the fomc decision is just under an hour. the fed is likely to project to raise rates only can 2022 at the very earliest. we will get the first economic forecast. that is probably the more interesting part of today's meeting. the forecast will be the first since before the coronavirus. let's go to tiffany wilding for more on what to expect. tiffany, let's get the yield curve control question of the way. askedalmost likely to be afterwards about it. globally say -- well he said? -- what will he say? tiffany: the fed will likely not announce a yield curve targeting type of regime today. we think there is a high likelihood they do moving forward. the reason is ultimately the fed wants to keep financial conditions easy. a way to do that is depend down yields. we think it will focus on the front end of the curve. the will look to go out to two to three year sector to implement that policy. is to keep financial conditions easy. one reason by they probably will not do it is because they are looking for more certainty around the fore

the truth is yesterday the fomc statement, there were no changes , there was no reference to the fomc-- the fomc statement last friday or any of the recent data. the committee is relying on him to be the spokesperson who comes out after the meeting to explain as clearly as possible what are the issues, where is the uncertainty, and i think he should be applauded for doing that in a tough job. lisa: it is especially tough. we are having a difficult time getting our hands around unemployment rates, with friday's much better than expected jobs report blowing away any expectations from economist, and today, i want to sit on this, the fact continuing claims payment almost one million higher than was expected at 20.9 million individuals receiving unemployment benefits in this nation. i'm trying to get a sense from you on whether there is any historical precedent and whether you have a sense underneath the data of what we are looking like in terms of labor market disruption? andrew: it is terrible, it is devastating. we have multiple sources of data, and in this case it is helpful to have th

uping up here, we will set the federal fomc division. power.ce of david: this is "balance of power." i'm david westin. the oecd's predict enjoyable global gdpedicting will decline 6% this year. on bloomberg surveillance today -- we have a vaccine or a medicine, we are in danger. obviously, the focus has to be on accelerating the research in order to get the medicine or the vaccine as soon as possible. when you look at the economy, do you worry about deflationary pressures? >> not the time to worry about inflation. right now, you throw everything you have got at the virus. it.hit you kill it. you win the war against the virus. you throw everything in terms of finance, in terms of budget resources, in terms of health resources, because the sooner you beat the virus, the less expensive the recovery will be. also, you will be able to cure the consequences of the virus itself in terms of unemployment and other sequels that it will leave us. good morning from new york. i am fascinated what was said at oecd about the amount of fiscal gdp.lus compared

most fomc members see rates near zero through 2022. the nasdaq bucks a downward trend closing above 10,000 for the first time. gold posts the biggest gain in a month. the yen advances on haven demand. and bank of italy's governor tells bloomberg there's no risk in using e.s.m. funds to weather the pandemic. this as multiple policymakers warn of the rising risk of deflation. manus: it's just gone 9:00 a.m. in dubai. 6:00 a.m. in london. we're digesting really one of these moments from the fed, nejra, whether it was truly a dovish message. we're not even thinking about thinking about the possibility of raising rates. so we got this jucks pox, q.e. forever -- juxtaposition, q.e. forever, versus the reality of risk for the world. as the number of cases rises, it is unsettling the markets. in excess of $2 million in the united states of america. so the message from the fed, battling against the uncertainty of covid-19. good morning, nejra. nerja: good morning, manus. the debate about yield curve control continues. we understood that the fed

they have the unemployment rate down 5.5%, but yes there's still only two members of the fomc participants who actually see anything other than a zero to 0.25%. so they're saying even if there's a strong recovery in 2022, they still won't move rates. they're going to that's a. >>> and the one more hag to do with how -- let me let you just. >> you know, they have times when they're lousy at predicting what they're going to do, in part back shocks come along, and in part because they gets stuff wrong. the reason i wanted to respond to this question, tyler, whether or not they're good at predicting the future, what i think the information is, is what the fed is thinking right now. that can change. they reserve the right to change these forecasts, and as any forecaster, they reserve the right to be wrong, but if you want to know what the fed is thinking right now -- i don't know that i would make a bet on two years of zero interest rates. i might make one for six months, maybe for a year right now, certainly if you don't get the inflation to come along, the fed is putting a number behind the c

a rather, fomc participants write down their individual views of the most likely path for the economy, conditional on each participant's view of t appropriate monetary policy. we tabulate those submissions and we publish them as the sep. given the unusually high level of uncertainty about the outlook, many participants noted that they see a number of reasonably likely paths for theu economy, and that it is not possible to identify with confidence a single path as the most likely one. nonetheless, we believe that regular publication of the sephe provides a useful perspective ol the way fomc participants are assessing the path ahead. what the june sep shows is a general expectation of an economic recovery beginning in the second half of this year and lasting over the next couple of years, supported by interestin rates that remain at their current level near zero. of course, my colleagues and i r will continue to base our policy decisions on the full range of plausible outcomes, and not on a particular forecast. this risk management approach is the best way we can promote our maximum emp

