and we are also talking about richard clarida. richard clarida at 11:30 a.m. london time. this is bloomberg. ♪ francine: this is "bloomberg: surveillance." let's get straight to your business flash in new york city. on its debut,ng becoming the second most valuable tech company to reach u.s. market. only topped by uber. shares closed 50% higher than the price set, giving them a workplace collaboration software that -- giving the workplace collaboration software a high-value. bloomberg lp is an investor in slack. foxconn announced a division chief will take the helm. the largest assembler of iphones named the replacement of a , buildinge terry guo the company into a global electronics powerhouse. he is stepping down to focus on taiwan's 2020 presidential election. slumping after the company warns about the larger-than-expected impacts of awei,- quality -- hu seeing full-year revenue forecasts lower. francine: let's bring in the latest on the race for the uk's top job. conservative lawmakers have narrowed the field to become britain's prime minister. jeremy hunt will go head

steve, take it away. >> i am here with fed vice chair richard clarida.et's talk about the conference which is this fed listens thing. and i wonder if you can boil it down to what the market needs to know about where the process could go is it possible that it leads to a very different way of the fed figuring out how to make policy as in a higher inflation target, average inflation target, what are we really caring about why you are listening and thinking about this process >> well, as we've indicated, we think our current framework is serving us well. so why do this the economy is in a good place and we have the opportunity to see if we can do our job even better we have a job assigned to us by the congress which is maximum employment and price stability and this is all about having the best set of tools and strategy to achieve this. we're early on in the process. this is called fed listens for a reason we're in listening mode. but later in the year within the committee during our regularly scheduled meetings, we will start drilling into particular ways

asked richard clarida, why will low rates help in this environment? no real answer to that. they cannot answer. why not? greg: that is not what they are solving for. the uncertainty around trade, uncertainty around the election in 2020, tax cuts rolling off, incentives rolling off, does not allow for corporate stew plan in advance. i think you take rates lower come it does not change the fundamental fact that corporate's don't know exactly what they are solving for until they get clarity around trade, politics, and the future tech structure. jonathan: in the meantime, on the cusp of global central bank stimulus, not just from the federal reserve, but ecb as well. we showed a chart a real yields in germany, japan, deeply negative in germany. said i'm looking at the united states right now. i'm not sure why they should have the luxury of a positive yield -- real yield. now we are going to zero. where is this going? greg: the u.s. still looks attractive vis-a-vis other markets. i think that spread is too wide. i see you was over time -- it may be overdone in the near term -- bu

tom keene asked richard clarida, why will low rates help in this environment? no real answer to that. they cannot answer. why not? greg: that is not what they are solving for. he uncertainty around trade, uncertainty around the election in 2020, tax cuts rolling off, incentives rolling off, does not allow for corporates to prepare in advance. i think if you take rates lower, it does not change the fundamental fact that orporates don't know exactly what they are solving for until they get clarity around trade, politics, and the future tax structure. jonathan: in the meantime, greg, we are on the cusp of global central bank stimulus, not just from the federal reserve, but also from the ecb as well. someone made a great call a couple months ago and i want to bring it out. we showed a chart of real yields in germany, japan. showed them deeply negative in a place like germany. mike collins said, i'm looking at the united states right now. i'm not sure why the united states should have the luxury of a positive real yield. guess what, we are going to zero. where is th

federal reserve vice chair richard clarida echoed his comments he said the u.s. economy is in good shape but the central bng is ready to act. he said he will be watching the current market conditions to decide whether the fed should go next. >> market pricing can go up and down, so we can't be handcuffed to that, but obviously we'll look at a range of indicators on where the economy is it's very simple we will put in place policies that need to be in place to keep the economy, which is in a very good place right now, and our job is to keep it there. >> meanwhile, chicago fed president charles evans said he's happy with current fed policy, but he's worried about persistently low levels of inflation. >> magnitudes of the one-off price increases that you would expect to see from a tariff increase or easily manageable and we can look through that, you know, the concern would be if you saw very strong increases in prices that somehow were accommodated by monetary policy that led to inflation, you know, upwards of 2.5% or more. i don't see anything like that. >> i'd li

