it tells us investors are seeing a hawkish tone from the fed around the fomc minutes. we are seeing a mixed reaction from the bloomberg dollar index. initially -- it is spiking higher, a moment ago it was wavering, but up about 0.2%. those are relatively hawkish signals from investors. when we go across asset class, we look at gold and the next, -- the nix, we see that gold is trading lower. we also have the dollar rallying against the safe haven. investors are not seeking the safety haven of the yen. we havege reaction, but a great chart that check -- that takes on the balance sheet. this is a long-term chart going back to 1992. in yellow, the fed balance sheet, $4.7 trillion over the last seven years. the extraordinary measures that they took to save the financial system. and in blue, the things that pressed that rate down. now the question is whether they will unwind the competition of -- of the sheet and balance sheet, and that will naturally raise rates higher. >> let's get a check on the bloomberg first word news with mark crumpton. mark: president trump condemne

all this after those fomc minutes came out at 2:00 p.m., so investors having a bearish take away from that meeting, not ready for rate hikes or the idea they can unwind the balance sheet. lower, down about .5 percent. bearish action once again for stocks. of course, out of those fomc minutes, one of the big locus is wasne of the big focuses the balance sheet. this is a longer-term chart from 2007. in yellow, we have the dead balance sheet. extraordinary accommodation that helps save the financial market. while that accommodation was coming on, not surprising that we had rates go to all-time lows. a real reversal. what idea is if the fed does look at its balance sheet, perhaps we are seeing some idea that investors are not they, but it's worth noting 10-year could still go lower. the balance sheet could stay even and there may not be in unwind any time soon, as had been true for the last several years. scarlet: thank you so much. argentina's largest union gearing up for a one-day general strike tomorrow, retching up pressure on the center-right government just six months before midterm

market plunged after the fomc minutes came out.oncern about what is going to happen down the middle league, the miami marilyns -- miami harlins and charlie gasparino is joining us, next. charles: breaking news a shake up at national security count, pano bannon is removed. rick perry and others were added to the group. charles: market came out the gate, with a gain on the adpjobs report, that morning respect sense market soaring, 263,000 well above concensus of 187,000, the jobs created point to long-term economic growth, manufacturing and mining, they are not going to get back to glory days, but i can see where years ahead are more glorious. the rally of derailed. it ran into a brick wall, after federal reserve minutes suggested more aggressive action to begin to undo merge accommodation that took their plan sheet on $4.5 trillion in august 2007, market was not prepared, we're ready for one or two or three rate hikes but for them getting rid of assets in 2017, no one was ready. they said they will warn the markets well in advance b

we've had other fomc members talking about the balance sheet.ught dudley's comments were quite interesting. i thought the fact that he was talking about unwinding the balance sheet and rate hikes as potentially substitutes for one another. the median number of hikes in the dot plot for next year is three again. the fact that they are talking about normalizing the balance sheet and having those three hikes is an interesting set up. nejra: michael grady and kit juckes stay with us. is the reflation trade set to fade? pimco and jeffrey gundlach, who both predicted last year's uptick in price growth, think u.s. inflation may have already passed its peak. this is bloomberg. ♪ nejra: you're watching "bloomberg surveillance." let's get the bloomberg business flash. here's sebastian salek. sebastian: deutsche bank has seen several senior employees leave after paying out compensation for previous years. at least three executives have left in asia. in january, europe's largest investment bank scrapped bonuses for top executives and slashed pay for other e

be happy fomc -- we have the fomc on wednesday, there is plenty of data from caixin on chinese pmi andervices this week. building up later in the week to big u.s. data wednesday and friday, the big payrolls number, so there is a bit for traders to get through. the french presidential election, the last vote on sunday, it is probably not a weak really want to take a huge amount of risks. the base case is for emmanuel macron to win the vote. you would be brave to be taking any big risk position i think this week. betty: absolutely. you might want to stand back for a moment. thank you so much. let's look at the week ahead on wall street. it will bring a fresh round of earnings, apple, facebook, the lord -- the latest job numbers and the fed meeting. chew on. investors to let's get more with su keenan. su: there is a big question on the direction of the market, where do we go from here? in the bloomberg, the s&p 500 was up 1.7 through thursday. looking at what we will see in terms of going ahead, this is a bullish signal for the s&p 500. the rally we have had with the french election that

is aere the fomc is, it good place. a few more hikes seems reasonable.nger than we expect, we go two more. what tells you it is time to raise rates? it took you a long time to move because people said nothing changed in the economy between december and march? on the same trajectory, growing above trend, 30 job gains, and we have been trying to communicate if we stayed on that trajectory, we would remove monastery policy a cop -- monetary policy accommodation. the economy was performing along with what we anticipated. reporter: would you consider moving in may, or do you want time to see what happens with this rate increase, to see if there are changes in the economy ? there is no press conference. william: there is a great urgency for monetary policy, because the economy is a great -- growing a bit above trend, and inflation is below target. if you look at the underlying pace, personal consumption, it is 1.75%. there is not a huge rush to tighten monetary policy quickly. have the same time, policy is accommodative, and we are close to full employment. it