the fomc was a big one. the fomc did not disappoint but did not surprise positively.it was going to be easier for them to disappoint, given that the rally had been driven by stimulus. once that was out of the way, that brought the attention back to the virus story, and that is looking increasingly negative. some thing we have been highlighting is that infections globally picked up aggressively --m mid-may, which would from monday, we saw global fidelity numbers pick up. now we will get back to the idea, is there the potential for the u.s. states to relock down again? problem in south asia is probably going to take the limelight. we will get increased virus concerns, and i think we will price in some of the ex ex exuberance of recent weeks. but there is one really important overriding thing to remember. incredible are on an rally, immensely overvalued, but many other stock markets around the world are still man u ash massively discounted -- are still massively discounted. whether you are bullish or bearish depends on whether you're u.s. centric or whether you have a gl

the fomc will release its first quarterly forecast since december. will be looking for any comment on why sisi. jeffrey gundlach says controllable happen. investors tumble over the stock -- a producer crisis falling at the fastest pace in four years. crude oil hits lower. welcome to "daybreak europe." all, jeff gundlach said if the 30 year gets to 2%, the fed might start, the stocks might fall from their lofty valuations. we could see a weaker dollar, and that has been the story the past several days. on the yield curve control, it is interesting. what could they signal? jeffrey gundlach talks about the long end. securities saying it is more likely the front at the fed is going to target. treasury bills might be the target because of all the issuance. rising 38 yields. could be unhinged according to jeffrey gundlach. the steepest since 2016. where do you go to yield curve control? do you go at the 30 year? market, dipping. the dollar is almost like a wounded wolf that attempted a snarl yesterday. to the oil market. we are rolling oil. crude stockpile

at a minimum, we know that from the fomc minutes.e have to keep in mind there's some good approaches to forward guidance and some really bad approaches to forward guidance. i would say a really bad approach is date based forward guidance. there is no way anyone can lay claim to, you know, in september of 2021, things are going to be better. i don't know why you would ever want to bind yourself by date based forward guidance. i am much more some but that it to data based forward guidance, even recognizing that there are some flaws with that. the fed had been talking about this idea that maybe the on employment rate is a pretty good metric for that. i think you have to tread carefully because as we all know , and we know this from the last couple of months, the un-limit rate can move in quirky ways -- the unemployment rate can move in quirky ways for reasons that are not always obvious. where are in i dynamic all of a sudden, the backdrop is better and people are really feeling good about the backdrop, you can get massive flow into the

fomc participants have individual views over likely path of economy based on each participants view of overall monetary policy we tabulate the submissions an publish them as the sep given unusually high level of urn certainty about the outlook many participants noted they see a number of reasonably likely path the for the economy and that it is not possible to identify with confidence a single path as the most likely one. nonetheless we believe regular publication of the sep provides the way the fomc participants are looking for path ahead. the sep shows a economic recovery beginning second half of this year and lasting next couple years supported by interest rates that remain at their current left near zero. of course my colleagues and i con to base our policy decisions on full range of plausible out come and not on a particular forecast. the risk management approach, this risk management approach is the best way we can promote our maximum employment an price stability goals in these usually uncertain circumstances. finally i want to acknowledge the tragic events that have again put a

years where there are not going to be any rate hikes. 2022, end of 2021 or there are two people on the fomc. two of 17 were going to be raising rates by then. i would call it ultra dovish from the fed. their minds were not changed by the strong may employment report. it was the biggest surprise ever. it shows how uncertain everyone is over the economy. thanks to the unemployment rate down six and a half percent this year, a 5% rebound next year. the fed also signaling they say more needs to be done. people wondering, could you clarify your bond buying plans? 40 billion of mortgage-backed securities a month. they said they are doing this to keep credit flowing to households and businesses and to sustain smooth market functioning. they are going to keep liquidity and more stimulus going into the economy. clearly some good news on the economy. we are near enough to a race. who do billion people not have 20 -- 22 million people do not have jobs. haidi: the issue of racial inequality in the economy, how does powell see the fed taking a role in making this change? >> it certainly came up from rep

the key event of the day, the fomc meeting. i am very curious to see what they have to say about yield curve control and how much of the treasury market the federal reserve lend up having to buy in order to peg. jonathan: will they give us a monthly rate? i imagine the dot plot is in play as well. how much does that come down from where it was at the turn of the year? i imagine considerably lower than where we were several months ago. tom: i've never been a big fan of the dot plots. bullard used to put that one down below just to show his protest as well. i think one of the key questions over the next one to three years is when does the dot plot disappear. the whole world came down to the bullard dot eventually. that's start the program with priya missouri -- with priya misra of td securities. let's begin with what you are focused on and what you want to hear from that news conference with chairman powell. priya: we are not looking for any specific odyssey action. we are not looking for forward guidance or a specific amount tha

