is it the fed or the economy? right now bank of america and yourselves, plenty of others, have five cuts this year, looking obviously for something to break. kathy: i think the markets are confused and rightly so. the economic data had been confusing. looking back at the pandemic era , it's very different. we never turned off the lights on the global economy and then turned around to say let's find out what happens. what has happened is this resilience in the u.s. relative to the rest of the world and the resilience in the economy, as mark mentioned, the stickiness and inflation says why would we do anything right now but wait and see how things develop? it's hard for me to envision a downturn in the economy given that we have the potential stimulus on the horizon with inflationary pressures and policy. it would be hard to make a case for lower rates from here. we would have to see something really change in the economic data. vonnie: how much are you pricing the possibility into your forecast that we might see ta

so it is going to force the fed to cut.ust depends on the real question for us all is what kind of pain we have to experience along the path. >> yeah. because you really can look at the december market activity and say this is essentially what the market was suggesting, right? you saw as yields went up, housing related stocks went down, but so did other cyclicals. banks had a big reset lower, industrials as well. so i guess the point is, you alluded to it, what do we have to go through before we get to a point where either the fed capitulates this view or you have, you know, i guess stock prices discounted in advance and can recover. >> yes, 7.5% peak to trough correction on equal weight in the month of december, i think that's a taste of what we have in store for us. it depends on how hawkish the fed wants to be. this is our view, we're bullish on the market. we think the soft landing is in tact, but fed has to cut. we have 100 basis point of fed cuts in our base case projection. and i think that our view is that they're g

fed's not handcuffed.will act if it sees severe weakness but i think it would be prudent of them to let the situation clarify and i think they will. >> we've discussed the relationship between the fed chair and the president many times in the past. but given everything that you just said, how are you thinking about the possibility of significant discourse between the two? from a president who has made no argument about the fact that he likes low rates. right? that's part of the business that he grew up doing. lower rates are more beneficial to the kind of business he's made his living in. the fed chair, to some extent, has his hands tied by the current situation. a little stick inflation. feels pretty good about where we are, but, you know, this is a president who's not worried about running for re-election, who wants to get specific programs through, and he wants to do it while at the same time keeping the economy really strong. so i just picture a situation that could get dicey from time to time. >> that

the three -- the fed has to hike.oesn't have a problem you can see inflation over 10%. but, that is why it feel like cash is one of my top five investments for starting. the last time i had that was in 2022 when the market went down 19%. we will see what happens. lisa: i was looking at your 2025 top-five tics. below cash you talked about cisco. you talked about the big chinese tech companies. are you concerned about what is going on with chinese hackers. cisco was named as a companies that the chinese hackers compromised their large network routers. dan: the chinese companies have compromised cisco and the federal reserve, which you might remember got hacked. it goes back to what we talked about earlier which is you need to support the u.s. companies and what they can do to try to make america's defense is better. i think with cisco it is one of our top five picks. they have some good security products that obviously, all security across all companies even though security software companies have gotten hacked, which y

we don't want a big surprise from the fed. powell could be on the government's side. the fed could.ere's a lot of uncertainty about what the fed might have to do next year. the fed has an under enviable challenge -- on enviable challenge -- unenviable challenge. mohamed: we spend a lot of time on the what of the policy side. do you think someone in washington is bringing together these elements and seeing what the effects of all these measures would be? meera: the challenge is if you do have a centralized strategic initiative towards all of this when it comes down to legislating and you think about congress there are so many competing interest because of everyone's different constituencies. that is how you end up with things that seem like a bit of a frankenstein, and this is true for any administration with any legislation because you are trying to please a certain number of parties. we are dealing with slim majorities that are going to make some of that negotiation quite fraught. mohamed: i completely agree. we hear quite strong predictions as opposed to embrace volatility. that w

the fed in _ inflation? it is interesting. the fed in the _ inflation? it is interesting.the previous i the fed in the previous meetings had really thought that inflation was under control, and putting the focus of the labour market, which would make this week's that are extremely important. in the last meeting we heard from the fed, we are not so sure inflation is completely under control, it has been quite sticky, there are things that could make inflation heat up a little bit more, going forward, with some of the new policies coming from the administration, whether it is tariffs, increasing demands with tax cuts. there is different elements there that could push inflation a little bit higher, so the above sides of that mandate they are going to have to look at. the labour market is going to be very important, it has to hold up in orderfor consumption to hold up, which is the majority of the us economy. it is a very important report that is coming in the next 30 minutes or so, let's see what openings look like. the concern we are seeing is that companies are not hiring.

