earlier. -- adrian or speaking to kathleen hays earlier. beijing has continued secures -- concerns about data security. this comes amid growing u.s. china tensions at the moment. what is the story about? >> what we understand is that the chinese government, including the ministry of finance, has urged state owned enterprises to stop using the big four. that is pricewaterhousecoopers, kpmg, deloitte. they would be allowed to continue to use the big four with her up short subsidiaries. -- offshore subsidiaries. this is about data security. u.s.-china tensions is undermining everything. this is one of the more acute manifestations of that tension in the business world. we understand the government is not mandating or giving the state owned enterprises the date by which they have to drop the big four. they are urging them to switch to chinese or hong kong companies as soon as they can. >> there are some pretty big implications for this. what does that mean when it comes to the attractiveness to be able to get international capital? >> two lists

our global economics and policy editor kathleen hays explains. en: no matter who is finally selected either prime minister, the big question for the next boj chief will be maintaining extraordinary monetary stimulus or taking the first steps toward policy normalization. once seen as a top contender for one of the deputy governor slots, says examining the impact of kuroda on the markets is already on the table. >> the bank is considering how to support the economy and gradually morph toward normalization in a way that does not cause major turmoil in the bond markets while watching the economic and financial situation carefully. kathleen: the next governor of the bank of japan is taking over at a time when deflation has turned into inflation. when the boj now owns more than half of japan's government bond market and is struggling to keep it functioning smoothly. what will it take to get the job of transition done? >> inflation is up, we think growth will be up, our view is yield curve control will be dismantled in the second quarter and japanese yie

let's get to kathleen hays is here. what are markets expecting? kathleen: we know so little about him. stan fischer is nothing to sneeze at and he was at the boj from 1998 to 2005 good while he was there he helped usher in quantitative easing so he is no stranger to inventing and using innovative and extraordinary monetary policy tools. we know that. the announcement came out that he was said to be the next governor. at this point, he's not going to rush anything, who would? but is he going to guide the path toward normalization? a lot of yield curve control. there is speculation and reporting that amamiya could not separate himself from kuroda. the situation, do you really want to stay there. it is the boj person who says we are not going to keep apo j person this long. we are going to have an outside person, and academic. it may be the prime minister looking at squabbles about how long they have to keep the extraordinary easing because they have a big deficit and will spend more on defense. they need to finance it created do you want rising rates

shery: the potential appointment for the next governor, kathleen hays is here. how significant would that be? kathleen: it would certainly put a strong, experienced boj official in the driver's seat, and someone who has worked so closely with governor kuroda. it may be a good thing or bad thing depending on how you think of super stimulative policies and yield curve control. but this is a powerful newspaper in japan and the fact they carry the story and officials have been talking to amamiya. it's no surprise because he's been a top contender the last few months. recent bloomberg survey shows far and away out of 43 economists, he has more than half of the votes as the logical replacement for kuroda. a former governor in kuroda's first term, he is finishing his second term in april, the longest serving boj governor on record. let's look at mr. amamiya. he's the current deputy governor but he is a boj lifer, that's why people have been talking about him for a long time, i call him mr. boj. he has had a hand in coming has even been the architect in key kuroda politi

kathleen hays is here with more.to hear directly from because will -- from kazuo ueda. kathleen: it certainly is because we will find out what his views are because we don't know his views. he was on the boj board from 1998 to 2005, but that was a long time ago. back then, he was in favor of quantitative easing. he opposed a rate hike by the boj that proved to be a misstep and was one of only two on the board that did. but that was a long time ago. he has been an academic, highly respected and well-known for his work in academia, but what does he think now? that is what we don't know. in a recent survey, 70% of the economists we talked to said they will start the normalization policy even at the april meeting. they are going to do it quickly, so what do we want to hear him say? first of all, yield curve control -- that's the big one because that's the one that governor kuroda who is outgoing had to tweak. what do we say about widening the band? maybe even getting rid of it altogether. a week young versus a strong yen

