slightly more hawkish comments from james bullard.s not a voting member but called out inflation issues in the states. we continue to watch develop its when it comes to the debt ceiling, no deal but optimism in terms of the mood music. a new revolution in ai is providing a powerful tailwind for nasdaq. the tech heavy index climbed to its highest level in over a year yesterday. the index's best performing is ai darling nvidia, rallying 113% year to date. valerie, is there anything stopping this tech rally? >> doesn't look like it for now. if you take this tech rally in the context of the fact that it has happened with yields rising, it makes it even more impressive. in the last five sessions, nasdaq has risen over 5%. two-year yields have risen 30 basis point. add to that the stronger dollar has strengthened to percent. these are normally quite big headwinds for tech stocks. it makes this rally even more impressive with all those macro backdrops going on, it is rising despite two-year yields rising, all signs that this has incredible m

time, james bullard will be speaking on the u.s. economy. tomorrow, a host of flash pmi's from across the world, including u.s., u.k. in europe. wednesday, minutes from the fomc march meeting, and u.k. cpi data. thursday, the turkish central bank will deliver its latest policy decision just three days before the country's presidential election runoff vote. on friday, more u.s. data. we will get the fed's favorite measure of inflation, pce, and durable goods. later, we will speak to the ryanair cfo, at 6:40 u.k. time off the back of a strong summer expectation. this is bloomberg. ♪ dani: let's get a look on china currency because the yuan rebounded friday after the pboc vowed to curb speculation, but concerns about the economy from the weak data coming in means there is still weakness in the renminbi. it is still sitting at seven above the dollar. let's get to our guest. how significant is it that we are over seven? >> it is psychologically significant, a landmark. i think the significant thing is that the chinese authorities allow that to ha

james bullard suggesting he could see another to rate hikes from the fed. how do you push on that view? what is underpinning your view that you could still get cuts this year? iain: we look at the data, we do understand that the jobs data is still pretty strong and the inflation data on a spot basis on a year-over-year basis looks elevated. as we look forward, the leading indicators that our team track indicates that there is slowing jobs growth in continuing claims are up 25% over the last year. that does not happen outside of a recession. if you look at some of the prices paid of the nfib surveys and shelter more real-time private rental markets, they are all coming down and pointing to the fact that the fed has done 500 basis points. they have done an awful lot of hiking and it feels to us that we are starting to see cracks in the beginning in the banking system. it makes sense for them to pause now, assess the data and art rotation is by the end of the year they will be thinking -- tom: it'stom: does a labor market push them over the edge? iain: it is a

liz: so if i were either laurie logan or james bullard i would listen to you and say i don't know why he keeps pushing that we are somehow going to pause. they've been very clear. powell has been pretty darn clear, and if you look at the fed funds futures for the june meeting, the next meeting, suddenly, you start to see that there's a 64% chance of unchange , that be the pause, but now, we have a 35.6% odds of the 25 basis point hike again. just so you understand, the 64% had just been in the 90s recently so now, the markets betting there might be a move. there you go, 91.5%. that's what it was as of may 5 and now you can see it's certainly changed. >> i also remember back in the beginning of 2022, the fed told us there might be between 50 and 75 basis points in rate hikes. we had 475 basis points rate hikes. they told us inflation was transitory. turned out that wasn't the case. they told us in may of last year they weren't even considering a rate hike above 50 basis points then we had four consecutive rate hikes of 75 basis points. how much credence do we need to give to the rhetor

louis fed president james bullard had said he would back two more quarter point hikes. others have expressed at least another safe quarter-point hike given the strength of the economic numbers of late. is the market prepared for that, jay, whether you support that or not, is the market prepared for that? >> yeah i think the market is prepared for it. the rhetoric continues to be hawkish. james bullard one of the biggest hawks that we have out there. he hasn't changed his tune. i think the consensus is 40% we go quarter-point hike. three weeks ago they were talking about cutting rates because of regional banks. that is not in the cards. if anything we cut, that would be a panic move because the fed doesn't know what they're doing. there will be that kind of reaction. i think a pause is what we expect down here and a pause is in the cards. that line in the sand, that 4200, i know luke was talking about how the treshrigs are going wild and they are, did you down here equities are taking it in stride. we keep making constructive higher lows. 4200 has been again and again an

