fed president patrick parker kicking off another busy week of fed speak.s hitting the polls for super tuesday. global pma finds rollout. chair powell testifies in the house followed by the senate on thursday. and ecb decision and a read on the u.s. labor market with the latest payrolls report. let's look at the data expectations. there is an expectation the data market is pulling with an estimated 190 k additions in jobs. softer than what we saw of the prior print of 350 three k, but above what jerome powell said would be the neutral pace of payrolls. the unemployment rate expected to stay unchanged. that does it from new york. same time, same place next week. this was "real yield" on bloomberg. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh i think he's having a midlife crisis i'm not. ahhhhhh

and the fed funds rate with a projection of 4.6%, there is some concern that the individual fed membersce they get done projecting it, could take off one of those rate cuts from the projection there and raise their outlook for the federal reserve funds rate for the end of the year. it would take only two members to do that. i'll live it there, tyler, and throw it back to you. we'll look at the projections and some information on the balance sheet of what's expected to be the start of a discussion about ending that balance sheet reduction. >> i would love it if you would give us a tutorial about a phrase that i'm sure is going to come up multiple times over the next hour and a half, and that is the so-called dot plot. what is the dot plot, why is everybody paying attention to it? how off do they plot the dots? walk me through it. >> so the dot plots are the individual forecast of federal reserve members for where they believe the federal funds rate should be at the end of this year, next year, 2026, and the long run. they take all those dots and they create a median out of it, and it's w

wall street braces for the fed and for fed chair powell as it looks for more clues on the central banks timing for rate cuts. get a quick check of the markets. there is a whole lot of nothing. take a look at the s&p 500 should pretty much unchanged. same story if you could on the list. nasdaq 100 unchanged. philadelphia semiconductor index pretty much unchanged. maybe down a 10th of a percent. you take a look at the bond market, it is the same story. the two year treasury yield. this will be the thing to watch in two hours right now, nothing going on. we have some mid-day movers ahead of the fed. watching shares of boeing after it cfo said the cash outflow will reach 4 billion to $4.5 billion in the first quarter. that is due to regulatory scrutiny and slowed output of its jetliners. that has taken a toll on its finances. more on that in a moment. shares of caring plunging after sales have fallen 20% in the first quarter and that is with the asia-pacific region in a decline. shares currently off 4%. let's talk about bitcoin. it is at a two week low. we saw its first net outflow for the

when does this influence fed decisioning making. >> wages influence fed decision making more than any or the form of inflation. this up here, this up here people making hourly wages were commanding whatever they wanted. charles: the great resignation. right. >> great resignation, but lowest pate workers were getting biggest wage gains. that slipped under. same with atlanta fed wage tracker. charles: these are forward looking. >> exactly. charles: real time when we saw last weeks. >> these are individuals losing their jobs. hey i worked for google. i got nine months of severance, good for me. all the thousands of stores closing, 60 to 90 days of severance. not very much so the fed's going to feel their pain much more quickly. that is going to force this cut. charles: all right. a lot of stuff here. do me a favor. want you to stay, q&a, ask you a few questions. >> of course. charles: thank you so much, danielle. >> thank you, charles. charles: my next guest says there are existential questions for the federal reserve. management life global chief economist as well as strategist frances

avril: it is a fed party. a lot of green on the screen. this fed theme is coming through. take a look at the e.m. asia fx, particularly the korean won. the yen also climbing. helped along by comments and parliament. he is striking a neutral tone, avoiding dovishness. after japan comes back from that holiday, we are seeing stocks are really rallying hard today. the msci asia pacific is hovering at a level we haven't seen in two years. tech is leading the charge. it's all the long not just by the fed but also the ai theme. that's boosting the likes of the kospi as well as the nikkei. it's going into the lunch break upwards of 40,500. we are also seeing risk appetite coming in for bitcoins as well as brent. china, maybe you are in the right color for that. china is a laggard today. haslinda: it is ai driven as well. avril: the question is turning into, given how the fed as well as the ai theme is playing out. how long can the mag seven keep up the broader rally in the ai theme? it seems like the music keeps going. we have a general optimism around the chips especially after m

>> the fed matters because everyone is obsessed with the fed.we've had a supply affect that's been maybe even more important than the fed. i think the fed will also matter if they get more hawkish. my view is there's upside risks to inflation. our ceo asked me to his office to talk about my market views. i sent him an email with one chart. i said i think this is the most important charting capital markets. it's a chart of the one year breakeven inflation implied by the markets. it was 2% in january. it's at 4.1% today. >> how much of the money will go into cruise line tickets that are floating cities on the ocean? >> your turn for the review. >> i will give you a one-word review. tolerable. >> ringing endorsement. >> the family loved it. it's not as crowded as you think. >> because it is so big. >> it's so big and everybody goes to the same place, the pool, and then you have different places to go to hide. you also go on islands, which is fun. i took my son on a hike on saint maarten. that was fantastic. >> sounds lovely, the island piece of it.

