kristin forbes voted for a rate hike today. that was fascinating.n a trade-off in the boe between slowing growth and -- hence the rate cut and quickening inflation by the weak pound. the trade-off for her has changed. for her, the outlook of above target inflation combined with a few concrete signs of slower growth warranted an immediate change of policy and that is why stirling grows. really quickly, since trump was elected president, the white line in emerging market currencies and the blue line is stocks, they have broken the yellow.. they are up today. who said a fed rate hike would --ert -- effect emerging they go from strength to strength. vonnie: it seems like nothing can do long -- wrong. the dollar index, it was at 102 a few sessions ago. now that we have the height, it is being priced in a little bit more. the mexican peso is weakening by the 19 markse to and we had a big move in the treasury yields. we have the front end at 1.31 and the 30-year at $3.14. you mentioned the pound, we have been looking at the currencies. we have been looking

jon: what interests me about this set of minutes in from kristin forbes -- kristin forbes, she says ite. we have been used to one direction monetary policy. could move both ways through a period of years? see itre beginning to more generally. if you look at the least that came out after the cp -- bce be meeting last week even as the ecb continues to buy assets. they're getting more sensitive to how they calculate. i don't see any reason why you couldn't see smaller adjustments. we have seen that with the fed. rather than the regular in 2015ng cycle we saw and 2016 and 2017, i think you'll rules of consistent upward cycles or downward cycles have broken. jon: how does that feel on the endless -- s&p market? >> i think those comments are right. we have extraordinary monetary policy and we should be entering a. period of ordinary policy. it wouldn't be surprising over the next three years to see other central banks changing the policy. your speaker has mentioned a potential rise in the deposit rate. it won't have any impact on the cost of lending. it is really just design to stop penalizi

it wasn't only kristin forbes who suggested it within the minutes, others might not be too far behind. we talked about volatility. against volatility is proving to be costly, especially in light of the dutch election and the surge of populism in the region. investors bought very expensive insurance. one analyst says there has been a bit of a miscalculation, which is exactly what this chart shows us. merkel, the german chancellor meets with donald trump. winner today. this essentially is the u.s. trade balance with the eu. you can see the trend, and this is the big issue that donald trump has, not only with the eu, but with germany. it could make today's discussions very interesting. julie: interesting indeed. not big moves here in the equity markets. second tightest range of the year on the s&p 500, given the it's the quarterly expiration of futures and options contracts, which can cause an uptick in volatility, but that's not happening today. it is causing an uptick in volume, running about 20% of the the 20 day average. financials the biggest slump in today's session. goldman sachs

kristin forbes voting for a rate hike.terling on a six-day winning run come up by 1% today could house an. how's it looking there? julie: we are seeing a downdraft in the u.s. stocks, and at one point, it looks like we might bring to an end this long streak of the s&p 500 not having a loss of at least 1% at the close. we are measuring it as of the close. all three major averages are having their worst day this year. for the dow, it's the worst session going back to october 11 as we start to see some questions over the so-called reflation trade. take a look at the bloomberg. this is 2622 and this looks at the daily change in the s&p 500. the last time we had a 1% drop was back in october. it looks like at one point today that we were going to have that 1% drop. now we have come up from that level of little bit, but we will be monitoring it throughout the day. regional banks one of the worst performing groups of the day. we talked about this the last hour -- the yield curve has not been steepening much as estimated in this i

kristin forbes said 25 basis point hike. >> i'm surprised from these minutes. discussion about the survey evidence of activity was almost glossed over. it was almost like they were saying there has been no survey evidence to show, but we know there has. we have seen business investments and intentions falling off quite sharply. not as much as we thought they would. i think we would see this data start to roll over. >> historically deep cuts, that's what president trump is proposing in his budget. the president's so-called skinny budget was released overnight and will touch on most every federal agency program. >> bottom line is this, president trump is trying to boost military spending by $54 billion. as a result, he will look to offset that by cutting several key agencies including the environmental protection agency. >> it is a matter of where you want to focus your priorities. we will move away from some of the domestic priorities. again, our president set is from day one of the campaign and i'm certainly not surprised by it. >> this to me is a very shortsig

kristin forbes has been out there with her news for a while. here.ads the mpc she says uncertainty has no impact on growth. that is very much at odds with what the government has been saying recently. rate't think we get any hike this year, but we make it next year. jonathon: bob michael? >> i think as the fed raises rates, you have the ecb talking about dialing down further. the bank of england will not go it alone. jonathon: i will wrap up the 30 minutes with a rapidfire question round. i will ask the question, one word answers please. treasury yields, higher or lower? >> higher. jonathon: michael collins. >> i will say lower. jonathon: bob michael. >> higher. jonathon: booms are treasuries? -- or treasuries? >> treasuries. >> treasuries. >> bonds. jonathon: retail credit, long or short? >> i am short, so short. >> short. >> short. jonathon: guilt, buy or sell? >> sell. >> sell. >> sell. jonathon: there you go. you agree on something. a privilege. thank you for joining me. a programming know, next friday, we will be back at our regular schedu

