it does mean the next few months will be volatile. >> we're coming out of fomc blackout. the minute we wake up tomorrow -- charles: aye yi yi, not that again? my goodness, i can't take it. >> like a vacation, 10 days of blackout. vacation. charles: before it used to be the fed chair. now every person on the fed can move the market. everyone of them can get up to the mic to say boo, we go straight down. >> coming out of earnings season. absolutely right. a vacuum. people are hungry for information. it will be all about the fed speak years what about main street? sounds like he punted in the sense that hey, you are still main street going to suffer inflation which is out of our hands? ukrainian stuff out of our hands, inflation from china out of our hands. folks are looking how do they get relief? how should main street feel? >> we know inflation is the most regressive tax out there there is, the bottom line it will be very hard to slow the economy, slow demand. slow financing and not hit main street. look at ism manufacturing. ism services, they're rolling over. it is tell

well that continue into the fomc meeting tomorrow?ker dollar likely following that interest rate. all likely to change tomorrow as we get those fomc decisions. let's talk about real rights. as we see the moves in the 10 year, the real yield, taking out inflation, is actually positive again. we saw it dip again as we saw the 10 year nominal yield hit 3%, but the question is does it stay positive? what are the questions for allocations when it comes to the bond market in particular? let's talk about the movers in the s&p 500. not a ton going on, but underneath the hood, western digital talking about a potential spinoff. activist investors pushing for that. it looks like investors are buying onto the idea. the real one i want to get to here is amazon down .2%, despite winning that union attempt in new york. that was supposed to be good news for the labor market policy, but you can see underperformance and amazon. speaking of underperformance, let's talk about one of the major scares happening overnight. alibaba. we saw the swedish stock

he still believes the fomc and the fed can engineer a soft landing for the u.s. economy. the details around the balance sheet runoff which will start in june. let's check back on the markets. 1.6% up on the ftse 100. unicredit earnings to factor in as well and the spanish ibex getting 1.5%. let's look how things are playing out across assets. it we are looking ahead to the bank of england as well. the ecb's panetta saying that there could be a potential stagnation. in terms of the futures stateside, you are seeing losses of zero 3% -- 0.3%. in terms of sterling, it is seeing weakness. we will see how the boe decision and any comments on the updates of the inflation forecast play into that. 194 on guilds. -- yields. and we saw that big run up yesterday on the back of that eu restriction -- decision to restrict russian oil. 110 dollars a barrel for brent. you had that fantastic conversation with jamie dimon yesterday and let's for us today -- and getting more market insight for us today. francine: this is a bit of a rubberstamp when it comes to regulating some of these busi

we're going to see rate hikes from the fomc.he lockdowns in china taking barrels of -- reducing the demand for barrels. keeping the supply stable. if we had not had the china lockdowns we would have been higher. i think we will see higher prices. dani: this push and pull from two competing factors. when you look at china and look at xi talking about lending more support to this economy. is that reigniting demand despite zero covid? >> it will. more the timing of it. the former guest talked about it as well. china will have to come up with some kind of response. they have to rectify that as soon as possible. we will see stimulus coming but we will also put a flow on the commodities sector. metal also suffer as a consequence as well. all about the longevity of this lockdown we're seeing but there will be a response from the chinese -- dani: ole, great to get your take on this commodity market. ole hansen. let's goat the first word news. >> good morning. the u.s. supreme court is reported to be poised to strike down the landmark ro

and while it certainly isn't your desire, the soft landing is the big hope of everyone, would this fomc have the courage to endure a recession to bring inflation down, if that were the only way necessary? >> so, i think it's certainly possible that we'll need to move policy to levels that we see as restrictive as opposed to just neutral. we can't know that today, that decision is not in front of us today, if we do conclude that we need to do that then we won't hesitate to do it. i'll say again there's no bright line that you're stepping over. you're really looking at what our policy stance is and what the market is forecasting for , looking at financial conditions, and how that's affecting the economy, and making a judgment. we won't be arguing about whose model of the neutral rate is better than the other one. it's much more about a practical application of our policy tools, and we're absolutely prepared to do that. wouldn't hesitate if that's what it takes, so i am of course, who isn't an admirer of paul volcker , i shouldn't be singled out but i knew him just a little bit and have tr

the kansas city president says rough markets won't deter the fomc's plans. president biden is said to be weighing a meeting with the saudi arabian mohammad bin salman mom in a possible following o -- thawing of relatoins. blackrock say they are not seeing a liquidity crisis yet. dani: that optimism giving us that friday feeling. we're seeing a pretty strong rebound in equity markets this morning. china up more than 1%, or that is that loan prime rate cut. we will get to that in just a moment. up more than 1% on both europe and nasdaq futures. i would remind everyone this is a pattern we have seen, one step forward, two back. one point $1 trillion wiped from u.s. stocks over the past four days. the worst week since 2001 as the concern shifts from inflation. i love a little bit of triple witching. nearly $2 trillion worth of stocks expired today, adding to the wrinkles. manus: mohamed el-erian says perhaps we are moving to the next phase, which is the second drug effects. -- round effects. yields are rising again this morning, oil is down at the prospect of mo

