into the march fomc meeting, there is nothing that will change the narrative.pect them to show more rate hikes in 2022. 50 basis points will be discussed but not executed on. there is a lot more uncertainty and volatility at the front end of the curve in this environment, and the risk is the curve will flatten further from here. lisa: from a pure economic level, what are some of the prices you are looking at, the price points for oil that could have ap big shock on the economy? -- a pretty big shock on the economy? steven: sustained at $100 a barrel is important. then that filters through to the entire chain of refined products and then in terms of the natural gas, demand, substitute, and that drives up natural gas prices as well. $100 a barrel is the level we are looking at as a sustained environment will lead to a scenario where our more conservative growth numbers on the more optimistic side -- are on the more optimistic side. the street lowered their knowers -- their number is to be consistent with what was put out in q4. it was weakened in the first quarte

the fomc reiterates a probl

was three weeks ago we had quite a few -- a lot of information since then, particularly from fomc membersadical proposal, 100 basis points in the next few months. i don't think the minutes will be that specific, but anything about whether they talk about a 50 basis point hike for or against, most members are still against that boy build surprised if there's a clear signal on that front and a clear key, when that's going to start. i think that's where the fed is still -- they still seem to be working that one out and there's a lot less clarity on that point. >> inflation just seems to keep running hotter and hotter, whether you're looking at the cpi numbers or ppi numbers that just came out today. how should investors be thinking about some of these economic data points and inflation and how that played into things like retail sales and growing revenues is that going to be about a sign of health or is it about inflation? is unit growth increasing? >> youmean in a sense of real growth >> exactly. >> it will be a lot less positive than the headline with inflation this high. i mean that said,

since the fomc, 20 basis points and extra tightening for september 2020 three. that translates into a whipsaw for the markets. have we gone too far? are we about to see investors caught wrongfooted? the equity market -- yesterday, we saw the biggest today rally for u.s. stocks since march 2020. down about zero point 2%. small-cap futures faring worse. we have a commentary coming out from jp morgan saying to they priced into much recession. we did see losses in january sliced in half. and the aussie dollar went down by as much as 0.5%. prime minister boris johnson is facing fresh fury from his own conservative lawmakers after a report slammed failures of leadership and judgment. metropolitan police are investigating 12 gatherings in government buildings including one in his own apartment. let's get more from our reporter. what did we learn from this report? parts were left out. >> this is an update because of the overlaps with the metropolitan police criminal investigation. the update was still highly critical. it found there were failures at leadership and in ju

at the july fomc meeting, they will announce the actual drawdown. that amounts to $600 billion this year, $1 trillion next year, 1.6 trillion over the next two years. what does that mean in terms of overall tightening? we have done a lot of work trying to equate that to interest rate hikes. that is 2.5 to three rate hikes. seven times equivalent this year, three times next year. you are talking more than three percentage points and effective tightening from the fed. jonathan: let's start with the 50. 50 basis points in march. what a difference a ten made. why did 10 basis points move that call in for you to 50 basis points for this fed next month? >> it is a great question. no doubt, 0.1 does not seem like much, but i begin with the jobs report, which was stronger than expected, which showed accelerating wage inflation. the number one data point was the inflation rate that gets rid of the two tales. it is a good metric of underlying inflation. that rose on a 12 month basis the most on record dating back to 1983. there is evidence within the underlyi

jonathan: still ahead, the week ahead featuring plenty of fed speak, and the fomc minutes.hat conversation is coming up. this is bloomberg. ♪ jonathan: live from new york city, this is bloomberg real yield. what a week we have had on the two year yield. up 85 basis points in a year. 20 in a single day. the biggest move since 2009. that curve is flatter. we have gone from 90 basis points 2s vs. 10s. think about the moves we have had in a short amount of time. over the next seven days, ecb president christine lagarde speaking on monday. uscp i on tuesday. then retail sales on wednesday. jobless claims on thursday. a host of fed speak throughout the week. maybe that will be the big event ended up itself. keep an eye out for all of that. back with us are victoria fernandez, vishwanath tirupattur ," jim bianco. just enough time for the rapid fire around. art 16, the federal reserve meeting. a 50 basis point hike, yes or no? victoria: no. vishwanath: yes. jim: yes. jonathan: what is higher at the end of the year, the two year yield or the 10-year yield? vishwanath: -- jim: two-ye

joe, was the fomc statement hawkish or dovish? >> no.was actually i guess you would say, charles, it was neutral. by the calls it was dovish, because it did corroborate of chatter we've seen recently of a 50 basis-point hike. in the fed funds futures market you see the probability of 50 basis points continue to drift lower. those minutes were basically a northern event. i would say that is neutral to dovish. the equity market and bond market mark recovery echoed that. charles: when the books are closed at end of this year what will we say is the biggest challenge? will it be inflation or a re session? >> the data today was a little on the softer side. housing permits are better than starts highest since 06. housing, charles is the one sector that does really well this year. seems to me what it will be, like a stagflation area environment, charles. the 2021 boom which we foresaw as did others basically about the consume reopening trade. too much fiscal stimulus. consumer spending grew at fastest pace since 1965. we didn't have enough good

