stagflation with the pimco report.imco says central banks very likely finished hiking cycles, but risks remain elevated. we have the executive vice president and portfolio manager from pimco joins us to talk through the report. nicola, the comment from the update signals what we saw from world bank. for the third year in a row, they downgraded the expectations or see slower growth for the world. where is this bearishness coming from? >> thank you so much. good morning. i think we need to recognize, first of all, the global economy has been very resilient, driven by a strong u.s. consumer. we don't think this resilience will not last. the reasons are two. the first is we had a big fiscal sugar rush in 2023 with the u.s. budget deficit widening with excess savings from the pandemic checks in the system which has been supporting the activity. the pass through of monetary policy has been slow partly given the long debt maturities in the u.s. think about mortgages which are 30 years on average. now as we look to 2024, the e

let's bring in pimco economist tiffany wilding. how do you make sense of the two conflicting data points on the jobs front this morning? tiffany: overall, i think you have to be careful reading too much into anyone report. i think the reports we saw this morning, the jobs report, the ism services data, i think there was a good bit of noise in that. on one hand, the ism that services data suggested employers, many employers, actually reduced employment. that number fell into a deeply recessionary level. the headline number on the actual payrolls report presented a very different picture. it was a pretty resilient labor market and economy. i think you have to take all this with a grain of salt. that is what the markets are doing. they aren't really reacting that much to the reports this morning. sonali: there are reports this morning and more data next week. when you think about the path of inflation, there have been a lot of conflicting signals. think about wages, about oil prices. how closely are you reading the numbers next week?

jon: tiffany with us, pimco economist and managing director.essions and if we could build on the conversation we were having about pce versus cpi. what is your read? tiffany: may be to start off by talking about what you were focused on. what are the key questions is how much additional improvement, supply-side improvements, can we get? this gets back to how much additional normalization post-pandemic should we expect? and where will the economy be? what is the underlying trend in inflation once those effects fade? we don't know that yet. we can try to estimate that but i'm not sure what it is. we are still waiting to see that. in our minds, that plus the fact that demand in the u.s. economy still looks pretty strong might be enough to keep the fed on hold for longer than the markets were pricing. there's this other issue of core cpi versus pce. as you suggested, the measures are calculated differently. cpi does not look as good. we are at 4% still year-over-year even though we have gotten down to the two. point something range there's a lot of

the former bond king, the founder of pimco, says 10 year treasuries at 4% are overvalued. i would think that is a consensus story but is not driving the bond market. there might be plenty of geopolitical risks. it could be stopping rate cuts from fully taking effect on the surface level. as you see yields come down, you would think the dollar would weaken and that is not the story. dollar strength is the name of the game. even brent crude trading at a $76 handle. we want to see how the asian markets are faring. avril: what we are seeing today is reversal of losses in asia stocks, including on the nikkei, which just closed at 34 year high, a clip the peak in july. the nikkei outperformed in the region, -- climbing is 8.4%, but was paring those gains toward the close. this is strain on the japanese currency. the boj saying it's going to reduce its buying of superlong government bonds and this is a reminder it could still take stimulus off the table this year despite tokyo inflation data coming in today showing cpi occurring for a second month. this is a leading indicator of

. >> at the same time, you have pimco. there is a lot of cushion and we could see prices move a lot higher from what bill gross is talking about. you have to move to the next 12 months. there is a deficit for all of that factoring in as well. >> the market is concerned about the possibility that you could even fiscal side becoming even more of something to worry about. is there going to be a problem in u.k. or the u.s.? let's start off with the call and go from there. this was in a sweet saying that he is staying clear. the treasury tenure at 4%. it is a better choice. it is interesting. is the 10 year overvalued? joining us now. what do you think? overvalued at 4%? >> look the curve. everything is about the same. you could buy a three year or a five-year. if you look at the second we added, go to the shorter in -- the shorter end. people think the 10 year is in a broad range. that might seem like a milquetoast incident, but i think that is the thing. i think rates will be lower. going in, the fed starts cutting. i think o

