fed -- the fed?e some time. scarlet: speaking of the markets, let's check in with julie hyman to take a look at just what the different classes are doing. julie: moderate trending right now ahead of this, and also, investors are focusing a lot on earnings right now. yes, they are talking about the set prettye bar is low here. are people really going to be expecting any new information today? the dow jones trading higher because of burning reports. s&p 500 lower and the nasdaq much lower because of the ponderings of disappointing technology earnings. we have technology as the biggest dragon s&p 500. note price. telecom energy and utilities are the best-performing groups today. oil prices have been all over the maps. an energy stocks rising today and it is important to look at oil prices. we did get a weekly inventory report that actually showed a larger than estimated build. we stop a steep drop on oil, but it has been coming back since then, up about 1.9 percent, said the gyration in the stock market

scarlet: ok, let's go live to the fed. on interest change rates, scarlet, but the federal open market committee drafted a policy statement with a somewhat hawkish tone, and that is a surprise. gone is the reference to risks from global and economic financial developments, which the fed used to explain its decision not to change policy back in march. translation? the fed is not as concerned about external risks to its outlook, and it focuses back on the domestic economy. as you know, the first paragraph of the policy statement is the most key, and in it, we find all kinds of words, all manner of words, that paid sure of a healthier economy -- that paint of a healthier economy, words like solid, strong, and strengthening. still absent in the statement is a reference to balanced risks. as you know, there was much focused on this heading into the meeting, and again, the balanced seen since theen december statement. there are plenty of to be sures. slowing growth and household spending as well as little change in inflation expe

we have markets responding to the fed and the fed responding to the markets, janet yellen noting thearkets have acted as an auto stabilizer, sort of. the market reaction provided some extra stimulus. does it concern you that the fed is saying two interest-rate increases? is there still a disconnect between the markets and what the fed is trying to communicate? bullard: there has been a longtime disconnect and i have worried. i have said so many times, that i'm worried that gets reconciled in some kind of violent way where there's a lot of turmoil caused in markets because of changing expectations of what the fed is going to do. i think the committee gives its in what theynt think will happen and where they think the policy rate will go. it's not clear to me why the pricing should be very different aom that unless markets have much more pessimistic view of the u.s. economy, which is certainly something you could if you look at the forecast in the private sector of how the economy is going to evolve, those are materially different from what the fed inks. i'm not quite sure why we need

chart isthe five-year the fed watching the market watching the fed. is because if the fed loses credibility with the markets, the monetary policy becomes less effective. it is really only if the markets or consumers believe that the fed can do what they say they want to do, that they could actually achieve their goals. so credibility is very important to monetary policy here. michael: michael pond, thank you very much for being with us here on "bloomberg surveillance." "surveillances on radio" later this morning. are going to speak with columbia university economics professor joe stiglitz. we will get his views on rates. and lily is just out, a reversal from what we are used to seeing. it beat on the top line and missed on the bottom line. shares coming in at $.83, which is a two cents miss. adjustedlion, and it its earnings per share in guidance to the year am a pretty much upward. many companies have been doing that. it will be interesting to see how the rest of this earnings season played out. have u.s.it does futures trading higher. s&p futures up

we are fed word counters. as far as i can tell almost a cut and paste of the march 1 with the exception of the economic activity appears to have slowed as the second sentence in the first one, the rest of it is almost exactly the same. >> i'm looking for the global bit. >> they used global one time. >> so they reduced that a little bit here, right? >> they did. there was a 50% reduction in the world global. two times in the march 1. >> that is coming off the boil. and really that second parra graph that they said global and financial developments pose risk. that is out. that is something they can do in terms of creating a very gradual backdrop to a change. remember, theoretically, the federal reserve is in a tightening cycle. >> by not mentioning global as much, that seems to be hawkish in and of itself. is the way -- i mean with the markets right now are interpreting it, by the way -- >> they took it out first time. is it in there at all? it is in the second one. right. they say indicators and global and fina

this story -- this oil story is inextricably linked along with a benevolent fed, a less aggressive fed that hold? think it does. we saw the economic data, sort of bottom out in the beginning of the year. things like terms of trade for commodity importers, or exporters adjusted. onsaw a significant rally that back. now, we are starting to see the uncertainty of growth. while we are not going to see downgrades in sort of regional outlook, we don't expect it to be spectacular. i think what we're seeing now is an adjustment for lower growth rates for an extended period of time. the global macro conditions, as you said, the dovish fed, macro conditions in china, should allow high-yield traders to continue to go after these currencies. it is interesting, that was one of our stories last week , the emerging market fx trading is driven by politics. look at what is happening, for example, in the real. even in terms of europe. in terms of the em space, you have the rail story -- the real story. you can see cut a bit of a shift in terms of the complexion. how do you differentiate -- at the top of

