a recent question, this from the treasury survey.t has the street thinking how long the treasury may go with ultralong securities. the question was as follows. price relative to the currency offering could treasury reasonably expect and ultralong to price? dealer body and is what it's going to take if you. great matches, especially for bonds, it's the day-to-day trading, the day-to-day risk that you are going to have to take on. satisfied whate the ratio looks like. it's going to be against the 30 year anyway. plus 20,spread does, plus 25. how are you going to trade that every day? that has to occur. it, think when they look at they need to work away from the primary dealer and find that permanent home. i think back to when the british started. how could they get people interested in an inflation protected bond in the you cake western mark if you put this in your pension plan, we will give you a benefit for doing that. i think they need to look at it and go how do i track the insurance company and put this in as a permanent level of

i also spotted the restriction -- treasury secretary there.isten ß. >> we started the morning at the blair house with graham and cardin as well as congressman smith and pass. of interaction, probably a lot of -- an hour and a half talking the budget to peacekeeping as well as conflicts north korea and syria. theproblems and iran. it was a healthy discussion there. there we came to the white house and the president greeted the members, had his picture taken with them. then we all sat down for lunch. it was an open dialogue, very much of the members wanting to hear from the president what his plans are. but he was going to continue to do on syria or not continue to you, north korea. all those issues are certainly at the forefront. the idea that he would have that dialogue with them is tremendously helpful to me. we needecurity council, them to now know that we are about action. we'll try to do in the yuan is bring reform in the way -- peacekeeping operation, but also in resolutions that are passed. that will we pass actually means something and

i have worked directly for four treasury secretaries. i know it makes a good treasury secretary. i have traveled millions of miles within that haven't spent time with this secretary, his vision in the president's vision, let me say i'm incredibly confident that this gentleman has the right ideas in the right team in place to advance a very progrowth agenda. miles within that haven't spent time with this secretary, his vision in the president's vision, let me say i'm incredibly confident that this gentleman has the right ideas in the right team in place to advance a very progrowth agenda. so with that like to introduce and thank you or or 77th 77th secretary of the treasury, steve mnuchin, and mark wineburger. [applause] >> well, put a lot of pressure on you there, mr. secretary. >> very kind introduction. >> well, thank you. let me add my thanks for being here. start on the permanent side, mr. secretary. obviously you had an incredibly distinguished private career. i'm not sure that prepared you necessarily for going into government, and my first question is, what is the biggest

treasury, steve mnuchin. and mark wineburger. [applause] >> well, put a lot of pressure on you there, mr. secretary. >> very kind introduction. >> absolutely. well, thank you. let me add my thanks for being here. thank all of you for being here. start a little bit on the personal side, mr. secretary. obviously you had an incredibly distinguished private career. you have done a lot of different things. but i'm not sure that prepared you necessarily for going into government, and my first question is, what is the biggest surprise, the biggest change you feel going into being the treasury of the united states of america? >> the biggest surprise is that the skill sets for private business carry over very well into government. i thought it would be much more different. but in a way, many of the aspects are similar, in the sense of no different in business. you have customers. here we have the american taxpayers and american workers. you have different constituents, whether it be shareholders, boards, regulators, h

with that, i would like to turn it to secretary treasury --agement -- treasury treasury secretary metuchen -- mnuchin. sec. mnuchin: we had a meeting this morning that was a breakout of the first comprehensive economic dialogue. we had very direct and frank conversations about how we would work together. secretary ross and i will be leaving that jointly. we will be focused on trade, investment, and other economic opportunities between both companies -- countries, excuse me. we focused specifically on a more balanced economic relationship, specifically on trade. we focused on the desire to have , bothpecific action items of the short term for the next time we get together, as well as what the goals are over the years. we think the restructuring of the dialogue and having a breakout that will address comprehensive economic opportunities across our different agencies both here and within china, i think we felt was very productive, i very good start to how we are going to structure it, and very specific things we talked about to look forward on making progress in the short term. secretary ross