the fomc minutes are breaking. we'll give you more on that later. in moments president biden will speak with germany's chancellor as the west tries to dissuade vladmir putin from invading ukraine. we're wasting fed guessing game as a slate of nominees hit a brick wall during confirmation. stocks are holding up pretty well. we'll discuss positioning with some of the best in the business. also retail sales came in much better than expected but something is certainly off. danielle dimartino booth will share her concerns. what does it mean when one of the most successful corporate raiders of all time says capitalism is broken. jim bianco is with us. he will sound off on that. all that and so much more on "making money." ♪. charles: here it is, guys, every day market sort of bouncing back and forth, influenced by more exogenous events, scuttlebutt. that matters more these days than earnings and fundamentals. it comes down to whether vladmir putin invade ukraine. will the fed hike 50 basis points and signal war on inflation where the stock market, maybe e

the effective fx markets has been driven by the fomc stop they close out the euro-dollar short and they go along but we look at the big adjustment in the rates market. lisa: how much does this affect the bets when people were going overweight europe? i wonder how many massive shifts in strategy in conviction happens in the next couple of trading sessions. jonathan: we have not even mentioned crude. tom: this is an unspoken story, it's really on the move. jonathan: it is grinding higher. we are on this payrolls friday. we will talk about the story this morning, futures dipping into negative territory, down 1 /10 this is bloomberg. ♪ ritika: amazon is giving the market back some of what the meta-platforms took away. it's poised to add almost 200 billion dollars in market value. that would be the biggest single dig gain in the u.s. stock market in history. it raised the price of amazon subscriptions. in the u.k., boris johnson's government has many of his officers resigning in the wake of a scandal. in beijing, the chinese president met with russia's vladimir putin. he attended the opening

let's bring you in at this point and get your views from what we saw from those fomc minutes. >> i think it was very interesting when i was reading through it and noting they seem to be wanting to focus the offloading focus on these mortgage-backed securities. it has a presence for keeping treasury securities. that tells you about the potential direction of travel of the various rates in the real economy and the u.s. we're seeing that offloading and that of course has big implications for home owners and their mortgage rates and anyone who is looking to get into the property market at this point in time is probably going to find it quite tricky. some commentary we have seen from contract suisse talking about how it can be for the fed to achieve a soft landing would be to find a way to raise mortgage costs which could filter through to the rest of the economy. francine: non if that filters through the european market open, moves that we're seeing today. it is clear that we're seeing tightening across the world. markets trying to price in. at the same time we look at what's happening in uk

bowman is a voting member on the fomc. has confirmed covid rules will come to an end in england in a move that has drawn criticism from opposition lawmakers and health experts. on thursday, people infected with the virus will no longer be legally required to self-isolate or inform their employers. free virus testing will end in april. >> until april 1, we will advise people who test positive to stay-at-home. after that, we will encourage people with covid-19 symptoms to exercise personal responsibility. just as we encourage people who may have flew to be considerate to others. paul: hong kong is expected to unveil a budget that is headed further into the red. the covert spy pushed authorities to implement some social distancing and travel measures which economists protect will leave a heavy toll on growth. paul chan is expected to drive the government budget to its fourth fiscal deficit in a row in the coming years. the announcement is expected on wednesday. global news, 24 hours a day, on air and on bloomberg quicktake, p

katie: has the fomc abandoned the idea that inflation will come down by itself?don't thinkno, think that was ever the view. a number of factors will work toward moderating inflation. one of those is improving supply chain operations. that is still expected to be a force that will lead to better competition in the car markets and other consumer goods. that is expected to be a tailwind for them but not a quick one. it's one that will steadily be improving and we can already see some signs of that may be starting to happen. the other thing that will pull inflation down is the fading fiscal impulse. consumers will lose about $1 trillion in transporting this year. the job market is healthy and wage gains have been solid but doesn't fully offset the loss of what has been a gigantic fiscal or stuff that's another force that will work on the left side of the ledger of moderating inflation stop consumers are likely to get a bit more price-sensitive as the cash fades and the other important force is that there is a wider set of consumption possibilities for consumers. they

