been heating up 's phone callai with president-elect donald trump. what is she referring to when she says beijing is being course of and intimidating? >> let me put her comments into context. had an eventful month since the phone call with the donald trump. a chi

the fed has not gone away. we will be clearly watching exactly how much tightening the fed says they'll have to do. what they said in the minutes is actually, look, if trump comes ahead with these fiscal policies, we may need to do more monetary policy. too much emphases has been placed on monetary policy so if fiscal policy can do more, it will raise rates faster. >> some people are jumping on the bandwagon. others say this rally has gone too far too furiously. some people say it's panic starting to set in because people have not participated so far. do you think much of the buying that we're seeing at the start of the year is just panic buying rather than fundamental belief in trump's policies? >> i think there's two things. the feedback from investors post-election was actually there's a shift here. fiscal policy is good. deregulation is good. for the u.s. corporate tax cuts also good. so positive catalysts why people wanted to get involved in equity markets. having said that, have we frontloaded a lot of 20

you are the ultimate fed washer -- the ultimate fed watcher in london.oint, quarter-point psychology. rob: we have a different situation. one thing we have not seen, death by a thousand cuts, has been the wages side. wages are now picking up. that means it needs to move. tom: critically, do we see inflation pop in the u.s., in germany? francine, you mentioned earlier, u.k. inflation popping. is that the surprise for this year? ab: i think it is going to be theme, definitely, across the g7. the next two months, we will see some substantial changes in headline inflation. ,f we watch that very carefully and that starts to nudge up, the fed has its work cut out. tom: rob carnell of ing, the second-most important interview of the day. we will continue on bloomberg radio with him, david gura and myself. look for mr. trump's press conference. that is at 11:00 a.m. this morning new york time. this is bloomberg. ♪ ♪ jonathan: from new york city to our viewers worldwide, i'm jonathan ferro alongside david westin and alix steel. it is a countdown to the truck news

i'd tend to go with the fed.oint is to listen to janet yellen to see how she responds to the fact that we have u.s. cpi at 2.1% already. we have unemployment at or below m-- think you are very right to say that the fed doesn't know what's coming as far as fiscal stimulus is concerned, but i think that the fed may be more interested in what's happening here and now, but they have still got in the back of their mind that there is likely to be some fiscal stimulus coming later in the year. anna: in days to come, do we see the fed trying to march very much under the radar? if they think they are going to do three, they need to start soon-ish. >> i think that's a strong likelihood. the market needs the price more in. if we come back to where we started the discussion, i think this could be an opportunity for the dollar. bnp paribas says three nice trades on the dollar -- the best ones are clearly dollar-yen. we're targeting 128 by the end of the year. we like short euro-dollar as well, given that there is dovish polic

for me, it was balance sheet of a given fed to gdp. is out of control with the expansion of their balance sheet. but the real surprise is europe and the ecb. tell me about the pressures on mr. draghi next year to right size his ecb. abby: mr. draghi has a problem that we see in terms of other central banks as well, and that is fiscal policy has been asleep, and it has been largely inactive for most of the period since the financial crisis. we have seen more stimulus in the united states, 2009, 2010, than was the case elsewhere, especially in europe, where they had the constraints that were very considerable in terms of deficit relative to gdp. so when we talk about mr. draghi , we talk about other central banks, let's not do it in a vacuum. let's recognize that we have asked central banks around the world to do way too much. and that is because fiscal policy largely has been absent. tom: right. abby: in 2017, the ecb is going to be looking not just a interest rate policy, but also in terms of their approach to qe, quantitative ease. an

fed tightening.tial candidates to head the federal reserve next year, including glenn hubbard of columbia, suggesting the monetary policy would be tighter if they were in charge. and that's what you need to know at this hour, and the last of those -- line line jon: is our morning must read. it's one of the most read stories, the future of the federal reserve. head chair janet yellen's term ends in 2018. we've got a list of candidates. they've all criticized fed policy. they're all considered as hawkish, and they all spoke in the last week. the comments, yes, they're hawkish, but not overly hawkish. if you listen to what john taylor said, the federal reserve is a little behind the curve. comments saying maybe they should move at a more brisk pace. hawkish, yes. dramatically different. maybe not on the margin. >> this is a cyclically robust labor market, but structurally challenged labor market. cyclically, we're soft landing to about 150,000 to 160,000 jobs a month. wage growth about 3%. it looks good