kristin forbes votes for a 25 basis point interest rate hike.k of england with rates unchanged. >> what i am surprised about from these minutes is the discussion about the survey evidence of activity was almost glossed over. it was almost like there was no evidence. we know there has been. we have seen business investments intentions fallen off sharply. admittedly not as much as we thought they would. i think we are going to see the data start to roll over. ♪ >> historically deep cuts, that is what president trump is proposing in his budget. the president's so-called skinny budget was released overnight and would touch almost every federal agency and program. >> president trump wants to boost military spending by $54 billion, and he would look to offset that increase by cutting several key agencies. including the epa. >> we are going to move away from some of the domestic priorities and move to protecting us. again, our president said this from day one on the campaign and i'm not surprised. >> this to me is a very shortsighted budget. i heard my

when it comes to kristin forbes, she has -- i think she said when she joined the committee she was morelf full person. somewhat hawkish is that what we are suggesting here? know.don't it is too early. mark: george stays with us. we will talk about the latest decision from the bank of japan and what we can expect for the rest of the major central banks. this is bloomberg. ♪ i think it would be different for the simple reason suffering mores and everywhere else is looking more optimistic, particularly in europe. thoseill be positive for countries. -- the fed maybe raising a couple of times this year. there are deviations, but it is partly because we're going to a shock which is specific to the u.k.. of aheade we got ahead of ourselves? bloombergmeeting went releases story, the ecb could end. rates before the are we getting ahead of ourselves? do you still think tapering will be preannounced this year? >> i think it will. it might not be until after the election season is over. the second half of 2018, it will take some time. i think we should remember that tapering is not tightening. it i

a lot of movement in key currencies this week. 123.65, kristin forbes is leaving soon but raised questions how far behind the rest might be. how scotland could abandon its current union with the u.k. on currency. euro, 107.79. the talking about a rate increase maybe on the ray -- on the way. way -- seems to be coming to her from the ecb. we put nymex on there for you. from words coming through gordon, something being watched by investors. they are recommending a purchase valueswhere, the deal issued share capital at 15.5 million pounds. not enormous but of interest, a story we have been following on bloomberg. we will get more details on this through the program. let's get the first word news. juliette: the you k's prime minister has pledged to forge a closer union within the u.k. in reviewed. is set to unveil a plan for britain that includes every region in the country as she addresses the conservative conference in the welsh capital. her comments come after she rejected a call for a new independent referendum to scotland. president trump's proposed deep spending cuts hit almost every fac

a great profile of kristin forbes, she will be leaving.loomberg has been profiling her and she is a rebel voice against the exit. brexit. some people are asking when we will see a rate hike on the bank of england? how on hold to think they will be? luke: there is a lot of uncertainty. there was a great paper on why uncertainty doesn't matter from an economic spectrum. she is leaving, that is one voice on. we could travel back in time, we would not see the cut. the alphabet soup we live in -- i think that will slightly tighten conditions anyway. i will be quite glad to see that. he thinks this is a temporary inflation boost rather than a rise in inflation seen around the world, which is more of a concern. if we get it right come i think we get it next year and it next year and it's the course of point emergency cut taken back. it doesn't feel like he will do it this year. was on aris johnson show yesterday they were talking about hard brexit and you have referred this a number of times, anna. his position was, i don't think the consequences

kristin forbes, who is about to head back to the u.s., is arguably one of the more hawkish candidates very good. peter dixon and simon french, stay with us, please. a snowstorm on the eastern seaboard of the u.s. will not get in the way of a federal reserve system meaning. the storm equivalent to the storm of 1660 seven in the united kingdom. the fed decides at 1:00 p.m. tomorrow. stay with us. ♪ francine: this is "bloomberg surveillance." francine from london and tom in new york. one to send in some tobler make up for these know, tom k first, here's emma chandra. emma: a new report on the republican plan to replace obamacare could leave republicans in a bind. the plan could force 14 million americans to lose health coverage by next year, according to the congressional budget office. senator lindsey graham suggests the party should rethink the legislation. there is reports trump has given the cia authority to conduct drone strikes against possible terrorists. in europe, prime minister theresa may was warned she will face more testing over brexit. there is a report that she would have

does this give ammunition to those others who seemed to be just a pace behind kristin forbes and votinghike? dan: mccafferty for example might look at this. in this print, there was a bit for the hawks and a bit for the doves. for the hawks, you have the headline number. for the doves, if you look in the details, services inflation, which is actually within this of domesticst gauge regenerator inflation remains range found at 2-3%. all the action has been on the good side, which is really sensitive for the exchange rate. that is what you are seeing pushing inflation higher here. mark: what sort of squeeze are we going to see on spending if there is evidence of it already if inflation keeps rising and wages move in the opposite direction? that's the sort of key question right now, isn't it? dan: up until now the real reason the u.k. economy has weathered the brexit storm is because of the british consumer. if you look at the wage data last week, regular pay is running at 2.3%. that is three months to january. inflation is running at 2.3%. essentially real wages much stagnating right now.

kristin forbes voted for a rate rise, pushing sterling higher.and monetary policy shouldn't go on hold. is the head of international trade and former advisor to david cameron. richard cochinos is also with us. helping explain the move in pound, but how much of a surprise was it that we heard from christine forbes that she wanted a rate rise. we don't know with the economy will do. was she right in voting for rate rise? perspective, her absolutely. it is consistent with her approach to the economy and intersection between the markets and where monetary policy should be set. what the market was surprised on was the timing given most of the communication was two-handed from the bank of england. there are a few other mpc members that were not far behind her. what is surprising is not only did she call for hike, but several others are one or two behind her. picture, ones is a of the ways of looking at inflation. forward.ing five-year in blue, the sterling five-year zero. will inflation in the u.k. kid out of hand? richard: i think the mpc has been cle