if anything, the fed is a little more hesitant. he did try to balance his comments their service to moving too soon in arista moving -- waiting too long. we will have to see loosening out sometime over this year. how do you think about this when it comes to interest rates. you've seen so much volatility but when we think of the balance sheet he think about the longer end of the curve. you think there will be more volatility especially when you have a fed chair acknowledging the fiscal issues as well? a lot of what he was questioned about today is outside the fed's purview. overall, this testimony today absent some blocks wanting that the data will be crucial especially the jobs are part. i will be watching closely to see if that strengths persist. they want to see further cooling with wage inflation when you think about what one critical question is if mortgage rates continue to come down how much will that shoot up housing prices? >> however, the longer-term structural issue when you think about the supply and demand dynamics, it'

the fed gets out of the way, rates get cut, data suggests the fed is getting closer. yet but they're getting closer to do that that. charles: the fomc tomorrow. jon housman put out this chart, i want to get your notion about the taylor rule, represented by this green line, that the fed funds rate usually have to be above this to be effective. again if you want to curb payroll employment, retail sales, all the things imply they have done their job, that it is not there yet, do you buy into that notion, that has got to be the case? >> i don't. here's why. the greatest amount of money ever infused to the u.s. economy, labor market, although minor weakening is extremely strong. until that inverts, we see real weakness about the labor market that doesn't matter. point about 10 year doesn't matter. mckenzie talked about more debt i get it. fed getting what they want, weakening consumer, with the job market hanging in there. why that data irrelevant. charles: you're still in the soft landing camp? >> i. charles: 30 seconds, some things you like, jpmorgan, amazon, and crowdst

fed chair powell wrapping up day one of his system. he'll be before the system tomorrow nvidia, $887, a gain of better than 3%, so the march towards $900 continues there microsoft, that is green, as well apple, it's hugging the flat line i'll see you on "closing bell. "the exchange" begins right now. welcome to "the exchange." i'm dominic chu. here's what's ahead on the show. fed chair jay powell not ready to cut rates yet our next guest says the biggest risk he sees now is the fed waiting too long to lower rates. >>> openai fires back, publishing elon musk's emails. what he wrote and how it may change where this fight goes next >>> and there's a new fomo trade

of course, the fed, after the boj, it is about the fed. waiting to hear if the fed will change its rate cut outlook. asian shares having that on the back of their mind after s&p closed out boosted by tech in particular. max seven in particular. we have seen a rise in yields in the dollar. it's all about whether or not the fed validates that hawkish stance. take a look at where we are in terms of the benchmark. taiex up 2/10 of 1%. in terms of the yuan, it is up a 10th of 1%. we are keeping and i out for the rate decision out of indonesia. it is likely to -- it is waiting on the fed. that's it from bloomberg markets: asia. bloomberg daybreak and middle east is up next. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh >> the following is a paid program. the opinions and views expres

chair powell: we would not be the fed to come up with the fed.ai: that is not answering the question. chair powell: a central bank that is excessively responsive to -- you have to look at other countries basically, and what you see is there is no credibility. credibility on inflation and on sticking to your knitting is everything, because if people believe that you will accomplish your goals and that you will not deviate from them for reasons like that, then it will be easier to do so. markets will react appropriately , and in people's thinking inflation should be around 2%, and if they think that we have probably will be around 2%. if you look at other emerging countries where they have weaker independence or lack of independence, it is hard price stability or maximum employment, so that is what would happen if that would happen. that is not the world we live in. kai: one more question along those lines and then i will leave it be. you do not comment on fiscal policy. it is a question about what the fed will do if our current fiscal past which m

that was a major shift in the fed's approach. do you think in retrospect of what we minister -- witnessed that that was a mistake in hindsight to change that framework? chr. powell: we said we would do a review on a five-year basis. we will start that towards the end of this year. i do think that will be one of the questions we look at. the bigger question is that change in the approach was really based on the fact we had very low interest rates and inflation for a long period of time and there wasn't any firepower for central banks so it was a way to keep inflation expectations anchored at 2% not have them slide down. the pandemic really may have change that in a sustained way. we don't know that yet. that's the big question we will be asking is the effect of lower bound to be thought of in a different way now and if it were that that would have ramifications for a framework. we haven't begun the review yet. it will begin at the end of this year. >> thank you. i yield back. >> gentleman yields back prayed we will go to the gentl

