the federal reserve did something today that will affect your money. it raised interest rates for just the fourth time since the end of 2015. the decision by the central bank signals confidence in the economy. a healthy economy is believed to be able to withstand an increase in borrowing costs. the hike came amid retail sales recording their biggest drop in 16 months, suggesting consumers remain cautious. and consumer prices fell unexpectedly last month. it's data on prices and inflation that the federal reserve is watching closely. kate rogers has more. >> reporter: the federal reserve raising rates for the second time this year because the economy looks stronger. the fed hiking the target range for the federal funds rate by a quarter point to between 1 and 1.25%. fed chair janet yellen citing strength in the economy and the labor market. >> a gradual reduction in the amount of pollack addition reflects the progress the economy has made and is expected to make toward maximum employment and price stability objectives assigned to us by law. >> reporter:

the federal reserve , with lots of things.e in interest rates, but also as well, basically the situation with regards to presidentjuncker again, and a report is investing —— presidentjuncker again, a wider probe into whether he attempted to obstruct justice. probe into whether he attempted to obstructjustice. that's causing a wobble in the markets. also, the uk chancellor of the exchequer, philip hammond, our finance minister, chancellor of the exchequer, philip hammond, ourfinance minister, is set to make a case for a new path of brexit when he speaks in a city of london annual mansion house address. that's later today. lots to watch out for. the liberal democrats face a new leadership race after tim farron announced he was standing down. mr farron said he could not reconcile his christian faith with leading a ‘progressive, liberal‘ party. our political correspondent vicky young reports. he's been leader of the liberal democrats for just two years. surrounded by colleagues, tim farron announced he was stepping down because of

the federal reserve also look at economic stimulus plans.dition to health care and the effective as in broader economy, tax reform and infrastructure packages, several folks in the fed board are saying we are naturally economy can handle such an economic growth package. is a cloud over washington regarding that shooting earlier today, a terrible tragedy. scarlet: do we know anything more about the shooting? the identity of the shooter has been revealed and we know he has died as a result of injuries but do we know anything about motive? kevin: the investigation is still ongoing. police briefed republicans and democrats earlier today on capitol hill. the investigation is ongoing and lawmakers will have the baseball game tomorrow night at the urging of democrats and republicans a rare moment of congressional unity. we heard from democrats speaking out today for their thankfulness for the capitol police. pelosi was speaking on the house floor earlier today following remarks by republican paul ryan and she said this is all in the family. we hear

it has been very well flat and you can give the federal reserve and you can give the federal reserve out on how interest rates are likely to move. but now, as of the last federal reserve meeting, we have a better idea of how the balance sheet will be unwound. a.3 trillion of treasuries mortgage—backed mortgages on the balance sheet. it's over a time that is yet to be defined, but that's the path of travel. that it is being seen as another way of tightening. therefore the impact of thatis tightening. therefore the impact of that is being taken in conjunction with the rates as well. so managing thatis with the rates as well. so managing that is going to be quite something to do, particularly as there will possibly be a change of the federal reserve governments next year. you willjoin this again at the end of the papers and think of your floors to announce at a job interview. i would imagine there are none! the british prime minister offers to ensure the post—brexit rights of three million eu citizens living in the uk. later we'll have a wrap up of this week's big economic stories with

>> deposit rates have always lagged the federal reserve rates on their way up. that's just the way it is. banks aren't particularly competing against themselves very aggressively at this point to attract deposits. over time we should see a gradual increase. bear in mind this interest rate path we're on from the fed is a lot shallower than past cycles. we've had two increases in the last three years, two this year, one expected tomorrow. this is a very slow pace. so we don't really see deposit rates rising very rapidly. it's a bit of a problem for savers. >> it is a problem for savers. i think you make an interesting and good point, for those of us who remember when interest rates were going higher at a more rapid pace, you did see cd rates much more attractive for savers and that's not the case now, partly because of some of the economics in t. >> well, also we're looking out in the future, and one of the interesting things about tomorrow's fed meeting is that we're not just looking for what the fed is going to do with interest rates, but what sort of signals we