the 77th secretary of treasury and i've worked directly for four treasury secretaries. i counseled four -- count four eye ones deer friends so i know what takes to be a good secretary. and having spent time withing this secretary and the president's vision and his team i am confident this gentleman has the right ideas and the right team in place to advance a very pro-growth agenda. so with that like to introduce and thank you or or 77th 77th secretary of the treasury, steve mnuchin, and mark wineburger. [applause] >> well, put a lot of pressure on you there, mr. secretary. >> very kind introduction. >> well, thank you. let me add my thanks for being here. start on the permanent side, mr. secretary. obviously you had an incredibly distinguished private career. i'm not sure that prepared you necessarily for going into government, and my first question is, what is the biggest surprise, the biggest change you feel going into being the secretary of the tress of -- treasury of the united states of america. >> the skill sets carry gopher into -- carry over into government. i t

treasury securities.we are hearing a different comment about china being labeled a currency manipulator, not only from president trump but his treasury secretary. now we have the head of the imf, christine lagarde, saying it would not make sense. tell us your reasoning. kathleen: let's put this in perspective. the treasury has a process to determine this. their next report comes out by april 15, this weekend. we will find out officially with the treasury department has decided. steve mnuchin said in february there is a process in place and his team would follow it. really looking at the criteria. let's see what they are for being labeled a currency manipulator. first of all, you have to have a material global trade surplus. what is the outlook overall for china? a significant surplus with the u.s. it is true china has a pretty big surplus with the u.s., the trade deficit is a $47 billion. persistent intervention to weaken the yuan, that is what makes him a manipulator. but actually, they have been trying

jonathan: long treasuries or long credit, treasuries or credit? carl: both. jonathan: marty?redit. jonathan: fran? fran: credit. jonathan: long high-yield or long e.m.? carl: that's a tough one. i'm going to go e.m. martin: high-yield. fran: e.m. jonathan: my special thanks to western asset management's carl eichstaedt, van eck's associate fran rodilloso, and lehmann livian fridson investors marty fridson. that does it for us. next week, we go back to fridays, 12:00 p.m. new york time, 5:00 p.m. london. from new york city, you have been watching "bloomberg real yield." ♪ so you're having a party? how nice. i'll be right there. and the butchery begins. what am i gonna wear? this party is super fancy. let's go. i'm ready. are you my uber? [ horn honks ] hold on. don't wait for watchathon week to return. [ doorbell rings ] who's that? show me netflix. sign up for netflix on x1 today and keep watching all year long. ♪ haslinda: hello and welcome to "high flyers," the show that gives you a 360 degree preview of asia's business elite. today, we are joinedoday by one of the world's

breaking news from the treasury department.xxon mobil had been hoping for an exemption from seychelles in the -- sanctions in the black sea, and the treasury department saying in consultation with president donald trump the treasury department will not issue waivers to u.s. companies, including exxon, authorizing drilling currently prohibited by current russian sanctions. this is a sanction floated when president obama was in the white house, but the treasury department denying that exemption. let's check with the markets stand with abigail doolittle. abigail: oil is on them sharply and on the week, down about 8%, on pace for his worst week since march 10. earlier in the week, around the time of the big dip, that came on a supply gasoline inventory build. another leg lower as it was productionpan's expanded more than expected. investors not liking that. oil down a percent on the week. relative to movers, we have the oil services area especially week after schlumberger, the biggest oil services company in the world, down 3% afte

treasury market, yeah, we broke through several key levels.be having this week's do we now have to start rethinking the range? higher, butill go do we then adjust everything lower as we make our way down the yield ladder. these are some of the levels j.p. morgan this watching. we are 2.2% at the moment roughly. below 2.15%,eak which is the bottom most line you see right there. we are roughly 2.2 at the moment. once we break below 2.15, that bottoms to 1.88%, the right here, which would signal if we fall below 2% a bullish break, a bearish break, it seems like that is so far away from us now, 2.6% a lot of people were arguing a few weeks back, so we were watch this closely as markets in europe and the u.s. get underway over the next few hours. right, the other thing, gdp numbers a bit later on, but this is another way of looking at it. this is your official rate of gdp growth out of beijing, six point 9%, better than expected, but have a look at the white line, that is a private measure of growth, the li keqiang index. it is not rocket science.

