the fed decision is up next. >> the market is expecting a rate cut. >> it's likely the fed will cut rateshown -- soon. >> weak economic data. >> the job state was disappointing. >> pmi came out and of was not great -- and it was not great. >> the u.s. economy is showing signs of fatigue. >> an economic slowdown. >> trailing data is ok. >> growth in the states is strong. >> you have other indicators of people being nervous about trade. your very late cycle. -- you are very late cycle. >> i think we are close to the end and people have recognized. jonathan: joining me now is a eepresentation -- representativ -- the trailing data is ok. what is the outlook -- what does the outlook look like from your perspective? ok,he trailing data is possibly more than ok depending on what you focus on. the market in general focuses on the negative. loves -- loves to focus on the negative. we have had some of the best mortgage application numbers recently. every time we get a slightly weaker avp number, at a time when we get a 50 year low in terms of unemployment, et cetera, the fact that there is a sentim

the fed is going to be dovish.aylor: joining me in new york is ken taubes, david leduc, and coming from our princeton bureau is ira jersey of bloomberg intelligence. david, let me start with you. we just heard about the g20. we were talking as we were coming into the show, what's the key risk or questions you're hearing from clients? is it all about the g20? >> yeah, the key questions are what's going on with the g20 and more broadly, trade policy, trade risks in the market. the other thing they want to know about is the fed, are they going to cut interest rates this year, and how are these related, what's going to happen? taylor: ken, how much of the bond markets are pricing in a deal or no deal? ing ourselvessition ahead of saturday? >> well, i think the bond markets are still pricing in a deal. it's certainly priced that way. you've seen credit spreads narrow. you've seen equity markets rebound to near highs. this is on the hopes of not just the fed easing but also that we'll get some trade agreement in the comi

looking at one fed president or one fed vote away from a rate cut this year. two fed votes away from two rate cuts this year. back to you, charles. charles: edward lawrence, thank you very much that's a whole lot. here to unpack it all, danielle dimartino booth, former investment banker carol roth, point bridge capital, maga fund founder hal lambert and oxford advisors managing partner, ted oakley. danielle, let me start with you. one fomc member for one hike, two for two hikes, referring to the dot plot. we'll get the official dot plot. that move, that changed, right? did it change as dramatically as people anticipated? >> no, i do not think it did. the markets are celebrating one word is gone, good-bye patient. that was the very least that the fed could have done today was said they're kind of finished being patient. this signals a higher sensitivity to data going forward. i think that will be applauded but this was a much more hawkish statement than i was anticipating. >> it was kind of bananas if you think about it. then they said we'll cut rates next year

the fed decision is up next. >> the market is expecting a rate cut. >> it's likely the fed will cut rates soon. >> i think they should. a lot of the states are recessionary. >> weak economic data. >> the jobs data was disappointing. >> our payrolls are week overall. >> pmi came out and it was not great. >> it was the biggest missing since december 2008. >> the u.s. economy is showing signs of fatigue. >> an economic slowdown. >> it is still growing. >> trailing data is ok. >> growth in the states is strong. >> the outlook has got the downside risk with other indicators of people being nervous about trade. >> it accelerates the pattern of a late cycle. >> you are in a very late cycle. >> i think we are closer to the end than people realized. jonathan: joining me around the table now, great to have you with us in studio. the trailing data is ok. what is the outlook look like from your perspective? >> the trailing data is ok, possibly more than ok depending on what you focus on. however, the headlines and the market in general love to focus on the negative. i do not see as many headlines aro

if the fed remains hawkish, the stock market would plummet and the fed will follow. once again, what is going to happen? more cuts. nothing to do with the dot plots . it depends on what the market dictates. that is the fed's problem. president trump was prescient in the fed would not listen. we he says he was right and were wrong. the other point is they are talking in terms of inflation after 10 years. they realize it is going to rise slowly. has it taken 10 years to get that realization? ae problem the fed has is loss of credibility. that is why they are going to have less impact on the market and they are going to be following the market unless something changes quickly. paul: all right. komal is staying with us. more from him in a moment. guest from the city office. he will discuss the impact of the fed policy in asia. kathleen: and mitt romney is pushing president trump not to go easy on huawei. tarifthis is bloomberg. ♪ paul: let's get back to los angeles and komal. thanks first thing with us. you are making a point about the independence of the fed. i want to