lauren: and of course could stay on as federal reserve chair. of unchecked to testify about her role in pushing james koenig to push the e-mail investigation a matter rather than an investigation. the company that inspired the "seinfeld" soup character is in hot water. we'll tell you about that one. dow futures pointing up 26 points. s&p up to coming nasdaq 10. oil prices trading at $46 down a full percent from yesterday. stay with us. you're watching "fbn:am" i am . i lost my sight in afghanistan. if you're totally blind, you may also be struggling with non-24. calling 844-844-2424. or visit my24info.com. when a fire destroyedd with us the living room. we were able to replace everything in it. liberty did what? liberty mutual paid to replace all of our property that was damaged. and we didn't have to touch our savings. yeah, our insurance won't do that. well, there goes my boat. you can leave worry behind when liberty stands with you™. liberty stands with you™. liberty mutual insurance. cheryl: it is 5:45 a.m. in new york or that they too caugh

we kicked off with the us federal reserve.tors will be keeping a close eye on this week's meeting from the central bank for any clues for the rest of the year. the outlook will further rate rises is nowhere near certain. the chief economist told me why the us central bank is expected to raise the cost of borrowing by another quarter of this week. it is pretty unanimous that they will raise rates. that has been the clear forward guidance. if they don't, it will be a shock to the markets. the interesting thing the markets are looking for is any forward guidance going forward. in view, given the economic fundamentals of the us economy, is this the right time to raise interest rates, or should they stay put for now until it is right time. it is a bit tricky. core inflation has been going down. the federal reserve is confused with the recent data. at the same time, though, the labour market continues to tighten. at some point, that typically leads to inflation. they need to get away from the emergency very low rates. at some point

one of the factors that led to gold dropping so drastically was the speech federal reserve chair janet yellen gave tuesday while in london she said we may not see another economic crash like we saw in two thousand and eight in her lifetime and beyond check it out which i see you will never ever be in those or financial crisis you probably would be going to four but. i do think we're much safer and i hope to do it will not be in order i don't believe it will be. my guest says that is outrageous he says there is no excuse for janet yellen so-called complacency thieve head of economics history of politics that kingston university joins me now thieve good to see again what do you make of that statement. i just can't believe it i mean that is so delusional it is simply going back to saying before the cross as i said no crosses could have. the only explanation i have for across this was a huge exultation a shock something from outside the economy like thing struck by media from new york or really really bad luck and just bad sort of economic numbers absolutely and i'll explain and then also

in the united states, the federal reserve raises interest rates.hairman janet yellen says a strong economy and robust job market numbers make the hike necessary. it is the second in three months. the u.s. central bank is also going to start cutting its holdings of bonds. ♪ brent: i am brent goff. it is good to have you with us. tonight, the death toll in a massive blaze in a massive london high-rise fire has climbed to 12. that figure is expected to rise even further. 18 people are in critical condition and firefighters have rescued 65 so far. after going through most of the building, they say they are not expecting to find any more survivors. london's fire chief says she has never seen anything like this in 29 years of firefighting. today, prime minister theresa may announced that an investigation will take place as soon as the last flames are extinguished. reporter: a 20 hours after the inferno broke out, firefighters were still working to put out fire in her to reach parts of the building. other crews continue to search for victims. incident com

federal reserve balance sheet in a hand fisted manner.notion was all this cash sloshing would spark the wealth effect, that done work out for main street, but. if the fed messes up, you can participate in shared misery with bankers and other rich folks. they forgot to tell us when they start doing this. this is one of many yellen discount -- dis-- connection. jobs, the federal reserve keep saying that economy is near full employment. it lowered its own unemployment rating this year, next years they say 4.2% from pou 4 by 4.5%. there is more room for job growth, record is 6.8 in october of 2000. they are saying that population ratio, like long-term unemploye unemployed debt. like training workers. that yellen dodged. she did say she thinks that combination of restraining and -- restraining and president trump apprentice plan. i am sure she got a -- she has got a point. but timing is an issue. that is not going to happen over night, why the fed should stop talking about full employment right there in a nutshell, then inflation, fed lowering

