, but what the fed says. steve? >> hey, tyler, good afternoon. the vote has already taken. the decision has been made. all this probably left is a little last minute mimeographing of the statement to see whether or not the fed will face some new facts and it does face a new set of facts when it comes to the economy and markets. here is a look at some of the things that changed since the last meeting. and with the question of how much they actually address in the statement. stocks obviously have sank. volatility has surged. oil has plunged. the inflation outlook has got to be lower now. the economic data has weakened. for the fourth quarter, between 0 and 1% growth. the dollar strengthened. jobs number, a bit softer after that blowout number we got for december. the claims numbers have come off. the question becomes, guys like jeff gunlack come forward with -- but the fed survey, step forward and say the fed should see all this as transtory, not weakened to the market or not respond heavily to the mark e the q

the san francisco fed president, could fine-tune the fed message when he speaks on friday. yellen will testify in two weeks as well. you have been watching a special edition of"bloomberg markets -- of "bloomberg markets -- the fed decides." ♪ to "bloomberg markets." from bloomberg world headquarters here in new york, good afternoon. i'm betty liu. you's what we are watching. markets are taking a turn -- here is what we are watching. markets are taking a turn lower. the fed says it is closely monitoring global economic developments. hikes fort out rate the rest of the year? driving down the market, apple and boeing, falling the most since this summer as their forecasts fall short of estimates. is it a temporary blip or a sign of tougher times ahead? facebook is reporting after the bell. 10 mark zuckerberg impress investors again? -- can mark zuckerberg impress investors again? wr

i don't think the fed should have ever changed, i don't think the fed is going to raise again. the checklist, if you would have done that checklist and put it on my paper, the last time they raised or the most recent time they raised, they shouldn't have raised then, either. there's no clarity. this is the most unclear the fed has ever been. >> gerard, where does this leave markets? >> well, it makes it interesting. i think there was enough of a table there for a march hike. you read the report, written nine 250i78s the word "labor or "jobs, and right next to it was increasing or improving or strengthening. maybe there's enough concern to feel there will be a pause, but we're looking ahead and our view is employment gains will be solid the next two months. we think that would be enough no the fed to hike in march. you look back, october 6th, there was only an 8% implied probability. a month later, we get an economic jobs number, and it goes up to 68%. our view would be the jobs would be better over the next month. >> they're already pretty good. can you get much better than add

to the fed. but even more fundamental changes need to be made to the fed. a few months ago chairman shelby put together an impressive bill that the senate banking and housing committee passed with my support, which would make important reforms to the fed. one provision would establish a commission to study the potential restructuring of the districts of the federal reserve system. chairman shelby's bill would also require the fed's open market committee to make more frequent and detailed reporting requirements to congress and increase transparency by reducing the time lag for federal open market committee transcripts from five years to two. these are very reasonable changes that i think democrats and republicans alike can support and i hope that chairman shelby's bill will be brought to the senate floor soon. mr. president, the federal reserve recently celebrated its 100th anniversary and in many aspects, the feds have not changed much since woodrow wilson's time. as most of us know, a few months

yes, it is a fed day.now, my opinion is some of the markets, many of the big fund managers seem to be acting like spoiled children with regard to the fed. listen, this loop of fed policy has to end some time. whether it's timing is appropriate or not is the issue. probably the fed advertising data dependant wasn't such a good idea. look at dynamics that were out from mid summer to the end of the year on just about every metric, especially manufacturing. the issue of china, the ships don't turn around in a day, a month, a quarter or a year. to think that the september tightening was avoided by china, only to see how the issues of china not only lingered, but to move from an emerging market to a developed economy is a process. but one thing in that process we see on all the countries economies who have made that transition that, your brogrowth starts to come down even though the girth of the economy has grown. it's a changeoff. look at a one and two-day of tens, 2% yesterday was the second since mid-november

fed decision.arket is betting policy makers raise borrowing costs anytime soon. later, special edition of bloomberg markets. we will bring you the fed decision live from new york. stay with us. is david: 1 p.m. in new york in 2 a.m. in hong kong. welcome to bloomberg markets. david: from bloomberg's world and quarters in your, good afternoon. alix: here is what we are watching at this hour -- does the fed follow the markets? investors are waiting to see how much the turmoil affects policy makers when they decide on interest rates one hour from now. david: oil prices may have crashed but that is not stopping one banker from starting a new commodities trading company. freelancer says it's all about me. we will look at the link to an alternative that is making waves. let's go to the markets desk are julie hyman has the latest. markets are kind of mixed. julie: we saw them recover in the wake of oil prices recovering, but the dow is going back to little changed on the negative side. you tend to see thi