we are looking forward to the fomc minutes. the minutes from the meeting in january. story. finance ministers meeting. i wonder how much of that will be virtual. the pioneer natural, cisco, i'm looking forward to hearing about nvidia, what is happening in the chip space. kailey: especially now that they have had to abandon that deal come interesting to see what is next. guy looking forward to thursday, a lot to get through on this wednesday. tomorrow nato defense ministers continued their meeting in brussels. russia and ukraine at the forefront as we look for certainty about whether or not the true pullback has happened. we know data and the west are looking for that evidence -- nato and the west are looking for that evidence. we will get a rate decision out of turkey. those tend to be exciting given the current stance of president erdogan. we also have walmart reporting. how are they faring in terms of pricing power, especially in light of the surprisingly strong retail sales data we got in the u.s. today. on the european side of earnings, commerzbank, nestle, airbus

david: we listen to all of them, and we are listening to the potential future appointees to the fomc. think there's a lot of uncertainty out there. we are trying to get all the views, but the uncertainty really pertains to inflation. the latest fuel to that fire is oil prices. you have heard fed speakers say things about the supply chain, and they can only do so much on the demand side, the supply chain needs to respond. right now, i think what we need to hear from nonfederal reserve policy setters is what needs to be the interim strategy if there is conflict in europe. i think allies like saudi arabia , maybe doing more cooperation with iran, and then turning to u.s. producers, those are the three spears that need to be used in order to make sure that russia is not successful at using energy as a weapon. jonathan: thank you for your input as always. we all read it. i happen to enjoy reading it. i don't know what is going on with tom. i never know. up 0.5% on the s&p this morning. across the single names, deere reason the profit outlook this morning. what are you looking at? tom: dear

since the fomc put on a team basis points, you are looking at a reappraisal of real yield in germany, up by 16 basis points since the start of the year. hsbc have a big note on the longer end. that is from -50 so -52 -30 but they say that this market is unreasonably hawkish. dani: it has been cut in half for europe since september. it's not all about bonds. tech is also the big story. nasdaq futures declining quite heavily after the miss yesterday, missing on user growth as well as sales outlook. the stat, $200 billion in market value are said to be wiped if it holds its losses overnight, more than netflix's entire market cap. nasdaq futures are seeming to spur more haven moves in general. the dollar stronger this morning as well and we had been bitcoin decline in sympathy with tech trying to fight against those declines, manus. manus: bitcoin is a born fighter. to ing on the numbers, let's go through that. net income is lighter than estimated. that is below the estimate of $1.08 billion. we have $141 million in restructuring costs for ing. loan loss provision rises by over 120 more t

the pressure on that next eci which we route -- which will be released just before the may fomc meetingormous because if it turns out the earnings surge is some kind of statistical fluke, and the eci remains calm, then the fed is in a much better position. if the eci print matches the earnings numbers, then heaven help us because inflation -- expectations of shot up over the last couple of weeks and will rise further and people will start to talk about a much longer timing cycle as well. all the focus is how many hikes in 2022 but if we are on the verge of sustained wage inflation, it will be how many in putting 23 and what happens in 2024 -- in 2023 and what happens in 2024. tom: -- jonathan: i remember a few payroll reports ago when you had a big number and you were sitting there, thinking this does not make sense. then we got the revisions and it started to make sense. ian: for sure. if we had the wages numbers we had, maybe the talk would have been more hawkish. i am very intrigued to see what fed officials say over the next couple of weeks, because they will be digesting those numb

but you nailed it, the fomc message turned the message around that the balance sheet reduction might come later in the year than expected although you saw members start to say actually we should start the balance sheet reduction right here right now. that being said, good news from markets that were expecting bad news. the s&p 500 closing about flat on the day, recovering about 1% on the losses. nasdaq similar, only 1/10 of 1%. even the 10 year yield ending flat on the day, although you saw choppy volatility. the dollar is where you saw a lot of the action we saw selling, a little weakening. that just means it's easier for foreign investors to hop into tech. but it looks like today, they did not take that opportunity. there are some after-hours earnings stories i want to get to. nvidia, strong demand and strong revenue. stock was actually down after hours because of a tiny little tidbit in their earnings. they are still making giant prepayments to help secure way for capacity. last quarter, they paid $9 billion for inventory purchases and long-term supply. compare that to the prior q

it is interesting when you talked about the markets beat on the fomc.e rates and commodities. it was about rotation on the institutional side. preparing for inflation is a risk to the outlook and has caused inflation. i think i am buying the robo manager and upping the game. it is very much trying to define what his arrow will be at ubs. kailey: what does he have to say about how inflation is impacting risk appetite for clients? manus: on the wealth side the risk appetite was clear, leverage and trading in asia. you saw that in credit suisse. they said they could turn on a dime but when it comes to the inflation narrative it is the institutions that are rotating and preparing for inflation. he thinks four to five rate hikes. the market can take that without a disruption. for him and his year of two have's. when you look at some of the swaps, the two your swap, the five year swap. the year of two halves for hamer on the inflation narrative. guy: coming back to renumeration. as you mentioned to get it again during that conversation, others are paying a lo