fed minutes yesterday.pecifically there wasn't anything hawkish from that lawyer speech we heard yesterday afternoon. it was his dovish comments that calmed the bond rout at least in the treasury market, for instance he did say that he believed inflation will continue on its trajectory downwards. he does support for the rate cuts but it was his comments on tariffs that the market found specifically interesting. he said he doesn't expect tariffs to have a significant impact on inflation. he noted the broad uncertainty around that and went on to say that tariffs are unlikely to shift his view on monetary policy. it calmed market down a bit. we are seeing a bit of calm when it comes to the treasury market. it's an early close for jimmy carter's funeral taking place in washington later today at 2:00 p.m. eastern time close. lack of liquidity perhaps we will see a bit of calm when it comes to the treasury market today. eyes on the 30 year old -- 30 year yield. some other markets have not found calm yet. tom: the

sometimes the reaction that the fed might have. so i think we are worried in the sense that the market is pushing this theme of less inflation normalization down, quite far, and possibly putting too much probability on fed hikes. if that's the case, if the market really worries and the fed potentially continues fueling that worry that you might get hikes. that's a big worry for the market. we could see bond yields continue to push higher and i think in particular, the concern is the back end, because the back end is to some extent, finding equal librium, no one is comfortable. you go a lot with recent experience. so, the longer the front end rates are higher, the longer the front end rates continue rising, the more you need to put up that neutral rate. that's the process currently. >> it's interesting, even discussing the possibility of a hike seems to some extent a little farfetched, because it is such a change in narrative for the fed. but i would like to understand from you as well, to put all into context. we started with marke

officials -- hear from fed officials?y adjust those views. pretty solid, around 160,000 for december. expecting to see unemployment stay around 4.2%. it will be a reminder of u.s. exceptionalism and therefore underscore the views we have been hearing articulated from fed officials but we will see the number and how that transpires if you get significant softness, maybe employment -- maybe unemployment going up. let's flip the board and have a look at inflation expectations and the prints out of the euro zone. pmi data and inflation later this week. markets still pricing in about 98 basis points, almost 100, 1% in terms of cuts from the ecb. you could seep a bit of a move up that she could see a bit of a move up -- you could see a bit of a move up. that's down to fuel. they see that trend continuing. tuesday, we will speak with stefan, the eu's commissioner for prosperity and industrial strategy, on europe's political and economic headwinds. up next, is the opening trade. stay with us. this is bloomberg. ♪ lock in let's go

the fed doesn't have that in its models. each of the fed models are broken.erest rates. the other is on how you use the balance sheet. they have used it very harmfully in terms of the lost money. third, the regulatory policy. the fed has this massive control over lending to small businesses and that hasn't been going well, but that can be repaired and fixed. you get more output, less inflation, you can bring interest rates and bond yields down. jonathan: something you have talked about a few times, david, i'm sure we will have this conversation again in the future. in the bond yup -- bond market, bonds are lower on the front-end of the curve. with an update on stories elsewhere, here's dani burger. danny: joe biden said that he's determined to peacefully hand over power later this month, writing in an op-ed published last month that he is determined to do everything he can to respect the peaceful transfer of power and restore long respected traditions in america, adding that he's invited the incoming president to the white house on january 20 and i will be pr

the real question you might ask is did the fed overdo it by a quarter?s it have to put that quarterback? we are here in the sense that -- there is that three month average. you can see how much it tanked which is exactly what kelly evans was talking about, the two in the middle. >> the data started to turn around right after that cut but this is where fed speak could have kept up with that. okay, yes, we see the stock market taking off. we see the date is getting better but we have been hearing the same thing from them since september. you know, maybe a few more rate cuts are warranted. >> the 50, which i opposed at the time, was a mistake. quarter, quarter, quarter. >> you said would you rather have the jobs or the rates? if the rates were locked in you would rather have the jobs but a lot of people were hoping mortgage rates would come -- they don't care hat the fed's fund rate is! they want to buy a home, so they care about the mortgage rate, i think. no one sits around the table saying -- well, maybe we do. >> the realtors at the time to talk to us a

you think the fed would raise rates? it might have been something you said before that, but he said the fed would lose their credibility if they raise rates. do you see that as a real possibility going forward? >> i do see it as plausible. this is not about a choice. if any of us had a choice, we would prefer for rates to stay lower and we would prefer for the cutting program to continue. i think if it is to become a reality, the fed simply won't have a choice. we start to get into mass deportation, trade wars and tariffs, deficits, cuts on taxes. i think you're going to see a very acute inflation and the fed won't have a choice. you have seen two governors come out and say that they decent from even last month's cut. so, you know, i think at the very least, we're going to see a pause. i'm going to refrain from saying it's likely that we see a raise, because by the time that becomes evident, it become accepted that the feds have no choice. >> i want to ask you about a red hot sector on the markets over the last couple of

the fed, the market.ls of the data you can look at and tell a different story. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: an important two hours coming up. cpi at 8:30 eastern time. numbers from goldman sachs in about 30 minutes time. after that, numbers from citi. following number some j.p. morgan and wells fargo. equity futures up by .4% on the s&p 500. similar on the nasdaq. yields are lower. giving a helping hand to risk. following eight days without a single day of falling years on the 10-year that yields on the 10-year -- yields on the 10-year . the outlook from jamie dimon pretty good. dani: for interest income in particular very good. that might be attributable to the fact of what the market is grappling with. rates are going to be coming out as much as we thought. as lisa would say, it is not a toxic cocktail. she's not here. it is the perfect cocktail. a delicious cocktail of rates higher, volatility in markets because of president tr

