we had bullard, kashkari yesterday. did their comments suggest that the market had been premature in betting that the fed would deposit rate hikes june? jill: you said it earlier. you went from essentially a baked in consensus that the fed is going to pause in june to now investors are pricing in a 30% chance of a raise. even though where we are at right now there is still it seems like division over it should they raise or pause, maybe even skip, which is something that kashkari had mentioned was a possibility. it plays into what we heard from analysts just a few weeks ago that this is a really, really unclear situation. we are still holding onto the sticky price pressures on the credit and banking issues which are still a major pressure there. it could be possible now that we are getting into if they hold, next month that by july, maybe we see another rate hike again. dani: to that point, if we are going to be holding in june and here is bullard and the hawkish comments from him saying that we might need to more moves

. >>> the federal reserve's neel kashkari talks about hiking or pausing in june and tells cnbc adjustmentsn rates will create volatility >> we are now in an normalization of rates we have rates and a lot of capital invested in areas that will not now be as profitable. that will continue to create, you know, volatility >>> julius baer sinks to the bottom with net flows in the first four months of the year challenging it a challenging year for swiss banking >>> good morning warm welcome to "street signs. we kickoff with the eurozone flash pmi just crossing the wires. the composite number has come in at 53.3. that is down from 54.1 in april. the expectation was 53.3 it looks that is in line p with the forecast in terms of the breakdown between services and manufacturing, there has been a two-speed economy going. as for the month of may, it will continue manufacturing pmi is 44.6. that is down a deceleration from 45.8 in april. slipping further into contraction territory. the services sector pmi at 55.9. firmly in expansion territory, but also marking a slowdown from what we saw in april those

for neel kashkari, he is not convinced. haidi: our global economics and policy editor, kathleen hays. front and center of expectations in terms of how asian assets have been tracking. we will be tracking any further strength when it comes to the dollar index. that has repercussion for asian earth day. the dollar seeing its best day since march. the boe signaling the pause may lift the broader currency index. the pound seeing its worst day against the greenback since early march. this is the picture when it comes to asian currencies. a bit of upside when it comes to the aussie dollar, a top 67 u.s. dollars. we're watching dollar-yen, sitting at 134. when it comes to equity, muted start to trading. futures about .1%. kiwi stocks to the downside, following broader asian stocks falling in thursday's session. traders are weighing the inflation numbers out of china as well as the u.s., we are through the thick of earnings season as well. we did see the broader asian pacific index falling by about .5%. continuing to watch when it

member this year kashkari is. "the wall street journal" framed it over the weekended kashkari is the biggest voting hawk. i wonder if you see it in hawks ve versus doves and how significant the comments he made on our air are? >> i think they're significant they want to leave this on the table and that gives them leave to pause which means the market will understand or think that -- not begin to think, that the fed has given up on fighting inflation, still something they want to do but take a look at the effect of what's happening with a pullback in lending from the banks and the second is the cumulative effects of all of its heightening that's happened so far. remember, morgan, it was not unusual for the federal reserve to hike every other meeting. it's what they used to do. the idea that we've been through right now or this run we've been through of ten in a row is what's in unusual. the fed being so aggressive as it's been. the fed likes to do in this a measured way and the idea of pause now and maybe coming ba

on the flipside, neel kashkari endorsing the pause. he has an appearance on friday.r euro this morning, up about 6/10 of a percent versus the dollar. that is it for daybreak. europe markets is next. this is bloomberg. ♪ anna: good morning, welcome to "bloomberg markets: europe." anna edwards, live in london.

. >>> and neel kashkari says he open to pausing hikes at the next meeting kashkari adding he would quoteu.s. is done raising rates let's go right to sam stovall. sam, great to have you here. sam, i want to bounce off the neel kashkari comments what do you think? this follows jay powell on friday taking a less hawkish tone. >> we're of the mind set that the fed is on pause. how we differ from the street is we believe the fed will not start to cut interest rates until the first quarter of 2024. so likely to be more of a traditional pause period of nine months which is the average going back to the late 1980s which be the implication of the difference from the street, but positive in terms of the pause situation right now. >> i want to go to the other big thing that is a market mover the meeting with the president and house speaker today. how do you see it impacting the market today is this uncertainty priced into the market and will it have an impact on the rest of the week >> i think as the two parties continue to talk without resolution, i think investors in a sense, will be on the down