does that shape the views of anyone on the fomc?om: we don't know what that meeting is going to be like right now. massive uncertainty. i don't mean that in a negative way, but massive uncertainty. they've got the jobs report and the inflation report, and frankly, the ism's early in the month. i can't believe i'm saying that. jonathan: it took me about 10 years, but i've got you on board to look at the ism. march 10 through the next cpi print. lisa:lisa: how important is it going to be after all the corporate earnings? people keep talking about the dynamism in corporate america, people who are still going out and spending even if they complain about the high prices. at what point does the fed take a look at that granular corporate data and say people might be feeling kind of rotten, but they are still going out and buying? because of that, it is hard to see how this inflationary bent conveyed in the near term. jonathan: at what point do we pivot and look through a different lens and start to say that could eat away at demand? lisa:

the most, and when we saw that hawkish pivot in the beginning of the year and then in the january fomc realized that the fed does want to speed things up any meaningful fashion, and they are getting really scared with the headline cpi number at 7.5%. having said all of that, we all have to remember that monetary policy works with a long and variable lag. the question i ask is do we really think that we can get seven rate hikes and a balance sheet unwind, and that not impact growth at all, especially if we are to believe that inflation is going to come back down a little bit from these really high 7.5% type numbers to a little bit more palatable level, 3%, 3.5%? i think we have to be very cognizant that many of us got this wrong in terms of how we came in in the beginning of the year, but i still think to expect 7% and not give the economy a chance to react to the rise in interest rates is probably not likely. lisa: that brings me exactly to where i wanted to go. we have seen this in cripple rotation into stocks and away from bonds, the biggest going back to 2013, and j.p. morgan says i

romaine: we are awaiting the release of the fomc minutes from that january 15, 16 meeting.markets that are lower on the day. s&p down more than a percent here. we have seen interesting moves in the bond market. the 10-year yields moving higher. the two-year moving in the opposite direction. taylor: the higher price is lower down to about 154. i'm looking at the 20-year. there are two basis points higher. it was relatively decent. we are getting at least the minutes released. we

you cannot rollout of 50 basis points move at the march fomc. " not my view. that is neil dutta.om: will be a lot of heat taken that this is an arcane science and they do not know what they are doing. this is difficult to do. it is all original. i have a 1.1 million job formation statistic. that is absolutely extraordinary. i want you to bring in jeffrey rosenberg as the markets move but i want to rip up the script and leave michael mckee here to give us further study on the most stunning miss i've ever seen. jonathan: this is a monster upside surprise. 467,000 is the number. wages look fantastic. the two year, yields tighter by nine basis points, we approach 1.30. michael: i want to jump in with one number. that 709,000 you were talking about, december was revised up from 199 to 5000. there is a note that suggests the seasonal factors have been updated to better distinguish what was covid and what was seasonal. it is not just that there was a huge gain this month, there was a huge gate last month as well. jonathan: let's get to jeff from blackrock. we were told to ignore this on

>> in fact, i'll make a prediction even if the fomc says there's no rate change, there might be a little positive up tick on that, but markets are going to back looking at the fundamentals and say interest rates are going up with or without the fed. >> do you think that could happen even if the economy slows for a period of time >> it's a question of how much it slows if it slows enough, and that's why i said for inflation, that's something we never wanted, a deep recession that could cure inflation, but at what cost you'd kill the patient in the process. >> so then boil this down for me for people who are exposed to stocks and want to be in areas still that maybe are reflation nar. financials in the cross roads between the flattening yield curve but positive prospects if the cycle continues, where do you want to be in this market given the warnings you're sounding here? >> i think the first thing is keep perspective even if you lose 15% of your portfolio, if you've been in the market for the last three, four, five years, you're giving back only half the returns you made last year. i thi

been behind some of this inflationary pressure that we're getting today, this 7% released in the last fomc i thought the speech by the kansas city fed president really kind of hit home with the idea that the balance sheet may be a little more focussed than what the market is thinking i think it's an interesting time to discuss it and think about what the fed does next >> we hear so much going into cycles about quantitative easing and on the way out, it seems like everybody says it doesn't matter the balance sheet is not the same steve, there's also some who are saying if we leaned more on the balance sheet, maybe that could help longer end rates start to rise there's more supply coming into the market and that would steepen the yeld curve instead of flattening it >> well, you know, kelly, first let me say the fed is dealing with the 80 0 pound ggorilla it will be reducing, and they made it clear. the question is how the federal reserve reduces the balance sheet, and i think the question is a passive or active runoff. and i hear the fed leaning some members at least to a very active runoff.