not a lot happening ahead of the fomc minutes.o see no movement in the bond market or limited in the face of a stronger dollar. what is the dollar reacting to? jon: a great sector to look at for the conviction story is the technology sector. to your point about green on the screen, we are seeing names that have struggled down anywhere from 40% to 50% this year. moving higher, the tesla story and docusign front and center. do growth stocks find a place in portfolios again? still so many sensitive on the outlooks and we will be watching nvidia closely after the bell about what they have to say on the road ahead. >> let's turn to the economic picture which has been a key factor in the volatility we have seen in the markets so far. we caught up with the ceo of the teachers pension plan board in davos. listen to his thoughts on inflation. >> our mission is to provide stable returns over longer-term. inflation is what we are watching the most. jon: we may get more insight on inflation and the path of rate hikes when the fed releases the

we are watching the fomc meeting in the move in the market are just amazing step real yields, benchmark rates in the united states are at the highest levels going back to the height of the pandemic, above zero once again and the pace of the move has been dramatic. people are seeing the fed as concerned about inflation and trying to get ahead of it with front loading those rate hikes. the two year yield is reaching highs not last seen until 2018. how does the fed sikkim to the market how to respond going forward? the goal is not to move anything but they don't want to calm the markets. you want that financial restriction to engage some sort of cooling of the inflation. we will get a sense of how hot the labor market is at 10:00 a.m. expected to remain the highest -- near the highest levels in history showing that perhaps the unemployment rate is below the official level in the representation of how tight the labor market really is. ministers of the european union are meeting in brussels to discuss how to respond to the demands of russia to pay for oil and gas in rubles. how do they deal

against this backdrop, today the fomc raised its policy interest rate by half percentage point and anticipates that ongoing increases in the target rate in the federal funds rate will be appropriate. in addition, were beginning the process of significantly reducing the size of our balance sheet. have more to say about today's monetary policy actions after briefly reviewing economic developments. after expanding at a robust 5.5% pace last year, overall economic activity edged down the first quarter. underlying momentum remained strong, however, as reflected in net exports, volatile categories whose movements last quarter likely carried little signal for future growth. indeed, household spending continued to expand briskly. the labor market has continued to strengthen and is extremely tight. over the first three months of the year, employment rose by nearly 1.7 million jobs. in march, the unappointed rate hit a post-pandemic and near five decade low of 3.6%. improvements in labor market conditions have been widespread, including for workers at the lower end of the wage distribution as well as fo

of course and read at the top of the agenda today meeting taking place at the federal open market fomc pretty much at the moment had signaled and almost amended a 50 basis point cut. the question will be what is the linguistics behind all of this? what is the verbiage, what is jay powell going to say if he gets more hawkish, bets are off in terms of currency. we'll talk about it, but overall, under pressure for the three-year aussie bonds losing to the upside. the yield just about 11 basis points. dropping 3.1% there. the two-year, 2.84% at the moment. the yield on the aussie. it's really all down to what the fed does next. and with the aussie, the rba did yesterday. let's have a look at what else is happening. haslinda: markets around the world gearing up for an aggressive fed rate hike. let's get more analysis from our global economics and policy editor kathleen hays. kathleen, a 50 basis point hike now expected. what about a 75 basis point hike into the future? kathleen: traders waiting to see if jay powell opens that door. the door is wide open. a 50 basis point hike, since the mar

with this fomc had the courage to endure a recession to bring inflation down if that were the only wayecessary? fed chair powell: so, i think it is certainly possible that we will need to move all see to levels we see as restrictive as opposed to just neutral. we cannot know that today. that decision is not in front of us today. if we conclude that we need to do that then we will not hesitate to do it. i will say again that there is no bright line you are stepping over. you are really looking at what our policy stance is and what the market is forecasting for it. if you are looking at financial conditions and how that is affecting the economy and making a judgment. we will not be arguing about whose model of the neutral rate is better than the other one. it is much more about practical application of our policy tools. and we're absolutely prepared to do that. would not hesitate. so i am of course -- who is not an admirer of paul voelker? i knew him just a little bit and have tremendous admiration for him. i would phrase it this way. he had the courage to do what he thought was the righ