you have got goolsby, kashkari being quite aggressive in terms of more to do. all versus bostic who said if i had to vote right now, i would vote for a hold. dani: kashkari is the only voting member among them, so maybe he is the only one to tune in to great it goes back to cuts being still priced in. how much more does the fed need to say to change the mind of this bond market? manus: the market is so presumptive of rate cuts coming that that is perhaps a disconnect. there is a disconnect in equity markets, we have heard that from one of the quant funds this morning. but the greatest fully of all is to think that the fed is done. i'm surprise the aussie is not lower, it has been a fairly anemic response to fairly underwhelming data out of china. the velocity of that reopening stalled. dani: the exciting thing though is japan, the topix at its highest level since the 1990's so at least something is moving in this market. this is bloomberg. ♪ am i? ya! save 50% on the sleep number limited edition smart bed. plus, free home delivery when you add an adjustable bas

you believe he's worried about more things than some of the others >> i think what we heard from kashkari had to happen credibility is still an issue for the fed. that's going to be very important that they vocalize what they need to to keep the market at bay, right i am not surprised about that at all. i think they will pause in june, absolutely we will get pce this week and see what goes on we have seen issues within the marketplace, and there's the banking crisis -- we don't know what other land mines could be out there. >> i will give you one land mine that could be out there and is explicit in other comments is not that they think they have beaten inflation, but now they have the tightening of the lending cycle in the shadow credit markets and the regional banks, so they are just handing off to them to do the work they want to do i don't think there's any chance, even if inflation comes down in the numbers we are looking for, and even if inflation comes down and shows a greater decline than we have seen in the past, that's just not enough for the fed in normal times during a banking

kashkari telling dow jones officials to give more time to boost.uld also reject any declaration that the fed is done raising interest rates. ukrainian president volodymyr zelenskyy suggests that bakhmut is falling as russia is getting control of the area. zelenskyy says he does not think the city is still in ukrainian hands. meanwhile, president biden says the u.s. will provide another $375 million in million eight -- military aid to ukraine bread meanwhile, russia's plans to -- we had talks with lula da silva on the sidelines, lula saying zelenskyy did not show up to the scheduled meeting. there will be other opportunities to meet in the future. that is a look at the first word news. david: just ahead, we will continue the conversation around the g7 and one of president biden's security advisors have said the g7 have made against steps in de-risking from china. we will hear from recent conversations from the conclude summit that recently took place in japan. this is bloomberg. ♪ good night! hey corporate types. would you stop calling each other ro

minneapolis fed president neel kashkari is a voting member, could a skip be just a hop away and it comes as a debt default looms large and tensions with china keep rising. why are large stocks shrugging it off a key metric flashing a major warning sign in the trucking industry is that a sign of what's to come for the rest of the economy? the ceo of freightway says he hasn't seen anything this extreme since covid. one of our guests has an under the radar name he calls a clear leader first, let's get the latest on these markets with mr. chu >> kelly, you mentioned the fed headlines and kashkari and it's all playing in right now and overall we have a market that's mixed and one in a wait and see mode a lot of things happening geopolitically and debt ceiling issues and the dow industrials are down just one-quarter of 1%, 33,327 the last trade day and a 0.1% trade hovering just below the 4200 mark and again, the trading range has been somewhat more muted today at the highs of the session we were positive by 18 points and actually down by 12 at the lows. a decent size range. we're sitting abou

the fed's james bullard and neel kashkari say more hikes could be needed, days after jerome powell signaled a pozner's month. the qatar economic forum takes off in doha. we will speak exclusively with global leaders in business and government. mood music positive again out of d.c. on the debt ceiling, but no concrete deal, mccarthy says. futures pointing lower in europe by 0.2%. the waiting for pmi data, services and manufacturing out of france and germany to flesh out the picture in terms of the resilience of this european economy. with a focus on services. the ftse 100 off by four points in the first few seconds. the spanish ibex pointing lower. the ftse 100 down 0.1%. better news on the corporate front in the banking sector which we will break down. we look ahead to the conversations out of doha at the qatar economic forum. the ftse 100 down 12 points. but see how things are playing out across sectors. given the run-up in yields, particularly at the front end after 30 days, the two-year is up about 40 basis points, but despite that, the nasdaq has rallied in 10 sessions, posting gains of