the fed is in a tough spot here. they are reacting to potential headwinds from these trade negotiations, some things they aren't serving from that. do ane they will insurance cut here and we think as much as 50 basis points. part of the reason is there is a lot of literature that says if you are going to do something, you are worried about getting to that lower zero bound of rates, what you need to do is something aggressive and do it early, so that it's effective to avoid getting there. we could get a 50 basis point cut in july but i also think the markets are too aggressive in pricing in 100 basis points this year. taylor: we used to think zero was a lower bound but mario draghi showing us that it is necessarily not lower bound. ken, you talk about the data. mario draghi of all people knows that we cannot cut our way to get inflation. the flipside of that is to look at the economic data. is the data bad enough to warrant a 100 basis point cut like the market is pricing in? ken: in the u.s., i doubt it. the fed prob

the fed can afford to be patient. if the downside risks materialize, they may have to ease, but why are we jumping the gun? lisa: the case is building for a rate cut. they said this week they think the data is still holding up, that economic growth is maintaining momentum although slowing, and they will watch it. it feels binary to me. if trade policy works itself out, if there is some positive tweet, we could see a better outcome, and the fed does not have to hike. i think their preference is a prolonged pause. jonathan: it's become very bullish, the bond market. they are looking for for 125 year end on the 10 year. saying, once the fed begins easing, the market will not stop there. it should account for a scenario of more aggressive preemptive steps which looks set to take u.s. yields to record lows. we have calls from commerzbank for rate cuts, bank of america, jpmorgan, natwest, barclays. barclays up 50 basis points in july, michael. do you see that happening? michael: no, but i see a july cut. i think the fed can

that the fed can extend. i would argue there is an interest rate -- the fed has not overdone it. let me start by saying i am still bullish here. i think supply is low. companies are doing the right being, trying to delever. you see it in the employment number. they are using that delever as well to scale back on their headcount. all of these things to extend profitability. the fed has a lot of things it can throw at the market. it is not just simply cutting rates. they can expand the balance sheet. but lisa is right, you start to worry about credit when recession is right around the corner. if these trade wars escalate into an all out war, you have to bring forth the probability of recession and price that into high-yield. i would probably lighten up on the next 50 basis point rally, to cut off the question that you will ask. jonathan: i was going to ask, thank you. the next 50 point basis move and spread, do you think it is tighter or wider? lisa: so much comes down to the next two weeks. i think it is the g

the fed did that.you look at the present environment, the real fed funds rate is well below the pace of growth in the economy. the real difference between now and those prior episodes is a much more accommodative stance of fed funds. amanda: one of the things we're looking for is more patience to come out of the statement. what of -- what is the reaction if the fed stays in? >> do not look for patients. look for patients to be gone. remains, and that would be a hawkish surprise from the fed, the signals are are they are resistant. the market would be caught off guard. it is a broad-based view that it would be replaced with something more akin to watchful or vigilant. taylor: we cannot cut our way to inflation. why are we doing it? >> that is an interesting question. we are well off the mark on inflation. if the fed is cutting, it is more an attempt to add some steepness to the yield curve, which would be positive for the financial sector. if it is positive for the financial sector, credit extension env

louis fed president wanted to cut rates. on rates, a major change in the dot plot or the outlook of the fed officials for their rates. a lot of disagreement. eight are now forecasting a rate cut. seven of them are forecasting two quarter-point cuts this year one is forecasting one cut eight are on hold. and one is forecasting a high cut. eight forecasting a cut. ser seven is two cuts. one is one cut, one on hold, one hike the result is actually unchanged. however, it's down by 50 basis points for 2020 to 2.1%, down by 1 for 2021 to one quarter point to 2.4%. the long run also down by a quarter. the long run fund rate to 2.5% from 2.8 all of this took place, by the way, without much change in the overall economic forecast. a little tweak here on jdp, unemployment let me get to what the statement says about the economy the labor market in the statement says remain strong economic activity rising at a moderate rate and that's down from a solid rate in the last. job gains solid, it says the unemployment rate remains low. same la

