because that was kathleen hays there. also dive into any of the securities of the bloomberg functions we talk about. plus, join in on the conversation. you can send us instant messages during the shows. this is for terminal describe -- terminal subscribers only. this is bloomberg. is it not introducing the new sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number. ♪ at morgan stanley, we see the world with the wonder of new eyes, ♪ helping you discover untapped possibilities and relentlessly working with you to make them real. ♪ because grit and vision working in lockstep ♪ puts you on the path to your full potential. ♪ >> here is a quick check of the latest business flash headlines. credit suisse is losing several senior executives. our sources say the head of the japan equity esteem is leaving. documents seen by bloomberg show the h

kathleen hays is here. russ are in a pause and rate hike, so what are we expecting? catherine: we are expecting the fed to wrap up the second day of a two day meeting in jay powell to explain what they have done, communication will be important in the decision, no matter if they decide to hold off, watch the landscape, see the steps that have taken that will calm the market allow those things that happen in equity in bonds that emily just outlined. or if they decide to do the hike. that's the other side. markets, it looks like credit suisse, ubs deal seemed to do a lot to make people think maybe they can do this. 20 basis point rate hike means they are almost leaning for sure for the 25, but not quite, but that's where people are leaning now. the dot plot, how will they do the dot plot? we are uncertain about if this financial thinking turmoil is over or not, but they have to put dots up. there was one pandemic where they did not put out dots. that's the step that makes people think the fed is worried. it won't tell us where it things it's rate hikes are going. termi

let's bring in a kathleen hays. our policy editor. i want to start with the u.s. report but this is taking president. kathleen: anything that kuroda has said since the january meeting with support that, there is no need to change, even though inflation is running twice the 2% target, over 4% year-over-year, the consensus view of the boj, the view of governor kuroda is that there's a lot of uncertainty about the economy. he's said a lot of increasing inflation is due to supply, materials prices, electricity prices, things that could reseed and bring inflation down. the other thing to remember is just yesterday, fourth quarter gdp, final number 0.1, it had been 0.6. this is the data that kuroda could have pointed to. they could've pointed it to and say, we don't know inflation is going to be. the incoming governor, let him decide what is next. david: let's bring in our next gas. takahide kiuchi, also former member at the bank of japan. thank you for joining us. takahide: the decision, i think december governor kuroda rose the long-term. i think this decision was made

haidi: kathleen hays there.entral banks, we are hearing from the rbnz at the moment, really looking at the comments when it comes to their deep commitment to bringing inflation down. their chief economist paul conway making these comments in his speech, that they are determined to get inflation back to target edging firms not to push up profit margins that express reassurances when it comes to new zealand's banking system, saying it is very well-capitalized. the path back to low inflation involves output losses according to the chief economist. rbnz really being at the forefront of the global tightening cycle. we have heard before that the reserve bank of new zealand expressing that confidence that banks under supervision have sound liquidity and funding positions, and they operate different business models >> inflation remains too high, and the labor market continues to be tight. we no longer state that we anticipate ongoing rate increases will be appropriate to quell inflation. if we need to raise rates higher

haidi: kathleen hays.hauling many regulatory bodies in the biggest bureaucratic revamp in decades, part of a broader push for economic sufficiency in the face of u.s. efforts. stephen engle joins us now with the latest from the national people's congress. what do we know? >> it's probably in response to pressure beijing is feeling with export controls led by the biden administration on advanced technology and bifurcation of the relationship. it seems as though leadership is taking the gloves off, this is been a combative national people's congress so far. they're playing to a domestic audience in large part because most people in the united states are not going to be digesting the words word by word. lang with fire on taiwan. fed policies. export controls. these moves to revamp the regulatory bodies is in direct response to what i believe leadership sees as the new normal, the united states will continue its aggressive approach towards china and china must adapt quickly, forcefully, and in a pragmatic way.