. >>> later, we have neel kashkari on the fed's next move he joins us on set at 7:00 a.m. eastern.uawk box" is coming right back helping businesses both large and small, communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank. how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people. the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com ♪ ♪ ♪ ♪ ♪ the l'or barista coffee and espresso system. a masterpiece in taste >>> the 23rd national economics challenge kicking off later today. i will be the alex trebek for the contest. joining us now are the two finalists from mt. hebron high school and the school from science and technology

neel kashkari is president of the federal reserve bank of minneapolis for he spoke -- minneapolis.made it clear, and he is a voter right now, that he is also looking at a closely, but leaning toward another hike. >> we at the federal reserve probably have more work to do on our end to try to bring inflation back down. most importantly, we should not be fooled by a few months of positive data. we are still in excess of our 2% inflation target and we need to finish the job. >> austan goolsbee, one of the newer fed bank presidents in chicago, speaking on cnbc, he said it was a close call. he almost voted to dissent against the 25 basis point rate hike. for now, he thinks the fed has to watch. let's probably pause, he has not made up his mind, but he says they have to be extra mindful of previous hikes. think about it, 500 basis points of rate hikes of the last year. tight credit conditions, concern about regional banks. he thinks they probably should wait and see. but, the tone we get here is that no matter how they are leaning, the matter how often gold to be leaned -- no matter what

we heard that from neel kashkari.the time. i think their leadership position in the banking industry is second to none and they will provide everybody the capital. the stress tests come out in a month and my sense is the fed will pass most of the banks but politely ask for more comfort capital and require banks to raise additional equity. lisa: which banks? christopher: once in equity and then regional banks. anything that happens at the top 20 banks will get pushed down to the next 20. lisa: we talk about the potential for profitability constraints and the regional banks. how much will be further constrained in lending mechanisms be curtailed if there is greater capital requirements hoisted on them by the fed? christopher: capital will improved because of retained earnings. you have payoffs and for sale securities. the challenge will be that raising additional capital will could be a future credit cycle in 20 -- 2024 or 2025. we have unrealized losses that will not go to zero but will get incrementally better. tom: s

ad . >> than, leslie. >>> kashkari and bullard both weighing in on rate hikes.ll break down prediction, what it might mean on the market jpmorgan's gabriella san toll la joining us >>> stories of influential aapi business leaders which is visio ceo and founder william wang >> this is a place where everything is possible after college i thought of my first career as a technical support engineer today i run a multibillion dollar corporation 20 more years later we sold millions of tvs. two years ago i took the company video public and we're publicly listed on the new york stock exchange i'm here living the american dream, great to be here. it's been an awesome journey ♪ this is rebecca, who needs a new script. ♪ ♪ and this is fernando, ♪ ♪ searching savings with a click. ♪ online or in-store, for your health and your wallet. 85% of scripts are under ten dollars. cvs pharmacy. healthier happens together. how do we show strength and stability? (eagle call) a mountain? a tree weathering a storm? (thunder) lions? nope. (lion rumbles) we do it with our people. lily! wel

neel kashkari in minneapolis says it's a close call. they could be skipping.u say pause, the market hears cuts. tom: deutsche bank says the same thing. jonathan: neel kashkari says we might take a break from hiking and then is conditional on the data. how much do we need to hike? do we hike again? they want to keep it open and conditional because they know if they start to say pause, this market will lean harder into cuts and that's not what they want to signal. there is a difference between what they think they will do what they will signal. maybe they think they might have to cut this year but at this point in time, they don't want to signal that lisa: you have seen a loosening in credit conditions since svb collapsed. you look at forward expectations for rates and they have come down by a full percentage point. how do they raise the expected rates in markets without doing anything. it's a time when they say we don't know. this is a difficult needle to threaten us the reason why you're getting these tortured skip/pause. they will have to come out and explain