with the fed funds rate, the , that does at 250 not give the fed a lot to cut in the next downturn. some have said that we may already be in recession, but this is not the case considering the health we are seeing in the consumer spending. amanda: definitely seems to be an outlier base that tariffs are not going to have a major effect on price or inflation. downturn,the data -- all sort of to cool down expectations of big cuts, but what i did find in a purist view is that she did say that they still have the tools left to think -- to create inflation. concern is growing as you start to get more and more cuts under their belt. what do you make of that comment? carl; right. -- carl: right. she thinks it will have some meaningful impact on economic prospects and inflation. i am not so sure given how far the market has moved in the current environment that really the fed delivering on that is going to pull rates down much further. this is the case of the markets bullying the fed into easier policy, although the fed is not really pushing back too hard against that. the fed is getting pus

easing, which is actually where we're at right now we are at no deal, no fed easing, no certain fed easing, or we get to a point where there's no deal and some cuts but the market is behaving like we're already in that environment. >> it's trying to anticipate where we are >> anticipating but close to 100 basis points out to next year of cuts that's pretty extreme and that's supporting the markets right now. >> if i told y'all that, okay, i guarantee you that the fed's going to cut at least 25 basis points in july >> yep >> is tudor jones going to be right? is now the time to buy stocks? we don't know that they're going to cut but if i say they're definitely going to do it and we begin to believe that they really are -- >> i would say over the next three to six months that yes, stocks will be higher. yeah, there's the unpredictability of what's going to happen with trade i would think in those three to six months, you'll get something that looks like, okay, we're on the path to something. we'll probably not going to get there by the election in november of 2020 because politically,

the belief the fed will cut rates probably was most strongly underscored when powell said the fed will quote, act appropriately to sustain the economy's expansion amid increasing uncertainties. markets weren't uncertain at all. let's take a look. all three major indices hitting session highs shortly after the announcement and while off the peaks of the dow, the s&p and nasdaq still higher than they were just before 2:00 p.m. when the announcement came out. let us fire up the intraday chart. the basket of 30 bellwether names spiking immediately to gains of 104 points. right now, we are still up a quarter of a percent or 73 points but s&p and nasdaq, while all still higher, are off their earlier peaks. treasury's gyrating wildly in the seconds following the report. this was really interesting. yields which stood at 2.08% right before the announcement, then moved higher as soon as jay powell's announcement but then plummeted to 2.04% and you can see right now, falling even lower to 2.03%. by the way, that is the lowest we have seen since election day of 2016. all right. rate cuts, the ant

the fed is very well aware of that. i don't think the fed is going to want to wait and see.east, theyhe very will send a message saying they are preparing to do something even as a form of insurance rate cut to see if the u.s. economy does not suffer too much in the second half of the year. when you look at some of the numbers, the latest number in terms of real hard numbers was the empire manufacturing survey which fell lock in the new york area. that suggesting that manufacturing activity within the u.s. is probably falling pretty quickly. that is concerning for someone like the fed. this is what you would expect from the fallout from the trade war talks. there is an impact. in progresswdown and also in sentiments terms. >> let's talk about what easing will look like. lotmarket has an awful priced in. the fed is not super dovish tomorrow i wonder where that leaves us. the fed some talk about may look to shock the market at some point. i am wondering whether or not he will get a hint of that tomorrow. market has athe long way to go to come back. i don't think that a 50 basi

the market mostly flat ahead of the fed meeting. the fed decides.loomberg. ♪ david: from bloomberg world headquarters in new york, i'm david westin. welcome to "balance of power," where the world of politics meets the world of business. that business world today is waiting for news from washington , where in two hours we get the latest fed rate decision and we welcome carl riccadonna. my question is is there anyway way for the markets not to be disappointed? their hopes are so high. carl: the market is really anticipating a dovish outcome. it is difficult to envision a scenario where jay powell delivers a dovish surprise. there could be potential for disappointment, especially if the fed is dragging their feet. patients falls out of the statement, patience and the trade war not really compatible. the fed does not want to panic at the first sign of any economic week was like the disappointing may jobs report and start firing ammunition because they do not have a lot of conventional ammunition to fire at the next economic downturn. they continue to sq