louis fed. turnout in wisconsin was better than anticipated, 47%, easily beating the 40% predicted by election officials. turnout was nearly 48% for the election in 1972. trump at 39% in pennsylvania with ted cruz second at 30%. in third with 24%. on the democratic side, mrs. clinton leads bernie sanders 54% . a year-long is an sentence for don blake and chip for his role in the deadliest u.s. mining disaster in four decades. -- don blankenship. the blast killed 29 people. he was convicted of conspiracy to violate mine safety standards. an icon of country music is that dead. -- merle haggard's death follows a hospital about hospitalital about julie -- bout with pneumonia. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. india has cuthead interest rates to a five-year low. will it improve the economic outlook? christopher of wells fargo joins us. york, ted cruz speaking after touring a charter school in the bronx. cruz coming up a big win

despite that blazen heist, the fed official told us that the fed has no control over cyber security at the global banks it does business with and that means there's potentially an enormous amount of money at risk, as many as 250 central banks and entities around the world have accounts at the new york ted. that totals about $3 trillion in assets. roughly $80 billion is wired into and out of those accounts every day, officials say, and that staggering pool of money represents a rich and tempting target for cyber thieves. but if those cyber thieves do strike, the new york fed says it does not have to tell anybody about it. the official said there's no law or regulation that requires the fed to reveal that heists have occurred. steve liesman and i asked if there have been other cyber thefts like the bank of bangladesh heist and the official replied that there have not been in a central bank context. but the official and the fed spokesperson declined to respond to several questions about whether accounts that private banks hold at the new york fed have ever been victimized. still some open

and to rotation of the fed minutes. the upside is that maybe -- with dovish representation of the fed minutes. the averages are now may be giving up their gains or getting closer to it. the yen has really been the big market story of the day. it continues to push higher to its level since october 2014 versus the u.s. dollar. 1.0 -- 108. we have to look at options trading on the end. we have the highest level of in optionsf volume that we have seen since february. this is something that definitely has picked up. we have also seen a lot of folks who has been saying that the yen rally will not last. they have been giving up on that view as they have been forced into it. alix: this is the third day the s&p has swung 1%. we've haven't -- we haven't seen that since february. and gold is a beneficiary of that. julie: indeed. we have seen gold do well with -- once again. in terms of some of the other commodities we are watching, oil and natural gas, oil resuming its declines as well today after getting a lift yesterday. a subst

certainly not with the fed.ed is expected to trade smoother risk investments at this time in some way. the reality is a lot of these banks have played a game of go fish, where you ask for cards and you may not have them. this creates the mood trajectory for the dollar and where the dollar is going. it does not necessarily mean a lower value for the dollar but just a stable value for the dollar. the volatility. has been a big concern over whether or not the fed is going to upset markets. we showed this chart earlier, the fed effective rate trading higher, but corporate bond rates are trading lower right now. two things toare highlight here. one is the fed effective rate. one is deemed to be the risk-free rate. fed funds invest in a rate for everybody. the spread is a little bit bigger than this. the second thing to highlight is the triple be spread. you noted earlier that came down. the interesting thing about this is the reason it came down because of quantitative policies from the global central-bank. attractiv

the markets look to the fed, the fed looks to markets, and in a sense, in all this posturing, the fedt sight of its longer run objectives. what i note going back and reading the march statement is it is only six paragraphs long, and three of the paragraphs they mention global market, international concerns. even though some fed members have said in the past when have had international turmoil it has not had much of an effect on the economy. i think that is one of the indicators to look at. i just think that the fed is just caught up in its own forward guidance and needs to get on with things. michael: let me ask a question that jim bullard keeps coming back to. given the economy we have right now, what is the proper level of interest rates? because zero or 25 basis points is not it. is a greatt question. we do not know the answer, but we know it is not negative real rates. if the federal funds rate right now were about the level of inflation, maybe a touch higher, i would not be concerned, but it is just inconsistent with even moderate economic growth and moderate inflation to maintai