>> i think by the time the march fomc rolls around we'll have one more inflation report.t won't be full of all these omicron driven supply chain kinks. it will be a lot cooler. unemployment rate will be even lower and fed will say, hey, look, let's do one rate hike, normalizing the balance sheet slowly. do what we need to do because we have a strong economy, not because we're so terrified we're behind the curve that we have to cause recession to bring in in inflation. that will be the message. not that she shouldn't hike rates but should not be in so much of a darn hurry. charles: don luskin thank you very much. don't hate the player out game. i like that one. if you want to be a venture capitalist, want to get on the ground floor, if you ad inkling getting on the ground floor this show is for you. disney had powerful earnings. the question should the mouse house buy netflix? who should have the answer, one of the best analysts on this, needham's laura martin. she joins us next. ♪. voiceover: riders. wanderers on the road of life. the journey is why they ride. when the ro

prohibitions that include governors, president, first vps and research directors at the banks and fomc staff and other staff may be included in the future they have 12 months to comply with these rules and take effect may one and fed officials are required to give 45 days before purchasing assets and disclose any asset changes within 30 days so scott, this is a widening of the trading rules in the wake of those controversies and the fed taking action and widening to stricter rules for the federal reserve. >> and then they went on even further, steve and said in congress senators can't trade stocks anymore because that's totally ridiculous >> they didn't do that >> no, you are correct to say that this really does cast a spotlight on what congress can and should be able to do as you know, they're debating that now the fed, i think these are among the most strict trading rules of any government agencies. they said that they looked around the world and they looked within other agencies here to broaden out these rules and what they first decided to do in october. >> all right steve, i appre

meanwhile voting members of the fomc also appear to be mixed on whether to go 50 basis points or notat least three of them right now though are leaning in that direction. with me now university of maryland economist peter morici and peter, you know, i know you think the fed has already behind the curve, so how critical is that with that in mind, is it for them to go 50 basis points? >> oh, i think it be very helpful for hem to go 50 basis points, but even with that, let's remember what paul volcker did in the same situation. over eight months he didn't go a point and a half or two. he went 7 percentage points. now, the economy did slow, he's back and then he pumped it again and went up around 17 or 18. it takes dramatic action to crack the back of an inflation like this , when you've got these kind of supply chain problems. simply there's too much money chasing too few goods. charles: so depending on where oil goes from here, there are signs that the cpi, consumer price index, maybe topping out. how would that inform where the fed goes afterwards? >> well oil topping out be helpful,

the reason i say that is because typically we have divergent voices in policymaking committees and fomc seems like from the last presser we had following the s 1-c meeting there is widening divergence about what the problem actually is. if you don't know what the problem is, it is harder to address. are we at full employment or not? is inflation structural? is it something else? because we do not know what the issue is, it is going to resort to something where the fed goes after what they know best, raising rates to address inflation. if that is not the issue, we are going to get a dripping in of higher rate expectations until we push the economy into recession. that is the fear and i fear other monetary stories are going to try to get ahead of the fed and. the passenger. shery: we do know the symptom is rising prices. >> i think that is what you should do at this point. even the way think the drivers of inflation right now are not traditional monetary drivers, it doesn't really matter in the end. this inflation sensitivity is going to be a theme for some time. right now, finding opport

it but this is the direction he is pushing the fomc in. the ecb, they are having a debate about how they have to react to inflation a record 5% year-over-year. christine lagarde seemed to open the door for rate hikes. today in an interview, she said if the ecb acts too fast now, the recovery in the economy could weaken, it could be slower than we want to see. yes, it is going to be high but it's going to fall over the course of the year. we were talking about an exclusive story from bloomberg that officials the ecb are starting to doubt the staff economists forecast. for right now, she is pulling away from the kind of path that bullard is getting the fed on. it's interesting if the boj would pull back. it's a push pull between the major central banks. shery: a big divergence from asia to the west. kathleen hays is here with the latest. let's bring in our guest who is forecasting 50 point faces pipe -- hike. the chief economist at citigroup. to have you with us. was this all about the cpi numbers today? >> it really was. when we saw the cpi

louis fed president jim bullard says the fomc needs to move forward plans to raise interest rates tots inflation tightening credibility. willard -- bullard called on policymakers to react to inflation data and repeated his view that rates should be raised by 100 basis points since -- points by july. thomas mark and says jobs and inflation data shows it would be timely to start normalizing monetary policy. ecb president christine lagarde says there is no rush to remove stimulus. lagarde highlighted the limits of the bank's powers at this time a volatile crisis saying it needs to be open about what is feasible. she turned more hawkish after the ecb let -- met last month. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. >> we will be looking into the latest earnings highlights of india's biggest -- our interview is next. keep it here with us. this is bloomberg. ♪ >> the markets in mumbai get underway. looking here at that futures contract which is higher looking at a positive start for india