we heard the fed chair talk about the balance sheet to we heard the fomc talk about it as well.are looking here at a four-point short -- $4.5 trillion balance sheet and all that comprises it. it is huge what do we know about their plans to unwind it at this point? guest: what we know is that they are at a very preliminary stage right now, so obviously, they are having discussions, and this is something we will be looking give any minutes to clues about the timing, the composition, which asset class they want to go with, and any clues about when and how they will proceed will be very useful, so we heard from the new york fed president in the bloomberg interview, and he suggested we might see something at the end of this year, sometime this year, and that for rates,ubstitute so we could see a pause. g#btv 717. is we have heard from a lot of governors, a lot of fed presidents over the last few weeks. is there a consistence -- a consensus emerging. yelena: i think especially for third quarter of this year do not matter that much because this is something we see year over year recurr

central -- technicals and central-bank balance sheets, impact direct or impact on credit markets, the fomc had a direct impact. the ecb has purchased investment-grade corporate debt and as we talk about central banks unwinding policy down the road, that may be more impactful. jonathan: where is the biggest distortion in europe? in the credit space or in the sovereign space? of btp's, 200 basis points over bunds. where's the biggest distortion? carl: i think you can make an argument either way. due to ecbervalued buying, in my opinion, but on the margin the sovereign base is just too low. jonathan: too low for stock in the sovereign space so the big question is whether you want to be active or passive. last week we had a lot of active managers saying it is time to be active. ,s a guy that sense of etf's you give me a reason to be passive as a fixed income investor. fran: i think without hedging my response, using fixed income dts, even passive ones -- etf's, even passive ones does not mean you are being a passive investor. , andan look at the lineup there are a wide variety of products and

about technicals and the central bank balance sheets and the indirect or direct impact on markets, the fomc has had an indirect impact, bringing the whole thing down. the ecb has purchased investment grade corporate debt. we talked about the policy down the road, that may be more impactful. jonathan: where is the biggest distortion in europe? in the sovereign space where you bonds at0 year twentysomething basis points, 10 years and 90 something basis points, and even the likes of 200 basis points, incredibly low nominal he it where is the biggest distortion? you could make an argument either way. opinion,overvalued, my probably on the margin, the sovereign space a little more. it is just too low. jonathan: the big question around this table is whether you want to be active or passive. last week, a lot of active managers saying it is time to be active. as a guy who sets up ecs, you can find a reason to be passive right now? without hedging my response, using fixed income etf's, it does not mean you are a passive investor. you can look at the lineup on bloomberg and search for fixed income an

a professional background and not academia, or is it actual change that is shift from a dovish to fomcthe lindsay -- >> i do think academia versus non-academia is that important. i think communication is job number 148 a chair, so whoever president trump nominates better have a clear way of communicating policy. sealed's are going to go higher, they do not. is that going to continue? >> i think with the weight of money chasing fixed income assets, it will be a problem for things to move materially higher. we have friends in europe where you talk about the european political risk. the spread of italian 10-years versus 10-year relative it moved, but to where it was in the real european crisis, things over there look very expensive to me. if you are going to get the move, it could come from europe, but qe dominates everything. when we get the signal to taper, that could be the pain trade. >> at this point, you sound very defensive. the question i would ask of you is if the reach for yield is intact in a huge way, in a way that many people said would end a couple of months ago. >> i do thi

when you talk about technicals and central-bank balance sheets and their indirect impact on markets, fomcas had an indirect impact on markets, bringing the whole curve down. the ecb has purchased investment grade corporate debt. when we talk about central banks unwinding policy down the road, that technical may be more impactful. jonathan: carl, where is the biggest distortion in europe? visit the credit space or is it in the sovereign space where you can see 10-year buns at twentysomething basis points? even the likes of 20 basis points are credibly low nominally? where is the biggest distortion? carl: you can make an argument either way. both are overvalued due to ecb buying in my opinion, but probably on the margin sovereign space is just too low. jonathan: too low. the big question around this table is whether you want to be active or passive. last week we had a lot of active managers saying it's time to be active. as a guy who sets up etf's, you give me a reason to be passive right now as a fixed income investor. fran: first of all, i think without hedging my response, using fixed in

