the committee -- fomc statement. the committee made the fundamental decision to continue indefinitely using our current operating procedure for implementing monetary policy. that is, we'll continue to use our administered rates to control the policy rate, with an example supply of reserves so active management of reserves is not required. this is often called a floor system or an abundant reserve system. under the current set of operating procedures, as outlined in the implementation note released today, this means that the federal funds rate, our active policy tool, is held within its target range by appropriately setting the federal reserve's administered rates of interest on reserves, as well as the offer rate on the overnight reserve reverse repo facility, without managing the supply of reserves actively. as the minutes of our recent discussions have indicated, the fomc strongly believes that this approach provides good control of short-term money market rates, in a variety of market conditions, and effective tra

times of economic uncertainty put a premium on the clarity and predictability of fomc policy. we are committed to clearly explaining what we are doing and why we're doing it, both regarding the path of rates and also regarding management of the balance sheet. we believe that this transparency is how we can best contribute to macroeconomic stability. thank you and i'll be glad to take your questions. reporter: so you said many times recently that policy was still accommodated and that it needn't be so. you've said recently that policy was still accommodative and the economy didn't require that anymore. is that still the case? if so, how do you justify the removal of the need for some further interest rate increases, basically are we at neutral now, or does the economy still need accommodation? mr. powell: we think that our policy is at the appropriate point. we think our policy stance is appropriate right now. we do. we also know that our policy rate is now in the range of the committee's estimates of neutral. so we think our policy stance is appropriate. imfrter: last week, th

there are 17 fomc participants. we just had an fomc meeting a week or so ago. we'll have another one in march. the preparations for the one in march are already ongoing. we know that things we're going to look at doing. the staff is working on analysis and memos. we're all tracking the path of the economy carefully. in a few weeks we'll be sending out documents to all fomc participants and staff at all 12 reserve banks and here individual governors and staff will start working on that meeting. then we'll do -- i talk to every participant before every meeting. so a great deal of work goes into thinking through, a lot of it happens before the meeting. there are conversations, memos back and forth. what do we think with interest rates? we consider -- our mandate is maximum employment and stable prices. in the labor market we look at -- just countless indications of the health of the labor market. the unemployment rate. it is the employment rate. it is the participation rate. really importantly in the united states participation just means what percent of working-a

last month, we conducted press conferences after every fomc meeting. tos change will allow me frequently explained the committee's thinking. last november, we announced a plan to conduct a comprehensive review on the strategies, tools, and practices we use to pursue our goals. this review will include a broad out of eight to a range of stakeholders across the country. -- the february monetary policy report provides additional information on these discussions. >> thank you, chairman powell. policyd that the normalization she may end sooner with a larger balance and previously anticipated. as i understand, it will be -- en by >> that is correct. increased frome $43 billion in 2008 to $2.8 trillion in 2014, if i understand correctly, before falling to $1.6 trillion currently. , and howve an estimate the prices affect this amount? reservesantity of before the financial crisis, mr. , so aan, was $20 billion relatively small amount. the important things we did after the financial crisis was requiring bank institutions to hold quite large buffers of highly li

nejra: market stand at a critical juncture ahead of today's fomc minutes.ets are flirting with levels some argue are deeply overbought when investors digest the meeting notes, any crack in the dovish narrative could send markets tumbling. has been combing through the markets. what have you found? >> we have quite a few of them because the doves fueled the major rally. that all stands to be undone. indexes are flirting with the 200 day moving averages. nasdaq 100 just crossed the threshold. chart watchers would argue this is a fragile point. tech stocks are rallying that have yet to confirm and over trend. sitting on the 200 day moving average, emerging markets have drawn a lot of concern. increasing numbers of strategist saying this rally is running out of steam. the dovish turn also echoed and central banks throughout the globe, ecb, pboc among those that followed suit. flirting with the 200 day moving average, the stocks euros 600 very touching them. most of these have yet to break out in a meaningful way. copper, the same situation. it's not just equitie

we're looking at the minutes from the fomc january meeting.y shed some light on the dovish tone. runoffvored ending the of their balance sheet, but expressed uncertainty on whether they would raise rates again. let's bring in the head of u.s. strategy at bank of america merrill lynch. what was the number one takeaway for you from these meeting minutes? mark: i think the most important take away was the signaling they had about the balance sheet. most think it's appropriate to end the balance sheet this year. he don't know when that will be. there was a presentation that suggested the latter half of this year, which raises risks they might announce something in june and implement it in july. or, they could way deeper in this year. outlook for the path of policy and interest rates, the committee seemed divided. they indicated they were happy to be patient right now and wait for further incoming information. it seems they need more time to assess the economy and figure out how some of the big uncertainties on the horizon will play themselves out.