treasuries.ing down two point 2%. today, a bit of a reversal. this chart tells a story. the two-year in particular down to 1.4%. is the reflation theme dead? >> it is looking ill. it has implications for all aspects. struggle if the yield curve flattens. is not actingmy particularly well. europe is acting ok. japan is acting ok. we have an upswing globally, but it is muted. alix: three weeks ago, things were good, did something change or is this capitulation of the treasury market? is both.k it sales were disappointing, inflation was disappointing. thate are starting to buy the inflation was oil related. we are coming out of the great recession. we are not operating at full capacity. there is plenty of slack. you get a little pickup and a littled you get inflation. it is being called into question. there is slack all around the world. unemployment rates are low in the u.s., but there is labor not in the statistics that can be brought in if demand is there. is unified growth around the world, incl

not treasuries, one or the other. they see a protectable path forward, and the other is that they will announce their plan. there are some disagreements. one is about the start date. predetermined or based on economic conditions. and should it be all at once or a phase out. the argument against it is that it is easier to communicate, but if you face it out, it might be less disruptive. it looks like we will be hearing more about this. their pre-much steady as she .oes with the economy steady are pretty much as she goes with the economy. it says that the inflation rate is approaching 2%, but is not quite at their goal. balance sheets go to the big story today, monetary policy is more what you would expect, and steady as she goes. >> let's continue the conversation with michael mckee. was just telling us, there are two paths. seems like the news here is more on the timeline of when they might unwind the balance sheet. mike: the fed is pretty much online for the policy -- for the rate increases, that has been the policy.

. >> earlier today president trump signed an executive order directing the treasury sectary to review regulations issued last year and recommend improvements. the president also signed a presidential memorandum to review dodd/frank financial regulations and the authority of the financial stability oversight council. his is 10 minutes. >> thank you very much. a great honor i must say. president trump: it's a great pleasure to be at the united states treasury department and meet so many dedicated public servants. i went through that beautiful hallway with the incredible paintings of past secretaries. it was really very interesting. i want to read every one and learn about every one of them but we have one i hope will go down as one of the greats. i think hamilton is tough to beat but maybe you can do that, too. we'll take it, right sf thank you very much. the treasury department is the guardian of america's wealth and a worldwide symbol of american prestige. this department was first led by the same gentleman, alexander hamilton, a man who understood that the government must protect the

treasuries.n the other side, who is the most market friendly candidate to come into the second round? would it be le pen or melenchon? >> le pen is actually the more market friendly potential candidate, but interestingly we saw what happened in the u.s. when the news mansions goes up, the candidate rises quickly. the market reaction at least in terms of some volatility was impressive. if you look at french equity markets, volatility is not that high yet. jonathan: using the polls and the chances of melenchon and le pen winning, the spread keeps blowing out. the 10 is about 70 basis points. that kind of political risk and a sovereign space, you're talking about what you're seeing in european high-yield and a credit at the time of this political uncertainty that dominates european markets at least for the next several months. >> the good news is that you are fairly valued by my analysis. you can look at the spread between the european high-yield index and the u.s. high-yield index and i would be fu

treasury is probably being the easiest one.come, u.s.bad treasuries are more than likely doing better. jonathan: we have had this big support for u.s. treasuries. who is the most market friendly candidate to come into the second round? le pen or melenchon? what is the likelihood of macron? is that lehave seen pen is the more market friendly potential second-round candidate , but interestingly we saw what happened in the u.s. when the news mentions go up. the candidate rises quickly so i think the market reaction, at least in terms of some volatility, was impressive. perhaps if you look at the french equity markets, volatility is not that high yet. jonathan: in the bond market we captured that story. you see the spread, it keeps blowing out, going out on 10 years at about 70 basis points. that kind of political risk in a sovereign space, talk to me about what you are hearing in european high-yield in a credit-based at the time of this at theal -- credit space timef this political uncertainty? carl: the good news is you are fairl

