we spoke to james bullard earlier today.colleagues about this rollout, could be orchestrated. take a listen. a good thing about unwinding the balance sheet is that it will create policy space for the committee in the future, if we need it. on the rate itself, i think we are not very far from appropriate rates for the u.s. economy that will keep inflation not too far from target and the labor market performing well. what i disagree with is a come on the idea we have to go 200 basis points higher to get to some sort of neutral rate. that is not the environment we're in. i think we can stay about where we are, possibly higher than where we are today. betty: i want to bring up this chart for our viewers come i am not sure if you can see that, as well. it shows what kathleen has been talking about, what we have been hearing over and over again. we have a hot jobs market better inflation numbers are cooling, whether you are looking at cpe or core cpi. your theous, why is it outlier here among the fed speaker we have seen? we hear

louis fed and james bullard says, washington needs to deliver on policy expectations.maker also said rates are close to where they need to be. may on the defensive, poll suggests landslide and win for the uk's prime minister mena be in the cards. how investore

we have been talking about james bullard's comments on the balance sheet.the fed resident williams of san francisco talking about making the downsizing very boring. we have some sound to play on that, guys, take a listen to -- listen. is not where we reduce the balance sheet significantly, but will it have $2 trillion or $2.5 trillion or something like that. i am not trying to communicate a decision, but that is the thinking, the right way to think about the endpoint of this. tell us what the u.s. is doing in terms of its balance sheets and rate hikes in terms of emerging markets including india and the rest of the emerging markets in asia. be ofuably it will significant importance. the u.s.n which chooses to reduce its balance sheet in terms of the speed, the vintage of the balance sheet in how it deals with the duration of the securities attached will have a large impact on not only yields per se, but the shape of the yield curve. if we assume that the yield , risingts steeper yields would see some capitulation of funds from emerging markets, especially a

louis fed and james bullard says, washington needs to deliver on policy expectations. dovish chipmaker also said rates are close to where they need to be. may on the defensive, poll suggests landslide and win for the uk's prime minister mena be in the cards. how investors price in a tight race. --s tailwinds and headwinds earnings growth thanks to cost cuts, while british airways efforts to slash spending are blamed for the epic holiday meltdown. an -- half hour away from the european open, the start of cash trade trade let's look at futures, down ross the board to reject it down yesterday rita looks like we can have a softer open, your stocks futures down 2/10 of a percent. with the futures -- ftse didn't trade yesterday because of the make holiday down 3/10 of 1%. futures us little changed train -- take a look at the gym in, some very interesting moves to see them yesterday. i got index is still open here. 2% and you have the chinese renminbi gaining a little bit. that's really losing a little bit of strength there. to watch currencies survey. especially want to see

james bullard said at some point, the honeymoon period will come to an end and washington will need toeliver on policy promises that have driven the stock market higher. james: the business numbers shot up after the election. the president was perceived as more business than the previous administration. washington does have to deliver at some point and i think that is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of american politics would settle in. we will see if that happens or not. i think the jury is still out on all of that. francine: let's bring in the chief officer at rathbone. julian, let's kick it off with you. do you think the trump administration will deliver on promises of taxjulian, let's kih you. reforms and infrastructure spending and the rest? julian: they will deliver on some of those promises. the markets have probably gotten ahead of itself in terms of expectations of what might be achieved, particularly around regulations in the banking industry. i'm not convinced that will be delivered as was set out. industry.

louis fed president james bullard and san francisco fed president john williams. >>> in the headlinesleon couperman's omega advisers reaching a settlement with the s.e.c. on insider trader claims. landon dowdy has the story. >> reporter: the firm has settled with the agency for 4$48 million. the hedge fund has admitted to no wrongdoing and cooperman will not be barred or suspended from the industry. in a statement to cnbc, cooperman says he looks forward to putting the matter behind him. last september the s.e.c. accused cooperman of insider trading following a five-year investigation. the following month he told "squawk box" he would fight the accusation accusations. >> omega was built on doing detailed fundamental research and complying with the law. we could have settled with the s.e.c. for an amount that is far less -- far less than i donate to charity on an annual basis. but i refuse to do so because i know we acted appropriately and lawfully. it took me 50 years of hard work, very long hours, playing by the rules to get where i am professionally. i'm not going to let them basica