as the fed is sniveling today, you are seeing skittishness, confusion. look at the s&p 500.e have seen the s&p 500 go positive, negative, over a dozen times. there is no leadership, little bit of confusion. for the first time, as we get closer to this 5% level on the 10 year, people are considering massive profit-taking or rebalancing, because 2023 and 2024 were historic equity gains back to back. at this moment in time, it seems like the 10 year note may go to 5%, and that will have a little bit of an acute reaction to these high flyers or top 10 holdings on the s&p 500, which you can easily argue our way over concentrated. >> david, what would ou say to that? >> i agree. i think something you have to factor in, what do higher rates mean for the equity market? i think the problem today is that somebody people are yearning for the ultra low rate environment we saw in the last cycle. but they don't understand is that to go back to that ultra low rate environment means the economy has to collapse. we don't want that. what we want is normal. it's not going to be an overnight se

do you think all of this has to do with the fed and people having less confidence in the fed cutting one time this year and definitely having less confidence in them cutting two times this year? >> as you said, the bond yields is all about the bond yields. the ten year, we were on with you in december and saying we could get to 5%. i think that's still our baseline that we get from 5% to 5.5% at the high end. now it would be a normal and healthy economy. it is possible we have the yield curve uninverted, but the ten-year is around 50 or 55 basis points higher. the normal is 00 to 120. that would be another 50 basis points hawaiier higher from he. that does put more competition. the earnings yield is less than the ten-year treasury compared to tips. there is more competition. >> you are saying the bond market is creating competition. not necessarily the bond yields have a fundamental reason to selloff. i do want to ask, we see so much mania in the markets. we see the a.i. trade. are you seeing sentiment has shifted so much that people thought there was no alternative to anything but e

the uncertainty is real for the fed.was not the time to back away from some of the forward-looking heuristics we have. lisa: mohamed el-erian would agree with you. what patterns are you observing that you think are going to be important and prescriptive for what is to come in the u.s. economy? claudia: i keep all eyes on the labor market. it's such a linchpin to the resilient economy we've had an ongoing recovery, in addition to millions of lives depending on their paychecks. i worry the fed is somewhat complacent. i think they are being hypervigilant on inflation. most of the officials laid out in the last economic projections are pretty optimistic one on the labor market and saying we are back to normal. we are back. mary daly used the term equilibrium. one vacancy for when unemployed worker. they project that is stay with us. we got back to the place. we will stay there. there are other dimensions you can look at, particularly the differences between hiring and the firing. when the hiring does not look good, the firin

that's the point that you are making for certain. >> yeah. >> what happens if the fed, if the fed doesn'tmore this year, however outlandish that may be, maybe once, maybe none, is that a problem? or does it not matter as long as the economy remains strong? >> i think it will happen because the economy remains strong. for the past three years, there has been talk of a recession. that is largely behind us. it could come back of course. but i think interest rates have normalized. i think 4.5% on the 10 year bond yield is maybe plus minus 25 or 50 basis points. it is kind of the range we will see for the next few years. that's what we had for the great financial crisis. the economy is resilient and it is growing at a decent base. i think it will grow at a faster pace. i'm bullish on productivity. you put it together and you get an economy that is strong with low, moderate inflation and the stock market moves higher on earnings, not valuation. >> what part of the market do you like the best right now? if we are talking about earnings, getting into tomorrow with the banks for example, what doia

revolution is still going strong. >> let's talk about the fed.ng tools for 2025. one is bull market and the other is the long game of the artificial intelligence. we just hit on that. the pace of interest rate cuts. we heard from kugler and daly and that's what they're saying. how should it change the view people have on the market and investments? does that make you more nervous or should investors stay an narrow, maybe not on the mag seven for the mega cap tech names? >> the path is lower. we are expecting 50 basis points in rate cuts this year as opposed to 100 basis points of rate cuts we were expecting back in september. we get another 50 basis point cuts in 2026 and perhaps lower in 2027. if the path forward is lower short-term interest rates accompanied by moderating levels of inflation, that provides tailwinds for stocks and bonds. again, don't limit yourselves to the seven large cap technology stocks. look at other areas like bio-tech and aerospace and defense and others that have not participated yet in the rally. >> i want to get to yo

charles: fed going to hike rate s? cuts till the third quarter at earliest, too early to predict rate hikes and i wouldn't dismiss that possibility. after all, never before in history have we had the fed cut rates bay full percentage point while at the same time the 10 year treasury yield rises by more than a percentage point. the bond market disagrees with the fed as far as the risk of higher inflation and where the economy is headed. charles: bonds are a central portion of people's portfolio and a lot of viewer haves 60/40 portfolio and easy money for many years and it's been straight down and unmitigated disaster. but, now that it's yielding 5%, people are saying it is attractive and it's come down a lot. you can lock in 5% and this might be a better bet than buying the stock market right now. your thoughts on just tlt as investment here? >> going up -- out more than one year, it's a good investment but not ruling out higher possibility of even higher treasury bond yield and corporate bond yields over the next six m