bloomberg economics and policy editor kathleen hays is here. what can we expect from fed chair powell this week? kathleen: i think of mary daly as a centrist, she is not super hawkish and not super dovish. so when we hear a voice like this ahead of jay powell's important biannual testimony to congress, we listen to it carefully and we wonder, is this paving the way for jay powell to echo these words that others have spoken on the fomc? it is clear there is more work to do. obviously, hiking rates. in order to put this episode of high inflation find us, more policy tightening and of course, hiking rates for a longer period of time will be necessary. most of them have said rates may have to stay wherever they peak well into 2024. she was talking about the fact that there is all of this uncertainty. inflation is high in goods, housing and other services. how much momentum there is for disinflation just is not clear. larry summers talking to bloomberg television as he does every friday on "wall street week" saying the fed should open the door to the

kathleen hays is here. he still emphasizes that it needs to be done right. >> a delicate balancing act trying to keep unstable markets stable and confident in what the fed is going to do. he started by staying with bloomberg television earlier today that it is clear the fed will not hike 50 basis points and they won't cut interest rates either. in fact he is said in favor of the pause the idea is first, do no harm. there is a financial crisis going on and you do not want to upset things. he does say he would add a little caveat and meanwhile he explains why he can also see the case for a 25 basis point hike. >> the case for zero is due no harm. we know the banking system is under stress. why continue to raise rates when the system is under stress. the case for 25 basis points is to say we still have an inflation problem. we can do both. use our liquidity to shore up the confidence. and use monetary policy to bring down inflation. if i was sitting there i would recommend taking a pause but we have to do it i

let's get more with our editor kathleen hays. lot of fed speak to digest today. >> it seems to me that one messages developing as it seems the banking crisis -- they're coalescing around the theme that banks are strong and we still have inflation fighting to do. susan collins spoke today, she said banks are strong but she is looking for more rate hikes. >> i currently anticipate some modest additional policy tightening then holding through the end of the year. i will be carefully watching a range of indicators including data on inflation, spending, labor markets, and financial conditions. >> president collins made it clear three more 25 basis point rate hikes is what she sees this year. no cuts. she thinks tighter lending standards to offset the need for how many rate hikes there are going to be. the richmond fed representative said he can see inflation is still high but he is waiting to see the impact of the right height. speaking again today agreed inflation is still too high and it is too soon to engage the impact -- to gauge

kathleen hays is here. is that we know the fed maybe pausing. >> it depends on their inflation because their inflation continues to rise. they believe it is going to be temporary and start coming back down. they went to had with this 25 basis point i took 4.2 5%. this is the highest since 2008. that was the great financial crisis. another landmark reached here. it is the 11th straight increase. it follows hikes at the fed. central bank around the world say they have to fight inflation and they all continue to tell us that they are watching very closely. the hawks ruled here. and the boe led by andrew bailey in this interview said they have to do more, they will. let's listen to a governor bailey said. he said he thinks inflation is going to peek and this is important, this is an anomaly. i think it will come back down. he said the will avoid recession. and that they are continuing to look past the turmoil. they assume they will be on good footing and by all accounts, they are. the most important thing is in

bloomberg's economics and policy editor kathleen hays is here. another hawkish message. at can we expect from powell this week? kathleen: sending that message that we have to raise rates more than even we may have expected. mary daly, speaking at princeton university over the weekend, here is how she summed up what she sees. it is clear there is more work to do. in order to put this episode of high inflation behind us, further policy tightening, maintained for a longer period of time, will likely be necessary. we have gotten lots of signals about keeping rates high well into 2024 and perhaps going about the five point 1%. a contributor telling david westin on "wall street week," he thinks the fed has to look at 50 basis points. they downshifted to 25 at the last meeting, are they having second thoughts? we will wait to hear from chair powell. larry summers pointing out that they have not been this far behind the curve in over a year. for jay powell, he will be speaking to the senate on tuesday, then on wednesday he will be speaking to the house, the financial services and