if the center of the fomc is snil that three to four range, or will do one and see how the numbers come through, then, arguably, the market has done a fair bit of work and two-year note of 1.3 something is kind of what you're going to get for now the map starts to work in favor of that call that inflation is peaking in a few months. not right now. because the numbers year over year will still be pretty eye popping. so i think that's, you know, that's the walk we are walking right now. also, we're in the bond market long-term yields are up but they're not really, you know, going and taking flight. and what that suggests is this tightening campaign may be short and concentrated, but likely to restrain inflation and not going to be this kind of pro tracted tightening effort where the fed is chasing inflation higher. >> yeah. you can argue you're seeing it play out with the dynamics in housing, right you have housing prices in major metro areas up something like 20%. now you have mortgage rates at the highest level since before the pandemic and starting to potentially see some -- i don't wa

opinions he came out this morning with a note saying we don't expect geopolitical risks to stop the fomc steadily by 25 basis points we expect some participants will see it a compelling reason not to hike by 50 basis points in march. i think that's the consensus for most the problem is look at what we have for stocks now. this is just not good. three facts that really don't weigh well for stocks. number one, higher stocks. number one, higher inflation stocks can do well, but rapidly higher inflation, no, historically they don't. number two, slower growth. the u.s. is nowhere near a recession, but higher commodity costs slow u.s. growth and the fed tightening here, slow rate hikes in a strong economy, not bad, but rapid rate hikes in a weaker economy, not good these three things are why the market is down the mark is cheaper. 21 times forward earnings in early january. now 19.6 times it's getting cheaper nobody feels god abood about th. is there good news >> no. we are trying to find a bottom how about a drop in selling fresh? no, haven't seen that. how about multiple 90% downside days fo

charles: you have three voting members of the fomc over the last 24 hours toward 50 basis points. but other than that you are right. talk about a cold and opportunity. in the stock market we see it all the time, the kitchen sink. when a company knows it has bad news they put everything out, everything and they pay a price for it. facebook is a recent example. once you put it out it is out there. this is a golden opportunity for the fed which admits they made a mistake with transitory notion to go out and be more aggressive and they are not going to do it. neil: rarely does the economy make a soft landing even after inflationary price. paul volcker indicated you could get to better times but it makes a bad situation at least in the interim even worse. i am wondering given the fact the federal reserve is deemed late to this fight and late pool back some of that fight, then what? charles: you are right about the soft landing part. markets, individual stocks, the economy, whatever is going to drive down, it is going to hit. i believe we should hit sooner rather than later. i know it i

because the increases in the report were not at all driven by the flighty up and down categories the fomcuse it's becoming increasingly evident that the central bank made an egregious error for staying so easy for so long the year over year rate, 9.7%, and near the second highest rate since the series began in 2010 only two places for this inflation to go, in consumer prices or reduced profits to companies who can't pass it along, but there is some ability for companies to ease pricing pressure with higher productivity we have seen some of that, but two things stand in the way of that first,io vusupply bottlenecks and high prices for capital goods equipment that would give you the productivity, and second, the ease with which companies have been passing along the higher prices. expect a chunk of gains to wind up in consumer prices, mike. >> i'll take it, steve not the greatest of news for consumers. steve liesman, breaking it down for us thank you. >> staying with the markets, we're joined by allspring global investment portfolio manager margaret patel, and cnbc contributor megan shu. the

there's agreement they need to raise rates even among the fomc hike from what i'm reading, their testugh some bad news, unemployment rises, market turnback, that's when i worry about them turning around their policy >> you think they should stay the course, even if, say, yield curve inverts, credit risk continues to rise, like we start to get some real recessionary signals from the market? even then? >> well, they better stay the course because this stop and go policy they have tried that in the bast, and it usually creates more uncertainty it also creates a more volatile environment. their credibility then becomes even more at risk, so you know, i'm not saying they should start raising rates 100 basis points that would only shock the market, but once they know they're behind the curve, and they are at 7.5%, once they know they have to raise rates at some pace, then they need to set that out for the public and stick to it if they start raising it and they get 75 basis points and the market starts to either -- the economy starts to slow, unemployment starts to rise, and they back off t

the fomc minutes are breaking. we'll give you more on that later.fed guessing game as a slate of nominees hit a brick wall during confirmation. stocks are holding up pretty well. we'll discuss positioning with some of the best in the business. also retail sales came in much better than expected but something is certain

trading prohibitions includes governors, bank presidents, first vice presidents, research directors at fomcfficers it required officials to give 45 days' notice before purchasing assets and disclosing asset purchases within 30 days separately, on the policy front, new york fed president john williams clearly signaling today that he favors a 25 basis point move as the first hike in march saying he, quote, does not see any compelling reason to take a big step at the beginning. i think that's an important voice in the issue of whether or not they'll do 25 or 50, guys. >> buller seems to be more and more like he's a lone voice in the 50 camp. back to the trading policy because i was speaking to congressman josh gottheimer right after the trading rules were announced and basically, these trading rules sound much more stringent than any of the bans being proposed by congress and i am wondering, under this trading ban, are blind trusts allowed? is this only direct ownership in a direct account >> there is some language on trust, melissa i'm afraid i'm not familiar with the details there. it did ta