right now there are 17 participants on the fomc. all 17 participants expressed concerns about whether or not negative rates should be relevant or supportive of the u.s. monetary policy, and i can tell you, from my perspective, and i think most of my colleagues, our views on that have not changed since then. i will leave it at that. liz: okay. the highest gdp has gotten since the financial crisis was the second quarter of 2014, about 5.5%, under president obama, and then under the president trump administration, currently, fourth quarter 2017, which was about 3.5%. he was able to hit that level around twice. you know, we're stuck in this covid situation. how tightly woven do you see the coronavirus threads within sort of this fabric of the u.s. economy? i mean, in other words, do you believe that until there's a vaccine, we won't attain growth that even matches the highs of the early 2010s? >> well, i think that's a tough call. as i always say in these interviews, i'm not an epidemiologist. obviously a vaccine would be a good send --

guidance that this policy is anchored in a calendar rather than fomc goals. think it was in that setting that you did not mention yield curve control. was it not right for that particular discussion or do you believe there is not a place for yield curve control in this dialogue? powell: i did say that we are not thinking about raising rates. we are not thinking about thinking about raising rates. i do not mention the end of 22. that came out of the summer of economic injections that showed overwhelmingly committee members did not see the likelihood under the current expected path of raising rates at least through the end of 2022. i did mention yield curve. i talked about it in the press conference. i said earlier. it was a briefing on the historical use of yield curve control by the u.s. during world war ii and after which led to the vet a treasury accord -- ed treasuryry -- f accord to appoint a committee with what it is and why some of the central banks have used it. we have not made any decision to go forward on that. , in the same way we have looked at ne

most fomc measures see rates zero through 2022. it raises concerns about the real state of the economy. .nd capitalizing on chaos goldman sachs makes $1 billion from the oil market turmoil. drivingp sees its bond trading revenue. big on europe. we are seeing futures .2 losses -- point two losses on the indexes. most of the major indexes were less than 1%. drops in the u.s. after that fed meeting. jay powell saying he's going to keep rates at zero through 2022. it looks like the market is now concerned about the strength of the underlying economy considering those comments. u.s. futures down 1.5% in terms of the dow and the s&p. anna: in terms of the underlying economy, concerned also about the rise in the rate of infections in the united states. the futures picture looks fairly negative. by australian market down more than 3%. other markets not far off 3%. the japanese nikkei down 3.8%. resurgence trends in the dollar. days and days of dollar losses have been part of the theme of recovery we have seen for risk assets. now we see a

jub: even talking about yield curve control does a lot of the work for the fomc.e think that if the fed was to adopt a yield curve control framework, it would be akin to what we have seen in australia, which is trying to pin the front end, to year to three year point, as opposed to what we have in japan. if we look at the way the curve apparently trades, you could argue that objective has already been achieved because you have five year treasury trading at only 30 basis points, so they are achieving a lot of the objectives the why cc would accomplish but without formally adopting that framework so it does beg the question of why the to would look to an extent tie their hands at this stage. unless we see a significant deterioration in the growth outlook, in the macro outlook, and they want to really cement that forward guidance. matt: if you look at spreads to bunds, we are seeing a real tightening from where we were one year ago, two years ago, and that has taken a little bit of -- that has taken a little bit of the enticement out of foreign investors to buy the d

with that in mind, we have the fomc meeting on wednesday. there is a good chance -- a higher chance that the disappointments -- -- so enthusiastic for what they have been delivering already. it might be that they are overly optimistic on the economic rebound. yields surge. that would squeeze financial conditions. that is one risk. the other risk is from mid-may, global virus infection numbers start accelerating again after flattening out from late march through april to mid-may. that would suggest we might start seeing a pickup in global fatalities around mid june with that lag between fatalities and infection numbers. that is another risk that might come through towards the end of this week as well. riskis another reason why reward is negative in the short term. this will be a tip that -- might be bought into -- dip that might be bought in -- a dip that might be bought into. matt: when you have the huge names in the industry capitulating, offering me a culpas, saying they screwed up, maybe that means this rally is out of steam. possibility

the fomc said it will increase its holdings of treasuries to sustain new functioning in the market.dent's top economic advisor said he does not see systemic racism as a problem in the united states. spoke at the funeral of george floyd, and said the white house is -- behavior. the president is expected to discuss this in a fundraiser. george floyd's brother called on congress to act. >> i am tired, i am tired of pain. pain you feel when you watch something like this. when you watch your big brother, who you looked up to for your whole life die, die baking for begging for his mom, ask you to make it stop. george called for help and he was ignored. haslinda: retail spending in new zealand surged after the lifting of the nationwide lockdown. numbers remain below priebe iris levels. purchases rose 79% at retail outlets, falling a 47% drop any 3% decline in march. the value of spending was almost 2% lower than in february. tokyo says it will simplify next year's delayed in olympic games taking the virus into account. organizers say they and the ioc have agreed a basic approach to make th