on the fed policy tight rope in 2025. equities yesterday and raising recent tech fueled gains. alicia of b.n.y. wealth. we expect more volatility in 2024 but a positive year because the consumer strong. the fed, though pausing for nowrks still has accounting bias. good morning. how constrained is your view given the most we are seeing in this bond market? alicia: i think the bond market here is pricing for the worst case scenario for what the upcoming administration could or might do. which isn't a bad set up for the rest of the year. in the end the talk about tariffs on everyone and everything, every border we might have, whatever those borders might be -- jonathan: some are imaginary lines, particularly that one in canada. annmarie: the truth of the -- alicia: that is the conversation. the anxiety about that is seeping into the bond market. i think just want to refer back to the fed press conference back in december which jay powell said some of the voting members incorporated future policy which is very rare because we

the fed will cut rates. one more thing is the fed will cut rates. they are a good friend for the market, but not as good of a friend you thought they would be. they will cut rates, but less than expected. why do we say that? the fed funds rate is 2% over inflation. it is pretty restrictive. also, you look at the fact that uncertainty with economic growth pushing growth higher. take all of this together and inflation and economic growth, there's uncertainty. the fed will still cut rates. the fed needs to cut rates in 2025. >> worry about market concentration. that was the issue raised in the final trading days. the magnificent seven is 95% of the gains give or take. that's a lot of concentration and narrowness in the market. does that concern you as we go forward? >> definitely. we talked about this before. one of my biggest new year's resolution is fomo to jomo. the joy of missing out. looking at stocks beat on the magnificent seven and large cap growth. last year, the s&p 500 had 57 record closing highs. if you think about the trading days we had l

and the fed's decision-making process this year.— and the fed's decision-making process this year.e uk now — because the government has been defending its handling of the economy amid growing unease on financial markets. that's seen the pound drop to its lowest level in more than a year — and government borrowing costs surge to a 16—year high. uk assets have been among the hardest hit amid worries the new trump administration will mean higher inflation and less global trade. chancellor of the exchequer rachel reeves is on her way to china for talks. she hopes to build closer business ties with beijing as part of the government's quest for economic growth. but investors are not looking positively at the uk as veteran market expert michael hewson told us earlier. it's a crisis of confidence, i think in the uk as an investment destination. it's not really been helped by the recent budget from the uk government, which has clobbered businesses. and while it has been a global phenomenon with respect to concerns about sticky inflation, and obviously the us economy is in focus today becaus

traders now betting the fed won't cut rates before july. we will get minutes from the central bank later today. samsung gains after a vote of confidence from nvidia's ceo. that's despite a profit mystery jensen huang tells us he is ready to meet u.s. president-elect donald trump. and, trump let's loose on foreign affairs threatening to absorb canada, sees the panama canal and take control of greenland. tom: after the tech-led gains of one day, it was the tech-led losses of yesterday fueled by stronger data into pushback in terms of market expectations as to where the fed lands with its next cut. as we said in the headlines, now not fully priced that next cut until july of this year the second half. european futures pointing lower 0.2%, taking the baton from a miserable session in asia and the weakness in the u.s. with the drop of well over one and a half percent for nasdaq and hundred and was 100 futures are currently flat rate s&p futures looking to gain 0.3%. nasdaq 100 futures looking to add 67 points, up 0.3%. big losses from nvidia in

part of that is down to reassessing how far the fed will go.e cuts this year, even suggesting the next move could be a hike. part of the risks around tariffs of course as well and this additional debt and deficit concerns and here you can see the russell 2000, one of the biggest beneficiaries on expectations of tax cuts from the incoming trump administration has unwound those gains and is now a negative territory. the s&p is not far off so that trade has deeply unwound. does that have further to go given the yield you could now be ticking up on a 10 year treasury versus the earnings yield of the s&p, which is about 1% below that 5% level and do you march higher above 5% and start targeting six? big question for the markets as you look at the pressure on u.s. stocks. further pressure on sterling today. markets and traders increasingly bet you could get below 120 on pound versus dollar, about 2% below where we ended friday, some putting on bets that maybe you get below 112, which would be a move lower of about 8%. rachel reeves hopes to address t

roger, tell me what the fed thinks about this number. >> i think the fed thinks about it exactly howd feared was softening, appears not to be. challenging news, you know, the anecdote the thought that inflation is going to continue to come down now is very much questioned and i think, as i said the last time we were on, the probability of them getting off two cuts next year dr osh, i'm sorry, this year seems to be very, very mud at this stage. good news is good news and good news is challenging news. >> what about the news that the ten year is now sitting at almost 4.8%? >> i think the so year and the bond market in general is doing what they're supposed to do. in in this market where we're expecting continued private sector demand for credit, continued government demand for credit both in u.s. and around the world, that way that gets equilibrated is higher interest rates. i think that's a reflection of the market doing what it is supposed to do, which is telling a supply and demand story. you will need higher rates to bring savings into these markets and that's exactly what we're ge