also thank you to kathleen hays. let's get to su keenan. >> we start with world bank president who says a global recession is still not off the table. the lender is reviewing its global growth forecast following china's lifting of the covid lockdown. he told bloomberg the last of investment -- lack of investment in economies is a concern. >> the latest we have seen is advanced economy growth expectations had gone up late last year. as the u.s. and china in particular as china lifted the embargo, the lockdown. as we are looking at it now, the growth is slow but positive in advanced economies but in developing countries, not much investment taking place. that i think is the big challenge. >> china and russia have reached a long-term deal to develop key nuclear technology. is part of a series of agreements that were signed during xi jinping's visit to moscow. the u.s. has raised over what it says beijing's ambitions to strengthen its weapons arsenal. china evergrande group has announced its restructuring plan. the devel

our policy editor kathleen hays that joins us with the latest. as i said, what is the fed going to do with this huge complication in terms of the banking sector and still elevated inflation? kathleen: think how -- think if you are a fed official, think about friday, what happens svb, what the markets did. yesterday we got the big news, headline from nomura that they think that the fed will cut to offset the financial volatility and follow. -- fallout. blackrock says they will do 25 because inflation is a bad problem. you run through them again. on the headline, the monthly came down. energy prices were a big part of this. they go up and down, they do not give us a trend. on the monthly number, it went up. what happened was, sometimes he focus more on the month, or the year-over-year. the year-over-year went down on both counts. but not very far. you've got components here, like airfares, auto insurance that are moving higher. those are the things that drive services. you have rent to rise. it started. to slow down but it is expected to stay high f

our bluebird reporters sally bakewell, emily graffeo, and our global economics and policy editor kathleen haysou have been very busy lately. sally: yes, very busy. concerns about credit suisse ratcheted up to a whole new level and part of it is credit suisse, it has been mired in a complex turnaround. but part of it is also colliding with this negative sentiment in the market after the collapse of three lenders. and we saw that very clearly in the market. it only took the top shareholder in credit suisse to say that he wants to keep his stake at around the 10% mark. there were reasons for that, regulatory and legal reasons. he spelled it out, but that was enough to spell a whole lot of carnage in the markets. haidi: how are counterparties in other banks seeking protections now? sally: some have been cutting back for a while. reported today that u.s. banks like jp morgan, bank of america and citigroup had been trimming their exposure to credit suisse in the past few months. they are seeing amped up questions from regulators who want to know about their exposure. but they have been pulling back

kathleen hays our global economics and policy editor. so we do have that inflation print still due out in a couple of hours so that rate cut call from nomura may be far fetched or is it, kathleen? seems to me what we're looking at is how big financial stability risks are in ten days and how much they have maybe gone a little bit to the back burner and are not such a compelling reason for the fed to move hikes to adjust policy and to be able to put more focus on inflation and that print that is coming out just hours from now. and, you know, when nomura talks about the cut, we know it's because they think stocks are still falling. you need to shore them up. let's cut also, i think the point about us stopping at least halting for a while, quantitative tightening makes a lot of sense. you're worried about not having enough liquidity. you know, you buy bonds when you want to put liquidity in, you sell them when you want to take it out. so halting of temporarily, even the cut seems to me like a very interesting call for the fed that has nothin

rishaad: kathleen hays thank you. equity markets of the lows of the day. european and u.s.tures to the upside, lending support. much more analysis on the way. this is bloomberg. ♪ keep eating all these chia seeds. i could live to be 100. we work with empower, even if we do live to 100 we don't have to worry. eh, not worried. take control of your financial future to empower what's next. go. go brain. no, not that one. go this one. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem is the brain for smarter, safer and more sustainable performance. go plant go. go boldly. emerson. ♪ at morgan stanley, we see the world with the wonder of new eyes, ♪ helping you discover untapped possibilities and relentlessly working with you to make them real. ♪ because grit and vision working in lockstep ♪ puts you on the path to your full potential. ♪ sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it c

kathleen hays is here with the latest. this is a sign of pressure in the sector. utely. this is the traditional thing that banks to when they are short on liquidity and need more money fast. this is the emergency lending window that has been around forever at the fed, the discount window. you let the fed know that you are short of money and it's a short-term lending facility to help them stay afloat, assuming this is some temporary stress they are under. you can see $153 billion in the week to march 15, the most that has ever been borrowed at the discount window. yes, there is inflation since other banking crises, but it is a large amount, suggesting there are banks that are in trouble or worried about getting in trouble. they want 20 of cash on hand. $12 billion from the new loan facility that the fed set up in the wake of what happened to sv b. that occurred in four days, sunday to wednesday. we hear of big banks like j.p. morgan putting this money out for republic bank. we had a story a couple days ago that b of a picked up $15 billion in deposits as svb has gon