the fed in its fomc minutes pointed out a disparity. financial markets tend to be uncertain from time to time, but the core economy seems to be doing nicely. how do you explain why the financial markets are nervous and the core economy seems to be growing at a good rate? jay: the financial markets beginning in the fourth quarter got more volatile and seemed to be pricing in a pessimistic outlook, which seems to be rooted in concerns about slowing growth and a related concern of the ongoing trade negotiations. but if you look at the incoming data right through the end of the year and through the beginning of this year, you don't see any evidence of a slowdown, so we have factors pointing in different directions. by the way, this is not uncommon. this happens not infrequently. what we have is we apply risk management principles. we're not just concerned about the baseline case. we're thinking about the risks and using our tools to address those risks. in that case, what does it mean? there's no preset path for rates. there never is. there

, the rate increases from the fomc meeting.ere certainly is risk because the 10% gain to start the year has been very strong. but i do think there are areas. the other area that i think managers -- you mentioned it coming in. managers are putting more and more work into a.i. and putting more capital to work there. i think that's going to be a strong trend for 2019. maria: your focus is hedge funds. that's really where you focus. your latest numbers show what, that they saw a good month in january. >> yeah. as i was saying, the hfri gained nearly 4% to start the year and this was the best single month since 2010 and the best start to the year, the best january since 1992. maria: so the whole market did well. it was a very strong month across the board in january. hedge funds included. because they had been under-performers again, i guess last year and for a couple years now, ken. >> yeah. actually, last year was a pretty decent year even though it was a year that i think we describe with defensive outperformance because of the s

dollar fluctuating ahead of fomc minutes in a few hours. with me is president of blue line futures.hing is in the minutes as we anticipated to be, being patient, changing the language in the balance sheet, so on, will be dollar move? guest: i think the dollar would ultimately weaken if it is in line with what we have seen. however, i don't think that is a case. i think the fed finds a bit of middle ground. historically, especially during the tightening cycle, they use the minutes and some of the meeting itself to really middle out the sentiment. i think if it became more dovish, i think the minutes .2 more of a middle ground, and really that could support the dollar. one of the things i am keeping an eye on is this run in gold. i think the fed metals it out again with these minutes today. wtiie: a little while ago, was down 1%. is this the continuing story as saudi and opec boost output cuts? guest: if you take crude itself and take away the global growth fears and focus on just crude oil, we are going into a seasonally bullish time of year for energies, and ultimately those drops i

during the press conference following the fomc's recent meeting chairman powell provided clarity on the fed's plans to normalize monetary policy saying the ultimate size of our balance sheet will be driven by financial institution's demand for reserves plus a buffer so demand doesn't require us to make frequent sizeable market interventions. estimates of the level of reserve demand are quite uncertain. we know this demand in post crisis environment is far larger than before. high resolve holdings are an important part of the stronger liquidity position that financial institutions must now hold. the implication is that the normal saigs of the size of the portfolio will be completed sooner and with a larger balance sheet than in previous estimates. banks reserve balances grew from $43 billion in january 2008 to a peak of $2.8 trillion in 2014 before falling to $1.6 trillion as of january 2019. during this hearing i look forward to understanding more about what factors the fed may consider to be the appropriate size of the balance sheet, what factors affected bank's demands for reserve and