the next catalyst, as i said earlier, will be this week's fomc meeting. to if chair powell decides adopt yield curve controlled than the dollar loses that support. why would it be important for the dollar for emerging markets? -- there are dollar still inside the u.s., but this dollar downturn, especially in this downtrend, accelerates that these moneys will leave the u.s. searching for better returns and emerging markets. >> when you talk about emerging markets, they take their directions mainly from china. we have this question of the day. how could chinese deflation affect assets? >> it not just china. elsewhere we are seeing a lot of countries coming under deflation pressure. 3% andna cpi still above what is more concerning our factory gate prices remaining in a deep depression. has moreecent decline to do with the oil market i think, that the two have a high correlation and we have to -- it is notable that wti prices have doubled in the past two months, and this will put some upside pressure on the china ppi as well. in the coming months we would see

if you cannot have more dovish support from your colleagues on the fomc, i don't know what it would be. theourse, jay powell said may jobs report sweeps 22 million people unemployed. that's why they will be aggressive. ddp down 6.5%. rebounding 25%. you have until -- also unemployment, falling to nine prepare percent by the end of this year. down to 6.5% by the end of next year. that is reasonably optimistic. powell said more needs to be done as the fed is going to be buying $80 billion worth of treasuries a month, $40 billion worth of mortgage-backed securities. why? they need to increase their bond holdings to keep credit flowing, to businesses and consumers and to having smooth market functioning. shery: the question of racial inequality in the economy has really risen to the forefront in people's minds. how does powell see fed's role in this? kathleen: i would like to remand everybody that he has been clear that the pandemic has hurt those who can least afford it the most. low-wage workers and proportionately, that has affected women, african-americans, hispanic most.s the it is in

chairman, that you said the fomc is not even thinking about raising rates. i think you went on to say that they are likely to stay at zero between now through 2022. it feels like forward guidance that policy is anchored in the calendar rather than fomc goals. i'm curious. i think it was in that setting that you did not make any mention of yield curve control, and i wasurious, was that just not right for that particular discussion? or do you believe there is not a place for yield curve control in this dialogue? mr. powell: i did say we are not only not thinking about raising rates, but we are not thinking about not thinking about raising rates. that is what i said. i did not mention the end of 2022 read what that came out of was a summary of economic projections showed that overwhelmingly, committee members did not see the likelihood, under the current expected path of raising rates, at least through the end of 22. i talked about yield curve control in the press conference, but i would just echo what i said earlier to senator to me. this was a briefing on the

holding above 108 ahead of the fomc decision. check out spot gold. a $70 range since april. goldman, seeing a push above $2000 for fully and if the fed tolerates above target inflation. >> let's turn to a deeper dive into the markets. our next guest is looking three to four months down the road beyond the fed's liquidity bridge. and founder ofio her company. added telling us you equities. where are you seeing opportunities at this point? >> thanks for having me. we have found opportunities abroad. there were some assets in europe and asia that we picked up. this is ao not think by and full the environment. we still think you have to be noble and tactical. popou get 3%-10% position from the market melt up, you take it. it is not something that you go into it thinking you're holding it for six months, 12 months. nadine, it is really a market where you want to be cautious. where do you see tensions in the market where you still see opportunities given the valuations we are seeing at the moment? >> of the convictions we have grown overt we have the past month, we were a month we

i hope it is sooner rather than soon i think it was last week that you said the fomc is not even thinking about raising rates i think you said they're likely to stay at zero between now and through 2022 that feels like the guidance is in the calendar. i think it informs that setting that you didn't make any mention of the old curve control and i was curious was that just not right for that particular discussion or you don't -- do you believe there is not a place for yield curve control in this dialogue >> i did say that, but we're not even thinking about thinking about raising rates. what came out of that was a summary of economic projectioning showing that committee members didn't see the likelihood under the current expected past. and the yield during and control in the press conference. but i just echo what i said earlier that this was a briefing on the historical use of yield curve control by the united states that lead to the fed treasury, of course, and on some current usage by the bank of japan it was to awant the committee with what it is and why some other central banks have used

i did that a couple of weeks ago when we had that vix spike after the fomc.g equity on my portfolio to have a core islands of what most other people have, a core cap -- to have reliance on what most other people have, the big cap techs. i think the second half is looking at this potential pivot where the european condition may be moving into a more interesting place with the stimulus slowly coming together, and at the same time, rising political risk in the united states and a whole bunch of uncertainties about what kind of policy we will get out of the in 2021. spx to be mostly range bound. committed.hard to be not to add too much into that answer, but i would also suggest arguably a consensus trade right now, but i've been very constructive on precious metals for some time, and continue to be so. i think you see a lot of pickup there, particularly in the -- in the miners and silver. jonathan: do you think we could see real outperformance on the continent? michael: we've all been there. hope inl had slivers of 2017. that lasted about six or nine months area