kathleen hays, are global economics and policy editor is here to tell close to the swap lines. kathleen: let's put this in perspective because the federal reserve has been reaching out to its global counterparts to settle this banking crisis down. the firsteginning of creating a kind of investor confidence, depositor confidence you need to see. jay powell, janet yellen saying they welcome the announcements. they support financial stability. capital liquidity positions are strong. the u.s. financial system is resilient. they're telling everybody don't worry. a few hours later we get the swaps announcement should the five major central banks are widening, boosting the availability to the dollar swap lines. the fed with the bank of canada, bank of england, bank of japan, european central bank, they are going to do these swap operations every day. when there are times of financial distress sometimes the accessibility to dollars, to finance funding can get rather strained. that is what they are trying to avoid. it will help them have the dollars they need. reassuring everyone the fed

decisions. >> professor ito, good to have you here, professor at columbia university, and also kathleen haysor that conversation as we head to the boj policy decision. breaking news at the moment. president biden proposing a series of new tax increases on billionaires, investors, and corporations in his latest proposal for how congress should prioritize taxes and spending. this budget request to congress is slated to be released thursday, that this could call for 25% minimum tax on billionaires according to people speaking to bloomberg. the plan would also double the capital gains tax investment to 39% from 20% and raise income levies on corporations and wealthy americans. of course this as president biden is seeking to rollback some tax breaks that businesses and rich people received from president trump, and now we are hearing that this could be put in the budget request to congress but will be released thursday -- that will be released on thursday. let's get the vonnie quinn with the headlines. >> thank you. jerome powell has softened his tone on policy rates, and besides that the next hi

our global economics and policy editor, kathleen hays is here. mplicated does this make things for the fed? kathleen: jay powell thought it would be a tough meeting. can you imagine how he feels now? after seeing the consumer price index report, it was not terrible it is just not moving in the right direction. you can see on the year-over-year numbers there was improvement from january to february. cpi down to 6%. on the core down to 5.5. this is what got people going. on the monthly core cpi, it went up .1%. the biggest level since -- in five months. when you look at the numbers inside, you see energy prices fell, but you see other things that are concerning. rent prices continue to rise. they will decelerate. airfares up. maybe that is the end of something, the reopening and all of that. basically, look at those white bars, that is goods prices. boy, look how low they got. going the right direction, what is that? that is core services. they seem to be up to about 7%. plus year-over-year. not only are they not falling, they are rising. when you t

kathleen hays is here. . there are risks in both a fed pause and a rate hike so what are we expecting? >> it does seem -- it is worse than anxiety. the banking fears, the crisis seems to have eased a bit does seem to have shifted what people are expecting. in terms of markets and what they are pricing in, it is not the usual over the last year rate hike. maybe they will do 75. they are pretty sure now the fed is going to hike or the door is open to them. they are not sure how aggressive it is going to be. the latest read from our bloomberg terminal is they are pricing in a 20 basis point hike. not everybody is convinced they are going to do the 25. that is the start. the terminal rate is another question. from the last survey it was at 5.1 on the consensus. the funds rate is that cointreau and three quarters. you have about -- is at four and three quarters. either they will do 25 and stop or 225's and stop. this is very important. what does the fed do next? do they may be think we should not do the hike right

vonnie: let's bring in kathleen hays.djunct professor of international and public affairs at columbia university in new york. irene, the comment that was added today before congress by the treasury secretary. was that game theory getting involved where yesterday she said we will not do anything, the banking system is fine. then banks dropped and she said we need to say something to placate the situation? >> what i find disturbing is that we are being reassured too much. we keep on hearing from the swiss central bank, from the fed , from all of the authorities that everything is fine. perhaps if everything were fine we would not need to be told it constantly. that to me is the concern. does secretary yellen already see the possibility of more severe contagion, and are these preemptive comments rather than strategic comments? haidi: -- >> one of the most basic things that exist right now is the fact that the fed did 400 basis point of rate hikes in rapid succession. after being down around zero for a long time, suddenly you

