what has changed is the fed narrative. the fed caused the financial crisis tightening.ctober, beginning, far away from neutral them in the may cost of the pullback. we are reacting to the fed, whereas the economy has been much steadier relative to the swings in financial conditions and swings and financial sentiment. i think we have a setback and remember, before october, people were talking about four hikes, six hikes, and were going the other extreme and saying no hikes. is that you at the? beginning, was my answer going to be? is going to be data dependent but also fed dependent. we have: something explored over the last couple of weeks, we understand the federal reserve is data dependent, do you understand how they are dependent on the data? increasingly they talk about inflation, and it is not clear to me what the function actually is. if we get inflation taking higher on the back half of this year, what do they do? >> that is part of it as well. over the course of the swing, far away from neutral, to today where we are having the conversation about the new regime

what has changed is the fed's narrative. and the fed caused the financial crisis typing, right?ober, beginning, we were far -- crisis tightening, right? october, beginning, we were far away from neutral. then they caused the pullback. we are reacting to the fed whereas the economy has been much, much steadier relative to the swings in financial condition and the swings in financial sentiment. so i think we have to take a step back and remember, pre-october we were talking about four hikes, six hikes. now we are going to the other extreme and talking about no hikes. i said to you in the beginning, what is my answer going to be. it is going to be data dependent but also fed dependent on the data. so there is a risk that we are overshooting. jonathan: let me pick up on data dependent, something from the last couple of weeks pay we understand the fed is data dependent. do you understand how they are dependent on the data? increasingly they talk a lot about inflation and it is not clear to me what the federal reserve's reaction function actually is if we get inflation going higher th

because it was fed easing. i think the fed wants to get out of that game. i think we were talking right before we came on the air, the chinese government is reducing maturity of its treasury holdings it makes sense for federal reserve to do exact same thing t gives them more flexibility, to come out say the economy is strong enough for to us reexamine shrinking the balance sheet anew. charles: lindsey, looking here at the, at their projections i'm not sure when they think the con mill will be strong enough to get back into play. again, danielle pointed out maybe great news they will only hike one time next year. you wonder how they have that much visibility but seems like they're looking at an economy sort of growing but not in any hurry to do anything to slow it down? >> that is exactly right. i think that is why the press conference will be increasingly important this time around. we'll be listening to powell's comments. right now seems that the fed is pretty comfortable with the twoish percent pace expected

. >> the fed does not need to tighten. >> the fed will be very passive and on the sidelines. >> i would it's time for investors to be more relaxed. >> there are reasons to be optimistic. jonathan: joining me, the fixed income head, a senior portfolio manager from blackrock, and from minneapolis great bishop from u.s. fixed income strategies at rbc wealth management. credit bishop, leave analysts at rc be -- rbc wealth management. let's start with craig, this goldilocks theme many people have become increasingly comfortable with. is it an argument that resonates with you? >> goldilocks is used a lot. i would like to maybe move on to something else. let's talk about a soft landing, the fact we believe the fed is done. the tightening cycle is over, and looking ahead, where we are now is a period similar to the late 1990's where the yield curve stayed flat for years. the fed held rate steady. did eventually invert and reset. it was not an imminent event. rather than goldilocks, i would say we are in an environment where the economic growth is going to remain slow but steady. not tip into re

what has changed is the fed's narrative. the fed caused the crisis tightening. we are far away from neutral. they caused the pullback. we are reacting to the fed whereas the economy has been much steadier relative to the swings in financial conditions and the sentiment. we have to take a step back and remember, pre-october we were talking about hikes. now we are going to the other extreme and talking about no hikes. is going to be data dependent but also fed dependent on the data. there is a risk that we are overshooting. we understand the fed is data dependent. do you understand how they are dependent on the data? it's not clear to me what the reaction function is. >> that is part of it. over the course of the swing from far away from neutral to today where we are having this conversation where we are having the new philosophy regime for which monetary policy operates, we're talking about makeup strategies and a fed that is much more willing to absorb higher inflation yet the inflation data is going in the opposite direction. that is part of what is fueling tha