federal reserve chairjanet yellen is in london talking about global economic issues.'s top central banker has anything to add on the fed's decision earlier this month to raise interest rates for the third time since december. now, her message is likely to emphasise that while the economy may not be overheating, the recovery in the us is strong enough for it to consider another rate hike this year. but will in—coming economic data reinforce that argument. two pieces to watch this tuesday is the case shiller house price index as well as a report on consumer confidence. mea nwwhile uber‘s search for a new ceo continues after the resignation of the founder travis kalanick last week. among those reportedly in the running are former yahoo ceo marissa mayer and facebook‘s ceo, cheryl sandberg and the former chief executive of ford, mark fields. thank you, michelle. joining us is jane foley, senior currency strategist, rabobank. you are doing markets with us, but i will mention a market related story thatis will mention a market related story that is now live —— that is on ou

. >> i would not like to speculate as the power of the chairman of the federal reserve board. >> what if they say the next cfpb director has a 30 year term?. >> in the decision of the supreme court that there was no tenure limit in the court held that was problematic the president could remove the official. >> i am talking about a term with the cfpb director of congress passes that that is fine and anything goes. >> what is that based on? history?. >> i am trying. >> vessel did worse than i meant. >> what this court has to deal with is a director with a five-year term ftc serve seven years and will not speculate if it were 10 or 15 years. >> if there is some kind of an anchor then that chefs. >> but all these agencies are different. >> one person over 20 years. >> that could be a different issue i don't know. with all those agencies the government has created that is more similar from the ftc. that is identical and that was upheld in the humphries executor case. and whether the president can take care as long as the president could remove the official for ducasse's -- ducasse's. >> th

historically this news from the federal reserve has been very good for bank invests.p after the news has been released in previous years. started to see this. citigroup, regions financials, american express, all the stocks building on rally started after the election up about 22%. if you get even more regulatory relief, specifically sarbanes oxy, we'll see banks continue to rise. they're new leadership in the market. david: jon hilsenrath, talk about relationship between the fed doing these tests and new administration, the trump administration. a lot of people say there is misalignment. trump administration wants to release banks from a lot of commitments they're meeting apparently in these stress tests. they think there is not enough lending. fed obviously still has a lot of interests in these tests. how does that misalignment get aligned if it does at all? >> well, i mean what we might be seeing here is the fed moving a little bit in the direction of the trump administration. you know, the banking community had been very critical of the way the fed had been doing t

federal reserve chair janet yellen forged ahead with tightening monetary policy despite concerns overeak inflation. how will it impact the tech ecosystem, then sure, and how could that trickle down? joining us now, jeremy lou and the first the sea investor in snap. fed officials raising rates, the

so like the central bank concept in the power of the federal reserve so in that area it has been different so the combination doesn't necessarily have the same impact to repair the president's power as it might outside the federal reserve or is that a false -- or is that a flawed analysis? >> it is not that congress can change these provisions. it is just that the other provisions have no impact on the power of congress or the president so they have no impact on the separation of powers issue. each of those analyzed separately. but vieweds them out in the totality is just too much. the response i'm trying to get is that because it is part of the federal reserve that that is the exception that historically has been recognized in the governmental system? >> i would not say that but the way the combination issue is resolved is that each of the things separately is a zero and respect to the for cause removal argument. you are adding zero plus zero plus zero and at the end of the day, you are still there with zero. the for cause removal provision that the court has explained in humphries execut

okay let's look at the federal reserve then that's the story the federal reserve hiked interest rates by a quarter percentage point no change there. we all knew that would happen. citing continued economic growth and labo viewing recent softness as temporary, the central bank went ahead with the second rate increase of the year janet yellen said the fomc sees inflation stabilizing over the medium term. >> with employment near its maximum sustainable level and the labor market continuing to strengthen, the committee still expects inflation to move up and stabilize around 2% over the next couple of years in line with the longer run objective. nonetheless, in light of the softer recent inflation readings, the committee is monitoring inflation developments closely >> yet the market is disbelieving doesn't matter what janet yellen says the market is disbelieving seeing the ten-year and 30-year seeing depressed yields. the fomc stuck to the forecast of one further rate hike this year with rates moving to around 3% in the longer term. it also began plans of unwinding its 4$4.5 trillion balan

