the u.s. economy. what we will try to do this morning is to parse through some of the noise and giving -- and give you a better sense of what you can expect in the economy in the next 12 months and longer-term. hopefully this will help you as governors to know whether to invest more now or to save for a rainy day. i am delighted to have such a distinguished panel of guests here to have this discussion. yogi bear is says it is difficult to make predictions, especially about the future but if anyone can do it accurately, it is these guys. we have a broad wealth of experience and knowledge. start withl do is five minutes or so about the current shape of the u.s. economy and we will turn to the discussionnd have a for the next half hour or so. at the end, i would like to open it up to westerns from the governors. if there are certain topics that are more pertinent to you. to set the scene a little bit allay some fears, it is a bit bizarre at the moment that there is so much speculation that we are headed

real economy, don't look at the financial markets as an intermediary of the real economy. have been in a period -- there has been a disconnect between what the financial markets tell you, and what the real economy shows you. it was really pronounced in china, where the financial markets went their own way, almost unrelated to the economy. by the way, the correction in the financial markets in china is significant and maybe, i would say, welcome, because any balloon that has too much air in it needs to let some air out without getting to explosion. -- without a complete explosion. it will have impact on growth in china, but let's face it, the financial market in china are narrowing a very small fraction of the chinese economy. china will continue to grow. it will continue to grow at a slower rate than what it has. and it is by design. they have changed their growth strategy from manufacturing reliance to services. it means they do not need to grow as rapidly. it has international applications. it reduces the demand for commodities by china. but the implications are a case-b

in addition, the economy itself doesn't always give warning signs when the economy will slow down. that said, the early read from the january economic data does not confirm the dismal market outlook. and low oil prices, low unemployment, and higher wages set up the consumer to keep spending this year. the biggest danger then may be the damage in the decline in stocks, undermining confidence and prompting some companies not to hire or to cut back on their capital spending. so the only thing the economy may have to fear franklin roosevelt might have said is fear of the stock market itself. >>> okay, but what about on the corporate side? earnings season is wrapping up and the numbers haven't exactly been something to write home about. a look at how the earnings have been and why they could be a possible red flag. >> reporter: there's a reason why some investors are worried about both the economy and the stock market ahead. it's earnings season. and while reports from america's largest companies have generally come in better than expected, the expectations were already low to begin with

what's the political economy down that line? >> i can look at it. >> what i'm getting at is there's a coming train wreck. the bipartisan squabbling doesn't do any good. the revenues aren't going to go too much higher than that. and then the spending -- we talk about the spending. what i want to get is this part of this. here's the train wreck. we're not really having to debate about discretionary spending. we're having a debate about that line out there, mandatory going straight up towards the roof. if you don't solve that, you've got a fundamental problem. then we can deal with the equity considerations too. van hollen was mentioned, you know, the top 1% whatever going to the wall street fat cats. we can do a political economy of that too. can you give us the numbers? give him the most generous assumptions you can. but then also look at the political economy. i think you'll find they're 50/50. the reluctant, right, if we're being honest, if you do the political economy, you guys talk about income distribution. if i'm wrong. righ

economy as well, yes? >> yes, but a lot of this has to do with the global economy. mining for example. encompasses the shale oil industry. we lost 7,000 jobs in mining last month, because the price of oil is so low, that it's very uncompetitive for relatively expensive shale oil producers to pro and -- produce and explore. you have so many oil producers from saudi arabia, to russia, just pumping constantly into this market. it's a mere supply and demand issue. and there are also fears about china, and the china effect, because china is the second biggest economy in the world, and that engine is slowing down, and the fear is, is that going to lesson china's demand. we may not sell a lot to china, but there's a lot of countries that export commodities, you know, china. as china's appetite for those raw materials ebbs, that has hurt those countries, and that has come back to hurt us. >> okay. let's bring in a little bit of what he had to say earlier, in case our viewers missed it. >> the united states of america right now has the strongest most durable economy in the world. i know that's