tom: there are three fed meetings coming up.ly. you saw the minutes yesterday. half of the members considered fiscal policy in their deliberations. diminish red hawkish to me. read hawkish to me. janet yellen does not think fiscal expansion is needed to bring the economy back to full employment. that suggests you are seeing a of a political confrontation on this front. whilene: let's go back thomas fixing his mouse. if you look at central banks, they have are ready been under pressure. it is nothing new. even theresa may says the bank of england sees inequality. do we mind? >> not especially. see not even so much interference, but bank policy from the most senior members. levele not had it at the -- the prime minister and the u.k. or someone important to treasury. this moves to a different level potentially. that is the difference. francine: jason, do you feel there is more and more pressure on central banks. jason: i do. the fed and the central banks influence on the economy has never been as great as it is now. it is notys, su

and the fed is in play. what have you penciled in for the fed?en: the fed call is not my call but as a house, we are saying two. my question to you is simple. dollar, does it continue as the dominant trade in 2017? yes,en: for the first half but current account deficit will start to way on the dollar in the second half. in the first half, the dollar wins on almost every french. in terms of rate advantage, economic outlook, and so on and so forth. manus: do we add some stage begin to reconsider what a trillion dollars potential he -- potentially, fiscal stimulus could look like. you have capitol hill to deal with before you get a fiscal stimulus of that magnitude. stephen: that would be really big. and our economists are not expecting that. i would take even what we have seen in terms of the selloff already and the rising yields and the uncertainty going forward, there is room for a in thee in that move and dollar. a slower pace of appreciation in the dollar. consider the fact that many of the people that are saying that donald trump's plans will

if you think the fed is going to go three times and fed funds by 1.5%, theend up about question you have rate is 1.5, what premium should i get paid to lock in rates for 10 years? 1% seems quite low to me. i think 10 year treasuries need .o yield at 3% rise and risewill slowly. let's say they don't and they continue at this rapid pace, could that cause a slowdown? guest: absolutely. i don't think you are going to get the pace of selloff in treasuries that you had the past six months. i think that was too low for too long. now you are getting back to reasonable level. a little bit of a selloff from here but not the same pace over the past six months, compared to the previous six months. >> i wanted to bring up a chart where we take a look at how the equity markets have done. if you look at the different , tech in this smp white line has been a dominant force in the smp. it has been information technology. >> we look at the broader equity markets. on a broader basis the market continues to go higher. expecting the stimulus to come through from the fed in the fiscal side of things. therefor

the fed sees limited room to keep policy accommodated. he said the fed tightening could make things easier for central banks. >> we're in the process of it exiting. with the federal reserve seeing limited room for continued accommodation, and starting to raise interest rates, i think you will see the rates come off as much as it has been over the last years to continue accommodations. >> the smog that link it did northeastern china has returned. there is a red alert for air quality triggering the closure of construction sites. 61 cities have imposed health warnings. conditions are not expected to improve. apple is unlikely to receive any more concessions from india. importsght discounts on and excise duties. the regulations cannot be used for just one company. india has relaxed rules requiring 30% of components sourced locally before a tech company can open a single brand outlet. this is bloomberg. >> we're certainly having a good day. hong kong not so much. what is going on? >> the rest of asia seems better. we have to draw this back to

the fed obviously uses many different mathematics.o, models to determine where they want to be, where they think interest rates will be. view, the logical back. >> are the checks and balances within the washington system to give us the miracle of 1951, usurped for a very independent fed. 25 years on. we want to drive that. everyone agrees with you. we want an independent that. other checks and balances to push back the mood of so many that support the president? >> i think it is important that it not just be the president but also to congress that a knowledge is that the fed should be independent. when the federal reserve chair comes and gives testimony before congress, it is important that that be an open dialogue rather berated forir being things that may or may not come under their control. >> you have piercing questions at the economic club of new york. vice also the emotion of chairman fisher according that phrase. 2017, how many rates rises will we need? how distant are we from a -- how or hardest distant highway from a restrict

