and john foust, a number of years at the fed, now at john hopkins but on leave back to the fed. you just can't quit the fed. so we're now in the third longest economic expansion that we've had. one of the questions is will policy change which has been discussed both in monetary and fiscal policy extend that expansion or not. in light of the discussion about the mortgage backed component of the fed's balance sheet, i've been looking -- we at fannie mae look at the ten-year treasury all the time. that actually started to rise back in july with the ecb holding steady post brexit in the second half of july and then with the d.o.j. saying that it was going to reassess negative rates at the end of july. the ten-year started a gradual rise at that point and of course it accelerated with the presidential election and it peaked at about 2.6. i think right now it's about 2.48 or something like that. so the fed hiked in december and it looks like now the market is prepped for a rise in march. we'll find out about that before too long. so let's start, if i could get each of you to address f

the fed can only buy treasury securities and agency securities, so it's not like the fed could have ever been as for good or for ill ever been as messy or as not clean as dcb can't buy corporate debt can't by equities so not only -- now is there a desire to exit the mortgage side of the back security, agency securities more rapidly than the treasuries? i think there was at one time but i'm not so sure that's still there. if randy said it is true that as the interest rates rise you get less mortgage prepayments and those mortgage back securities live longer and so they're naturally going to be living longer as rates increase as we all hope and then there will be a question whether the fed wants to sell some and could have a bit of a long tail and so far the fed has more recently said that it's unlikely to sell just because they don't want to disrupt the market except maybe residual that once it gets to be so small that it couldn't faffet the market. so those are little amendments. >> sure. obviously something that's on people's mind. five of the first ten questions that came in were about

the fed swagger is not its own. the his the by a point of my book when you talk about the fed we misunderstand the of credit mcanally misallocated resources sandy argument i make is be vastly overstate livi how much the fed misallocating. is just not that important. i am a big believer of market forces the way the electorate is there's a lot of skepticism right now in the world about the central bank and there is some skepticism on the of misperception and that the world that the fed gives it is not defined by reality. popularized by economist politicians and pundits that many and credit are one in desks,me. and we could not be morere different if the with the same heydey in honduras would have as much credit flowing through their economies as we do. counterfeiting would not own the be legal but broadly encouraged. credit is a real economic t resource. when you borrow dollars desks, chairs, buildings and labor we are the credit we are the of producers that when people seek to borrow dollars to the fed has no private

jon foust now at jon hopkins on leave and back with the feds. you can't quit the fed. so we're now in the third longest economic expansion that we've had. one of the questions is will policy change which is being discussed in monetary and fiscal policy extend that expansion or not. in light of the discussion about the mortgage backed component of the fed's balance sheet, we have been looking at fannie mae look at that all the time. ecb holding stead in the second half of july and with the boj saying it's going to assess negative rates. it accelerated with the presidential election and it peeked at 2.6. right now it's 2.48 or something like that. the fed hike in december it looks like the market is prepped for a rise in march, we'll find out about that. let's start, get each of you to address -- first, what's your view of current monetary policy. how have the fed been doing up to this point. how fast and far would they go or should they go what's your view on up to the present and then what we should think about going forward. we'll go across the panel here. >> great. i

the fed did move it -- move rates. >> the fed keeping a gradualist tone.advancing while the dollar fell. aussie bond tracking that move in treasury shares, falling eight basis points. oil rallying 1/2 a percent. holding it at $49 a barrel. it dropped for the first time since december. gold steady at the 1200 mark since climbing the most in six months, which brought a relief rally in mining stocks. this is up 1/3 of 1% and new zealand shares up 7/10 of 1%. this is helping miners on wall street. it is playing out in sydney, as well. materials leaving the gate, along with energy stocks. gains movers, leading the in sydney. the rest of the region looks fair. futures,oking at asian looking broadly higher except for japan. stocks weaken in tokyo as the yen strengthened ahead of the boj policy decision. looking at the function on the terminal we do have the yen coming up less than 1/10 of 1% after getting to 1.2% overnight. stand withpected to a rates, along with new zealand and the u.k. overnight. above 123 of the euro trading near a one-month high following the

fed, february 2014, is when she became a governor. .hree years as chair of the fed i'm here with scarlet fu. we welcome all of you. bloomberg radio, and the television as well. let's look at equities, bonds, currencies, commodities, before we dive into an interpretation of what we saw today. bond yields have come in, and i guess the question here is why did we see this reaction? the curve flattening to 119 basis points. the two sent spread. i would suggest that much of this was maybe a disappointment that we did not see more lift in s.e dot scarlet: correct, we saw more strong conviction for the three rate hikes forecast this year, and three in 2018. some thought maybe the fed would move toward four increases in 2018 and 20 17. tom: most of the action in bonds. the green should be read -- 1.31% on the two-year yield and a solid seven basis points. that is a big move. gold with a big lift, 1199 earlier today. 1216 on gold. we will speak to kathleen hays. she was in the press conference with her good questions, and then a conversation with bill gross of janus capital. we will talk to mr. g