right now they have not yet unveiled new attempts like at the june fomc meeting, did not unveil too manyaks that are potentially being discussed because right now they still feel they are not in any rush to raise rates, and they just want to be extra careful and make sure markets are functioning properly, and they can do all they can to start the economy on a recovery path. noticed as the testimony went on and it got more politically, the house also tends to be more political. that is what we can expect in 15 minutes. saying politicians seem to want to -- want the central bank to take on a host of responsibilities that is firmly with the government. the fed is in the design and financing of government policies. how do you view it? kevin: we have never seen the contraction we are experiencing right now. i think the fed is basically throwing the entire kitchen sink at it. any sort of worries in the past we had about running large federal budget deficits and worries about the fed balance and possible repercussions on inflation or things like that have not come to pass in the most recent res

then of course, the fomc meeting does begin today. i am curious on that front, is the fed going to dial back some of the expectations for its stimulus based on the better-than-expected data, or are they going to give a grim outlook and say we need to do everything we can to bring financing particularly too small and medium-sized businesses? jonathan: i imagine a lot of people are leaning towards the latter. we do get some forecasts. we get a dot plot as well. i am looking to see how far that muchdot comes lower, how they pull that down on the forecast, and where the fed thinks rates will be in the coming years. tom: the key statistic there, i totally agree that is the great mystery of these meetings. we really begin with these meetings 18 months out to consider, i can't believe i am saying this number, when you go back to 1933 like i do, to get up to 2022 is really difficult. but it is sort of a first look at 22. jonathan: with equity futures a little lower this tuesday morning, down 0.9% on the s&p at, down around 28 points the momen

taylor: we pushed forward into that fomc meeting. sophie kamaruddin there.he bull run and stocks is forcing some of the most successful investors to admit defeat. hedge fund manager said he was far too cautious during the market gains. "i missed a great opportunity here. won't be the last time." he said the risk reward calculation for equities was the worst he had seen in his career. still on the bullish side is the senior portfolio manager for wells fargo asset management and he joins us now from newton, massachusetts. are you fully in the camp this is a bull market instead of a really big bear market rally? >> yes, i think it is the beginning of a bull market rally. you can't underestimate the effect of what the fed did, pouring trillions of dollars of liquidity into the financial markets. one, it stabilize the real economy and you can see that by the recent unemployment numbers. two, it assures the companies will not go bankrupt during this complete shutdown. we think that as we go through each quarter, we will see surprises on the upside. inould say this

what chair powell and the rest of the fomc will announce today, i think changing the view on the curve in either are going tothey remain anchored for a long time in terms of incredibly low rates and the front of the belly of the curve. alix: off of that, going forward to make sure everything is ok with the fed, looking at the long end, the option with the 10 year was pretty weak. on the other hand, we are having so much t-bill issuance. i wonder if that winds up raising the front end of the curve? which are you more concerned about? marilyn: obviously supply and demand has a huge impact. i think at the moment we are focusing on the idea that the 10 year part of the curve and how those will be held. not outright yield curve control but it is almost there. we are focusing on the five to 10 year part of the curve, the fundamentals, and the fact that the fed is going to remain supportive and an easy mode for a long time to come. that is where we are focusing at the moment. guy: where are you taking your cues from right now? what data are you looking at? what is giving you a sense of how th

if you have seen how chairman powell has spoken in past fomc meetings, he is asking for more fiscal aid, saying we have done this much on the monetary side, but we need or. we think -- we need more. we think it is better than a coin flip to say we will get more stimulus, but in what form? it looks like it is probably going to take more of a state and local aid, but we don't know yet. we will have to see when congress reconvenes in july. that is going to help the economic recovery for sure. -- jonathan: anna, thank you. in this market right now, there is a massive challenge to the market narrative at the moment. what has been important over the last several weeks is the sequential growth. what we have seen this week is real evidence we will be bel ow capacity for a whole lot longer. if we had elevated unemployment and income still hit, we will need that policy in the next 60 days. for me, that has probably got to be the number one issue. will we get the support in washington required to offset the hit to this economy, that will continue because of the data we are seeing in texas,, and el