james bullard talked about the fact he sees two more rate hikes this year. you have to wonder if there is a macro theme, if it is more idiosyncratic. guy: let's talk about europe. i mentioned what is happening with the travel sector and the connection it may be has to what is going on in inflation. ryanair up by 1.2%. michael o'leary earlier with a positive picture he is telling. it links to inflation because of the pricing power michael o'leary has. this is what he had to say earlier on. quite clear taking huge amounts of market share from everyone else. we are offering really low airfares. we expect our lowest airfare to rise 5% or 10% for the next couple of years because of the capacity constraint. a huge backlog on manufacturing orders because of supply chain difficulties for the next five years. i think you are looking at a european marketplace with stable capacity and more reasonable pricing going forward. alix: may be good news for michael o'leary. not so much in the ecb. the croatian central bank governors said inflationary pressures in the tourism s

time, fed president james bullard will speak on the u.s. and monetary policy at an event in florida, after jerome powell seemed to suggest a pause in june is appropriate. tomorrow we get pmi's from around the world, including the u.s., u.k. and europe. on wednesday, the minutes from the fomc's march meeting will be published. we also get u.k. ppi data -- cpi data. neel kashkari as well speaking to the wall street journal over the weekend suggesting a pause in june to assess the impacts of hikes so far would be appropriate. we are getting more data to inform that view before that decision and meeting in june. thursday, the turkish central bank delivers its latest policy rate decision, after erdogan's solid first round in terms of elections. the presidential election will go to runoff vote. on friday, there is more data from the u.s. with an update on pce and durable goods. it's -- let's check in on how greek assets are performing -- we go from turkish to greek politics, mitsotakis the prime minister of new democracy, performing better than e

james bullard is set to discuss the economic outlook in minneapolis. the fed governor lisa cook will speak at michigan state university. coming up on the show we will revert back to christine lagarde and her language at the central bank. the job is not done on beating inflation just yet dared we will discuss if europe can divert from the fed and plot its own course right here on bloomberg. ♪ tom: the ecb has delivered it smallest rate increase yet, 25 basis point in the battle with persistently strong inflation. christine lagarde said about was unanimous and the central banks work is not yet done. >> everybody agreed that increasing rate was necessary, that second, we are not pausing. that's very clear. third, we know that we have more ground to cover on the basis of the baseline that we had, which is still guiding us until we have our next production exercise third -- projection exercise. manus: madame lagarde there. as sir was this a 25 basis point hike out of appeasement to deliver optionality to stretch it out rather than being brutal and doing wit

skip doing anything this time, they still retain the option of increasing at the next meeting as james bullardrry logan from the dallas fed said we can still increase. i think they will sit this one out. maria: we will leave it there. judy, good to see you. judy shelton joining us. do you agree with the pause in june? >> i think the cover is there to pause. i still think we have one or two hikes coming. >> i think it would be crazy to hike down in june. producer prices are down with two handle 2.1, 2.3%. no, let it breathe. >> the fed has -- onus on the fed to do what politicians want. maria: it really is. our last guest said 18 months. 18 months till we feel impact of ten rate hikes. equities and cofounder phil haslet is here with an inside look as higher rates and the banking crisis weighs in, we are getting into ipo's next. ♪ ♪ ♪ before... and bath fitter. before... and bath fitter. if you have a “before” bath, now's the time to call bath fitter to get a beautiful “after.” with our unique tub over tub process, there's no mess or stress. spend smart on a beautiful new bath done right, backed

neel kashkari, saying that perhaps, don't take a pauses meaning the rate hiking cycle is done in james bullardmaybe we need to more hikes, so there you go. you look at all that as we try to sort out all these minor technical problems. yvonne: plenty more ahead. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh ahhh rishaad: this is bloomberg markets. before the break we were talking to stephanie, e apex cio at deutsche bank. and we had some issues, but we are back with stephanie. stephanie, yvonne was asking you about the fomc? once we get -- yvonne: once we get the debt talks done, we can move passes, i think the markets will once again focus on the fed. we see treasuries selling off the past two weeks or so. but markets are still focused so much on price, or cuts from the fed. when are we going to see that resolve between what the fed says and what the market says? >> first of all, at the moment we get quite a differentiated picture. jerome powell is looki

louis federal reserve president james bullard suggesting higher rates as insurance against inflationow futures market pricing in a 40% chance fed raises in june where are you on that. >> well, chairman powell has been pretty clear he is looking to pays if the data will support that, so i think between now the and june we are going to have to have data come in, evaluate that determine whether or not that is a appropriate for a pause. the bottom line maria is i don't think it matters. fed raised by a full 5%, in a little over a year. it takes time for those rate hikes to work through the economy so whether or not fed raises another quarter point whether or not they pause it really doesn't matter. we are at a point today monitor policy is extremely restrictive the largest decline in money supply ever seen? history going to have negative compact on economy so i think back-and-forth on is the fed going to pause, raise again? the key is how long do fed funds operate stay at current level how long does it take for liquidity to drain out of the system where we can see inflation come down to