the feds can help i just think the verbiage doesn't sound right. threatening to send in the feds.ople out there can't leave their house. i have a theory he is a victim of his own mentality. he knows what to do but if you do it, you will be considered a bigot or a racist by targeting the minorities because they happen to be victims of crimes but also causing the crimes in these instances and gangs. i think that's what paralyzes him. >> i agree with you. it goes a lot further than that. politicians do crappy things. they pander to the base so they can get elected. it's rule one. you get reelected. to me, it's blatantly favor with the black and hispanic communities were most of this stuff is taking place. if you bring people in, you are being pc and whatever group they are members of Ãthey will come vote for you. that's what immigration is so much to do with that. our president said it was not existential but it was a existential threat to kate steinle and two other people got killed. sanctuary city? i have an idea Ãlet's let a bunch of bad guys and and not do anything about it. that

gary: is the fed behind come is the fed just right or ahead? >> two things i look at it said the fund futures. gary: we should should explain to viewers that a year ago the fed funds model was saying it was 24 and ultimately have one. >> a lot of things are priced to perfection. the dollar is priced to perfection presents february be dollar is up 10%. we like the dollar and we like to dollar assets that we had sure bets come into february. we did some of the large commodity currencies in brazil, russia and hedge that debt. those currencies are 13 to 22%. as far as that goes behind the curve i think they are in the right place at the right time. i think dependency is one thing but they're also going to look at markets and they have done that last year where they pulled back from the numbers it came out and said the markets aren't reacting positively. we have to take a deep rest of the way. melissa -- melissa: what do you think? >> i think what's really interesting is the two weeks after the election basic lee did with the fed could do in for fiv

coming up, the fed speak in focus.hree fed presidents say the central bank should start discussing how to unwind emergency era measures while janet yellen sees the u.s. economy facing no serious short-term obstacles. the future of the fed and what it means for futures. that's next and this is bloomberg. jonathan: from new york city this is "bloomberg daybreak." a lot of earnings to discuss it. futures as we wrap up the week and the dow positive two. and if you want a record winning streak, look no further than the ftse, 14 straight days of games in a minute sponingsly. the longest ever in london. switch on the board, potentially also the biggest weekly drop post election. the euro north of a dollar in six cents and the weaker dollar and treasuries bids lower at 2 .35. that's a squeeze. alix: here's what you need to know at this hour. banking on trump, wall street's first earnings after the u.s. election underway with bank of america, jp morgan and wells fargo reporting this morning. bank of america profit up 43% and th

forecasty the fed's for the fed funds rate economy are consistent with what he sees.de it clear it's time to start hiking rates and one thing he was clear about was full employment and the fed and economy getting close to that. the thing we will be debating is the rate at which we should be removing accommodations. i think the sep that came out a sense of where we are and a sense of my views. at least three other fed officials signed on and was split between three and two. ramy: the december jobs report came in a little lower than expected. what is the fed taking away from this? i suppose they are going to watch it. up over payrolls november. this one and you can see payrolls on one line, a yellow line with a three month moving average and a turquoise -- will that continue? that probably did not surprise everybody on the fed. rob kaplan of the dallas fed where he is president told michael mckee pcs some labor markets flat but if this continues and donald trump doesn't fire things up as much as people think, it's going to play a bigger role. he said the economy is rapi

louis fed president.hat do you think of harker's comments, talking about three rate hikes that he thinks are appropriate this year? >> president harker has been a great addition to the committee. i respect his views. obviously i'm a little bit more on the softer side for rate hikes for this year. i guess we're looking at the same data but interpreting it differently. >> we're also joined this morning by joel prakken, the co-founder of macroeconomic advisers. joel, let's get your take just on the economic numbers that we see today, what we've been seeing recently. it has been very strong economic numbers when it comes to confidence, when it comes to a lot of these things we put into it. how do you take all that and decide where you see things headed? >> i think this morning's numbers are consistent with the recent pattern no both unemployment claims and inflation. i like to look at the nonpetro prices because of the depreciation of the dollar over the last year and a half. but going forward, pretty solid g