we are just minutes away from the fed's decision on interest rates president trump criticizing fed chaire powell this week for not cutting rates. in his recent interview with abc news, the president has said he is not happy with powell >> frankly, if we had a different person in the federal reserve, then i wouldn't have raised interest rates so much. we would have been at least a point and a half higher. we also have people in there that were -- but he's my pick, and i disagree with him. as you know, it's independent. >> what do you make of the critics that say it's just inappropriate for you to be talking about -- >> they used to speak to the federal reserve often. and it was very much a part of the administration from the standpoint they'd talk and we have no idea how important it is, but i'm not happy with what he's done. i am not happy with the fact that they've done quantitative tightening now he doesn't make that decision himself, but i would think that the head of the federal reserve -- no, i'm not happy. >> and yesterday the president responding to reports that he's even looking

the fed can't afford to be patient.f the downside risks materialize, they may have to ease, but why are we jumping the gun? lisa: the case is building for a rate cut. they said this week they think the data is still holding up, that economic growth is maintaining momentum although slowing, and they will watch it. it feels binary to me. if trade policy works itself out, if there is some positive tweet, we could see a better outcome, and the fed does not have to hike. i think their preference is a prolonged pause. jonathan: it's become very bullish, the bond market. looking for 125 year end on the 10 year. saying, once the fed begins easing, the market will not stop there. it should account for a scenario of more aggressive preemptive steps which looks set to take u.s. yields to record lows. we have calls from commerzbank for rate cuts, bank of america, jpmorgan, natwest, barclays. barclays up 50 basis points in july, michael. do you see that happening? michael: no, but i see a july cut. i think the fed can be patient, un

that's@fed is trying to raise the interest rate on reserves at the fed. they want money to go back into the system and not just collect the interest rate so there's excess reserves there. so the liquidity isn't the issue. maybe the fear of it is. it really comes down to what incents banks to lend more, is a steeper 2-10 curve the fed cuts rates and the shadow banks like the 2-10 curve, and the fed cuts rates, that will probably as it is today drive the longer end higher, which incents banks and shadow banks to lend more money. >> tony, thanks for joining us >> thank you have a great day, guys >> up next, we'll be coming back with your last chance trade. 18 minutes left of today's session. >> later, former ford ceo mark fields joins us here at post 9 ills us the one thing uber must don his opinion to succeed "closing bell" will be right back other 150 years. ♪ other 150 years. to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature. ♪ to treat every car like i treat mine.

i want to stress since it is fed day the importance of the fed on the markets. influential they are the fourth quarter of last year, when powell came out in early october and said we will raise three, four times over the next year, the market couldn't handle that too much debt in the system, whatever the reason is we had a huge decline in the fourth quarter. he comes out early january and says we'll be patient. that helped fuel this rally we've seen so far this year. third example is he comes out in the last meeting in may, may 1st and the market was hoping they would hint towards a cut, he said we'll remain patient. we saw an ugly may down 6.5% in may the point i'm trying to stress is how important and influential the fed is on the markets. >> just because the market wants to see a cut, they like that adrenaline hit, does that make it the right thing to do i'm not sure what they're seeing out there. they have something on their radar which is making them think they need that >> my theory is that we're in a global economy it's no longer the u.s. just isolated th

fed easing will help.ut what is very important when looking at emerging markets, is to -- to which both -- the trade impacts, but also how much leeway they have in terms of monetary and fiscal policy. if you look at china, for instance, they can use a lot of, you know, tools on the policy side. if you look at middle east, for instance, they're not trade dependent. and on top of that, they might benefit from a weaker dollar, lower u.s. bond yields, and they have some fiscal leeway. if you look down at e.m. asia, a lot of countries are too much related to china. and on top of that, their balance sheet is not strong enough. they will struggle. so again, emerging markets is not just one block. it is to be -- dealt in a very selective way. manus: my guest in the last hour made it clear the current account deficits which will be perhaps most vulnerable if the yuan breaks seven, it is those pan asian currencies that are going to be most exposed. the dollar will rally and those with deficits that will be most expo