. >>> minneapolis fed president neel kashkari added to the speak of the rate hike is too close to caller ferguson here with us roger, great to have you with us do you think it is too close to call at this point what data are you looking at here >> i do think it is too close to call as i listened to what neel kashkari had to say, he focused on where everyone is in with inflation still sticky with the specific focus on the services sector which is the area where the job market tightness will play through directly the numbers are one where we look and show a toss up which is a surprise given how much they already moved. >> are you in the camp of neel kashkari who said that there should be a pause, but a signal there could be more tightening ahead or let's say a bullard who said front loading is better the front loading and wait and see separation where would you stand on this? >> i think i would stand close torcloser to the wait and see. they moved at a fast pace. there is a great deal of uncertainty in the banking sector which hasn't shown through everywhere you heard from neel kashkari

and i think -- i think kashkari is taking the position we don't know the impact of the korean increasess in distress. there's a lot of debt that needs to be refinanced out there and that debt is going to be refinanced at higher rates. the federal government in and of itselfs has a problem with higher rates. think about this. the interest burden on the fefederal government for treasuries last year was 475 billion. it's going to increase to 600, plus, 650 billion which is almost 3% of gdp. so when you consider the fact that the increase in interest rates in one year is going to use up 70 to 80 basis points of our total gdp, that's pretty costly. so i think that there's -- and again, as i've said before, this isn't a u.s. problem. it's a global problem. we have global inflation factors across the board from reshoring, from rearming our militaries and from green energy policies quite candidly. when you add those up, there's all sorts of inflationary pressures out there. maria: yeah. and -- >> i think the impact -- go ahead. i'm sorry. maria: we are worried about so many things, an economy s

not good enough for neel kashkari. we have about six weeks left to see if it will be good enough for other fed officials. heidi: the bank of england hiking rates for the 12th straight time. andrew bailey says more hikes are possible. you can see why he says that if you look at the data. kathleen: 12th rate hike in a row. if you look at where consumer prices are and when you look at where the key rate is, you can see there is a big gap. if you are in the camp that says, you have to get your key money market rate if you are the fed, this rate if you are the be away, above inflation rate, there is a long way to go. in the policy statement, the bank of england did keep the door open to more rate hikes, not surprising. depending on what wages do, wages are running over 6% year-over-year. well above the key rate. services inflation, sticky in the u.k. just like it is sticking in other parts of the world. andrew bailey did seem to open the door to a rate hike pause. >> we are approaching a point when we should be able to rest

neel kashkari mention services prices, core services not changing that much. not convinced with the more hawkish people, but definitely i think investors have the sense that maybe this does add weight to arguing for a pause when they get to june. rishaad: we just move to the bank of england increasing rates for the 12 time in the governor andrew bailey saying more hikes are possible. david told me earlier that we saw this forecast for growth. the biggest alteration, if you will, since it gained its independence in 1997. kathleen: that's why there was a lot of conversation about how economists are questioning the credibility of andrew bailey when it comes to inflation and that the press conference, the port -- the reporters were all over bailey saying what's going on because they have made these big changes. key rates wednesday five basis points as expected to 4.5%. in the policy statement they said they kept the door open to more hikes saying it depends on wages, it depends on services inflation and when andrew bailey spoke to bloomberg television he seemed to

listening to the federal reserve kneel kashkari. it is serious.rest payments due. you have got to cut something else. in terms of defaulting on our creditors absolutely not. the thing though is it's the iron law of washington. if you give congress a deadline, they are going to go right up to it and maybe just a little bit past it. and, yes, kevin mccarthy says you have got to get it done this week. you look at and this say there is 10 days macy forever. maybe attack a couple days off and start up. i don't think there is a real sense of urgency still that we are going to see nine days from now. >> bret: political implications, juan? >> the politics of this is the reason the white house is surprised, bret. the politics is from the democrats' point of view we wouldn't have a crisis if you didn't have republicans in the house saying we are going to push against the debt limit, the debt ceiling and if you don't play ball, we will default on the debt. they were like, what, you can't do that president trump said he wouldn't do it. there's a lot of histor

the market tone improves again, 372 on the ten ten-year debt ceiling negotiations, we've got neel kashkaring it's a close call whether to raise interest rates. >> thanks, kelly >>> coming up, the economic challenge. and we're not talking about whether the fed should raise rates or solve the debt ceiling issue. we're talking about the national economics challenge. we'll speak to the winners next. >> announcer: the bond report is brought to you by pimco, a global leader in fixed income. (vo) this is more than just a building. it's an ai-powered investment firm with billion-dollar views. a cutting-edge data-security enterprise. yes, with a slide. a perfect location for the world's first one-hour delivery. an inspiration for the next workout cult. and enough space for a pecan-based nutrition bar empire. it could happen. because there's space for any dream on loopnet. the most popular place to find a space. >>> welcome back to "power lunch. time now, the winners of the economics chachlkt let's get back to steve liesman steve liesman. >> i'm here with the winners of the advanced division, the ad