of the chinese economy. the total social debt is now 300%. 350% if youup to take into account the external effects. it is serious. ♪ ♪ >> welcome back to bloomberg best. we're in davos. here are some of our best conversations from the week. all the angst and the fielders in the market at the deal with china and oil. where do you think the bottom is in oil prices? oil isink an issue for economic growth from china being slower. which means that there is lots of oil in the market. we have more supply than demand. demand equation has changed. we're under pressure. i don't see why they would be a increase in 2016. at some point, the oversupply will come off the market. >> it is exactly what i wanted to say. bring veryil prices low investment projects. time, thereyears of could be a crisis. because they're not a new -- not enough new projects. when we look at the economies of major oil producers, they are in bad shape, and they may be in worse shape if the prices remain at these levels. francine: but you are tellin

where is the chinese economy headed? with the new five year plan being presented in 2016, how can the world's second-largest economy shift gears without stalling its growth engine? and what does the market volitility tell us about the perception of china, and the task facing chinese regulators? well, we have, i am pleased to say, an a-star panel. thank you so much for coming on. jiang jianqing, chairman of the board of the industrial & commercial bank of china. christine lagarde, the managing director at the imf. fang xinghai, vice chairman of china's securities regulatory commission and director general at the intercontinental economic department. president at goldman sachs. zhang xin, chief executive officer and co-founder at soho china. and ray dalio, chairman and chief executive officer at bridgewater associates. thank you so much for joining us. ray dalio, is there something that the west misunderstands about chinese markets? and does that exacerbate the volatility we have seen the last few weeks? dalio: i think ther

southeast asia, the economies will are really tipping over. l prices obviously correlate with everything these days. i'm not going to say the employment number is the be all that ends all. but if it's a strong number, what happens then? the markets start to reprice the fed. a weak number will solidify all these recession expectations. i think what we should hope for is a number along with consensus. >> so let's -- i mean, you have an economic and kmarkt timarketa lot of the analysis you do. where does jobs rank in terms of what you said, oil, the economy, emerging markets, china, everything else? >> well, when push comes to shove, there's nothing more important than employment. why is that? it's because it supports 70% of the economy called the consumer. so i think the employment number and the details within the number, the workweek, the dispersion, the breadth of the gains. we already know that the energy sector is bleeding pretty badly. that's going to continue. the question is, how does that feed through the rest of the economy? and the wag

xin: i come from the real estate economy side. at i see is, a difference between the stock market, which is hugely discounted, and the real economy, where we see the easing of monetary policy is actually pushing the asset price up. that is on the one side. in terms of transition from an investment-driven economy to consumption-driven economy, we used to build buildings. today, we just manage the leasing. leasing is going well. the cities i operate in, beijing and shanghai, we see a massive uptake of space by internet companies. not so much of the old economy, non-internet and traditional companies. by and large, we have new buildings coming up almost every other month, and they are all taken up. we have not seen a building sitting there empty. i think there must be a communication issue. on the one hand, the real economy seems to be doing ok. on the other hand, the stock market is trading at a huge discount. obviously, the investors are not getting the same message as we operate in the economy. francine: again, to this point of tra

in fact, the u.s. economys in such good shape that the federal reserve decided a couple of months ago that it could withstand slightly higher borrowing costs. so for the first time in a decade it raised interest rates. and it's doing that alone among all of the developed nations around the world because at the same time that we're raising interest rates here, the eurozone is cutting them into negative territory. japan is cutting them into negative territory. so the u.s. really stands out as almost a beacon of a strong economy in this turbulent time. now, there's the positivity out of the way. so there are a couple of very good reasons why concerns have risen recently, because the risks to the economic outlook have certainly increased over the past two months. the first of these concerns is the stock market. so the u.s. stock market had its worst start to the year on record. and the first ten trading days of the year more than $1 trillion of value was wiped off the s&p 500. that is absolutely concerning. and so

if we could grow the economy at the average rate. we would see a decrease of 3 trilli trillion. >> remarkable ought to be our goal. you mention a lot of things that are growing. what's not growing clearly is our economy. the spending that we have on -- this is the amount of spending. 1965. one third of spending in our nation was mandatory spending. the congress could define what those priorities were year after year after year. now it's flipped completely. those programs are primarily medicare, medicaid and other mandatory programs. the discretionary part is what gets crowded out. that's everything the american people think about, when they think about the federal government, including defense. so it gets smaller and smaller. >> in your report on page 1, you identified a federal outlay is projected to rise by 6% this year. remember, the economy is growing at less than 3. 7% increase. 14% increase in interest payments. what if we had the economy growing faster than the government. we continue to grow the government faster than the econ