treasury secretary jack lew in his first interview since leaving treasury. his thoughts on the u.s.as president trump hosts president xi in florida. this is bloomberg. ♪ mark: i am mark crumpton. time for first word news. the un security council condemns north korea's latest ballistic missile launch and is ordering a halt. the statement released by the council today addresses concern at the north's "highly destabilizing behavior and flagrant and provocative defiance of the security council by conducting a large three weeks after the previous -- launch three weeks after the previous one." north korea will be on the agenda when president trump meets with xi jinping at his resort in mar-a-lago. mr. trump is promised to deliver an ultimatum to president xi to rein in north korea. the president blames china for the loss of american jobs. house intelligence committee chairman devin nunes is recusing himself from the investigation into the 2016 election and russia. investigators are looking should --nes global news before hours a day powered by more than 2400 journalists in over 120 countr

treasuries stated.ay's session against the euro and the pound. in new york, you are watching bloomberg. ♪ ♪ emma: this is "bloomberg daybreak." i am a much harder. chandra., -- i am emma coming up, steve schwarzman, blackstone ceo, will join our own westin for interview -- our own david westin for interview live from washington, d.c. we are watching united airline stock after a video of police driving a customer off united airline flight went viral. george, walk me through what the real issue is here for united aside from pr? i think all the u.s., full-service airlines are looking for ways to make their operations more efficient. filling the airplane more makes them more efficient. i think we are getting close to the maximum overbooking, and what we call load factors. the amount of people in the airplane. we are getting to that maximum they can put into or sell into an airplane. i think that is the challenger. if they are, hitting up against their maximum load factor, what does that mean for their botto

we will bring you the treasury secretaries comments. the dodd-frank replacement, the financial choice act. a sweeping legislation led by the chairman. we'll get a hearing on capitol hill next week. leaderst trump welcomes where they will hold a news conference. a free cherry -- trade message is unlikely to sit well with resident trump. -- president trump. ♪ the white house later today, president trump will host italian prime minister. they will address the u.s. italy alliance, the migrant crisis in the mediterranean, and the group of seven meeting in italy next month. he wants the g7 to reaffirm free traded that meeting. the former chief economist at the italian treasury at the london school of economics. he joins us today from the lawn. let me start with a shallow question about these personalities. how different are they? the leaders of italy and the united states. >> i was a totally different. he is kind of a local prime minister. at the end of his political term. go for the next general election and trump is at the beginning of his

nds andou are short bu treasuries?quarter was in unwind of what we had. since then it has been coming off. buathan: can you be short nds, characterize them as a bubble, expected to burst, and still belong european equities? binky: absolutely. you just saw the reaction of the european financials yesterday, and exactly the same story. the immediate electorate rods the market to move up with the the market to move up with rates. i argue that low rates are just an enormous tax so normalizing rates is what the world needs. jonathan: financials with the built likethey have 100 basis points, 150. the speed changes. binky: but the baseline view is that it happens very gradually, with a couple of short spikes. we have had a couple of sharp spikes in equities. if you look at u.s. yields or global yields around the u.s. election we got a spike and equities did fine. david: there was a spike in the and, the euro jumping up you have the ecb potentially tightening monetary conditions. is that a threat? binky: i would say no. i would

how cautiously should the treasury proceed? the criteria, ones that are generally considered and our part of the treasury's technical process, the key issue is, are they taking actions to drive down the value of their currency to gain unfair advantage? the way you look to measure that, are they intervening in order to devalue their currency? for the last year china has been intervening to prevent the devaluation. to support the r&b. that makes it challenging to look at the current situation and reach a conclusion that there is currency manipulation. clearly, there is a transition underway from a very managed exchange rate to a more market oriented exchange rate, but it is not a pure market oriented exchange rate. right now, the interventions are in the opposite direction from what you look at in terms of measuring manipulation. david: you have a president very keen on implementing tax reforms. the white house is adamant that they are driving the train. how much of that would fall under treasury department? you have heard the re