. >> that is the same for the federal reserve board and a number of other agencies. but to get back to my question so when the president exercised his power of the people which is the greater intrusion?. >> if you take the decisions that were made and reaffirmed seven years ago by the united states supreme court is the power of appointment is extremely important for the court goes on to say. >> a power to remove is the same for the commissioners and the director of the bureau the or not answering my question. could you agree the president has more of that power to replace the director than replacing a number of the commission?. >> a particular president at a particular point and time with the right circumstances may have more power with respect to the individual but the next president may not so that power may not be there. i would like to reserve the remainder of my time for rebuttal. >> so to return to my perspective, this debate about the difference of multi member agencies is fascinating. but i don't understand how orson -- morrison not only up held but excess up

for the federal reserve. >> behind the curve. behind the curve european high-yield or u.s. , high-yield? rick: u.s. high-yield. jonathan: long europe or south africa? tableau long brazil. : jonathan: yes or no? rick no. : jonathan: short or long? jeff short. : jonathan: chair yellen to hike three times next year? yes or no, rick rieder? rick: i would say -- i would say yes. that is the general direction of travel. jonathan: rick rieder and the guys at black rock, this is "bloomberg real ♪ >> it hasn't been nearly six years since tim cook took over cofounder, iconic steve jobs. there will be apple watch and apple music, he pulled off the largest acquisition in history buying beats. he takes on social issues like equality and education. he stood up to president obama and maintains a relationship with president trump despite

jonathan: let's begin with the federal reserve. hawkish bias from the chairman. rick: i think it definitely was hawkish tilt do it. quite frkli think it was the , best press conference from chair yellen. she was directed, committed, unwavering and quite frankly there were , questions that were distracting. she laid out the plan. this is our plan and we're sticking to it. quite frankly, some of the short-term data, she rightfully ignored. she thought about the bigger picture. she is focused much more today on financial conditions. and those have gotten easier. she was committed to this is where we are going. jonathan: last year we talked about a fed that did not stick to their forecasts, they had a credibility problem.

the djere the federal reserve must decide if the federal reserve must decide if the rest of the economyrt in the shape of altar low borrowing costs. —— suuchi. this former official believes they are ready to act. this economic data was next to me so why the rush? it has been mixed because the inflation numbers have softened a little. a lot of that has been transitory and surprising declines in things like ceuphone surprising declines in things like cellphone bills, oil prices having dropped a little, but they are likely to be temporary. the key thing is the labour market continues to tighten. with the unemployment rate at a 16 year low, those inside here are betting that wage growth might not be far behind. a driving force in the global economy, america is enjoying one of the longest expansions in its history. to prevent the economy from overheating, the us central bank is likely to raise interest rates this wednesday, in another step towards concluding the stimulus campaign that began after the financial crisis. michelle fleury, bbc news, washington. even if they increase rates, it is

jonathan: let's talk about your time at the federal reserve.alance sheet over at the to, what were your warnings the rest of the federal reserve? what were they doing? as you were building it up, the jew think about how you would unwind the balance sheet as well? on, one of my concerns about the balance sheet and policy action was the fed was eager during the qe to do something. policyre eager to make and be effective and healthy economy and so forth and so on. one of my cautions was repeatedly we need to think further ahead. we do this, then what? we need to plan further ahead and see what the exit is going to look like. i said this many times. we are doing this, maybe it's the right thing. what's going to be important is how we get out of this and what that structure or operating regime is going to look like. they never really came to grips with that, even today. that's why people struggle with the balance sheet did -- sheet. they don't say by how much. they don't say what the operating regime will be when they get there. they want to do it s