jay powell and richard clarida are mainstream economic thinkers.are not particularly dovish, which is what the president wants. vonnie: it is the fed thinking the president is that ought with, -- is at odds with. markets had a tendency to dismiss this given that it has never happened before and would be completely unprecedented and almost unethical, and may be unethical. at the same time, now to markets take it more seriously? ira: i do not think they necessarily will. this would be a strange thing to remove him as chair and keep him as that governor, which is what the bloomberg story is mentioning. could that happen? potentially. who becomes chair next? at least temporarily, it would be richard flared up, which means that that would be on the same court it has been anyway. -- thatld not come cannot help president trump with his crusade to get interest rates lower. guy: we have moved on from this story, or half week? -- or have we? there is now talk the fed will drop rates aggressively. that will put the president and a more amiable state of mind w

two vice chair richard clarida -- to vice chair richard clarida. >> the economy is hitting some crosscurrents. there has been a marking down of global growth prospects. there's uncertainty about international trade. there is some evidence that is weighing on sentiment. we are monitoring that closely and we will act as appropriate to sustain expansion. >> you kashkari, who of course -- was saying kashkari he was gunning for a 50 point drop. we talk about the fed's dovish pivot being cemented if we don't get a great outcome from the g20. how does that change the way you would trade fixed income? christopher: the inflation is just more lasting than the vagaries that might come out of the g20. we can make assessments about what trump and xi might decide, but none of us know. it's been a significant step down over the course of the last six months. it's a global phenomenon, both europe and the u.s. and central banks with an inflation targeting mandate, or in the u.s. case with the dual mandate, has to pay attention to that -- have to pay attention to that. it's both market-based measures, but cons

alix: that was richard clarida in an exclusive interview with tom keene. l mckee. it is sort of like chairman powell, totally dodging your question. here you have rich clarida saying let's look at this thing over here. michael: the argument seems to be we cut rates of the confidence measure and everything will be ok. everyone to trace the impact of monetary policy it is a much diverse out because the interest rate sensitive sectors of the economy are not in trouble at the moment, nor are rates particularly high. it is hard to see how much bang for the buck they get. the cost of capital is not the problem for the economy. david: one of the big concerns is capital investment. they picked up some and then turns it back off. it does not seem to be a question of the rates are too high. how is a rate cut going to cause the ceo to say i will invest? >> absolutely. they did not say the fed would not be in play in terms of ending the recovery. that was what we had in the fall, a fed that was too aggressive and we would have bad things happen. what we are seeing is t

fed chair jay powell speaking about the economy and richard clarida speaking here on cnbc. steve joining us with the highlights hi, steve. >> reporter: hey, tyler. from chicago here. richard clarida, key policy maker, telling us that rate cuts are indeed a possibility in response to growing tariffs, whether it's the federal reserve needs to know more about the impact on the outlet for the economy. here's what he said. >> today, the tariffs that have been put in place on the economy have had a small effect in the aggregate and i think others agree in the contessa brewsensue consider more tariffs and potentially retaliation, that potentially has a more noticeable effect on the economy and we would have to take that into account >> reporter: in one of the most detailed explanations of how the fed thinks about these tariffs, they raised prices but not inflation. in other words, one time rise in the price level but doesn't continue it should address and take seriously potential weaker growth and a persistent yield curve growth would be serious. the possibility of a fed reaction

tomorrow, we will speak with richard clarida, the vice chair of the fed.hat is a conversation you don't want to miss at 11:30 a.m. london time. minutes from the open and next, a look at your stocks to watch this morning. when you need to know to get prepared for the market open, including sap after the u.s. -- the rival software maker oracle reported a return to sales growth. what does that mean for the german software maker? this is bloomberg. ♪ matt: welcome back to this is bloomberg. -- "bloomberg markets: the european open." let's get stocks to watch around the bloomberg newsroom. dani burger, paul jarvis, and , focusing onern miners. >> we see gold miners likely to open higher, surging past a 5.5 year high this morning. miners could go higher in the sense we have iron ore prices up more than $100 a ton. rio tinto, saying they have to cut their outlook but on the other hand, we have valet coming back on or -- online. anna: let's talk about the retail space. paul, we've got some car phone talking. >> we have two things. the good and the battle retail. o

jonathan: richard clarida weighing in.his is what he had to say. >> we are attuned to potential risks in the outlook. if we saw a downside risk to the outlook, then that would be a factor that could call for more accommodative policy. that is definitely something in the risk management area that we would think about. jonathan: i don't know if we are clutching at straws, but some thought that comments were the window opening slowly toward the idea of a rate cut. your thoughts on that? to me, that is a very incremental move if that is the story. lale: i am in the same boat with you. i agree. he also emphasized data. data does not suggest that. unless they would fall to the whims of what is happening in the equity markets -- we are just down 5%. let's take this into perspective. just 5%. jonathan: jpmorgan out today. looking for a rate cut in september and december. this is not the first time we have seen a decent spread between what the market is looking for and what the fed is implying through the communication. we have see