kathleen hays is here with the latest. what do you make of this? >> it's interesting because out there on the horizon or somewhere down the road in 2023, we have recession concerns. manufacturing has been week but then the consumer keep spending money. this latest report in january was something. there were statistical seasonal adjustments and shifts and yes it could have made it a bit stronger, but up 3% that is an extremely strong number. it is way stronger than the forecast of 2% and it follows two months in a row of declines of a full percent. 2% 3% is even bigger. let's look at the details. up 3%, if you take out autos which were up nearly 7%, that number is 2.3%. that alone we would have said this is so strong. department store sales were up 17.5%. furniture that something you don't think about. gift cards may have padded these january sales. people used to go christmas shopping and spend a lot of money in november december, now they get gift cards and they spend it in january. the consumer isn't slowing down the rate hikes, what is that goin

haidi: kathleen hays there. joining us now is the chief strategist at j.p. an securities, japan. good to have you with us. kathleen was running us through perhaps some speculation of what the policy stance could be from mr. ueda. we saw the yen reacts when there were reports that perhaps he was more hawkish than the expected deputy governor. what are you making of where he could stand on this altria dovish policy from haruhiko kuroda zero? -- kuroda's era? rie: thank you. that is the most frequently asked question in the past couple of days whether mr. ueda would be hawkish or dovish. i would say that he is neutral. he is academia. his decision is always based on theory in his framework. and also, he sees data so his decision for the boj's with him as a governor, the boj's decision is more data dependent and based on theory, theoretical framework going forward, so i would say that professor ueda is, you know, hawkish or dovish. i would not say that. he would be neutral, more data dependent, based on the theory. of course, i know what you are asking. the marke

let's get the latest with kathleen hays. it's been a busy morning. kathleen: it's so interesting because the issues we have been talking about for months if not years, but the last two months, the last six month of 2022 going into this year all about yield curve control, the difficulty the boj has had keeping it in control, right? and the big tweak surprising tweak, in almost former governor says this was a technical adjustment and then they widened it, they doubled it. what are they saying now? if we hit our 2% inflation target we will do all kinds of things. we will stop buying bonds. we will start backing away from yield curve control. we will normalize policy, but the question is as he said, he does not know how much confidence they have, he hasn't getting there and keeping it there. again, i would say how are they going to achieve the target? a time, averaging 2% over time? very important i think that he said shortening the yield curve control target is one of many options. people suggest this a number of times and suggested that instead of targe

haidi: kathleen hays with the latest on that. the other big market story we continue to watch going into the third week the ongoing crisis surrounding the indian conglomerate adani. officials trying to calm investor nerves. the high-stakes of a potential contagion or spillover effects seen over the weekend as we saw these moves to try to quiet the markets. >> aquatic coordinator response trying to stem the rally because it is quite significant in terms of what we have heard so far. the indian government has largely stayed quiet on the issue but over the weekend we heard from the countries finance minister and she tried to distance what is going on with adani to any broader market implications. she says this is a company specific issue. the other place we heard from was the country's market watch dog. they said india's financial markets are stable and continue to function in a transparent and of patient manner. there has been a lot of credit stress around this company. look at the terminal charge. it shows some of the bonds for th

kathleen hays there. the silver lining is the blue line hits 5%. there is a lot more yield on now for right now and risk-free securities. do not even get me started on dividend yield in stocks. talk to your bank. >> on the repricing we are seeing, let's begin our contributor. does it change the picture when it comes to bonds? up until recently it has been longer bonds short dollar trade. does the recent data change that? >> it changed it along the path where things were already going. the reaction was a little bit muted in bonds. yields are moving up a lot and the yield curve inversion has been widening gradually and reached the widest inversion since the 1980's. the grind away from the optimism , that is not what the bond market is seeing. the bond market is seeing the chance that there will be a recession and that it will be a recession the fed will help to create because it will be forced to push rates up high enough and keep them there long enough in order to slow demand sufficiently to bring down inflation. that is what is going on there. we h

