michael mckee mentioned the inflation number coming up this week. report. this likely food prices will also moderate in that report. the important thing now is that inflation is slowing in certain parts of the consumer price basket. that's what drives expectations. you are spending your money on these things. tom: what's your 2024 gdp call? >> i think 2.5%. tom: this is extraordinary. this is added up over one year or two years or three years and it is american exceptionalism. jonathan: it takes a degree of confidence to say things out ok. -- that things are ok. you're also haunted by what could go wrong. how do you approach that, the idea of this will turn out ok? >> the base case on society is that we figure things out. that's been my experience. i think people made -- got a lot of notoriety for getting one big call right into thousand eight and they been trading on that for a long time. i remember being a young analyst at the time and everything was wrong, wrong, wrong and then spectacularly right. it just makes more sense to stay on the optimist

tomorrow 11:30, michael mckee, loretta mester. michael mckee joins us now. is still uncertainty. perhaps the bitcoin exchange at about 1500 yesterday. essentially you want to see how much confidence one of the bigger hots has that we are out of the woods on inflation because we saw mickey bowman yesterday say essentially she thinks that we are at the peak and she has been urging the fed to continue raising rates. if that is the case, then we will see if loretta agrees. that might give a little more certainty to it. one of the questions that has arisen is what they should do about the biology. it is not the open market committee's decision. it is the board because the board is in charge of that but they will weigh in on that. we will see what it looks like from there. somebody sit me a question the other day which i think is very important and that is what do you think is driving inflation now. do we think it is going to keep coming down? how confident are you that it will come down? tom: right. michael: what is the inflation dynamic these days? tom: the last

loretta mester with michael mckee. mr. at 11:30 eastern time live on tv and radio. tom: she's the fed mathematician. it will be interesting what she says off of inflation data. since the top of the show, overlaid ppi tomorrow, it is not first and last down from another time and place, but there's a new importance to ppi. jonathan: find the time we get to the weekend you will have the fed speak and bank earnings. jp morgan, bank of america, -- tom: jp morgan. jonathan: she said that things could get rocky, may be volatile the first humans of this year, the topic is jp -- maybe volatile the first few months of this year, the top pick is jp morgan. tom: i believe it is one out of five profit dollars. it is amazing. let's not forget the call that citigroup, there is -- jonathan: that is the banking story. that's get a conversation started with the macro strategy director at ts lombard. it's wonderful to catch up with you. let's go to the data in 85 minutes. what are you looking for in cpi? >> i think the headline of what we ne

i'm michael mckee, international economic policy correspond from bloomberg then joined now by lorettapresident of the federal reserve bank of cleveland and for at least half a year, the voter on the open market committee. it will ask about that part later the thank you for joining us today. cpi day. we got mixed news, a little bit of an increase in the headline, a little bit of a decrease in the core. what do you take away from this? >> first, thanks for having me. it doesn't really change my view of where we are. if you think about where we start the year, the economy and monetary policy are both in a good place. inflation today is in a much better place than a year ago and we've really seen this discernible progress on the inflation, but the december cpi report shows that the job isn't done yet and we are committed to finish the job of getting inflation back to the 2% target. but the important thing to realize is that that disinflation that has been happening has happened while labor market conditions remain healthy. that's given us an opportunity i think to really look at where the

let's say good morning to michael mckee.r higher cpi lower-than-expected ppi. down .1% with the forecast for a 10th gain and last month it was completely flat. the core is flat which was expected to be a 2%. energy and trade which is the important core of this number of .2%. that's on expectation with a little bit of a higher yield. for the year-over-year number, ppi goes up 1% and core 1.8% and energy and trade stays unchanged at 2.5%. people asking if this is good news for the future, we shall see. the important thing to note is there are a number of categories that are used by economies to figure out what pce is going to be. used by the government as well. if we are in line here. it means ppe will come in a little lower. it's we will start with equities and then bond in foreign exchange. we are still down to touch on the s&p by 0.4%. the two-year is 4.22 in the euro against the dollar was negative but now 1.068. march is too early. is that the fed's view. mike: we could see big change in the data but the data we have been

bloomberg's michael mckee is joining us. what do you think? mike: if you go by what the fed is saying we are not having a landing. you go back to the beige book yesterday the main line was that there was little or no change in economic activity. but he said the fourth quarter would be slower than the gang busters third. also, little or no change in employment. we know that. we keep getting additional jobs. chris wallace this week said cuts are coming, but methodically and carefully, and raphael bostic this morning said cuts in the third quarter, but would not want to cut and then have to raise. the fed is saying, right now we see a strong economy and we are going to be cautious about it and we are not going to rush in to declare a soft landing and act on it. guy: is a no landing good for stocks are bad for stocks? on one hand you could say you have a strong u.s. economy. that should be good for stocks. but if you back out the rate cuts that should be bad for stocks. which is it? >> that is the troubling sign we have seen. overall there are goo