get your take on what we heard from the fomc minutes, nancy. >> we talked about this, charles. was suspicious they would raise as much as the market is forecasting. when they're hiking rates into a slowing economy, not just the u.s. but it's globally and i think i think we're starting to see now some reality kind of pop in as investors step back and say, yeah, maybe this isn't, maybe we're not going to be on a relentless march up. even getting governors saying the same thing, we may see a pause in september. it's a midterm year. the pause is likely political, because they don't want to drive the economy into the ground. charles: yeah. >> the last i will say, gdp numbers everyone has been wringing hands over, negative 1.4% print in the first quarter. it was all imports. imports are subtraction from gdp that was 3.2% negative. otherwise we would have been up. i think there is starting to be digging into the numbers. looking beyond the next two minutes. i think that is what you're see seeing in the market. charles: phil, are you seasoned pro place off bear market bounces or like m

from the last fomc meeting minutes came out and suggested we are going to get half point rate hikes but fed is going to wait after that to see how the economy is reacting. it will not be super aggressive one right after another but this is good for the market, the market is worried the fed will keep increasing rates until there's a recession that ends in inflation and hope that's not the case. people going and by these stocks. jack: you will tell me it's not time to back up the truck and start loading up on speculative tech. jack: that is right. if you like those stocks you are betting the economy is going to be fine and inflation will come down on its own without the fed doing more than what is going on. that's a fairly big risk right now. we don't know how this is going to play out. will the fed get aggressive again, will inflation stay high, will the economy fall into recession, not the kind of market i want speculative stocks. i'm looking at things that were higher-quality and stable earnings, good cash flows, profits. jack: recession and inflation are the big questions. any indicat

the labor market is extremely tight and inflation is much too high against this backdrop, today the fomc raised its policy interest rate by a half percentage point and anticipates that the target rate for the federal funds rate will be appropriate. in addition, we are beginning the process of significantly reducing the size of our balance sheet. i'll have more to say about today's monetary policy actions after briefly reviewing economic developments after expanding at a robust 5.5% pace last year, overall economic activity edged down in the first quarter. underlying momentum remained strong, however, as the decline largely reflected swings in inventories and net exports, two volatile categories whose movements last quarter likely carried little signal for future growth >> household spending and business fix continued to expand briskly. >> the labor market is extremely tight. over the first three months of the year inflation rose. in march it hit a post-pandemic and near decade low of 3.6%. improvements in labor market conditions have been widespread including for workers at the lower end

the look back, its rear view mirror looking confirming the fomc voting members firmly are in fed chair jerome powell's camp. they agreed three weeks ago that they should stay on track and implement half point interest rate hikes, at their next two meetings in june and july, but look at the intraday chart of the s&p 500. you can see how it gave up gains in the minutes after the 2:00 p.m. eastern release. our floor show traders are here, even though the s&p is backup 42 points, they're going to tell us if the backward-looking notes from three weeks ago still match up with the current economic environment, because that was then, this is now. workers digging in their heels, millions insisting they want to remain remote. how's that and a slowing economy affecting commercial real estate markets is in the thick of it, they are the ones who lease warehouses to amazon and office space to thousands of companies, with their stock down 22%, is this the new normal, or this too shall pass? we've got the ceo. and those who predicted stay-at-home workouts be the new normal were totally wrong. gym chai

against the backdrop, today the fomc raised its policy interest rate by a half percentage point.nticipates ongoing increases in the target rate for the federal funds rate will be appropriate. >> to have more from washington, d.c. on why the increases in. -- the increase is important. >> the reasons behind inflation are so specific, the war in ukraine, supply chain issues, the lack of affordable housing, corporate price gouging we are seeing on the energy sectors, food sectors, pharmaceutical sectors -- these are the reasons why inflation rates are so high and the hikes are not going to do much about those specific issues. what this does a signal is even though this was the largest rate increase since 2000, it doesn't so that there is a sense of moderation of the fed. more reasons might be coming, too. they are not listening to those on the right of the political spectrum. they always want to start curbing inflation to high interest rates. no matter the economic and social costs. this is a very blunt instrument. what we are talking about here is raising interest rates to make peop

still down 23% on the nasdaq are we actually feeling better some of the inning thises that tim cited, fomc minutes. do we know anything more retailers did give us goodnews >> do you feel better >> i think i feel better but again, that's a relative term i mean, there were some pretty dark days there for a lot of us as we watched six, seven, eight weeks of continuing downward pressure so when i look at a market like this, it's the extremes that concern me so we've had the best week since 2020 after having the worst streak in a decade after having the greatest bull market in the past decade. after having oil price at the highest level and inflation at the highest level in several decades. it's all of those conflicting messages that make it very hard for me to take one data point and try to extrapolate that out to a trend and if there's one thing that i think the fed has told us, even if it's going to be at the detriment of moving too slow, they will be methodical and data dependent. i expect that they will be very deliberate and data dependent when it comes to changing course so one pce readi