betty: more to come on our analysis of the feds they can. -- fed statement. i would jersey and carl riccadonna -- ira jersey and carl riccadonna, thank you. much more ahead. boeing shares hit turbulence following -- turbulence, falling the most in five months. waning demand for new airplanes. facebook earning reports -- earnings reports after the close. while keep down costs growing mobile video revenue? and here is a look at today's trade. the dow dropping big time. we have been digesting the that decision -- that fed decision. ♪ betty: good afternoon. welcome back to "bloomberg ."rkets we are near lows on the s&p. nine of 10 of the major sectors are in the red right now, led by check -- tech. the dow is also down, as you can see, off by almost 2%. finally, the nasdaq has been hit the most. apple shares down. we are waiting for facebook results after the bell. the off -- that index is off by 2.5%. let's look at some of the biggest is this stories in the news right now. spotify wants to borrow $500 million from investors, eight months after it raised the same

i'm not defending the fed but i'm defending the fed. >> the fed has been -- >> far be it for you. >> think the fed has been very transparent on this one. the bottom line is though is that what's bothering me more about the fed is the fact that they have allowed the market to at times -- they have been almost too complacent or really sort of giving into the markets because they're worried about the reaction. at times they haven't done prehap what is they needed to do when they needed to do it. reinforcing bad behavior in the way of the markets. >> that's what stan fisher may have added to this mix here is that he seems to care a little bit less about -- >> now he did say to me on wednesday, look, we want to do this without creating a mess in the markets and i think they do this by giving warning and following through and doing things. you know, the fed doesn't -- i don't think it's going to be pleased with what's going on right now but at the same time yori don't think from a policy standpoint they can do more than telegraph and deliver. >> and then the other thing too, we're talking

expensive than they were in 2011 and the fed is no longer our friend. we're now fighting the fed. and this is what that looks like. so the bottom line is, keep some powder dry, sell the weak stocks in your portfolio, remember, bear markets we have, spike's up. keep a clear head and eventually this too shall pass. dave in california. >> caller: booyah, jim, how are you? >> you know, i'm hanging in there, partner. how are you? >> caller: pretty good. jim, here's my question. with sustained lower energy feedstock prices be enough to boost blue course steel's competition? >> no, nothing can stomp this dumping which is insane. rather, their use of natural gas has already been -- well, they were going to moth ball the plant we went to a couple of years ago. no, you can't make steel in this country without the government protecting steel makers. that's not what the government globalization. michael in new york. >> caller: i would like to hear your thoughts on the reason news from metlife that it will spin off -- >> metlife is not going to sit there and take the beatdown. they're trying t

the fed is on hold. today, the u.s. central bank citing lower economic growth and inflation expectations kept interest rates right where they are. near historic lows. but it was less what the fed did or didn't do, and more what it said and didn't say that got investors' attention today. it said, among other things, it was monitoring global economic and financial events and watching how they might effect our job market and inflation. and uncharacteristically, it deleted any reference to how it assesses the balance of risks to the u.s. economy, a sign, say some fed watchers, that janet yellen and friends are a little more worried than they were just six weeks ago. those renewed concerns pressured stocks, so did the fact that the fed didn't explicitly take a rate hike off the table for march when it meets next. the dow jones industrial average dropped 222 points to 15,944. the nasdaq fell 99. the s&p 500 lost 20. hampton pearson has more now on what's worrying the central bank. >> reporter: the first federal reserve meetin

you are fighting the fed big time. if the fed isn't careful, 2016 will mark a return to recession. that's the overarching reason for the selloff, especially in a world that is starved for growth. if janet yellen and company continue on their current course, stifling liquidity and raising rates five times in lockstep, that's exactly what we will get. stick with cramer. degree gave women a motion-activated wristband to understand how much they move,... and created degree with motionsense. the world's first antiperspirant activated by movement, it has unique microcapsules that break with friction to release bursts of freshness all day. keeping you fresher with every move. motionsense. protection to keep you moving. you get a cold. you can't breathe through your nose. suddenly, you're a mouthbreather. well, just put on a breathe right strip which instantly opens your nose up to 38% more than cold medicine alone. shut your mouth and say goodnight mouthbreathers. breathe right jay knows how to keep his wheels spinning. nice shorts, dad... this is what the pros wear. uhhh... that's why he