fed chairman jerome powell. the boe decision is out thursday as well as an ipo. let's talk how much we will see in the wild central bank's monetary policy for 40% of the world's gdp coming out next week. the boj, boe and fed are highly watched for their -- and of course there are many others and we will keep an eye on all that throughout next week. from new york that is it for us time same place next week. this was bloomberg go yields. -- this was bloomberg real yield. this is bloomberg. ♪ sonali: welcome to bloomberg markets. we are looking at stocks falling with tech selling off and we are hitting session lows. benchmarks tumble in the last hours a let's check on the markets. the s&p 500 is on track to have the second week in a rollover. weeds -- it's now down 0.7% and the nasdaq is down more than 1.2% and semiconductors are down almost 0.3%. volatility is inching slightly higher but we are watching the second da

for a long time we had az8 lot f mail from people at the fed -- to the fed saying you should raise interestwe are not getting anything on our checking accounts. we solved that problem. senator warnock: i don't think we are asking for that. given the reality -- let me pivot, the monetary policy report states that while demand for housing has fallen, the strong labor market has kept prices high, that matches what i have bee in georgia. too many folks can't afford a home. according to the monetary policy report, mortgage rates were averaging around last month. that's tough for lower income home buyers. increases of just a percentage point or two can be the difference between owning a home or not. are you concerned about this interplay between lower demand yet stubbornly high prices and what it means for folks trying to buy a home? what do you think is driving these high prices? chair powell: the market is in a very challenging situation right now. you have this longer run housing shortage, but at the same time you've got a bunch of things that have to do with the pandemic and inflation and our

more than the fed anticipated. let's take a look at when we might see the fed cuts. odds are different from a few weeks ago. let's take a different at the -- look at the odds for may, june. priced in, that's the yellow line, the only certainty the market is willing to express. the blue line, june odds, still below one. obviously, we have practice the price out any cuts in may. let's hear directly from jay powell himself, with his take. >> we believe that we are at the peak for the tightening cycle and if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. the economic outlook is uncertain, however, and we are highly attentive to inflation risks. vonnie: joining us now, marianne and matt, thank you for joining. after having seen what we saw this week, are your thoughts on where we are headed rate-wise any different? marianne: as for me, no. the fed has been very clear in their process since last year. what is amazing, as you pointed out, the market continues to look for rate cuts. the e

is the ecb going to cut before the fed. that is the other question that looking forward we will be talking about. sonali: thank you so much for your time. president biden preparing for consequential state of the union address coming days after his rival, donald trump all but clinched the republican nomination. annmarie hordern joins us here. i am wondering from your perspective. i heard you talk about this idea of are we better now than four years ago. how do we expect president biden to address the question? annmarie: this very famous line that reagan used in talking about president jimmy carter is something that i've heard from republicans and democrats. and when biden is set to give his speech what he is trying to do, not just give a report of the state of the union to congress and the american people but pivot to the election. and this idea are we better now than four years ago will remind people that four years ago was march 2020 when the world health organization said that covid was a pandemic. he is going to want to

away from the fed and the fed is following it?ocus on the fed. at the end of the day it is about the data. the data matters. the markets were so obsessed with rate cuts. the only way the risk markets could do better is if the fed cut rates. it is about the data. the underlying data is strong. i would focus on labor markets 10 times over the fed. i think there is something to do focusing on jay powell and the fed. at the end of the day it is labor. jonathan: can we finish on the bank of japan? i want to talk about the boj. it is the last anchor around the neck of the global fixed income market be lifted. we've seen the fed shift. when you think about not just the next five minutes, the next six to 12 months, the next 10 years, what are we going to look like compared to what we did look like over the previous decade or so? greg: you could see the situation where japan rises from the ashes, finally. what we got yesterday out of the boj is moving policy out of negative territory but that's it. you are continuing to see a week yan -- y

the fed -- jonathan: the fed decision next wednesday.factor for next week according to many of you on wall street, ellen zentner pointing out saying it would take three participants to change from three cuts to two for the median dot to change to two cuts in 2024. we can all agree on the direction. it is fewer, not more than what you are looking for at the start of the year. lisa: which is the reason why it is compelling it is not taking a toll that much on equity markets or credit markets. it does not matter whether or not they can't. annmarie: i think back to what stephen stanley had to tell us and reiterated yesterday, that he will not call victory just yet, but no cuts until after the u.s. election. the fed wants to cut, the data is not there. annmarie: stephen stanley, they will wait until after the election, nobody else is on board with that. they will cut 100 basis points going into the u.s. election? that is quite a call. lisa: i was struggling with all of the fed prognostications because that cristobal is looking cracked and clo

