michael mckee with that data. this will not be good news down at 1600 pennsylvania avenue, the cpi comes up 1% for the month of may which is higher than .3% and much higher than the .7% that had been forecast. it comes up .6% of the same as it was the prior month, but higher than what had been anticipated. year-over-year basis, where you look at where inflation is, week -- we thought it peaked, but it had not. 8.6% for the month of may, matching the all-time high in this cycle at the core rate up 6%, a little bit lower than last month. that is what we have been expecting given the fact that the energy complex is driving so much of what is going on. let us take a quick look at that. gasoline up 4.1% in the month of may and that is one of the things that had dropped on a year-over-year basis. gasoline 48 .7% higher than may 2020. -- may 2021. food up 1.2 percent, and that keeps the year-over-year rate at 10.1%. use cars and trucks, the bogeyman since the pandemic began, up i .7%. they are up by 5% year-over-year and

must get to michael mckee who was in washington right now. a historic moment here. could possibly go wrong in the market is pricing and 75 basis points? michael: if the market got a 50 basis point movement, it might have been exploited because it has been telegraphed for days. if you went higher, there would be a bit of a spike. if they did 75, it suggests with a dot plot they will move up the pace of rate increases going forward. people will basically have seen what the price should be. it will not be a big question. the question that might go wrong for the chairman is why you changed your views on how fasting should go? how concerned are you about the big inflation jump we saw last week? kriti: how does chairman powell navigate this and that he has to reassure the market the economy is not heading for recession while showing them the fed is taking this seriously? what kind of precedent does the set for future meetings? michael: that's a good question because forward guidance was the precedence they were using. that goes out the window if they go to 75. he's likely

michael mckee in washington.i love this sentence, the cfo of federal express, the increased dividend we announced today is a culmination of our board's thoughtful efforts over many months. hogwash. absolute hogwash. te shaw went after fedex. they announced the new seven and a half percent -- 7.5% move in the stock explodes higher. lisa: how much will this be an increasing strategy for companies that don't see a place to put their money elsewhere? i .2 target and caterpillar among those that have boosted their dividends. target being most interesting after cutting their forecast several times in the same number of months. how much are we looking at companies do not see an optimistic place for their cash and they are going to return it to shareholders to be disciplined? tom: buffeted by the pandemic, no question, but the model for fedex right now, this is not coinbase. this is a moneymaking machine when we send the package out. lisa: and it wants to remind its shareholders by saying, here you go, you can have some.

with your economic data, let's get to michael mckee. it is durable goods orders and these are may numbers so they are kind of important given the focus on whether or not the economy is slowing. durable goods up .7%, better than last months .5% in much better than the .1% anticipated. take out transportation you're still up .7%. the focus was for a .3% rise. this is what we look at to see what is going into gdp. it is up .5%, better than the .4% the prior month and much better than the .2%. it looks like businesses are still spending, which is kind of interesting. in their latest statement the federal reserve suggested investment had slowed. capital goods shipments up .8%, matches last month in much better than the .2%. that suggests the gdp numbers will get better. one of the things we have been looking at is what is happening with second-quarter gdp. the fed thinks it will be reasonable and the consensus of economists is for 2.7%. as of last friday the atlanta fed gdp now number was zero. the fed is in this position of are we slowing t

let's ask michael mckee. our policy correspondent. mike, starting with you, we have a quiet time where we don't know what the fed is going to say at the end. how big of a game changer was friday? do you think we are going to need to hear from the fed before the market stabilizes? mike: friday was a big game changer for the markets but not necessarily the fed. the thing that comes to mind about the whole thing is who needs the fed to? the markets are already reacting. that his what has happened throughout the cycle. the fed doesn't like to surprise markets, but there is a good chance that they will stick with that. we could get jay powell saying 75 is on the table if we need to . that will just spur more selling and yields will continue to rise and we will see the front running with the market doing the work without the fed going that high. the real question for wednesday is what is the terminal rate? how long will they lift the final. in the. plot? where will they get to with people working backwards from that, the map on how they hav

michael mckee joins us now. the factory orders seems like a big miss. michael: it is a bit of a mess. we knew that because we got those numbers earlier in the week. nondurable goods increased by 0.2%. there is a real disappointment. shipments come in a little bit better. inventories continued to rise. inventories are up for 20 of the last 21 months. it does show manufacturers getting closer to normal. as i said many times, these are volatile numbers. i would not put too much stock in it. maybe the idea that orders are up for 11 of the last 12 months may be the more important number to keep in mind. >> given so many concerns about the consumer and their ability to keep buying durable goods, maybe the fact that number has not collapsed is positive. let me ask about the adp data. what clues are we getting from the private sector and its ability to create jobs as to what the u.s. economy looks like now? michael: we have been expecting a weaker payrolls from the government. a full court press to higher and can they find people to do so? the adp report suggest

and inflation report, michael mckee doing what he does best.rilled to tell you that michael dart out will join us after mr. mckee, he is focused on the nominal economy and top line cpi. he is always part of the surveillance dialogue, jim paulson will attend, chief investment officer, lisa wheaton's. inflation report in early four minutes -- 34 minutes. ♪ close the key question -- >> the key question is