marco rubio's website, there's plenty of plans to grow the economy. mark seems to think -- sorry, the left seems to think that growing the government is a good idea. look, i'm not, honestly, jerry, to go through all these plans and dissect them. just reading through ted cruz's tax plan was mind boggling. i went to the tax foundation, they ran through all the plans and all the economic numbers. on the left side, they looked at a number of different factors. ten year gdp growth for every republican candidate was positive. for both sanders and clinton, it was negative. same with job growth. negative under anyone on the left, positive under anyone on the right. wage growth, negative under both sanders and clinton. so look, the tax foundation, all their interested in is what is going to be the affect of their economic policy on the economy, on jobs, on wages and things like that. it's decidedly skewed toward the republicans. if you have some kind of, you know, fais that the government's going to do it, it just doesn't add up to what the number's say. >> com

and i think in light of the slow growth in the u.s. economy and the fact that we have needed to hold the federal funds rate for almost seven years, for seven years at zero to achieve the progress that we have made, that setting it at the level that it would now recommend would be highly damaging to the economic situation. and we've tried to provide some analysis in the monetary policy report we submitted about what -- why that is. and in particular, this idea that the neutral fed funds rate, because of the damage from the financial crisis -- >> i must reclaim my time because i have one additional thing that i must say. i appreciate your commentary and i think a good many people have the point. i want to say this. we have some people that are visiting today. i don't want to have a response from them but i want to acknowledge their presence because they're concerned about wages. they're concerned about wages across the board, especially as they impact working people. people who are on salaries. people who make minimumsen unded of stress. one of

the economy is held back by headwinds. i would point out that a te net of thele rule is that it takes -- it assumes and embodies in it an assumption that the equilibrium level of the fed funds rate with the 2% objective is 4%. or that the real equilibrium fed funds rate is 2%. that isn't the case. >> i'm not actually pushing the tailorle rule. i am asking about a general rule-based system because you have shown support for it in the past. my question is this. what does the world have to look like. employment is better. inflation seems to be under control. you say the fed funds rate is low which it is. that's something urn your control. what does the world have to look like in order for the federal reserve to start considering transitioning to a rule-based system. >> the benefit of a rule-based system is the systematic and understandable. the federal reserve has attempted to engage in the systematic policy. it takes a different form. >> what does it look like? when you come back next year what should the world look like to s

and the international economy before it raises the federal rates? is no way you are saying? >> yes we certainly will evaluating the outlook certainly taking these developments into account and what i want to emphasize sa said monetary policy is not on a preset course. we want to set the path of policy that will achieve the objectives that congress has assigned to us and not certainly entails making sure that the expansion, doing what they can to make sure that the expansion continues. >> could you just take a couple of minutes and share with us your view as to the strength of our banking system today? we hope we won't go into a recession but we do have cycles and we know that. what is the condition of our banking system? do you feel comfortable about our banking system or is it something you are working every day on? >> i would think the steps that we have taken over the last seven years have had very substantial payoffs in the form of a much more resilient and stronger, better capitalized more liquid banking system. we have not only raised capital

the economy grew only .7% between october through december. st pace since the first quarter of last year when the economy only grew at .6%. now, mind you, we had bad weather in 2016. weather was blamed on that, but the question is why did the economy at the end of last year only grow at .7% when, hmm, the weather was warm? all is not perfect. you look at overall growth last year, it was only 2.4%. that matched 2014. what does that say? that says growth in the united states was stagnant from 2014 to 2015 if you base it on that one data figure. ashleigh. >> well, max doesn't lie, allison, and that's why you are in this moment with us, and i'm going to go to jeff because you can take math, jeff, and you can add politics to it, and everything changes. >> no question, ashleigh. one central figure of this presidential campaign is president obama. he is not running for office again, of course, but his record and the record of this economy are a central player in this campaign. the president coming out today to report these jobs numbers is very signifi