neel kashkari as well speaking to the wall street journal over the weekend suggesting a pause in juness 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 expected. his opponents syriza performing less well than some expected. it looks like it may go to a second vote. mitsotakis campaign on the back of pro-market reforms, the greek economy one of the best performing european economies and closing in on investment grade status. we will see how things transpire as they had for what looks like another vote. markets welcomed that, in terms of money moving into greek debt. t

neel kashkari is open to skipping a rate hike in june. he told the dow jones it would give them more time to assess the effect of rate hikes and that he would object to any assertion that they are done raising rate hikes. the philippines finance chief is not expecting food prices to spike even as the country braces for the el niÑo phenomenon. they say that the extreme weather pattern is expected to only cause a slight drop in price and court output. he expects they will experience a week to moderate effect. australia and employment minister tony burke is backing an increasing the minimum wage that matches inflation. he says the government does not want employees to go backward when passing on, where he supported a 7% pay rise in line with inflation. he also pointed out there would be further figures released before the pay decision is taken. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn and this is bloomberg. >> still ahead, the u.s.

rishaad: we will look at the comments made by neel kashkari, saying that perhaps, don't take a pauseseaning the rate hiking cycle is done in james bullard, maybe 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

seen two, three banks go down, globally the fed is we saw the -- the rhetoric from fed chain, neel kashkarik, really turn to over the weekend, so that you might be in the pause camp that is a positive so they hike until things break things broke, now going to pause see what happens. so that is, obviously, a positive as well right now you see nasdaq outperforming because chatgpt, right now a.i., chatgpt, over bid stocks, amazon -- the beneficiaries krbts 3 trillion dollars to gdp if, natural language processing if that is even comparable to the -- the internet talking about a huge bump up in gdp, productivity as well as well as this is going to be a disinflationary event, as people obviously, are, lose jobs because of the -- the technology that is coming, into the system. on the positive side drug discovery seen is going to ramp up, there is things that are going to happen, over the next five to 10 years, that we can't dream about there is huge winners huge losers. maria: were you surprised to hear jamie dimon at jpmorgan investor day talk about commercial real estate? yesterday, ceo diamond

minneapolis fed president neel kashkari weighing in on "squawk box" earlier this morning. >> right now it's a close call, versus raising another time in june or skipping some of my colleagues have talked about skipping. important to me is not signaling that we're done. if we did -- if we were to skip in june, that does not mean we're done with our tightening cycle. it means to me we're getting more information do we then start raising again in july potentially? so, that's the most important thing to me, is that we're not taking it off the table. >> oppenheimer in the same camp today, saying that a rate hike in june is still very much a possibility. and another in the second half of the year. so, what might that mean for markets? with us is schwab asset management ceo and cio omar aguilar. what is your current thinking in terms of the likelihood of a fed pause and how much that directly matters today for the markets? >> yes, thank you. thank you for having me. it seems to be going to what they call the hawkish pause, which is a little related to what we heard this morning with several f

francine: raphael bostic and neel kashkari on the banks next move to tackle inflation.till with us tristan hanson from m&g investment management. when you look at the fed calls and the path forward for inflation, you believe we can be at a turning point in we could see a recession. what for where you want to be fully invested? tristan: the bond market is difficult because the market is already pricing cuts to a degree. the long end of the curve is potentially more interesting because on a multiyear horizon, you have got 1.5-2 percent real interest rates if we are right that inflation comes back down. in the long run there's a question over that but if we start to worry about growth first, the market i think will put aside concerns about inflation for the time being and therefore those funds could be quite attractively valued at a positive real yield. tom: maybe look at the long end of the curve of the 10 year. 380 on the 30 year in the u.s.. the earnings picture has been relatively resilient spirit do you see that holding up amid the concern around slow growth? tristan:

kashkari and barken later today as the two-year inches back to 4% back in a moment (cecily) you're lookingith yourself. (seth) not to brag, but i just switched to verizon. (cecily) so you got an awesome network... (seth) and when i switched, i got to choose the phone i wanted. for free. not bragging. (cecily) you're bragging. (neighbor) oh, he's bragging. (seth) who, me? never. oh, excuse me. hello, your royal highness, sir... (cecily) okay, that's a brag. (seth) hey, mom. i gotta call you back. (vo) visit your verizon store during our spring savings event and choose the phone you want, like the incredible iphone 14, on us. verizon ♪ >>> don't miss it, tomorrow, after the tesla annual shareholder meeting, going to be sitting down with elon musk live from headquarters in austin for a one-on-one interview that i certainly am looking forward to. i can't speak for him, but i think he's going to -- apparently he's in france meeting with macron, and then he comes back, does the shareholder meeting, and then we'll have a chance to talk don't miss it. the first time you made a sale online with god