and kathleen hays is here with the latest. markets are trying to figure out how to take his message today. kathleen: my key take away is that he had a very warm, interesting conversation with david rubenstein the first question was if you knew what you knew about the jobs report, would you have still done 25 basis point heights instead of 50 -- hikes instead of 50? jay powell says we do not have the luxury of working that way. dave rubenstein moved on to other questions. basically, it was a conversation that i would say laid out all of the things jay powell said last week. in terms of financial conditions being easy, he did not pound on the table last week or today. he repeated that the disinflation has started, another thing people found dovish. he acknowledged the obvious reality. what he adds onto that, there is still a long ways to go. there still more work to do. that has been the message for some. it's interesting, markets had been very reluctant to price in 5% terminal rate. now it seems that they are getting to the idea

haidi: kathleen hays.adani taking steps to restore confidence. 100 $20 billion of market cap has been erased following a u.s. short seller report a managing editor -- report. we are seeing an assortment of measures to prop up investor confidence. broader market sentiment. a bit of relief for investors. what are we seeing and is it having the intended effect? >> yeah. the most recent move is the adani group buying back share back loans, freeing up stock in some of those more infrastructure focused units. adani transmission. adani ports. that is firmly seen as a firefighting, restoring confidence move and a way to ward off margin calls, which they are very concerned about. this comes after a bunch of banks, credit suisse among them, started to stop accepting adani securities as collateral. very much pro--- very much trying to sell things. market moves are coming down. in the absence of a first of element on this story, but we are not out of the woods. shery: especially we -- given we have many companies repo

kathleen hays is here with the latest.trong consensus within the red on this -- fed on this? guest: we have to say there is. jay powell said, after the meeting of a 25 basis point hike , a downshift says to more rates point hikes anyway. we hear 4 more today, that they agree. let's start with chris waller. he is a governor at the federal reserve. he has been on the hawkish side. he was speaking at an event today. he also said, that they have made some progress, but they are not there yet. they have more to do. let's listen to what he said. >> we are seeing that ever begin to pay off, but we have farther to go. it might be a long fight. with interest rates higher for younger than some -- longer than some are currently expecting. we will not hesitate to do what is needed to get the job done. >> we have heard that from jay powell and more and more fed officials. they will not hesitate. they will do what it takes to get the job done. i year and a half ago he was quite the dove and now he is quite the hawk. he says the fed need

global economics and policy editor kathleen hays is here. mentioned super court cpi but there are other prints and the fact remains that the numbers are pretty elevated. kathleen: they are elevated. big numbers, year-over-year numbers for headline inflation, core inflation, those have to come down. if they are coming down and jay powell has pointed out that the core services minus shelter makes up more than half of what goes into cpi. that is why he is watching so closely. if that does not come down and continue to come down, these numbers will not improve. and we can see here on the headline, a little improvement. one tent is nice but it's continuing to drop sharply in i don't know what i'm seeing here. core cpi coming down, but within there, you can see core services like shelter coming down. that's enough -- not enough to bring the index down. .5 on cpi for the month. that .1 increase, not very big. it used to be for december and -0.1. that is no longer as good. core cpi is about double or at least double what a healthy number would look l

according to this report, let's bring in kathleen hays, are global economics and policy correspondent. kathleen, remind us who this is and what that might mean in terms of orientation of monetary policy. kathleen: he is a long time bank of japan -- some call him a life, but this is the big question now as governor gets ready to finish his second term. who is going to replace him? and amamiya's name has long been in the lead. there are others. this is based on a report by the nikkei, a prominent news organization that members of the ruling coalition party of talk to him about taking the job. of course, we don't know if they talk to anyone else, that occurred to me and the last few hours that we've been talking about this. but we do know that he has been approached because he has been the lead. most people have given him the upperhand hand getting the job, because he is for many reasons right there behind the governor, pushing this policy forward. deputy governor in the first term, well-known internationally, outspoken on financial regulations, banks, and extraordinary stimulus leading