you are fighting the fed big time. if the fed isn't careful, 2016 will mark a return to recession. that's the overarching reason for the selloff, especially in a world that is starved for growth. if janet yellen and company continue on their current course, stifling liquidity and raising rates five times in lockstep, that's exactly what we will get. stick with cramer. ♪ those who define sophistication stand out. those who dare to redefine it stand apart. the all-new lexus rx and rx hybrid. never has luxury been this expressive. this is the pursuit of perfection. this bale of hay cannot be controlled. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. chase for business. so you can own it. >>> you never want

>> on the fed?> what do you think the markets are willing to accept today. >> i don't know if a 25 basis point move or 75 point move which is what we're forecasting this year is really as important as what we're seeing. >> 75 additional. >> yes. so three more tightenings this year. so we have a very outer consensus call on the trajectory of tightening and it's based on improving data in the u.s. >> i'm assuming that you put forth that target weeks ago, right? have the performance of the markets changed your view at all? >> well, okay. so january certainly started off with a bang and the fed typically doesn't tighten it into a volatile market. we have never seen a tightening cycle embark with the vicks above 23 or something. so obviously there is that feedback mechanism but i think what might be more important than the fed is the idea that cash is going from zero yield to a positive yield. i think that's really important because what we have noticed in the market, like take apple for example, cash ma

auditing the fed?concerninged this way. it won't make the fed stronger, more effective, more accountable. it will impair the fed's functions. it will give conservative members of congress more tools to second-guess the fed's decision making and it makes the system ultimately less sound and responsive. if you think about what happened in 2009, president obama took office, we're losing 800,000 jobs a month. congress passed the recovery act, passed the auto rescue, which mattered so much to the presiding officer's state and my state, and frankly to the senator from kentucky, to his state, too. but then with the change in -- the election elections 2010, ths congress engained in austerity. it -- engaged in austerity. it took a bush-appointed federal reserve chair, ben bernanke, who engaged in enough pump priming, if you will, through low interest rates and then q.e., to get the economy going. would we have want add federal reserve then where congress had its tentacles in monetary policy? congress failed in

past.ed i think the fed -- the fed's. behavior obligates us to take a th legisla different approach. one good beginning step would be the legislation we are considering today. the legislation that would audit ongress the fed. all it really does would give -e congress and the american people the opportunity to examine and inking understand the mechanics, theetg thinng behind changes in monetary policy and something close to real time. need i think we absolutely need thatt and i will say i was a skeptic about this. no for a long time i thought i'm not so sure it such a good ideae to have congress looking closel. over the shoulders of the folks from making monetary policy. ii think that dangerous behavios the fed has engaged in for years now means that they havewe squandered the right to be independent. we need to have more supervisioe i think the next step that woule be very important with the foren adopt a rule that would govern monetary policy. i preferred to let the fed decide what that role should bee and if circumstanc

who is receiving the loans from the fed today? who is the fed paying interest to? aren't any conflicts of interest about how these payments are determined? aren't any checks and balances on the size of these payments? the federal reserve act actually forbids the fed from buying some of the troubled assets that it bought in 2008, if they did it anyway. given all these unanswered questions and given the sharp increase in the risk of the fed's balance sheet, it is unquestionably necessary for the fed to be audited more thoroughly than it has in the past. audit the fed is just three pages long and it simply says that the government accountability office, the gao, which is a nonpartisan a political agency in charge, that they be allowed to audit the fed. a full and thorough audit. currently the gao is not allowed to audit the fed's monetary policy deliberations over the fed's open market committee transactions. the gao would -- was also forbidden from reading agreements with foreign central banks during the downturn of 2008, trillions of dollars were spent, much or quit