2018 as the labor market kept strengthening and economic activity continued to expand strongly, the fomcally moved interest rates toward levels more healthy for a healthy economy. at our december and january -- september and december meetings, we decided to raise the target range for the federal funds rate by 0.25 percentage point at each, putting the current range at 2.25% to 2.5% at our december meeting we stressed that the extent and timing of any further rate increases would depend on incoming data and the evolving outlook. we also noted we would be paying close attention to global economic and financial developments and assessing their implications for the outlook in january, with inflation pressures muted, the fomc determined the cumulative effects of these developments, along with ongoing government policy uncertainty warranted taking a patient approach with regard to future policy changes. going forward, our policy decisions will continue to be data dependent and take into account new information as economic conditions and the outlook evolve for guide posts on appropriate policy,

for guideposts on appropriate policy the fomc routinely looks at monetary policy rules that recommend a level for the federal funds rate based on measures of inflation and cyclical position of the u.s. economy. the february monetary policy report gives an update on monetary policy rules. and i continue to find these rules to be helpful benchmarks but of course no simple rule can adequately capture the full range of factors the committee must assess in conducting policy. we do, however, conduct monetary policy in a systemic manner to promote the longer run goals of maximum employment and stable prices. as part of this approach we strive to communicate clearly about our monetary policy decisions. we also continued to gradually shrink the size of our balance sheet by reducing our holdings of treasury and agency securities the federal reserve total assets declined 310 billion since the middle of last year. currently stand at close to $4 trillion. relative to the peak in 2014 bank reserve balances within the federal reserve declined 1.2 trillion a drop of more than 40%. in light of the sub

the picture may be very different later today when we have those fomc minutes.nese exports have had their biggest fall in more than two years on the back of weak chinese demand the nikkei's -- has more details. >> japan's finance ministry said japanese exports in january had fallen 8.4% from a year earlier to around $50 billion, which was a steeper decline than economists had expected. it was the sharpest drop since their 10 measures fall in october 2016 now, exports to china who is japan's largest trading partner in asia, plunged more than 17% to less than $9 billion dragging down the overall figure. shipments of electrical machinery and semiconductor manufacturing equipment were the hardest hit. now, economists say the fall was due to a combination of weakness in china's domestic economy and uncertainty over the u.s. trade war -- u.s.-china trade war. meanwhile, japan's imports fell a modest 0.6% in january widening the trade deficit to around $13 billion it was the fourth consecutive month of overall trade falling into the red however, tokyo markets shrugged

comes out governor brainard's comments in december leading to the rate hike like many, all of the fomc doesn't look or sound like it does today, but that's not an antagonism, that's actually a positive we want them to flow with the economy. but the problem is we want more than that, and if we do, we're going to be disappointed in what we hear. david, back to you >> rick, thank you >>> we're getting breaking news regarding amazon and its hq2 here in new york city. deirdre bose has more. >> amazon says it will not build a headquarters in new york after mounting opposition, according to a company statement and multiple reports we have reached out, we'll update when we hear back of course, david, there has been a lot of opposition from local politicians and advocacy groups to the project last week "the washington post" reported that amazon was reconsidering plans to open up there, hire as many as 25,000 employees, putting huge amounts of investments the controversy was a lot surrounding the tax breaks and incentives that new york wanted to give amazon remember, there were high profile name

we're talking about a voting member of the, the fomc, questioning the credibility of federal reserve.t mean to you? >> i think he was referring to the december rate increase we saw. charles: right. >> absolutely i you agree with him, the fed should not have raised rates in december. in fact they shouldn't have raised rates in september. the economy is showing signs of instability, signs of weakness bubbling under the surface. we can't wait for the economy to fall off a cliff for the fed to stop this tightening cycle. they need to realize fed policy comes with a significant lag. i absolutely agree with the more dovish sentiment, the fed needs to back off. but the outspokenness of doves at this point i think is doing the fed a little bit of disservice, it is creating a lot of chaos in the market, trying to figure out, what does this mean? does this mean the fed now bypassed neutral? is the risk of recession rapidly rising? the fed is talking about potentially two additional rate increases the latest summary of economic projection shows. so there is a lot of uncertainty and uncertainty i

later in the week, minutes from the fomc january meeting, existing home sales, and durable goods dataill with me is michael, doug peebles, and krishna memani. krishna, i want to begin with you and the skipped call option on the 81 in santander in spain. how concerned are you? krishna: it is the first, so if you are a typical european investor and got into the market with certain expectations, you are disappointed, flustered. how could they do this? if you are a long-term investor in credit markets, have been doing this for a long time, this sort of thing happens all the time. we have had this with tier one's, lbo's, a company would promise all sorts of things. as an analyst, you have to expect what is the most economic thing for the issuer to do? this was, indeed, the most economic thing for the issuer to do. they are fiduciaries. jonathan: this is a market that is now maturing? doug: one great analyst in london said just that. if you look, from an economic standpoint, were they supposed to do this? yes, they were. did they know it was going to surprise the market? they probably did.