given the fled -- fed theibility to raise rates fed is considering the globe.cond place chart. day for tech earnings and all of the action is about to kick off in a few minutes. the excitement is palpable. we have talked a lot about the expectation that iphone sales are going to be less than good. >> the first sales decline in more than a decade. thequestion is, how that is decline? apple has conditional market for a drop off. iphone,version of the that has not quite kicked in yet and there is a new iphone in september. we're in an in between time. sometime.one seven >> there is a concern right now about a global saturation of the smart phone market. if you want a smart phone, you have already bought it i large. not many new people are coming in the market a lot more give-and-take, pillaging each other's customers, samsung and baffled, etc.. what is tim cook doing in order to kind of get apple prepared for the shift in demand? what is the next new thing? the last earnings call, we started to hint at the idea of virtual reality. that is still a ways off. is in t

what has spooked the fed?a bit by markets and by concerns about global growth. it certainly isn't anything in the domestic economy. the real focus is about the economic factors. if thisust wonder translates into a surprise shipped in monetary policy. the fed seems to be fighting themselves. this is driven by changes in secular stories, where the -- then there is the side that is the more cautious approach. in the recent uptick in the participation rate in the labor market i think ultimately will andhe driver for the fed the speed of future rate hikes right now. that is the untold story in the fed, as opposed to the ones we just touched. are we seeing a calibration or is there a fundamental shift in how they are looking at it. the employment level is up and there is more capacity online. larry: it is sort of funny. -- you don't find many echoes of it in terms of the fed. i think it is coming simply isause the video -- that beginning to evolve. it does seem to be larger than previously thought. vonnie: the fed h

nejra, what did jamie dimon say about the fed?ejra: what he's not worried about is the fed resorting to negative rates. he cites job growth and consumer strength as reasons for this. he is more concerned that rates might rise faster than expected. he also says the market will love the able to rely on the biggest buyers of u.s. debt, the fed, foreign countries and commercial banks. he says, "if this scenario were to happen with interest rates on treasuries on the rise, the result is unlikely to be as smooth as we all might hope for." basically, treasuries have their biggest quarterly gain in the first quarter this year in four years. what jamie dimon is warning is that rally could turn to a rout. francine: we also heard him warn about brexit. i don't know how much of a game changer that is. jamieng to lagarde and dimon, it is clear that brexit is a worldwide risk. nejra: exactly. the things that jamie dimon said about brexit are not surprising. he did say the outcomes are large potentially unknown. he said and one bad scenario, and

before we talk about what the fed should do, did you learn anything today about what the fed is going to do? >> not much. to me, much ado about nothing. they did downgrade the global condition and they did not mention june. that has given heart to the long bond by three or four basis points. i think we will know more over , as globalnth or two equity markets and risk markets are stabilized. to me, that is a key for janet yellen. she has assumed the role of global central banker in the last few meetings, indicating global is not just domestic rish's -- risk markets are critical. this may stabilize the stock market and bond prices, it is a sad commentary about the artificiality of yield and the repressioninancial going on for almost six years now. >> you have got to wonder how much control she has over markets. if they do something that moves the dollar, instead of moving atital markets in general, this point, is it just a circular effort by central banks to do more that keeps economies from breaking out? i think that is true with the boj and the ecb. we know the raise in interest rates

fed minutes watching financials closely. we did have one off the initial fed meeting.o, j pchlt morpmor neutral to underweight. they're modeling conservative switching revenue offset by better routing and security growth and slowing u.s. growth offset by better china and india growth. you're getting paid to hold it. >> i think that's one of the biggest highest div didends out there. owens illinois. ticker oi. citigroup upgrading to buy from neutral. the analyst says the stock is poised to outperform because shares are down 35% over the past 12 months, cut guidance three consecutive quarters. citi sees prices stabilizing and like that management set the low bar for this year's guidance, easier to beat. citigroup says this is a multiyear deleveraging story. they boost their target to 19 from 15, so about 17, 18% upside. keep in mind, though, it was a $35 stock. >> all right. darden restaurants is our next stock. after the 4% decline yesterday, and lower than expected guidance, raymond james is cautious, saying the stock has a premium valuation. raymond james sees a modes

fed won't hike rates.inancial conditions of eased. we have seen lower real yields, that the dollar has depreciated, and overall, as you mentioned, financial conditions are back to where they were at the end of last year. that means whatever changes in their forecast that they had from december to march are probably going to be closer to where they were in december than where they are in march. at the next meeting where they do their forecast. we are not there yet. we are still in april right now. they don't have any new forecast to present. they are still buying their time right now. there is no rush to do anything. that is the status quo for the fed which is wait until the data forces you to hike rates. >> let's talk about the data, the german breakeven rate in the u.s. 10 year bond. they have ticked up noticeably in the last few days. as that an aberration or an indication of things to come? yields remainall, extremely low. certainly, we see the tenure selloff quite a bit. that is significant. that is ro