the fed funds won't move higher than the two-year treasury on purpose.they move to the sidelines and this cheap money could support stock prices for quite awhile. this trend feels like it's s stubbornly in place and valuations are high, but stocks that are expensive continue to be expensive. we learned that in the '90s. >> thank you very much, michael farr. a lot to watch today. >> coming into today, all i was focusing on were the u.s. banks, bank of america, goldman sachs, now added to that on my list in just under 20 minutes time, theresa may's announcement from downing street. the pound down off the back of the news this announcement is coming. >> some other earnings reports, housing starts as well in the u.s. it's tax day. there's going to be a lot of things going on. >> you love that it's tax day. you love it. >> it's one of the foremost issues for investors now coming out of washington, in light of those remarks from treasury secretary steven mnuchin. you will hear more of that this week. a lot of official commentary. >>> that's it for "worldwide e

treasury secretary jack lu i sat down for an exclusive conversation. media interview since he left his post. something that came up numerous times on the trail has come up less is currency manipulation within the treasury's pretty. you have china with a trade deficit, is it enough to declare china a currency manipulator? jack lew: if you look at the criteria generally considered and now a part of the treasury's technical process, the key issue are they taking -- shoes -- actions to drive down the currency to get an unfair advantage? are they intervened in order to devalue their currency? for the last year, china has been intervening to prevent the devaluation, to support the r&b. that makes it challenging to look at the current situation and reach a conclusion that there is currency manipulation. there is a transition underway from a very managed exchange rate to a more market oriented exchange rate. it is not a pure market oriented exchange rate. the intervention is in the opposite direction from what you look at in terms of measuring manipulation. on

treasuries a little bit down in the coming weeks.is interesting, because we have seen this correlation. , want to throw up this chart #799 six, which shows this correlation between where 10 ear yields and dollar-yen were going. can the correlation stick? can the 10 year yield follow now? think the u.s. strength that had been there following the election obviously has dissipated a little bit, but overall we still see the u.s. ,conomy strengthening continuing to be strong, so that should continue to be supportive of u.s. strength and a longer-term cents. sense. >> we will be discussing what is next for france, the eu, and the markets over the next hour, joined by rik spooner from cmc markets, and later, we look at the latest investment opportunities with fidelity. at 9:40 a.m.ergy hong kong time: 9:40 p.m. if you are watching in new york. coming up next, north korea celebrates the birth of the nation this week, and some observers expect it will be sending a message to the world. this is bloomberg. ♪ york.m betty liu in new this is "day

treasuries probably being the easiest one. u.s. treasuries are probably morehan likely doing better. inathan: on the other side, just wonder who is the most market friendly candidate to come into the second round? >> i think what we saw from the market reaction, le pen is actually the more market butndly potential candidate interestingly, we saw what happened in the u.s. when the news mentions go up and the candidate rices quickly. market reaction at least in terms of some volatility was impressive. perhaps if you look at the french equity market, volatility is not that high yet. jonathan: in the bond market, we captured that story. you see the spread, the spread keeps blowing out, blowing out, blowing out on 10 years at 70 basis points. , youkind of political risk talked to me about what you are seeing in european high-yield the time of this political uncertainty dominating for at least several months. >> the good news there is you are fairly valued by my analysis. you can look at the spread between the european high-yield index a

the treasury department does participate in that. we will be announcing additional sanctions on syria as part of our ongoing effort to stop this type of activity and emphasize how significant we view this and we expect those will continue to effect onportant preventing people from doing business with them. >> {indiscernible] sec. mnuchin: again, they will be coming out in the near future, but i would say we view sanctions has a very important tool, whether north korea or syria, the sanctions are very important and we will use them to the maximum effect. mostross: to me, the dramatic thing about being in the situation room as he was making the decision was the aramis -- thoroughness of the supporting information that when into it, the consultation he did with a wide range of advisors, and the a seriousness and thoughtfulness with which he made this very great decision. strikes of the themselves, my understanding is they took out something like 20% of the entire syrian air force, so it was huge, not just in terms of number of planes, b

secretary of the treasury jack lew. there will be plenty for president trump and president xi to discuss in the first face-to-face meeting but there is a growing divide over what to do with climate change. i will also speak to former u.s. energy secretary ernest moneys later in the hour. president trump begins two days of meetings with president choosing thing. the two heads of state are excited to discuss north korea after president trump promised to be tough on trade. joining us from the florida is kevin cirilli. the white house yesterday insisted there would be no golf at this meeting. what is the white house expecting us -- telling us to expect over the next few days. kevin: no golf but plenty of policy. air force one is expected to land at palm beach air for. president trump is being accompanied by senior administration officials such as wilbur ross and steve mnuchin. they will then head to mar-a-lago will they -- where they will begin a series of meetings with president xi as well as his administration officials o