so it sounds like the fed has come down to where the markets stood now the fed is saying no rate hikes for 2019. we are seeing the markets react positively the dow is down by 39 points s&p going in was down by 12. it's now just off by a quarter of a point now we're seeing the entire yield curve move up a bit. so surprises, rebecca, in your view >> well, i thought they'd have to try hard to be more dovish. they were more dovish. i would focus less on the dots and zee rro mikes to the balanc sheet. the fact we're tapering the balance sheet in may and finish up by september means they're going to get this thing done and then they're going to be looks like reinvesting into treasuries, finishing the mbs, holding more into treasury market i would say they got the message loud and clear in december that the balance sheet tightening, quantitative tightening was whether psychologically or having a real effect on the markets in the economy and they want to get that done. >> i think the one thing they've done really well here is tried to diminish uncertainty. unlike what we're seeing on the polit

particular fed chairman j.he weekend. steve leashman joining us now with more. president will not lay off. >> yeah, i guess its full employment for federal reserve reporter he continues to bash the fed and hand picked chairman jerome powell the conservative political action conference on saturday, president trump didn't mention him by name but you know who he's talking with. >> with all of that we're doing great. can you imagine if we left interest rates where they were there's no inflation essentially. there's no inflation can you imagine if we left interest rates where they were, if we didn't do quantitative tightening taking money out of the market if we didn't do quantitative targeting. and this would lead to a little bit lower dollar, little bit i want a strong dollar but i want a dollar that's going to be great for our country. >>ed for record, there's 2% annual inflation it was a two-hour plus speech the president cursed and had harsh words for his critics. president trump has commented more publicly on

the fed has been enough. this fed has your back >> we'll find out a lot more they talked about reducing the balance sheet and some of the changes there. what was going to be a multi-race year looks like something that will not have a single raise i think the market s have responded to well. the fedex story is bigger. you're starting to hear from a couple of ceos where they are talking about we are feeling the strains now. not just of the trade war but the slowing economy of the united states. i think that's something we got to take -- we got to look at that and make sure we are fully prepared in some of the other names. i think it's really interesting. >> does that mean the fed will run out of the only thing that matters? >> you had -- why did the fed pivot. they made the pivot because you had a fading fiscal boost. that kind of disappeared you had slowing global growth and you had tighter financial conditions what's changed over the last 45 days we have easier financial conditions that's basically it. we rea

i think the fed has a multitude of tools at their tdisposal you can do more qe the fed has a lot more room to go and they will use it. i think we need to see for data before they do it. the data in europe and the tools left in europe and japan maybe it really difficult. that's one of the the things that jay powell talked about it's the flow ball dynamic that's really tricky >> i think a lot of it does center our trade you can't rely on that as a predict predictor. it's 50/50 at best case. we saw positive up there that's sort of pre-stages what could happen and what couldn't happen i don't believe anymore stimulus in the u.s. will drive growth. multiple expansion >> changing tax policies will sieve everybody what are we missing? >> when they talk about. you keep giving antibiotics and eventually they lose their effectiveness. i think they are there with cutting rates and easing in europe and japan >> it's the most foreseeable outcome you can damage then you see, etf bond sales go crazy for almost a deck indicate and then accelerating furthering buy backs grow they don't have a politica

vonnie: it was the fed -- romaine: it was the fed.w did was a dovish sign for the market but it flashed a significant bear signal when it comes to the economy and corporate earnings. it took the market a couple days to digest that. if you paying attention to the bond market and what was going on with the yen, if you're paying attention to what was going on overseas, it was obvious this was a market there was not buying into the upbeat economic narrative we got on wednesday. vonnie: our thanks to romaine bostick. this is bloomberg. ♪ this isn't just any moving day. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving simple. easy. awesome. stay connected with the best wifi experience and two-hour appointment windows. click, call or visit a store today. vonnie: live from london and n

i mean, the fed doesn't.en though you've been raising rates this last year and a half, rates are still very low. so to you get concerned about that, that if, in fact the, there's a situation where you do feel like you need to cut rates, can't go much lower. >> it's true, but that speaks to where the neutral interest rate is, and the neutral rate is lower. we don't control that. that's controlled bid broader macroeconomic forces. but if we did have another recession, we could cut rates. we could turn back to quantitative easing, we do have other tools that i think they're not perfect tools, but they did work in the wake of the financial crisis in helping to boost economic activity. so i don't feel like we would be out of ammunition if, unfortunately, a recession were to occur. maria: well, you're right. let me ask you about the balance sheet drawdown. the federal reserve balance sheet is still above 4 trillion right now? >> it's around four. maria: you want to get it down to one and a half? >> well, no. it's g