at all, the fed simply does technocratic fed-type things for nonpartisan reasons. and this, critics will say, erodes that just a little bit. >> it does come though at a time when the bernanke fed and also this fed, under ms. yellen, has been much more open than fed governing bodies of the past. >> yes, absolutely. in a way this is a victory for transparency. these contributions are in the federal election commission records, they're there for anybody to see. nobody's hiding anything here with this one. so there are those who support brainard's position and say, if she's a democrat, why shouldn't she be a democrat and act like democrats do in washington? so that's the counter argument that, hey, at least nobody's hiding anything in all this. >> thank you, have a great weekend, emoney javers. >> american area lines buying back $2 billion worth of shares. "market focus." the largest u.s. airline by some measures said low fuel prices have helped profits grow but the company pointed out revenue was pressured by competition and softness in travel to and from latin americ

the fed -- the cbo has not. traditionally the federal reserve cut interest rates by about 3%. 300 basis points. what is it going to do now given that there are not 300 points to cut? chairman bernanke: it's an excellent question. let me say first that as janet pointed out there is no sense in which expansion dies of old age. the risk of recession is more or less constant every year. 10%-50%. -- 10%-15%. just because we have been in this case seven years of recovery does not mean we are due for another recession at all. we are facing, and i agree with a lot of what janet's analysis, we are facing risks and developments globally. growth is only modest which is also a problem. domestic u.s. economy is moving forward. households are pretty strong financially speaking. the housing sectors continue to expand and so on. i do see any particular reason to think a recession is any more likely in 20 18 than it was in 2015 or 2014. that being said it is true that if a recession where to begin in the next year or two would b

the fed's mission is to protect the persons, we haven't even seen the fed hitting its inflation target, by that metric, it has not been, but as you alluded precedented period and zero interest rates and negative interest rates in parts of the world and that has all the other consequences, ben bernanke would say that low interest rates make prices go up. that's exactly what it's supposed to do. it's one of the three channels, which is cheaper to buy and the second caused currency to decrease and puts people back to work and the third is that other asset prices go up, so buying a house is cheaper. i don't know unless anybody does what the effect of all these asset prices increases might be and other related things, so for example, people like -- i forget his name, the head of the reserve bank of india, when the u.s. interest rates get so low, money goes around the rest of the world because people look for yield, that's extremely destabilizing in places like india or smaller economies and when u.s. start raising rates it's going to come all back. i think the jury is out on what the impact

making it unlikely the fed will raise rates soon. cannot miss.carlet: all the asset classes or range bound. it looks like the smallest move so far this month. oil prices and go places all decline. and oil prices all decline. alix: one area of stocks is the and small-cap stocks broke above the 200 day moving average. is thaty breakout, and an indicator to where the market could be headed. meanwhile, global government debt markets, lower yields. that is the japanese 40 year yield plunging to a new low. i want to look at ireland. they had a 10 year bond auction today. ireland still doesn't have a government. yieldhart is the average on 10 year bond auctions in ireland. that continues to plunge to a new low. ireland borrowing money at its lowest level ever this white not having a government. the singapore dollar tumbling in value, the u.s. dollar tumbling. singapore's bank unexpectedly shifted gears, adopting a neutral policy, the first time since the aftermath of the global financial crisis. what does this mean? one of the most trade sensitive econo

the external risks the fed has highlighted. that is the fed beige book cannot answer. david: stay with us. we will get a check of the markets. julie: we have not seen much reaction as of yet. perhaps people still reading through the beige book to get some takeaways. stocks and bonds holding steady from where they were before these headlights came out. the nasdaq king on to its leadership on the day. -- hanging onto his leadership on the day. we got economic data out of tina -- out of china. let's take a look at the bond market and the 10 year and its reaction, going into these headlines, we had seen some buying in the treasury market. see, there has not been much reaction directly in the wake of this report. let's take a look at the groups within the s&p 500. financials continue to take the leap on jpmorgan. evenlical lead rally today as the more defensive groups are lagging. staples, telecom and utilities trading lower today. jpmorgan shows building under again throughout the highs of -- session up or .5% on that 4.5% on that stronger-than-expected report. a building