we saw a pop in expectations right after the fomc meeting last week. the scheme of things, it will be hard to see sustained rise and inflation, especially given the global environment. if you look at the revisions you saw from the european commission on growth and inflation, they are bringing down their inflation forecasts for 2019. i think that is what will weigh on u.s. inflation. jonathan: we will talk about that. jones, rajappa, kathy and diana amoa, staying with us. coming up, the auction block. hasobal first four bonds investors scooping up italian debt. that conversation is next. this is "bloomberg real yield." ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." to the auction block where you find another sign that the drug pocket is alive and well. clear channel sold $2 billion of bonds in the largest triple see a deal rated since september. it is spinning off of its bankrupt parent company. in asia, and auction of 10-year japanese bonds, the highest since 2005, one day before the central banks regular purchases. finally, italy surp

a day after we saw the fomc minutes, it basically said we are going to stop the balance sheet much earlier. we are unsure on rates. they are on hold. it looked like a quantitative tightening day. that tells me we are getting to that stage where everybody has rushed to the other side of the boat. i don't think it means much in terms of a trigger for us to see risk off. in this environment, without inflation spiking higher, without the threat of anything meaningful from central banks, i don't think that is going to last. jonathan: i am very sympathetic with the view of all three of you. it has quickly become the consensus view that everyone wants to fade this strength. and makes me wonder whether the pain trade is the risk rally continues. jpmorgan writes that a more accommodative fed, combined with minimal inflation, excessive capital markets, and inflation in equity markets should be supported with a continued benign credit cycle in 2019 and beyond. jpmorgan lifting the outlook for returns of junk bonds even with spreads where they are right now. what do you think of that? >> if you look a

he is currently a voting member of the fomc.blem with your feed, president bullard. let's see if we can make sure that mike is still working try one more time. >> he's not working. >> jim, i'm so sorry we're having a problem we'll try to get that fixed. we'll hold on for one moment while we do this steve, what's so important about this number -- never mind. his mike is working. jim, we're getting to you. >> oh, great >> let's look at this number this was a much stronger number than anticipated what do you think immediately as a voting member on the fomc? >> my immediate reaction is that this is very strong for this month. but you got this big revision for last month so -- and you've got some noise in this data broadly speaking aempbl over the last three months, that's a strong jobs market but we knew that i think in this stage in the cycle you know, looking at low unemployment job growth is maybe a backwards looking signal >> i have to say, you look confident and comfortable right now. you were somebody who had been saying for a

he is the only permanent voting member of the fomc presidents of regional banks do you think what heituation where we have to wait a lot longer to see data before the fed does anything else? >> i agree with him. i think the fed is on pause right now. they continue to reiterate that word "patient. they've removed the language that says they expect further gradual increases. yeah, i think they're on pause right now. you know, heading into this year, the fed and trade were the two biggest obstacles that were raeld holding the supreme court back if you remove them both, the market is going to rally i do think the fed is on pause right now, and really the biggest thing that we're watching right now is whether or not there's going to be a trade resolution that's positive >> all right you can argue that the sharp up turn we've seen in markets has been because of a softer tone from the fed and because of more optimism from trade. have we gone maybe a little too far too fast at this stage the market has really had a staggering move higher ever since christmas eve. >> i don't think so. we're s

we saw a pop in inflation expectations right after the fomc meeting last week.the big scheme of things, it will be hard to see sustained rise in inflation, as well as inflation expectations, especially given the global environment. if you look at the revisions you saw from the european commission on growth and inflation, they are really bringing down their inflation forecasts for 2019. i think that's what will weigh on u.s. inflation. jonathan: we're going to talk about that in just a moment. subadra rajappa, kathy jones, and diana amoa, staying with us. coming up, the auction block. a global first for bonds has investors scooping up italian debt. that conversation's next. this is "bloomberg real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." i want to head to the auction block now, where you'll find another sign that the u.s. junk-bond market is alive and well. clear channel sold $2 billion of bonds in the largest triple c rated deal since september. it's spinning off of its parent company, i heart media. elsewhere over in asia, and a