we can debate that with our pimco guest. this was a virulent week for bonds. we will go along.0 a.m. this morning. we don't get it until 10 a.m. after the market opens. oil climbing from a three week high. escalating tensions in the middle east continue to keep us on notice. under surveillance this morning, the ceo of jp morgan, jamie dimon, getting a pay raise is the bank posts the highest annual profit in the history of american banking. according to regulatory findings -- filings, he was paid. that's a 4.3% increase. you can compare that to your own salary increase he may have gotten or not. manus: have you filled in your e val yet? there's a bloomberg evaluation period. 4.3 percent sounds reasonable in the inflationary environment but it's about delivery. they put in $49.6 billion last year. there was something for everybody. mary erdos got $27 million, the global head of wealth management, so it was not just for the dom -- the don juan of wall street. scarlet: in coming days, we will hear from -- look at filings of how the other banks are paying their ceos and we will brin

pimco's head of public policy joins us next to discuss this. >>> later, a.i.any that used them higher. mark mahaney will be here to talk big tech and more. "squawk box" will be right back. - if i told you something extends your life span, improves your sleep, makes you more empathetic, and reduces stress and cognitive decline, you would think it was a miracle drug. but i'm talking about reading. reading every day does all those things and more, which is why i started my book club, read with jenna. so start a reading streak, even if it's just a few minutes every day, on the way to work, your lunch break, before you go to bed. every little bit helps. the more you know. >>> from avoiding a government shutdown to a bipartisan tax deal, it has been a busy week on capitol hill. joining us now with the impact on the markets, pimco head of public policy, libby cantrill. good to see you. >> good to see you. >> short-term budget deal, i don't think the markets were too wound up in anticipation of this. but where does it ultimately lead us in terms of getting something a

let's get back to markets and bring in our next guest, the cio of core strategies at pimco and manages over $100 billion in assets. how closely are we watching this election? >> thanks for having me. we are certainly closely watching this election. it will be a source of relativity across many -- of volatility across many countries. we will be closely watching this and making adjustments as needed based on the elections. it is too early to make a distinction one way or the other what the election outcome would be. yvonne: do you think it has anything to impact the fed pricing we have seen? we have seen a bit of a recalibration of late? mohit: i think the fed pricing is more of a function of growth and inflation data. the fed will continue to focus on that. we have seen inflation come closer to the central banks target. you are seeing increased probability of the fed cutting rates this year. the fed will remain data dependent and adjust policy course over the next six to 12 months. haslinda: talk about volatility. when you look at the price action, is it a fundamental shift, or is it ab

the pimco co-founder. he is saying the fed should not keep policy restrictive for too long or it could end up in a recession. annabelle: the pullback is something that has taken a little pressure off the boj because they are expected to keep their main monetary policy steady. our chief north asia correspondent steve engle is outside the boj headquarters in tokyo. as we said, nobody expecting a change today but we could get something in the inflation outlook possibly. stephen: that is right. that is what the nikkei is reporting this morning. the boj could revise its outlook for fiscal year 24 which starts in april and fiscal year 25 which is the following year. on the cpi front. the forecasts are for to play percent growth in cpi for fiscal year 2024. and 1.7 percent for 2025 a drop of is expected. the nikkei reporting the boj in this review could upgrade its inflation forecast for 2025 fiscal year to 2%. from 1.7 to 2%. that would be an interesting indication of the boj's assessment inflation, higher infla

let's explore that with libby chemtrail, the head of public policy at pimco and brian schwartz, the clinicalr cnbc.com. brian, you have news on a donor pausing who had been supporting haley? >> right before i came on air we are learning reed hoffman who did give $250,000 to the nikki haley super pack last year's now deciding to put a pause on any future help. that obviously could change if things change in the primary. right now nikki haley could look at is where hoffman is stepping back. he's usually a democratic donor. he gave to nikki haley in the idea is to be the best bet. he said that on a linkedin post. we are hearing that is over, at least for now. that is just a little trickle of what we have been hearing throughout the last 24 hours from gop fundraisers and the like where there is a look at this race right now and questions as to what impact any money they raise for her could have on the race? and where is she going in south carolina? >> in conventional wisdom, whoever brings in the most dollars has a better shot. in part because you can splash it over the airways and inundate peop