is to say respondents don't think the fed is quite as tight as the fed itself believes it to be. >> allht. steve, stick with me. our next guest says the market and the fed are currently aligned on three cuts this year, but says it doesn't take much for the fed to scale back to two. joining me now is paul mccallie, former chief economist and adjunct professor at georgetown mcdunna school of business. paul, what's the big open question when we hear tomorrow from the fed? >> i think there are a number of them, most important will be what the results of the dot plot are. and it drives me nuts to have to say that, because i think the essential message of the fed is pretty clear. and that came clear last december when the fed rhetorically pivoted and put three cuts into the outlook for this year. between then and now, the marketplace has been all over the place. but they're in alignment right now, they're in a really good place of alignment with the fed. so i don't think that the fed needs to change anything really in the dot plot. but because of how it comes together, you do want to have two

what feels appropriate to you, knowing what -- where the fed stands right now? and, what can the market take? >> the federal reserve really doesn't know how far they can push down the balance sheet before they have a repeat of what happened in september of 2019, were short rates suddenly bounced up. they are using this ample reserves regime, they have all these reserves, so they are gradually draining reserves from the system, but they don't know how far they can go, and they are making guesses. i've seen some research coming out of the st. louis fed saying, if you get it down between 10 and 12% of gdp, that might be right. >> david? maybe you can answer question for me. if they have the standing repo facility, which is something that you can break glass in case of a fire, in other words, if they don't have reserves, they can go to the fed for those reserves. what is the difference? i'm trying to figure out a reason to be concerned the fed could go too low on the balance sheet if this standing repo facility is something that really exists and will work. why shou

what should the fed do and when should the fed do it? >> i think the fed wants to avoid a mistake. the fed doesn't want to cut rates too early and move the risk and have a resurgence of p inflation. maybe the last report, the ppi report you referenced, maybe that is some sign that we could have inflation resurging in so way. i think the position of the committee is as long as the economy seems to be tolerating this level of interest rates, i think we'll stand pat and make sure when we make the move that we have it right and make sure that inflation is going to be on a path to 2%. >> in december, we seem to have gotten indications from the fed there would be two-to-four rate cuts this year. do you think that stands? >> this heameeting is a meeting which they update the projections. as you point out, the range was two-to-four, so there are a variety of opinions on the committee. i suspect we will see on wednesday afternoon is something very similar to what we saw in december. however, there could be movement within that range. that was 15 of the 19 members of the committee who were f

into the fed a little bit later.uple of basis points but starting the week, highs across the curve. lisa: it's not just basic nominal rates. it is real rates. you have seen them rise. equity markets are falling victim to real yields. not by this idea of breakeven, inflation, also extra premium built in because of the uncertainty for a host of reasons. are we crossing the rubicon with respect to real yields to the point of what investors will demand? jonathan: have we already fallen victim given last week we are down 0.13%. 20 basis point move on yields, pretty impressive. lisa: if you look under the hood it is fascinating. real estate, utilities, some of the more interest rate sensitive areas, they did really badly. energy crushed it. we saw a huge game. how much is being driven by goods related inflation that is necessarily positive? it is an interesting dynamic. jonathan: really interesting development in the past week. i want to turn to foreign-exchange. just below 150 after the boj decision. i love this, hoping t

this as we count down to the fed decision. that line is what you want to watch, the 10-year treasury yield lower by one basis point. we are sitting at 4.3% or so. of course that meeting kicked off at 9:00 a.m.. let us dive deeper into the markets with catherine, the stone next financial chief market strategist. let us talk about the fed but let us start about the bank of japan, the big news out overnight, the negative interest rate and the zero interest rate era is over. what could that mean for global markets? >> it could mean a bit of an impetus for more growth in japan, i think the negative interest rate policy was controversial in its effectiveness which is why you continue to see this move higher in japanese equities which have done remarkably well. if we are looking from a global perspective, getting off of negative interest rate policy increases the attractiveness of the jgp which comes at a difficult time when you have the fed unwinding its balancing sheet and high financing needs. it increases the chances of a higher

is good to have you on the day after fed day -- it is good to have you on the day after fed day. jerome powell hit the nail on the head when he said we just do not know. >> i think chair powell stuck to the narrative that we have been hearing for some time, both in terms of the direction of the economy as well as the direction of policy. no real new ground was broken in this meeting. there was not a strong hawkish pivot, although there was the migration of some of the dots in the summary of economic projections. more in the direction of three, very strong consensus now of three great cuts this year. haidi: three cuts on the dot plot, does that seem dovish given the revisions we have seen to unemployment? >> i think -- most of the members of the committee are staying with their views going into this meeting and that is that the number of cuts would either be three or two. what was interesting in looking at the dots is that there are four people in december who actually had uppercuts and that group moved out. there is only one left of that four. they all moved into the three or the