now everyone is focused on what the fed is going to do. sonali: if you think about the fed's moves and where it could hit policy implications in the near term, and you have an issue where you have janet yellen writing to congress, saying the new debt limit right be hit around the time of inauguration, you have a speak about happening as we sit here now, how do you really parse through those critical moments when policy can start to up and the bond market a bit? ed: with respect to the debt ceiling, the treasury buys itself a little bit of time through these extraordinary cash management operations. i think they still have, perhaps well into the second order, to manage that. where it is going to impact us on the right side is with respect to the fed's balance sheet. we are going to start to see tensions in terms of excess liquidity, the lack of t-bill supply starting to attack the front end of the curve. when we think about further out on the curve i think the good news for now is we are going to have to wait for the ticket items. most impo

what we learned this week in fed minutes was that the fed in their last meeting was very much on hold. what we heard from the st. louis fed, since september, his view is the world has changed. this is a new member and it's very clear within the fed that is so data-dependent, if anything, we're now out to march, at best, on a cut. yes, that's what the market is digesting. it's been a lose-lose market for equities and bonds over the last five weeks. we haven't done this since back to 2023. but it feels a lot like the early stages of when the fed was telegraphing that they were hiking. we're not getting anything close to that. that was historic in terms of what they did in '21, into '22 and '23. but markets came into all of this with cash levels for professionals at lowest levels we've seen in a long time, complacency, bitcoin going through the moon. we came into this period of rising rates, set up for volatility. volatility not comfortable, not always bad. >> so an excuse to lighten up positions, or is the pace of this rise in rates, is that actually scary? does that actually factor int

it's now pretty close, quite close to the fed's target. so, prices aren't continuing to rise at anything like that pace. it's now very close to normal. >> so, daniel, your take on what janet yellen had to say. >> the last pe with inflation on a year on year was 2.8%. frankly, it has been at that rate for many months now similar to the eurozone. we don't see the deceleration that you want to see at the same time, central banks are forward looking. they are not supposed to be taking positions on what is happening with inflation right now, but in 12 months. from that point of view, you may see the deceleration of inflation. if you look at market measures, there is more skepticism how quickly that will happen >> daniel morris of bnp, thank you very much. >>> coming up on "worldwide exchange," my next guest says is a buy. >>> first, the latest on the deadly wildfires that are forcing tens of thousands of people to evacuate. >>> plus, the economic legacy of president carter and what people can learn from his four years in office more "worldwide

is it something that the fed needs to address and how do you explain the fed cutting rates and the longk at the long rate for the people who say that's because of expected inflation that can't really explain it. you take the tips measures of what inflation expectations are that explains that most maybe a third of what has been happening. i think some significant part is factoring in that if growth will be higher than what people thought the feds -- the speed at which the fed is going to be reducing down to nuetral is slower than what they thought would be a more shallow rate path if you want to call it that. that will affect long rates because they are just adding up a lot of short rates. i think there is a -- a fair bit of uncertainty about policy, coupled with -- as sarah was saying you have seen the up tick in some business confidence and if you think the growth rate will be higher i think that could be contributing to it as well. >> do you still want to cut rates this year? >> i -- look. it is not what we want. it is what will the conditions authorize or justify? i still think look

the fed is still not really giving up on their fed pivot and a lot of these interest rate cuts have beenotential for , you know, a buy the news-type reaction in tlt if inflation data come in a little bit softer than expected or the labor market softens a little bit more. it's just right now, we really have an extremely hawkish situation pricing the bond markets. i'm looking to maybe catch a bounce. we'll see if it happens. charles: well, we get the jobs report friday so that could help clarify. hopefully it will help clarify stuff. adam see you soon, my man. >> thank you, charles. charles: folks in the last few weeks, we have seen just a complete reversal of the woke world and corporate america. last week jpmorgan joined all these wall street firms saying forget about the climate alliance and look what's happening on social media. the business world getting on board with president trump. i've got rebecca walser to tell us what it means to for your portfolio, next. from starting out... whatever you need you guys give me a call! ...to saving up... ...to income in retirement. you got this.

that the feds' 2% target is outdated.u'll fix everything. >> first of all, i don't think we're going to move the goal post. they are going to tolerate that inflation is slightly charger. it would be in a 2.5 to 3%. it would be in a range 2.5 to 3. inflation expectations are stable. we don't have an inflation problem. we have an inflation issue relative to a 2% target. you heard previously, this notion of sticking inflation, that's actually stable inflation. that doesn't disrupt the underlying economy in any fundamental way. >> are you arguing for them to cut rates even as inflation is hotter than they'd been hoping for? >> my worry is the opposite. if they really believe in 2% inflation, they would hike rates. >> so this is an argument against them hiking rates. >> correct. so if they really believed it, what i think we're going to hear is yes, we are aiming for 2% inflation, but down the road, and we're going to tolerate, we may get one cut this year, but we should not want them to be dead set on 2%. because if they're d