. >> the bond report brought to by pimco, global leader and act fixed income. ♪♪ hi, i'm janice, andost 172 pounds on golo. when i was a teenager i had some severe trauma in my life and i turned to food for comfort. a friend told me that i was the only one holding me back from being as beautiful on the outside as i am the inside. once i saw golo was working, i felt this rush, i just had to keep going. a lot of people think no pain no gain, but with golo it is so easy. when i look in the mirror, i don't even recognize myself. golo really works. >>> let's get back to pippa stevens now. >> under pressure after a california state appeals court ruled the drugmaker and phase negligence claims over delays in the development of new hiv medicines. shares down around one and one -- 1 3/4 of a percent. the highest level in over two years after the robotic surgery manufacturer issued strong preliminary results for their fourth order. a rise of 20% year-over-year during the period. and expect an increase of 13 to 16% in 2024. >> thank you. please stand by for realtime captions. why wall street is

so joining me now with that view is paul mcculley, the former chief economist at pimco and professorgeorgetown's mcdona school of business. professor, great to see you and great to get your thoughts. let's talk about why july. it does seem much more reasonable andconsensus and less aggressive than the market would expect. >> i don't have a huge quarrel with the survey that says june. there's no difference between june and july. i think the economic community is correct in being less aggressive in where the futures market is. it's the difference between economics and money management. so i don't have a quarrel with that consensus. i think the fundamental issue is that there is no urgency for the fed to ease. in the fullness of time, they need to ease to validate what the marketplace has already done in easing financial conditions, which will be supportive of the economy. but there's no urgency for them to do that. it's only over time, as well as the fact that i think they have to guard against being too aggressive in their rhetoric about easing because of the risk that financial condi

the report is brought to you by pimco, a global leader in fixed income. 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 here's why you should switch fo to duckduckgo on all your devie duckduckgo comes with a built-n engine like google, but it's pi and doesn't spy on your searchs and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. and there's no catch. it's fre. we make money from ads, but they don't follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. >>> welcome back to power lunch, everybody. solar stocks having a rough start to the year and getting hit hard today. following a pair of downgrades of sunrun and anaphase energy by key bank on valuation concerns. sunrun, one of the biggest losers in

. >> the bond report is brought to you by pimco. of 10 of our clients are likely to recommend us. neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. oh, charades! - okay! - love it! umm... first word. - tonsillitis! - nostril! uh-uh... bill! uh-huh... - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com pictionary?! the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for c

and some of those expectations are exiting icc negative rates from the fourth quarter, pimco seeing underd tighten quite notably, that is one of the big risk factors. we are also hearing from the japanese prime minister, speaking to reporters, talking about the new year's day earthquake, the ensuing tsunami and tsunami warning that is still in place for parts of japan. speaking to reporters, saying they have set up a local task force for the earthquake. we are here in confirmation from nhk the earthquake has killed eight people and japan -- in japan. there's a lot of disruption ongoing. one of the big calls, one of the big uncertainties is where the greenback is headed. for more weakness this year? markets are expecting the fed to start cutting rates. let's ask our bloomberg mlive strategist. mary nicola. it does look like a lot of structural challenges to come. >> absolutely. it looks like the outlook for the dollar looks like there is more weakness to come. if we look at the key factors the fed is looking at, for example, inflation, we had the pce numbers for november and inflation show

. >> announcer: the bond report is brought to you by pimco, a global leader in active fixed income. -. - hip-hop! - limping! mmhmm! medical bills! uh-huh! - pancakes! - cash! who pays you cash when you have medical bills? grrr! no idea. [tapping] gap! the gap left by health insurance? who pays cash to help close that gap? aflac! oh, aflac! get help with expenses health insurance doesn't cover at aflac.com pictionary?! there are some things that work better together. like your workplace benefits and retirement savings. voya helps you choose the right amounts without over or under investing. so you can feel confident in your financial choices. voya, well planned, well invested, well protected. >>> take a look at the s&p heat map. pretty green here as we blasted through 4800 last week. 4864 this morning, as it's really financials, tech and industrials carrying a lot of water this morning. th j ag ing to get stop tradin wiimfter a very short break. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. you're probably not

former pimco chief economist paul mccauley with us, an adjunct professor at georgetown.orning. >> was this a troublesome print? >> no, i don't think so. it was a noisy print. we got another disappointment on homeowners equivalent in rent, still not telling us what the real world is telling us, but in general, i think it's just noisy and the underlying disinflationary trend is very much intact and i do think that rents are going to come down as the year progresses, and the most important issue for the markets is it pivot is unambiguously in. the data have said, the fed is finished. the fed effectively has said they're finished. the next move is a cut, and it's going to be a series of cuts to take us back to neutral. so that's the theme the market is working on. i think it's the right theme and the data doesn't change that really at all. it's noisy in the data. it's noisy in the market. we're fundamentally in a soft landing with a pivot already in rhetorically and we're just waiting for it to come in reality. timing, pace and magnitude. >> but there is this sort of nagging