the treasury secretary said the tongue for a risk rally. deutsche bank takes first position in the race no one wants to win. the bank hit with the fed's first major fine for failing to comply with the volcker rule. the markets, let's get you up to speed. political risk in europe colliding. the euro a little softer. the treasury market is stable. futures a little firm. continues,ed speech 9:30. neel kashkari and a q&a session. killer pmi's in europe. will the u.s. follow suit? 10:00, existing home sales for march will be out. sunday march the first round of one of the most tightly contested presidential elections in the custody -- in the country. carolyn.s now, great to have you on the program. what is the latest? minister is speaking on the investigation. attackingrently france while -- attacking cran francois. we will hear more from him in two minutes. press conference from the independent a few minutes ago. will be to priority protect the french and the congregates, saying he wants to collaborate with united dates and russia in the fight

the treasury department is the guardian of america's wealth.a worldwide symbol of american prestige. this department was first led by the same gentle man, alexander hamilton, a man who understood that the government must protect the jobs of its citizens and the wealth of our nation. secretary mnuchin, who i have known for so long, and he's so good and so smart and so financially adept, is working very hard every day to do just that. to protect the working citizen of america and to safe guard our finances from anyone, anybody, any nation who would try to take advantage of the united states. his vast experience and financial talent are now being put into service on behalf of the american people. and you'll see what i mean very soon. we have taken unprecedented action to bring back our jobs and return power to our citizens. it's been taken away. we've lifted one terrible regulation after another at a record clip from the energy sector to the auto sector. we have many more to go. and that's going to be happening over the next, i would say, four to

they keep reinvesting in mortgages and treasuries.ou are baking up a bigger problem and qe is restoring the market, which i think is the biggest factor. >> you have to put this in the context of bank lending as well. you look outside the u.s., i think europe and european tapering would be a bigger deal in some sense because it might be a bigger surprise. japanese change of policy would be a much bigger deal, given what expectations are. >> of bias in this market is that the federal reserve normalizes the balance sheet, they will pull back on rate hikes. at the moment, that is all that matters to me. do you buy that? >> i think that's a good point and bill deadly deserves credit for it. they should put upward pressure on the balance sheet. deadly -- dudley acknowledge that. john williams said more or less the same thing of frankfurt this week as well. that's another wildcard, the slope of the curve depending on the balance sheet. >> the federal reserve comes out. i assume you do not usually care much about 18, 19 in a significant way,

that is the 10-year treasury bonds.g to move lower, it is really tough for stocks to move higher in that environment because it takes out the entile financial -- that's pretty troubling for stocks. i think eventually you get to a point where stocks are over sold in that environment and it creates a really strong buying opportunity because we don't see the economic data sort of deteriorating as a result of geo politics. i think that is not likely to be the case. your long-term bull trend is still intact but the short term could become much more painful if the 10-year treasury keeps rallying. >> i am not sure there is a single geo political risk but the combination of risks, if it begins to dent sentiment that is the biggest risk out there. right now investors are still worried about missing out on further upside not worried about taking a capital loss. if that dynamic begins to change i think it spells rouble for the equity markets. >> thank you very much. coming up on this program we bring you out one of the bears. the

treasury secretary will be joining us. all live out of the sea this morning and president trump response to north korea and russia. from new york and washington, this is bloomberg. >> this is bloomberg daybreak. i am emma chandra with your bloomberg business flash. more problems for the embattled ceo jeff staley. the u.s. justice department has joined british regulators investigating him for repeatedly trying to reach out to whistle blowers. they have recommended -- recommended him -- reprimanded him. of mercedes-benz, mercedes earnings were up from a year ago. there are rising demands for the e class sedan. that is three times the growth rate of her cities rivaling the luxury market. the ceo of united airlines is pledging to review the company policy after a passenger was dragged off a flight in chicago. the federal department of transportation has begun its own review as the senate commerce committee told united. that is your bloomberg business flash. i am emma chandra. this is >> bloomberg. over the last few days, the m