let's bring in kathleen hays and garfield reynolds. kathleen, the market took whatever was the message from all of the fed speak today as being more dovish. >> i think all those investors and traders were lucky that they did not see what chris waller, a fed governor, getting even more hawkish in remarks he made today. he started in this key part of his speech, saying that if jobs and inflation data that were so hard in january start cooling off, i would endorse a couple of more hikes. on the other hand, if they come in too hot, the policy target range will have to be racing this year even more, above 5.4, to ensure we do not lose the momentum that was in place before the data for january release. -- released. this is what he is concerned about. this is nothing but hawkish. raphael bostic kept the door open to pausing in a few months. he is going to watch the data. if the data suggest the economy is stronger than projected, he said i will just adjust my policy trajectory. susan collins is still in the camp of i will watch it. when you lo

kathleen hays is here with the latest. markets repricing the rate hike trajectory. kathleen: everything has shifted dramatically in the u.s. and around the world and that is why it has become a big question for markets and even some governments. let's take a look and go into detail as we start this hour of our shows. the idea here is we were looking for how aggressive will the fed be? but this ominous financial instability just on the horizon is with us and making everyone rethink that. before we get into number, goldman sachs has the easy call. the fed will pause but will pick up with another rate hike or two. they will get to five point way five or 5.5. number a has the tougher one. that could send an alarming signal to the markets but nevertheless, they think in reaction to the need to put a floor under markets, the fed will cut rates in 10 days. they also expected to stop quantitative tightening which makes a lot of sense. why sell bonds and take liquidity out of the system when you need to make sure it stays there. that could make the financial instability worse

kathleen hays is with us. of fed speak, higher rates then inspected -- expect did. >> fed officials say they think we might have to do a couple more rate hikes. the taste that way, we might have to do more than that. let's start with the fed reserve governor. he said, if we see these hot numbers cooling off, a couple more rate hikes and we could be ready to call it quit for a while. on the other hand if the policy rates come into hot, we might have to raise rates even more. to ensure we are not going to lose momentum, they will put rates in place. we did see inflation is starting to come down. now it is leveling off. raphael bostic saying, we are going to watch the data. the data comes in stronger, i will adjust my policy trajectory. that means he will adjusted up. his and collins is a little more in the boston fed she is saying, we have to watch the numbers and do a whole look at the information we are going to get. we are opening the door to doing more. haslinda: this is also a headache for the ecb? record h

kathleen hays is here with the latest. does a pause in the hiking cycle make sense?> it is interesting. he is an opinion, last. bill dudley said it is pretty obvious, they are not going to cut rates and they are not going to do a 50 basis point hike. he says when it comes to zero, the idea is the base case, do no harm, do the right thing. make sure you are aware of the difficulties of the financial stability. he thinks he would not argue for the 25 basis point hike. he does for the pause which he is in favor of saying. let's listen. >> the key is do no harm. we still have an inflation problem. we can do both. we will use monetary policy to bring down inflation. >> you have to do it in a way that doesn't alarm people. >> what he was trying to say is that if you stop hiking rates, people are going to say they know something we don't know. the point is they are going to have to explain very carefully why they are pausing, how they are pausing and what it is going to be in for the economy. that is the point that bill dudley is trying to make their. >> we know the ecb dec

reserve and how it is looking at the banking situation, with our global economics and policy editor, kathleen haysey mandate, versus making sure is financial stability. we have had this treasury study as well, how does this all play out? kathleen: this is a study to see if people at the treasury department spoke to bloomberg about it, it shows they are looking down the road. not necessarily looking at future banking crises, i think they are indicating that we are looking right now at what we could do if this does not let up . this is different from the 2008 financial crisis: banks had a lot of structured credit made up of mortgage-backed securities. they didn't even know what they were. . they were aaa rated and many of them were worth next to nothing. that is why the fed added liquidity tools. the fdic said what if we guarantee all the deposits from all depositors, from wealthier americans, the more affluent who have some higher amount of cash in the bank, to the small businesses that count on these small banks for their payroll services? if investor confidence does not come back, if depositor co