he's currently a voting member of the fomc. i don't know where to start, jim. that? do you have faith in that number or faith in the employment report we saw a couple weeks ago? >> that was a bit negative but it's volatile, we'll see how it plays out going forward. >> did you and your colleagues spend time thinking about that >> there's mixed signals in retail sector. you had walmart reporting pretty positive. >> let me ask you in a nutshell. some people thought the put was back on after the selloff in december and the change in stance from the fed. is that a realistic view point and is there a fed call that if the trade talks go well you'll be back on dours raise rates >> the normalization process in the united states is coming to an end on rates, we've already raised rates about 225 basis point from where they were initial ly on th balance sheet we have that decision the next couple meetings so we're in a good place, we've had a lot of success, people said it couldn't be done we got the interest rate back up we got the balance sheet -- reserves are down 40% f

later today, investors would be calling for the latest minutes on the fomc meeting.>> these will be the minutes from the meeting where the fed pivoted to a policy on rate hikes. it also revised policy on making it more sensitive to changing economic data. investors looking for clues about just what it would take for the fed to resume rate hikes or how long it's going to be on hold in a reuters interview, john williams said it would take faster growth and higher inflation to change economic outlook. and there's the question about how small the balance sheet will get, how fast it will get there, and what it will look like once it's there >> what we're looking to do is create a whole plan that will bring us to our goal which is a balance sheet no larger than it needs to be for us to efficiently conduct monetary policy. but to do so in a way that doesn't put our goals at risk or result in unnecessary market tone >> evercore said the fed would likely go big, slow, and mostly shorp. that means a big balance sheet gets there slowly and mostly shorp inside the balance sheet

. >> of course, we have the fomc minutes as well this week. there seemed to be more consensus on ending the runoff of the balance sheet this year, but at the same time, they did not totally rule out potential rate hikes. >> know, they did not totally rule it out. the thing to remember about the minutes is it is a summary of the discussion, not necessarily the determining statement which we saw at the end of january. just one anecdote -- it does also underscore how influential points much at turning of the cycle we need to listen flagged who have balance sheet normalization. there is a core group of fed officials that really matter, particularly at turning points. the minutes attempt to represent the views of the group. i would go for what the key players themselves say and what the fomc statement said. obscure how decisions are actually made. >> thank you so much for joining us. bloomberg opinion columnist dan moss. still ahead, and update forecast from chinese search engine by do. we will look at the forecast later this hour. coming up next,

stock pools could not have gotten a better gift from jay powell wednesday and the fomc.y are going to pause, they say their balance sheet is going to shrink a lot less. that concern about liquidity is off the table. morning's jobless numbers were absolutely great. what i love to see is strong payroll and a rise in the produce rate, and that participation rate went up to a six-year high. and that is very favorable because that is -- that puts less pressure on the labor market. we saw a pick up in unemployment, less tightness means there's less chance of inflation being. transmitted through the labor market that was great news. the report they came out was also better than expected, especially new orders. we do not see any signs of that recession that was so in the air at the end of last month. caroline: certainly the word recession coming off the agenda but i am looking at a performance we have seen since ish,ary as the fed got dov jose about the economy returning an united states, the best performance since the 1980's. i'm looking at the bes chart. is that sustainable? >

tilt with the fomc minutes, not to mention nine fed speakers this week? >> we do.with the minutes. the risk with the minutes is they are a summary of the discussions that took place. you will hear from some voices that perhaps were not as clearly dovish as the fomc statement and as chair powell was in his subsequent press conference. this is the trick with the fed. there are a lot of voices. not every voice matters at a particular juncture. george orwell said all animals are not equal. i would really look towards rich clarida at the end of the week and then chair powell's testimony to the senate and house next week. is it possible the minutes are not the biggest thing in terms of what we are waiting to hear from all of these speakers? we are waiting to hear from mario draghi as well as the rba ministers as well to give us an idea whether we are seeing the synchronized turn to dovishness. minutes are the hefty us to material -- heftyist material. thrust, thecure the tilt that is initiated, stewart stewardedpherded -- and shepherded. there is a core group of three or