economy like rather than energy consumption. those type of things might bring new opportunities for the chinese economy. >> is the chinese economy prepared to get out of the way. that's exactly a big tension in china. so on the one hand the chinese leaders they have very ambitious reform plan. we want to reform china's economy. that will be a more sustainable model. especially the chinese communist party the leadership they're worried about their political stability. in recent several years they have tightened their political control for many of the china experts outside of china or china watchers they worry about the tension or even the contradictory train. have more open, more knowledge based economy, more innovation based economy. on the other hand they have tight political control. i agree with you. it's very difficult in the short-term it's difficult to implement these reform plans successfully. more on china when we come back. >> and back on "nevada newsmakers" we continue our conversation with xiaoyu pu. he is an expert on china and he's also an assistant professor of political science at unr. one of the things that seems

but it looks at the u.s. economys not falling into a recession, the growth is starting to decelerate. the can take pressure off pboc on the currency side somebody they don't have to they did as much as previously to the extent that this has influenced the stock .arkets on the downside fear about the magnitude of the intervention could be helpful over the next couple of weeks. >> what is interesting is that you speak about the u.s. causing ent last week -- had you stop this downward spiral? what is the circuit breaker here? for ais not that unusual ms. cycle scenario. -- mid-cycle scenario. growth isum of the not as strong anymore, we're not really accelerating anywhere anymore. i would absolutely agree, sometimes it is oil, sometimes it is china -- there is always a different corporate. markets are a bit nervous but they also cannot pin down what they see is the ultimate corp. -- corporate. -- culprit. wage inflation has already started, maybe we will see more of that. i don't think it would take that much for this s

the arguments about the economy are around. en't got any precise evidence of that being related to what happening to productivity growth, but that's a possibility. >> another question on china, if i may. is a problemthere with the data exchange rate. do you talk to them? do you plan a trip to china soon? do you have their phone number in your mobile? the governors of , the leading economies, meet every two months in basel at the bank of international settlements and in the what is going on countries. so yes, we do meet with our colleagues in china. a lot of my colleagues will be in shanghai for the g-20 coming up in february. those contacts are ongoing. governors is af rather remarkable institution, and you can pick up the phone with anybody in that community and have a serious conversation. in world war ii, there was a war room for the generals. do you have a currency war room at the fed? [laughter] mr. fischer: we will see, but it is nice to sit in this very elegant room with plaques on the is where that operation was planned.

and it is the support of the economy. senator tester: hiccup in the housing industry, what would it mean to the taxpayer? what would a housing slowdown or perhaps -- not a collapse but a decrease in their growth mean to the american taxpayer vis-a-vis c -- e ma chair yellen: i'm sorry. senator tester: give me a sense of what the fed is doing to ensure we are protecting consumers while at the same time differentiating between community banks and the big banks? chair yellen: when you say we are protecting consumers -- senator tester: while at the same time differentiating the regulations that impact the small banks versus the big guys. chair yellen: it is part of our supervision. and the cfpb examines the larger banks in terms of their consumer compliance and our responsibility is now with the smaller banks and community banks where we have consumer protection enforcement. our exams of or the community banks so they are not too burdensome. senator tester: do you believe you have been successful? chair yellen: we are focused

significant consequences for the u.s. economy. and that financial conditions are tighter now than they were when the fed last met in december and the fed has to take tighter conditions into account making monetary policy. most of the data this week has been soft. one more chance for the bulls. if the payroll report on friday shows strength along with wage gones, it could direct the market away from fear of recession and back to the upside of cheaper oil and more americans being employed and bringing home paychecks. for "nightly business report," i'm steve liesman. >>> michael hansen joins us to talk more about the economy. he's senior economist with bank of america global research. michael, welcome. nice to have you here. let's start with that recession call, 40%, others are right around there, but you think that the percentage would be quite a bit lower than that, why? >> yeah, we've been saying that it's probably in the vicinity maybe of 20%. i do think the risks are perhaps skewed toward it being higher if we continue to see a

we are optimistic about the economy in china. nd $150 billion trade, ouro-way largest trading partner, and australia has been a great beneficiary of the rise of china , and particularly the demand for hard commodities. the economy and china is transitioning, but it is also continuing to grow, and andnization is steady leading to an increase in demand for resources. we are optimistic about china. is growing off of a larger base, so even though it is no longer double digit, it is still a larger base than it was a decade ago, and australia continues to strengthen its relationship with china and sees it as a major market for us, not just in hard commodities, but also increasingly for services and the benefit of a free-trade agreement recently concluded. australia a major exporter for coal used in steel and directly in power, given plunging prices and the rising political opposition to: as a use of power, the rise of alternative energy resources, what is your prognosis for the coal industry and further investment in that industry? we a