go into effect, fed cuts happen anyway. tariffs de-escalate, fed cuts happen anyway. it is kind of irrelevant. vonnie: some people say you can get the fed cuts if you want, but it is not going to help. jordan: the credit cycle is turning. i guess you've kind of summed it up. the fed would probably need to do a lot the data was to slow down as much as people are extrapolating. right now, u.s. data has reversed its trend. some measures have gone slightly below trend, so it is going to when the fed98, cuts by 25 basis points, 25 basis points, and another on top of that. if you get those fed cuts down to zero, you're right. you will probably need to see some fiscal stimulus because that is a story where those tariffs have led to an escalation of financial conditions tightening further. it has led to a worse slow down them with the fed is looking for or we are looking for. i think it is all in extrapolation, and it is a little bit too much at this stage. from us, the messages we are expecting it when he five basis point cut in july. we will expect perhaps another one by ye

i think the fed's blinked. i think jay powell probably has made his second mistake and his fed leadership here. the first being when he said, you know, we're nowhere near neutral last fall and the market freaked out. i think he sort of came forward and said, we've got your back, market i think that probably is a mistake, a little bit premature, certainly stocks like it and when the fed guy has your back, i mean, you've got to own stocks >> the danger, i guess you're saying, michael, is that you have what could be a temporary shock from this tariff situation so the fed makes a move and then you get the trade issues resolved and then the fed's like, well, why did we do that >> you know, i mean, i think the fed has long said they're going to be data dependent they've got to be more whites of the eyes they're going to be seen as caving but i think a little more pause, a little more patience, a little more discipline, perhaps, at least in their messaging. you get bullard and then you get the chairman back-to-back da

that's not good. >> no. >> you talked to a lot of fed people this week >> yeah. >> there were many fed speakers on the docket this week. >> right >> is the market ahead of itself are we going to get a rate cut next month >> i think it is >> in what sense >> let's say before the jobs report, i was running a marathon against one of those, like, stellar nigerian guys in the marathon let's say that was happening he would be in central park and i would be warming up in brooklyn >> you'd still be in the early part >> i'd be out of breath already. but now, i think the fed is maybe more in queens, about to come over the bridge i still -- which is to say i still think the market is ahead of the fed but not as much as it was. >> in the number of times that the market expects or as soon as it expects >> give me a second, here. i want to go through two screens. could you put that one back up the expectations there you go >> the percentages are going up. >> 78% in july, 95% and this is for a quarter cut. now, go to the next screen and i'll walk you through that because this is where it gets super a

we were we were the fed was crooked about it they lied about the reason the fed printed all this money and end to the banks took it and the fed paid them etc paid them interest on excess all the slowly bailed out the banks and over time in the us drag it in the opposite cabinet is that mack right that's an excellent point and as you point out in the in the. states the the policy of allowing the banks to put excess reserves on the balance sheet of the fed and they receive an income beldam out over time in europe its negative interest rates and bankrupted the economy don't your bank is the new lehman brothers it's about to go belly up that will cause a cloud global contagion however and no bank will be able to escape the 2008 financial crisis part 2 you know i'm thinking about your musical number bubbles be good miss shedd luck if you want to watch those bubbles be good video go to miss talk dot com it's michelle block as you've never seen him before singing and dancing you know why not just make this into a broadway musical it could be a version of sweeney todd the demon barber of of fl

i'm not sure how much that's actually influencing what the fed is doing the fed has plenty of reasonsk, to go easier. i think the president may provide a reason, but that's through this trade war, which i think is weighing down on the economy. i think it's weighing down on business investment. i think it's creating a lot of uncertainty. the president may give the fed a reason to go easy, but kind of unintentionally. >> thank you very much we'll know more tomorrow, roughly this time. thank you both very much appreciate it. >>> coming up, the way we work is changing. people aren't spending 40 years working for the same company they're not? so as we change jobs more often, our income isn't always so stable we'll explain why that matters to our economy so much after this >>> technology has disrupted many aspects of our lives frk from how we watch tv to how we get a ride our next guest says it will shake our view of full-time views. the professor joins us as part of our partnership with acorns, the savings and investing app. he makes the case to address income instability as the workforce