the fed meets on june 15, and the fed will take that into account, won't they?ah, eight days before. i think the timing of the meeting and when the brexit vote happens is very important. i watched the interview you did with mr. kaplan, and he's, i think, certainly the second fed official that i've noticed who's talked about brexit. we've had dennis lockhath also talk about it. i think it's something that's playing into the decision making process, and, of course, it's only eight weeks away now. betty: richard, how conscious do you think fed officials are? even though they may not say it, if we're wreaking havoc on the markets, in some sense given the weakness of the dollar in the face of pending ate hikes here in the u.s. richard: the dollar has been weak since the december rate hike, and it's kind of a catch-22 for the fed, i think, because i think they'll welcome the fact that financial conditions are loosening from a weaker dollar. it's something that's welcome in the u.s. but if they take a more hawkish stance, then the dollar might strengthen and turn that

one to turn to the fed because normally we have been talking about the fed.apan's approximately by doing nothing. they took things over. a nice roundup of all the central-bank action today by said no, no,ng" i the u.s. economy is not healthy yet." the boj's policymaking looks increasingly uncertain." just making mention of the royal bank of new zealand not doing anything today, either. they might have cut but they didn't. everything is reliant on what the fed does. the fed is the global central-bank. >> especially if you are in emerging markets. are sitting somewhere in the eurozone or for that matter in japan, but if you are sitting somewhere, whether it is in singapore or china or mexico or brazil, you are basically more or less interlinked with the local policy of the united states. it is a doll universe. it has some significant amounts -- it is a dollar universe. . aancine: we had baron berg in nd the fed is itching to hike he says. they are looking for evidence to support hike. >> they would like to hike. this is really a quandary, because of you look ba

francine: how long can the fed state dovish? hoping a march jobs report to shed light on the shadowy rate path. kickulus kick sharding -- starting the old engines of growth. is the rally doomed to fail? elon musk unveils the newest tesla as orders surge. so, welcome to "the pulse" live here in london. i'm francine lacqua. we've had some news for individual countries. euro area march manufacturing pmi actually rising a touch, to 51.6. compared to a preliminary figure of 51.4. that gain really comes from germany. germany saying the manufacturing therising 50.7 instead of 50.4 we saw previously. we are getting the headlines from the pboc. we had some china gauge figures. the china economy operation is stable. what we heard yesterday from s&p, downgrading the chinese economy. given the breaking news we had a couple minutes ago, let's check in on the markets. this is a picture for european stocks at the moment. the new quarter was fresh to clients. down 3.5%. investors today really looking to key u.s. jobs data for indications of the

fed.xit vote occurs one after the june fomc meeting. is a real concern, how will they be able to raise rates in june? these are just the known things, right? it is the fear of the unknown that spooks the fed. think about when china devalued back in august. the fed had a holy cow moment. that is why the hike in december was derailed. always the ones to watch out for. that was tom porcelli. don't miss our fed decision special. ♪ matt: time for off the charts. gina martin adams is here to break down some data before the fed decision. first off, i want to talk about the probability of a hike. it,he futures market sees no chance of a hike, but 2% chance of a cut. what is up with that? gina: it shows you the deflationary concerns that are pervasive. everybody has written off the prospect of the fed hiking until june. even then, only 21%. you don't get above 50% until november. the market is very complacent with respect to the fed. any language that suggests they will consider something this summ

the fed has not. the cbo has not. if there is a recession, traditionally the federal reserve cut interest rates by about 3%. 300 basis points. what is it going to do now, given that there aren't 300 points to cut? mr. bernanke: excellent question. let me just say first that as janet has pointed out, there's no sense in which expansions die of old age. the risk of recession is more or less constant every year. though we can't forecast them, there's no reason to think that just because we've been in seven years of recovery, doesn't mean we are due for another recession. we are facing, and i agree with a lot of janet's early analysis, we are facing some risks like developments globally, which are creating headwinds in the united states. productivity growth is only modest, which is a problem. the domestic u.s. economy is moving toward. households are pretty strong. housing sectors continue to expand. i don't see any particular reason to think a recession is it waskely in 2016 than in 2015 or 2014. it is true that if a rec

the entire improvement in the market came from multiple expansions. -- why why the fed so the fed iso important. expansion stress to deteriorate and we will need to see earnings growth, not yet visible. stat andill borrow the keep saying it no earnings growth in the last four years. i love that. check out the chart. it shows how financial conditions in the united states have been in recent months from their lows in february. i have johnny aligned to any figure above that line showing conditions or below that line, showing conditions relative to precrisis norms. how vulnerable are financial conditions right now? are we over the worst of earlier this year? >> i think the fed will it knowledge we have seen an improvement globally and the u.s. and financial positions. we have seen credit spreads start to narrow. is flowing andty credit creation is fairly robust outside the emerging markets. that is why think the fed statement is actually going to be, i hate to say the word irrelevant, but well anticipated. what is not is what will be the market reaction. if we start to see a significant