that sort of fed into the narrative today.did remain positive as bertha coombs noted earlier, social media stocks did a little bit better, helping the overall nasdaq into positive territory netflix, twitter, facebook, alphabet all leading the charge. russell down .75%. and the dollar sinking honeywell ceo on committee and whether the grounding of boeing 737 max jets could impact his company's bottom line. he is a supplier to those planes >>> here are the stories on our radar fofr investors fed says no more hikes this year ceo jamie dimon says tech giants are about to get hit with a full monte of regular oversight he has been there. and chip maker micron earnings in the flesh, for a change, henessy funds at post nine mike, the fed got more dovish than expected and yet sold off why? >> a bit of a soggy response i don't think it was an outright sell the news. i think almost all the weakness can be attributed to the financial sector it was more or less flattish and really the treasury that you mentioned, when you had this rally in

that is true at the fed. we get better results to the extent that we have diverse perspectives around the table. i've also been involved in the selection of reserve bank directors since 2012, and we have made substantial progress there, and i am proud of the progress we have made. if you look at the numbers over the last five to seven years, the number is higher than what you read from the report. >> that is true of chicago, but when you look at dallas, it is the direct opposite. chair powell: i know the numbers at the aggregate level. that we have,rs 70% are diverse in one or another it, and 25% are african-american. these numbers have come way up. on the rooney rule, we are way past the rooney rule. i have been involved in every multiple -- had anyway, sorry. >> we can talk later. >> the gentlelady's time is expired. our lasting to get member in from ohio, you are recognized for five minutes. >> thank you madam chairwoman. chairman powell, it has been a long stretch at the mic. it is an honor to get this qu

we heard from the fed. they gave a pretty soft economic outlook, downgrading gdp, saying unemployment will bottom out. no rate hikes this year. we were looking perhaps two, pointing to softer economy, slowing down economy. would you agree with that assessment? >> yeah, absolutely. the thing with chair powell has become what a lot of folks are saying about president trump which is ignore what he says. watch what he does. if you look what fed chair jay powell did today he lowered economic projections like you said. he held rates steady. he said we'll stop the balance sheet run up. that tells you economy is get worse not better. really you have to put that aside, if the economy is so great, why can't we get interest rates up past real zero interest rates? why can't we stop the balance sheet runup? why do you continue to buy $3 trillion in bonds. ashley: good questions. [closing bell rings] we head towards closing bell. markets ending solidly in the red. now connell mcshane, susan li, "after the bell." susan: s

in the white is the fed funds target rate. of one of the longest expansion or recovery times economically, globally we have seen. so much of it has been fueled by debt around the world. where thee a position fed and other bankers are dovish, do they have the monetary policy space to deal with something if it goes wrong again? that is a great question. during years of expansion, debt gdp, itcentage of usually decreases. we haven't seen that. since this expansion started, debt as percentage of gdp has increased a lot. that will put added pressure on government, central banks around when we do go into recession. 2020,eople are calling 2021 but whenever it is, usually recession,of governments and the fed have to add stimulus to the economy to boost. , think what we are seeing here the fed continues to keep rates low, they might decrease, some people calling for a directories -- a decrease of this year, that will reduce a flexibility when we do go into a recession, whenever that might be. haidi: in the meantime the markets are assu

the fed doesn't have any ammunition at this point. >> that is one concern the fed is wrestling with.eak federal funds rate is 3.5%. there's not much room between that and zero. there's been a lot of discussion among fed officials and other market observers. another --d have have enough firepower to get us out of a new downturn? like assetew tools purchases, open ended asset purchases. michael: one of the arguments there, a lot of that success that success the fed had with those tools came from the announcement value. now, people know the tools are there. they may not have as much of an effect. if the fed announced we will agencysuries and mortgage-backed securities, that would be a good commitment strategy, making people realize rates will stay low for a long time. that is quite powerful in terms of supporting economic activity. michael: has the fed gotten too intertwined with the markets now? the fed went on hold because of the market problems we saw in december. now, everyone is back to the powell put. about fed doesn't care the stock market for the stock market's sake. it would ha