against this backdrop, today the fomc raised the interest rate by half percentage point. >> michelle has been analyzing the shift in monetary policy in washington. reporter: the federal reserve has raised rates by half a percentage point, as expected. bringing its key benchmark rates are the range of 0.75 and 1%. this was a big move designed to try and manage soaring inflation, which is not currently at a 40 year high. it is a step up in efforts that began a month ago. but even one the federal reserve -- when the federal reserve raised rates last month, there has not been a cooling off in prices. so it's trying to act more aggressively to address the cost of living prices. >> there has been some criticism they have been a bit slow on this. reporter: well, there have been plenty of criticism they were too slow to react. i think part of that has been driven by the fact that you are talking about inflation as i mentioned at 40 year highs. u have to go back to 1981. they are being forced to play catch-up. that means that we are expecting throughout, much of the rest of this year. there a

today the fomc raised the policy interest rates by a half a percentage point. it's a strong economy. nothing about it suggests it's close to or vulnerable to a recession. 75 basis point increase is not something that the committee is actively considering. maria: meanwhile, rates are pulling back. the 10 year treasury yield dipping with the ruling out of more adress i've action. -- more aggressive action. the yield is up 2 basis points at a level of 2.957%. stocks meanwhile are also pulling back this morning after you powerful big relief rally yesterday. this morning the dow jones industrial average down 142, s&p 500 down 26 and nasdaq down 111. after all three major indices rallied strongly, up almost 3% on the session yesterday, after the federal reserve's move and press conference, the dow was up 932 points. thats was almost 3%. the nasdaq was up 401, better than 3%. and the s&p 500 higher by 3%, 124 points higher at 4:00 on wall street. check the level of oil this morning, oil prices right now are slightly higher. the price of brent at 110, 52, up about a th

sustainability is the question ahead of the fomc meeting. it is not just inflation. it is underlying growth. copper down on global growth fears. jon: certainly, investors feeling unsettled. we saw that in the underperformance for technology last month. as we go through the trading day again, we are seeing cautiousness with respect to amazon down another 3% after its worst day last week since 2006. we are continuing to roll through earnings out of the technology sector this week. ahead of those numbers, we are seeing selloff pressure in those names. kriti: let's get to a big conversation. mark loewen spoke with erik schatzker earlier today at the milken global conference. listen to what he had to say. >> the key point i was making is everything you believe prior to 2008 no longer exists. jon: for more on the markets today, let's get more insight and analysis from michael regan. i guess we should start with the significance of the 10-year yield getting to the 3% threshold. we have had past conversations around how stock market investors would feel about it. we have alr

loretta mester says the fomc may need to hike by 75 basis points if inflation does not subside.ta is due out today. chinese stocks jumd

committing again to 50 basis points and reiterating 75 basis points is not being actively considered by the fomc. the s&p 500, gyrations that we saw yesterday, just a reminder, you are down on that index 70% year to date. citi saying that u.s. equities are coming out of bubble territory. in the first few seconds of this friday open, the ftse 100 gaining .8%. the cac 40 also higher. in germany after heavy losses, the dax is up .7%. and the spanish ibex higher by around 55 points. let's see how things are playing out across as it with our focus in the tech heavy nasdaq sector. and volatility across the fx space this week has been pronounced. nasdaq futures with gains of 1.2%. a healthy session if that holds. on the euro-dollar, parity in focus. that has been the big debate. as they geopolitics remains an issue. the u.s. 10 year at 2.88, up three basis points, but on the week, the move have been lower. and it's been one of the strongest weeks for u.s. bonds in a while. bitcoin has returned about $30,000, some of that pronounced volatility across the crypto space yesterday easing somewhat. tether re

perhaps the biggest driver for the rally, the fed on wednesday, the fomc minutes, suggesting there mayme flexibility ahead. as for the p inflation expectations, a great chart shows us the forward five-year breakeven that it is at the lowest level going back to 2019. you really see this come in here telling you in some ways perhaps markets thank the fed can in fact handle inflation. another question could be, do consumers think the fed can handle inflation? we don't know the answer to that yet. a mixed picture in retail. today we have retailers up in a big way. ulta particular sharply higher on a solid quarter. this is a one-week chart. ulta up to 1%. we had a wide variety -- ulta up 21%. we had a wide variety putting up weak quarters but more around the operating margin. dollar tree and dollar general. doing quite well. it seems we have more clues on how consumers and companies are handling the inflation picture. anna: a nuanced picture around retail. abigail, thank you. let's stick with some of the point she was making about inflation. for more, joining us now is tomorrow. let me star