it is fed day.uld monetary authorities and chair yellen worry about a fiscal program out of capitol hill? carmen: i am sorry, tom, could you repeat the question? tom: i will try toepeat it if i can remember it -- the question is with monetary policy, should the fed worry about fiscal policy that could come out of the senate, the house, and out of president trump's administration? carmen: of course. look, a combination of loose fiscal policy and tight monetary policy is tailor-made for raising interest rates and strengthening the dollar. our of those things combine -- may initially not do much damage, but high interest rates and a strong dollar would not be the kind of combination that -- that would certainly foster a -- you know -- the kind of growth the administration has been announcing. tom: let's do this. professor reinhardt, let's come back as we can. we were set up with professor reinhardt. we will get her back. scarlet: absolutely. i want to get her take on the recovery we are stuck in. for f

if the fed. i think they'd just soas soon en if there was no, ma'am value to that, they'd like to get back to something more standard in operating procedure, which would involve the balance sheet shrinking back to something much smaller. the right number right now is is not a matter of thinking about for another year or two. how will they adjust the sheet? i think the preperred approach is to do something really predictable, not disrupt markets and have that not be the way policy is adjusted. that is when they change how the balance sheet is being used, that's a technical choice to get them back to narmal. it's not a monetary policy situation to signal they want more or less accommodative financial conditions. they'd like to interest rate to be the main signal of policy. and to have the balance sheet be a side show. now a whole new fomc or set of governors, at least soon and there are other views on that. trz if folks wanted to redice the balance sheet more quickly as some people do, i think that

countdown to the fed is on. t-minus 59 minutes, investors widely expecting our third rate hike in ten years. anything could happen. we'll hear from the chief herself, fed chair janet yellen will hold a news conference at 2:30 pm eastern time. will the fed hit them in the hind or take a dovish tone? >> it's a big deal if we have a countdown clock. as we countdown to the fed we also count down to a key vote on the fate of obamacare. it happens tomorrow in the house. >>> coming up, from one house republican who says he cannot support the bill in its current form. remember, no health care reform? does that put tax reform in jeopardy? live on capitol hill straight ahead. >>> i'm melissa lee. a very close eye on snap. the stock on the verge of becoming a teenager. down 12% from its opening price of 24 bucks a share. is a big snap back in the works and is now the time to get in? we'll debate that, ahead. >>> welcome to "power lunch." tyler mathisen here. we have a big show on tap for you. we'll kick it off with that co

-- the fed?reasons we have settled into a new range on rates is because there are three distinct factors going on. one is domestic developments pushing rates higher. two is technical positions capping that move. three is international conditions that are also acting as a counterforce to domestic conditions. you have is very balanced tug-of-war right now. it is interesting to see whether statement and press conference changes what has been a very finely balanced tug-of-war. alix: what area of the market is underpricing a more hawkish fed? ,ohammed: the key issue is those the fed hikes involve a handoff to tax reform, higher fiscaland deficit? yes or no? it is less about the fed. it is more about, what do you expect the administration to be able to get congress to do? alix: we just heard from one say they are neutral on theties because the longer reflation trade goes the more asymmetric risk that is to the downside. how do you adjust a portfolio to encompass something like that? mohamed: we have co

>> the fed is in a period of trantion. the janet yellen bloomberg dovish fed has got vacancies. there is going to be a presumptive's -- presumptive change. i don't know if we can make any on where productions the fed wants to take the environment. but indicates a change in the marketplace as it relates to the near-term probability. the reality is the fed talks an awful lot. hear the same thing out of them, they would love to raise rates. they redefine what those targets would be. certainly there is a higher probability of the fed going at its next meeting in march. on the other hand the quotes you put forward a few moments ago indicated what she said was soon. soon doesn't mean march. a very poor record of actually doing what they said they were going to do. >> not only does the fed have a poor record -- in general if we any investor trying to -- ict rates, it is failed jonathan: comparatively earlier yes, but as the fed behind the curve to some extent already? >> the way to fed defines it, even the way they define it they are somewhat behind the curve. properlyay it should be d

watch out for the fed today.ey really -- i'm a little worried they are going to be feeling so confident that the market has given them the "good housekeeping" seal of approval. they might come out on the hawkish side. that would be good for the long bond. more of risk is getting risky in the near term. i like holding into the next rise. >> your view is not away from the view of david temper, who made the case on cnbc next week, wake me up when rates get to 4%. there is not much in the way to hold a stock rally back until you get to a point where the ten-year yield becomes somewhat worrisome and inflation picks up to that degree, a degree higher than the 3% that you mentioned would cause you to at least pause for a moment. >> i agree with that. i think, and i've been talking about this all year, i think investors should use the relative outperformance of the s&p 500 and other indices in the united states to diversify into more global investing. what international stocks and bonds go on a terror and outperform the