man has grappled with federal reserve communication many times. of streets that moved the markets in a significant way over the last 24 hours. walk me through the walk back we have gotten in the last 60 minutes. that the ecb is going to its own taper tantrum. sending the message that they are able to end their extraordinary policy, to stop making it looser and more accommodative. that caused the markets to immediately selloff as they immediately took it as coming very quickly a reversal of policy. the same thing happened when ben bernanke started to talk about tapering qe. the fed waited longer and then said that bernanke was misinterpreted. the ecb taking its lessons from the fed, seeming to have put out the word rather quickly, don't overreact. the interesting thing, though, when you talked analysts and get the notes from the trading desk this morning, they know believe the walk back on a longer-term basis. they really do seem to be accepting the fact that yeti of ever increasing accommodation from the ecb is just about over. is how the market t

one of the factors that led to gold dropping so drastically was the speech federal reserve chair janet yellen gave tuesday while in london she said we may not see another economic crash like we saw in two thousand and eight in her lifetime and beyond check it out which i see you will never ever be in those or financial crisis you know you probably would be going to for but. i do think we're much safer a night.

steve liesman is about to go into the federal reserve lockup. before he does, he joins us with what exactly investors need to be looking for and listening for in today's announce. steve? >> reporter: brian, it was going to be a boring rate hike meeting became more interesting with the release of weak data the consensus is it could prompt one or more dissents it's more we're likely to emerge from the statement and the press conference with less certainty about the direction of policy. take a look at the ten-year melissa was talking about. it fell sharply in the wake of the two data reports this morning. it hasn't been this low since november 10th, two days after the election the yield has fall en nearly 50 basis points from its post election high. economists said, quote, we now expect this afternoon's fomc statement to include a stronger acknowledgement of the recent soft inflation data. and over at pantheon, if this trend continues through the summer, then the next hike, which we have been expecting in september, will be delayed you can see here

the atlanta federal reserve has done research on how accurate they are, they're looking for 3.4% growth in the second quarter. that's almost three times faster than what we saw in the first quart even after the upward revision. if you're going to get anything close to 3% in the second quarter, guess what, on june 14th the federal reserve has only one option, that is to raise short term interest rates irrespective of what we saw in the report today. >> maybe a rate increase on flag day, we'll see. thanks for joining us tonight, anthony chase. >> a pleasure. >>> bill, that labor shortage is hitting america's classrooms. the need for teachers is growing nationwide. that's especially true in detroit. kate rogers reports. >> how's everybody doing today? >> reporter: detroit native donovan gardner is following in his mother's footsteps as a special education teacher in motor city. >> it was something i knew i could wake up every day and do and do well. >> reporter: but working in the city's public school district, which is is 250 teachers short at this time, according to the detroit federatio

earlier, i spoke to tony nash from complete intelligence, asking him whether the federal reserve willweek raise interest rates for a second time this year the pill it is quite possible. in the first quarter, gp was up 7%. the economy is looking better. inflation is over 2% one of the key targets for the fed. i would not be surprised to see a rise this week and maybe one later in the year. if they decide to hold in this meeting, why? they could be cautious and say we want more workforce participation and other things. but it is... there is less and less reason to be cautious and more and more reason to be a little bit more active than they have been. the uk, the flux after the elections, will there be a reason for the bank moving on monetary policy? we don't think so. there has been talk about easing. the uk needs fixed investment, they need investment. retail has come off a bit because of the pound depreciation. but they really need investment to get the economy going again. umm, but the central bank, they are already in middle interest rates, it won't help. the bank of japan, middle

the federal reserve board of governors talked about economic activity rising moderately. business fixed investment continues to expand and job gains have moderated. inflation appears to be a concern here as they say it declined recently and is expected to remain somewhat below 2% in the near term amounts it relates to the balance sheet, the fomc also saying toward the tail end of the statement the following. i quote. the committee currently expects to implementing balance sheet normalization program earlier this year, provided that the economy evolves broadly than anticipated. in a separate press release, trish, they outline how all of this will work. fed will begin to unwind the balance sheet by allowing $6 billion to roll off monthly initially, $6 billion at three-month intervals over 12 months until it reaches 30 billion per month. separately as relates to mortgage-backed securities, 4 billion a month initially. will increase to 4 billion over three-month intervals to 12 months until it reaches $20 billion per month. as far as relates to long term projackses here, the