we are going to want to watch gold, treasuries. now let's get the bloomberg first word news, for that we go back to hong kong with deborah mao. deborah: thank you. in the u.s., said share janet yellen says the central banks changed to holding on to progress made. she and her colleagues are looking to ease back significantly on the support the fed is providing on the u.s. economy as they close in on their goal of full employment and 2% inflation. if the economy and's of overheating a -- >> -- where we have to raise rates rapidly, which could conceivably cause another recession. we want to be ahead of the curve and not behind it. deborah: south korean presidential hopeful says he would confronted north korea nuclear ambitions i direct talks with kim jong un. the left wing candidate told the press the south is a spectator to the actions of china and the u.s. the u.s. has diverted warships seoul sayson, while they may conduct a nuclear test. is publicly naming and shaming cities over air pollution. the ministry of environmental protect

a favorable treasury market? is that the trade at the moment.ory is 80% of the story. is where we are at at this point. is changing and quite flexible and moving around a lot. you have to be flexible in terms of which basket to use. reflation going to hit next? where does it go now? thing people are worried about is europe. the are we going to get inflection points? they have been critical for the markets. to me, that is where markets are looking most intently right now. >> what changed? the central bank finally kicking in? what got global growth going again? >> i am not sure there has been a dramatic change. you look at the fed and the way they are doing things, they were spooked by everything. now all of a sudden, they have grown more comfortable with the situation. more about a shrinkage of downside risk. >> don't underestimate china. alix: as long as that stays. you are both sticking with us. defensep, you have the and a budget deficit. we speak with a general later in the hour. this is bloomberg ♪. jon: this is bloomberg. in france, unleave

treasury secretaries steve mnuchin and gary cohen will brief reporters at the white house. that's scheduled for 1:30 eastern. you can stream it on the c-span radio app. we heard about the tax reform from steny hoyer. we'll hear about the president's tax plan, we'll look at it but if it gives a huge tax break to the very wealthy democrats, that won't pass muster with democrats. the treasury secretary talked about the tax policy this morning in an event hosted by the hill" newspaper. [applause] >> thanks. well, we timed this event quite well, i think. well, mr. secretary, thanks for doing this. you met with republican leaders on capitol hill about tax reform yesterday. is the administration and republican leaders, are you on the same page and how confident are you this can get done this year? secretary mnuchin: well, first of all, thank you for having me here this morning. it's a pleasure. we've been meeting weekly with chairman brady and people at the senate on tax reform. so since the president has been in office, this is something we've been working on very closely. i thin

i think that there's still demand for treasuries everywhere. not calling for treasury shortage.the federal reserve should be offering their bonds, but we don't have any inflation. i mean, the inflation is caused by the government with tariffs. but, you know, as someone was on today saying there's housing inflation, up in 12,000. i mean, please, the housing inflation is because they're not building a lot of houses but there is a no core inflation at the supermarket and wages. there's just not. >> the fear would be that if the trade strategy broadens, right, that things do get more expensive if with we add tariffs on to aluminum and dairy. >> the wood thing had been simmering for a long time. i had the huge steel user on yesterday. not yet, not an issue, i like that. >> let's get to the opening bell here. s&p at the bottom of your screen. at the big board this morning, warrior met call celebrating the recent ipo. and an online auction company. 2400 and change if you're watching those numbers. >> wow. i mean, there's some stocks that are really popping here that i really like. i me

u.s. 10 year treasuries, 2.3% and change.looking for opportunities, shorter duration, defense and less correlated things to do. we are looking for smaller and under followed capital structures, and staying india's syncretic -- idiosyncratic on the short side. e.m. is as like little bit more stable than developed markets. are you hearing that from investors that they want the yield and a little bit of safety, they will go to e.m. instead? >> a number of investors say emerging-market feel more stable. they are saying in many cases em is decoupling from dm. it is not about how much china trades with the u.s. they trade with europe and around asia. it is not what india is doing anywhere else. india is almost purely a domestic story. you see people investing in things like the msci etf, but taking a step back and redeploying that money into more active strategies, because if you look at the indices in yen they are backward looking. -- in em, they are backward looking. in emerging markets the growth is an internet, mobile banking,