we migrate there right now with michael mckee, as he and i await for claims data. one and know something weird? this is the third week in a row where the initial print has come in at 229,000. last month, it was revised up higher. the expectation was for 226, but we have entered a period of stasis with jobless claims. they are at the same level. a lot of people have been wondering, are they the canary in the coal mine and raising recession concerns? you would expect that. if you look back in history at recessions, jobless claims do rise going into recessions. they rise at other times and do not predict recessions, but they do rise into recessions. if we are flat at this point, it does not look like anything is imminent, which is what jay powell said yesterday. tom: claims are symmetric. you have been a genius on the schulz survey. if you were sitting with chairman powell, what would you say about these other surveys? do they show his strong economy? schulz and the others you lean on? michael: they show a strong labor economy. the jolts suggested there are a lot of j

with derrick johnson come here is michael mckee -- with your jobs report, here is michael mckee. 00 jobs restored. it dropped to 3 -- michael: 390,000 jobs restored. down from last month. last month, 420 8000 and 406,000 for private peer manufacturing payrolls -- 428,000 and 406,004 private. it looks like the economy may be slowing down just a bit. the unemployment rate stays at 3.6%. we had anticipated it would drop to 3.5. that may be because the labor participation rate didn't move all that much. it did move up from the expectations. average earnings coming and weaker than anticipated, .3% higher for the month. 5.2% on a year over year basis, down from 5.5%. in this upside down world we have seen, this is good news for the fed, numbers weaker than expected but still strong. it shows signs of a decelerating economy and inflation pressures without suggesting it is falling off of a cliff. jonathan: inches recovered, negative .5% -- futures recovered, negative .5%. further along the curve come up by three or four basis points. no major changes off the back of this one. tom: i am go

to answer that question, let's bring in bloomberg international correspondent michael mckee and ira jersey. thanks you both for coming to speak with us. catch us up with where we are on the job story and where you think we have gotten to. michael: the economy seems to be slowing down and cooling down to 390,000, better than the average we have seen over the last couple of months. -- anna: apologies, we appear to have some interference on the line or some other technical issue. we will try and get michael mckee to fix that. we will go to ira jersey of bloomberg intelligence. give us your initial response to the data we saw today, the jobs picture we saw today because it did start to send yields higher close to the 3% mark on the u.s. 10 year initially. ira: initially it did but we bounced back since then. the big thing with today's data is that stay the course. it is strong enough and when you look at the bulk of the data, the whole mosaic of the data released with the jobs situation report, it was good. not as fast as april but certainly a good report and that keeps the fed on track to hik

tom: michael mckee with a huge -- yesterday. airman stumbled over nominal, how the economy should go about this. in tepid real gdp, you overlay substantial inflation. is that factoring in analysis right now? michael: the fed us supposed to target headline, headline numbers keep getting pushed up. the fed would like to look at the core rate of inflation. tom: it can't. michael: in terms of what policy, they do. the problem becomes, what do they say to the average person who is filling up their tank and paying $80, their confidence level goes down and they stop spending money? michael: mickey was ignored by chairman powell. jonathan: such a good question. you asked him whether a key chase in inflation would be fueled by crude, you were blunt about it. are we going to chase the oil market? michael: he said, we do not want to, but we may have to because that is what consumers respond to. the overhang of the news conference was, the fed is thinking it is going to have a tough time bringing down inflation. so much of it, they cannot co

let's go to michael mckee. recession this year? yes or no? michael: if you're going to make a forecast, give a timeframe but don't give both. i don't think people really know whether will -- whether we will be in recession this year. some think we are in it and some see the economy decelerating and the fed sees the economy accelerate a little bit. a lot of this has to do with covid. it could shut us down again a lot has to do with the war which keep dragging on most he keeps weighing on prices on energy. some say it could be this year. guy: from a market perspective, if it's a 2022 recession, you want to position one way. it may be that recession comes late in 2023 and maybe it holds off for now. you got a little bit of time before the recession really bites. >> you are seeing that expected and a lot of expectations for earnings growth in 2022. those are analyst estimates of when you look at what you are getting as far as the ceos themselves, you are seeing a lot more concern about inflationary pressures and potential recessionary pressures. o

ask that question to michael mckee about new york. mike, i'm going to ask you for the first response on that one. which mistake you think central banks are making right now? mike: i have to agree with you that the situation has been on both sides. it is very hard to say what a mistake is except in hindsight. what may be happening here is the u.s. economy is already slowing. we are talking about home sale starting to slow, and retail sales negative in the past month, even though inflation was out. so is the fed tightening into a slowing economy and speeding up that pace of tightening? given the fact that we see a variable of a lag, as they say, with the impact of interest rates, we could be seeing those impacts start to hit at a time when the economy has already nearing the close? the other side of the question, are they going to fast for the kind of monetary union where everybody has a different economy? this gets to the question, did they make a mistake last week by not talking about fragmentation, did they do something acceptable ab