china markets are joining in on this regional shout out on the back of those fomc statements overnight. chemchina is closer to its $43 billion acquisition of syngenta after the eu competition authority approved the deal him a but china's capital outflow restrictions could mean it is the last megadeal for quite some time. our gadfly columnist has more on this story from hong kong. are we sing this latest step by step towards the ultimate conclusion of this deal, why are they so key to chemchina? >> because i think these are the two big approvals that would have gotten the deal through. now they have the u.s., and in europe. you only have mexico, india, and china left. mexico and india have not stood in the way of big mergers. india has asked for concession sometimes, but generally they don't get in the way, whereas china once this deal. china has to cope with the basic dilemma. it has such a huge population and only 9% of the world's land. we have heard the sentiment coming through from chinese corporate, mumbling or capital controls have put a stop to their ability to do deals. is it r

down, jeffreyps lacher, nonvoting member of the fomc, resigning after disclosing his role in an allegedlyive information in 2012. how will this disrupt the central bank? last, general motors, unfeeling a new version of the sedan today. we speak to mark royce, the executive vp, later in the hour, on the challenges for the auto industry. -- joe: let's look at where the major averages a stand. lot happening. the dow, s&p, and nasdaq, barely changed. the s&p 500 flipping positive right now, nasdaq down ever so slightly. let's look where there is a lot of direction. details, down a little bit on the worst day since early august of last year. the reuters report said that a takeover process, the potential takeover process is slowing down and it could take a few more weeks, suggesting that a price may not be agreeable to all parties and that a lower price could be agreed on. two potential suitors, of course, are michael kors and coal -- and coach. we also have ralph lorenz on pace for its worst days since early february after the company said that they would be closing onir flagship polo store fi

how does the fomc feel about this?t know how they feel about jamie dimon and his letter because we haven't spoken about that. but the general feeling is too big to fail has not been solved. and one of the reasons is what ithkari cites, that when comes time to make as a holder's, bondholders never do. who will make them give up -- even if you did turn holdings into liabilities, the next bank they plea from. the fed and most people believe that you need more equity capital, which is the point kashkari is making. jamie dimon goes on to make a point that maybe we have too much capital requirements, but what that comes down to is how much capital you have -- not how much capital you have come up at how you pay for a great equity capital is a different way of getting the capital. you can do it through deposits, loans, or through equity. it doesn't mean you can't lend the money. joe: i know these regular three debates are very important -- regulatory debates are very important but i'm fascinated by the fact that neel kashkari

he's the vice-chairman of the fomc and where he is, the chair usually is.ming soon. she said in her humphrey hawkins testimony that they would be talking about it in meetings to come, laying out plans, and at some point they would give us all what the plans are. it may be too early to get what the plans are, but the minutes will tell us the kinds of things they are discussing, how they would go about it, whether they approached stopping reinvestment of treasuries, mortgages, or both at the same time, how quickly they want it wind down, with a cell, with their just be a runoff? the kind of detail they went into. big economic report of the week will be the jobs report, i would think. what are they going to be focusing on? hourly earnings for something else? equity investors want the goldilocks environment, right? not so much growth, but enough areustify occasions that we still recovering. they want goldilocks, which is onewhere between 100,000, hundred 50,000, maybe 200,000 jobs on the upside. nothing too exciting. sequential hourly earnings from the last yea

the minutes show most of the fomc continues to seek gradual rate hikes in the months to come. conducted in what they call a passive and predictive manner. the minutes show a split over the prospect of inflation moving above the fed's 2% goal. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. guy and matt. matt: thanks for a much. from the best day in three weeks that was the worst, the roller coaster investors road yesterday when the s&p 500 index whipsawed late in the session in its biggest reversal of this kind in 14 months. mark cudmore is in singapore. from looking through your blog this morning it seems you see this move as a very bearish move for equities, explain. mark: i think it is. it is the timing of how it happened, it is not where we are now. we have not broken the key ranges. , its not about where we are is how we got here. the point is that yesterday afternoon we were breaking higher. if there's -- i look like they were breaking up at u.s. equities. there is a strong adp employment repor

the big question on mark -- trump might not be what he thinks about specific people on the fomc.t might be what his policies are combined with his stance toward the u.s. dollar actually mean. a lot of people have pointed out tension between desiring a weaker u.s. dollar and a stronger u.s. economy. peopleaybe calling other a currency manipulator or not is interesting and everything is interconnected. thanks to tracy alloway and mark cranfield. you can follow live market insights on the bloomberg mliv blog. it is fascinating and helpful. we have people up all around the world, people are putting in content from hong kong as well as from princeton. it is very late in new jersey. coming up on the show. we are live in istanbul ahead of the critical vote that could reshape turkey's democracy and with markets. later we are in a preview of bank earnings season in the u.s. as today is a doozy, jpmorgan, city, and wells fargo of report today. you do not want to miss these numbers. this is bloomberg. ♪ matt: it is 8:45 a.m. in the morning and they german capital of berlin. the sun is shini