that's not a statement about the fed. that's a statement about an economic forecast and now randy and i both know a thing about economics and a bit about the fed. either one of these are forecasters. that's where you find out how many rate increases there will be. they are no better than anywhere else at the forecast. the fed would still like to normalized policy as rapidly as prudently possible and they will raise rates unless the economy says no. so what different? then it was a year ago and those were all manes of those are good games? those are pretty modest. the main big thing that's changed the premise that what will happen with tax and spending and regulatory policy there are all sorts of fears if raising rates in order to take strategic position after the government shot across the bow i heard. that kind of stuff is just taking that opportunity to say we praise it. now, think about it this way. whether you like it or not, most of the fomc is kind of academic types like randy and me i guess. we don't think we know

jonathan: fed speak has been front and center.fficials seemed to be leaning towards a hike this month. even the fed's chief staff, lael brainard, said it will likely be appropriate soon to remove additional accommodations, continuing on a gradual path. we want to bring in the guests. joining us from l.a., tad rivelle is tcw's chief investment chief of fixed income. with me in new york, jeff cucunato of blackrock's head of u.s. investment grade credit and, of course, oksana aronov, the alternative fixed income strategist at jpmorgan asset management. it seems the journey for the federal reserve will begin a little bit earlier in 2017. has the destination, the terminal rate, the ultimate endgame, has that changed at all? tad: well, the fed is obviously in a period of transition. the janet yellen dovish fed we have lived with a number of years has vacancies. there is going to be a presumptive change with respect to who the chairman's going to be in a years time. i don't know if we can make any long-term productions on where the fed w

the new york fed disagrees with the atlanta fed. why is this?s looking at hard data. the new york fed is looking at the survey data. look at the isn for manufacturing and nonmanufacturing and it is almost off the charts. it has been lined with more than 3% growth now. there is some disagreement. tom: dr. hooper, to get this started, the idea of ben bernanke, anna schwartz, milton freeman, did you ever see this debate in fed history or is this original territory that chair yellen is on? a we are coming out of historical. for the fed. zero interest at the zero bound. a vastly expanded balance sheet. this is an unusual situation, no question. growth is at a historic low from a supply-side standpoint but they are seeing potential growth dropping this low so the challenge is getting things going. yesterday,entioned this depends on more than just what the fed is doing. it depends on getting some policies through congress, getting the administration going on policies that are going to raise the supply side of the economy, getting growth back to normal.

louis fed projection going forward.een: what about -- you said the fed doesn't need to be preemptive. the fed raised the key rate once in 2015. once in 2016. and now it's talking about three rate hikes. that would be five interest rate increases in three years after a long period with none. our colleagues are arguing this is so gradual. how could you worry about overkill? how could you be worried about being preemptive? jim: it's not overkill now. but if you go forward with a whole lot of rate hikes without the data really perking up more than it has, i would call that into question. again, you got first quarter g.d.p. here tracking us and it's below 1%. kathleen: let me pretend i'm one of your colleagues. they would say -- jim: we can argue about that. kathleen: g.d.p. isn't what we follow. and g.d.p. logs. unemployment is doufpblet the labor market is getting tight. jim: unemployment is down .3 in the last 18 months. kathleen: you have inflation at target, jim, if we wait too long, inflation will get out of hand. jim:

adding to the commentary around the fed are the expectations around the fed. those stories playing in the markets overnight. we've seen that 10 year yield increasing for the third straight there. let's have a quick look at the nikkei, up by 1.4%. the end down for a third day, boosting stocks over in japan. this is work which is in the white line and then the stock market in the blue line. up to 80%.d the market is just trying to whether this is positioning themselves for the possibility and the probability of that rate hike, as they say. if it pairsto see that back. that is the question. anna: let's get some breaking news from the dutch retailer, giving us the underlying operating income. coming in ahead of estimates. about they're talking synergies between now and 2019 million euros.0 this year alone, they will 220ver synergies of around million euros. that is essentially what the market wants to know and understand. the market was looking for 571 million. we will have a conversation with the ceo later in the show. bloombergs get to first word news now with s

bond yields falling after the fed decision. let's have a look at how the nikkei and the broader topix are reacting to all of this for thursday, march 16th. both indexes there in the negative, down almost 0.6%. we'll see how that goes through the morning session. now, tokyo investors may be focusing of course more on the fact that the dollar fell after the fed announcement, and that may be weighing on exporters. i'll check all the sectors during the morning session. that's also after the fed mentions its intention of keeping its steady pace of race hikes to around 3 this year. many analysts expected maybe perhaps a bit more than just 3. ai? >> ramin, you mentioned the dollar fell after the decision. what was behind this? why did investors sell the dollar, and what's going on with currencies this morning? >> well, exactly. if you look at how the dollar reacted there, now it's at 113.30-31. it actually fell just over 1% against the yen. now many traders had expected a more aggressive stance by the fed in raising rates other than t