economic growth but you also have people like a dove on the fomc saying we need to continue to raise rates and tighten financial conditions, all of that plays into further dollar strife in there. jonathan: euro-dollar parity for the team over at ubs. dollar cnh at seven. tom: over the weekend we began to finally see that. this is a big thing for wall street firms for global firms in city firms. it is not as un-american, but there's just something about parity which i think people really run from. it's a tougher decision than saying we will go to 105. jonathan: this time it suggested the europeans don't want to do there. tom: this is one of the great signs of a slowdown and juergen have to translate. this is a minister for safeguarding all over the british news. everybody's got in the u.k. news. this is someone with a very serious job, all sorts of social issues. the minister says in london take on more hours and get a better paying job. this shows up like clockwork. jonathan: i don't know what to say, tom. i'm at a loss for words. just how detached policymakers are from reality is un

if they deliver anything less than 50 that will be less -- quite a dovish step given that the fomc have already like that as nearly a done deal. markets are turning their sites to a potential 75 basis point hike. we got to a 50% probability in terms of rising for that over the last couple days. but of course, it really shows how much have amped up their hawkish expectations and now are expecting policymakers to deliver. francine: what i'm hearing from traders, they were saying, it's difficult as a chief executive to know what to do with prices. if you are a young trader, you haven't lived through inflation, my tip of the day, speak to a bloomberg who lived through the 80's and 90's. kristine: its immense pressure on other central banks for sure. we saw the rba deliver a bigger than expected rate hike yesterday. that makes sense. australia is an open small economy that really responds to what happens globally. the rba really needed to deliver that surprise to create that impact instead of markets following the global trend. it brings the pressure as well for the bank of england, meeting

kriti: as we talk about this fomc decision, we have to talk about and only second long trend coming ton end, negative yielding to. all main -100 yielding bonds in the world, mostly in europe. you can say a steep drop starting your to date, everything to do with an extremely hawkish federal reserve. a lot of that negative yielding that still left in europe. the question is if you see that policy diversion between the fed, ecb, other central banks around the world, how much longer does this go? the other ball case for bonds could reverse this trend is the growth scare, china scare, ecb scare coming off of the war in ukraine. bill negative dots extent as it was eight years ago? tom: i am just looking at my bond portfolio. jonathan: how is that working out? tom: down 50% on that austrian peace -- piece. jonathan: this is painful. tom: 60% annualized. jonathan: one thing that stands out to me, the german two-year. this is quite the move that we have gone from positive 28 basis points from negative one full percentage point in the pandemic. that is a massive change. the ecb has been lar

the fomc is not meeting in august. when wallace says several, he means through the end of september. a lot can happen between now and the end of september. you have to get back from your holiday, for example. the global economy is decelerating quickly. i would not necessarily take several to the bank. he is a governor, that is true. he's also one of the more hawkish governors. i always say and i stick by it, listen to the chair, vice chair, and head of the new york fed. the rest are backbenchers. manus: i hope you don't run into them on your travels. [laughter] what is the risk from this hawkish approach? one thing we were looking at, breakevens rolling over, pce, breakevens begin to roll over. the bond market in some ways is perhaps frontloaded, front running, overzealous? what is your take? the dichotomy. dan: the big risk is when jay powell says he wants to see -- his word, not project, what see -- clear evidence that inflation is running close to 2%. that is 2% on pce, not the labor department broader measure. if y

once again, not a ton of movement there, talking about waiting here for those fomc minutes and what might be indicated as a softening on the stance with the dollar index up 3/10 of 1%, which is significant when we talk about the bid for stocks and the s&p 500 still catching. guy: thank you very much indeed. the european union trying to push back on the hungarian resistance to the ban on russian oil imports. with hope that a deal can be done within a week. >> now we are proposing the oil embargo. as you know, we are building an agreement. we are not yet there, but we are hopeful that we can reach an agreement in the coming days and weeks. guy: meanwhile, russia getting closer and closer to a default after the u.s. treasury department let a key sanctions waiver benefiting american investors, i.e. they could still take payment, it has now expired. russia is close to a default and we have an emergency meeting on thursday as well. looks like we could be potentially seeing a rate cut coming out of the central bank there. notionally the idea there is that to try and reduce what is seen on the sc