the comments we are hearing from the fed also if anything will take our time really mean that our fed is in a position to be more patient and to watch the economy, which is certainly more resilient than europe's economy. in fact, this dollar move is much against the euro as it is against anything. we put it in the context of us versus at least what's going on across the board. >> yeah. >> go ahead. >> sorry, go ahead. >> no, i was going to say -- >> sorry, finish. you go. >> you go. >> all right. we will transition because i was going to say, you gave us a perfect segue to the next topic, the dollar and the dollar index seeing the fifth positive week in a row. the green back trading around november 2022 highs even with today's sluggishness and the head of data expects the dollar to remain strong the first half the new year. let's bring in intelligence, co-founder and ceo of market reader, a wall street analysis platform. your prediction, jens. happy new year. your prediction for the dollar for the first half the year and will the second half be different and why? >> it's very hard to

the fed needs to cut and the fed will do what it feels right and this is the bernanke legacy fed withome powell at the helm and it is remarkably communicated and it's been very straight so far. >> to be clear, i hope you're right. that would be awesome. john, thanks. appreciate it today. john stoltfus. >> one thing i will say about john, he's done it since '82 and the dow closed 1982 at just over a thousand points. so through all of that sterm, the dow's gone from 1,000 to 42,000. >> and this is why i was joking the other day, i've had to come around to that point of view because i know in the long run they're right. >> one day you kids will get it right. by the way, nothing wrong with a little bit of age. >> let's see how bonds are aging because we've seen a big rise in yields as we've been bidding up, i guess, or setting up rick santelli, to this week's big inflation data. there's nothing wrong with age when it comes to humans, too, in the markets because, by the way, it's experience. >> yeah. well, we've experienced a lot of debt and deficits which is one of the reasons i think we'

the fed can't do anything about it because it cut rates. the fed is in a bind. it can't help us. we are at the mercy of the macro numbers going in the wrong direction. put it another way, we need to be lucky. i don't like that. that's not a good place to be. i don't want to be a bear. but i've been talking about how much of this market has been in bear territory for some time. the hard-hit sectors got a bump today. but tesla and nvidia, the hottest of the hot, got clobbered today. the former leaders will go lower if the labor department comes in too hot. that report has got to come in cool. luck. the garbage sold to you -- just stop with them. blow them out tomorrow morning or you won't be watching me by next week because you will be gone, too. the setup, big employment number, it does not favor the bulls. we need some sign the fed did the right thing when it cut rates or more days like today when loan rate goes up and stocks go down. we want stocks to represent the fundamentals, not the s&p futures. an overheated set of numbers aren't going to get order restored. we need real re

, i think we put the fed -- the fed easing this year is going to be tricky. back over the year you could change. >> at all? >> we're only pricing in one cut now, and if you said with an economy, i was looking at this payroll report, we've had our income benchmark was over 5% and it's been amazingly stable. you have 5% plus income, you can have 5% nominal gdp. if you're the federal reserve you will cut rates into that and by the way, financial conditions despite some pullback are enthusiastic today. at least for the next quarter you should assume it is on hold for a while. could you see growth moderate? some of the models should see growth moderation in the success half of the year, but we ought to see it. >> it's interesting because in september when the fed started cutting, we all assumed that this was the beginning of several cuts over the course of 2025. interest rates have backed up more than 100 basis points since then, and there was a lot of optimism about the pros pecks prospects for the equity market and the rates were going to come down and the rates

you are 4.7 plus percent we'll see what the fed has to say about this.already said there's no shot we're going to get a rate cut according to market expectations until june, so, you know, we'll see what that means, jerry, in terms of the dynamics for earnings for not just bank, but even retail. >> absolutely. and, again, you know, don't -- everyone said, oh, it was a great holiday. don't expect that to be across the board. all boats didn't float. you're going to have some positive surprises and a lot of negative surprises on the retail earnings front when retailers start to come honest about what happened over the holiday season. and it's just going to be tougher going forward unless this moves quickly. maria: well, they're all trying to figure out how to address this in washington, steve, and, you know, john thune reportedly told president trump that they'll start with one big, beautiful bill as the president wants, but if it doesn't work out, if they can see they're not getting the votes for that that, then they'll switch it to the bills. but what i'm

we are joined by former kansas city fed president. he was chair of the fdic and also played a supervisory role for banking while he was at the kansas fed. thanks for joining. does today cpi data put a cut or multiple cuts back in the cards? tom: different people take different interpretations but i thought the cpi was up 2.9%. core was slightly down. overall inflation is not coming down. that is the message i got from it. as i look at the economy more broadly i think we are in what i will call a modest inflationary boom. we are coming off a strong 2024. you saw the bank earnings. strong earnings there. i think our investment in the fiscal side is stimulative. i am all convinced that inflation will come down. you look at interest rates. the inflation rate -- let's give them the benefit, 2.5%. if we want to take that number with the policy rate of 4.1 he 5%. real interest rates are not substantially high. that does not strike me as a tight monetary policy. given the recent cuts it is more of an accommodative monetary policy. there is a