>> the economy is slowing, but the economy is not as bad as it looks. is happening is new and old , oldtries at the moment industries are labor intensive, manufacturing, heavy industry, which have been driving china's growth, now losing out, but the new economies are not strong enough to drive chinese growth. the problem, the mistake, we often make is that when we look at china, investors only focus on the traditional industries, and these are insignificant. we often ignore what is happening and other parts of the economy, upgrading of the manufacturing, the services sector, innovation. these are all happening. that is why come some should -- why consumption is rising. despite the economy has been slowing, the labor market remains robust. we should take a much more balanced view. very quickly, my last question, 20 seconds, let's put a floor on fear. what is the worst case 2-3 years? >> in terms of growth? >> do we get growth at 5%? >> growth can slow a bit further, although we are seeing some signs of stabilization. i think we are going to see some rise

the u.s. economy is economic weakness and instability around the world. we are encountering some headwinds in our economy because we are not seeing other economies grow as we would like them to be. i think the question for the united states is what is our response going to be. the president's view is that there are a couple of things we can do. weekend the our connections with those economies that are growing robustly right now. we see that many of the economies included in the transpacific partnership our economies that are quite dynamic. let's deepen those connections and level the playing field and get american businesses more of an opportunity to compete in that region of the world. that is the one way we can start to compensate for some of the weakness on volatility we see in other markets. that's not the entire solution but that should be part of it. the other thing we can do is some of the ways we can prep for the u.s. workforce to be even more competitive and even more productive. why longer-t

and the global economy. ort will certainly give us some indication of what's going to be happening going forward. i think it's going to be a pretty good u.s. economic story. not maybe as good as last year or the year before, but still a solid u.s. showing. >> isn't that an argument for buying stocks at these low prices? >> yeah. i think it is. >> i would like your job. ass asset allocation. cash is zero. no. stocks. did i get it? >> i think that the big drag on the market has been not necessarily the u.s. data, but what's been reflected into the u.s. data from abroad. >> is your asset allocation includes whether your global or international. >> yes. >> that might be a harder job. in terms of assets equity is a good idea somewhere, would you think. >> yes. >> what are the best areas. here? >> you know, this has been theoretically considered the best house in the neighborhood. it's the best house in the united states. there are other markets that are also pretty interesting. believe it or not i do think europe

if only the economy was strong enough. i wondered if that expected path into underestimate the labor market and further raising rates is further away from what is to insure that vulnerable population is met. and to explore the ramifications. that relies heavily on the private sector banks into discuss reasonable alternatives. with the federal reserve but i just wondered for the funds to be used to have the workers of the vulnerable populations many of us have been patient and this is a record of the dodd/frank act and designed to be too big to fail. farha how but after '01 common not to the federal reserve can have consequences than they are not credible what can we do about this? it is time and we understand we give a lot of opportunities to the banks to get their right in we have not do that eyelid forward to hear your views on the economy how we can more effectively to promote a safe and sound financial system so i would welcome opportunities to address their concerns the balance of my time. >> the vice-chairman of monet

the data shows the economy may be right on track. alix: we will dig into the legal argument over unlocking the iphone. rallied into the close, we talked about the s&p 500 erasing it loss for the month. holdout was chevron but it has closed in the positive. one -- dow is more than 1000 points above its low. joe: we are back to where we were january 6. remember those really ugly days that started the market? most of these your doesn't look that bad anymore. extraordinary gains we've seen in the last week and a half or so. alix: in some ways the rally was not expected today. the shanghai composite of the most in a month, you had the overnight repo rate klein. it really wiped out the 10% rebound since its low but u.s. stocks were able to claw their way higher. another wild thing that happened in asian trading. i didn't know that japan has a 40 year government bond. i sort of assumed it cap touted 30 years. now that is trading below 1% yield. the bank of japan went negative, the yields have really collapsed. that is just crazy. the dollar