jackson hole in august and the september fomc may see fed officials guiding towards a high neutral ratehe need to overshoot it. the back end of q3 into q4 and play. lisa: timing is not necessarily on the democrats side. though supply-side issues are not abating. in five minutes, we are going to get the ppi rating, producer prices and how quickly inflation is rising. do we get a new sense of how much momentum there is? jonathan: mike mckee is in the seat. we will get to him in about five minutes time when we get that economic data. down 0.9% on the s&p. it has been brutal. on the nasdaq 100, down 1.4%. yields lower for a fourth straight session. in a few minutes time, we get a call of economic data. breakdown from mike mckee. for our audience worldwide, alongside kailey leinz and lisa abramowicz, i am jonathan ferro. this is bloomberg. ♪ mberg. ♪ jonathan: economic data 10 seconds away. this is bloomberg surveillance. your market is lower .9% on the s&p. on the nasdaq down 1.5%. yields lower. with your economic data, here is michael mckee. michael: on the inflation front it looks a littl

lisa: it does come before that today meeting starts of the fmc in washington, -- of the fomc in washington, d.c. i'm watching ahead of the decision what is going on in the real yields space. if you look at inflation adjusted yields, they have spiked higher, decidedly in positive territory. this to me is telling. people are expecting higher yields. people continue to bring forward a hawkish this on the federal reserve as you see these inflationary pressures persist. related to that, at tenant lucky, we get the u.s. dabo openings data, expected to come in around the record highs we have seen. more openings than there are people who are unemployed, at least based on the numbers. this is basically feeding into the idea that there's probably more momentum in the labor market then the employment rate does it suggest. how far does the fed have to go? this data point may give some indication or fuel to that sentiment. today we have to keep a focus on what is going on in europe. this has to do with gas prices. this has to do with some sort of cohesion in the european union. the nesters are meeting

kansas city fed president as there george says that -- markets will not deserve the fomc's tightening. les u.k. consumer confidence strikes the gloomiest readings than's the 1970's -- since the 1970's. retail sales unexpectedly jump. let's take a look at which sectors are on the move as investors digest that bigger than expected drop in the low prime rate out of china. a boost for mortgages, the real estate sector, and short-term loans. how does that build towards the real economy one so much of it is still restricted with everything that is happening with covid zero and how they are trying to control covid-19? basic resources is the top of the pack. iron ore around 6% up and the back of loser policy. there has been a focus of spending around infrastructure and whether that drives the demand for iron ore is factoring into this. energy also up as well 1%. at the bottom of the list, one sector at the bottom in consumer products, reiterating that fed officials this week have made no signs they are going to walk back the rate hikes despite the s&p 500 on track for the seventh straight wee

the cleveland fed president says the fomc may need to hike by 75 basis points if inflation does not subsides. cpi data is due out today. chinese stocks jump as coronavirus cases jumped, but i study warns china faces a tsunami of infections if they abandon the covid zero policy. european gas supplies are threatened after ukraine says pipeline flows could be disrupted. european market making some gains. feels like we are still bouncing from losses that have been a roller coaster. tom: to say the least. mark cudmore from our mliv team suggesting the markets are gearing up for this cpi print to come in lower than the previous month. and if it comes above the estimates, you could see volatility return. very modest gains, up .2% across the benchmark. similar for the dax and ftse 100 , also up .2%. we heard from the cleveland fed basis poi -- that 75 basis points are on the table. consumer products leading the pack, followed by auto parts and technology. riskier parts of the market gaining in the session today. health care being suggested as a defensive player, but currently down 1%. we keep a fir

with the -- markets, we have different markets for every fomc meeting.or 25, 50 or 75 basis point hikes, our markets safer to we will be seeing a 50 basis point hike with a 95% chance. the markets are also saying the july meeting will see another 50 basis point spike with a 90% chance. across the whole year, markets are expecting fed hikes versus a couple months ago was predicting around seven. definitely a lot of hikes coming. emily: president biden in veiled his whole plan to keep inflation down, what do your markets a inflation is actually going to do? >> we also have arc it's on inflation from 0% to 1.2%. rockets are saying the next inflation trend coming out next week will be around 0.65% local remotes. or over the whole year, 8.2% inflation. actual markets have predicted seven of the eight -- correctly. our traders have not been surprised at all to see the high inflation numbers. it is important to say that for the rest of the year, the markets are expecting around 4%. which really is around normal levels. really expecting inflation to go back to n

on wednesday we have the fomc meeting. the fed will hike 50 bits in june and july and investors will closely watch what chairman powell will say -- to rein in inflation. on thursday we have u.s. gdp data. and on friday we have the core pce producer, price index, rather. earlier today i chatted with a couple of strategists. two things, when are we going to see the bottom and one is the selloff going to end? traders are really exhausted, everybody seems to be having a different answer of where the bottom is, or what will be the next catalyst to the upside or the downside. it's really something we are closely watching. every day it seems to change. haidi: it suddenly does not seem like a tech sell off has slowed. what with the drivers and do we see the downside. >> we might. because meta tech stocks had a bad day today. the company to blame might be snap. it fell more than 40% today, the biggest one-day drop on record. that is because the company credits revenue 180 turned from last month. snap blinked. the macro economic --