louis fed president, james bullard, intraday. joining us now liz young, sofi's head of investment strategy. good to have you back. >> good to be here. >> he wasn't the only one hawkish today, lori logan as well and others. do you think we're under estimating how resolute the fed is going to be and how sticky the inflation is going to be >> i think they opened up the flexibility to do a pause if they saw fit i think what's going to happen -- to be fair, i expect a pause in june -- but i think what's going to happen is we enter this high and hold portion of the cycle but votes are no longer unanimous we had unanimous votes up until now. >> we haven't had decents. >> right i think we'll have them. and they may not be ones that push it in the other direction i think jerome powell still rules the roost in that regard and what he wants to do is what happens. but if you get closer to 50/50 or real debates on the fed, it could get interesting. i think i mentioned on the show before, the big gap between what the market thinks and the fed

being a little bit too aggressive in terms of bringing inflation down nine days later president james bullard said we need not one but two more rate hikes. i greatly respect these people i see where they're coming from. housing prices are relentlessly going higher as are rents. we still have far more jobs than potential workers. according to the jobs, openings and labor turnover survey we got today. i expect unemployment to hover around 50 year lows. friday morning, 8:30 if you look at wage data, housing data, the economy is booming. the fed clearly needs to slow things down. you would think money grows on sequoias american airlines raised its rate but outside of those areas, everything else has gotten soft. everything to the point where i'm thinking maybe the strength in housing and wages should be tempted by the data from everything else. i'm not saying inflakes hawks are wrong, i hope they don't agree with philly fed patrick harper who admitted the economy is resilient, maybe they should skip in meeting hikes. in other words, maybe not do the hike in the next meeting in june i think so muc

it is a fast-moving picture with james bullard adding his own hawkish fuel to the fire. let's get to reporters from around the world to talk about these major top stories. we need to talk about the debt ceiling saga with bill faries and jill desis is on hand to talk through the most recent federal reserve signals. to the debt ceiling where u.s. president joe biden and house speaker kevin mccarthy remained without a deal on the debt limit after another round of talks on monday. however, they both called questions productive and vowed to keep negotiating. joining us for more on this is bloomberg's bill faries. some positive signals coming from mccarthy and coming from the white house. where do we stand? bill: absolutely. it was the first meeting between president biden and speaker mccarthy since the president returned from the g7. they both describe it as productive. they had their staffs continue to meet afterwards, well into the monday evening there in washington. they said they will likely be meeting on a daily basis until they get a deal. speaker mccarthy did say that

maybe james bullard is but no one else.s the first commercial banker who has talked about getting used to a 6% rate. lisa: i think he also said that in 2014 and 2015. tom: i don't disagree with that. jonathan: preparing for higher rates is a little different in the banking sector then in the market. running a bank and it running a portfolio are slightly different things. tom: we love to talk to ceo's about microeconomics. i've never really understood. -- about macro economics. we talked to liz ann saunders about economics. she is the chief investment strategist at charles schwab. she's been a great supporter of our effort and joins us this morning. i want you to translate for people with a little bit longer term timeframe what to do with the focus on net shorts. i want to talk about saunders and the net shorts right now. there is of that we are going down? >> there is but it's interesting, there are times when extreme positioning or sentiment indicators are a contrarian move. the deposition in terms of the larger speculator

the thing that really got, jumped out at me, was james bullard said just last week, i think, he is thepresident of the st. louis fed, that the federal reserve missed the banking crisis, they didn't see what was going on with the regional banks. and so you think about this, these are bankers and they missed the consequences of their actions on the banks. so my sense that they're confused is not really even an opinion. it's a fact and so, the fact that powell and the fed kept raising rates, even just this last 25 basis point hike, really tells you that they're so fixated on inflation that they don't understand the lagging data that they rely on and what they actually should be doing. charles: right. >> is dealing with the regional banks because when they stop, that is a negative feedback loop that is going to really take everything down. so that is my, my feeling about the fed. charles: everyone says they go in there with a mallet. the lag effect is a crapshoot. they keep going until they break a lot of things which sounds like a sorry excuse for an entity which is that powerful with so