can we blame all of this on the fed? is it fed, you just messed everything up? by mid december, there were clear signs that liquidity was at a premium. repo that waserse as high as the low 500 billions and if that is the wave as the fed now increases interest rates, the fed is not a significant drain on liquidity. scarlet: let me break in for a moment because netflix has just $.10 appearsd -- to be the number, higher than expected because the estimate was for two cents. in terms of streaming numbers, domestic numbers, 1.5 6 million, that is a miss for netflix. of people are focused on his international streaming and that was 4.4 million when analysts were looking for three point 5 million, so that is a better than expected growth rate. is looking for earnings per share of three cents and analyst were looking in the neighborhood of two cents. if you look at netflix shares acting in there after-hours trade, it is a big spike up. so we see netflix rallying, but netflix has been hit hard with omentum names rolling over. do you think the selloff we saw in the last fe

since the fed raised the short-term rate, the fed funds rate, really the only rates that have gone up are the zero to one year money. all the way up to 30 years all the rates came down, that ought to be good for markets. markets should react to that positively but they're not. i think the market is having a tough time processing all this uncertainty that's going on. liz: look, we could look at treasuries. the 10-year yield right now is at 2% flat. earlier, i want to say 1:00 p.m. eastern, michael, we saw it at the highs of the session. 2.03, i think. 2.05, actually. now, folks this is a flight to quality here. there is flight, right, michael? this is fear, of what? >> flight to quality. eight years unprecedented low interest rates, nothing like that before, getting out of that period of time is not pretty, not going to be fast. but i think the markets, as greg giff talked about in the "wall street journal," did you know each one of the last five fed funds rate increases the market went up? we're not experiencing that right now. this rate increase has just begun. let's have optimism he

will the fed be blown off course? >> well, of course the big headache for them is that the market is trying to tell the fed something, but the economic data is still relatively good. it's pretty amazing you have such a significant selloff in the stock market when payroll has been running at a rate close to 300,000. i think the fed is somewhat puzzled by market developments and is trying to say maybe these problems in energy are going to spill over. maybe these problems in china could have some implications for the global economy later on. up to this point, the u.s. economic data, job openings, nonfarm payrolls, all looks strong. >> i think we're all a little puzzled by the market reaction and the action we've seen in 2016. just overnight, it's hard to pinpoint the trigger for a 6% move down in chinese stocks. the 1.5% move yesterday in u.s. stocks. and the fact that we don't know the why is even more scary. >> that's right. that's why all investors should be asking themselves, what's the story we tell each other at th

ahead of those fed minutes. will the fed raise rates by four times this year?es are rising for the first day in four. u.s. sales falling but not as much. brent crude falling to the lowest level since 2004, ahead of stockpile data in the u.s. which should show an increase. 15 seconds.in who is the champ? francine: you are the best. a reminder, you can follow me on twitter. coming up we have "surveillance" . i will be with tom keene in new york. in london, we will talk more about china. we will revisit the highlights of that marc faber interview. later on "surveillance", we speak to stephen roach. all of that and much more coming up. ♪ concern and skepticism as north korea claims it has tested for a hydrogen bomb. some leaders challenge the claim. confidence crumbles again. since 2011.fixing and mapping the past. the fed minutes today are expected to provide clues on another hike. good morning, this is "bloomberg surveillance,"

fed chair yellen didn't get to explain what the fed did. there's no new set of economic forecasts. the next time we'll hear from the fed on any of that is in the middle of february, i think february 10th, when chair yellen testifies before congress. we'll have another ten days or so before we actually hear what the fed is thinking about this. my sense is the fed is concerned about global growth but probably not as concerned as financial markets are. but they are concerned. the market right now only has the fed hiking rates one time this year. the fed says it's still going to do four hikes this the year. that's got to meet in the middle. my guess is it probably meets closer to what the market thinks than the fed thinks but we have another ten days or so to wait that out. we won't know until then. >> john, there is a lot of rumor going around in the market and a lot of fear in parts of the market, despite today's big move to the upside, about things like sovereign debt defaults, currency defaults, things we have seen in the past. are those valid? the market seems to think that they a

we are more right than the fed is.he fed officials are trying to play down a bit of those market jitters. contrariane have a in the student appeared you believe the u.s. economy is not as strong as people are led to believe. stewart: that has been the case at for a number of years in terms of the economy undershooting the optimistic fed's forecast. as we look at what happened towards the end of last year, the second half of last year was disappointed for most economists. yesterday.coming in the economy is not doing as well as most people thought. privately, fed governors would admit that. the manufacturing sector probably in recession. the services sector doing ok, boosted by increases in health care costs. if you look at one side, there is bound to be a recession. the other, we can still muddle through. francine: muddle through does not lead to interest rate rises. stewart: we also have the fed, they've done a lot of work on their communication policies. but we have seen from the two fed governors as they are trying t