our economic policy editor, kathleen hays is here and the expectation is now that kazuo ueda will takehe helm. kathleen: he has a tough road to hoe. when he was asked on friday, the news was raking, what do you think about monetary policy, he said it is appropriate at this point and monetary easing needs to be continued at this point. the question is what is he going to do down the road? is he a hawk or dove? let's look a little at who he is. he's a respected academic. he got his phd from m.i.t.. he is a university professor in tokyo teaching economics. he has not been in the spotlight lately. he was a member of the boj board from 1998 to 2005 and help introduce quantitative easing and negative interest rates. when they needed to get devilish, he was on board with that. he is someone i think who is viewed as a realist who knows he has to walk this very narrow path between maintaining that easing but still looking at market pressures and how it may have to be adjusted because the first thing, it looks like the bond market is starting to push up against the start of that yield curve ban

let's bring in our global economics and policy editor kathleen hays, to discuss this yield curve inversione deepest since 1986. how powerful is this? kathleen: pretty powerful. the difference between the two year note and the 10-year note, it means it is much higher. they are not supposed to be that way. if the economy is healthy, you want to sell the 10-year note. if that yield goes up, you want to buy the two year. this chart, what it tells you is that when there is an inverted yield curve, particularly and extremely inverted one, the biggest, as you said, since 1986, it is followed by a recession. there have been some that were not followed by recession, but in every recession, that is what has happened. that is why it is important. one story that got a lot of attention is about the senior matt microstrategist from macro hive -- senior macrostrategist from macro hive, she says that the fed funds rate will have to go up to 8% to get inflation down, that is where the fed will have to take it. right now the market is pricing in something like 5.2%. the fed consensus has been 5.1%, but they

scarlet: kathleen hays with the latest on where the fed could go from here given those numbers. let's turn to president biden saying he wants to speak with xi jinping to ease tensions over the shooting down of a suspected chinese spy balloon. >> as i have said since the beginning of the administration, we seek competition not conflict china. we are not looking for a new cold war. but i make no apologies and we will compete. >> let's discuss all of this with jodi schneider in new york. again this line up competition not conflict, we don't want a new cold war. but there is the sense that president biden wants to reestablish this relationship with beijing. >> this is an important speech for him. he made these remarks before he leaves for poland on monday. he wanted to be very clear that while he was not apologizing for shooting down the alleged spy balloon over the coast of south carolina on february 4, but that he did want to reestablish the relationship with his chinese counterpart and that he didn't want the relationship to deteriorate any further. he also said the other three o

bring in kathleen hays. it seems that traders are honing into the fact that jay powell sounded a little bit more optimistic about the inflationary outlook. >> very important, he said that after two years when inflation didn't come down at all .21 and 2022, now it is starting to come down more quickly. he says disinflation has started. however, he said there is still a ways to go. that the policy statement opened the door to more rate hikes as well in particular, he pointed out the labor market is still very tight. the core services x housing, the super court for inflation has not really come down. that indicates that yes, they may have to do more rate hikes. at the same time and it comes to financial conditions, he said the broader financial conditions not sufficiently restrictive policy stance yet another thing that keeps the door open to doing more. he was asked about the debt ceiling. fed chairs don't want to talk about these kind of things but here's what he would say when pushed. >> there's only one way

kathleen hays, thank you so much for that. markets and bring in our guest eddy loh from maybank. + people were talking about that peak was october of last year. more to come? eddy: we are still cautious on the markets. when it comes to terminal rates, have a rate of a 5.2% rank. inflation is the one that is striving this outlook. there is some outside surprise to the data coming through and we would be surprised to see these expectations being raised as well. haslinda: that data out of the u.s. is crucial. what would it do for the dollar? eddy: we are expecting the inflation to moderate further from last month. but i think the market is also increasingly shifting their focus. is also getting quite sticky. while inflation may have peaked, it may not normalize fast enough for the fed to think about cutting rates, which is what investors are pricing in. haslinda: when you take a look at the dollar, what has been priced in a current levels? eddy: it has recently seen a nice rebound after being sold off for months. [indiscernible]