the fed funds rate.hikes. jonathan: getting closer, that's for sure. adam posen suggesting that could be a reality. i have to give him credit for this. august before we got the jackson hole speech. lisa: it has now become an increasing conversation with bank of america saying there is this increasing risk that the next move is a hike. you wonder at what point that is really factoring on the sellout that we are seeing. jonathan: i thought we were about to do a pop quiz with mike mckee. brent schutte of northwestern mutual joins us now. we have had a strong data point, selloff in bonds, the bears started to come out. can you give us reason to be confident, if there are any reason to be left? brent: more on the cautious side, not only the optimistic side. the conversation you are having is a real one. we have higher interest rates. the hope was the fed could cut rates to alleviate pressure on areas of the economy that have been harmed by rates, housing, manufacturing. you did have a strong jobs report what

>> the bond market is rejecting fed cuts, they tell fed they did the wrong thing, the fed is now rejecting its own cuts, saying we might cut twice this year, looking at market pricing maybe one more time this is a retreat from where they were, there is a danger they may have reignited inflation, the way out of it is companyian economic -- trumpian economics, we need more on supply side. we don't want to key qsqueeze the economy to a slowdown, we need tax cuts to ramp up production. larry: stocks, you know, i don't want to take it too far, they are threats. not necessarily facts. it is interesting stock market turned shaky in the last month, it had a fr -- great trump bump after enough 5 election, taylor, you look at this let's say 10 year treasury now about 4.60ish, if it got to 5 or 5 and a quarter could signal -- not the kind of scenario that an incoming president would want to have. >> different from 2016, i am glad you mentioned 10 year at 5%. that is the magic number that we hear about, that will be big pressure on the equity market, simple math higher the discount rate, the higher th

makes the fed look better. makes you feel better that rates aren't such big competition to stock, which they are getting to be. look at the game plan for next week with an eye towards seeing something positive to find the bull market somewhere. on monday, we hope to get good news out of the wildfire situation. it is discon concerting there c be anything good coming out of the fires. like any natural disaster, our governments and insurance companies try to get things on a better footing. that means an expanded economy in the areas hit. i think you will hear about that pretty soon. i profiteering off this. people have to rebuild. some of the retailers went up. but they can go up further. look for the possibility. when the insurance checks come in and the government starts spending money, they will go toward rebuilding. how about the other side of the trade? i'm talking about earnings. can great earnings triumph over a sour bond market? we will find out. this is a week we associate with bank earnings. whether they

larry: kevin warsh, former fed head and maybe next one to be.e have byron york, chief political correspondent at washington examiner and also fox news contributor and you too are great. you two are great. byron, biden is on the way out, honestly on the way out and the last vessels laning tajikistans of weaponization and lawfare -- vestiges of weaponization and lawfare and merrick garland. i can't read it in the morning and it's too comical or too much or too stupid. don't they know they're been voted out of office and people rejected all this nonsense? >> you may want to skip the news reports tomorrow when donald trump is scheduled to be sentenced in the manhattan alvin bragg case, which is really kind of the last gasp of all this. we all know that judge merchan wants to do this apparently for symbolic reasons because there's no sentence he can enforce against the president of the united states, but it is the final act in this -- in the last five weeks or so and a lot of excess of wokeness and anti-trump have been fading a little bit. make they'

there's no more cuts coming from the fed. the fed still thinks there are more cuts coming. if you listen to some of the fed speakers they say oh, we think there's still room to cut. there's no more room to cut. the discussion is very quickly going to change to does the fed have to hike. right now, inflation has been stuck and way above where it needs to be, but if it starts to climb, then we are going to get people very seriously looking at fed hikes in the future. larry: which will be very badly received. >> jay powell needs to step down if they start or need to hike because he pitched everything on the idea that he was going to get it right this time. i mean, think about all the mistakes he made. he made a mistake at missing inflation when it came on board and then he messed this up again when he thought inflation was going away. he's too doveish. brian: if they raise rates this year, to me, that be more political than cutting rates before the election because that's not giving time for the trump plan to take effect on spending cuts, on regulatory cuts. it wouldn't only b

whether the fed can be accommodative or not and this market rally without an accommodative fed, we knowcan, but there's a large section that wants its cake and eating it too. hardly anyone thinks a rate cut is going to be anytime soon, but some say, guess what, folks? no more rate cuts. yesterday i was honored to participate in a round table which has become an annual event, and it's really wonderful. hosted by double line's deputy chief investment officer, jeffrey sherman, and i want to bring jeffrey in right now. jeffrey -- >> hey, charles, how are you? good to see you again. charles: you too, man. you did an amazing job yesterday. i'm glad this pays a lot less than you do, or i'd be worried about my job. [laughter] let's talk about the data today. the jobs report was stronger than expected, that michigan sentiment number sent a lot of ripples through the market. your thoughts. >> yeah. i mean, as we've been seeing, you know, i kind of put this in the context of the last 14 months, and the bond market especially on the rate side got really excited when jay powell in november of '23 sa