can the fed stay the hour course? four hike the world's biggest company forecast its first sale drop since 2003. lender's profit falls. we'll hear exclusively from the bank's chair, this lady. nelcome to "the pulse" live i london. francine is not here. she's been talking to santander. first, let's get you up to speed. nejra: china's central bank is said to have asked some chinese banks in hong kong to suspend offshore yuan lending. according to people with knowledge of the matter, the pboc also asked some chinese banks and companies to collect information about shortselling orders in the offshore yuan market. tim cook admits he sees -- in china, especially in hong kong after forecasting apple's first quarterly sales declined since 2003. even with the lunar new year shopping season, china may no longer offset the broader slow down. takenbank of scotland has 3.6 billion pounds of additional charges to cover past misconduct. th quarter charge includes a 1.5 billion pound provision in relation to u.s. mortgage-backed secu

that markets will force the fed out. jonathan: walk us through it. from high-yield into stocks, you talk about the correlation with oil. walk us through the market reaction. the fed says, you know what, maybe we will back off. >> i think the primary worry is driven by a high-yield market. does have been the ones which were highly correlated. that is where we saw the big misallocation of capital this time around. so where are the bubbles? energy companies that were overleveraged. i think the solution will be a painful deleveraging. the question is if they are more accommodative, will that usease it. i think the equity market will rally, volatility will fall, high-yield spreads will tighten, and that would affect markets globally. we can see the same thing in europe. they followed u.s. spreads wider, and fundamentally europe shouldn't have sold off. investment grade credit shouldn't have sold off. the fundamentals were better, the oil exposure was in there. that is the market where we see a lot of upside. also in europe, i

this is december 16, the last fed meeting.hen, it has been down for this ratio, the financials relative to the s&p 500. when the line goes down, it indicates they underperformed relative to the s&p 500. once the rate hike did come, it was coupled with a broad-based selloff, plus a lot of concerns about economic growth. joe: it's funny that we had so many people talk about how the banks will like higher rates. people fought all stocks would like higher rates. it's interesting to see these popular ideals. scarlet: financials were the most favored group among managers, according to global tax data. alix: interesting. that makes sense. you don't deliver there for you switch it out. wasaw that bank of america buying financials. scarlet: after they had been bombed out. alix: exactly. joe: i want to dive into the terminal to talk about an interesting phenomenon. apple won't be the largest company in the world for a short period. is apple'ste line market cap and the other is google. $518 billion, google is $486.9 billion. over the yea

in the feds own scheme of things. i think the fed will regret the move in december.ou'll begin hearing speeches from various fed persons saying in the circumstances we might well consider this data are not as friendly as it might be and we think blah, blah, blah. i think they missed it. >> you're not saying -- they painted themselves into the corner they're in right now. >> let us consider what these ultralow rates do. they pull consumption forward. car sales a prime example. lease terms never easier or cheaper to borrow or easier to arrange a subprime loan. a lot of car sales in 2015, that's great, right? it's great until financial terms tighten and those cars can't be sold. the ultralow rates pull consumption forward and they push into the background business failure or recognition of business failure because everything is so easy to finance. i think what we have in 2016 is a conjunction of weakened consumption for cars and the manifestation of business failure that was masked or shrouded by ultralow rates. the fed has given us a hall of mirrors. it's changed perce

the fed?> i would hope that the fed is not basing monetary policy on one day's trading in the stock market. melissa: not one day, though. it's been the tenure, the end of the year ended this way. we've been on the slide for a bit. >> but, melissa, the last thing you would want right now is stocks charging higher every day. when valuations are full and markets are looking peeky and not a lot of earnings growth in the stock market, what you want right now is a cool down period where best case scenario we go through a year or two of stock prices staying flat, valuations resetting and no one getting hurt. worst-case scenario is we have a sell off and share prices get cheaper. but i'm hoping that the fed isn't watching that. do they have room to raise a few more times? i suppose, but it depends on what happens from here. it depends on numbers that we or they haven't seen yet. david: all right, gentlemen, thank you very much. melissa: tomorrow's jobs day in america, maria bartiromo will have a live