[laughter] jonathan: richard clarida weighing in. this is what he had to say.ake a listen. >> we are attuned to potential risks in the outlook. and if we saw a downside risk to the outlook, then that would be a factor that could call for more accommodative policy. that is definitely something in the risk management area that we would think about. jonathan: i don't know if we are clutching at straws, but some thought that comments were the window opening very slowly toward the idea of a rate cut. your thoughts on that? to me, that is a very incremental move, if that is the story. lale: i am in the same boat with you. i agree. he also emphasized data. the data does not suggest that. so unless they will fold to the winds of what is happening in the equity markets, -- we are just down 5%. let's take this into perspective. just 5%. jonathan: jpmorgan out today. the analyst looking for a rate cut in september and another in december. this is not the first time we have seen a decent spread between what the market is looking for, and what the fed is implying through th

[laughter] jonathan: richard clarida weighing in. this is what he had to say.ake a listen. >> we are attuned to potential risks in the outlook. and if we saw a downside risk to the outlook, then that would be a factor that could call for more accommodative policy. that is definitely something in the risk management area that we would think about. jonathan: i don't know if we are clutching at straws, but some thought that comments were the window opening very slowly toward the idea of a rate cut. your thoughts on that? to me, that is a very incremental move, if that is the story. lale: i am in the same boat with you. he also emphasized data. the data does not suggest that. so unless they will fold to the winds of what is happening in the equity markets, -- we are just down 5%. let's take this into perspective. just 5%. jonathan: jpmorgan out today. the analyst looking for a rate cut in september and another in december. this is not the first time we have seen a decent spread between what the market is looking for, and what the fed is implying through the communi

on friday, fed vice chair richard clarida offered insight perspective on their path forward in an exclusiveation with bloomberg's tom keene. richard: we had very strong growth in the first quarter north of 3%. we could see some moderation in growth this year, but the economy's baseline outlook is good. sustained growth, a strong they were market, and inflation near our objective. tom: then why are we speaking of cutting interest rates? richard: well, because in this environment, especially in the last six to eight weeks, there has been elevated uncertainty about the outlook. the economy is hitting crosscurrents. there has been a marking down in global growth prospects. there is uncertainty about international trade. there is evidence that is weighing on sentiment. we are monitoring that closely. we will act as appropriate to sustain expansion. tom: if we have one rate cut, two or even three, what does that accomplish for the american economy given your 2% statistic for growth? richard: first of all, let me remind your viewers that in our most recent meeting we made no adjustment to policy,

the fed vice chair richard clarida speaking earlier to bloomberg's tom keene, telling him in an excuse of interview that the argument for cutting rates is getting stronger. clarida: there was broad agreement around the table that the case for providing more accommodation has increased since our may meeting. clearly, we are going to be looking and be very attuned to the incoming data flow. guy: let's get another take on this. assetheets, chief strategist at morgan stanley, joined us at london. you have got 50 basis points priced in now. at what yourised ?ave generated internally where do you think the market is right now? guest: we are calling for a big cut. we are now expecting the fed to go 50 basis points as soon as the july meeting. move, wet is a large had them -- while that is not a large move, we had them pausing before. isaac there is pressure for the market that they don't want to disappoint, and the market is increasingly difficult to get ahead of -- it is increasing the difficult for the fed to get ahead of the market. guy: so you get 50 basis points delivered next meeting. t

sure to tune in tomorrow morning to "bloomberg surveillance" for an exclusive interview for richard clarida's. let's check in with kailey leinz. kailey: the tension between the u.s. and iran has gotten worse. the command calls the shooting down of u.s. drones unprovoked and said it was shot down by an iranian missile. iranian media journalism said -- notey is warning the u.s. to pull sanctions for the purchase of a russian missile defense system. erdogan says turkey will retaliate. he says relations with the people under mr. trump are not that good. and the u.k., conservative members of parliament will select the final two candidates to replace theresa may. boris johnson had been the previous winner and he will be -- conservative grassroots members will pick a winner in july. the city of austin, texas has a number of selling points for tech workers per the cost of living is lower than in bigger cities. paychecks are getting fatter. salaries rose 15% over a three-year period according to a recruiting platform. global news 24 hours a day on air and on tictoc on twitter, powered by more than 270