louis fed president, james bullard, suggesting higher rates as, quote, insurance against inflation, scottfed takes a pause in the june meeting or not? >> yeah, they're going to pause. look, i hear what all these folks are saying, they're trying to increase optionality into the decision in june which makes sense from a game theory standpoint if you're acting on the fed but the data are pretty clear. we are in disinflation. like every gauge you can look at, the fed has underlying prices gauge index, the small business survey says nobody is planning on raising prices, cpi, ppi data is consistent with inflation that is, one, still too high. two, predictively coming down. so that backdrop makes a lot of sense for the fed to pause at this point and just sort of wait and a see what happens. maria: i'm with john lonski this morning. john, jump in here real quick. >> you know, i'm puzzled by something, scott. that is, there is an index of housing sector stock prices from the phlx and that's up by 23% for the year-to-date. that compares with 9% s&p 500 and it's even bigger gain than the nasdaq. can

louis president james bullard speaks this guy as become my true north in this market. today, the fed finally went where it had to be to beat inflation. he also knowledged the end of the tiniest cycle. that is my thesis exactly. i'm getting it from him, or whether he's getting it from me. if we have more banking headaches this week, i wonder if you will say, going too far. i trust, can't wait to hear what he says. he had good comments today. bottom line, we know there's no real.let around next week. we also the clock is ticking on the debt ceiling deal. i don't have faith in these her side and the market field, and i keep from peak control from this period in 2011. wouldn't be surprised if it happened again now that things are even more rancorous. despite jumping three hurdles, the fourth one will be looking soon with no resolution in sight. you might want to do some selling into the rally to begin today. the wave continues through the week! i feel like taking calls. just my predilection for lisko to rex in missouri. rex? >> hey. big kansas city barbecue capital of the

thank you very much for bringing us those headlines from james bullard.adlines. >>> thanks, scott. here's what's happening at this hour president biden arriving in japan for this week's g7 summit. biden kicked off his visit with a meeting with japanese prime minister fumi of kishida as the world leaders are expected to discuss concerns about china's use of economic coercion at the summit the u.s. federal trade commission has sought information from two privately held companies as part of its probe into pharmacy benefit managers the commission said the inquiry looks to highlight unfair practices among pbms among them are cigna's express script and united health's optum. >>> and montana's governor signing legislation to ban chinese-owned tiktok from operating in the state this makes montana the first u.s. state to completely ban the short video app. the ban is to take effect on january 1st and is almost certain to face legal challenges scott? >> bertha, thank you >>> up next, gold is pulling back one firm says now is the time to buy it and they have three r

you if that continues to go down 3.3, 3.2, 3.1, you know, a year and a half ago, i interviewed james bullard and he thought it was going down to 3.5% by a the end of 2022, and if that continues to go down, that would be ammunition for continued rise of interest rates by the fed now i don't think that's going to happen, but that is one thing that i'm certainly watching, and certainly did surprise me, 3.4% today. >> let's be honest bryn, the unemployment rate is falling. the fed is not exactly getting what it want when it comes to my word, not theirs, cracking the labor market it depends how much and how intent they are in getting to the point, and it may take longer than anybody thought. >> well, the problem they have is that we're still short, what? 4 million or 4.5 million workers, and i don't think outside of california with silicon valley, i don't think unless we have some event, you're going to see some structural move higher in unemployment just because we're still short those workers, and people are still trying to hire, and so from the fed's perspective with a very, very blunt instrum

james bullard moves yields higher.abilities are overextended in order to get recession under control he said the labor market is slowing but that does not mean recession. the idea of two more rate hikes this year flies in the face of what people are pricing and or saying at the federal reserve but to meet this is really the distinction that we keep hearing from fed officials. if they think things are too good, that is bad for markets because that means they are going to raise rates further. tom: let's review this. i do think this is important. bullard has been an outlier agreeing with others leading the charge. but a while back he was giving scope and scale to a really significant reset in interest rates without any whisper of distant and. i see a recapitulation inflation staying too high, one reason for more hikes, plural. we are very plural this morning. lisa: this is the distinction between skipping of june meeting or the pause, the skip being there might be more needed as you get data that has come out as unexpecte

haidi: james bullard there on the state of the u.s. economy.et's take a look at the week ahead because after the fed's hint on pausing rate hikes, that core measure of inflation has remained sticky. also watching inflation numbers out of china and india. on thursday, economists think the bank of england will hike its key rate after a surprisingly strong range. investors have fully price a 5% rate by september. and we will be watching april producer prices. they are expected to have contracted 4.5% year on year, a steeper fall than in march and would mark a seventh straight month of declines. more eco-data to note -- china's trade balance as well and consumer confidence gauges and south korean employment -- unemployment numbers. let's get through some of that with the chief asia-pacific economist. trait to have you with us. seems like there's so much uncertainty when it comes to the broader macro outlook. a lot of that comes to how structural these inflation drivers are. does that make that element of a mistake more of a risk? >> globally, certa