from the fed to the feds they're reportedly investigating deutsche bank for alleged violations of money laundering regulations according to the new york times a probe is underway as to how the bank handled transactions labeled suspicious by employees think good some linked to donald trump's key advisor and son in law jared questioner a former employee told the newspaper that the bank failed to file a report with the u.s. treasury even though she flagged some questionable activity surrounding kush 1st company account back in 2016. joins us from frankfurt so this is more bad news for deutsche bank can you tell us more about the transactions being examined in the probe. more bad news for doj a bank and i guess i can tell you know that traders here in the financial world in frankfurt are used to these very bad headlines but this headline could really bring the lender even more in trouble because it is related to the u.s. president we have to remember that donald trump has been creating of all his financial situation quite a mystery during his campaign but also during the last year which mad

our credit spreads trying to bully the fed? could have a big tightening in financial conditions, which would force them to ease. maybe you are looking ahead. invite this ony themselves, if you look at how they responded to the 20% equity drop in december? you listen to powell, clarida, they talk about financial condition indicators. these are all about falling markets. it is part of the reaction function. jonathan: not just chairman powell, the ecb is in the mix. president draghi says he does , atsee a recession coming the same time, admitting the possibility of a rate cut. lisa, there's been a wrestler rally in btp's to end the week. 15 basis points on the two-year. that is today on the session, not the last week. are we seeing that massive clamoring for yield again and this belief we can have a soft landing, worldwide, not just the u.s.? lisa: nobody knows what to do with regard to global growth. ton of money piling into not just money markets, but bonds in general. $12 trillion of negative yielding debt. at the end of the da

look at the philly fed, empire state fed survey earlier this week they are not good take a look at truck orders. this is a little bit microscopic but it's important >> hold the thought. i promise i'll come back to you. we want to note what's happening in the market right now. as you can see a little bit more steam is coming out of stocks. let's go to eamon javers who is at the white house this having to do with some comments the president just made regarding iran >> reporter: a couple of comments the president was welcoming the canadian prime minister. with relation to action towards iran he said you'll soon find out. he's with the prime minister inside the west wing he's made a couple of more comments the president said iran made a very big mistake in terms of shooting down that u.s. drone. that echos his tweet from earlier today. he said the drone was over international waters and it's all been quote scientifically document ee eed according to th president. trudeau said he's very concerned. but he looks forward to work with the international community to find a way forward on the irani

this idea that the fed is there is being driven by the fed's actions itself.: we talk about the equity market. the s&p 500 is not far of a record. if the fed does not capitulate to the market, say we don't get much of a dovish signal in june, what will the fed say to justify that? >> the data has always been there to be able to justify. they are the first people to say, the numbers that are coming in actually right now would not support a heavy move by the fed. that has always been the case. they have turned around and said, we have to listen to what the market is telling us. that seems to me to be wrong. if we are talking about a fed that should be focusing on the economy. behind all this is the trade story. behind all this is the pressure about the dollar. it seems really telling that these comments have been coming from the president when he is talking about the fed. he has been referencing specifically, what the central bank has been doing. the impact he has been having on currency. there's a sense that currency wars are coming back. it is increasingly the

paul: the fed chief

post fed, we'll be joined by that man right there, richard fisher, the former dallas fed president.oney," jim cramer has the union pacific ceo, lance fritz, don't want to miss that. i wanted to go through some of these 52-week highs today. pete, disney >> yeah. i own it i honestly, i love what's happening right now, scott, but i am a little shocked it continues to go to the upside because the pace of the move i understand it's been a ten-year move if you go all the way back, but i think this very rapid move to the upside, you have to be cautious here i would sell calls >> stef, i recall under armour was your final trade yesterday >> 20% of the shares are still short, so i mean, i think that it's a pretty good story in terms of margin improvement, and they're turning things around in north america, and they have a lot of room to grow internationally. i have owned it for a while, but i still like it. >> joe, honeywell, all-time high >> can't find an alternative >> you're still in it? >> i'm still in it >> microsoft everybody seems to be in that. doc? you in microsoft >> love it, yep.