you mentioned the fed meeting this week. there is no press congress and we do not expect a lot of data. he looks like inflation expectations are working higher. if you look at the 10 year, the yield is higher for the sixth straight session. it is part of a move we see. also been watching inflation expectations. look at the five year breakeven, we have seen an increase. here is the increase we have been seeing. this is another gauge of inflation expectations on the part of market participants. even though we are not seeing any kind of probability being priced into the market, there will be a rate increase this week and there is an increasing that inflation will start to move higher. it will be interesting to hear what the fed has to say. lisa: especially because inflation has been for so many years. now it's check on the news this afternoon. mark crumpton has the news. mark: returning to united states after history to saudi arabia. earlier today, the president and heads of state of france and italy and the united kingdom and

how does the fed play this here? >> if you look at the march 16th minutes they pretty much say there is going on the gradual increases in the fed funds rate. and i'm thinking that we're going to see in june. the u.s. economy has been fine. slowly just going up and up every single month. job creations first two months have averaged 209,000. unemployment rate is around 5 or 4.. the dollar has weakened a bit, which is good it. helps u.s. exporters and everything. the only caveat is internationally there is some issues out there internationally. i feel confident the rates will be increased by the fed in june, after a june meeting. and also one other time this year, probably at the september or december meeting. you have to remember the fed wants to get the fed funds rate up to about 3.5 and it is way belov there now. and it is between one quarter and one-half point. they want to get it up if nothing else to give them ammo when the next recession hits. we're still at very low rates and then the fed doesn't have a whole lo

the fed has not. the cbo has not. if there is a recession, traditionally the federal reserve cuts interest rates by about 3%. 300 basis points. what's it going to do now given that there are 300 points come from the point to cut? >> that's an excellent question. let me say first, as jen has pointed out there's no sense in which it doesn't always get the risk is more or less constant in every year. 10, 15% as you suggested. the weekend forecast it's no reason think just because we had been in this case seven years of recovery doesn't mean we are due for another session at all. we are facing, and i agree with a lot of janet earlier analysis can we are facing some risks like developments globally which aggressive headwinds to the united states. productivity growth is only modest which is also a problem but the domestic u.s. economy is moving forward. householdhouseholder for strongl speaking. housing sectors continue to expand. idles any particular reason think a recession is a more likely in 2016 that was in 2015 or 201

let's turn to the fed and your thoughts on the fed.here is growth, and might not be stunning, but there is growth. talk about the distinction between the strength in the u.s. concernsn the clear they have about the global story. >> that was a really fascinating bit. thingsas always been about global markets, going back to 1998. i think it has become more explicit over the past 12 months and that was made most clear in september last year when we had and in the crisis first rate hike was postponed. go to this year, all of a sudden we have the turmoil which i would argue was generated indirectly by the strong dollar. the fed suddenly backed off, and then we go to march. i think it presents an becauseing conundrum you could argue, looking at the u.s. economy, they could do with a rate hike. >> i have a chart that shows u.s. deflation hedges getting cheaper. unlike australia, it seems in the u.s. the concern is on the other side about inflation. >> may be to strengthen the dollar feeds into that over time. the problem is from their if oil

the fed has not, the cbo has not. if there is a recession, traditionally the federal reserve cuts interest rates by about 3%. the jargon is called 300 bases points. what is it going to do now given there are not 300 points? >> it is a great question. there is no sense in which expansions die of old age. the risk of recession is constant every year. sort of 10-15 percent. we cannot forecast it. there is no reason to think just because we have been seven years in recovery doesn't mean we are due for another recession at all. we are facing, and i agree with a lot of janet's early analysis, we are facing some risks like developments globally which are creating head winds for the united states. productivity growth is only modest which is also a problem. but the domestic u.s. any is moving forward. households are strong financially speaking. housing sectors continuing to expand and so on. i don't see any reason to think a recession is anymore likely than was in 2015 and 2014. it is true if a recession were to begin we would