let's get more on the fed decision and bring in kathleen hays. he highlights. kathleen: let's start with the fact that the fed reserve opted for the 25 basis point rate hike instead of pausing like many suggested they could or should. if you listen to bill dudley, former vice new york fed president and alan blinder, former fed vice chair. they both thought they should pause. they didn't because they are still worried about inflation but kept the door open to at least considering rate hikes. let's listen to what jay powell said. >> if we need to raise rates higher, we will. i think for now, as i have mentioned, we see the likelihood of credit tightening. we know it can has an effect on the macroeconomy, demands, labor market, inflation, and we will be watching to see what that is. kathleen: they are cognizant however this banking crisis plays out that it will impact the economy and therefore on prices. the median dot is still looking for a ceiling of 5.1%. four weeks ago we would've been looking at 5.5% or higher. so there is an acknowledgment that maybe the term

david: kathleen hays, are global economics and policy editor. point, the end is going to come. it's a bit deep. i'm talking about the tightening cycle. it's how far we are at the end of the tunnel. positioning ahead, we're nearer the end than we were, as a function of time, than a few weeks ago. the j.p. morgan treasury client survey tells us that the change from week to week is that there are more outright long in the treasury market, their bets that rates will fall. all these changes in recent days has led to this recent graphic. the stakes are incredibly high, going into this, when you look at actual two-year treasury futures. you have to go past the gse to the early 80's to get something that we have gotten these last 10 days or so. it is something going into the fed meeting. i cannot stress this enough. vonnie quinn has a first word news. vonnie: thank you. japanese prime minister kishida has made his first visit to kyiv since russia's invasion. he offered support to ukraine and invited linsky --zelinski to join the summit in may. kishida m

haidi: bloomberg's global economics and policy editor, kathleen hays. volatility is gripping global markets as it lurches from one crisis to the other. let's bring in our strategist, mark canfield. to kathleen's point, just before, we are in a situation where it is not possible to predict what happens in the days or weeks or months to come. so, is there a way to navigate these volatilities? do you think it gets a bit worse? mark: at the moment, most traders would just want to be in defensive mode. even if as an individual you may feel confident about one thing or the other your risk manager is telling you that it' times, or not you have a strong conviction on anything, on equities, financial institutions will tell traders to get closer and reduce risks. sell something that is on the edge of your portfolio. that is exaggerating all the moves in financial markets. people are moving into the most offensive places like u.s. treasuries. the u.s. dollars catching a bid. gold is strong. despite the fact that it is not a major asset these days, as much as that h

kathleen hays there. let's bring in simon england over at nuveen. you have been surveying a lot of your institutional investors all around the world. this is dating back to last year around october or november. before china came out of covid zero, before the banking collapse. has much changed? >> the actual survey took place in november 2022. it is the third year of the survey. a hundred institutions across the globe, north america, and, asia pacific. we are talking to these institutions about why is there long-term focus. so these immediate market movements, guests, certainly a topic of conversation. i still think the date from the surveys relevant today. >> what is the key take away? >> realistically, we are looking at a continued shifting to various different asset classes. for various different reasons. it is also the diversified allocation as well. what i would say is that over the last few months, we have seen the strategy has not changed, it is the timing of it. they have pressed paused on the private asset classes. >> looking ahead, and expe

let's get more without global economics and policy editor kathleen hays. on the rate, they did not have this number. now they do. >> can you imagine in a few weeks, what a change in how they are looking at policy, the economy. thanking stress as a whole kettle of fish nobody was looking for. that is why they are listening so closely to people like susan collins, president of the federal reserve bank of boston. she spoke today, and in her prepared remarks she noted the system is still strong. and they have got tools to do whatever they need to do, and inflation is still high, and there is still work to do. let's listen. >> i currently anticipate some modest additional policy tightening and holding through the end of the year. of course, i will be carefully watching our range of indicators including data on inflation, spending, labor markets, and financial conditions. >> she said today very clearly she sees three more 25 basis point rate hikes this year, tighter lending standards which could lead to less lending from banks, and that could affect the economy,