we look ahead to the futures on a day when we get fomc minutes, and any more clarity on the direction of travel for the federal reserve. futures looking at gains of .8% for the tech heavy nasdaq. the u.s. two-year 2.51, 83 basis point move after significant moves into treasuries yesterday as that shelter for havens on recession risks, you had that weaker data coming out from the richmond fed in terms of concerns around consumer or business sentiment, and home sales as well. euro-dollar 1.06, down by .4%. bitcoin as a gauge of risk sentiment, currently below 30,000. oil is gaining today after suggestions of reports around [indiscernible] decreasing stateside for the summer driving season. pfizer the drugmaker behind the mrna vaccine saying they will sell branded drugs at cost to low income countries, that is the announcement around branded drugs. they are going to start with a small number of countries, then expand over time. we will get more when that comes through. let's get over to our mliv energy editor, mark. mark: i'm looking at the bloomberg u.s. economic surprise which plunged

the increase the fomc targets takes us to a range of 0.75% to 1%. we get that quarter rise in much. rates have been near zero because the fed was trying to prop up the economy from the immediate impacts of the covid-19 pandemic locally. but the gap between rates and where we see inflation, which is at its highest since the 1980's, is the most on record. the spread between those two measures. chair powell was saying he envisioned 50 basis point hikes at the next meeting. he got asked, could we see 75? he said that was not currently being considered. not the only story. lyft and uber, two different stories with similar market reaction. lyft off by 30%, a huge chunk of market cap lost after a weed outlook -- after a week outlook. they are going to have to spend heavy on driver incentives. uber showed some strength, but the stock suffering in conjunction with lyft. for questions about how these companies stand on their own in this post-pandemic world. emily: thank you. los to digest. the federal reserve giving a much-needed boost to tech stocks by ruling out a more aggressive rate hike

he is not a voting member of the fomc, so he may be irrelevant. >> never.on-voters are not relevant. when they sit down at the table, they go one by one by one around the table and say what they see. charles evans has been at the federal reserve for a long time, well respected monetary economist, and he has been dovish. he is in the same campus jerome powell. we got an interesting nuance from him because he thinks the fed should frontload the heights , 50 basis points at first, but before december, he thinks they will have started to do may be beast a few 25 basis point hikes to get to the neutral rate, 2.2 product percent to two point have percent -- 2.25% to 2.50%. this, after some dinner remarks in a question and answer session with an audience. he wants to get the neutral by september and thinks the economy is in good shape. he thinks inflation, that the great the fed watches will be down to 3% or lower in 2023. he says he can see lots of scenarios where maybe that will not happen in the fed will have to do more, but i would say we got a somewhat dovish

even in those fomc minutes, a headline that got buried is a lot a fed officials looked at q1 data and said, this is not indicative of where q2 will be. they were more optimistic about the second quarter. is that a view that you share? claudia: two parts here. first, the housing sector is one of the more interest sensitive sectors. the fed is going to look to it as it is starting to have any effect. that is good. in terms of the strength, i agree that the first quarter is giving us two week of a signal -- too weak of a signal. if you look at the business fixed investment and consumption data together, take out inventories, taking out a net exports, that looks strong in the first quarter. that is always a better signal of where things are going, and the fed has to get that to cool off a little. that is not what is in the first quarter data. kriti: it is interesting that you mention the first quarter was an anomaly. if you look at the markets, a lot of this volatility is pricing in a recession. i am wondering, what drives an economy from a 2% growth clip to a contraction to negative terr

there is concern that rates have feet, at least until the next fomc meeting. we have some of the hawks speaking today. bostic is definitely going to put the pressure on the. i don't know if you will mention 75 basis points, but that is something to look out for. tom: and the st. louis fed president reiterating his view for the end of the year on rates to bring down inflation. on the 10 year by the way you are at 2.82. let's head over to davos where francine is standing by, good morning, francine. no snow, no russians. i hope the coffee is good, and a stellar lineup. francine: good morning, tom. the stellar lineup is here in part, but the mood is very different i'm not talking about the weather, but you have a war three hours from here. so it is very different in the past where it was more a billions. -- ebullient. we are joined by alok sharma, the cop26 president, who has a lot on his hands talking about everything to do with climate change. thank you for joining us on bloomberg tv. there were concrete roles -- goals, phasing out of coal and methane, does the