the eyes of the federal reserve are quite healthy.banks that lack of a better term, then you're allowed to do that before the test and they came in just fine. capital one will be not objected to, but the missions according to the fed to continue paying a dividend. there is that the fed said about capital one. quote, federal reserve did not object to the financial corp. but as requiring the firm to submit a new capital plan within six months but addresses identified weaknesses in the capital planning process. as for capital one, they still scored well in their tier one capital ratio of five by 9% above the 45% minimum. this is the first time since they began stress testing the banks that there were no objections whatsoever. back to you. lauren: adam shapiro, thank you. cheryl: another twist in what has become a big piece of drama when it comes to the efforts to replace about the care one day after senate majority mitch mcconnell abruptly put a vote on the bill until after the july 4th recess. lawmakers scrambling to agree on a bill. pr

also on capitol hill today, the federal reserve holding one of their regular meetings announcing an interest rate hike. the fourth interest rate hike in 18 months. and that news conference with the fed chair, janet yellin, is under way. you can -- yellen, is under way. you can follow that on our companion network, c-span3. chairman isakson: let me apologize for being late. i got caught on a couple things coming down the hall which i don't want to slip up. we'll stand at ease. that's a military term i learned a long time ago in the air force for one minute while i talk to my warm and trusted friend, the ranking member, then we'll open the hearing.

and on the other side of the atlantic the us federal reserve increased the cost of borrowing.ith the uk and brexit. we were expecting to hear philip hammond speaking last night in the mansion house but that was cancelled because of the dreadful tower fire cancelled because of the dreadful towerfire in london. what were we expecting to hear from towerfire in london. what were we expecting to hearfrom him? towerfire in london. what were we expecting to hear from him7m towerfire in london. what were we expecting to hear from him? it is a week since the uk election. that election was called so that the prime minister theresa may could get a mandate, strengthen your position, to deliver the kind of brexit she had promised. we are out of the single market, the customs union, no deal is better than a bad deal, that is what she said. she fell short of a majority and has to go into talks with the dup, the northern irish party, to try to get a majority. are we going to get that kind of approach now when the brexit negotiations start on monday? in a way it was a shame we didn't hear from

the central banks around the world federal reserve bank bank of england bank of japan european central bank was to make these loans to the privileged class not for a billion dollars though they made loans of over fifteen trillion dollars to the bankers in america and the united kingdom and europe to pay down on their bond deposits that were technically insolvent remember they said a smaller insolvency problem it's a liquidity problem even though it wasn't insolvency problem so my my my point being that central banks have another fifteen trillion dollars to create in this way yes they do so that's why i don't agree that this is the time for the financialization bubble to implode to collapse i don't think it's time yet these banks have another fifteen trillion dollars to create the european central bank. bank of japan is a never ending fountain of free cash at zero percent interest rate so this is a way to go he does say that financialization has done some interesting things namely new york city. said if you look at it. the brooklyn especially all this money has redevelop the city you li

federal reserve and uber as the day unfolds.irector at aberdeen asset management, your thoughts on the fed, are you expecting a rate rise?|j thoughts on the fed, are you expecting a rate rise? i think we are expecting a rate rise tomorrow, janet yellen has been keen to get interest rates up to a more normal level. the us economy is in reasonable health, we have seen a little weakness over the last few weeks, which may have tempered some market enthusiasm, but i think that is where we're heading. how much are going up by? a quarter point, possibly another one by year end, but she is keen to get the price of money up to a more normal level, to get the us economy back to a more normal footing. we are going to hold you do that! of course! let's talk about the uk, and indeed across europe, a whole load of data due this week, inflation data for the uk, expected to stay steady, but the inflation problem is a problem around the world, easing zone and a little bit in the us, but still a problem in the uk. expected to be 2.7% in the uk, u