thisg up, more on the fed is bloomberg. ♪ . -- on the fed.his is bloomberg. ♪ >> this is "bloomberg daybreak." largesthe world's aluminum producers is fighting off a cyber attack. it is saying it is switching to manual production when possible. it provides highly specialized aluminum parts to customers, including aerospace and automobile making. another shot at eli's muscat, saying it is stunning that elon musk did not seek preapproval for any of his tweets. the agency has reiterated its request that musk be held in contempt of court. it is a sign of new competition between two silicon valley apple and netflix. reed hastings confirming the company will not be taking part in apple's new streaming service. apple plans to unveil the platform next week. that is your bloomberg business flash. alix: does that mean i can't get netflix on my apple tv? oh man. i'm going to have 17 different apps? fed officials begin their march policy meeting today. market participants expect them to stand pat. >> we are in a place where we can be patient and flexible

and the fed has been responded.different factors that was cited by chairman powell that are coming into play. and the fact that they're going data dependent, there's a bit of wait-and-see as the economy -- economic data weakens up. i think the dovish stance right now is positive from an economic picture. it's supportive for markets. and we'll have to see how the economy goes whether they are going to move further or not. shery: as an investor how do you look at the environment right now? where do you put your money? >> yeah. we -- right now, based off of the rebound of asset prices that you've seen in the first quarter of this year, and the supportive stance of the fed, we think economic data will continue to be slightly weaker based off of the financial tightening that we saw at the end of last year. that being said, we think that you'll see stability at lower growth levels, inflation is in check and now we have a little bit more certainty with policy. so we like kind of quality carry assets. in general, there's wa

>> the fed should -- i find it amazing people are shocked when the fed says they're data dependent. imagine them saying they're not? they're looking at current events it looks like it may be awhile before they have to make a decision about changing interest rates. i have faith they'll do the right thing based on the data they have at the time. >> do you believe the fed is between a rock and a hard place. you raise rates too quickly. >> i think that's always been true i don't think they're between a rock and a hard place. they're trying to navigate what goes on today. what's going on in the u.s. economy is strong. this isn't like a bad thing. remind people rate goes up, it's because the economy is strong. that's not necessarily a bad thing. a strong economy is far more important than a 25 basis point effect on the economy and jobs >> the trade war could tip the u.s. into a recession. the president just said a few minutes ago that even if we get a deal with china where he says talks are going well that tariffs could stay in place for a substantial period of time how much of an overhan

but i think the fed is okay for now. >> i think you guys are overreacting i think to say that the fed is out of tools and out of bullets, first of all, is to imply we're at zero rates, which we're not i know we're close to zero but not at zero rates. zero rates would produce a very different economy than the one we have. it's an economy that i think there is inflation, which is why i think inflation trades are very interesting because rates are a function of policy, not a function of what's going on globally and guy brought up the president. look, we all have to ask the question, it may not be a markets question, but ultimately the markets will respond to this did the fed -- did something change in the fed's pivot that was data related or did the fed change and why did the fed change and i think you can look around the world. you can look at europe basically germany went into recession two quarters in a row. china, pmi after two years of going sideways and not that big a deal really have decelerated there's a rationale for what the fed did. even i would admit i think it was extraordin

following the dovish fed and the fed putting these rate hikes on pause for some time, that is certainly going to be weakening the dollar index. it's interesting to see that key technical line. the dollar fall below that. nejra: especially as hedge funds have been boosting bets the dollar is going to outperform. we have this weakness in knee-jerk reaction. the question is, what to other central banks do? annmarie hordern, thank you. now let's get the bloomberg first word news with debra mao. bra: theresa may's standoff with the european union is driving the u.k. to the brink of a no deal divorce. the prime minister has asked to delay brexit. the bloc warns limited extension will only be possible if she can get her deal through in the next nine days. if she can't, the choice will be prolonged delay or crashing out of the eu without a deal. >> we will not leave on time with a deal on the 29th of march. this delay is a matter of great personal regret for me, but i am not prepared to delay brexit any further than the 30th of june. debra: bank of england policymakers face paralysis over brexi

that was on the fed. the fed in the past had cited brexit uncertainty as something that it pays a great deal of attention to. i struggle to see any meaningful impact into the u.s. economy. can you find any? harm: from brexit? not much. maybe some of the corporate -- credit corporate stories at this point. some more meaningful presence in the u.k. from a macroperspective, i don't think there is much that affects the u.s. economy at this point. first of all the u.s., if you want the poster charge for large, close economy, less affected by global disturbances, it's not totally immune against it. the bigger issue and concern are certainly china and the broader european union than brexit itself. vonnie: harm, trade is dragging on and on and on. speaking of things dragging on. i was reading the note today if you rn out of land you build more land at this point. that's what's happening with the trade negotiations. where do they end up? at what point does it harm business confidence and business spending here in