ondo get fomc minutes wednesday.hould they be dovish, that could support the euro versus the dollar. how much more pessimistic will be ecb b at thise point? 0.8% at $56 a barrel. this is just about a three-month high. i want to stick with the commodity story. interesting breakout we have seen, and that is precious metals today rallying. trading at its highest since april. the white line is palladium. not the common metal you talk about every day. it is trading at a high. it is the metal used in cars to cut emissions. tighter than the gold market. that has helped drive up these gains. i want to talk about bunds today. we have seen yields rising. yields right now trading at about 10 bits. by the end of the year, they expect yields to fall to a -10 basis points. we have to go back to september to see the last time it was like that. investors might have to start paying again to old german debt. guy: you wonder whether the trade narrative could be the catalyst to send us into that position. thank you. let's get to that ve

investors trading ahead of those fomc minutes that will come out meeting.the we have gains not so muchor china, but emerging markets overall, up more than in a month. emerging markets very sensitive to moves that are both dovish or hawkish. dovish in the case of the pause getting a bit of a boost. it may continue based on some of the charting. let's take a look at emerging markets relative to other global markets in the bloomberg. this is a chart out of the disastrous fourth quarter. what we are looking at in yellow, the s&p 500, the purple the dax. and white, china, and in blue, the emerging markets index. there is a huge selloff. china, the dax, and emerging markets overall had been selling ahead of that. the s&p 500 at an all-time high. it is those emerging markets were covering the most. that speaks to that dovish stance we have seen more recently out of the fed. as to what is moving the markets in the u.s., let's to get some of those movers for the nasdaq. apple up 1.1%. there is a report that apple is said to target combining the mac by 2021. and analog devices up 3%. they booste

. >> we are looking at the minutes from the fomc january meeting that shed some light on the dovish turnit will favor ending the runoff of the balance sheet this year but they express uncertainty over whether they would raise rates this year. what was the number one take away you? , the signaling that they had it on the balance sheet. the fact is most appropriate to end the balance sheet this year, we don't know when that will be. we know the balance sheet unwind will stop. >> to us it sounds like the minutes were dovish compared to the statements area it sounds like there is some bias towards hiking. the timing of the next move is uncertain. >> china offering [indiscernible] this comes as the latest round of high-level talks taking off in washington this morning. we already knew china was offering to buy more soybeans back in december. what is the latest offering from china? >> this is from bloomberg news, china offered to buy 30 billion more. ,hat does it mean, what time what commodities? if you are talking about 2017, about well $24 billion. that was the last clean reader. their deman

yesterday the fomc minutes came out a little more hawkish than some expected.here's no sense whether the fed has actually paused in hiking rates or whether or not they will resume, plus the runoff into the balance sheet. some expect that to stop by april. in we have the 10 year yield the biggest back up in about three weeks, pressuring stocks perhaps as investors contend with the idea of the bank may not be on a long, dovish pause. if we take a look at a chart in the s&p 500, the white is the s&p 500, the blue the 10 year that we have here the 10 year yield flat over that time, but the expectation the fed is hiking rates, we have the s&p 500 climbing. here's the move back up and rates we had today. a small move down for the s&p 500, but if that continues it really could play out. as theys trading lower were cut to a hold. i dax laboratories down. we have some big tex selling. that is somewhat worrying -- big tech selling. that is somewhat worrisome. for the nasdaq 100, we are going to see an interesting chart here. and the six-month chart, we see the nasdaq 100

the fomc members, including daily and liens, are talking about maybe we should allow overshooting anday be one way to do that is to talk about average inflation targeting. not targeting to research, but if it is over a longer time frame, it could be fun. vonnie: is in the idea of it being average for a certain period of time in the either? -- ether. torsten: absolutely. that is been the understanding. we should never expect inflation to go up two and then go sideways. it is always the case that we fluctuate around that we have not been above two for a number of reasons. we haven't had enough demand. we haven't been close to full capacity. it is notanswer is too different from the framework they have today but the idea is that they want to open up their idea to say maybe we should allow osu. if it comes, it is ok. we don't need to aggressively raise interest rates because we are allowing overshooting as long as the average inflation rate is around two. vonnie: dawn of the other things that caught my eye is mary daly said it matters more than now. more than one? -- when? torsten: you ha