sense of what's coming up, mary daly, james bullard. we have lisa cook on deck these next 12 hours or so to maybe back against this. do we get a rate cut this year? joining us now, executive director and senior economist at the cme group joining us now. a pleasure to have you on the show and nice to see you here in the region. recession fears, do we get one or not, if we do, when and what type, if not, why not? >> it's also unlikely to happen in a very short-term. if you consider that perhaps last week was the last of the fed rate hikes and you look back over the last 35 years of history and you look at the previous tightening cycles, 1989, 2000 and 2006 they finished tightening cycles and in those three instances it took between 10 months in 17 months for the u.s. economy to fall into a recession. so, if we have that same lag, you might be looking at a recession in sometimes towards the early to mid part of early 2024. but it would also add one other thing. the fed raised rates 300 basis points in 19 94 and early 1995 in that time they

it really is a very public debate playing out with the likes of james bullard and neel kashkari pushingkes, whilst on the other side you have the likes of mary daly saying that there could be a need for a pause in june. monetary policy does operate with a lag. we will watch very closely for biden. shery: we are seeing u.s. futures continuing to trend higher, up 0.3% as we get that latest commentary from president biden on the white house statement, saying that they have reiterated that default is off the table. they are now saying that the only way to move forward is in good faith, towards a bipartisan agreement. of course, this is on the white house statement on budget negotiations. again, that meeting between president biden and congressional leaders. let's get more analysis with breaking news managing editor derek wallbank. we heard from house speaker kevin mccarthy that it was a productive meeting, but still no deal. what can we gauge from the tone of these latest negotiations? derek: in this case, saying that things were productive and that negotiators will continue, it has to be r

looking at the chit chat we have to put up with every day from austan goolsbee of chicago over to james bullardlouis. are these people talking too much? dominic: [laughter] they are certainly talking a lot. the question is whether it is helpful for the markets. in my mind, it is a lot of noise. i think in general, the governors are good people to listen to. i think the presidents can be a little white noise around the whole conversation. especially if they are not voting, it is much less relevant for markets. tom: 24 months out, where is the 10-year yield if we move from constant restricted to something new with labor deterioration? dominic: the key is what happens to the supply side, the supply driven inflation we are observing is still high. my guess is, a lot of that is covid pandemic related and that will dissipate especially as you see the labor market normalize. on that basis, 10 year yields should come down to three percent or below because the fed needs to be getting back to a neutral rate, which william now confirms is different than what he thought it was before. jonathan: [laughter]

comes to fed rate hikes, are we going to be fairly priced if two more hikes come down the pike, as james bullardif it's one hike, but also the indication that there could be more to come? or do we need to see a pause, a full-stop pause in order to say that we are fairly priced? >> so of the three things i mentioned that i'm certain, the debt ceiling, what the fed is going to do next, and what's going to happen to credit, to the economy. it is the fed that's the most difficult to resolve this is a fed that has been inconsistent it has made mistakes in its analysis, in its forecast, in its communication, and its supervision. and it's very hard to predict. so melissa, i don't know what the answer is to that question, because i don't think the fed itself knows what it is. >> fair enough mohamed, thanks. >>> coming up, zoom cfo, kelly stekelberg first off first quarter earnings "squawk box" will be right back. (dr. aaron king) if you have diabetes, getting on dexcom is the single most important thing you can do. it eliminates painful finger sticks, helps lower a1c, and it's covered by medicare. befor

there'll be a commencement address at usc. 7:45 a.m., eastern time, we get james bullard. we have heard from others talking about the need to combat inflation. those g7 finance minister meetings continue over in japan. we are going to hear from emory, but to me, how much is the focus for these financial stability? that chart we were talking about the regional banking index, it is the lowest since november 2020. >> amh coming up. we are looking forward to it. just to confirm against the euro, in the last hour. 10899 is the loaf the session. we are joined by chris, the co-cio of funds. great to catch up with you. people are frustrated with the debt ceiling debate and it's only getting started. can you ignore it? >> you can ignore it for the next two weeks. hopefully not three weeks. it will be in the news. something we have to pay attention to, but we don't have to act on it. one of the hardest things to do is sit on your hands. that may be a prescription. the bedrock is full of corporate demands is the riskless asset, and that is the asset that may be at risk. what do you d