even the fed, a lot of fed decision is based on external factors., then certainly there is a lot of room to declining rates. with brexit the risk reward is not attractive because you're as well ash european u.k. political risk. a reach for yield comes back, if the recession fears are justified, then treasuries will be the outperform or. i think we are at that inflection point. alix: priya misra, thanks for joining us. david: a short look at biogen. pulling anwn after experiment on an all-time are struck. joining us for more is bloomberg's taylor riggs. taylor: so far we are off about of, the lowest since july 2016. they need to boost their deal flow to offset a stagnant pipeline of drugs. jeffries looking to settle around the 200 to do 30 range -- to 230 range. their value is now $241 a share. 200all consensus remains dollars to $250 range. rbc say biogen is trading below 240. alix: that sums it up for you. that wraps it up for bloomberg daybreak. , jonathan ferro. this is bloomberg. ♪ jonathan: from new york city for our viewers worldwide. i'm jona

that continues a theme from yesterday after the fed.ation of what happened yesterday in a much more pronounced fashion today bringing in bob pisani a reversal of the trend today. bob? >> a little bit of trendless a great day for levi strauss i 3o market is officially open i have been asked a lot about apple today. 4% move. what's going on? very simple. after the open, 190.65 200-day moving average the minute we moved that market lifted the whole apple just blew up on terms of the volume size so i think that was important. >> is that also the note talking about ecosystems >> well, there was -- i'm sure that was a factor but the volume moved up dramatically. technicals mattered. it is up march 8th, bank of america upgrade and the stock up since may we got the big upgrade of bank of america elsewhere again, banks your ballwick. tough to make money in a regional bank when you don't have big loan growth and no interest rates moving up. >> thank you very much there's the bell at the close up over 1% for the s&p. well over 1% for the russell a

fed finished the fed doesn't continue to high into recessions.hey're done, the yield curve inverts -- >> so you're in recession camp >> there is nothing bombastic or headline grabbing about that they happen at the end of the every cycle. >> when, though? >> the question is timing. >> yeah. when >> the runway between now and the next recession is two of the main factors coming into the year were trade and fed policy we got an answer on fed policy with the dovish tilt and other central banks moving back toward an easing mind-set and don't have a resolution on trade and now we have the inversion of the yield curve plus the fact that the stock market had a near bear market in the fourth quarter that's important because if you look at recessions and stock market performance once you're in recession historically, the stock market's done fairly well. look at beginning of enlds of recessions and the market it's up on average. the worst performance in the six months leading into. you know you have seen the rolling over since last september and the leading

back to the fed.he was giving markete that maybe the should focus less on the dots and more on communication coming through from the fed's statement. do we draw too much from the dots still? ira: a little bit. lookrily because, if you at the definition the dots have given themselves, this is what the members of the fomc think this will be given their own forecast. if their forecasts are wrong, the dots are wrong. i wouldn't be surprised -- and they are doing a review of the dots right now. i would not be surprised if, by the end of the year, the dot plot went away. the market has not paid attention to it over the last six years. important signaling tool during the financial crisis, but today, it's usefulness is significantly less. much ira jersey. bloomberg raises its interest rates for the second time. we speak to the governor of the largest bank. that interview is 10:30 a.m. bloomberg. ♪ viviana: this is "bloomberg surveillance." today, shares of levi strauss traded on the new york stock exchange. t

yes, the fed is your friend. it underscored that yesterday. in taking down the economy, it shows you what the risks are then there's tom lee who says there's a lot of gas left in the tank that we're mid cycle not even as late as some people think. >> i think i lean more towards tom but not quite to the level of that kind of enthusiasm we've been talking about this for a while. it's been a great trading environment. i don't know necessarily that you're going in to sell and saying i'm not going to shift around because we are in a position where this is a rotating environment what we see in the market. energy was back in favor oil over 60. the xle and many different names in there have been moving to.upside. yesterday we highlighted exxonmobil multiple beta names are really moving to the upside then tool and the semiconductors we have rotated. now you're losing the financials because of what happened yesterday powell and the patience and everything they're talking about. we're losing financials after that big run i talked about goldman on monday