kathleen hays, of a global economics and policy editor is here. counting down to that pressure from adriana moore. could be interesting. what are you expecting to hear from the rbnz governor? i want to start with something tracy withers nor burlington bureau picked out as the key phrase because they did make the 50-basis point hike, they point out that while there are early signs of demand easy, it continues to outpace supply. the committee agreed monetary conditions need to tighten further. how much further, mr. orr? you say the rates will peak at 5.5%? does that mean another 50-25? what would make you slow down? the fact that they say implement remains beyond the maximum level, how much does it have to slow down? that unemployment rate is still very low. and remember, they will update their forecast, very important as well. they see in terms of the more dovish part of this, the recession starting in the second quarter of this year. although adrian orr says they expect him be a mild recession. they see the policy as contractionary no, that is ano

we have kathleen hays joining us, stephen chiu, and mark cudmore. that screen is crowded. 's get over to kathleen. we had nicholas smith saying it looks like a dream team. but does it to you, and what are people likely to say about all this? kathleen: i tend to agree with them. certainly from a starting point. we hope it does not turn into a nightmare if you want to go on that dream team. first of all, kazuo ueda, as nicholas pointed out, as did the previous guest i said you are like an adjunct boj official now. ueda has been very well-connected with the boj over the years. as recently as november he oversaw one of their conferences. so he is definitely in the mix. he knows what is going on, he knows what the thinking has been, he knows what the challenges are. and a deputy governors of course, the executive director of the bank of japan, in stories i have read he seemed like a star, potentially a future governor. so, a very strong teammate to support ueda as he makes this transition. he's an academic. doing all the testimonies. and you have ryozo himino, a ministry of fina

haidi: kathleen hays. now let's get vonnie quinn.nie: president biden's top economic adviser will step down later this month. he helped craft much of the president's economic legislation in the first two years of office. president biden has not yet named a successor but candidates include the fed vice chair. an x out activist says he expects that people -- to stay there long term. he told us he expects to leave the city two years into the program and is urging -- >> we need support for the things that are going to count to china's narrative. the preservation of our culture, identity, efficacy is crucial when it comes to whether we can have thriving in a community. vonnie: hong kong has revealed details of its plan to hand out air tickets to lord visitors. -- lou are visitors. the giveaway will begin at the start of march and last six months. hong kong had 600,000 visitors last year compared to 56 million before the pandemic. u.s. regulators are said to have asked hedge funds to look into the use of whatsapp and other social platforms

kathleen hays joins us now. 25 basis points baked in. we go back to the statement which was? >> and the press conference is the big one. rish, what you said about a hawkish 25 or a more dovish 25. we have had three separate fed guests in the last few hours on our shows. and david and i just talked to vince reinhardt, a divisional monetary affairs and the board of governors, and they all said jay powell does not like to surprise. boy oh boy, have they made sure they will not surprise. 82 of 92 economist say 25 basis points. marcus were very happy -- -- markets were very happy today with the back burner numbers, wages and benefits and what does it tell you about the number on inflation? was it 1%, lower than forecast? it's at its slowest pace since the fourth quarter. 2021 cpi slowing. still high. nevertheless, things moving in the right traction. what is not moving in the right direction is labor market, still very tight. jobless claims, you can see they just keep falling. they have not broken the back of the labor market. in fact, it will be interesting to see what jay powell