fed who is a voter they've commented residential rates are too high in remarks of reuters, neel kashkari, smart guy, quote, if i had to err, i would err on 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

minneapolis fed president neel kashkari will be speaking on a panel about minimum wage.gs after the bell. devon energy, paypal, lucid among others. the big thing for the markets is the fed's release of two banking reports, the senior loan officers survey, or sloos, and the financial stability report for may. alix: let's get more on that because michael mckee still here. take it one by one. what are we expecting at 2:00 p.m. from the sloos? michael: probably that things have not changed as much as people might have thought. alix: that is not exciting. michael: they changed a lot in january, up to 43%. and then jay powell in his news conference last week, sort of a lack of excitement on his part when he was asked about the loan officers survey. my guess is we see a small increase in the number of banks tightening credit. what we have not seen so far is banks really pulling back on offering that credit. there was a brief period in mid-march, but now we have seen numbers go up again. dani: he did mention only three times -- i guess if you have seen the report, it's maybe not

liz: well, minneapolis fed president neel kashkari thinks you're with the crowd that's being fooled, and those are his words. he said this morning specifically, because we've seen a few months of cooling inflation doesn't mean we should not be fooled by that. the fed has more work to do. >> i certainly realize there's some like austan goolsbee of the chicago fed that wants to be cautious. remember, monetary policy works with a lag. if they wait until the labor market really comes down, unemployment really rises, they've waited too long. i mean, steering the economy is not like driving a car do -- [laughter] you know, when you have your hands on the steering wheel and you can instantly move it right or left. they should have learned that lesson when inflation started and picked up and then, you know, they started tightening 14 months ago knowing that it wouldn't really start having an effect until 6 months, 8 months later. if you wait and see real declining labor market, my research says you've waited too long. i hope that they pause. yes, we might have -- we're going to have some wag

issue, because it appears this is he pore spun advisory issue the promising more regulation neel kashkari target wage growth softened so what should federal reserve be doing now given the fact that we have already seen a real impact from these 10 rate hikes? and we are looking at small business, worried about they can't get a loan, that is only going to compound this problem of slow growth and high inflation isn't it? >> yes, so if i were sitting in my old seat at dallas fed, i would not raise rates here at the moment, i would have what i call a hawkish pause i wouldn't have raised rates in most recent meeting either, the reason for that is i am worried we are at the point where rate increases are disproportionately tightening the vice on small midsides banks and bias big companies do not borrow at fed funds rate they don't use a lot of bank data, seasonal working capital, they tend to borrow in financial markets 10-year treasury if anything, is lower, as a result of fed rate he increases the curve more inverted, so last two months hasn't really hurt financeability of big companies it is

. >> reporter: she's not a voting member this year, but neel kashkari is, the president of the minneapolishave clinical challenges here at home. if i compare our challenges to those of other major economies, especially europe or china, i think we're in a very -- we have very strong things going for us. we need to deal with some of the near term challenges that we have, we need to get our fiscal house in order, but these are things that are within our control to address, and i'm cautiously optimistic that we will address them. >> reporter: treasury secretary saying again they have to have something signed into law by next wednesday in order to avoid, as early as that deadline on june 1st. back to you, liz. liz: very quiet in the halls of congress, although we still have a camera standing by many statuary hall -- many statuary hall, waiting to see if kevin mccarthy -- there's a live picture. we'll see if kevin mcthink gets in front of the camera. he's very intimately involved as speaker of the house. ed warmed, thank you -- edward, thank you. in one week the federal government is supposed to