complete repricing of the fed. the fed is on hold for the rest of the year. the data has been weaker than people expected. first quarter, you would expect data to come down especially in the u.s. without fiscal stimulus. we have a rally. we have seen concerns around global growth. essentially, thanks doing nothing. -- banks doing nothing. we are not concerned. >> the direction is correct. it has been too extreme. pausing is one thing. we are pricing cuts. that is a much higher hurdle. we are in a low rate environment, flatter curve. near-term. really, we have pushed it hard. >> couldn't agree more. 50% expectation they will do two cuts by year end. long-term rates are coming down. things atlet's talk the epicenter of the rally. the yield curve, the treasury curve. decompose the things that are happening in core government bonds in the u.s. when you boil it down to the fine point where it has dropped, it is the belly of the curve, the front, has collapsed over the last month. t bills. two-tens,-two, 30's, it is extreme, the front and has moved. end has moved.

is the fed making a mistake? saed: i think the fed made a mistake in january.e's been dovish against for quite a while. i think what the fed did in january, pivoting that sharply from a hawkish stance to a dovish stance is throwing the markets off. this is why we're seeing volatile moves in fixed income and equities. the market has gotten used to it from the fed, gentle way of communicating, now they are seeing generation. yousef: the valuation story, which you just mentioned, as well, it's got traders quite split in terms of, yes, by historical standards, arguably, you'd be -- book values are going to be quite stretched. earnings values, same thing. but in a wider context, it might be an opportunity to buy. which side are you on? saed: this is the conventional way of thinking. but the idea we are approaching gross reduction story or global contraction in growth, asia, u.s., latin america, and europe, i think you're more bound to head towards fixed income in the short-term t equitieshan. merrillbank of america, lynch says the gains and stocks have been driven b

the fed finally made this pivot. now we feel great. >> they've almost ended the party before it ended. >> so jenny can mine for companies that don't have the fed policy but a lot of the stocks are responding to fed policy it's been ten years of a continued fight against inflationary environment we're at the point where the fed has to create it >> does anything else matter at all as long as the fed is perceived to have a put under the market is this rally? is the bull mark, if you want to say the bull market is still intact and it will extend as long as policy is? >> i think we have a positive catalyst the reason we are having this pause is those catalysts, i completely agree with jen. we need earnings growth. that's not happening today we need positive news on trade none of that will happen today, tomorrow this week so we will have probably a little pause until we get another positive catalyst in the market >> yields around the world, they are falling on the euro zone, let's welcome in jeffrey sherman now. welcome. g

look, the fed didn't ease yes.so it's going to wait to see if the market is right. you know, we have that famous statistic that the market has predict predicted five of the last nine recessions. >> last fall fed was being criticized for not paying attention to the market so they can't win either way. >> reporter: well, look, i have a running joke with our producer that the fed is in a box the fed gets paid to be in a box. it should always be betwixt and between the right policy that's what they do. they should be on the hot seat that's what they are there for >> steve, thanks a lot more to come from steve obviously on this fed day. we'll see you soon oppenheimer funds ceo joining us us and good morning to both. are we in this giddy phase when we're post-pivot and haven't yet seen the pikes of higher prices? >> giddy phase depends on your perspective, but i think a soft landing is very much in the cards, and by that i mean the data is softening. it has been softening for quite some time, and i don't think it's softe

donald trump renews his attacks on fed chair jay powell. exclusiveom our interview with the standard lights aberdeen boss. >> we have to ask ourselves why he is commenting on the dollar. he clearly wants it weaker. are 30 minutes away from the start of trading. let's take a look at what is going on in terms of treasuries. this will give you a clue as to whether or not we are looking at a risk on market today. you can see that on thursday we were down 2.66%. now we are up to 2.76%. investors are willing to let go of the perceived safety of u.s. government debt and wade into equities. take a look at futures. we have positive trade across european equity indexes. futures i should say. we are looking at gains of a 0.4% on dax futures right now. ftse futures are up about 0.4% as well. a little bit less than that. what do you see on the gmm? we see appetite for stocks, not so much for fixed income. that seems to be the risk-on nature. we see appetite for equities in hong kong and china. .ll this talk about trade what can we expect from the growth