shery: let's talk about those risks because richard clarida really laid out everything that is out therefear in the environment. listen first. especially in the last six or eight weeks there have been elevated uncertainty about the outlook, economy with crosscurrents. there is a marking down in global growth prospects, uncertainty on international trade, there is evidence that is weighing on sentiment. we are monitoring that closely and it will act as appropriate to sustain expansion. investors flocking to risk assets. is it to do with the fact investors think the status quote will prevail -- status quo will prevail in the easing cycle? martin: it is weighing on balance where they see the risks laying at this point in time. on hold, avironment cap by the fed at some stage, it will support the focus on equities. the key is economic numbers. the second half of last year was fairly weak we saw green ,hooting in the first quarter but it looks like that is waning in terms of industrial reduction and manufacturing and other areas of pmi. doesn't look like there will be that momentum. and the p

guy: that was federal reserve vice chairman richard clarida speaking with bloomberg's tom keene earlierare talking to the ceo of siemens. we will get a take on what is happening with trade tensions and what is happening next with that business. this is bloomberg. ♪ ♪ guy: from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is "bloomberg markets." time now for futures in focus. we will start with the latest iran tensions and oil prices, which are rising. there are many factors at play here, scott. how much is iran factoring into the increase in wti prices? to be aran is going very big focus moving forward. with all the bullish headlines coming across this week, a drop in stocks for u.s. that added a little bit of bullish tension to the upside, throwing iran into the mix with the drone being shut down, if anything happens with the streets of hormuz -- with the straits of hormuz, it is going to genetically affect the world supply much immediately -- it is going to dramatically affect the world supply much immediately. we expect those prices to continue being pushed a

on friday, fed vice chair richard clarida offered insight perspective on their path forward in an exclusiversation with bloomberg's tom keene. richard: we had very strong growth in the first quarter north of 3%. we could see moderation and growth this year, but the economy's baseline outlook is good. we have sustained growth, inflation near our objective. tom: then why are we speaking of cutting interest rates? richard: well, tom, because in this environment, especially in the last six to eight weeks, there has been elevated uncertainty about the economy. there has been a marking down in global growth and there is uncertainty about international trade. there is some evidence it is weighing on sentiment. we will act as appropriate to sustain expansion. tom: if we have one rate cut, two or three, what does that accomplish for the american economy? given your 2% statistic for growth. richard: first of all, let me remind your viewers that in our most recent meeting, we made no adjustment to policy, but we did say we were monitoring closely the crosscurrents that are facing the economy, and some

richard clarida echoed those remarks.rty they face "extinction" if they do not deliver brexit. he is the front runner to replace theresa may, telling lawmakers if brexit is delayed they will not be forgiven. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. , further lift to the markets equities, bonds, currencies, commodities. upures up 17, dow futures 151. that is an 800 point move by the market opening. vix showing a the stunning 16.73 off a near 20 level 24 hours ago. interest rates grinding lower. a negative .210. francine: we have a very similar data check. we are aligned. stocks extending some of the gains, oil falling. peso, thet mexican real surprise in the markets was mexican peso with the tariffs. 19.53. tom: the queen is scheduled to speak in the next hour, but we need to find time for washington. kevin cirilli joins us in washington, our chief washington corr

less dovish than say, fed chair jerome powell was earlier this week in chicago or vice chair richard claridaif it happens, we will react. not necessarily the message of john williams. i hear it, i see it, i'll take it into account. >> steve, thanks very much steve liesman. >>> typically seen as good for the big banks when the fed hikes rates. why are financials rallying right now as investors are getting hyped up for a rate cut? wilfred ross is here to explain. >> reporter: banks bounced back recently even as expectations of a rate cut have risen. so first, let's explore why a hike typically is good for banks. it's because it increases their ability to charge borrowers more without paying necessarily savers more at the same time also get more from reinvesting their securities, which boosts their net interest income. perhaps not as much as feared. the shape of the curve is also important. banks borrow short and lend long, so their net interest margin is bigger with a steeper curve given the current shape of the curve as you can see, a cut will, in fact, lead to a steeper curve if that short e