do and what the fed should do. should the fed have lifted off in december? certainly not. and i think many committee members on the fomc actually recognize that with still very moderate language around several key sectors in the u.s. economy, particularly household and business spending. but on the flip side, it's very clear that they're leaving the door open for a rate increase as early as march. focus now on expectations of where they think the economy is headed. still a generally, very optimistic overview of the u.s. economy in that january statement, particularly on the labor market front. upgrading that language surrounding job creation to solid as of late. so again, a growing divide between the lack of realize improvement in the u.s. economy and the committee members' expectation for growth one to two years hence, which will be driving that need for subsequent rate increases at this point. >> but really, the fed here is keeping the door open to a hike, which means they are keen to keep on this gradual path th

scarlet: and when the fed will move on interest rates.you come inside, you can take a look at how the odds have been dropping for march. this is a better way of looking at it. the red line tracks the odds, those are greater in september that the fed would raise rates. but they have since plummeted. this goes right in line with the selloff. joe: that is the most extraordinary chart. we had a greater than 50% chance of a hike at the end of the year now the probability is cut in half. >> it can be extreme and drop off that quickly. know, the fed has a lot of time before they do anything. there are a lot of points to get to. joe: and i recall in october after the volatility in august and september, people do not fear a hike in this, then we had a surprising surge in the market and just like that -- you can really change. it is really sensitive. scarlet: on october 14, the odds were about 10%. there you go. coming up, you'll hear from wall street's top voices on the market selloff. we will be back. the only way to get better is to challenge yo

fed up?oe lavorgna joins us with his take after the break. stay with us. you're watching cnbc, first in business worldwide. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. >>> our next guest says there's a problem with the way the fed is communicating with the markets. the fed can't hike until the markets find footing, but the markets may not find footing until the central bank's intentions are clear. joe lavorgna lavorgjoins us now. let's get your latest take from yesterday's statement. is your view still one that the fed is confusing things a little? >> oh, absolutely. the fed, in fact, in december said the balance -- the risks were balanced around the economic outlook. that had been a change from nearly balanced in the meetings before. so they were nearly balanced then became balanced in dec

what is a become a worry for the fed?ard: it is something of a feed into the thought present terms of what are they going to do with rates this year. the interesting thing in the wake of the job report is that we have seen the dollar give up some of its gains. number,at the headline the knee-jerk reaction to take the dollar higher, u.s. yields higher and equities higher as well, we have seen those trends reverse little bit in the past few hours. investors are looking at the earnings. mark: a disparity between the fed indicates it would even with the market ranks it will do. which is going to inch towards the other one? richard: if previous performance is anything to go by, the fed will gravitate more towards market pricing is saying. marker this not make a trend. at the minutes in the previous meeting, there was concern about the ability for the fed to reach its deflation targets. the hourly earnings in today's report will certainly not give them much comfort. that was the standout in the miss -- in the report. betty: i'm

bob: i think it is confusing in part because the fed messages contain -- because the fed messages are is difficult to figure out what is going on in currency markets and china and other parts of the world that have an influence on said policy decisions. tom: i will speak with chairman fisher on the council of foreign relations in a few days. what is your number one question for stan fischer? think they have to figure out the implications of a rising dollar on the american economy. it is contractionary. do they want to add to the contractionary impact of a dollar by the fed monetary policy? also looms large. it is not as huge as many people notk, but it plays a role just in the united states but in the markets that we sell to. tom: francine, ellen zentner with that important note from morgan stanley, the idea of the contraction going on right now, even as monetary policymakers are frozen. francine: one of the things we have not been exploring is here in the u k we talk about brexit and the be a wii's hands being tied. -- andin u.s. election the boe's hands being tied. we are in u.s. el

weight and see mode at the fed. people are hoping they will change the economic outlook following economic turmoil. the company reports a loss at the investment bank as revenue from each of its businesses fell. guy johnson will be speaking to the cfo later today and investors like facebook post another quarter of record revenue, sending shares soaring in after-hours. ahead of the open, what are we? 15 seconds away with futures marginally lower. caroline hyde has your market open. caroline: we are digesting with the fed said, they are keeping their options open for march. many are feeling that they are closely monitoring. you have the pboc injecting cash. the most we have seen in three years coming from china, rest ridley trying to keep foreign costs down. they have today meetings kicking off today. will central banks ride to the rescue. u.s. selloff after the federal reserve. the ftse 100 off by 3 -- 0.3%. germany opening on the lower side. a bit of risk aversion when it comes to equities. we are seeing brent on the