have five new members of the federal reserve. you have three people who have been talked about as nominees, said banks that will be filled. you might as well throw out in 2018, 2019 start block, because there is no way to say that is what they will do. scarlet: very theoretical. to getsense a rush started to lay out a plan for the unwinding of the balance sheets before the "the? -- begin that process? >> yes. .nemployment is the taylor rule everything else is not building as such. it is not looking even at the picture. it is a simple document that we need talent for the future recession. we need higher interest rates and qe. it is an important part of this that we normalize things. equities are doing well, credit spreads are doing well, they are quite pleased. so the fed needs to be prepared. we still think the probability of recession is less than 10%. there are very many people who say we are late cycle. i don't know what it means because we are still midcycle if anything. we have not seen late cycle. have a wayshink we to run

isn't likely domiciled it's a british bank writing this letter to american federal reserve chairman ben bernanke and as you point out in the language of this letter it goes from saying we over here in britain are really concerned about this because this is a multi billion hundred you know it's a trillion that's a delta merely a multi-billion dollar fine and then he brings in this language suggesting there's a third party there's a third party at work here and this is what people have to understand why do these banks keep getting given these communities why is there so much financial fraud around the world why is there no accountability why do bankers not go to jail because of this third party which talk about this ok so the two sentences i referred to the second one which is we reinforce global standards rules the first sentence says to bernanke and geithner it is of course it's for you to decide on her. don't force compliance in your jurisdiction and so that you're going to get a casual person might say well that means u.s. law you're means in the us it doesn't those are loaded legal t

melissa: federal reserve is out now with its report on banks. let's go to adam shapiro.going to walk you through this real quick. the parameters of the test, 34 firms taking part. they assume in the test parameters severe global recession over nine quarters and unemployment rising to 10%. with that scenario in place we would having a a gaat loss of 34 firms of $383 billion in loan losses -- aggregate. since 2009 by the way those 34 firms added 750 billion in capital. here is how the fed is viewing this, quote from jerome powell, federal reserve governor, this year's results even during severe recession our large banks would remain well-capitalized. this would allow them to loan during the economic cycle and lend to households and businesses when times are tough. look at breakdown of results of 34 firms. the firms with the highest buffer, buffer against loans they want to make sure is in place, should the economy go south. highest tier one capital after severe event, cit group, hsbc north america. you can see there, santander holds and td group u.s. holdings 11.3. the low

he is in fact looking at the federal reserve. stocks are higher with european and this is the ft 100 up one half of 1%. of two thirds of 1%. in asia overnight, markets mostly lower squeak dedicating their shanghai composite down three quarters of 1%. ceo travis kalanick taking an indefinite leave of absence following a month-long investigation. the port number forced to resign with the disrespectful remark in a companywide meeting yesterday. he founded more in the future. ponder them and stop at the board as a result of the comment. the glowing reviews receiving. of that coming up and all those stories coming up to talk about it. dagen mcdowell, editorial page editor james freeman of former ceo of crile and former home depot bob mayor daley with us this morning. busy news day. great to have you back. >> here to hear among the most famous ge loves his thinking these days. maria: yesterday we had that ms. ms. davies stepping away, stepping down. a lot of people expecting this over the years. >> it happened someone suddenly. i think

this of course right after the federal reserve raised interest rates.s are under pressure as a result. we will see the weakness with the ft 100 down. down with all the others as well. in asia overnight. they ended like this. mostly lower. finding the best on the flight. will tell you which of the best in the worst coach seats plus it's a beautiful day for the first day of the u.s. open. we have a preview i have as a come to you live from the u.s. open here at aaron hills. first, republican congressman sean duffy of wisconsin. thank you so much for joining us this morning. we're all thinking about your colleague steve scalise and sending him our best wishes. what was your reaction when we heard the news. you were not at the baseball team and you were not there. team and you were not there. we were shocked. we all get threats there is a lot of violence that come into the offices via e-mail and twitter and on our office door step but this is the first time we see somebody take action like this. there was a hollow book of congress members in staff when one