no one talks about the fed anymore. we still talk about the fed. joe: i'm exaggerating.carlet: it's true that in the global consciousness, the fed is no longer going to come in and save everything. the dow off once again by three points. this is bloomberg. ♪ ♪ scarlet: we are moments away from the closing bell. "what'd you miss?" u.s. stocks heading for the first two days slide. fu.scarlet rosenthal.oe begin with our markets, and when we say a two day decline, it is not really a decline. 500 little changed. the nasdaq barely budging higher. joe: a quiet end to a busy week. everyone had to digest the fed officials talking up the prospect of a rate hike on march 15. it began with john williams of the san francisco fed, then bill dudley, robert kaplan earlier, and today was the main event with janet yellen. moved so much on the other ones, and she is so smooth. she never creates volatility. scarlet: we did see big gains and snap. it followed up yesterday's 44% 20 percent much as today. it came back there. article says short interest $1 billion reach within a week because of

you mentioned the fed.ioning policy regimes from excessive reliance on central banks to something else. hopefully is much broader from excessive reliance on central and much more effective in terms of genuine growth. let's not forget the politics. this is incredibly fluid in terms of what's going on. yes, there will be changes but it's a good indicator as to where the fed's head is. give you had to pick one thing for the trump administration that would affect job numbers going forward, what would it be? mohamed: factory. jon: mohamed el-erian. fantastic to have you with us on the program. you can get your insight. coming up, first reaction of payrolls report with gary cohn, the national economic council director and the far. argue program each friday at midday, 30 minutes on fixed income every week. what a week to have it after the treasury route. got as this morning little firmer, up for tents of 1% on the dow. you are watching bloomberg. ♪ ♪ jon: clearing the path for march. jobs report in the u.s. set th

and on the fed docket, dallas fed president, rob kaplan and fed governor lael brainard.owe's, best buy, mylan labs before the bell. after the close, broadcom, box and shake shack. also, big event today. snap, the company expected to price its ipo after the close. sources say the company is targeting $17 to $18 per share price range. we will watch that. one of the most highly anticipated tech ipos since alibaba? will it be a facebook or twitter? neither of those? the company calls its a camera company. >> thursday will be more excited than the close today. >>> focusing in on the earnings reports and best buy in particular, landon dowdy has three things to watch in best buy's numbers. good morning. >> good morning. the street is looking for best buy to post earnings of $1.67 on revenue of $13.6 billion. watch for q4 sales. same-store sales expected to increase for a third quarter. while target yesterday struggled due to a rise in online shopping, best buy has thrived in that environment. at the same time consumers are willing to spend a larger part of their budget to consu

and now at you just cannot quit that fed. now in the third longest economic expansion we ife had and a question is policy will be discussed. in light of the discussions with the mortgage-backed component of the fed and the balance sheet, we have looked at the treasury. this started to rise in july holding of the ecb and the bank of japan saying they would assess the negative rates and started we will find out about this before too long. addresst each of you to monetary policy and what to and how far will they go or should they go? what is your view of to the present? maybe we will just go across here? >> i am delighted to be back here. i was on this board and i can see the conference has grown stronger and i am delighted to see that. grownnomy, i wish it had stronger, but i think there has been a consistent, if not exciting recovery. of the demographic reasons, it will be hard to get the labor hours and productivity has been slow. that is why we are getting 2% rateh with the inflation being consistently below the theet of 2%

the fed is behind the curve. jonathan: the fed is behind the curve. here is a story -- we had a story in the last 30 minutes or 40 mins about rates over at the ecb. here's the message -- the governing council expects the key interest rate rate to remain at present or lower levels for an extended period of time and well past the horizon of not asset purchases. this morning here at bloomberg -- a question to you, krishna -- we have learned there was a conversation with the ecb that they might raise rates s.fore qe end do you see that happening? happen, and held was -- draghi was asked the exact question, and his answer was circumspect. they could do that -- the deport -- depot rate could be raised. i have a great difficulty, kind of, except in that. hat uld be, like, the fed doing things with it balance sheet long before it raises rates. is it possible, yes. is it likely, the answer is no. jonathan: the answer is no -- i look at a bond market in germany. you look at a fed market behind yieldsve, with 10-year blowing out -- that is a huge 48 basis points