pimco is busy in today's dollars and cents. i'll take an order of one of those heart shaped pizzas. >> okay, just for you, apple and amazon topped the list of stocks to watch this morning. the european union's competition watchdog announced plans to block amazon's purchase of irobot, the maker of the roomba vacuum cleaner. on the news, irobot stock dropped more than 30% when that opening bell rang this morning, ringing the bell pinstripes celebrating its ipo this month, the bistro bowling bocce hangout is now a publicly traded company. pinstripe, here in the bay area, has one location in san mateo. they are opening one in walnut creek. this spring. taking a live look at the numbers up across the board to end this week, the dow jones up about a quarter of a percent. the s&p 500 about the same us 4794 as it gets closer to 4800. and the nasdaq back above 15,000 this morning. it's up 64 points. macy's closing at store in san leandro macy's confirmed the store at bayfair mall is one of five stores set to close across the country, th

head of public policy at pimco. great to get your perspective on all of this.results overnight. where do we go from here? libby: hardly shocking. good morning from a very snowy new york. the big question was is this going to be a coronation of donald trump? he has obviously been the clear front runner in polls for months. i think last night underscores the narrative that this is very much his nomination to lose. not only did he clear that 50%, which was something that was symbolically important for the trump campaign. in terms of the alternatives to a trump candidacy, there was no real clear alternative that emerged. ron desantis came in a distant second. nikki haley a close third to that. in terms of separating the field , separating that alternative and consolidating that anti-trump vote, that did not happen last night. this was a good night for former president trump. it will likely corroborate the narrative in the market that this is very much trump's nomination to lose. lisa: he wrote one of the most interesting and quotable things in your notes. you wrote

holding down the fort on the open today, i will go through the lineup,"' sherrod brown, all of that -- pimcorking on a special project. tom: i think he is killing it at 5:00 a.m. jonathan: with dani burger. tom: i not here. jonathan: you are barely present now. tom: 5:52. jonathan: to be fair, neither am i. still adjusting to a brand-new year. from new york city, equity futures near session lows. this is bloomberg. ♪ c'mon, we're right there. c'mon baby. it's the only we need. go, go, go, go! ah! touchdown baby! -touchdown! are your neighbors watching the same game? yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs. i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with t-mobile 5g home internet. catch it on the xfinity 10g network. (announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin l

eastern time, bill gross of pimco on this bond market performance.n in or lien out of bonds? it is predicated on this idea over the longer-term the fed is going to cut rates, the u.s. economy is going to slow. it raises a question for stocks. jonathan: counting you down to the opening bell, as well around the corner. your equity market on the s&p 500 is positive. live from new york city this morning, good morning. this was "bloomberg surveillance." ♪ an ever-changing landscape comes with challenges. from our vantage point, we see opportunities. as a top-ten real estate manager, we harness the power of a 360° perspective, delivering local insights and global expertise across public and private equity and debt. our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested. jonathan: from new york -- manus: from new york city, it's taken us two years to put in new records and $10 trillion in value. is it too rich for your blood? the countdown to the open st

the former pimco chief weighing in on what the federal reserve will do."we think the fed will taper qt. the fed is trying to finesse the lowest level of reserve to present a situation similar to the repo strike in 2019." lisa: i am curious. the conversation has been dominated with when they will cut rates. a big amount of dissent whether it matters. deutsche bank writing in response to some of the rally that we have seen in applico these -- and equities "the chink in the armor is rate expectations. futures are now pricing and with a 42% chance of a fed rate cut by march which is a big ship that shift by 2023." does it matter if the direction is known? you get different answers. jonathan: i will not answer that. does it matter? >> i do not think so. if you are trading the contracts it does matter. if you are trading the two year or equities of any asset class what matters is the end point. how much are they cutting and what are the reason? are they trying to normalize or ease policy. i would argue that the market is pricing in rate cuts. whether they start

jonathan: andrew balls of pimco. thank you to lynn martin, the n.y.c. president.next hour, major general patrick reiner of the u.s. department of defense. david leibowitz of j.p. morgan asset management. a massive week ahead, a preview next hour. ♪ hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall. ♪ >> our base case in the u.s. is for a rate cut in the second half of 2024. >> the next leg and recovery is when you start to see cuts. >> june is where the market is gravitated to. >> there is cover to start to cut. >> it will come at the beginning of the summer, maybe july. not only do i think that is what is going to happen, i think that is what should happen. >> this is "bloomberg surveillance" with john -- jon