jonathan: michael mckee has some details on that. they are facing a big risk. they risk "turning the perception of the fed from the most powerful central bank to an institution that too closely resembles and emerging-market bank." lisa: trying to catch up with a market that is gotten ahead of itself. jonathan: strong words from mohamed el-erian on bloomberg opinion this morning. futures up .5%. this is bloomberg. ritika: keeping you up-to-date with news from around the world. u.s. democrats constrain new energy legislation. the senator may proposed a tax of up to 42% on companies that report a profit margin better than 10%. democrats in the white house are struggling to curb u.s. energy costs and broader inflation. the european central bank governing council is ready to step in if it considers moving government bond markets to be unjustified. the group's open to taking actions. the ecb is holding an emergency meeting to discuss a selloff in government bonds. the u.k. has canceled its first flight deporting migrants to rwanda. the asylum-seekers -- the governmen

president of the united states in madrid, we are going to see how that goes under the 8:30 moment, michael mckeeth us. i am going to rip up the script and go to what we heard from chairman powell once ago, this goes back to the wonderful neil sauce at credit suisse years ago. neil sauce would pound the table on asymmetric outcomes, the third rail of jerome powell and all of phd's -- all the phd's around him, is there is a asymmetry and a much bigger risk if they are wrong on inflation. michael: that is the argument the fed is making, that is the argument, to an extent, christine lagarde is making. you look back at historical inflation, you see when it started rising in the 1960's, it wasn't until the mid-1970's that it started to come down. you ended up with about 14 years of extraordinarily elevated inflation, that just away at and comes and living standards. the fed does not want to repeat that. every central banker, it is like the stephen king novel for central bankers. it is the thing that keeps them up at night terrified. you read between the lines, it means they are going to go hard on try

i believe michael mckee would tell me the math does not work. jonathan: lisa?isa: we talk about data dependency. can we start stripping out certain data points and say they are irrelevant. thank you for that edification. jonathan: you want any more time? we can say it is relatively speaking less important than the numbers we get tomorrow. i will be diplomatic for once. out of opec, that meeting has started and they are looking at maybe increasing things by 600,000 barrels a day instead of the scheduled 430,000 according to delegates. they might decide on july output and on august hikes as well. some of the latest from delegates speaking to our team. that is the latest from opec. jonathan: what did francisco blanche jessee of bank of america? this is so important to keep going over at. you have an oil analyst saying it does not matter what opec does if they boost output by 400,000. ultimately this is about refining capacity and through summer the price at the pump for the consumer is going to be problematic. lisa: you had another oil analyst saying they are usin

weakening demand and i think that will not help them at all. 2 it's sort of the lisa: opposite of what michael mckeeg. it may help the fed with cooling in the economic data but it indicates that perhaps the next meeting, they will be looking at inflation trends that are more in their favor. what is your push to that narrative? >> the issue is that fed rate hikes take a long time to impact the economy. when you think about demand destruction, it has shifted to now coming not from auto prices but coming from rent, areas in the economy are much more sticky. for that reason, you need to get housing roll over but housing prices to moderate more. these are changes that don't happen overnight and are changes that come with wider implications for growth. we already got houses under pressure and we've already seen households be impacted by inflation negatively so demands depression is already here. tom: if we get a 75 beat move, three quarters a percentage point move, does the 30 year mortgage go up three quarters of a percentage point? >> it has actually gone up more than the long and has. i think we contin

get more reaction now and bring in michael mckee. it really seemed like the central bankers were doubling down. but it is worth it because inflation expectations getting de-anchored be worse. did you learn anything new? mike: not anything new in terms of what would affect the markets or change monetary policy. perhaps the only new thing we heard was christine lagarde saying the new anti-fragmentation tool would be discussed at their next meeting. the first time she has put a time on that. but in terms of where they are, what they are all saying is uncertainty is key. do not know what is going to happen to the overall economy because we have had a series of shocks we did not anticipate. that touches on the fact our models were wrong because we did not anticipate supply shocks. so we have laid out a path now we think will get us to a place where inflation comes down, and eventually gets to 2%. but there is a lot that can happen between now and then. so we might have to tighten more, we might have to go too far, there will be pain, that

put a gun to shoot, park jaron lubbock mckee. such a must be attracted number 25 you may receive, but by that by the one you will want. wayland with a with michael brown, but let me just get it done but dont but i will. it is a port it galandes avenue, but our listing of bentley were made on me as long as i was in london. mahathy's soniega don't vote for profess buelo a song on being you don't you are being met by liaison fuzzy so, but the bowman, i'm booked to boy law is there's opposite baller design. me told you that up as if i tell you about, but i did it too. and i said facebook like it. i thought it when i spoke with them with the marsh. m a n d y a. yep. well you've, you've received it yet. it will laugh, i will give you a bunch more more you why you more we why you got this now cannot back again yet again. you know, not really. you know why you was the subject is poor doggie? no be was not because i see these are a me a good a for my a don't with me not next year. not that name going again. my name is jennifer. i seen it that you found in illinois to let does seem like that are yearly. got di obama, if you do more new fit. i didn't a lie

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