we got a hike from the fed as expected. be so aggressive or hawkish when it came to what comes next. what's your take? >> that's a good point. obviously the hike itself was telegraphed. i think the reason why you got the market reaction is that the markets had been concerned that at this meeting the fed might indicate four hikes this year or four hikes next year through the dot plot, they actually didn't do that. so we got a well telegraphed hike, but no increase in the liftoff pass. so markets took that as a net dovish hike. you saw the em and risk in equity assets responding. >> do you think we'll see the yield curve flatten from here? >> i think in your earlier segment you talked about that. typically in rate hike cycles we do get a flattening as short rates move up more than long rates. we had that yesterday. i think it will depend upon what we see coming out of fiscal policy in the u.s. yellen yesterday basically said they have not started to factor that in yet. if we do get a big fiscal package later this year, even i

forget the fed. all around the world rates are so low, negative in places, even with the fed move today yields went down. >> the economies are not very strong around the world. and i don't think they -- the rest of the world doesn't have the optimism that exists today in the united states. now, i believe that optimism is a leading indicator of results. i think one of the reasons our economy has been so slow in the past is because of the pessimism that was created by the fed every six weeks saying the economy is so bad we'll have interest rates low forever. that's not the way to conduct policy when you want to try to stimulate growth. therefore, i think the united states is leading -- has to lead the way because it has the best economy at the moment. and when it does, it will stimulate economic activity through the rest of the world and the world -- rest of the world will come along. it's the most important thing we should have been doing in the last eight years and the most important thing we should

overnight following the fed decision.t australia and new zealand, yields down 10 basis points. the certainly the momentum coming through into treasuries and equities to get -- today. david: some substantial market moves in australia. thank you. let's turn our attention to the u.s. where president trump has promised to go all the way to the supreme court after he traveled -- his travel ban was blocked, which he called terrible and says america looks week. ramy inocencio is standing by. another blow for the white house. ramy: second blow for the president, second of two. he was hoping he would get this through without a scrap, especially after narrowing the first version down to what is the second version, but no avail. the president was in nashville, tennessee, talking to people at his rally. it was supposed to be something positive, policies from obamacare and tax policies, cutting those, but it turned out to be pushing back against that hawaii court that said this was not going to happen, that everything he was going to

next hour is going to be rock 'n rolling, fed time. >> fed time. >> as we work our way through powell and yellen and fisher. >> we'll recap all of them on "closing bell" today at 3:00. >> love that show. >> let's get over to headquarters. sc scott wapner and "the half." ♪ >> welcome to the "halftime report." i'm scott wapner. top trade this hour, why the tom tramped financial advisor in the country according to barron's thinks the trump rally is far from over. how high can stocks climb? steven weiss, steve lebenthal, jon najarian. let's begin with stanley chais from stanford. andy, welcome back. >> thank you. thank you. >> how much higher do you think the market can go? >> it depends over what time frame i suppose. but my guess over the next couple or three years is another 50% or something like that. would be my guess. i just give it to you mathematically. but with interest rates at 2%, and maybe they go to 3%, but you could argue with -- i'm talking about five- and ten-year rates now, not fed funds. you could argue that multiples should be up at 25 times earnings. and pretty easily

fed governors and eventually a fed chair. i'm trying to make a clever segue. thoughts, briefly, on the makeup of the fed in the next 12-18 months, and the importance of that? austan: tremendously important. the stars have really aligned for president trump, that he could have maybe up to five governor appointments, including a vice chair for supervision and a not-too-distant of a time, the chair of the fed. i think you will have to see , the trump people are going to put some attention to that. thus far, we have heard virtually nothing. they haven't suggested any names or's adjusted any style. what do they want from the fed. the last we heard about the trump opinion on the fed was really in the campaign, criticizing them for keeping rates low. anhink that is going to be apparent tension. i wouldn't be surprised to find that over the coming appointments, the trump administration discovers what many previous administrations have discovered, which is -- when you are in office, you like the fed to be loose and not tight. so i thi

did the fed trump trump?ettingresident his big address, sci-fi, rate hike expectations jumped to 80% this month. go to your bloomberg article your work, go to the drop down on the ois, more short-term contracts and it is going to show you we are in 90% on the probability of a move in march. this time last week, when matt and i were going downhill fast, it was 40%. the move has been massive. that is why we showed you the pictures earlier on. 's director at london and capital. are you surprised at the speed of this move? >> i'm surprised. i know inflation is up across the globe everywhere, including the u.s., but that has been happening for a couple of months already. ashok: in the market, i think, is now getting into it in the upturn in this inflation is going to ease because the pmi data coming out across the globe is indicating --ther very good pmi's. it's indicating inflationary pressures are going to keep coming up, so it is time for the market to respond to that by saying it is time for the u.s. to begin