your foot off the gas and continue to be aggressive the fed does not -- a position that almost all fomc members supported. they're being cautious about the damage going forward, so i want to ask you, would you continue to hold interest rates as zero until 2022 even if conditions improve in other words, what would cause you to change your position until 2022 that's actually not a committee forecast what that was is that was evident we have said we would keep rates where they are until we are confidence that the economy has weathered the conditions and well on its way to recovery. we're thinking this economy will need support through an extended period of time this is the largest economic shock to hit our economy in living memory, and also without any precedent, it looks like the deepest recession. it may not turned out to be a long one but the road back we believe will take time and we'll be there to fully support this economy. >> where we were we're a low and moderate -- we want to get back to that as soon as possible and we'll be using our pools to do so. >>> that's fed chaired jerome

we will pivot into that when we talk about the fomc meeting next week. markets are challenged to figure out what is the right level of yields because it is not driven solely by these economic fundamentals like the payroll report would have done in years gone past because we have this historic -- it is analogous to world war ii history. relative to our modern experience, a historic change in the fed operation with regards to what we are talking about, which is yield curve control. what are the levels around that? lisa: we are speaking with jeff rosenberg of blackrock. we are seeing futures rising substantially. the s&p futures now up 1.6%. longer dated yields also ripping higher off of this report. 10-year gilts at .93%. yields at10 year .93%. you're getting a pylon as people expect this to portend good news. can we go over the fact that this does not cohere with the continuing claims and the jobless reports we are getting out of state and federal agencies over the past few weeks? there is a skepticism one has to have when looking at these numbers. can yo

the move in the last few days, is it due to the fomc, is it due to people saying, things are going wellably a little of both. with chairman powell, he says the recovery is likely to be pretty long, pretty slow he dismissed the tremendous jobs report last month, but the fed has to get a fair amount of credit and a little bit of blame as well. >> michael, it sounds like you also think chair powell needs to smile now and then >> well, it was a blowout jobs report, so we're being a little more upbeat about that probably would have been a good thing, but the fed put into play so many programs in the last few months, and generally they've done their job they provided a nice circuit breaker, if you will, gave some nice reports to the credit markets. but if you look at the treasury yields, we're talking about equities going wild the last few months treasury yields are doing nothing. if you look at the treasury yields today, it's about nine or ten points below where it was when the s&p hit bottom on february 23rd. the fed has well locked-in rates. >> kim, let me bring you back in for those who s

we looked at it during, you know, the long expansion that february, that fomc has looked carefully ategative rates to see pretty broadly across the committee, that negative rates are not something that we think is appropriate for the u.s. economy, at least at this time, and it is not something we see ourselves resorting to. instead, we see ourselves using asset purchase and forward guidance. in terms of yield control, as you pointed out, it is currently being used by central banks around the world, and rather than buying assets, what you're doing is you are saying we will not let the treasury curve move above, it starts to move above buy level, and we treasuries to drive the rate level back down. we are really just educating ourselves at this point. it is not something that we all decided to do. rep. mchenry: thank you, chair powell. i also appreciate the fact that when you said when the crisis pass us, we will put these away, these new tools. i think that is a very sober assessment. we need to have a return to normalcy once the crisis passed. thank you for your leadership. chairwoman

chair powell: that number is just the median of the 17 projections by the 17 participants in the fomc. it is not an official projection of the fed or anything like that. it will be based on different assumptions made by different people. each of the 17 will have made a somewhat different assumption. i would think the answer to your question largely will be no. , and mynot a number colleagues will not have assumed there'll be a substantial second wave. >> that is concerning. congress will need to find the best path forward as we begin an unprecedented and involving pandemic. leaderscounts on our for the scientific facts. businesses and families will need immediate economic relief if case counts worsen and for the restrictions are warranted. would you agree, given the possibility of several future waves of the virus, that identifying flexible economic stabilizers could quickly make impacted businesses and family stable would be beneficial for our economic growth? chair powell: i think the question of automatic stabilizers is a classic fiscal policy question, and one you and your colleag

i'm talking about, everybody forgets, but let's walk through wednesday's session when they had the fomcet opens lower. the s&p was down, down 26 points hour and half into trading. then we turn around. we began to roar right as the fed announcement came out, the market rocketed. we were up 40 s&p points from the session low, but then when that question-and-answer period happened, all those gains faded and we saw the s&p close down 31 points from the high 17 points for the session and for the dow we're talking about 300, almost 350 points from the high of the session. you know, i think the market wants powell to be clearer with respect to the fed potentially using the caps or any other measure and really they did not expect or want him to talk about caps on bond buying despite the fact it is 120 billion, i think unfortunately wall street is so addicted to the fed, david, that they wanted more. >> charles, well said. i mean, the market is hungry for liquidity. and so i think if there's any element that we see powell back away from that, we see the markets sell off but it is nothing new; ri