that is what the fed needs. let's see whether she gets it or not. scarlet: i thought it was striking how carefully she tiptoed the idea of a stronger dollar. one of the questions was the stronger dollar. how does it little through your world? she made the usual comments about how strong the daughter -- dollar would make u.s. exports more competitive. what you would expect her to say in the situation. it is magnified because donald trump of the dollar is too strong. she made the obvious point that the fed's plan to continue raising interest rates, the dollar is going to get stronger and the effect of that in terms of economics is that it is a drag on exports. really put in terms of expected this football is he the said the fed is watching it because of its impact. sensitive to remarks about the dollar, remarks about monetary policy because we have whoesident-elect in today's talks about things previous presidents have not talked about area >> we got these comments from trump about him feeling the dollar is too strong. we are used to these comments fr

fed would like to have the option.y don't height much, i think what the fed wants to do this year. by saving some language on the strong data. i can prepare the markets in case they need to hike in march. i think the fed will not hike if no reason to. but if they don't have an excuse, i don't see why they would hike. not only two, but three or even four times this year. call.all right, bold but something we have heard from a number of people. you are going to stay with us. up next, we have had a high court ruling in a supreme court appeal. now, u.k. parliament gets its moment as the bill to trigger brexit is debated in westminster. we are there live. this is bloomberg. ♪ ♪ guy: you are watching the open. this is bloomberg. mcginn's two days of debate on the article 50 bell. if passed, it will give theresa may authority to trigger brexit. or the start of the process. anna edwards is in westminster. mps are expected to pass the bill, but will there be any amendments? anna: one of the big questions. bill, or the eu notifi

fed minutes, quite hawkish. been quite extreme of late and pushed the dollar quite a long way, so the japanese yen, probably one of the biggest gainers this morning in terms of the majors, trading 116. we have seen a move in the euro as well. the british pound down by 3%. just keep an eye on that one. a story in asia and what is happening with fed minutes does seem to be the dominant theme at the moment, so circle back. take a look at your gmm. equity markets fairly mixed. you can do this quite clearly appear by taking this off. we do have the luxenberg markets trading a little bit higher. denmark is trading higher but the bold of european equities are seeing weakness. a lot of upgrade and downgrade coming through. the fed, though, probably in some ways, the chinese story reflects a number of issues. the fed story i think is quite interesting. the federal reserve time figure out exactly what is going on here, but it is in some ways a new problem. it is basically dealing with faster growth. it does not know how t

gary: is the fed behind come is the fed just right or ahead? >> two things i look at it said the fund futures. gary: we should should explain to viewers that a year ago the fed funds model was saying it was 24 and ultimately have one. >> a lot of things are priced to perfection. the dollar is priced to perfection presents february be dollar is up 10%. we like the dollar and we like to dollar assets that we had sure bets come into february. we did some of the large commodity currencies in brazil, russia and hedge that debt. those currencies are 13 to 22%. as far as that goes behind the curve i think they are in the right place at the right time. i think dependency is one thing but they're also going to look at markets and they have done that last year where they pulled back from the numbers it came out and said the markets aren't reacting positively. we have to take a deep rest of the way. melissa -- melissa: what do you think? >> i think what's really interesting is the two weeks after the election basic lee did with the fed could do in for fiv

the fed was also concerned the unemployment rate could fall too far. so two sources talking about fiscal policies expected coming from the trump administration. for "nightly business report." >>> macy's posted disappointing sales in the holiday season and that's where we begin the market focus. the retailers said same store sales growth came in at the low end saying customer behavior and ongoing weakness in hand bags and accessories hurt its results. macy's said it will eliminate with 10,000 jobs as part of the previously announced store closings. shares fell nearly 10 ners after hours trading following the news. they ended the regular session of almost 2%. 3584. after the bell, kohl's reported a drop in same store sales saying purchases during that period were volatile. shares were hit hard after the release, wiping out a 4% gain during the regular session where they closed at 51.88. affiliates of the hedge fund have provided sweers a $500 million secured loan backed by mortgages on the properties. sears had exercised its right the terminate leases on