coming up, the former new york fed president on the fed's next move.k, this is bloomberg. ♪ e all new godaddy airo helps you get your business online in minutes with the power of ai... ...with a perfect name, a great logo, and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo when i was your age, we never had anything like this. and yowhat? wifi?iness. wifi that works all over the house, even the basement. the basement. so i can finally throw that party... and invite shannon barnes. dream do come true. xfinity gives you reliable wifi with wall-to-wall coverage on all your devices, even when everyone is online. maybe we'll even get married one day. i wonder what i will be doing? probably still living here with mom and dad. fast reliable speeds right where you need them. that's wall-to-wall wifi on the xfinity 10g network. ♪ jonathan: let's run for the price action for you, equity futures waking up this morning positive by 0.1%, the nasdaq going absolutely nowhere. not what you wo

a looser fed.that real fed funds rating come down for more than year. i want to see if that stays steady, which is what i expect, more or less. worth the fed tie in with on the early year inflation we have had. we are basically working through those. i think there is too much concern about inflation. people looking at oil and -- i think they are jumping the gun. a re-acceleration of inflation is possible down the road. but i think the data right now is still on the this inflationary path. >> we do have the s&p licking through what would be a closing record high. just a quick word on oil. you mentioned it. it obviously has a little bit of momentum. where is it heading? >> i think we tapped out around 90. our model had been bullish for about a year. they gained about 8% on the trade, we are happy with that. that signal has closed. we went from a market that is extremely pessimistic and now -- in the long energy sector. i think we are close to the end of this move. again, like i have been aying, saudi

>> i think watch what the fed does.hink fed chair powell signaled that we're not far away from declining interest rates and i think the longer they hold off on raising interest rates the better it is for the stock market because the risk here is that if you think it's a melt-up now wait until you see what happens if the fed starts lowering interest rates too soon. charles: all right, well, for right now wall street is like who, the fed, who? never heard of them. ed, thanks a lot. appreciate it. >> thank you. charles: so my next guest, his firm just got a strong sell signal through their proprietary research. i want to bring in long view economic research economic strategist, chris watt link. chris, first and foremost i've been a fan of your research for a long time. your equity research, it is flashing a strong sell signal. listen, there are a lot of signs like this. certainly a lot of sense that the market is overvalued. walk through the audience why this is important? >> yeah, charles, great to be on the show. i mean

she thinks market pricing for fed cuts is close in line with fed forecasts for now. up, reaction. no itchy fingers. don't be in a hurry to cut rates. >> there's a reason not to be hurried. at the end of the day, that's what the fed is saying. they are not in a hurry. it's only three cuts. even if they do cut by three times this year, it is still higher than where we started. but i think what we are looking at is, where is the potential growth in the u.s.? how much lower can the interest rates go from here? at this point, the market can only focus on the cuts this year. after all, we are in an election year. haslinda: it is higher for longer. three cuts this year. in 2025, they factored in fewer the -- fear cuts. >> exactly. when you talk about the geopolitical risks that could model the conversation later on, they may not be able to cut further in 2025. there could be new drivers of inflation. that would really be driven by u.s. industrial policy or maybe even trade policy. nobody is talking about that now because the focus is on the fed cutting three times. haslinda

we had gains ahead of the fed. we expect the fed to push back as the economy and surprises.resh record high, broad-based rally. energy is the best performer as we see a rise in oil prices. wti above 83 dollars, propelling prices higher. seeing the impact of drone attacks adding upside pressure ahead of key summer driving season. nasdaq 100 up by 1/10 of a percent and we had date or saying china's stock pile declined in january. we saw japanese holdings of treasuries increase. we are focused on the fed. let's bring in enda. for the assets across fx, the fed seems to be the bigger influence. enda: no change expected tomorrow, but all eyes will be on these. stickier than expected. the market is expecting to look at cuts, three different stories . broadly speaking since the year began, the growth story has been good. jobs has been good. no policy change expected. paul: to that point, we are seeing the market steadily repricing. we are down to three now considering inflation numbers did not really play ball. enda: car insurance and services areas, it is not so long when people we

the fed was saying no. now the fed saying we will get three and it doesn't matter for investors. i hear a lot less about the fed these days from investors. >> jeff, last word. >> you know, i love jim cramer, but he has this one wrong. the fed is driving the boat here. if you look at the sensitivity to the fed's road ahead, we really saw last december that we were expecting 150 basis points in cuts. now we have three. the fed is absolutely in the position. i'm really surprised we are giving them so much credibility. the fed was talking about the inflation being transitory years ago and now i think they're wrong. tt ll do it for us on "worldwide exchange." thank you for watching. "squawk box" is coming up next. morikawa on 18. he is really boxed in here. -not a good spot. off the comcast business van. into the vending area. oh, not the fries! where's the ball? -anybody see it? oh wait, there it is! -back into play and... aw no, it's in the water. wait a minute... are you kidding me? you got to be kidding me. rolling towards the cup, and it's in the hole! what an impossible shot bro