i remember, when i got here, that there were people both on and off the fomc who thought if we ever dipped below 6% unemployment, it would trigger inflation. and that it was not 6% come about 5.5%, 4.5%, 4%, and then what we know, we are in this economy between 3.5 percent, 4% unemployment for 2.5 years, and we maintained, in fact, we were sort of the price stability target. the fact of the matter is that during your tenure, mr. chair, and i to my had to you, sir,-- i sir, yout to you, have open peoples eyes to the labor, and you have done that, and we cannot thank you enough. well done, sir. you have pointed out, rightfully, that labor markets help with wage growth, but especially with employment levels and wage growth where people at the lower end of the income spectrum, again, i want to thank you. chair, fact remains, mr. that the mission of the fed no different today than it was over two generations when it never to operate economy labor staffs. we are going to get past this, and the sooner the better, but my question for you is, short of you having a lifetime appointment, which come o

long expansion that ended in february and chose not to deploy them in the united states lately the fomc has looked carefully at negative rates and continues to see pretty broadly across the committee that negative rates are not something that we think is appropriate for the u.s. economy at least at this time. it's not something that we see ourselves resorting to instead, we look at ourselves using asset purchases and forward guidance in terms of yield curve control, as you pointed out, it's currently being used by a couple of central banks around the world. rather than buying assets. what you're doing is saying we won't let the treasury curve at a certain level move above something. if it starts to move above that level, then we'll buy treasuries to drive the rate level back down the united states actually did that from the late '40s into the early '50s we're really just educating on it at this point it's not something we have at all decided to do. >> thank you i appreciate that you said when the crisis passes we will put them away, these new tools i think that is a very sober assessmen

three main take-aways from the fomc today. one, they will remain very very dovish. they don't expect to raise rates at any point over their forecast horizon and their inflation and employment expectations suggest they should stay firmly on hold. two, the fed shifted to a monthly pace of asset purchases. they say they are going to buy at least $80 billion of treasuries a month, at least $40 billion of net agency mbs each month. i think that's very encouraging to the market. it provides some clarity, helps the market plan for all of the upcoming treasury issuance that's coming down the pipeline and the fed retains flexibility to do more if they need to. third and finally, the fed is thinking about additional tools they could employ in their tool kit. chair powell talked about yield curve control. he noted that stit's still an on question, this is something the fed is still studying and if they put it in place it would reinforce forward guidance and maintain a very dovish stance from the fed for a long time. on net, this is going to keep rates low. it should be support

curvery yields with the continuing flattening ahead of the fomc decision.per barrel. keeping an eye on developments with the noc, saying an armed group had entered an oilfield. pandemic related shutdowns globally will continue to take a bite out of global growth according to the latest numbers from the world bank. global gdp is seen shrinking more than 5% this year while emerging and developing economies will see a decline of two point 5%, the worst performance since data began in 1960. our economy reporter has more. what does the world bank see as being a unique problem facing emerging markets right now? message: it's a similar as we've seen from the imf since the early days of the crisis, would be disproportionally affected by the crisis. they have a deeply integrated supply chain and are much more vulnerable in relation to global trade downturn, and depend on a lot of foreign financing. despite the good news in the markets today, they will continue to struggle to keep a risk on mode and attract foreign investors and keep financial system stable. alllast

that is the expectation for today's fomc meeting.k all but certain to keep its benchmark rate on hold. we will discuss that next with paul. definitely a conversation you don't want to miss is that is probably the biggest issue facing financial markets today. we are also going to have full coverage of this week's fed decision from 7:00 p.m. in london time. tune in for that. that is 8:00 p.m. here on the continent. of course to :00 p.m. in washington dc this is bloomberg. ♪ control of yield curve as a cap on bond yields. the fed usually cuts short-term interest rates. the fed toc lead restart bond purchases for around four of quantitative easing. with the economy on track for its worst recession since the great depression, the fed can go even further by targeting a long-term rate. central banks across asia already do this. the boj begin picking tenure rates at zero. india also manages its yields. the fed has gone down this path before. during world war ii, it successfully capped yields in 30 year bonds without having to buy large amoun

decision, on the fomc treasury futures are taking higher while the dollar is trading about steady anden holding onto a two-day gain. proxy, aussie dollar, unable to hang onto that 70 handle. heidi? haidi: investors are taking a break from this rally. let's get some ideas and a little bit of wisdom from mike, the head of research. i want to start by throwing up this quick chart that shows where we are at in terms of global stocks. since that bottom that we hit in march, we've seen $20 trillion worth of value being added to global stocks market cap. in light of all this, i know you say every great investment starts with discomfort. where are you finding discomfort in this market? >> thanks. say that the rally has not been as wide as we thought it would be. it has been focused on stocks. value more in the stress stocks, the ones that are looking like they might survive. the ones that are linked to future inflation, such as property trust, small-cap stocks, commodity and resource-related investment. these are ones that have done poorly compared to other securities, but that is where the v

what the bond market doesn't know and we'll talk more about it and the fomc meeting, what kind of shapef the yield curve is the fed looking for what is consistent with supporting market functioning. another step down in the pace of purchases from treasuries. and that's helping to steepen the curve in light of a historic amount of issuance coming our way. >> every time people get excited about bond moves, we're back to the lows i know this is still below 11% which is still a low bond yield, but how far do you think this move goes? >> you know, that is not really up to the fundamentals that way it might have been in the two weeks in the middle of the covid crisis, we strurkly changed the make up of the bond market bond professionals like myself, we debate what the fed is going to do. what does supporting market functioning mean how big will the balance sheet go to support that we're detached from the economic fundamentals of real interest rates and inflation and inflation expectations because it's really about this epic wave of supply relative to an unlimited amount of balance sheets the