minneapolis federal reserve president neel kashkari believes fiscal policy is unsustainable. >> we alwaysical challenges here at home. if i compare our challenges to those of other major economies, especially europe or china, i think we're in a very strong -- we have very strong things going for us. we need to deal with some of the near term challenges that we have, we need to get our fiscal house in order, but these are things that are within our control to address, and i'm cautiously optimistic we will address them. >> reporter: so in the share of the global market that is using the u.s. dollar has now decreased by 20% over the last 20 years. liz? elizabeth: edward lawrence, hang for that news. that's good information, thank you. joining us now from house ways and means, congressman greg steube. congressman, good to see you again. so you heard edward lawrence's report. the u.s. dollar is an issue right now. but the white house says they want to keep biden's student loan forgiveness plan, that they would threaten any house gop ban on that, and the supreme court has been taking on that fi

chairman jerome powell said he plans to stay the course bringing down inflation, you heard neil kashkarieed to keep rates tight there may be a trade when the fed starts to at least pause and then cut. last time our countdown closer was on the show, commodities he said will do well when that happens. he is mark lopresti. mark row press at this joins. what do you intend to buy? >> i agree with liz ann sonders one of the smartest money managers on the street. i do not see the fed cutting this year as much as i would love to see it. i think we hear a dovish adoption of a pause in the june meeting which the fedex police italy disavowed last week. when that happens, when there is a actual true indication we're at the end of the line cuts are coming i don't believe they will come this year as i said before, you're going to see as we have in the past four consecutive rate hike cycles commodities, particularly gold and silver do well. liz: okay. >> so we're looking for that to happen again. liz: gold and silver, silver is actually dropping today. >> it is. liz: that popped in my eye, that is inte

you look at insurance or whether it's the banks, the federal reserve in the past 48 hours, neil kashkari of the minnesota fed, saying we are not done yet. we need to raise rates. just yesterday, we asked jeremy segal of warton business school and he said the banking crisis, the regional banking crisis has already done some of the work for the federal reserve but they don't quite see it. here is what he said. >> i believe that the tightening caused by this crisis is equivalent to three or four 25 basis point hikes of the fed, and so they are in dangerous territory precipitating a recession. i was not in favor of the last 25 basis points. i was very pleased to say that they are likely to pause but there's still a lot of hawks there on the committee that just want to keep on raising it until they smash the economy. liz: is that really what's going to happen, john? smash the economy? >> well that's what i hope does not happen, but professor segal is absolutely right. several of these banks that went under caused consumers to horde cash. caused consumers to cut back. we saw it in the likes of

neel kashkari is open to skipping a rate hike at the fed meeting in june. it would give officials more time to assess the risks of more rate hike and the look out the output. he also objected to any sufficient that they are done raising rates. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn and this is bloomberg. >> still ahead, we speak to japan's biggest pagemaker, after they posted strong quarterly earnings. we discussed investment strategies with vanguard after jerome powell hinted at a pause during the bank taking cycle. this is bloomberg. -- tightening cycle. this is bloomberg. ♪\ the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com >> we will be watching several central banking decisions on wednesday. the rbnz is expected to deliver a final rate hike taking

neel kashkari also emphasized how much more it is than the target, more than double, etc. . that's why he is leaning toward the rate hike, but even he doesn't sound 100% convinced yet. let's listen. >> we have more work to do on our into try to bring inflation back down and most importantly, we should not be fooled by a few months of positive data. we still are well in excess of our 2% inflation target and we need to finish the job. kathleen: the relatively new president of the chicago fed said it was a close call in that meeting. now it so much going on with the banks and the economy and inflation, he thinks it's time to sit back and watch and see how the impact of 500 basis points of rate hikes a year are affecting the economy. he thinks the fed needs to be extra mindful of previous hikes and finally, tom barkan saying he sees no barriers to rate hikes. he was asked about financial stability and instability and he said he thinks he is watching inflation, if it is too high, the fed will have to do more. he seems to have not made up his mind but will not be deterred by the b

we've got a number of fed speakers out over the coming days including neel kashkari, jim bullard, rafaeltick, john williams among them. huge lineup, really the opportunity for the fed, if they need to push back on this narrative that we will see, as i said, cuts as soon as september. >> of course casting a long shadow over investor sentiment is a lot of uncertainty when it comes to china. the government has launched a nationwide anti-espionage act on consulting firms, accusing one of leaking state secrets and having ties with foreign intelligence agencies. let's discuss this with the friedman sharon china studies for strategic for international studies. always great to have you with us and we are all hoping that you can help us on what's going on and what the intended strategy is because from the outset, xi xiping on the government are trying to restore international confidence and domestic confidence in china as an investment destination following covid zero. how does this get them there? >> it doesn't, what has been a head scratching his there's makes messaging coming from beijing. par