with the federal reserve, we are unsure what their level of tightening would do. the balance sheet reduction would have -- we do not know what effect the balance sheet reduction would have on the economy. if i were a business owner, i would operate slowly. that is why we are seeing new business activity. david: if this plays out the way it looks now, it is cheaper to borrow money if i am a company. does that change the way i structure my balance sheet? am i going to leverage up more if i get cheaper that? steve: i do not think that is the answer. plenty of balance sheets are levered and need to the lever to some extent. it is really what the productive use of the capital will be. issuing bonds, buying cash, but at the end of the day that productivitywith and business investment. the money is cheaper, but it has been cheaper for a wild. does it matter for the real economy? unless you can get productivity higher. jonathan: a lot of money will come back from overseas with tax cuts, and they will invest it. if they have productive uses already in that capital, why wou

rishaad: investors looking ahead to the decision from the federal reserve.he chances of a rate hike this week are almost 100%. haidi: big u.s. banks, preparing you -- regulations. -- new regulations. rishaad: how innovative is hong kong 20 years after the handover? has the city slipped off the pace? we are looking at chinese shares. we have aged shares. let's bring up this chart. all we have isou a situation that they are cheap, but this is something going on for a wild. looking back to 2006, seeing how cheap they are in terms of valuation and a share counterparts. betteralso have is value, something people are counting on for a while. that margin or divergence between the two has always been per point the would narrow, but is seemingly remaining at the same level. it's amazing how many people -- the alignment never really seems to happen. haidi: people are always talking about the convergence eating inevitable, but it has not happened, continuing to confound analysts. size -- signssee of evening -- signs of easing when it comes to this tech tantrum. after w

let's begin with the federal reserve. hawkish bias from the chairman.as: i think it definitely hawkish. i think it was the best press conference from chair yellen. she was directed, committed, unwavering. there were questions that were distracting. she laid out the plan. this is our plan and we're sticking to it. quite frankly, some of the short-term data, she rightfully ignored o. she is much more focused on financial conditions. she was committed to this is where we are going. jonathan: last year we talked about a fed that did not stick to their forecasts, they had a credibility. now they are ignoring the data and making a policy mistake. are they stuck between a rock and a hard place? jeffrey: i want to walk back what you said. it is not clear they are making a policy mistake. they moved off of data dependency. there are good reasons for that. they stated the inflation data being temporary. but now it an error, is not clear that it is at all. it is important that we understand the disconnect. the market is still data dependent, but the fed has moved

jonathan: as of the ecb leaving the door open for the federal reserve to get the ecb going?er of reasons, the fed has an incredible window to move. we talked about the dispersion between the bank of japan and the ecb. there's a lot of talk about to be issue long debt in the u.s.? what is much more important is quite likely where the central bank's are going to go. jonathan: we're going to answer some questions with one word answers. behind the curve or too far ahead? >> behind the curve. jonathan: european high-yield or u.s. high-yield? >> u.s. high-yield. jonathan: long brazil or long south africa? >> long brazil. jonathan: returns before yellen is out? >> no. jonathan: short or long-term duration? >> short. jonathan: chair yellen to hike three times next year, yes or no? >> i would say yes. that is the general direction. jonathan: rick rieder and the guys at black rock. this is "bloomberg reayield." ♪ ♪ emily: it has been nearly six years since tim cook to go over apple for steve jobs. he put off the largest acquisition in apple history. he is taken on issues like the envi

federal reserve. they have enough capital to keep on trading, even in the case of another financial meltdown. this is the first round of hypothetical tests. the second and takes place next week. it is expected that a strong report card will bolster the industry's case for coming back regulations. we can bring in our men on wall street. if these results do indeed make the case for the loosening of bank regulation, would that be a wise move us in mark -- move? >> it does give some lobbyists in the banking industry and other parts of the trump adadministration more ammunition to make the case to water down the financial regulation. the big question is if that is really going to be a good idea. donald trump and his administration argue that if you give thanks, then they can borrow more money. think about all the cheap money from the federal reserve, after the financial crisis hit, two companies really spend more money? they used all the cheap money to buy back more shares, increased dividends, it is doubt