they don't want the fed to be involved in this at all. but the fed obviously is. do you think the dangers would be if the fed would change, be more accommodative, print more money? what risk would that be? >> good for the markets, that is massive hyperinflation if they were to keep printing money which i don't think that is what fed chair powell is hinting at. i think he is hinting at a rate cut this year which is what markets are expecting. you will not get massive hyperinflation when they're buying assets left and right which they did of a recession in 2018. since december 2018. we haven't seen a rate cut yet until perhaps this year. i think biggest danger if we had a true recession, fed chair, fed chair janet yellen saying that, on average, the fed has to cut rates about 5% in order to get us, get the economy out of a recession. so that is the problem. it is that there would be no room to cut rates if we had a true recession. charles: rob, some folks looking at today's jobs report, a lot of manufacturing data, other data points say the economic backdrop does no

vonnie: the fed chair came out earlier and clearly, the fed is in a bind as well because they are in dark as to what's going to happen. he did say the expansion is going to continue. does that make you think the fed will indeed cut rates in june or september or december or maybe twice this year? david: it is very clear that the fed will be data-dependent in this. inflation is remaining very low. that said, i think most people believe the u.s. economy is in pretty good shape. you talk to people around the world, they will say global growth is slowing, but our biggest worry is europe, not the u.s. people are much more focused on the week numbers out of the u.k. and germany as part of this global slowdown. that is the main risk. not the u.s. we: just to pick up on that, find ourselves in a situation where the market has priced in 50 basis point cuts from the fed this year. are you saying that is a mistake? david: no. as you know, we've been very early to the lower for longer philosophy of rates. we believe that is not just because of the fed but we believe that the role of demographics

that is lower than the fed funds rate would be if the fed wanted to achieve maximal accommodation.er words, the runway is shorter. the question is the extent to which the fed is going to want to waste all of its so-called ammo on a big rate cut, as a so-called insurance policy, now, or whether they will want to hold back some of it should things deteriorate or need more room to accommodate. alix: is there another narrative that we are all missing because we are so focused on a preemptive cut? i thought what what i learned yesterday is that jay powell is very intense on having the fed maintain credibility when it comes to inflation, and wants to get that number consistently at 2% or over. did you get that at all? lale: i think one of the angles people have stopped talking about, is they have the balance sheet to run off. you could just stop the balance sheet runoff, and that will help support asset prices. not that the lending conditions are tight. if the issue is we just want to keep asset prices going up, you can easily do that by just halting the balance sheet side of the equatio

the fed is a backdrop to that. i still believe that, particularly in the high-tech stakes, we will see a lot of demand. -- fed me delay that a bit the fed me delay that a bit, but not to a large extent. taylor: i wonder, if we are looking at a fed rate cut, that means they might think the economy is starting to turn. case, some of the high-yield credits might get caught off guard if revenue goes down. how do you position against but? stephanie: we make sure we are in the water source, the toll roads, services. things that have more of an elastic demand and will not be affected. when looking at high-yield, we are looking at the more liquid names. names that we don't think would run into any issues with a potential slow down into the market. guy: as we approach 2020 how do we i think about what is going to go on in the muni market? as you look at the election that will take place, the possibility the president might change, the possibility that we could see as a result of which, fiscal changes as well, how does the e

you have to see it after what the fed said this week.his is bloomberg. ♪ kathleen: now for a quick check of the latest business flash headlines, workplace software collaborator slacks soared on debut, becoming the most valuable tech company to reach u.s. markets this year after uber. shares closed 50% higher than the price said before the direct listing, giving slack and evaluation about $21 billion, three times its last private funding round. the venture capital arm of bloomberg lp is an investor in slack. about profitbts and demand. a goldman sachs analyst said volume estimates for the rest of the year of your to be on the high side and that tesla has little to stoke interest. he as the second quarter may have improved but "to a level that is likely not sustainable." elon musk has said sales could hit a record this quarter. kathleen: apple is recalling some macbook pro laptops because of concerns about overheating batteries catching fire. apple recommends you stop using the machines and says it will replace the batteries for free. last