i don't think the economy is not strong. the u.s. economy. i know we are the best game in town.et me wrong. the best store in the global economy which is low down. i think they feel like they're about to get worse. they are not investing in businesses right now. they are borrowing to do m&a. when you look at the industrial side, that we know. it's in recession because of the collapse and commodities prices. even the services part of the economy. it's not that vibrant. >> berea, i would turn down what you said. what i am saying is i don't think it is all that week. i don't think it is as bleak as we feel it is when we see markets all over the world. consumers -- yellen said yesterday the average american household is getting mugged out of dollars and they drop to the oil prices. maria: we know what is happening on the other side of the equation. they saved money on oil. what oil. whether they do in terms of health care? that money went out the window. >> corporate balance sheets, stronger. if you look at the s&p in 2014, it basically shrank. if you thought it was one company, buy

the economy is being held back by headwinds. i would point out that a tenet of the taylor rule is that it takes -- it assumes and embodies in it an assumption that the equilibrium level of the feds funds rate with a 2% objective is 4% or that the real equilibrium federal funds rate is 2% and that simply isn't the case. >> madam chair, i'm surprisingly not pushing the taylor rule. i'm simply asking about a general rule-based system because you have shown some support for it in the past. and i guess my question is this -- what does the world have to look like? because i think admittedly employment is better. inflation it seems to be under control. yes, you say that the fed funds rate is extraordinarily low, which it is, but that's something under your control. what does the world have to look like in order for the federal reserve to start considering transitioning to a rule-based system? >> well, i think the benefit of a rules-based system is its systematic and understandable. and the federal reserve has attempted to engage in a sy

will they keep the economy on track? scarlet: overall for major indexes, good, but the dow and sap could not hold onto gains. you have materials, financial, energy, and industrial. they highly leverage the economy. these are some of the biggest losers. quiet day overall, but this is an external narrate week, nasdaq up 2% -- extraordinary week, nasdaq up 2%. pretty incredible comeback. s&p, if you look at the this is a 50 day moving average, so maybe a medium-term trend line. we are right above that level. what does that mean? is a sign the s&p is above moving average for the first time since october, or is a negative side because the 50 day average has moved so much lower? when a continues to come down, that could be dangerous for site -- stocks. joe: we saw a solid jump in the two-year yield. this is after a very solid core pc report, the inflation the fled it looked at -- the fed it looked at. none of these are based in reality, so it probably means more rate hikes, higher short-term rates. you can see where we were. al

turmoil in global markets and the slowing u.s. economy, some analysts are now talking about the u.s. possibly falling into a recession this year. what would it take for you to consider cutting interest rates again? would it be a severe downturn in the economy or stubbornly low inflation? is to achieveent our congressionally mandated goals of maximum and employment and price stability. expect that the fomc is going to be soon in a situation where is necessary to cut rates. let's remember that the labor market is continuing to perform and i continuee to think that many of the factors holding down inflation are transitory. while there is always some risk of a recession and i recognize and just stated that global financial developments could produce a slowing in the economy, i think we want to be careful not to jump to a premature conclusion about what is in store for the u.s. economy. i don't think it's going to be necessary to cut rates but that said, monetary policy is not on a preset course, as i said. would bened out that necessary, obvi

they predate the downturn in the economy. e downturn probably accelerated those trends that perhaps relate to globalization and technological change that are demanding increased skill. have one comment -- i think we cannot be satisfied we have full employment without full employment across demographic lines meeting women and minorities especially. we don't really have full employment until it's full for them also. i know you recognize that. buton't have a lot of time we have discussed the process of living wills and you felt the fed and fdic have provided companies and clear feedback on the deficiencies of the submissions and you would be willing to make formal determinations that some plans are not credible. wendy you anticipate inviting feedback on last year's submissions? when do you provide feedback on those submissions and are you committed to making formal determinations about insufficient plans and will you differentiate between and among firms when you provide feedback or make determinations? actively engaged in evalua