the fed held a steady course.ikely starting in june, and that was reaffirmed by jay powell. i think, becky, that's the right outlook. that's what should happen given the economy we are living in today. >> even if that inflation number comes in hotter than anticipated, you don't think that will push things off? jamie dimon speaking yesterday said he thinks maybe the fed should not cut in june but wait and see how it goes and give the fed room, and he thinks the fed's reputation is at risk if they cut too soon. >> yeah, and they could wait too long. what is the right underlying inflation rate, or what economists call the neutral interest rates? what do you think the equilibrium rate? if you think it's 2%, then they should hold off. if, like me, you believe we are living in a world where supply is flexible and you should aim higher than 2% and tolerate more than 2% for a while, 2.5 to 3, then we are restrictive and we should cut. all of the discussions lead back to something that people don't like talking about, whic

in -- the fed does need to move slowly.ts are pricing in around three cuts this year, seeing around 100 basis points of cuts. is that the right pace of reduction, do you think? lydia: i think the fed is going to be well-positioned to start cutting interest rates. fed chair jay powell mentioned we are not too far from that confidence and we are expecting to see that disinflation trend resuming in the coming months. and that should lead to the fed easing monetary policy. it is not going to be a fast process. you are going to proceed very carefully. but we expect to see rate cuts this year as inflation continues to come down. and the fed really wants to balance the risk of keeping interest rates too high for too long and risking some damage to the economy and potentially a deeper economic slowdown. or a recession. haidi: the jobs numbers on friday was also quite perplexing for the market. we saw that pretty immediate reaction. i wonder how you are seeing this being conveyed through the strength of the u.s. consumer? are there

it is what the fed is thinking.g that there is no hurry to start moving but it seems appropriate to start moving sometime relatively soon. maybe not with an aggressive cutting campaign. it is not the economy rolling into a recession but a more gradual recalibration of policy. if i could put one point around that, last week we saw the pce deflator data. headline pce deflator, the fed's target, has gone from above seven to brown thing to two -- to rounding to two. we haven't gotten to target but the monetary prescription in place at seven is not appropriate when you are basically rounding towards your target. recalibration is appropriate at some point. jonathan: payrolls, let's talk about it. at the end of last year payrolls growth is ok, but it is coming from fewer and fewer industries. now you're talking about the broadening of job growth in the more cyclical sectors. where is the change coming from? carl: from a very interesting point, the collective improvement of animal spirits in the economy. we try to put a pri

the outlook from the fed will be important. >> ppi has direct application for the fed's -- inflation rebalance friday and operations index. you have the fed next week and, i think we should take the fed at its word they see the risk as balance etween slowing growth and inflation staying high. therefore, you have to be sensitive to slowing growth dictators as they come along. not fatal but something to keep you on alert. >> what is going on with william sonoma and dollar tree? >> dollar tree shares having the worst day since may 2022. its first-quarter guidance is taking a shares lower. executives less confident in reaching the $10 previously announced earnings target. they are focusing more on seven dollar mack this year. the family dollar banner -- expected to remain challenged because of the merchandise mix and pressured lower income shopper caters to. they plan to close around 600 underperforming family dollar stores over the next year and 370 more over the next few years and 30 as lease expires. they plan to open 600 new stores in the fiscal year so we will see how that balance o

several things the fed can do. execute a clear, long-term communications strategy to the public. to make clear that primary credit saleh jit mat source of funding for solvent banks when they need it. last lot of confusion on this point. we have a long, checkered history since the 19 20's about whether the discount window tool is something that should be used when needed or is really not ok to use. second, i think the fed could explore a way to administer secondary cr which is really akin to recovering resolution funding. separately from administration of primary credit at the discount window. i to reduce the kind of muddying the waters of having both sal vent and weak banking programs, david: so secondary is for banks that are in trouble? susan: the official language is, it's for banks not eligible for primary credit. but essentially it's more akin to recovery and resolution funding, i think, in practice. other federal banks have drawn a much brighter line between lend toggle solvent banks and lenng to and those ce

and the fed funds rate at 4.6 peshz. that was the fed's projection or three 25 basis point cuts. orange number there in the middle there, at 4.6 or three cuts. it's just two of the 19 officials decided to cut only twice. the median moves to the right there, which is essentially two rate cuts. for the fed, it comes down to a question of how to think about the past couple of months of inflation, are they a sign of a stall in the progress or just noise? is the progress expected for this year delayed perhaps into next year, which would delay rate cuts? rsm says -- is >> the future market began the year looking for 160 basis points bringing the rate down to 3.8. that's gone away. now it's just 80 basis points built in, or right about where the fed is right now. so the question for next week, whether the fed moves that forecast, markets have to price in the risk about when the fed cuts, and also, tyler, by how much. >> explain to the uninitiated like me what the dot plot really is, and what it shows? >> so, it's an important question and an important distinction because the dot plot ar