hints from fed speak and fomc minutes. more signs the central bank is causing.ernie sanders announced his presidential bid while elizabeth warren proposed universal childcare funded by a wealth act. the u.s. is asking china to keep the value of the yuan stable. romaine: the fed has a new mantra, patience. take a listen. >> the common sense risk management suggests patiently awaiting greater clarity, and approach that served policymakers well in the past. >> the approach we need is one of prudence, patience, and good judgment. >> we would be well served if we paused and were patient for some number of months. january's minutes are out tomorrow and we will see how patience is influence the central bank's thinking. our u.s. economist for bloomberg economics joins us now. really going to be a blockbuster day where we learn something we have not heard already from powell one of the other members? yelena: we heard a lot from them since the december meeting when -- since the december meeting they change the view and the january meeting is obviously important. the minut

there are two open seats on the fomc, so an opportunity for the to exertse to continue influence or getconomists on there who see the economy the same way. how soon might we see those seats filled? kevin: it is definitely something we are actively and so on, andle the timing is not something i'm necessarily involved in, but there are candidates being vetted and talk to. we are moving forward with a plan to get people in their this year. caroline: thank you so much for your time, kevin hassett. great to have you. mci is set to announce whether they are increasing chinese representation in the industry. this is bloomberg. ♪ y. this is bloomberg. ♪ romaine: quick breaking news here. kim jong-un is basically telling his own news agency in korea he is bound to meet with donald trump again in the future. we don't have any more details, but we will bring them to you as we get them. turning back to the market, tesla is not going to be the only big announcement today. msci, the index tracking companies, announcing it will potentially increase the weighting of chinese industries. the ceo says bei

the december dots spooked markets with the prospect of twx in 2019 the didn't convey the fomc's own uncertaintyn those forecasts. richard clarida is trying to come up with a better solution. carl riccadonna joins us now. saying el-erian today losing it completely is not necessary. what do you say? i think probably he would be in line with the majority of fed watchers and economists who think this is a valuable tool. flaws, has its inherent we cannot print in three or four dimensions, we only have a two dimensional plot where we can put these interest rate forecast down, but this is valuable for transparency. i have to agree, we should get rid of the dot plot. it is useful for market participants, the fed, and for signaling intentions to the market. vonnie: so you disagree with mohamed el-erian. looking for even more transparency, and it feels like they are guarding the market by the hand, why not attach names to the dots? kevin: you can have too much transparency to a fault, especially if people start running surveys to see who was the best forecaster last year -- don't listen to certain offici

results the fomc hiking in now., at least for i think this positive momentum in the market is because we climbed these walls of worry. broadly, it is probably how much of the u.s. growth flow, earnings flow, etc., which is hanging there. >> optimistic ringing from the market. >> we did trade higher on the nasdaq, but it closed near a flow of the session. over the last half hour, they saw a paring of those advances from the afternoon. >> between yesterday and today, we arranged the hiccup last week. here.ll a four-day gain >> s&p now up about 17% from the december low. that is exactly as you are saying, one by one, the bricks thin of the wall of worry are falling out of place. >> abigail, what are you watching? >> i am looking at the momentum about. are talking the s&p 500 up 17% from the december low, erasing last week's blip to the downside. this is a chart we have looked while. not for a s&p 500 is at the green line, showing that the index is oversold. above the red line, it says it is overbought. last year it was overbought for a while and then consolidated in range. last time we w

are covering the fomc january meeting.fficials widely favored ending the runoff up their balance sheet this year. they expressed uncertainty over whether they would raise rates again this year. what was the number one take away from this meeting? >> the most important for me was the signaling about the balance sheet. most think it is appropriate to end the balance sheet later this year. we don't know when that will be bullied of the balance sheet unwind will stop. >> it sounds like these minutes are less dovish than the statements and recent communication from the fed officials. it sounds like there is some bias towards hiking. the timing of the next policy move is uncertain. offering -- comes as the latest round of high-level talks kick off in washington this morning. we already knew that china was offering to buy more soybeans. what is the latest offering from china? >> this is a report that china has offered to buy 30 billion more. what does that mean over one time period? in 2017 we sold them about $24 billion worth of