so positioning is light heading into the fed so we think it's a pretty big time for the fed and what important. >> so you think the week ahead is quite binary for markets. how big a move up or down do you expect on wednesday based on the decision itself or the rhetoric from the fed >> that's an interesting question the implied move for the s&p is only 80 basis points, very low i think people are taken aback with that because it's a very big decision keep in mind the street, the markets are pricing in about three rate cuts into year end and the fed still with the dot plot has a hike built in and a big delta between the two of those. for an 80-basis point move baked in is surprising and i think the reason we see that as somewhat reasonable because it is based a lot we believe on the trading desk at least that the g20 and trump's meeting with xi is a big part of what the fed does. so i think wednesday's move is a little bit maybe undersold 80 basis points you could have a bigger move especially if the fed doesn't produce that the street is expecting. >> positioning is light, mike. how d

happy fed day. a lot of expectations for the fed here. alix: i feel like no matter what, it is sort of like being a parent. you are going to say the wrong thing and upset somebody. [laughter] david: in the meantime, president trump, there are reports that back in february, he was looking at a way to demote jay powell so he wouldn't be chair anymore, not fire him. i think a lot of people think it would be against the law. i asked senator tillis from north carolina, who is on the finance committee. he thought maybe it was possible. president, ithe is his administration. he should look at everything he can do within his legal authority. i haven't reviewed the legal analysis, but they've got a lot of smart people in the white house. it probably is within his authority not to remove him, but potentially consider another chair. david: it sums like if you were to do that, the republican senate wouldn't stop him. alix: well no, of course not. someone, who would he pick? of --uld be the perfect the perfect dove? david: i think you will come out fo

the fed to the rescue. they will act appropriately to sustain the expansion and stocks are surging. we will hear from richard clarida beginning just minutes from now plus privacy abuse, regulators have those issues top of mind. our guests will tell you which names are safest and who is most at risk. >>> and the next round of the trade war may be fought underground. should authorities think twice about outsourcing our subways to the chinese?

the fed indicated they are there. if there's tensions on trade a market selloff, it's probably got people too complacent, but it is the fed driving markets now. all of the central banks have to compete with that. draghi just before the fed meeting last week indicated he's ready to cut to make sure the euro doesn't appreciate against the backdrop of a dovish fed >> patrick armstrong, conscious uncoupling, the phrase of the day. thank you very much. >>> when we come back, no quick fix. new problems for boeing's troubled 737 max and new york apparently so last year the one surprising city that has become a new hot spot for fintech. later, why bitcoin invest verse got to break out the dramamine the latest trade if you own bitcoin, maybe go 'rba aerhid. wee ckft ts. moving is hard. no kidding. but moving your internet and tv? that's easy. easy?! easy? easy. because now xfinity lets you transfer your service online in just about a minute with a few simple steps. really? really. that was easy. yup. plus, with two-hour appoin

reshuffledo with a but it was the fed. the fed fire that has been lit under equity markets in the asian session. under risk assets, generally. can -- not in the move mood to be patient anymore. the door is now open to rate cuts which sent emerging-market currencies higher. on the currency side, we've got the dollar weaker and the yen going higher. no change in the boj. stories interest rate at play and emerging-market currencies, going higher. interesting to see norwegian krone as we talk about rate differentials there. on the other side of the gmm, lingering on a green gmm because there is so much green to talk about. appetite for sovereign bonds today. when you put that alongside stocks. i want to focus on commodities. wti and brent crude have been lifted by the fed but also by the dwindling stockpiles. keep an eye on iron ore and the valet story. word newsa first update with debra mao in hong kong. debra: the federal reserve has dropped its patient approach to monetary policy. it signaled it is open to lower interest ra