look at fed funds, two day and one week, what you'll notice is that fed funds started a rally. see that? they went right back down after the testimony. when it goes down, that is pricing in more fed. what isn't happening with bad things in the other markets. dollar index, yes, it's down but not much before the text. twos and tens are going a bit lower. but, by far, the piece de la resistance is the dollar. not only can the u.s. economy handle normalization, it needs it. kudos to the fed. let's forge ahead with more tightenings. >> rick giving the fed a good grade. i'm writing this down. writing this down. >> now we have to make sure it doesn't have what brian just expected, such high expectations but no action. >> yeah. >> like every weekend for me. high expectations, no actions. >> of course, we wait the q & a as well, which will be crucial. that's coming up from janet yellen in about 45 minutes time. >>> meanwhile, commerce secretary wilbur ross going on the record exclusively with cnbc with the markets fearful about a trade war with chiena. new commerce secretary said we hav

president of the minneapolis fed dissented and did not think the fed should raise rates now. in february committee issued a statement saying he voted not to change rates then. wages are not rising. there is no wage inflation issue. i bet one of the things he was arguing today at that meeting when he voted to not raise rates, a big deal at a meeting like this. rishaad: thank you. kathleen hays there. let's get to first word news headlines. here's rosalind chin. rosalind: president trump has promised to take his new travel ban all the way to the supreme court after the order was blocked by a judge in hawaii. the president slammed the ruling as terrible and said it makes america look weak. it is the second setback for the president one day. earlier, the house intelligence committee said there is no evidence to support his claim that the obama administration tapped his phones. >> the order he blocked was a watered-down version of the first-order. that was also blocked by another judge. that should never have been blocked to start with. anger andchina's insurance has denied doing

decision came fed with one dissent from the many appellees fed president or it i wonder what will happenh future rate hikes. the nine dots are lined in the median, one in a quarter and won and a half percent range. will this tight clustering hold in the future? >> as you have mentioned, there has been a dissent in yesterday's decision. it has been a dovish dissent. my guess is that we will continue to see the dot plot tight into the upside, rather than to the downside. i mentioned that the risks are given where policy has been the last few years. i think this is only the word fed hike and about 11 years. inare still very, very low terms of the absolute level of interest rates. i think until we get to 2%, it is difficult to see how interest rates can remain so low. earlier,u mentioned wage inflation. some people argue that there are so many people who can rejoin the labor force, that there will be no inflationary wage pressures. what is your take on those comments and how do you expect that to affect the rate hike pace now? subject thats a has been discussed widely. i them not sure that a

we have the fed in play. this trump budget skinny as it might be, equities are rising and yields are falling. it will go up toward the end of the year. u.s., there is a little room. maybe not that much. -- we are looking for a tax plans. .t is mostly about shifting that is to be expected but nothing major yet. pboc noten you see the matching the fed that tinkering with that lending rate, what message does it send to you as a multi-asset manager? what go see your head? -- goes through your head? economy, it is a balancing game. we think it will remain a balancing game for a long time. you want to look at the market technical and strategic. chinese equities are attractive and we are positioned for that. it could be different two weeks down the road. it is we have this blog, a must like twitter, you become fixated with it. let's worry about brexit and the potential outcome. manager, the triggering of article 50, we have yet to do it. would you and your team coverts can -- brexit, are you how concerned are you fr

the fed certainly in focus. >> fed front and center, oil prices as well. we'll get that report today at 10:30 a.m. eastern time. last week, we saw a surprise build and oil started to move sharply lower. last night we got an inventory report showing a surprise draw down, now oil is rising again. it's weighing on the market. >> the fed, 2:00 p.m. the press conference at 2:30 p.m. all tof live of it live on cnbc. stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence. bp engineered a fleet of 32 brand new ships with advanced technology, so we can make sure oil and gas get where they need to go safely. because safety is never being satisfied. and always working to be better. >>> good morning. ready, set, hike! i get it. the fed widely expected to raise interest rates at today's meeting. will janet yellen then though drop hints about more aggressive moves for the rest of the year? >>> tax day for the white house. parts of president trump's tax return form from 2005 were leaked. turns out he paid $38 million in taxes on

is hybrid fed system. he board of governors supposed to be seven members, only five sitting right now, that may be is on theur soon, one way out, this will give a chance for president trump to make new and when he if chooses. they do sit in washington. they are the most powerful within that system. they are appointed by the president and confirmed by the there is a process similar to that for say supreme there.udges in place then there are 12 regional banks, sort of artifact of discussions long, long ago about regional wer versus power and federal interest versus interest of farmers in kansas or something like that. are in fact anks privately held, you are right. there has been debate over of her too much influence bankers on the boards of that oversee those institutions. keep in mind, only five of those 12 regional bankers any given time are sitting on the committee that sets national policy and ultimately when it comes to national policy, it is the fed chair, which is keep in mind, only five of l those 1