the question of the fomc?. now that i am not on the fomc, it really doesn't change anything -- any of the conversation at all. on theink that people committee find it easier to do their job without having a collective -- having elected officials commenting so directly on monetary policy choices but they are independent. the use that independence and they will do what is best for the economy. alix: fed chair janet yellen might do that but the conversation is if she doesn't want of getting renominated in 2018, the next person president trump will put in won't have that kind of independent mindset and will have a closer relationship with the white house in a credible it -- it really issue. what are the chances of that? >> i think that yesterday's comments from president trump about chair yellen were quite -- i thought they were -- i welcome them. i thought he seemed more open to the idea of re-nominating or reappointing her. for a good reason. if you look at the outcomes the fed has enjoyed, unemployment is low,

they said on monetary policy, he's with the consensus of the fomc. >> that calls for two more rate hikesnd a piggy theback on reduction. it says it's riding back rules and the departure of donald trump may be the successor. there are several candidates, those have been ruled out or withdrawn themselves. so the fed, the former governor or as president trump would like underwriting back regulations, for "nightly business report," i'm steve leishman in walk. >>> the payroll growth was strong across the board. goods producing firms added positions, business services, but the biggest growth area came from small firms, many with fewer than 50 employees, kate rogers tells us why small business saw such big job gains. >> reporter: small employers with lower than 49 workers have been steadily adding jobs. 18,000 in december. 52,000 in january, 104,000 in february and 100,000 in march. main street optimism hit record highs since donald trump was elected, holding at historic levels for the national independent business and separate business for wells fargo. they hope they would usher in a new era o

it was a slow build at the fomc minutes when the most recent came out at 2:00 eastern. was a time when the market was digesting the information and then debbie wasserman schultz a slow roll south. we've just -- we lost everything, you know, all of the gains we had. >> if that is the case -- by the way, it didn't help oil which was strong was weak on production data. >> right. >> a couple of other reversals. it feels like the old day where the fed could come out and move markets with every utterance. in this case it is the fed minutes. there you have it. >> interesting day. meanwhile, retail continues to struggle against the trend toward e-commerce. morgan stanley highlighting a surge in store closure announcements, over 2,000 announced for the first quarter this year compared to 1,000 last year and only 100 reported in the fourth quarter of '16. >>> plus rbc capital markets is expecting things to get worse for various brick and mortar retailers, naming nine brands it expects to have the largest revenue deceleration this year. top of the list is a center retail group, un

this puts him at odds with the rest of the fomc. that far left a diagram on your tv screen, you can see that 11 out of 14 official c three rate hikes this year. jim bullard will speak in about three hours in melbourne, look maybe elaborate on this, and then janet yellen in monday, talking about public policy and will take questions from the audience and responding on twitter. we will get more of a sense where the fed is heading. it was a great interview. always great to talk to you. thank you so much. kathleen hays joining us from new york. coming up, can sales be sustained. we look at the nuts and bolts of the u.s. auto industry. this is bloomberg. ♪ shery: this is "daybreak: asia." in hong kong. ramy: let's look at the latest business flash headlines. south korea, google has offered a one trillion won investment in screens for its smartphones, the equivalent of $880 million. lg display officials declined to confirm the offer, but google is expected to release a second version of its pixel phone later this year. shares at $15 new t

that is ahead of the fomc march meeting notes.ing uncomfortable truths when it comes to china's economy. this is bloomberg. ♪ haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. avestors are looking to highly anticipated and potentially very controversial report when it comes to households in china. led byy the study southwestern university has fundamentally changed the way one should think about the economy. tom mackenzie spoke to the economists uncovering some uncomfortable home troops. >> the income a quality is really bad for chinese economy, not for instability for social instability, but for china's economy. china's government has done not enough not sufficiently to help the poor by transferring income to the poor. i give you statistics come up 40% of chinese government spending are using as transfers. the united states number is 36%. other european countries are higher. >> what have you learned about asset allocation, where chinese money is in savings? .> housing so for example, overall average asset ine hou

we should mention you are also a member of the shadow fomc, right?d members of congress is ithat the fed is doing must immediately embark on a strategy to unwind the assets and this portfolio. it will not do that. does that mean that there is financial dislocation? so the portfolio right now, the fed's portfolio, was so large. there are over $2 trillion excess reserves in the banking system. so the fed will set out on a passive and predictable unwind. so it will not sell assets, it just will not reinvest the proceeds from maturing assets. because you're starting out with so much excess reserves in the banking system, it should not because ifocations, you ask how is the fed financing its oversized balance sheet, it is borrowing from the banks. simply stops reinvesting its assets, those will naturally roll off the just --nd be banks will the banks will just lend less. i would note that since the fed minutes came out -- that now it is public knowledge the fed is deliberating on rolling out a program to slow down its reinvestment's -- the bond market and