for more now, we are joined by michael mckee. michael: they're not going to break the string of good news numbers today, because new home sales come in higher-than-expected. 606 to 4000 on an annual basis. that is up 8%. the anticipation was for a 10% rise for this. economists did not know that last month was revised higher to six and 15,000, from 590,000. more sales in november. and more sales in the month of december. good news on the new housing front. we'll see what happens in january. the storms may slow us down. it continues this trend we have seen all day of good news. ddp coming in, up 3.3% in the fourth quarter. much higher than anticipated. the gdp price index, 1.5%, way down from what the fed target would be. jobless claims, up from 189, but still very low. and capital goods orders on aircraft and defense, the part that goes in gdp, revised higher in november. really good news today. katie: good to watch markets take good news ahead of good news, interesting ahead of the fed market -- fed meeting next week. is anything

in the last 24 hours wykle mckee spoke with loretta mester about -- michael mckee spoke with lorettater. >> i think march is too early in my estimation for a rate decline because i think we need to see more evidence. i think the december cpi report shows there is more work to do. the work will take restrictive monetary policy. >> i cannot give you a date but if we win this battle and we reach the 2% inflation target as we predict in 2025 and if it is confirmed by the data in the months to come, i'm very confident the rates will start going down as soon the data confirms the inflation path. kriti: christine lagarde and loretta mester both talking about rate cuts and their timing. all of that could change in view of the geopolitics we are saying. coverage of our top two stories. in a moment, we will get to the latest on south africa's efforts on a legal ruling on israel's actions in gaza. american m british forces have launched airstrikes on more than 60 houthi targets in yemen. the groups have launched weeks of attacks on commercial boats in the red sea. talk to us about the houthi re

michael mckee is here to break down the numbers. what do you make of this?ike: it's kind of hard to say it will change anybody's minds. at this point, we know the retail sales numbers came in reasonably good. the michigan numbers are not going to change people's views of whether or not the economy will continue getting better. the idea of the inflation numbers may be a little bit of an issue for the fed but probably not. they've look beyond this and they know it goes up and down a little bit. since we are seeing gas prices continue to come down, we thank you for that. we are seeing an improvement and we see improvement in the median five year inflation numbers which comes down to 2.8. not too bad in people's household finances, the idea that they are better, 40%-33% from the month before. at this point, it's marginally better. overall, it's the kind of number that's better than we have seen. people are starting to feel better as inflation comes down. guy: can we call this number a goldilocks number? the consumer sees inflation coming down and feels better, t

michael mckee will break it down and tiffany wilding.irst time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com jon: the last big batch of economic data going into the fed meeting next week. the s&p -0.1%. on the two-year guild, shaping up as follows. yields higher by one basis point the two year. on the 10 year, 4.1%, yields lower by a single basis point. the economic data in america has dropped. good morning. >> check the fed funds futures because we got a two handle on the pc core, 2.9% on the month, the first time since before the pandemic that we have had pce core inflation that low. pce headline 2.6%, a .2% gain, the same as the month before. personal income up .3% for the month, lower than last month, and personal spending a strong .7%. the forecast was for a .5%. we got some real strength in personal spendin

let's get to michael mckee. michael: good morning. i'll get the breakdown in a second, but right now, .68%, and i will wait for the revisions. x autos and gas up .6%. we know gas prices fell, so that is still a lot. retail sales control group, which goes into gdp, up .8%, after an initially reported .4% in november, so double what was seen last month, and it is four times what was expected. looking at import prices, they were flat on the month after a decline in november, and x petroleum flat on the month, so no inflation pressures coming in from those. one other data point before we get to the breakdowns of this, mortgage applications, we have not paid a lot of attention to that for obvious reasons, they were up 10.4% last week after 9.9% the week before, so we have seen a backupin rates, and we are seeing some results in the mortgage market. jonathan: we have seen some moves in financial markets, so let's go through equities, bonds, and foreign-exchange. large rate cut -- march rate cut, what march rate cut? we said this a few frida

jonathan: did you see the michael mckee's tweet about the tug-of-war between markets in the fed? it on twitter or threads, but basically to boil it down, what the ad does is put out a compendium of 19 different forecasts, and we picked the middle number. and that becomes basically the median that everybody focuses on, but it is not a plan but 19 different forecasts, so you have to look at it in the context of which thomas talking about, everybody says this is what we think will happen. and if it does indeed happen, then this is what we will do. or this is what each of them would do. and if you look at the dot plot, and we have talked about the dispersion of dots, it is still pretty wide for next year from six to one. or none. so there is not any real set of what they will do. jonathan: the range on the federal reserve is pretty wide, and it is now for 2024. like the forecast for s&p 500 year end, we can talk about the average and median but at the high end, you have a 1000 point spread to the low-end. tom: the fall over to the equity markets is really apt. after the pandemic, we h