gold prices advanced following the fed division -- fed decision.western energy a highlight citigroup raised its recommendation to buy. joe: let's look at the bond market were a lot of the bond action was significantly lower both in the two-year and 10 year interval. the 10 year yield has been in that range from long time. back down to 2.5. let's look at the intraday on the 10 year yield. not much of a mystery there, you could see the drop right when the minutes came out. nothing janet yellen said was perceived as being more hawkish or anything like that. let's look slightly longer, six months on the 10 year and we've been in this range for a long time, topping out at about 2.6% and then it goes to about 2.3%. we will see if perhaps we have topped out again for the time being. scarlet: take a look at the dollar, everything is green except for the box with the u.s. dollar. the biggest decline since january. if you look at the individual one pair that has been performing strongly all day long even before the fed announcement was the mexican peso. it j

the fed really cannot anticipate what might happen. they can't act before the trump administration and the congress make their move. so they're not changing their forecast on that. but i think there may well be a tax cut, and that would make the economy even stronger and make the fed raise rates faster, but that's not a certainty. and the fed will not indicate that until after it happens. >> how will the u.s. monetary policy affect japan and other asian countries? do you think this will affect policymaking at the bank of japan? >> well, i think the continued solid growth of the u.s. economy, which allows the fed to raise rates, is probably good news from the bank of japan's point of view. it actually helps to widen the difference between interest rates in the u.s. and japan. that weakens the yen and stimulates the japanese economy. so i think the bank of japan will be happy. that will help get japan back to 2% inflation, which would be good for everyone. >> finally, what are your prospects for future u.s. rate hikes, and when would be

the meeting takes place the day after the fed.ld tighten, and with the bank of japan having a loose policy, you get more of a divergence. we should be celebrating if you are japanese and into inflation. vonnie: you make it so hard for me. that was a wonderful presentation. you made a wonderful case. but danni. for the premiere of our fixed income show starting at the top of the hour. join us again monday. ♪ jonathan: with 30 minutes dedicated to fixed income, this is bloomberg real you. coming up, the final word along to chairman yellen. after a week of fed speech shakes of the treasury market. french presidential candidate gains ground in the poll has issuance. . is said toche bank be reviewing options to raise capital.

i think they discounted it because of the fed itself, which is that the fed has signaled these thingsd over again , and then pulled the rug out more than three times. when they do that, the market says, ok, well, they said this, but i do not believe it. that is problematic for the fed if the markets do not believe it, so i think they took this as a serious meeting. the data kept coming in good. they decided they better get the markets ready for this, which is what i think we saw happening the last couple of weeks. >> the other very important part meeting is-day the fed comes out with its summary of projections, the famous dot plot. consensus inarrow december for three interest-rate increases in 2017. do you think that consensus might get bigger or moved to four rate hikes? what would you be voting for? what would your dot look like? on the: mine was noise high end. i think there will be more of a consensus closer to the three. i think they are going to be very cautious. what they have seen since the elections and the markets, the economies, is that, in fact, the s gone up, the forecas

the market leading the fed?ohamed: i think we are, and we saw it as early as two weeks ago when the fed implied the probability of a hike was only 30%. it was a very coordinated matter to triple net probability, so by the time it hiked two days ago, the market reaction was favorable. so yes, so i think we are seeing the fed's transition regimes, and it will be leading rather than following market. jonathan: robert, you are looking at what most people have characterized as a dovish hike you completely disagree. robert: i do. inghink the fed is rope a dop the market. when you look at the dots and how they have progressed, the participants of the meeting that wanted the under as of december 16, you had six of them that wanted the under and five that wanted the under. when you come to this meeting, you have five that want the over and three that want the under. so in other words, the balance. the medians did not change but that participants shifted. i think janet yellen also hinted at this when she described gradual

the fed meets in washington on wednesday.ere's what a chair said about this. >> certainly wants to keep the good times rolling. too fast. there's not much danger of that and i think the primary motivation is to get back in the normal range so if things go badly they can cut. it can't be genuinely very worried about inflation at the moment. reporter: benefiting from other positive factor. wall street expectations aligned with the direction the fed is signaling it is heading now. a survey of 45 economists shows that the estimate is for three quarter-point rate hikes in 2017 in march, june, december. that is up from the two hikes predicted as early as february and matches the median number that policymakers forecast in a december of last year. what could really surprised the market is if it gets more aggressive and points to for interest rates increases in 2017. many economists say the fed is not ready to go yes. -- yet. david: so much to consider out there. underpricing political risk in the eurozone. , senior investment strate

trump was criticizing the fed for cow towing to the fed. he wants loose policy now, too. >> you said the dollar. this is a guy who got the call in january. he's now fired his national security adviser to ask what a strong dollar means for our economy. we know that happened. don't think that there is any plan by his part whatsoever. i don't think he knows what he's talking about, to be frank. >> in terms of currency. donald trump doesn't. >> i don't think he knows what the cycle means. >> forget that the president. let's talk about the fed. if it did you tell move, their confidence is shot based on people coming out this week making such direct comments about the fed not moving. it's happening. we went from 20 to 80 plus in seven days. >> what about the that banks? >> should you be buying the bank that's the the fed does hike? >> i think banks are okay. the banks traded well. it was a pretty benign tape and it nung there relatively well yesterday. i think it is such that the banks can rally. if for whatever reason it did sell off. he will ab