scarlet: coming up, a bloomberg exclusive -- james bullard warning that washington will need to fulfill policy expectations or the president's honeymoon with the stock market may soon be over. from new york, this is bloomberg. ♪ julia: this is "bloomberg markets." julia: st. louis spent president jim bullard warning that u.s. washington needs to deliver on expectations that have driven the market higher since the election. the process of unwinding the fed's balance sheet should come in baby steps. i think a bullard: good thing about unwinding the balance sheet is it will create policy the committee in the -- we are not very far from the appropriate rate for the u.s. economy that will keep too far from target and the labor market performing well. what i disagree with is the idea that we have to go 200 basis points higher to get to some sort of neutral rate. that's not the environment we are in. we could stay above where we are. >> i want to bring up this chart for our viewers. what kathleenhows has been talking about and what we've been hearing over and over again -- we have a hot job ma

i do not think james bullard has much to worry about from the bond market perspective.fhe fed continueso hike rate, hethe suggested may not be happy with that. but the monde market is on -- the bond market is on his page. jonathan: we have broken 100 basis points. down toward 90. is there a message in the curve for the fed? >> yes, it is that the more they hike, the more long-term growth will come down. it will be a problem. the economy is not accelerating. jonathan: why do you see a steeper curve from here? >> part of it is the idea that the more the fed hikes interest rates, the closer they will come to the point that they will have to start cutting interest rates again. this is what they are telling us they will do in the face of another downturn, they will lower interest rates. >> are you saying it will steepen because the fed will soon have to lower interest rates again? >> it will keep the intermediate sector of the curve mi -- much richer than you would expect. >> you think this will cause the fed to have 2 -- >> absolutely not. if you look out a year or two, it

james bullard today said that the markets should be ready for continued political volatility. he also said that gridlock on big policy issues is the norm in washington. so if current events delay or stall major decisions, it won't change the current outlook. >>> the speaker of the house will send the health care overhaul bill to the senate in just a couple of weeks. paul ryan said the delay was out of an abundance of caution until the congressional budget office releases its analysis of the measure, including the legislation's cost and impact on health insurance coverage. that analysis, or score, is expected late wednesday. when asked if the score could force another vote in the house, speaker ryan said no. >>> president trump's 2018 budget proposal will aim to balance the budget in ten years. to do so, it will rely on the assumption that annual economic growth will reach 3% by 2021 and it calls for a total of $54 billion in domestic spending consults. the budget, which was being printed today, outlines cuts to medicare through social security and medicare benefits will not be

we heard from james bullard saying washington has to start to deliver.ubber meets the road at least in the u.s. washington does have to start delivering and it does not look like there is much more upside here. as we have seen in the last few months or the last month of trade. it does not seem like there is much more upside until we get to move in washington. >> especially with that disappointment in replacing obamacare. a recent market rally is encouraging a greater appetite for investment and it is planning to high -- hire more staff. entering the top 10 of asia's private banks. the ceo said there is a need for caution. speaking to our international correspondent for southeast asian, haslinda amin. >> clients are cautious but they are investing. haslinda: investing more? >> investment is increasing. this is where we continue to remind clients to be cautious. because the numbers, the economic numbers are not there yet. you can see positive data but the market has taken in more than that. optimisticvery outlook for the markets. haslinda: what do you see

the federal reserve bank nsesident james bullard war that the honeymoon period will end and washingtonhave to act. d is one of the more dovish members on the fed and talks about the pace of raising rates and unwinding the balance sheets. d: one of the good things about unwinding the balance sheet is it will create commodity space in the future if we need it. on the rate itself, we are not very far from appropriate rates for the u.s. economy that will keep inflation not too far from target. and the labor market performing well. but i disagree with is the idea we have to go to hundred basis points higher to get to a neutral rate. i don't think that is the environment we are in. i think we could stay where we are, possibly a little higher than we are today. >> i want to ring up this chart for our viewers. i'm not sure if you can see it as well. it shows what we have been hearing over and over, that we the a hot jobs market, but inflation numbers are cooling, if you are looking at for cpi, cpi, or pce. you are the outlier among the fed speakers that we have seen. we hear from john williams

james bullard warns that washington needs to deliver on the policy expectations that have driven markets higher since the election. he also agrees with recent thatnts with sean williams the process of unwinding the fed's balance sheet should coming baby steps. our colleagues on bloomberg daybreak: asia asked for his thoughts on the matter. >> i think a good thing about unwinding the balance sheet is it will create balance if we need it and on the rate of south, i think we are not far from an appropriate rate for the u.s. economy that will keep inflation not too far from target and the labor market performing well, so what i disagree with is the idea that we have to go 200 basis points higher in order to get to some sort of neutral rate. i do not think that is the environment we are in. i think we can stay about where we are, possibly higher, the today. >> i am not sure if in this student you can see this, but this chart shows what kathleen has been talking about what we have heard, which is we have a hot jobs market but inflation numbers seem to the cooling, whether you are looking at cp