>> the most interesting remarks at the fomc press conference were all about lots of red lines really, to hear about a few more questions about what exactly those red lines were, how they can transgress these red lines as well is interesting. but i think the other element that we will hope to get some news on is after the latest retail sales data is chairman powell feeling more optimistic on the economy we have seen a few headlines just to suggest that's mentioned there is a modest rebound in the economy, but i'm not sure whether that's includes the latest retail sales data or not. >> right, better jobs, better retail sales, sounds like he's still talking about uncertainty. phil, what about from you? what do investors need to hear i thought it was a strange reaction last week fed chair powell cited uncertainty, sounded downbeat on the economy and promise to provide a lot of extra stimulus feels like the market wants it both ways. >> yes, i'm finding the comments of not even thinking about raising rates took some optimism out of the market, but it is something that he has to say, sara,

purchases qe quantitative easing forever mentioned that rate caps yield curve control in prepared remarks fomchought to get out of this mark? >> without a doubt we have gone from 2300 to 3200 on s&p literally with snap of a finger, so we were up 40% from bottom, the market was actually at point where it was most overbought in 30 years needed to consolidate there are huge discontext the economy reopens unemployment rate goes down, yet millions of people are filing for unemployment claims every single week, so what typically coming off major low about a 10% pullback, because up trend is strong, pull babs are viable so i would say a ton of support in that 2900 to 2000 zone where i would be adding the position. maria: i mean i think you have to kristen look at sell-off in context than us we have had a melt-up, for the last six months we have had this market near record highs nasdaq just hit another record high yesterday, above 10,000 you have to look at this he sell-off 800 points right now in context of we are up thousands of points even throughout this pandemic. >> sure i think folks are realizi

maria: so let me ask you about the federal reserve and what we're expecting out of this fomc meeting,kicks off the meeting today. they announced significant changes to improving the main street lending program designed to help small and mid-size companies. after the strong jobs report, you're out with an op ed titled the job surprise complicates the picture for the federal reserve. you write when it comes to new policy announcements this week the fed should stay on the sidelines for now, instead focus on of making the main street lending program operational as soon as possible. the expectations here of course is the language, especially any changes to forward guidance. we are expecting the main message will be rates are going to be at zero for a long time. anything else that you're expecting from the fed these next two days, mohammed? >> i'm not expecting it to go further. but you should know that there are people who believe they will go further. that they will signal what's called yield curve control which means they'll target certain yields and there's even people who say they'll s

the fed indicated, hey, we've taken a look at negative rates every single fomc member who commented doesn't feels it good for the u.s. >> right one of my pet peeves we need to have that conversation we have conversations about the most outlandish stuff. no, let's not have the conversation we are never doing it. stop saying that what does that do. conversation talk is cheap. thank you. just kidding paul, thank you. appreciate it. andrew >>> coming up, when we return, dow futures down 2% this morning. much more on today's move before the opening bell we'll talk about it before we return take a look at this morning's biggest decliners in the a bk j wereacinust a moment today, that philosophy extends to how we connect with you. we call it, audi at your door. whether a remote test drive, shopping, trade-in, or even service pickup, audi at your door can do this and more at participating dealers. the premium audi dealership experience, on your terms. audi at your door. try nature's bounty sleep3, a unique tri-layer supplement that calms you, helps you fall asleep faster and stay asleep longer grea

you know, new york fed president john williams who is a voting member of the fomc, federal open markete are on the road to recovery, seeing signs the economy is starting to recover. he's also seeing the worst economic distress may be behind us. he's saying what he sees is a sizeable increase in consumer spending that's boosting all this. now, he does acknowledge that there's a rise in cases but at the moment, that is not really worrying him. he believes that there will be a strong recovery and that strong recovery does depend upon containment of the coronavirus. now, williams says the fed will continue to use all of the tools in their toolbox for a robust recovery. he does believe a full recovery could take years but he says we are on the path now. back to you. stuart: i would definitely call this a positive. i think it has something to do with the market's turnaround, especially the nasdaq which i now see up 100 points. edward, thank you very much indeed. good stuff. the nasdaq is up 100 points and first, the mayor cut the police department budget by $1 billion. now, he's a far left g