michael mckee is our go to for all things fed here at bloomberg. and walk us through what michael barr is doing. he's not resigning from the federal reserve overall. mike: no. he's resigning from a vice chair for supervision position that is relatively new. so, there is something of a president here -- precedent here, and his issue is does he want to stay on to fight with donald trump about what regulations should be. they were going to re-propose proposals in the first quarter, but that now appears to be kind of dead because the trump administration wouldn't want it anyway. he is not resigning as a governor of the federal reserve, meaning there is an opening and donald trump can only elevate someone who is on the board. he can't put in a new vice chair for supervision as governor, because it isn't an opening until january of 2026. scarlet: i see. as he won a month the vice chair for supervision? is this a role he's looking to fill? mike: that's an interesting question. in wake of his decision to resign on february 28, they said they would not move

and whether or not the fed ought to have cut. i think there's still a case to be made for the fed to be on or around where it is now. quarter up, quarter down, i don't know. we had ghouls bee on today. >> he didn't walk it back really. >> he didn't walk it back. still continuings the fed will be a fair bit lower. "fair bit" is the term he used in 12 to 18 months. i think the market is coming to terms with it is going to be a higher rate. or even a higher neutral rate. as you know, productivity is higher. you have this potential boom. there's some people that thought they looked at the numbers this morning. joe was one of them. he thought he maybe saw a trump boom in the numbers. i talked to other economists about that. >> i noticed that manufacturing was negative. >> that is something you would have expected to be high er. >> in the long run? if you look at the jobs i put together, guys in the back, you'll see -- they're so good in the back. >> there's that retail number. >> some of the likely suspects in there. 70,000 are if hea

against incoming administration includes 25 million dollars california department of justice to fight feds in court another 25 million to defending migrants against trump's mass deportation plan fund grants for immigration nonprofits support centers yesterday expanded package to include 2 1/2 billion dollars wildfire spending a special legislative session scheduled today canceled due to wildfires new date remains up in the air. todd you saw that sound bite governor newsom way bobbing back-and-forth, your reaction? >> i actually had not seen that until now, it was definitely a little odd, if you defectively into what he says one amazingly smooth talker most time the words sea that is over on in circles if you recall the debate sean hannity did, so many to see smoog talking can get away with 20 second sound bite svent backed up by anything we're seeing that right now answers, go around in circles the end of the day peaccount built qualify how this was completely preventable two going forward what is going to change? >> that is right, we reported on sun, "sunday morning futures", that now, pr

we focus on the ten-year treasury we focus on the fed.

the fed says he intends to stay on as a member of the board of governors.ing up, traders are dialing back bets for ecb rate cuts this year. we will discuss the outlook for inflation in europe and other risks ahead with swiss re cheap euro area economist ne lock in let's go. rated e for everyone. [rock and roll music playing] xfinity. made for gaming. rewards members, get early access to an ea sports fc25 kit. visit xfinity.com/rewards. ♪ >> good morning this is bloomberg to break up on, because he london these are the stories at your agenda the pentagon blacklists see atl to stay ahead in the race for supremacy, asian stocks surge in canada begins the search for a new leader after their prime minister steps down. you have optimism and our team will be interviewing him. european futures lower, solid day with s&p closing higher, ftse lower, flipped the board. money is moving, down on the benchmark, future cuts and japanese yen currently down versus the dolla, $76 a barrel. bitcoin up so far. inflation date or from the euro area, numbers remind policymakers 2%

part of the confusion is the fact in the last fed meeting the fed people said essentially inflation risk upside, last meeting in september everybody says inflation is balance, the only thing that changed between the two things was the election, what we have is a fed that looks like the pricing in the possibility of trauma policies, specifically tariffs but those are known yet we don't know what is going to do and frankly the impact of care policy is anything but certain terms of global economic analysis this is about the introduced us to a degree of politicalization and definitely confusion into the reaction function and make eventual place were more worried about inflation than we are about growth and that's a place where good is bad and bad is good and we sought on friday with the jobs report. maria: the whole idea that rates have been spiking have also impacted the growth stories out there, we were talking about risk on a couple of weeks ago with bitcoin a big tech. look at nvidia in the last week it is down most analysts missed the key data point of exponential growth for nvidia and

the fed told us they don't want to cut a lot. market is taking all that in stride and pricing in fewer cuts and you got the 10 year surging and i don't think the 10 year can stay that long. it's clear to me it's really having a deafening impact on economic activity. now, i remember listening to lenars earning call and it was a big miss and they were noting the higher interest rate for the act and i have the in addition to that, seeing the stock market having trouble digesting the yields. this is kind of a self-correcting thing and you go as yields approach 5% slow economic activity and that'll force the market to price in cuts again. charles: to your point, i want to hit this because part of the story has been in the tariff talk and going for them seeing in fomc minutes and some are saying that's why yields are going and you happen put out a tweet at beginning of expo and in the last year and president trump using on more than one occasion and saying the skepticism on the plans and likely the policy changes and tariffs become a m