joining us now is sonali basak and kathleen hays. of course we have seen all of this movement around credit suisse. ubs coming in of course also the government regulators and the backstop as well. take a listen to what the regulator had to say. >> we are speaking close it key regulators. most importantly the ones in the u.s. and the u.k. that were deeply involved. you have seen today their support for the solution as well, strong support for the solution in the purpose of financial stability. shery: for our viewers waking up in asia right now, put this into context. how historic where the events of this weekend? sonali: truly historic. this ends a 166 year run for credit suisse. more than that, really. this deal is being done at a value per share that is a 99% decline since 2007 of credit suisse's stock price. ubs is already systemic, becoming a larger bank across the world. this creates a wealth management giant as well as a larger investment bank. they are going to have to slim down the investment bank meaningfully. there are a lot

kathleen hays is here. it is complicated. is complicated although the behavior of the markets and maybe the fact this was a cpi report that came into strong to say you just want to sit and not worry about inflation, maybe in some sense as you put all this together, this crazy 48 hours, 24 hours, that maybe it is more clear for the fed what they have to do because the cpi was the progress on the year-over-year numbers on the headline, the top, and the court taking up food and energy, actually going down as well. it is the monthly number particular the bottom one, 0.5%, the biggest monthly increase over the past five months, and a son that some key components jerome powell and his colleagues are worried about are not moving in the right direction, and energy prices help these numbers improve, but you have things like services prices that include airfare, medical costs, transportation, car insurance, etc. there are lots of wages involved that are sticky now. so let's distill it down. the white bars are prices. look how far it ha

let's get more from kathleen hays.ve. >> a very widely anticipated and i think it is interesting to see they said inflation has peaked. it is not good enough for a central bank to necessarily start cutting interest rates are not raising them further if it is still so far above target. however you look at it, it is above 7%. there target is two or 3%. the rba is saying they are determined to return the cbi to target. they say immediate inflation expectations are anchored. in terms of further tightening will be needed, it does not get much clearer than that. they will signal that they have to do more interest rates. the consensus among economists that follow this is maybe three more rate hikes at 25 basis points. this will get them further along, the household consumption growth has stalled, they think growth will be below consensus. they took off the hawkish tilt from their last meeting. they are now put in -- putting it back in. it is significant. he has been criticized for moving in one direction and seeming to stop m

tom: kathleen hays looking at the outgoing boj governor kuroda.up, credit suisse shares fall at the bank releases -- delays the release of the annual work. that is next. this is bloomberg. ♪ and it's easier than ever to■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done. tom: welcome back to the open. the sentiment modestly it seems getting a little less dire down .2%. the selloff in bonds and guilds has moderated. futures in the u.s. down .2% on the s&p. credit suisse trading lower this morning after the bank says there will be a delay in the publication of its 2022 annual review ort. this is after the sec raised a last-minute query on statements. we are joined by tom metcalf bloomberg finance reporter. let's start in eu

kathleen hays is here and su keenan joins us as well. pretty bold by the ecb. d christine lagarde say, or perhaps what did she not say? kathleen: she made it clear that from their view, the eurozone banks are on sound footing, there are pressures in the region, we have seen bank stocks get hit, various credit securities get hit around this, but she said they are monitoring the situation closely. they are constantly in contact with everyone and at this point, they think they can go ahead with this move. she also made it clear that not only are they in better shape than what the swiss national bank has to deal with, they are in better shape than what the fed has to deal with, especially when it comes to svb. >> we have strong supervision. we have strong capital. and we have stolid -- solid liquidity positions. as the vice president said, exposures are not concentrated and based on the work that has been conducted by the ssm, we do not have a similar occurrence as the one that occurred in california. kathleen: madame lagarde wanted to make sure everyone understands