-- then the fed to change that. talk a little bit more about central-bank action him and our thanks to bloomberg news' neil borofsky on his paper with the panama papers. coming up, an exclusive interview later on with mr. kaplan of the federal reserve of dallas. he is giving a speech today. we have a look at the prepared remarks, and he is saying that he thinks the growth outlook for 2016 should be around 2%. he is talking about inflation, also about the risks coming from china, that the spillovers there are likely to spill over into emerging markets in the u.s. he is not a voting member, but he is an influential member of the federal reserve. robert kaplan, that interview later today, 10:30 a.m. in new york, 3:30 p.m. in london. ♪ francine: you are watching "bloomberg surveillance." i am francie likewise in london. vonnie quinn is in new york. to work out the bugs in a new chip-based card. have been complaints from retailers about slow checkout times, so there is new software to make the process faster. the new car

alix: a divided fed. we will sit down with a bond veteran in just a few minutes. ♪ mark: former coal executive on blankenship was sentenced to year in prison for his role in the deadliest u.s. mine disaster in four decades. massey energy of when one of the company's mines exploded in 2010. 29 people anded he was convicted of conspiracy to violate mine safety standards. year'sstandards for this boston marathon -- authority 5000there will be up to law enforcement officers, enhanced checkpoint and dozens of surveillance cameras along the route. security has increased since the terror attack in teen. a japanese military jet carrying six airmen has disappeared over southern japan. it was reported missing about one hour after it took off for what was supposed to be a three-hour flight. was inspecting facilities in the region and the search has been suspended for the night. two republican lawmakers opposed to the iran nuclear deal are trying to block a proposal that would ease rules on dollar transactions to sup

fed chairs don't want to comment on current conditions.et any sort of thing along those lines, it will be very interesting by the stuff is probably what we will hear more of. scarlet: i wonder to what extent they will take note of what's happening globally. there's a lot of thinking out loud about what role central banks should play. guest: that's a great point. that's one area where you may see some overlap about what they can and cannot talk about tonight. any sort of commentary on the global situation and the federal as the u.s. central bank on the world stage will be interesting to hear. alix: have a good time. we are jealous we are not there. don't forget tonight's conversation. at all-star lineup starts 5:30 p.m. eastern time on bloomberg tv and radio. scarlet: coming up, the first round bidders for the company's web business have emerged. the value of yahoos core business. ♪ scarlet: verizon set to be plenty to make a first round that for yahoos a web business next week. google also considering bidding for yahoos core business. we k

have also seen that split in the fed.th a bunch of presidents coming out hawk after hawk after hawk, even if they were not voting members this year. it's going to be interesting to see what kind of unity there will be among voting members. joe: to your point, for so long, everyone was talking about they were doing well on the employment side of the mandate, but on the inflation side, they have room to go, but in the last few months, more people are convinced they are getting close on the inflation side, too, which makes the dovish rhetoric a little more surprising and striking. scarlet: it is good the fed is making progress. it seems like central banks around the world are not so much. sweden plus central bank said it is time for a rethink on how central banks were, making clear that he is open to changing how theral banks were and have curve on japan. you wonder if this will be a conversation that wilson be taken up here, if the head needs to be looking at changing up its inflation gauge. alix: i have the awesome gauge o

the number the fed is really looking at is the core pce.-year, we are seeing it run it 1.67%. that is below the inflation target. if you trying to inform yourself, you now want to look at these two elements. yearat basis, we are not -- there yet. betty: the fed has taken care of one mandate, now it's inflation. it's your turn. caroline: i am talking about apple. i'm talking about the pain some of the european suppliers are feeling. they been kicked off the list. this is a german maker of led chips. it's no longer as important. this is the supply chain. revenuews you how much they get from all of its customers and suppliers. check out one he customer. apparently, they are less important. they have been kicked off that top suppliers list. they have been replaced by the lips. they managed to go up toward the end. they looked with a market valuation. apple struck them off the list of key suppliers. it's an important one. this is a great function. you can run it on your bloomberg. see all the suppliers when you want to dig into the details. grea

standing flat fed and the others going the opposite direction. will we see the boj go in the opposite direction? half economists we surveyed say they probably will be some further loosening of fed policy. a slight majority are probably favoring the boj doing something. what do something mean? it is considered quite unlikely they would cut the interest rate further into negative territory. that has not worked out too well for them. coupling that with more asset purchases or qe, or maybe just or say we need more time to see how it plays out. thatore of an expectation something will come from the boj this evening. talked aboutfink the boj earlier this morning. larry: the whole process of what japan is trend to do was restimulated economy through aggressive monetary policy, but the second phase -- erik: what option do you have right now? to thehe has to talk prime minister and say i ran out of runway. betty: are we there? a desperate situation. abe ironically, the administration has been the one most inclined to pursue a reflation or strategy. kuroda