will it slow the economy down? the other question is if the federal reserve is not the thing that participates this recession is it the combination of world events? that would be a new event. most of the time, i think we think about the united states as moving along its own path and not being driven by external influences. if this is a new case where china and china slow down precipitates a greater slowdown in the east asian industry and that translates to the united states that would be effective. >> host: has the legislation of 2008 important for stabilization of the economy? >> guest: so i think there are many aspects of the legislative response. the first one, the first big wan was the araa, the american recovery and reinvestment act implemented in 2009. that was a big counter cycle move. i would say that is one thing that pushed the economy in the right direction. that was early on and most affects of that have petered out. but i think that mitigated a lot of the pain and suffering that could have occurred. the

concerns about the health of the global economy. ile, apple has been iphone to lock up the used by the san bernardino gunman. they are recovering information from the device. there is mounting tension between governments and tech companies regarding access to the information. killed manyis wife people in the san bernardino attack. continuation from a country set to become the world's largest aerospace market in the next two decades. the confederation of british industry has joined with 21 counterpart and other european union nation's in urging the u.k. to remain in the block. that if your bloomberg business flash. manus: fairly growing, that is the latest on china from world economics. report shows that sales are still growing at a reasonable rate. anna: they are still short of the levels seen one year ago. for more, let's welcome ed jones. he is still with us. let's talk a little bit about this. you produced a sales manager index, a different way of looking at the chinese growth story. the doom and gloom we saw last was your index t

mitsubishitokyo doing wonderful work on the american economy. nley, she had the fed call over the last 18 months. ellen zentner is going to disneyland in the game of market economics. wonderful to have you here on jobs day. i want you to dovetail your out of consensus gloom on the american economy with where the dots are going on the fed. .here are 2.4% you are under 2%. do you presume the dots will come down? yes, and what we have seen is the dots have been perpetually coming down at major meetings when they have to revise their forecasts. you mentioned that 2.4% expectation for growth this year. they are going to have to bring those forecasts down. we will see the forecast come down in march, and the dots come down yet again. i will tell you that many others are starting to join our camp of dropping their growth estimates for this year. tom: what does that do for fed ramification? dialog like with a the united kingdom, where we are talking about 2017? ellen: i think for monetary policy makers, they like to have full faith in their outlook. when

when we talk about the economy -- it's not just well. it is income. , we have many people, millions throughout our country working not one job but to jobs and three jobs trying to cobble together the income they need and some health care. despite the hard work of the american people, and we of the hardest working people of any in the industrialized world. we work the longest hours. 58% of all new income generated today goes to top 1%. my friends, this is not an american economy. it is not a fair economy. economy anded together we are going to change that. [applause] it's not only a rigged economy where the people on top are doing phenomenally well while the middle class continues to disappear and 47 million americans live in poverty. what you have accompanying the rigged economy is a corrupt campaign finance system that has undermined american democracy. [applause] wish i could give you a gentler word, a less harsh word but the word is corrupt. the word is correct because what we are seeing today is wall street and billionaires spending u

her assessment of the u.s. economy seems to contradict the assessment of her boss, and i think that's something scary, i should point out -- liz: she should argue she is independent, charlie. >> she was appointed as a dove, she was appointed by president obama. his hand appointed fed chairwoman is contradicting him, and that is a pretty big political story. i will say one other thing, for people out there wondering whether to get back into the market. we have a 10-year chart of the market, pre-financial crisis, post-financial crisis. throw it up there, it will be nice, you will see you didn't gain that much over the past approximately ten years. that's it. liz: since 2009, definitely come back. >> that's not the chart. liz: you're saying encompass that. >> first off, that is not a chart of stocks, that's a chart of treasury yields, going down, we know that. give us the 10-year chart of the dow, approximately ten years, you returned, if you invested, it's about a 10% return. liz: let's bring in adam. you were looking at

and the international economy before it raises the federal fund rates? is that what you're saying? >> yes, we certainly will evaluate the outlook, certainly taking these developments into account. i want to emphasize that aspect said monetary policy is not on a preset course. we want to set the path a policy that will achieve the objectives that congress has assigned to us and that certainly entails making sure that the expansion, doing what we can to make sure that the expansion continues. >> trilogy just take a couple of minutes and share with us your view as to the strength of our banking system today? we hope we won't go into recession but we do have the cycles and we know that. what's the condition of our banking system quacks do you feel comfortable about our banking system quacks is it a work, working every day on? >> i think the steps that we have taken over the last seven years have had very substantial payoffs in the form of a much more resilient and stronger, that'll capitalized more liquid banking system. we have not only raise the capital an