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

kashkari seeming to endorse a pause in june and blackrock saying that's pretty much what they're expectingn june and not necessarily a given that you end up in a deep recession, echoing dimon yesterday. >> the fed is considering a pause and is leaning in that direction. the problem is that core inflation is at 5.5% we don't know how fast it's going to come down half the people i talk to will tell you nonissue. look everywhere, it's coming down it's going to. the fed should not be worried at all. the other half say there's some sticky elements here to this inflation. look what jamie dimon said, get used to 6 or 7% rates. if he would have said that last year the market would have taken that negatively. but this market is choosing to ignore the hawkier side of the arguments and price in a 50 basis points of cuts by january of next year that's not a 6 or 7% rate. >> no. it is far from a 6 or 7% rate. obviously, there has not been any talk of any of these fed governors we've heard from about cuts during the course of this year. >> they won't go there they explicitly say we're not thinking about

. >>> welcome back neel kashkari reiterating he's on the hawkish end of the fed policy spectrum on positivey and wholesale prices and yesterday on consumer prices our next guest says there's no way the fed will pivot to rate cuts so quickly. joining us chief investment strategist liz ann sonders i don't talk to anyone who expects rate cuts yet the swaps market is pricing this in. why is there a disconnect? >> well, the swaps market, you have to look at the range of positions that have been put on and what's really happening is, it suggests either the fed pauses but then stays there for a while, or there's something more calamitous and they have to cut aggressively you aggregate the data, and it shows the possibility of rate cuts starting in mid summer. you know, understanding how that data is collected and then aggregated i think is important. by the way, it's not impossible that the fed would start cutting. it's just sequel, meaning, if inflation stays about where it is, even if it needs to trend down, we don't see something more calamitous in the financial system or we don't see significa

. >> we're grabbing it >> neal kashkari was with us he's worried the fed loses too much credibility ifey keep raising rates to get to 2% inflation? >> so i think you can get there in a different way, which is if you believe wage inflation will be in the higher single digit, below 5% but let's say 3 to 5, not 2% you can drive 2% productivity growth to bring you down back to that 2% level of inflation people are looking at. people are looking at ways to automate lots of different things and that's been going on for quite a long time and i think the ability to use regen regenerative -- generativpe a.i. they're things we never imagined a year ago but it's still not quite ready for primetime. i think it going to be ready for primetime in the next two years. we'll deal with the issues that cause it to be less stable and it's going to be a tool that can be used to drive significant productivity increase. the large language models, friends of mine who are much smarter than i am about these things would suggest that's going to become a commodity, that's not the area of competition. it's really

. >> but do you think the fed is going to -- we heard from kneel cash kashkari last week >> it's veryhe capacity for the economy to absorb much higher rates. you see this in deposit trends if you get 6% or near -- let's anticipate 6% money market mutual funds and the bank is offering 2 1/2 >> not to revisit history. both parties agreed to stimulate the economy because of covid in 2020 it was terrifying. i get it but they kept stimulating into 2021 the president came in again, not blaming any political parties except the ones in power the first stimulus was bipartisan for the most part we kept stimulating. i traveled to 20 states during covid. i only bring that up because only half the country basically never shut down or shut down very briefly but we kept stimulating as if the entire nation was locked down and nothing was happening. and that's history, i get it but at that time the fed saw 1% fed funds rates now they're fighting 5 1/2 to 6% is there one point in time you could go back and say this is where the fed and/or congress really screwed up? because somebody screwed up. >> well

. >> neel kashkari is been vocal about that, but not the head of the fed.at music) ♪ ( ♪♪ ) woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall. >> live from your city, this is bloomberg surveillance where we hope things are just really bad, and if you don't understand that joe, i'm not going over that again. run the s&p 500. 0.3% on the nasdaq totally unchanged, and finally, someone said it. lexis the quiet part out loud. let's get to bonds. two-year, 10 year, 30 year. little bit later, fully five and it's from now, we are looking at the two-year at 381, and the euro is shaping up as follows in the fx market. go on. you've got this. >> 110. you can make a story about this. >> the could make a story, but to come up with a story, congratulations and you are doing it good work. whether it takes up for two basis points or it's in this race for quite a while. next people border on that. >> we've never even gotten to that. the state o