. >> it is one prices are falling to there's another thing, lowflation. when prices are rising but rising slower than 2% a year. >> when you talk about the price of things, we are talking about markets for commodities. financial markets. the price of products and wages. >> economists they are talking about the price of everything people by. -- buy. the price of a dining room table or a shirt. food. also the price of taking the bus. the price of taking a vacation. the fees associated with getting a bank account. the fees associated with sending your kid to college or going to the hospital. it is not the price of buying a stock. that is different. it is not the wage rate. it is a generalized price level. >> the price of commodities. >> that is an important input. when you have a situation when prices are falling, people say to themselves, why should i buy something now, it will be cheaper? you get a negative psychology where people do not spend. they think things are going to be cheaper next year. because they do not spend, there is enormous pressure to red

lowflation in the united kingdom. disinflation in europe. declining rates of inflation in the united states. look beyond those inflation numbers. look to the core. that was the message from the federal reserve. jobs being trumped by inflation. that's my take on where we are. $1.7 trillion has been wiped off equities. it has been a bumpy start to the year. industrial production in germany declining by 0.6%. that is what picked the post in terms of sentiment. what happens in this country, germany, defines absolutely defines what happens in the periphery. what happens in terms of growth for the entire euro zone. can they survive if the greek sleeve? what would they lose by a breakup of the eurozone? great piece written this morning. i will tweeted this later. most of the money goes back to daddy. that is germany. next, london. a few other stocks for you to watch. barrett's down 4.6%. this goes down 1.9%. i'm not going to spoil my picture of three. other big trending theme, look at this. dollar down. this is on the day. dollar is reversing down

this feeds into that lowflation story. it's a global story.t guilt yields going lower. it's switzerland. the u.s. treasury had their best start to a year since 1998 the consensus for this year is that yields go high. so much consensus, so much uncertainty in the world. yields go lower. the judgment call for market participants is whether to move in these yields a reflection of low growth and low inflation. this could be just a surge of money. >> thanks for a much. jonathan ferro on the markets. >> another bloomberg exclusive this is the french ambassador to the united kingdom. also with this is luke johnson. thank you so much for joining us, ambassador. we want to move beyond that a little. can you tell us about the sense of cooperation there is between france and the u.k. in terms of intelligence sharing at this point? >> of course. france in the u.k. have very close relation ships. we are both members of the security council and that is very important. there is a french community in the u.k. which is about 300,000 people. the british also li

lowflation in the united kingdom. disinflation in europe.ation in the united states. look beyond those inflation numbers. look to the core. that was the message from the federal reserve. jobs being trumped by inflation. that's my take on where we are. $1.7 trillion has been wiped off equities. i

the lowflation expectation presents a persistent downside risk to the u.s. outlook. she is front and center, isn't she? >> absolutely. the fed is trying to be patient. financial conditions are already tightening given the strong appreciation of the dollar. the stronger dollar is going to weigh on the export sector and different profits. it is already starting to create down drafts and slow the economy down. >> i have been chewing on the word patient. it is the fed's way of saying, we're still figuring it out. >> they are still looking at the data. i think what the fed might be missing -- and this is going to be the critical thing to watch -- the minutes of the december meeting indicate that they were starting to have some doubts about the inflation outlook. they know lower oil prices will weigh on headline inflation. what happens to the core? well it strips out food and energy, it is still sensitive to energy. if we look at previous episodes were oil and gasoline prices fell as much as they have core inflation decelerated significantly. the fed is not going to have t