it's really the fed story playing into it.di: you mentioned the reaction in the markets when it comes to that supplies unemployment number from australia, we've seen three year bond futures dropping in australia after the jobs report. we are also seeing appearing of those gains across the equity session as well, the australian dollar extending some of that gain we've already seen in the session. let's bring back garfield reynolds. we are talking about the volatility of this data series, it was supposed to become and has been for a while now us volatile, but this was quite a surprise. garfield: definitely quite a surprise. i will be interested to see the data, if they come out with a caution. last month they said you don't pay too much attention so will see if they say it again. the more immediate picture as far as markets are concerned is this really pushes back on any expectations the rba would be amongst the first movers when it comes to rate cuts this year. in the wake of a slightly dovish fed, we would see something like a

lisa: which raises this question about the threshold for today's fed meeting and how hawkish fed chair powell would have to be before you see a move in the yen that would actually cause the bank of japan to say way second, maybe we need a second step. >> i think that is unlikely but given what we've just seen, why not? if we had sat here last week and called higher dollar-yen on the basis of what we've just seen, it would have been an outlier, so why not? let's go with it. chair powell goes hawkish and says it was a mistake what i said before. he's not going to say that. one thing you can say for sure, he's not going to say that. lisa: not like that. >> we can guarantee that is not going to be said. jonathan: reflecting on this fixed income market, obviously in europe we were there together, we have to talk about negative bond yield. what did we get up to, some ridiculous number of negative yielding assets? how would you describe that? for those who maybe are just joining the industry and were not living it, how would you describe that to them? >> it was an experiment in monetary polic

we are here with the former fed vice chair rich clarida. your praises last week because i was thinking about the second outlook from pimco when you wrote down that the fed will except to point something -- two point something. can you explain what you saw and if it is coming around? rich: i think it has played out. i think chair powell and the committee deserves large credit, inflation got up, and are the two's, and argue then was two point something would be the point at which the powell fed would pivot towards easing. i think they think they are done and they are signaling that they are going to be cutting, starting this year. it is important to remember that the goal is to get to do percent, but they will start cutting before 2% based on their view that national conditions are tight. that has played out how it has gone. jonathan: can you help explain the difference between what you see and others see when they start to see things like a higher tolerance for inflation? what's the difference? rich: i don't think there is the tolerance. opp

if the fed hikes i think we're selling all. i agree with that but, look -- >> it would also take time probably for them to get to that point of making that. >> they need different data on jobs andinflation. our website, you search it and zero search results. i see so many opportunities to buy things underneath that it feels optimistic about security selection, active security selection and the risk/reward is still positive. >> 1985, i have been bringing it up as the ultimate soft landing if everything went perfectly, the fed cut twice, july and december after a long tightening cycle so i'm sure that's in your data set of markets that treated it well. >> yeah, but there was still scope for the unemployment rate to keep coming down. >> that's a lot of the other stuff doesn't match up, exactly. we'll pick and choose as we can. thanks a lot. >> good to talk to you. >> let's send it over to steve kovachfor a look at the biggest names moving into the close. >> pepsico shares are popping about 4% today after analysts at morgan stanley

it's funny, when you look back at the turning points for the fed, the data that the fed had in frontthe time can be completely different from what it looks like one year later or so. that is one of the problems with being on the fed that you don't have on twitter or x, you can comment on stuff like -- of course they should have done this, but that was not the number they were dealing with at the time. jonathan: in 24 hours we will have been sitting on the inflation data for 24 minutes. we have a lot of information on what that would look like tomorrow. what is your view? mike: i'm going with jay powell. jonathan: easy to go with. [laughter] mike: he said would -- we would get a .3% rise and i have no doubt in their analysis. this is of course on a year-over-year basis, which is what the fed is following. chris waller said the same thing last night and as he pointed out, the october to december average was about .03 percent, rather than 3/10 percent. so, it's 10 times higher in january and it would be the same this month. that suggests some progress has halted, if not gone the other w

the fed has one tool available.hat tool does nothing to address the cause for wide costs remain too high. corporations price gouging to boost profits and make the shareholdersrs richer. higher rates of doomed force, higher interest rateson't ons to lower but high interest rates are rising housing costs hindering wage growth stifling small business that. now is the time for the fed to decide whether it's going to make good on its commitments into families by lowering interest rates and the financial system from wall street executives who used their wealth and power to influence economic policy and avoidlity for the ry bets. keeping the rates too high long strangles the economy. no one wants this and makes it harder for small businesses to expand aynd hire more workers undermining job creations and it also stifles overdue investments that are creating high-quality good paying jobs and that are t competitive and innovative economy in the world. interest rates rising housing costs higher and higher for families. familie