the fed is behind the curve. jonathan: what is the story for bunds?had a story about rates over the ecb. here is the message from the ecb, the governing council expects the key interest rate to remain at present or lower levels and well past the horizon of net asset purchases. a question to you, we have learned from sources familiar with the matter that there was a conversation with the ecb that they might raise rates before qe ends. do you see that happening? >> it could happen, but mario draghi was asked that question. his answer was circumspect. i think that is where the situation is at the moment. they could do that. the rate could be raised, but i have a great difficulty accepting that. that would be like the fed doing things with its balance sheet long before it raises rates. is it possible? yes. is it likely? the answer is no. jonathan: how far is the bund market behind the curve? 48 basis points? which one is anchoring which? is the bund market anchoring treasuries? >> treasuries are the anchor for the world. i don't believe that the ecb would

the fed meeting.ight range of 41 points. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. >>> more squawk on the street is coming up. >>> in a little less than an hour, we may find out who is behind the yahoo hack that impacted millions of users. a top official says the hacking to be discussed was, quote, done with the backing of a nation state with others saying the nation involved is russia and as cramer and david said in the 9:00 a.m. hour, russians aren't necessarily coming. they have already been here. >> they have. he pointed that out. in '95 they were concerned about the russians. yahoo was

the feds might raise rates too quickly.ys exchange views on economic outlook and the development in our country. it will be my objective to exain u.s. monetary policy and to try to make the same points to them that i've made here already today about what the outlook is. for the monetary policy in the united states. either gets fair to say that the global economy is doing better. it is growing a bit more strongly than it was perhaps the last time i got together with my counterparts. the risks do somewhat more balance. is a very significant amount of risk. i am sure that those will be discussed as well. >> you said you and your colleagues aren't making assumptions about fiscal policy but many other people are. the business and community complex. it was at the highest level since 2005. are you concerned about the effects on the economy and some of these policies on infrastructure spending don't get enacted or are delayed. >> we recognized last time that there have been an improvement in business and household sentiment. it is

then chicago fed president charles evans, boston fed president, eric rosen grin, and san francisco fedresident john williams will be in front of the microphone today in an interview on cnbc yesterday, steve liesman asked fed vice chairman stanley fischer if the average fomc member forecast for two additional rate hikes this year is just about right or if the markets should prepare for something else. here's what fischer had to say. >> that seems to me about right, that is to say that's my forecast as well. but, yes, you have to be certain -- you know for sure that you don't get everything right, particularly about the future. you need to think about what happens if the economy is growing more slowly or the economy is growing faster. >> so fisher says the fed's current outlook has not changed much from its march meeting. he also adds that the central bank is closely watching policies coming out of the trump administration. i think fed funds futures now pricing in a 53% probability of a move in june. >> the interesting take away of yesterday, not just from mr. fisher but all sorts of fed

and the tories fed hater ron paul who wrote a book called and the fed will join us and how it could cost a flash. whether he he were still in congress would vote for the gop health plan. markets spikes the normal -- the moment they were there. and now post janet yellen post they were hoping most of these gains here it was a hundred and ten. we are watching it very closely. s&p up to 20. nasdaq up 45. she seems the economy improving and a modest rate. it is nearhe 2% target that is not new. the victims here and there are victims get to the u.s. dollar. they immediately plummeted to a two week low. against a basket. look at this picture. i think it was a two week low against the yen. at the fed is following the right path what is the right way to do this. they plummet seven basis points. they are pretty bullish about stocks. unless intending to go to the safe haven. let's get right to the insider. did a small part of you kind of expect that it might have been a little bit more hawkish. we have strong economic data. they think what's good today is that they were optimistic. they have confid

i am interested in the fed. we like the fed.he wall when it comes to angela merkel meeting president trump tomorrow. these two people could not be more different, but terribly important. we get the budget finally out of the trump administration, at least the outline, so we will have some sense of where he is headed with the economy. not taking on the position's into a week promising headlines. here is where we stack up 30 minutes to the open. s&p futures go nowhere. you have the yield up one basis point. the fluency of .3% as the pound is near a three-week high. ftse is up .3% as the pound is near a three-week high. volatility under 13, a slightly , copper catching a bid despite a stronger dollar, but oil off when 3%. that is your macro look as we look ahead to the fed on wednesday. julie hyman joins us with individual movers. that woman reading her magazine as the car drives itself. software fors autonomous driving. intel is buying the company. you can see mobile ishares surging by 30%. this is the biggest purchase until has ev