yvonne: i wanted to get your take on these fomc minutes.en talk about tricking the balance sheet and we thought reaction when it comes to the yield curve. it steepened on that news. if you take a look at the terminal, you can see that take up higher between the five-year and 30 year spread. this has been a flattening curve story the past three years. is this a significant, long-lasting move? depends on theit follow-through actions of the fed. today they reiterated two additional hikes this year and shrinking of the balance sheet on a measured basis later in the year. they need to see follow-through in the economy. feeley do that, they will comfortable the economy can withstand rising interest rates. their comments on the equity markets are that they are concerned about overheating. that is why they put multiple tools on the table. bob was talking about policy promises to be delivered. to to be delivered soon ignite this animal spirit in the economy. we are seeing trump do some things on the energy side. we know he will be moving on regulati

he is not just head of the new york fed, he is also vice chair of the fomc.id, at some point if the economy goes around 2018, we will start to let the balance sheet go off, and then we will take interest rate increases, ofause it will be a removal accommodation. the chairman said that was a discussion about balance sheets, so we are looking very closely in the minutes to get a sense of the tone of that conversation, whether there was conviction, but deadly really outlined an interesting roadmap. it was great. betty: it certainly was. dan moss thank you. looking at the bank of japan, releasing their survey on business confidence. we will have immediate reaction. this is bloomberg. ♪ ♪ yvonne: this is daybreak asia. betty: a quick check of the biggest flash -- business flash todlines, san miguel plans invest $34 million in heavy industry as they want to ride the wave of economic growth. money will go into an oil refinery and integrated still complex and an ocean side power plant. the sales will rise 20% to about $1.2 billion. yvonne: china's agent day group gro

the impression that the consensus was looking to him to be appointing more hawkish members on to the fomcaccelerate the run down of the qe and the balance sheet and push for higher interest rates. that is what caused people to think, especially when they came in, in asia and europe. becauseextra pressure the lower yields are favorable for dollar strength. also the effect we have seen across the global market with much lower yields, everywhere in europe. italy, itance and shows that the effect that those comments have. mark: the count down to the french first round continues. so many wonderful charts, this week. them, riskt one of reversal on the euro pound. ould a le pen victory reinvigorate sterling? projecthole of the euro comes into doubt if marine le pen is winning. candidate had this big surge in the polls in the last week or two. and there anti-euro is a possibility we could have the are right against the far ,eft, both pretty extreme views neither our favorite -- favorable to the eu or the european union. that could be damaging to the markets if we get that kind of a situation. the

. >> investors looking at the fomc meetings as for clues as to what the fed policy path is.s us that the fed path for tightening is clear. we have the unemployment rate at 4.7%, the dual mandate for the fed is unemployment between 4.5% and 5%, that is on course. below the pc, the fed preferred inflation measure, should be at two pour cent at 120%. -- should be a to present but at 1.8%. but at one be 2% point percent. +++ march. this is our best chart -- 75 -- on top, is the fed balance sheet , $4.8 trillion and the 10-year gilts on bottom, the fed has said that an equivalent to raising rates could be to unwind the balance sheet. interesting to see whether investors accept that different. what a dramatic session. >> thanks to abigail. do not miss our scores of interview with the president of argentina at 3:30 eastern. this is bloomberg. as the april showers of yesterday happen, we are bloomberg world headquarters. i'm vonnie quinn and this is bloomberg markets. with the bloomberg first word news. mark crumpton. mark: there's been a cabinet shuffle in president trump's securit

some fomc members are concerned that the stock market is overvalued.ll of that weighed on stocks yesterday. >> thank you. when you have accuweather, you can put any city in. i was checking out augusta. augusta, georgia, just to see. >> yesterday the practice rounds got rained out. >> today, sunny, but windy. cooler. 64 degrees. tomorrow, sunny, breezy. awesome when there's wind. >> awesome for us. not them. >> not for them. then the way the trees are set up. you see these guys, especially around some of the -- on the back nine. they're looking around. you can't tell what's going on up there versus down here. and it affect par 3, jordan spieth. remember 12? sunday, 78 degrees for the last round. warmer. should be great. will we get when jack tees off with gary? can't run that? we don't have that, but we have corporate stories. several deals in the works. unilever plans to exit its spreads unit, which includes brands like country crock and i can't believe -- not i can't believe -- >> it is. >> i can't believe it's not butter. >> a double negative. >> tha