. >> our global economics and policy editor kathleen hays with a look ahead to the rbnz decision. we will speak to the governor, to go over today's decision and talk about what comes next, at 6:15 a.m. hong kong, 11:15 am in wellington. let's get you to paul allen with the first word headlines. paul: hong kong is said to unveil its budget on wednesday, balancing the need for incentives to revive the cities international image -- city's international image while keeping spending under control. most expect a return to fiscal surplus, with a balanced budget as the top priority. most also expect new measures to attract global talent, such as targeted tax exemptions. the u.k. government has as much as $36 billion for short-term giveaways in next month's budget after public finances did far better than expected in january. borrowing over the fiscal year was running well below the official forecast, plus, the treasury received $6.6 billion more in revenue than it spent in january alone, thanks to brilliant tax revenue -- buoyant tax revenue. a bitter cold said to stretch from the pacific

kathleen hays is here with a breakdown of what to expect. >> we do not know. the questions are big, he was a policy board member, but he has not been in the policy business for a long time. he has not written many articles. when i was talking to people on friday in the u.s. that is what people said, we do not know. people close to the boj said just that. he was on the board from 1998 to 2005, he graduated from m.i.t.. stanley fisher was among the people who taught him then but this is many years since. right now, you kind of have to guess is he going to be more hawkish? or is he going to be dovish? when he was approached by reporters in the last couple of days he said the current policy is appropriate. monetary easing needs to be continued at this point. he also said the amount of policy review should be done at some point. he also said recently in an article that the boj is far from achieving 2% inflation that is sustainable, and rate hikes would only lead to economic deterioration. you see a variety of things coming from him, and i think that it is interesti

: let's get more on the rba's rate decision later today with global economic and policy editor kathleen hays5 basis point hike widely expected, what are the dynamics in favor of an upside or downside from the rba? kathleen: let's note that phil said the rba is starting preset course that he has signaled he is ready to do what he needs to do to bring inflation down. inflation is so far above target, a kind of pressure does he see keeping at higher. in terms of what the rate hike will look like, their receipt, 25 basis to 3.35. you can also remember in december, and their minutes and post policy acknowledgments, that they consider a 50 basis point hike. so this is the central bank ready to do it needs to be done. inflation is a big question except it's not so much of a question, it's a fact. 6.9% is far above their target. it's peak iron the fourth quarter or maybe it hasn't peak like the rba expected it would. if you look at what people are expecting, economists, there is a hugely wide range. if you start at the top, we have, looking out the inflation, the numbers the one that could push them

kathleen hays is here with the latest. we saw the markets being hit slightly when governor phil jefferson spoke. what that he say? kathleen: i guess because they decided it was not something people are watching closely, the fact he was asked about it at a harvard economics class got him to expound and he started by saying yes, inflation is high and it has been very hard to get it down. the big question when you look at a chart that shows you where inflation is and you see where the target is, the gap is still wide. to the extent there are many voices out there, economists and analysts are saying you can't get inflation down. it's caused by disruptions or a labor force that is just not big enough with interest rates, you are going to have to move that target up 3% or 4%. here's how he dove into that question. >> i am committed to lowering inflation to our 2% target. changing the fomc's longer run inflation objective, however, would introduce an additional risk by calling into question the fomc's commitment to stabilizing inf

kathleen hays, what are we looking at? what else are we looking at?it aggregate itself and give us a sense of how important this is compared to previous prince. >> it is very important, because he sees two more rate hikes this year and everybody is wearing if the fed will be able to do that and we know inflation started coming down and he sees disinflation for the first time, jobs, a big focus, because labor market still look tight on many levels, so as for this employment report on the payrolls, 189,000 expected down from the previous month. they have been 220,000, 230,000 for a few months now. unemployment, and i want to say that is a solid gain here that is not a week -- gain. that is not a weak report. this is important. wages 0.3 two months in a row in terms of year-over-year comparison. 4.3 percent from 4.6% down. that is good pit still well above the pre-pandemic level, but going in the right direction. now, technology jobs, finance jobs, that is where you see the high-profile, big headline layoffs, tech jobs in particular, almost 70,000 over t