kathleen: i am kathleen hays. top stories this hour. investors are gearing up for another volatile week in the markets as worries over the banking sector persist with haven currencies edging higher in early trading. haidi: minneapolis fed president neel kashkari says recent baked turmoil boosting fears of u.s. recession. kathleen: and credit suisse following an investigation. a quick check on wall street now. another volatile day. the banking crisis continued to dominate. reassuring words from financial regulators in the morning turned a 1% drop in the s&p 500 to a gain of about .6%. green on the screen for stocks into asian trade now. in terms of the bond market and rally, the two-year and ten-year falling in yield. the three-year down to 3.37. the two-year to 3.77. it's a simple argument. investors are convinced the fed cannot even raise rates one more time this year. there will be 100 basis points of rate cuts as we see the banking crisis damage sentiment and hurt lending and leave the economy leaning possibly more closely towards a

max reyes, emily graffeo, and kathleen hays, thank you. we have seen u.s. futures perhaps a little bit of a rebound in the asian open. really not a lot given of course that we saw a lot of volatility in the new york session. u.s. stocks, dropping with bank stocks plunging. interestingly we had tech stocks benefiting from the idea that we might see if you were rate hikes and of course we saw that idea being played out in the two-year yield, with it plunging below that for percent level -- 4% level. >> the u.s. will sell up to five nuclear powered submarines to australia in a deal aimed at blunting china's growing assertiveness at sea. the leaders meet in san diego in the august a lien -- alliance. the project is expected to take two decades. >> australia is a proud nonnuclear weapon states, and it's committed to stay that way. these boats will not have any nuclear weapons of any kind on them. each of us standing here today representing the u.s., australia, and great britain is deeply committed to strengthening the nuclear nonproliferation regime. >> the chin

kathleen hays is here, no hitting the brakes on tightening at this meeting at least. kathleen: don't think so, inflation is just too high, a little too early. so many things are giving inflation acceleration, after so many rate hikes. they're expecting to do it when he five basis points hike. the last meeting was 25 basis points, but bottom line, the highest level since may of 2012, that's more than 10 years. 325 basis point total, that's a lot of rate hikes. but potentially not enough yet. look at cpi, and that gives you the answer why. if you look at the monthly numbers, the peak was in december. quarterly numbers which is what the rba ultimately has to rely on. gdp growth is slow, weaker than expected wage growth, consumer spending is slowing down. they took more hawkish tilt in february. it's surprised people, they came in with a 35 basis point rate hike. first of all, they took up this wording, that they were not on a preset path, and they took that out, meaning that they are going to do whatever they feel like they need to do. they also added this statement that

for more joining us is kathleen hays. also max reyes and garfield reynolds. the surge in rates that we have seen with the hawkish fed is now taking its toll and the banking sector. with the latest with svb? >> the latest as you said is that essentially venture capitalists are advising their firms, their clients companies they work with to pull deposits out of silicon valley bank as it becomes uncertain as to where the bank is headed. whether or not they will be able to weather the storm. part of the uncertainty and concern is arising from the fact that just yesterday we saw a bank that catered to crypto specifically make this decision to liquidate to wind down operations which really hurt sentiment across the market. there's also illustrated the damage the banks are suffering on the asset side of the balance sheet due to the interest-rate environment. >> it's interesting seeing the outsized reaction. the big banks falling in sympathy to what is happening at svb. is this a crisis that is contained to this one bank much smaller than the big lenders and is it ju

kathleen hays joins us also our executive editor paul dobson. we continue to hear the consistency from the fed leaning into the narrative that more needs to be done to fight inflation. >> consistency is definitely the word. fed officials whether they're going to do 25 or 50 whatever they're saying about the size or speed, they keep saying rates have to move higher. rafael bostick went out of his way today to write an essay about it. he says the funds rate will have to go up to at least 5.0 25.25% and it will have to stay there. neel kashkari, says we have to slow inflation and so for the rate hikes have not done enough. here's what else he said. >> i'm open-minded at this point about whether it's 25 or 50 basis points. to me what is much more important is what we signal in what's called the dot plot. >> that is certainly true because if you think about it, every three months you get the updated summary of economic projections. that's where the 19 fed officials put in their forecast where they think the funds rate should be to get there. will get