i do think if there's some confidence about the path, there's no way we go into the march fomc meetingbeing a tremendous amount of uncertainty as to what's likely to happen. i think, in fact next week, there's a ton of fed speaker out there in addition to bullard i would guarantee all of them probably including bullard are going to be less hawkish than bullard was yesterday. so i think there's going to be a massaging of the story, and as to the idea the fed is behind the curve, there isn't one curve. the curve isn't drawn yet. we don't know the path of inflation. we don't know how far you have to go. this fed has told you it was not going to be pre-emptive this cycle. i don't think that tells you much of anything except yes, probably seven live fed meetings this year, and that's probably the makings of a little bit of suspense each time but to me, it's not the story and the market has gone a long way. credit markets have wobbled a bit. that's a little bit of a concern alongside, but one final thing, since the cpi number yesterday, we haven't gotten anything that would make the fed incr

our point of view, if you look at it, there's likely to be continued volatility into that march 16th fomc meeting and beyond. if you had only the fed to deal with, which you don't, and you have the geopolitical risk, and you have this transition, this psychological transition from growth stocks to value, which we think is quite a durable transition, all of this has caused uncertainty in the marnets. from our point of view, this is likely to persist. we think you get a test of the january lows at 4200 in the s&p 500. you in all likelihood undercut them for a point at some point later toward the end of the year, we think the market regains its footing around the narrative that you have durable economic strength and earnings which ultimately drive stock prices higher. >> do we have durable economic strength in the second half in earnings there have been a number of negative sprys on the earnings front. you see what happens to stocks when that happens and there are questions about the sustainability of the recovery given monetary and fiscal stimulus changing dynamics >> there definitely are.

renaissance macro says this, you cannot rule out a 50 basis point move at the march fomc meeting, sos is all about rates. stuart: absolutely. look what's happening on the market right now. as soon as the number, the jobless report came out, stock futures went down, and they stayed down. kenny poll carry joins us this friday morning. kenny, it was a strong report and a strong revision. the problem is that means that the fed is probably going to raise rates sharply soon. that's the problem for the market, right? >> well, it is a problem for the market. but, listen, the fed -- no matter what this report was, the fed was going to raise rates, otherwise they'd lose all credibility. what lauren brings up and what people have been talking about is do we go up 25 basis points or 50 basis points. considering the december number was revised up by nearly 400,000 and today's number was, you know, much better than the expectation -- because, remember, the white house came out in the early part of the week telling us, you know, don't be upset if it's a crazy number. they were trying to prepare you

better than it did in the 1970s it's a different world i think the market is anticipating when the fomc of march this year it will increase fed fund rates by about 25 basis points 50 basis points is possible with the data between now and march 15th or so, but i suspect anything less than 25 basis points which would say no rate increase would be a big shock. something more than 50 basis points would also be a big shock. i expect the fed will move gingerly each time it meet probably looking at quarter point basis points, 25 basis points each time it meet this year seven times overall and it's already met once, so six more times this year. i suspect it won't increase at every one of those meetings but something around 25 basis points >> no question this is not what we saw of inflation in the 1970s. we're not looking anywhere near that when you're talking 7% increases in cpi that is significant we were talking this morning about comments made in england about how they think workers should stop asking for raises and bosses should be more strict in stopping handing out raises to cut inflation

and here, in early 2022, and i think that will continue through the year -- the fd the fomc is unquestionablydemand so policy is going to be set in a way to try to deal with the inflation question and slow things a little bit or take a little bit of the froth out of the economy. i think we are going to continue to see solid growth. maria: so dan what is your take i mean we see new numbers, expectations that are slowing economy does it change the fed's plan or do you agree with lockhart? >> yeah i don't think its changes fed plan at all at least so far i think you keep. mind fed is an indicator this fed has been the most lagging fed by the time you know that you are seeing, you know the more and more signs of a sustained slowdown are there going to be slow to react still reacting to very, very strong end of 2021, the other thing if you listen to comments that chairmen powell made last week he is telling us that, you know, there is two two -- there is employment mandate place of employment mandate full employment in their eyes what they said the economy and labor market, can sustain a lot more