squawk box," an interview with charles evans and later this afternoon, even more coverage with richard claridat 1:15 on "the exchange." and in the latest blow to retail, forever 21 is exploring restructuri restructuring. the company is in talks with apollo global management about raising debtor in possession funds to provide financing should it file for bankruptcy, that is according to a person familiar with the situation. forever 21 has 815 stores nationwide, most located in malls where traffic has continued to fall. back over to you >> frank, thank you. let's get your macro markets set up futures are rising dow futures up about 144 points right now. reports that congress may try to block the planned escalating tariffs on mexico giving you a little green on the screen jim cramer tweeting this morning that could also be the reason the dow began to turn positive late in the day yesterday as reports of rumors sort of leaked on ultimate that congress may try to go after those tariffs. that news also moving bonds. in fact the ten year yield doing something it has not done in a long time, it is act

sticking with the fed and richard clarida, federal reserve vice chairs said they are given in favor of cutting interest rates has strengthened. the outlook is for sustained economic expansion and that is important. this will become the longest expansion in u.s. history. we had strong growth in the first quarter north of 3%. we could see some moderation in growth but the economies baseline outlook is good. sustained growth, a strong labor market and inflation near our objective. we speaking of cutting interest rates? >> in this environment especially in the loss sex or -- years, the eight economy is hitting some harsh currents. there is a marking down in growth prospects and uncertainty about trade. -- weighingtiment on sentiment. it will act as appropriate to sustain expansion. >> let's begin with this new word, uncertainty. is nonpolicy policy shocks. we focused on the trade war but we focused on the president. many other shocks out there. draghi, mr. kuroda. there is the norwegian bank just yesterday or the day before raising rates because of the shocks they have. what is the non-pol

we will hear from richard clarida beginning just minutes from now plus privacy abuse, regulators haveof mind. our guests will tell you which names are safest and who is most at risk. >>> and the next round of the trade war may be fought underground. should authorities think twice about outsourcing our subways to the chinese?

evans from chicago, from the fed's listening tour that they're doing, and then 1:15, we talk to richard claridae i got a few questions for those guys. >> yeah, absolutely. looking forward to it. we'll see if they change their tone to match with the markets >> good point. >> thanks. >> joining us now for a closer look at trade tensions, the impact on the economy, and evercore's founder roger altman joins us good morning to you. we played a clip from your last appearance, i think, with us, less than a month ago. you were relatively positive on the possibility that china and the u.s. would get back together with the negotiating table you didn't say what happened within weeks but you did expect that they would reach a deal as a rule evy do you still feel that way >> i do. but the agreement might be to suspend tariffs and resume negotiating rather than have a full blown ultimate agreement. the united states has the advantage over the very short-term, simply because their exports to us are so much larger than ours to them. but over the medium and long-term, china has the advantage because the authori

he said policy is in a good place, and he'll get a feel for how vice chairman richard clarida feels aboutt issue we'll interview him at 1:15 eastern time >>> there seems to be a menu of opinions for investors to take in terms of rate cut assurance from the fed, whether it's bu bullard. who do we listen to besides the chair? >> when there's conflicting opinions out there, you listen to the chair but i'm not sure everybody is conflicting i think what there is, is there's in the center but i think they're leaning towards at least one cut. now, i think the market is very aggressively priced. we're talking about a 50% probability priced into the market for a rate cut in july. sorry, 51% and ivory soap pure towards the end of the year, 99.9%, sure of a rate cut by the end of 2019, and by the way, two rate cuts are actually built into those numbers there, so that's very aggressive for what i'm hearing from the fed but certainly if the inflation short fall persists. if trade is seen as a negative for growth, i think the federal reserve will cut, not quite as soon as the markets expected. >> did p

he is sort of like richard clarida. i would point out that he is french experienced.ys into the parlor game, that he is one of the few germans with experience working with the french. francine: but he was also one of the only board members to push back -- >> exactly. francine: we will get more on that. back to the g20, the most powerfully there's -- leaders are gathering their four key meetings that may make the difference between war and peace in hotspots. the key things to watch our the rising tensions between the united states and iran and the china talks. the president play down expectations of the big meeting earlier. ofon there is a lot controversy -- yvonne man, there is a lot of controversy surrounding this meeting. i think they are expecting a status quo, probably the best outcome that we have talked to people here. i mention this is probably one of the most g20 meetings that we have seen when it comes to trade. high-stakes ahead of saturday. the president said just a couple of hours ago that he did not promised to hold off on additional tariffs on china if t