financial system maker well-qualified to contribute in a meaningful way to monetary policy issues of the fomc. i'm just looking here. she will begin her role as president of the dallas fed august 22 2022. she will miss the june and july meetings, the first time she will take part in an actual meeting will be september 21. maybe we will see her at jackson hole. kriti: let sue mount and put this into context. we know he has left can first 2020 two coming off of speculation of trading which he did say did meet some of the bank compliance but at the end of the day, what does this do from a policy perspective? delude robert -- delude robert kaplan and to lori logan. michael: it will probably not change too much. they are kind of all hawks at this point. the question is lori logan's leanings, we don't really know a lot about her monetary policy views because she has been on the technical side for the fed but as she comes into a situation where the inflation rate is a .2 percent on the cpi we saw today, she will probably lean hawkish. she will vote -- will not vote until 2023 but the fed will be rai

that came a couple of days after the fomc meeting when bitcoin flirted with the $40,000 level key levelhe down side is now $30,000. there's also been a lot of action in the futures markets with investors betting on the direction of bitcoin versus wanting to get exposure to the cryptocurrency there was a boom with almost a billion there ares worth of open contracts added and that was almost completely wiped away a day later as traders closed out some of those positions. traders were looking for down side protection and shorting crypto markets and analysts pointed the strong correlation with nasdaq and tech they called some of the bearishness in crypto futures, a quote, ominous sign for broader risk assets. >> it certainly has settled the question of how will it trade and it's more like the nasdaq than gold. kate, a lot of people are hanging on to the institutional participation as kind of a long-term reason or structural reason to stay bullish has there been any shift there in terms of people putting money into the asset >> it's interesting. on squawk box, that's one reason why people se

financial conditions need to tighten, bill dudley, the former europe fed president and vice chair of the fomc saying conditions need to tighten. stocks and bonds need to reprice. i would keep the index back at 2000 levels so we are not tied it all, which is tighter than the past two years, and the s&p 500 would have to change. it started the year at 175% of gdp, down to 140% of gdp. but the 2000 bubble peak we were at 120% of gdp, so there is still a long way to go before we find stability. with all of the uncertainty just in the headline risk out there, i would not take the chance right now. i would be more cautious and focus on value needs have more attractive valuations at this time. tom: are you going to be in cash or something wicked defensive? michael: because i tend to be more cautious, i would definitely have more cash on hand. for investors who have to be invested, i see this as 2000 and 2002. the past 15 years, the russell 1000 has outperformed. value has outperformed by about 18% this year. that's how i would look at it. if you need to be invested, be invested in value. tom: michae

removal, retracing some of the moves that we saw in the past three days of the market ahead of the fomcrsus actual fundamental drivers? bilal: very good question. a large part is this reversal of the markets initial interpretation of the fed meeting being dovish. in the end, if you step back, with the fed has done is raised interest rates by 50 basis points, started quantitative tightening, qt, which will likely see happy trillion dollars on the balance sheet be reduced. that is still hawkish in the grand scheme of things. in the middle of a hiking cycle that could go further than people think. in the grand scheme of things, that is bad for risk. at the same time come investors want to front run what the fed is doing, always want to anticipate the dovish turn in the fed. what we are seeing is that does not work right now. guy: does the market, central banks have a clue what is going on here and how to react to it? is this now the new normal? we have been through 10 years of qe, central banks anesthetize in markets. this is the new normal, get used to it? bilal: absolutely. not having be

bullard, a voting measure of the fomc setting monetary policy with his vote. he said 50 basis points the last few meetings is what he expects. >> the more we confront load and get inflation, the inflation expectations the better off we will be and 23, 24 we could be lowering policy rate because we've got inflation under control. >> reporter: he said we would like to be at 3. 5% at the end of this year. if you do the math it doesn't work with the 50 basis point increase. that's up to the chairman to figure that out. the federal reserve uses rate increases to slow down the economy, suddenly enough not to spark a recession, bullard sees the economy slowing down, believes it will pick up at the end of the year and does not see a recession. >> that's not my base case, recession would have to come because of a large shock and i can't rule out a big shock, maybe there would be. not in the near-term. >> bullard believes the unemployment rate could go below 3% this year. he would like to see more matching going on with of those unemployed and those jobs that are open.

. >> this coming on the second day of the fomc meeting where we'll get a decision nasdaq down about 1.3% lyft nearly a third of its value down today the problem there is they couldn't really answer a direct question on the call last night. in a way, neither can uber, because they don't know in terms of how much they're going to spend in terms of drivers incentives, regulation, et cetera that's maybe one of the core problems of the entire ride-sharing industry. there's still so many unknowns. >> a big part of it. look at uber and lyft, their business more of a mud wrestling match than a sprint that was promised pre ipo remember the talk about driverless cars and changing transportation the world over and the one mega app that got you everywhere that's not what's happening here they're not breaking away and changing the world then at the same time, you've got airbnb that doesn't have to pay property owners to list their property, right? the incentives are a bit morale lined for them, and things are lining up for more efficient use of that capital under airbnb's platform they're arguably th