it cannot be good for the economy. then, give candidates who come along and angrily huge tax cuts are great new spending program or free this or three that. -- free that. we have people telling you the deficit does not matter. where john talk about why this matters and how it is connected to people's economic well-being. we put the debt on the downward path. you would over time's see significant growth in the economy. people will be making more, on average with their wages. it really does impact their bottom line. a politicalle with year trying to get them to talk with candidates or talk with candidates directly. saying you cannot run around the , and not talk about how you're going to fix the debt. if they have not talked about it on the campaign trail come it will be a lot harder to help people get what we're spending, how we're spending. passing that bell with our kids is not a sustainable economic land. host: your turn to talk with milo mcginnis -- mia mcginnis. thank you for taking my call. i just wanted to point o

bill, the economy is doing terribly. ng at the stock market, finally, that was the one passionate of the economy and finally that's crashing those are phony numbers put up by4ej politicians to make them look good. when you hear 5% and 4.9%. it's not the right number. plus, as you have probably heard. good jobs and bad jobs. i have seen 15 different reports on that. but the fact is, if you look around for a job for months and months, you can't get it. you just sort of go home and forget about it. you are considered employed. there are millions of people out there, bill, that can't get jobs. that's why i'm filling up these stadiums. bill, if you had a real fight. >> you and bernie sanders have the same thing. coming up and he we will ask them about that both the left and the right are saying the economy is rigged. okay. so you are not going to give president obama any credit for the 4.9. now, i believe that one of the biggest problems america has is the national debt. it's rarely talked about on the stump. most people don't

which cause concern about the global economy. we think the global economy is fine. t think it will grow slowly this year. clearly, there has been a little easing of that concern in the near term, but obviously that could come back. we would be very surprised here if we end up in a global recession and the u.s. ends up in recession. that is why we are buyers of emerging markets in the near term. as a we mention oil driver, but what about the dollar? is aems like there correlation between the dollar and the emerging stocks. rallies,dollar emerging markets sell off. you could make an argument that at some point you will have a another flight to safety, that the dollar has been sucking up so much money and that will boost the dollar again. cause andll about effect. you are right. if there were to be another concern about the global economy, you would get a flight to safety for sure. our fx folks are arguing that euro will go to 116. we feel there may be more surprises in the european economy than the u.s. economy. that will support emerging-market equities. we have argue

the economy is being held back by headwinds. i would point out that a nant of the taylor rule is that it takes -- it assumes and embodies in it an assumption that the equilibrium level of the fed funds rate with the 2% objective 4% or it's the real equilibrium fed funds rate is 2% and that is not the case. >> i'm not pushing the taylor rule. i'm asking about a general rule based system because you have shown some support for it in the past. and i guess my question is this. what does the world have to look like? because i think admittedly, employment is better. inflation it seems to be under control. yes, you say the fed funds rate is extraordinarily low, which it is but that's something under your control. what does the world have to look like in order for the federal reserve to start considering transitioning to a rule-based system? chairwoman yellen: well, i think to benefit of a rule-based system is it's systematic and understandable. and the fresh has attempted to -- federal reserve has attempted to engage in a systematic pol

the economy is going. i'll tell you why small businesses like this one are being left out. >>> welcome back, the top stories on al jazeera. iran's supreme leader ayatollah khamenei cast his vote in the first elections since the lifting of international sanctions. polls opened in iran. people will be electing members of parliament and those of the assembly of experts >>> u.s. president obama says a ceasefire scheduled to come into the effect on saturday could be a step towards ending syria's war. halting air strikes was essential for the struth to be successful >>> and the u.s. and china agreed on a draft resolution to expand u.n. sanctions against north korea. it's in response to the weapons test and rocket launch. members include restrictions on access to international ports >>> now to the united states, and some of the republican presidential hopefuls called for the deportation of undocumented migrants. businessman donald trump, and senators ted cruz and marco rubio say if elected they'll chase over 11 mi