on the latter part, there are hopeful signs to me and some of the fed like vice-chairman richard claridapickup. inflation has been tickler lilo been are -- inflation has low so we are looking at a trend nominal growth rate of 4%. does it require 2% rates? up chairman would not draw what he thinks of long-term real yields yet. tom: john ryding with us. we drive forward the conversation on central banking and its impact on your life, from michael mckee. mary daly of the san francisco fed in the 11:00 hour. this is bloomberg. ♪ ♪ viviana: this is bloomberg "surveillance." let's get the bloomberg business flash. elon musk says the electric car maker could be on the verge of a quarterly record for deliveries. he will have to go all out the last few days of june to set the mark. buyers may be motivated by a deadline on july 1 for the u.s. tax credit on electric cars. rally --eserved its resumed its rally, going over $12,000 for the first time this year. cryptocurrency has been gaining a septa and's and attracting attention -- acceptance and attracting attention. management had its biggest sing

is concerned >>> meantime, as steve liesman just mentioned to us, federal reserve vice chair richard clarida appeared on cnbc this afternoon saying the fed is open to changing its policy of patience on interest rates listen >> if we get a sense that the outlook is -- growth is slower than we expect and we get the sense that underlying inflation is below where we want it to be, then as chair powell and i and others have indicated we're going to put in place appropriate policy to achieve those goals. and whether or not that means acting pre-emptively or when the data comes in is just going to depend on the context at the time >> the tone and the message was a little different than when i spoke to him just two months ago. during that interview he was defending the fed's wait and see policy on interest rates listen >> we can afford to be patient because we're really operating very close to our goals of maximum employment and price stability. >> joining us now is julia coronado, founder of macro policy perspectives. julia, we sense a change in tone is that what you're getting from the key members

liz: to susan's point, it's a good one that richard clarida just said, we are coming into the currentout to be the longest in u.s. history since records started being kept since 1850, that's next month. i'm not sure this will jeopardize that. that's way out into -- in other words, the market is still looking like it's pricing this in. we are up triple digits. ashley: again up 113 on the dow. remarkable. after a jobs report that missed, then the previous months revised down and we lost another 75,000 jobs on revisions. >>> let's move on. beyond meat surging after a rosy forecast. jonathan, did you buy this after the ipo? >> i didn't buy it. look, you've got meat. why would you want to go beyond meat? meat is perfect as it is. you're not having good enough meat if you want to go beyond. you have a really good steak or anything. this is a momentum stock here. what it reminds me of is very much the early days of the internet stocks in the mid 1990s. if you wanted internet exposure back then, it was just a few ideas to invest. this is the same thing. great idea, very restricted flow and on

steve's going to have another fed interview coming up, talking to vice chair richard clarida on today'swashington entering on mexico, but the trade dispute with china is still brewing. and now we've got a war of words between the two countries. kayla tausche joins us now with more >> hey, andrew there's no quieting down yet the u.s. is hitting back at china, trying to correct the record after beijing released a white paper over the weekend saying the u.s. reneged on talks, not china the u.s. trade representative and treasury issuing a joint statement saying china is misrepresenting its actions, saying, "our negotiating positions have been consistent throughout these talks and china back-pedaled on important elements of what the parties had agreed to. the chinese embassy releasing a lengthy statement in response to separate remarks from secretary of state mike pompeo, calling those comments arrogant and prejudiced and that, quote, whoever attempts to patronize and bully the chinese people in any name will only end up in the ash heap of history. vice president mike pence is planning a chi

later in a cnbc interview, fed vice chair richard clarida said the fed would take more rate cuts intoso concerned about inflation on the front end, but more about how tariffs could weaken the economy >> i think we will confront that when we get to it, but i think the way that i think about it, steve, as one member of the committee, is i think textbook macro would indicate that you would tend to look through the price-level effect of higher tariffs, because it's not really telling you anything about long-run inflation, and i think that that would be my first instinct, which would be to look through that on the price level. >> okay, and now -- >> and then obviously slower growth means you want to do what you can to maintain growth at its potential. >> do what you can so, let's see what the market probabilities are here june, market was actually flirting with june for a little bit, but that's back down to 18%. we'll talk about june in a second july, 63% for a rate cut, september, 93%, october, 96%, and two rate cuts at least are built into the structure of the fed rate funds market. the

tomorrow, a conversation with richard clarida, the vice chairman of the fed. that the 6:00 hour.