he will do whatever the fomc agrees to in a consensus.phed. if they don't they hurt their credibility. i think we have to ignore mister bullard. maria: it is a good point. let me bring in nancy taylor. >> good to see you. i'm wondering how you are investing in this aforementioned energy, your commitment to energy. how do you anticipate where we are and how you invest going forward in light of fit increases and inflation? >> any stock or any company can raise prices is being rewarded. i had an earnings announcement, i was shocked how strong the guidance was. we have a retail sales report in january and stocks announced good earnings like nvidia, i like encore wire. any of those strong stocks that get hit after announcing great earnings, we have some consolidation in the margins because earnings season is largely over and some consolidation is normal. from mid march on we should pick up again. earnings are working. fundamentals are working. the market is more narrow but energy so is are the best sectors. anything that can go higher is being

managing director of russell investments say we think that the fomc's hawkish pivot will sustain hikingough the first half of 2022 we believe it will allow for the softening of the hawkish stance. it is for a decline to 4.2% this year 2.9% by the end of 2023. it comes with the belief inflation welcome down respondents look for more balance sheet runoff than the prior survey look here. the average looks for the balance sheet to begin running off in july, which was the same. the total of $460 billion this year up from 3$380 billion befor the meeting. that grows next year to $930 billion. by the way, that total is also lower. it had been 2.8 in the prior survey the fed may prove the hawkish view of rates to be correct. it is also possible the fed will do somewhat less on rate hikes and more on the balance sheet. that will determine whether inflation -- all determined if inflation comes down becky, the story here is they are leaning more on the balance sheet. i think you heard that from esther george from kansas city >> is that something they think will be effective on inflation as well or

what we think people haven't focused on enough is those minutes reflect last year's fomc and this year'sh. we have three nominee whose are being held up right now but presumably at the march meeting powell will survey those nominees, if he thinks they're going to be on the board. so five out of seven members will be doveish. we think the fed will focus on a dual mandate now which they haven't been for 20 years. they just had the 2% target. so we think they're going to be more doveish than bullard so we don't think there will be 50 basis point hike and they're going to wait because monetary policy acts with a lag. maria: so wait. do you think then that it's because inflation will get tamped down when the economy is slowing down? is that's what's behind the thinking that they'll be more doveish? >> well, it's mainly that that composition, but the key sector to focus on is housing. housing has been associated with all -- i've been over the last 11 recessions since world war ii and housing cost a lot of the inflation, we had a 20% increase in housing prices, double digit rents. keep in mind,

the -- the fed the fomc, is unquestionable plea going to raise interest rates try to take edge off demandittle bit or contagious a little bit of froth out of the economy. but i think, we are going to continue to see solid growth, let's remember, that the trend rate of growth long-term rate of growth u.s. economy around 2% we are in a way, returning to if median. >> look at other factors as you look at your macro expectations you've got oil right under 90 dollars a barrel dennis how important is that in terms of a pressure on consumers we have all that money going to people after the covid legislation back in march of 2021. it is expected that that money is now spent or saved consumer doesn't have as much money as perhaps, the balance sheet was stronger after you know all that money went out 1400 there are a checks a week, so your expectations of two things how it may shape your examinations for the macrostory this year. >> well, i make two points, first point is household balance sheets in pretty good shape one of the reasons in good shape because they weren't destroyed through the early

taking comfort in the fomc minutes. a more calibrated approach to rate rises. the march hike may not be 15. might be 50 basis point, now below 50%. nikkei 225 under pressure. the gains for the csi 300, the kospi. singapore stocks are gaining on the back of those gdp numbers. expected to grow 3% to 5%. reopening trade easing of those restrictions. taking a look at where we are in terms of those haven plays and how it looks on the back of the tension in ukraine. taking a look at where brent crude is. about 2%. rishaad: you were saying the news on the markets digesting and russia's military border -- movements across the border. the things we are looking at now as we see iron horn. let's kick up with the fed minutes. does mean we will get a rate hike. 50 basis points certainly receding. >> i don't know how high the odds were, when they were calling for either considering it, maybe they will. the meetings tell us what they are thinking. 25, 26 meeting. these minutes are closely, carefully worded. let's look at the sentence that jumped out for everyone. most noted i

i think what we saw yesterday was indicative of where the markets had overpriced, even after the fomc minutes, which many people were calling hawkish. i personally did not see it that way. you saw basically a quick steepening in the curves, and that was essentially a result of the shorter end of the curve repricing lower in terms of yield. i think that is a market looking at themselves and thinking they got ahead of themselves. so i think the fed is fairly priced at the moment. maybe even actually too high priced in terms of rate hikes. but you make a good point. political instability does reduce growth. it does cause issues with energy prices. i think they had to lean one way or the other. do they lean towards lower growth concern then towards higher energy prices? kailey: we will be hearing more from that officials throughout the coming days, including jim bullard himself at 11:00 a.m. eastern time. obviously we are seeing some action in the bond market, some pulling back on yields. the 10 year yield now back at 1.9 6%. how high can yields go in an environment where the fed may be m