madame lagarde expected to announce a hike in rates once again.stion is, are those credit conditions, the tightening, how much work has that done for the ecb in terms of the consideration of the scope and scale of hikes? maria: you mentioned madame lagarde. let me let you in on a piece of information. my producer max spotted her. she came into work at 725:00 in the morning, up early, doing the bloomberg hours. the decision today, there is perhaps a definitive consensus, but there is one that carries a lot of momentum going into the meeting because of the data you cited, the lending survey, the cautiousness that would feed into the banking sector. 25 basis points would be a downshift from the european central bank. when you look at the calls, deutsche bank sees 25 basis points. but it is a close call, because you could spin a lot of the data in multiple ways. those who say 50 basis points is on the cards will point to inflation data still being on except -- being on except of lehigh. -- unnacceptably high. but when he put it together, the european

we just heard this quote from madame lagarde. tually, the fed setting the tone in global monetary policy, and i think what lagarde did yesterday was stressing that ecb will not follow at least for now , but that they are actually intending to diverge from u.s. monetary policy. this is also reflected in the euro. this is why these levels that we currently see are justified. manus: ironically, do you know i just pulled up in front of myself? a euro-dollar chart and gp. we put on 500 basis points in a month. i'm looking at the euro-yen. let's run that one. another 25 basis points is already priced in. 500 basis points since the start of march. the euro-yen has collapsed for a different story. do you it is fully priced, the ecb? another couple of hikes in their ? esther: i am not sure whether it's maybe even overpriced because we should not forget that there is a strong majority of depth within ecb monetary counsel and these jobs will get stronger and stronger as we go into summer. in particular, as it sticks to the rate pause and oth

madame lagarde takes a to verging line from fed officials, saying inflation stays a challenge in the euro zone and pointing to at least one hike. fed chair powell seemingly siding within those in the fomc for a pause. the two-year with a little money flowing into the front end. brent down again by 1%. let's get to the details around the u.s. debt ceiling and what to expect later today. president joe biden says his call with house speaker mccarthy on sunday vote, went well, as he flew back from the g7 summit in japan. it sets the stage for fresh talks read treasury secretary janet yellen warned the u.s. is fast running out of cash. >> there is always uncertainty about tax receipts and spending. so, it's hard to be absolutely certain about this. but my assessment is that the odds of reaching june 15 while being able to pay all of our bills is quite low. tom: for more let's bring in jill disis. when are biden and mccarthy said to meet? what's the timeframe and what we know about what transpired over the weekend? jill: ultimately, they are expected to me today as fighting returns to the

finance ministers, they said, with respect to the european central bank, we have confidence in madame lagardehere is now a real responsibility to tailor fiscal policy so we don't counter the effects of the central bank policy. that is what pascal donohue told me. >> there are signs the inflationary dynamic is beginning to change. from an overall level it is moderating downwards from where we were a year ago. but inside that, we are still saying -- seeing core inflation at too high a level. i believe 2023 and 2024, the ecb governments can take the steps needed to get inflation back to a level that it will not be the challenge that it is today for living standards and the ability of households and businesses to trade and live. maria: that was the head of the euro group yesterday talking exclusively to bloomberg. the other thing we picked up from a number of ministers is that companies will now have to pitch in if the cost of making things goes down, they want that reflected in the actions they take, and not perhaps profit. a lot going on as euro group continues for day two. dani: that's our blo

tom: maria tadeo is on the ground giving us context on that and we will be listening into madame lagarde her guidance as well around that. we also have the earnings extra. francine: volkswagen be after rising deliveries and demand offset a slide in sales in china. the cfo who is also the coo arno antlitz spoke to our reporter. arno: the competition will increase. with the semi conductor supply improving, demand coming down, the q3 and q4 will see more competition and we are preparing for that accordingly. we have a strong substance but we are not naÏve. we had to prepare on the cost side both in terms of activity and fixed cost discipline and we need a program to improve margins. these other things that we have set up right now. >> something that this quarter was also marked by, the launch of the model behind you but also your entire board went to china. what did you leave that visit? arno: you are right. we have been in china and spent three days in china and look at competition. we talk to teams on the ground and customers. we talked to our partners. it is clear we have a very strong p

if you listen to the speech that madame lagarde gave at the conference in april, if you listen to theast press conference that she delivered, she is very much focused on bringing down inflation and not just her. we had hawkish members of the ecb governing council. we think the ecb will continue to hike rates and we see at least another three rate hikes but the ecb. that is independent of what the fed is doing. what the deutsche bank analysis does is purely focusing on the fed i think is not enough. you have to keep in mind that we have two players here and the ecb is becoming increasingly independent in setting monetary policy and pursuing price stability. they have a single mandate. they don't have a dual mandate. they will really be focused on inflation control. we've got a lot of members of the governing council from smaller member states of the euro area are facing double-digit inflation in their countries. these people are under tremendous domestic pressure to do something to bring inflation down in your area. we think the ecb is more determined than the fed to continue hiking ra

but the ecb language from madame lagarde is a fullbore head on interest rates.here is 20th downward pressure on the broader eurozone. -- plenty of downward pressure on the broader eurozone. dani: you have done a world tour of economics and you are now in a d.c., coming from asia, but as you hopped from europe, how are you thinking about the different drivers from the european inflation story and the american inflation story? enda: obviously, they are so different. european story, and a lot of it reflecting the russian invasion of ukraine and that the ensuing energy crisis. you hear criticism in the eurozone that a tight labor market isn't necessarily the biggest concern, although the ecb takes a different stance on that. in the u.s., here it is a blame game going on about what there too much government spending, have consumers been prodded to get out and about too much. supply story seems to be improving here, but there is a lot of pressure -- the services side of the u.s. economy, and the warnings are coming and that is why people say that even if the fed pause

madame lagarde: everybody agreed that an increasing rate was necessary.ry clear. third, we know that we have more ground to cover on the basis of the baseline that we had, which is still guiding us, until we have our next projection exercise. kathleen: the vote was not unanimous, ms. lagarde said, so obviously, a couple of hawks still wanted if you basis points, and it is perceived that's why they announced they are going to stop the reinvestment in one of their main bonds purchased -- one of their main bond purchase programs. they are making some progress. we do note that the latest quarterly review showed there is some reduction in lending. i think what lagarde is telling us, they got more to do, but certainly the door is open to saying we have reached a peak in rates. similar to the fed, maybe just a different timetable for now. rishaad: all right, kathleen. kathleen hays there. let's get now to sean taylor, if you investment officer at dws. what are you making of the messaging coming out of both these central banks? you got a different economic climat

i've got to start with the eu and the challenges madam lagarde faces.gives us dynamism. did europe have the dynamism to have a higher interest rate regime? >> part of the problem they face is the conditions you just laid out. there is a wage subsidy issue which certainly as to the concept of the whole euro sclerosis discussion we've been having for years about europe. i think europe is aging rapidly there finding a way not to keep their best educated people on the sidelines and a comfortable way. lisa: this is what i'm watching, this is the chart. do you think europe has played -- overplayed the strength story to withstand higher rates and consistent growth that was the consensus heading into this meeting and then they took the lesser of the two options and the date is still strong in the u.s.. does this underscore anything more important? >> when you look at the oil numbers, people talk about a fed mistake in terms of the decline in oil but you are not seeing the kind of resilience coming out of the chinese opening for out of europe. greatest attention