and .72 on the fed's path forward. the fed-fueled rally pushing stocks to all-time highs. the s&p 500 hitting his 20th record this year. not even tech losses curbing the momentum. the fed meeting this week seems to have confirmed that the central bank is also on the soft landing path and gave markets enough to imply that even with elevated inflation readings and 24 the path is still open for lower rates. sarah joins us for more. how constructive have you become after what you heard from chairman powell? sarah: it is difficult not to be constructive. first in december of last year we had the concern of the hawkish fed in august into october. december, they basically said we think that the risks are balanced. he had a chance this week to say we think that there has been some irrational exuberance or over enthusiasm, and he didn't. that says that the fed is comfortable where things are going. sort of overlooked to the higher inflation readings in january. that has to be positive for equity. we are still saying it's lower. we aren't even saying we aren't going to do it. that w

that is what they want the fed to be, they want the fed to reignite and push their political agenda whicho do. prior to the u.s. government getting involved in the money supply and money, before 1913 the setup of the fed prices had been stable for almost two centuries. the government did not control the quantity of money. they deprived dollar at 1/20-ounce of gold. also silver. they also minted coins, charles. everyone else minted coins too. the money supply were bank notes, not federal reserve, there was a private banking system that kept price stability. since they took it over price level has gone up 30 fold. look what they have done, the dollar is collapsing everywhere against goods and services. it is collapsing against gold. it is a classic when the government gets their hands on a product they ruin its quality, ruin its availability and this is exactly what they're doing right now. it is a tragic shame. charles: art, i have got 30 seconds, let me slip this in because president trump used the word bloodbath over the weekend. media took it, used it for something else that was really

that is a soft signal from the fed. the extremes are very big, somewhere in between is probably the answer. haslinda: what are we seeing in terms of positioning? mark: yen shorts are still significant in the foreign exchange market. they have come down a bit, but they are still very large. there are definitely people who on the scenario, which is favorable for the end, people with positions in the bond market, it is a bit squareer that it was. so, the room for volatility is pretty good because we do not have markets that really have extreme points and in terms of trade deposition, they are extremes where it is priced in. it is not appear to be priced in. haslinda: when it comes to the boj, what are the key things markets are looking at? what are the key things for bond traders? mark: the big one is negative rates. we talked about it this morning, the way the headlines come through typically for traders to watch, the first headline is the boj leaves the rate at -0.1%. whatever that headline is when it first comes out, tr

with the fed funds expected at 4.6 right now there's room for the fed to cut if that remains the sameidual members may raise their concern. it takes just two feds to be more hawkish. we'll also look at details for what's discussed to unwind the balance sheet. it's down by 1.5 so far in the past year. the cnbc fed survey looks for an average of another trillion or so to come off before the fed finishes quantitative tightening as expected in january. we'll see if that fed forecast is right from the survey. also asked in the survey about politics and fed. it founds that 73% found the presidential inflelection has n influence on the fed's decision to cut. 88% say the fed would go ahead and reverse course and hike if needed despite the presidential election while a small contingent, 12% thinks it makes them less likely to do so. survey respondents and the market take the fed at their word they're data dependent with no economic risks on the ho horizon. all of this means the fed is likely to be tied to the inflation cycle and when and how much to cut not necessarily the political cycle. >>

let's go back to the fed. want to bring into the conversation senior economic correspondent, steve liesman. pretty busy morning, steve. speaking to todd burke, chicago fed president austin mosby, knit it together in terms of what you discern as the current state of thinking on the fed for when, how much, and what this economy does and does not need. >> mike, i want to bring you through a little tale of the tape and show you how my general take on the fed is they are all out there being hyper gain independent and the market is, as well. i doubt you will hear anybody, -- being very dogmatic about the direction of policy. first let's take a look at the ten year. the ten year shut up this morning. people said, the comments that bark in gave us, i will play those comments in just a second, and then it came back down. let's hear first what bark in had to say. he is in no hurry to. cut >> it is an important time because the overall numbers are likely to come down over the next few months because the comps from last y

usually somebody is between us. >> let's go from the lovefest to the fed. >> from the fed, i don't think they will say two, three, four or anything. what you have to pay attention to is the narrative that powell has, is he going to stay on theme, which is that, hey, we're poised to ease. not verbatim. he won't say that. or overly play out hotter inflation numbers, not meaningfully hotter, but keep in mind they've reversed the trend that was going straight down. so he's going to give a nod to that. the market shouldn't care because the economy is very strong, and so there is no difference, frankly, if he goes in may or june or july. >> you're in the camp, as long as the cuts are coming, that's all that matters? >> yes and no. yes and no, because we are seeing some underlying data that is weaker. jamie dimon says that soft landing is not a slam dunk as has david solomon. they're seeing it from so many vantage points globally. you can take what joe and bryn said as complacency, and bulls always sound complacent, right, all the time. that's the bullish story, things are great. i think they c