: looking at bond markets and rates in the u.s., we saw last week a host of voices coming from the fomc, seemingly talking about when we will need a faster pace of rate hikes. what is your base case, and how much does it matter? what's your big story, your big picture? >> i think the fed probably moves three times. i don't think it really matters whether it is three extending into next year or two would be a story, four -- somewhat less so. most fund managers cannot make money for a very short term move around the fed or interest rates. we are more interested in bonds and equities, which have a lagged effect. three times as our expectations. we had a dovish high-class time, and it will be interesting to see with the minutes of it is reinforced. -- looking at the curve, we are seeing a real flatness. morgan stanley saying the curve will stay. wells fargo says it will flatten. this is the narrowest it has been for quite some time. does that perpetuate -- the bond market is not that worried about inflation, is it? >> i'm going to give a third answer, which is that it will steepen in the fu

we're seeing some movement in yields after the fomc minutes yesterday.0 year yield is holding in range. the possibility it might break below 230. it did not. crude oil holding up, even though we saw a big build in inventory. 51.56. as president xi meets with president trump come ecb offshore is as weak or strong as it ever has been. no real movement. see the markets, we can corrina is up 1.7%. a lot of money flowing in out of tech bonds after the cap was removed by the cnb. let's get to abigail doolittle. today, a lot happening in d.c. little bit ofg a intraday volatility. this is the small-cap russell 2000. yesterday, the russell 2000 had been up 1%, then down 1%. specialist onange a technical analysis conference said it was a reversal he cannot remember seeing in a long time, but worried him. we have this volatility breaking to the upside for the russell 2000. investors do not like the uncertainty of the news coming out of d.c. they seem to be a little put off by the fed yesterday. , this is ae a look chart of the s&p 500 since the election. morell, an

. >> among other headlines out of the fomc minutes, the fed is likely on a faster pace with rated hikeshead. some members are concerned that the stock market may be overvalued. add it all up, we have a little bit of a hawkish reaction from the fed. never -- investors never like to hear the fed commenting on the stock market, the stock market valuations. unusual. >> unusual. i think overall -- >> are they usually right? maybe. >> a bit hawkish in tone. not in terms of the short-term or rate hikes, which still sat around three for this year, but more hawkish in terms of the long-term, in particular what they will do with the balance sheet. >> then we have to start contemplating that normalization what will it look like? will they focus on mortgage-backed securities? will that influence the mortgage market? will they focus on other bonds? >> the mechanics of it are complicated. the division that exists was also clear in the minutes. we finally got to a semic semi consensus about interest rate hikes. on this, this is something we have not started thinking about, and i don't think they start

in minutes, the march fomc meeting is expected to be released tomorrow.vin cirilli joining us from the washington bureau. let's talk why the visit of the king of jordan. it will be a press conference in the east room with the president and the king of jordan. what can we expect? a lot of this i expect will settle on security the middle east? kevin: people say this is going to be the main topic of discussion. we don't have word yet whether there will be that official press conference tomorrow but it will ca off's series of international business with foreign leaders president trump is doing this week. and the big one on everyone's to-do list, china's president xi inping, and will arrive florida on thursday and friday after he finishes his trip to denver. -- his trip to finland. david: why is he going to helsinki first? unclear, but has drawn raised eyebrows from folks in washington because if you think back to what the two topics of main discussion will be this week, it's all about national security as well as trade policy. earlier today, president trump r

they have the may fomc meeting, then the june press conference.nnual testimony before congress in mid-july, then if she speaks of the jackson hole congress, that would be late august, so there will be lots of opportunities to finalize the plans clearly. david: thank you for that. for more on the fed balance by head ofe joined macro strategy at green capital. george magnus is still with us. there are two different kinds of securities, treasuries and mortgage backed securities. it is unclear what the plan is, but some fed governors saying we treat them all the same. are they all the same? >> no, they are not the same. newfed lies 20% to 25% of mortgages. reinvestmentat come at there could be a problem in the mortgage market and we could see spreads move higher, which then has a knock on effect that is bad for banks. it may also slow down the housing recovery. not is a significant part of the u.s. economy. >> right now, we are 4% on the 30 year mortgage. to 4.5%, that becomes a big damper. they have to be careful with it. jonathan: we can talk about

half of the fomc members apparently did this. now we are having increasing concerns that may the agenda is getting bogged down. before thex reform august break or stimulus in 2017, both looked to be in jeopardy. so policymakers may be dolling back the implicit fiscal nudge in their forecast. pimm: i like that, fiscal knowledge. that is another two words that we have to add to the lexicon. carl riccadonna. now let's get a check on first word news this afternoon with mark crumpton. mark: the pentagon says u.s. forces in afghanistan dropped the military's largest nonnuclear bomb on an islamic state target in the country. spokesperson said it was the first ever combat use of the bomb which is air force calls a massive organization air blt bomb or mother of all bombs. he said the bomb was dropped on a cave complex to believe to be used by islamic state fighters your the border with pakistan. in syria the u.s. military's is a misdirected airstrike killed 18 allied troops fighting isil. coalition aircraft were given the wrong coordinate