steve: i don't advise the fed. i try and forecast the fed. as long as dr.yellen and company have looked at the labor market as one of their most important indicators, we will continue to look at it as being important as well. if you look it inflation getting closer to the 2% number, it's not quite there yet. i thought there were couple of pieces of data. one is with the vice-chairman said last week, they are getting into a zone where they think three or four rate hikes the share would be appropriate. and also what happened with european central bank. they're looking for not only expanding but deepening their quantitative easing. europeans are beginning to from 2014. if he gets wonderfully into the dollar, which will tempt on inflation. i think the fed is going to be more cautious, but i expect them to get back to policy. david: steve, michelle, thank you. coming up in the next 20 minutes of "bloomberg markets," bill gross warns for a tough time for bonds of the fed relies on job growth. of rateghts on the pace hikes, china, and this week's market turmoil co

the fed is intent on doing and what the fed may actually do. what's your best? >> i don't look at the fed as a wild card, to be honest with you. you know? who thinks that 15 times earnings the market is discounting 2% government rates and zero treasury rate. >> on average it's been 2.5 years. the fed raising rates and i assume they raise rates with the economy continuing to move ahead. it is indicative of an improving economy, rising earnings, rising dividends, and a positive economic environment. the stock market is already discounting higher rates. i think the stock market discount soming combination of slower secular economic growth or higher interest rates. the fact is discounting it is constructive. what i say to myself, you know, i put my pants on one leg at a time. i'm no different than anybody else. i could put it in government bonds at 2%. i think it's a bad decision. rates don't belong here. the third thing is i could buy common stocks that make a sense and have a return package. as i spike now, i think half of the s&p 500 yield more

less of a concern for banks like the fed or the boe.e wait -- wage growth is robust. -- -- as things stand, will the fed be able to counter global recession? the fed's ability to do that was curtailed to a degree. they will be in a position to do more if need be. that is a headache for the markets right now. is hiking rates further but there is a risk in global growth slowing so they cannot do much more than what they are planning or they make be forced to resort back to unconventional measures. you still expect the central -- potentially increasing the likelihood of further global growth. investors will anticipate more to come from the central banks. francine: thank you. much. coming up, the biggest risks for the exchange in 2016. we talked about some of the ammunition risks. what else is out there? we will continue our year ahead discussion. ♪ francine: welcome back to "the pulse". let us continue our 2016 look ahead and turn our rochus to the exchange. richard jones joins us. talking ae haven't little bit about ammunition or lack of

on the other hand, it's the fed. the fed has already hiked. we discuss that had at the end of last year. the big question is how far they go in 2016. i think these unequal market factors or opposing market factors. so from our p.e., i think it's china that's been holding back. having said that, i think overnight we've had two significant developments which could give us the first glimpse of some hope. the first one is we saw a rebound in chinese stocks, clearly with the removal -- francine: that's intervention, isn't it? steven: well, the removal. the second one is the signal from the pboc, people's park of china, as far as the currency is concerned. if you look at the v.i.x. overnight, that suggests on monday morning we'll actually dollar. ronger those two factors, certainly in our mind, positive for risk. tom: television links into the jobs report, but maybe it doesn't. the basic idea is to make the call and the u.s. dollar. we saw a strong yen, one of the surprises of the last 48 hours is relatively strong euro as well. do you have to amend

, the fed, the fed.he european central bank, the japanese central bank, what are the chinese doing, all quantitatively driven by central bank activity. that's not the way markets should be working. they should be working on their own animal spirits but they were juiced up by the central banks, i including the federal reserve. you have to acknowledge reality. >> we're totally out of time. one word answer. the fed forecast for rate hikes this year. the market says it will be half of that who will be right? >> i thought john williams interview was right yesterday. i'll bank on that. >> if the fed goes through with their forecasts. richard fisher, always a pleasure. thanks for joining us. >> thanks so much. >>> with that, let's send it over to rick santelli at the cme group in chicago for the santelli exchange who i'm sure enjoyed that interview. >> i like simon. simon, you go, guy. that was a good interview. one of the big topics on this trading floor outside of china yesterday was puerto rico. i have jim s

fed inflation is unlikely to rise rapidly.hen said we're still going to raise rates gradually. both and then add that signals are out of the rate hike game