and fed president james bullard and fed governor lael brainard will speak today.hey have been warning they have not fulfilled the inflation part of the picture, which is the key fed debate going on now. not hitting inflation, hitting the unemployment rate, which one whips out in terms of policy. >>> when we come back, the stocks to watch including better than expected earnings from the maker of tommy hilfiger and calvin klein. >>> and officials in washington are digging deeper into ties between president trump and russia. now they're getting deutsche bank involved. details when we return. stay tuned, you're watching "worldwide exchange." so you miss the big city? i don't miss much... definitely not the traffic. excuse me, doctor... the genomic data came in. thank you. you can do that kind of analysis? yeah, watson. i can quickly analyze millions of clinical and scientific reports to help you tailor treatment options for the patient's genomic profile. you can do that? even way out here? yes. even way out here. >> good morning. welcome back. yesterday we saw a recor

last week 90% chance, james bullard, 90% chance of seeing a june rate hike.73.8, but earlier when we saw the big dip, phil flynn, it was below 60%. that certainly affected oil but there are other drivers there. oil is a big winner and saw the 18th week in a row of the recount going up. >> it is, i'll tell you why, liz, it's because of the bigger geopolitical situation that's going on in the world. i mean there's a lot of risk going back into oil. you ask chris what you think the best sector to invest in? probably the sector beaten up more than anything. that is oil. not only do you have the iranian election creating uncertainty, you have the upcoming opec meeting next week and rumors that opec could double down and add to the production cut, actually make a bigger cut rather than expending it to next march. so that can change the dynamic. now you add all of the geopolitical uncertainty, not just here in the u.s. if it's only about donald trump, i don't think we'd be that worried. this is about other countries around the globe. a lot of instability in brazil.

james bullard says the honeymoon will come to an end. the question is, when? from new york, this is bloomberg. ♪ scarlet: "what'd you miss?" president jim bullard warning washington needs to deliver on policy expectations that has driven the stock market to record highs since the election. the process ofys unwinding the balance sheet should come in baby steps. our colleagues on "daybreak: asia" asked bullard for his thoughts on the matter. bullard: unwinding the balance sheet will create policy space for the committee in the future, if we needed, and on the rate itself, i think we are not very far from an appropriate rate for the u.s. economy that will keep inflation not too far from target, and the labor market performing well. so, what i disagree with is the idea that we have to go to hundred basis points higher to get to some sort of neutral right. i don't think that is the environment we are in. i think we can stay about where we are, possibly a little bit higher than where we are today. >> i have to follow up on the question of the markets taking balance-

we heard from james bullard on friday during a lecture in tokyo , saying he is concerned about the u.sts 2% inflation goal. he said it was worrisome, so plenty more to ask him tomorrow from the st. louis fed president. looking ahead, japan raising the inkes, preferring a casino osaka rather than tokyo. we will hear from the melco boss soon. >> trade and rising protectionism on the agenda as preparations begin for talks with the eu. this is bloomberg. ♪ >> li keqiang the chinese premier is in europe for a summit with the eu leaders, it of the answer to a american protectionism. a look ahead to the trip with the president of the european chamber of commerce in china. also is the head of asia economics at oxford economics. summit look ahead to the , what some are calling a watershed moment from angela merkel, saying the reliable the u.s. are to some extent over and we must take our destiny into our hands. can they actually work together on the world stage? is a good question. there are some areas where europe and china sea i to i, but eye, but that to is not true in all dimensions. the th

you started with james bullard -- i was going to go, eh! not even comment on what -- >> let me tell you another news story. >> let's see if this one measures up. >> get your red button out. talking currently. the pound is under pressure on polling data that's out in the uk. where is your eh? nobody cares about polls. polls are wrong. the first ugov survey conducted since the terror attack in manchester showing the conser conservatives lost a full percent this week and the labour party picked up three. >> they lost a full percentage point. as we know, that's their limits of resolution. they're not even good within five points. >> on today's agenda there's a trio of economic reports out. >> i like those. those are important. april durable goods out at 8:30 a.m. eastern time along with the second estimate on first quarter gdp. growth revised up slightly to just 0.8%. 10:00 a.m., may consumer sentiment. becky has news on bullard. >> it makes sense, he's worried that inflation is too low. >> he's worried about the absence of inflation. >> he's w