do we have to wait closer to the june fomc meting? >> that may be the case. what seems to be happening in relation to the dollar and fed, it's driven by two factors. one is the timing of the next rate hike by the fed, which could become more of a driver for the currency as we move closer to the june meeting. at the same time it's about the forward guidance by the fed which has been at least historically the more important driver of the dollar. forward guidance for the time being, from what we heard from janet yellen is neutral. unless the fed steps up to the plate, like they did ahead of the march meeting and starts dropping very strong hints that rates will be going up, the dollar may remain that range, close to the multi-month lows. that said, i don't think the dollar is a sell or the downside correction will continue from here. if anything wlashg we ahat we a at is the performance of the dollar trade weighted index around the presidential election, and that compared to the historic performance looking back to the '80s. how the dollar trade weighted debt be

that is what we do at every fomc meeting. things proceed as you expect, you would be in favor of normalizing the balance sheet by the end of the year. a number of decisions must be made on how to do that. one think that people want to know, when would we get that announcement of how the fed is going to handle the balance sheet? george: i don't know the date of that. you saw in the minutes that we began that discussion with the staff, helping us understand, and discussions lead to more questions, so i think we want to be thoughtful and continue to talk about what we think the implications are, what the timing would be, and all of that happened in the context of how we see the economy unfolding. we have not made a decision about when, but i think as we continue this discussion, you will see the minutes reflecting this. michael: later rather than sooner? ms. george my preference would : be that we nail down what we think about the relationship between short-term interest rates and that balance sheet, that we have to make decisio

separate statement last night, the fed says it is committed to maintaining the security of confidential fomcnformation. earlier this morning, dennis lockhart who served with lacker told cnbc the incident was regrettable. it could very well be inadvertent. a mind lapse where you're not thinking about the timing. this was a few days before the minutes were to come out. so the leak, as i recall the details, involved disclosing information in advance of the minutes which, of course, is a no-no. you know, jeff has been a -- for me, a valued colleague for many years. i just think this is a regrettable set of circumstances. >> the richmond fed says it is looking for a replacement in the interim the first vice president will serve as acting president. guys, back over to you. >> strange story. that was a wow headline yesterday. landon, thank you. >> thanks. >>> no real move in markets on the back of this, but a sign that this fed will change a lot in its shape. >> a lot of appointments. >> this is a regional fed president, it's not appointed by the president, but he has some picks, he was a noted haw

the minutes showed most of the fomc continues to seek gradual rate hikes. there is a split over the prospects of inflation eventually moving above the fed's 2% goal. gary cohn is set to support a policy that could see wall street firms separating their consumer lending businesses from investment banks. according to people with knowledge of the matter, the comments were made in a private meeting with lawmakers. they said the former goldman sachs executive favors underwriting securities. the u.k. prime minister has met with saudi arabian energy minister as she tries to convince aramco to pick london for its initial public offering. that is according to a u.k. government official. saudi's deputy crown prince says the sale could value the company at more than $2 trillion. analysts reckon it could be much lower. argentina's president said his government has no plan b for the economy and is confident he can slow inflation and stimulate growth ahead of key midterm elections. we are leaving argentina being a predictable and reliable country, but still there are min

a number of people on the fomc's were read. if you want equilibrium, it is a fact. bill doug bill dudley say it. from the lows, there is always a recession. roaming down the hill, you cannot stop it. dave: how do you invest? ft and people hide out in high yields, a pretty worriedry, if you're about rising rates, you might want to carry a buffer. 36 billion dollars into fixed income this year alone. we see investors wanting fist income to cushion against the volatility and equity markets. david: it is fair to say there's a flood of money of every sort. is that exuberance? are seeing a fundamental shift for efficient ways to handle portfolios from retailers investors, etf has grown up as a pool to navigate more efficiently. david: we hear there is a stock british market. it is essential you pick stocks. >> we are seeing the separation between out for and beta, people ha and beta, people want to pick. jonathan: how to invest around it and a lot of people talking about saving deflation, do you see it in the data? see it in the data. the data looks robust. job creation i

we are off session highs, mostly on the back of the fomc minutes.ion here, about 12 points off highs on the s&p 500 specifically. we should note that yields have gone higher, highest level since the beginning of the month. >> and the fed doing what some people probably would, disagreed. the fed commenting on equity prices. some fed members saying they looked a little high and maybe people were hoping that too much was going to happen with the trump administration. >> yep. interesting to watch the yield curve. it will be sums important. >> and tomorrow we will washington the meeting. fascinating stuff. >> thanks for watching "power lunch." "closing bell" starts right now. ♪ >> hi, everybody. welcome to the "closing bell" at the new york stock exchange. i'm kelly evans. >> i'm bill driveeth. this turned out to be an gresing day in the last hour. stocks initially popped on the back of that strong adp jobs number this morning. now we're off -- and i should point out the dow was up 190 points at its peak today. the nasdaq hit a record intra day but now w