joining us is michael mckee, kicking off the year. of this data being the important ones to really focus on? michael: the inflation data we get later in the month will be the important thing because the fed is tying everything to the pce numbers and the cpi is the warm-up act for that, everybody will be looking at a six month average rather than the year-over-year because we have been making progress, but the jobs and overs will be important because of this argument of declining inflation without rising on the limit because demand has to be destroyed. there is a forecast for a 3.8%, a bit higher unappointed forget that is something to keep your eyes on on friday. and the total job creation, the idea is we need to slow down or we will not see the kind of soft landing we are looking for. so far, that has not worked as a theory but we will see this week. tom: are we still in the throes of the pandemic? we actually moved on? michael: we have moved on and are starting to see a normalization of the economic data while at the same time, healt

let's get to michael mckee. mike: it's tertiary data but it's what we got to day.erver very just survey covering new york mainly went down, new orders fall to negative 49.4. those of the worst numbers since may of 2020 which was in the teeth of the pandemic, the worst numbers anybody had gotten. prices paid go up, 23.2 and employment drops -6.9 percent from -8.4. you look at the headline numbers and it says cut rates sooner and it says not so fast but they are big numbers in any case. jonathan: how unusual is it to see those swings in those numbers? mike: we've never seen anything of this magnitude. is it because of the weather or winter? is this an outlier or not? we will see when we get the additional numbers like the philly fed coming up later this week. lisa: are we seeing any patterns in terms of deterioration or negative so prizes and some of the economic data is more real time since this is the first read on january? mike: we really haven't yet. the numbers we get tomorrow should be interesting because we will get the retail sales figures of industrial produ

michael mckee is going to break that down.&p 500 trying to bounce here. -5.4%. into the bond market, your teen year yield basically unchanged going into the fed later this afternoon. -- your 10 year yield basically unchanged going into the fed later this afternoon. ♪ how am i going to find a doctor when i'm hallucinating? what do you think, fever monster? what about zocdoc? zocdoc? dr. castell has a great bedside manner. so many options. but dr. xichun will take your sketchy insurance. xi-chun! xi-chun, xi-chun, xi-chun! thanks, bro! you've got more options than you know. book now. was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com (grunting) at morgan stanley, old school hard work meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vis

here is mike mckee. michaelmber according to the bureau of labor statistics. the unemployment rate stays unchanged at 3.7%. strength in the labor markets. average hourly earnings up port 4%. average hourly earnings on a year-over-year basis go up to 4.1% from 4%, higher than the 3.9% forecasted. we get surprise in the numbers here. the two month net revision, however, is -71. we are seeing a decline in the number of jobs that were reported in october and november. for december -- for november, the number was 173,000. originally reported as 199,000. changing private payrolls, very strong. people have been talking about government hiring driving this. 164,000 are on private payrolls, up 136,000 month before and well over the 130,000 that had been inspected. manufacturing payrolls come up 6000, 1000 more than forecast, down from 26,000 the month of november. labor force participation rate falls to 62 point 5%. average hours worked falls to -- yeah, falls to 34.3. very strong report. considering the circumstances. i

michael mckee has the data. obless claims come in extraordinarily low, 187,000 last week. this could be a seasonal effect, down from 203,000. it has gotten the markets attention. we have seen trimming of bets on a march rate cut. housing starts down 4.3%. that is not as bad as the -8.7% forecast. building permits up 1.9%. the philly fed interesting numbers, -10.6 from -12.8. here a number to keep an eye on that should catch wall street's attention as well. prices paid. 11.3. it was 24.3 last month. inflation coming down very rapidly. no change in the job market. you have raphael bostic out with headlines on the terminal suggesting it seems they are making progress but he is still a higher for longer guy. jonathan: thank you very much. let's return to that number before a commercial break. 187,000 jobless claims. we start the year talking about rate cuts in march. you just get this trip feet of data that says what rate cuts? it started with payrolls. then we have had retail sales, we have jobless claims, you throw

jon: michael mckee final word on the data?in status quo, which has been good news for the overall economy, because we are not seeing inflation rise but we are seeing employment strong. that is what the fed and the soft landing people want to see. jon: payrolls report tomorrow morning, 8:30 eastern time, the estimate in our survey currently 171,000. the data so far, so good on the adp report and jobless claims. coming up, you cannot say the same thing about the auto sector for gm or ford. the latest with david welch on the auto industry next. ♪ how am i going to find a doctor when i'm hallucinating? what do you think, fever monster? what about zocdoc? zocdoc? dr. castell has a great bedside manner. so many options. but dr. xichun will take your sketchy insurance. xi-chun! xi-chun, xi-chun, xi-chun! thanks, bro! you've got more options than you know. book now. jon: how much of a reality check are we getting from the industry from the likes of gm and ford? >> a big reality check. they have pulled back from the ev strategy in detr