she is echoing what james bullard said, the falling inflation.s the fact the fed is getting further and further away from its price target, with the level it should be. is not opposing a june rate hike. if the economy is as expected, the rate hikes can continue. the question is, what happens in september, if inflation remains of software gets softer? productionsst-rate -- projections, the probability of a hike in june now at 90.6%. odds are only seen a 26%. certainlyarkets are not in step with there being another rate hike after the june hike. the fed is watching the numbers. much more in the debate. mainstream fed watchers are saying they will keep hiking rates. the bond market says, no, week inflation numbers out of june, we need more of a debate. yvonne: what became of the balance sheet? there was not too much to debate on. brainard echoed williams and bullard on reduction. kathleen: she says we are heading in that direction, it has to do with details, timing, and the path of normalization. the does the fed get to point where the fund rate is

louis fed says the james bullard fomc is close to where it needs to be on the policy rates. speaking to reporters in tokyo, he said the inflation path since is cause for concern. >> the price level has begun to diverge from this 2% path and we are almost 5% below the previously established path. this is not as bad as what has happened in japan. i will show you that picture. but it is worrisome nevertheless. francine: still with us, jon jonsson, senior portfolio manager at neuberger berman europe, and david stubbs, global market strategist at jpmorgan. david, what did you learn from the fomc this week? david: the most interesting thing was the initial stab they took at outlining how they are going to draw down the balance sheet. they laid out a series all caps. this is a nice halfway house between letting the balance sheet runoff passively, which would lead to rapid drawdowns vis-a-vis outlining a very rigid timetable, having it both ways there. i think this outlines the fact they are going to tread very carefully in drawing down this balance sheet. that underlines one of the

was clearly reinforced by james bullard's speech last friday.ernor brainard is viewed as one of the most dovish on the fomc. i think her comments today are going to be really important. several years ago you said this is going to be the loosest tightening in history. it has been more than that. it has been a dovish tightening cycle. financial conditions have eased. what's the message that comes from the market? i think i and others have underestimated all of the sources of liquidity into this market. not just central banks. as the profit share of gdp has soared, companies have accumulated more and more money on their balance sheet. then there's the inequality argument is more of the income has gone to the risk -- rich. what i underestimated is the extent to which liquidity continues to be pumped into this market. whatever the fed does, the incoming liquidity is so loud that financial contingents end up losing. there's a limit to that and people should remember minsky. at some point too much stability leads to instability. i'm a little bit worrie

plus, coming up tomorrow, james bullard, federal reserve bank of st. president, recovering from all -- we're covering it from all angles. this is bloomberg. >> live from london. is 2:00 p.m. in berlin. i am matt miller. welcome to bloomberg markets. ♪ matt: let's get top stories we are from bloomberg and around the world. unwinding the balance sheet. the fed's next move could start as early as this year. we will give you more from that exclusive interview. >> will mario draghi be able to answer the riddle of inflation before he peaks to the european parliament? matt: drifting apart. as the g-7 dust settles, relationships forged since the and of world war ii, over. let's take a look at the markets this morning. a fairly lightve day with london on a bank holiday, the u.s. not scheduled to open until memorial day, and we are getting very little sense of direction. not a lot of movement. .03%.x is up 0.33%, and right now the italian 10 year yield up about two basis points, 1.81%. >> i am looking at the dollar. the dollar index moving in its tightest range

louis fed president james bullard will speak before the markets open.anged at its meeting last week. but many are expecting a rate hike during the june meeting. okay we want to -- before we get back to omaha we should tell you some news just crossing, comcast and charter, we talked about it earlier, agreeing to explore operational efficiencies to speed entry into the wireless market. they effectively are forming an alliance in this respect when it comes to how to deal with the wireless market. both of these companies have activated what they're calling a mobile virtual network operator reseller agreement. of course they have that deal with verizon wireless. it's going to be providing the wireless services, but together they're going to work together they say, and a little quote from brian roberts this morning, we're looking forward to launching xfinity mobile to our dus hers in the coming weeks and are excited to work with charter to explore ways we can make our respective wireless initiatives more effective and cost efficient. both of our companies hav

james bull. >> narrator: -- bullard to the rally? do they want to see more easing? >> i don't think so.he big down trend we had this week had a lot to do with trump, and it had a lot to do with the concern on investors' part that if he is not able to lead the republicans in any kind of roll back from a regulatory perspective and some incentives from the tax perspecti perspective, what do we have in the market being up here? that had a huge impact. >> danny? >> yes? >> it's interesting. what you said is absolutely true in the currency markets. absolutely true in the bond market. it does not appear to be true in the stock market. if you lock at what's happened, you had a round trip on the q10 spread, below where it was when donald trump was elected. you had a round trip on the dxy, the dollar index, which is below where it was when donald trump was elected, but no round trip on the stock market, which is -- there you go. there's that two tenths, 96 basis points. was as much as 135 basis points. >> but i'm hearing from our investors, both institutional and high net worth, is a big concern