the fed, they noted that 20 times. when you hear that kind of concern, the fed is very much more a global fed than it was under volcker. paul volcker raised rates and thwarted inflation. greenspan butchered bond markets twice by raising rates in 1994. and look at this, the lockstep is that he made in the early 2000's. treasuries have been demolished in terms of yield. saying toat overall you? ramin: i think what is key is where we are headed. what is the ultimate level of the fed funds rate going to be? that depends on the level of growth, which has been coming down steadily over the past 30, 40 years. what we expecting is that the terminal rate is going to be 2.9%. on your chart, that is a lot lower than in the past. manus: i'm going to all this up as well. that is what markets are really getting the hang of. the fed hiked rates for the first time in december. the boj went negative. msci. we go into negative rates here. we are beginning to fade. we had disbelief. there is a lack of belief in terms of the drug that is

hello, eamon. >> yes, a new york fed official told steve and they the fed is taking it very seriouslythe cyber security of banks around the world that the fed transacts with is critical to the stability of the global financial system. remember, back in february, the crooks got into computer systems in bang ladesh, and authorized transfers of nearly $1 billion out of the accounts at the fed, and in new york, they blocked some of the transfers, but released $81 million to philippines and sri lanka and some of it was sent on to casinos in the philippines, and converted to chips there on the gaming table, and we don't have any idea who stole all of that money. despite the brazen heist, the fed official told us that the fed has no control of the cyber security over to the banks that it does business with, which means potentially an enormous amount of money at risk. there are nearly $3 trillion in assets and rough ly $80 billion is wired into and out of the accounts everyday the official sa said. that is staggering pool of money that represents a rich and tempting target for cyber thieves,

i think the fed should probably normalize rates here. this is a chance. >> chris, thanks so much for joining us this morning. >> always refreshing to get his positive view. a minute left. i want to show you the dow transports. yesterday broke below the 200-moving day amplg. it's been a leader in this market. it has gone down in the last few sessions. is that a bad signal for stocks or will it rebound today? >> quickly, results of our twitter question. 48% said yes. 52% said no. much more on that debate coming up on "squawk box." that's it for "worldwide exchange." have a nice morning. going on h? oh hey allison. i'm val, the orange money retirement squirrel from voya. val from voya? yeah, val from voya. quick question, what are voya retirement squirrels doing in my house? we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? no, i'm more like a metaphor. okay, a spokes-metaphor. no, i'm... you're a spokes-metaphor. yeah. ok. see how voya can help you get organized at

all eyes on the fed.ld on the u.s. 10-year is falling after the longest losing wrong since september 2014. this is the 8 day chart, which has taken the yield on the 10-year to 1.9%. the probability of a hike in june is 20% and july 20 5% in september is 50%. one way they could pave the way for a june rate increase is bringing back phrasing that found risk to the outlook were "nearly balanced." policynguage would mean makers equal chances the economy will turn out better. or worse than forecast . after upgrading the assessments to balance in december, officials admitted the so-called balance of risk clause from am ary, for march financiali market turmoil. thatd is something to watch out for later. earnings today from barclays. profit falling 25% in the first quarter. it posted a larger loss in the division that holds the wants.ses it no longer revenue at the investment bank falling less than expected in turbulent markets. barclays had warned the first quarter would feature lower revenue from the investment

i think it was the same with the fed. we can make a big deal about fractious, but i'm not buying it. it's the head coach that comes off locker room and only what comes out of that mouth counts. i will still with that, whether it's janet yellen ben bernanke or alan greenspan i great with steve that it is a sweet spot. steve said make she won't change her chance. i think we can count on them changing that stance almost every meeting, but the problem is they probably won't raise a lot until after the election. i think that does afford a sweet spot. take it to the ecderivative. we're sitting at an important level, the dollar index at 94, we're seeing a key level an around 114, 115. it's all the same trade from different tangents. if that dollar weakens on all those three scenarios, that sweet spot is going to get a lot sweeter. >> all right. we'll see what happening. guys, we've got to go, thank you all for your thoughts. appreciate it. minutes left. actually the dow holding on to some gains at the moment, up 85 appointments,

right now it's all the fed. the fed is keeping everything afloat on that sea of liquidity. probably from the who do we know, then hillary they probably feel more comfortable with that. but i don't think the markets are enamored with any of the people. >> you have a referendum on the u.k. on june 23 that would be an element of uncertainty in the market. tone require many the great britain is thinking about exiting the european economic union. >> that would be an element one would focus on more intensely than the election. the notion of regulation and tax, will we reform taxes and make it u.s. competitive again? and what impact will that have on the earning and will the house and ways committee be able to do a major change and will that take effect in 2017? anthony: who has a bert chance of doing that? a democratic or republican president? >> if bind and warren are the candidates on the democratic side i'm not as convinced. anthony: that was a wildcard you threw in there. >> if it's more conventional thinking either -- anthony: is the market repaired for that sort of wildcard