federal reserve commented, federal reserve committed to maintaining the security of confidential fomc open market committee information. so that is an interesting development. melissa: hmmm. white house reportedly considering methods extreme vetting of visitors to the u.s. new details that could have travelers handing over much more than that passports. david: keeping irs in check, a method first designed to stop drug traffickers, money launders, a lot of small business folks as well. what is being done to fix irs over reach. melissa: susan rice speaking out to responding to accusations she inappropriate unmasked trump officials. this as republican leaders called for her to testify under oath. >> i'm not going to prejudge here, but i think every american should know whether or not the national security advisor for president obama was involved in unmasking trump transition seekers for political purposes. it should be easy to figure out and we will. anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan

fomc meeting tomorrow.have a lot of fed speak last week, and a big jobs report on friday so a lot of this, it is a push and pull that we are seeing. you are seeing the risk get ready for these events around the corner. vonnie: thank you so much. nejra: i will be watching for that gold -- golden cross. we are awaiting wilbur ross and ivanka trump at the white house ceo townhall, and also awaiting the president later on. you can catch every second on the bloomberg at tv . bring it up on your terminal. this is bloomberg. ♪ ♪ this is bloomberg markets. i am nejra cehic in london. vonnie: i am vonnie quinn in new york. julie: joining me from princeton to discuss which ones investors put the most money into his eric ball tennis. back at the first quarter, let's talk about some of the big .uperlatives about the quarter but the most flows? most goes to, vanguard value etf. is barelygue this smart beta. it gives you about 300 stocks on the value side. it has 98% correlation to the s&p. it is easy to understand,

he will be able to bring along one or two members of the fomc with him. i think the markets are pretty much pricing in the two rate hikes. when it comes to treasuries, i think there may be a little more there. because it is primarily all priced in, you really have to start seeing a lot stronger growth or perhaps more inflation in order to drive yields much higher than we are now. nejra: on that note of growth and inflation, i want to show you this chart. this was a great one. we've got the pce here versus the 10-year breakevens. what it shows you is that even though we saw the pce actually pick up, that core measure is not near the fence target. we then saw the 10-year breakevens come down slightly. peter, is this the market not being quite so convinced about inflation and is that why we seeing the flattening yield curve? >> spot on. it is one of the key things. when you look at it not only in the u.s. context, but when you look over in europe, the picture looks even worse. haverope, the breakevens been coming down significantly. in the u.s., they've been

would be interested to get your response to it via the neel kashkari's looking to get aim role on the fomc>> when some of the can't argue on or facts or analysis. they are left with trying to criticize the messenger. i interpret that as a white flag of surrender. the analysis stands on its face. >> this goes back a couple of years. people agree with you? do other people share your view? corrects several have reached out to me and said thank you for continuing to beat this trump, for continuing to wait -- to raise this issue. we keep pointing out the facts, showing where other folks are wrong. that we will motivate people. i like the fact there are some new stories coming out of the administration saying they're looking at a financial reform trying to address too big to fail. i think we all need to keep pushing in the same direction and let the american people decide. do we want to live where one of the biggest banks are supported by tax players implicitly. or do we want a more rational system? job to give them the facts and information's they can make that decision. >> if it is a responsib

fed fallout as markets await minutes from the fomc's meeting. jeffrey lacker resigns abruptly.

>> there is a narrative around you that neel kashkari is looking for publicity to steamroll on the fomc. argue --en 70 can't when somebody can't argue with the substance end values, they are left to criticize the messenger. i interpret that as a white flag. they can't argue with the analysis. the first time you have raised a question with two big to fail. many people will federal reserve governors or presidents agree with you? others in the fed share your view? guest: several do. my hope is that if we keep talking about it, we keep pointing out the facts, showing where other folks are wrong and we have solved this, that we will motivate people. i like the fact that there is some new stories coming out of the administration looking for financial reforms to a dressed to big to fail. i think we all need to keep pushing in the same direction and the -- and let the american people decide. do we want a more rational system where taxpayers are not on the hook? to give them the facts and information so they can make that decision. kashkarithat was neel speaking on daybreak america. oliver: join

lacker, this concerns the 12obe of these september 20 fomc minutes.y opened the floodgates again and added an extra layer of treasury purchases and listen to forward guidance. medley published a report in october, the day before a september meeting came out, foreshadowing this further swaying of easing in december. the report was called december band, and this erupted a while ago, they're been multiple investigations, the fed ran an investigation, the fed ig ran an investigation, jeff lacker talks about the fbi talks about seven district of manhattan. the plot thickens, and we find out more in the coming days. thank you so much, dan moss. oliver: still ahead, president trump's auto factory push may be in jeopardy at following yesterday's weak sales numbers. this is bloomberg. ♪ scarlet: in business, disappointing auto sales yesterday may signal the industry sales winning streak could be running out of gas. carol massar and cory johnson are here. we're joined by the ceo all the way from michigan. but the notion that this is technologytment in driven ch