what about for the fed?ngthy discussion about what might happen under the fiscal policies of donald trump. there's a lot of uncertainty. my eye is their discussion of labor markets and the fact that a number of people think they could undershoot the fed target of full implement. there is a line in here that says if that were to happen, many participants have emphasized that timely adjustments to monetary policy could be required to achieve and maintain the committee's maximum employment and inflation objectives. we are forecasting three rate increases spread out over the are. if the economy continues to run hot or get stronger and labor markets get even stronger, we might be forced to move sooner and faster than the markets anticipate. scarlet: that is the labor market angle. that has two mandates. keeping that under control and you've also got unemployment -- full employment. inflationeds to get to that 2% target. and keep it there. core cpi at 2.1%. pc not at that 2% level. above that 2% level at one time.

is the fed themselves.ckee joins us now. this is like no surprise. of course senator rand paul will put this out there. time?his get through this michael: in the past while republicans have supported it and the house passed a version, the senate never did because they felt barack obama would veto it. with donald trump coming to office, who has suggested he supports the idea, it is very possible we could see this happen. , "it is time for the fed to be solely focused on price stability and not recently announced qe2, which will monetize our debt and trigger inflation." dallas mike pence. he wanted to limit what the fed could do. mike pence directing a lot of what the ministration does. there's a better chance of this happening. alix: what happens when you have a bunch of government guys running the fed instead of economists? michael: they are already supervising the fed. all of its financial books are audited. knowpaul says we do not what they hold, but we do down to the identification number on every securi

the fed unveils the minutes from its december meeting tomorrow.llar and the unknown variables of the trump presidency could force janet yellen off the rate hike path. joining us, mike mckee and joe weisenthal. what are we looking for in these minutes beyond rates went up? mike: not a whole lot. we make it some indication of they feel about raising interest rates again and whether or not there was any discussion of what the trump policies would impact -- what the impact of trump policies would be. if we get a lot of stimulus and people are worried about with the going up and fed could be forced to race sooner and faster. suppose we get a trade war. fed isnomy tanks and the forced to be on hold or even look at cutting rates. a lot of uncertainty. ngarlet: a lot of guesstimati going on. you have a new face at the fomc. in and, new members come others go outcome including three of the dissenters over the last year. joe: we get a refresh. of course, we are going to once again see how janet yellen does at creating consensus at the fomc. many think that

and then the fed.m them because it is so early in the trump administration. they don't know what is going on. mode? in the rate rises or are we just going to sneak out of town without anybody noticing? underlying that, household spending, moderating but still hanging in there. investment business growing. talk about that. than 18 economist says if you take trump out of it, the change of administrations out of it, the data justifies a rate increase. if you see the economy growing fast enough to perhaps generate some more inflation, rates are so low you could do that. talking about three rate increases over the course of the year. it is also a non-press conference meeting. that just makes the logistics harder. at this point they feel they probably can wait until march. >> it was dubious may 12 months ago whether the next move was up or down. time, who's to say this bank may hike interest rates? it may cut them again. >> the pound is obviously getting weaker and weaker. that would bring inflation. if the

jonathan: here is the issue with the fed. if i'm right and wages are going up the way that i expect, the fed is going to be engaged. initially the market will be perfectly comfortable because we normalizing rates is fine but at some point the fed will be forced to get involved in that was spooked the markets. joe: thank you, jonathan. we have some breaking news from bank of america which is sent out a memo regarding president trump's executive orders over the weekend. the firm is monitoring the fallout from the immigration ban. he is connecting with teammates who may be affected. we will continue to see if there is more addressing it. also earlier we had goldman sachs breaking with the government thing they disapproved of the immigration executive orders on friday. continuing to see more corporate america reaction to the news from over the weekend which we will continue to follow. as world and business leaders react to the executive order at immigration have an interview with jeff on wednesday. from new york, this is bloomber