but the fed doesn't have a lot of ammunition at this point. >> that's one concern that the fed is wrestlingl funds rate in the cycle is 2.5%, 3%, is not that much room between that and zero. there's still a lot of discussion among fed officials and other market observers of does the president have enough firepower? my own view is that i think there's more firepower than people realize, because they invented a whole bunch of new tools to use if they are ever at the guidance, asset purchases, open-ended purchases, we will just keep buying until we achieve our objectives. ♪ week marked the end of an era in investing, as bill gross's retirement became official. erik schatzker sat down for an exclusive conversation. the bond king shared his views on market and politics, as well as some very personal stories about his life and career. ♪ personality -- i have asperger's, which i keep compartmentalized. universe,indifferent the universe is affecting them as much. divorce and i till had feelings -- i think i did pretty well in compartmentalizing. siden't start damning one or the other. but it was al

the markets are watching the fed today.entral bank will be wrapping up its two-day meeting with chairman jay powell holding a news conference. all of which you can see right here on cnbc meantime take a look at the u.s. equity futures yesterday towards the end of the session you did see pressure on stocks as there were concerns about what would happen with the trade talks with china none of that has been cleared this morning, but you do see things, though, that are modestly higher. yesterday the dow was down by about 26 points. s&p was down slightly, and then the nasdaq was up by just under ten points dow ended a four-day winning streak s&p was down for the first time in three sessions. nasdaq was up for the third time in a row, and this morning things are relatively flat overnight in asia, you'll see that the nikkei ended up by .2%. hang seng was off by half a percent, and then the shanghai composite was flat, and then in europe where the early trading hours are already taking place, a bit of a mixed picture there not too

the fed needs to stay low.he signal we are on hold for the foreseeable future, we're not worried about inflation and that pushes people into risk assets. jonathan: that has been the story for the first of the year, do you think that story pleats through to the rest of 2019? jub: growth data is on a declining trend, it is difficult to where we would see sharp inflationary impulse. that is the primary factor that would cause a central banks to switch to a hawkish stance. welfare inspiration is quite low. i think it's difficult to formulate a case of what the fed return hawkish. i do think that we see this opportunity and risk assets as being a window that will not be open forever. for the next three to six months we do have blue skies risk assets. jonathan: i asked you if you liked jay powell, and you said you did because he makes mistakes. there are opportunities to seize on those mistakes. he has corrected his path radically in the last couple of months. do you see him carving out a new path in the next couple

the fed's response at this point is very important. we do not think they will make the same mistake i don't think they necessarily need to cut. i agree with kevin the inflation feds fund rate is less than 50 basis points. >> here is the problem for stock investors, nobody knows exactly how weak the economy either is or may get nobody knows how bad our earnings could be or maybe they drop in the first quarter and you get a pick up and everything is great you just can't answer some of the most critical questions as you try to figure out what the feds will do next and what it means to the market. >> i think that's exactly the point. there is no play book for this you can go back and instructive and great points you made but the facts that we have hasn't them be negative like this for when >> especially after a 20% move in the market. it only muddies the decision making process the knee jerk reaction is the fed cuts can be good for stocks. catch for clunkers >> if rates continue to go down, you're going to have a hard time making a positiv

in the meantime, let's come back to the fed. the fed meets this afternoon. i will put up the dots chart here because everyone is focused on the dots as a practical matter. right now we've got priced in essentially two hikes this year. something's got to give. sarah: there is clearly a disconnect. right now it seems like the consensus going into this rate hikesthat the will come down to one. it seems like it would be very difficult for the fed to come out with a dove a surprise because they said over and over again they are to be data-dependent, they are going to be patient. the market is expecting such a dovish turnout, so investors are saying the fed needs to do exactly what they have done. if they just stay on the path they have been on, we should be pretty for now. alix: i still don't get the dollar because in theory, if you are going to have a dovish fed, you have a weaker dollar. vincent: it is not all about interest rates. there are a lot of other things that come into play. your differentials -- you'll differentials, real economics, real yields.

and of course we have the fed. bayer, stanley maintains they are overweight but there is a lot of optimism regarding the trial. losing that trial about cancer and the roundup lead thing -- central.g will be and it is fed day in the u.s., one of my favorite days. new 2%lation is the inflation. francine: breaking news out of bmw, earnings falling well below last year's level. we understand that they will embark on an efficiency drive to offset the impact of some of the trade conflicts. 2.6% withe bmw down that news coming out in the last couple of seconds. let's get straight to the bloomberg first word news. >> british prime minister theresa may will not ask european union for a long delay to the brexit deadline. it increases the chance the u.k. could lead -- leave the block without an agreement. it could lead for a tense moment between european leaders and the eu summit. president trump sounds somewhat optimistic. china may be pushing back against american demands. chinese officials shifted their stance after agreei