taylor: when in doubt go back to fixed income. 10-year treasury minus the two-year treasury and the spreadat. so we have the election as we know. the big reflakes trade sprayeding out and look what has been slowly coming down. don't let this little fool you. we're still down to the lowest since the election. a few things going on. we have some of the geopolitical risks we saw last week. north korea tensions flaring up. russia tensions flaring up. but finally what struck out to me this morning, scott at guggenheim tweeted out this morning saying he expects a 2% 2%, 20.0-year where a .5% on the a 1 10-year. what i'm hearing is flatter, flatter. vonnie: taylor, thank you for alerting us to that. julie. julie: weighty for the markets and weighty for people individually and their pocketbook. as we talk about this big tax reform issue it's important to note the cost of preparing your taxes is rising. and the labor department actually tracks this as part of the consumer price index. it breaks it down into a lot of specific components. one of them is tax preparation. we're actually seeing a record

the treasury department does participate in that. we will be announcing additional sanctions on syria as part of our ongoing effort to stop this type of activity. to emphasize how significant we view this. we expect that those will ontinue to have an important effect on preventing people from doing business with them. it will be coming out in the near future. i would say, we view sanctions as being a very important tool, whether it is north korea or syria. these sanctions are very mportant, and we will use them to the maximal effect. sec. ross: to me, the most traumatic thing about being and the situation room as he was making the decision was the thoroughness of the supporting information that went into it. the consultation he did with a ide range of military, diplomatic advisors, and the serious thought on which he made this very grave decision. in terms of the strikes themselves, it is my understanding they took out something like 20% of the entire syrian air force. it was huge, not just in terms of number of planes, but relative

treasury was the same thing. not a big drop in the treasury yields.e have seen moves this big this week as well. and all of the asset classes, oil and gold as well, you do not see the big moves. they are pronounced on the screen and we can look at oil and gold right here. 52,is up, but not 2%, so 59, it may be interesting for the gold. and gold a move that we only see 1% on. most interesting was gold, you would expect a stronger move. it could go to 1300, but now we are only looking at 1264. so keep your eye on those moves. with that in mind we go to the first word news. debra: thank you. the u.s. has launched a missile attack against syria, the pentagon says that the cruise missiles were aimed at planes and feel tanks -- fuel tanks at the shayrat airfield. this comes after the u.s. accused the assad regime of using gas to kill civilians. what president trump called, "an affront to community." the u.s. secretary of state says russia has been incompetent over syria. rex tillerson went on to say there were no discussions prior to the strike, however it

why were treasuries so well bid yesterday? to the fed when they're talking about the equity markets, but not when the fed is talking about the fixed income market. we still have a lot of investors in this mood looking to profit. we are seeing inflation grinding higher everywhere in the world. we are seeing the momentum accelerating in the rest of the world. that is calling for a lot more active management. a lot more selectivity than just seeking that dimension. jon: what we have to see european growth pick up that much more than u.s. growth? jean: there's a gap between the u.s. and the rest of the world that is reducing. and doesn't mean japan europe are going to grow faster than the u.s., but the gap is going to shrink. the inflation number over the last 12 months -- the gap trunk. gap shrunk. alix: the output gap is closing more effectively here then europe -- than europe. jean: this is calling for the acceleration in the rest of the world. one of the biggest risks for the u.s. economy would be to have a poorly contracted s

treasury secretary steven mnuchin saying the white house wants to get tax reform done well before the end of the year. let's go to adam shapiro at the white house for more. >> good morning, lauren, good morning, nicole. the president's agenda moves front and center. markets rallied on news from treasury secretary steve mnuchin that the administration and congress will deliver tax reform by the end of the year. the president's economic adviser gary cohn says it will include tax breaks for individuals as well as businesses and secretary mnuchin promises the tax reform package will help the u.s. economy grow stronger. >> just to be clear, we hope this won't take till the end of the year. we are very focused on it. big priority for the president. we will get tax reform done. it'll be sweeping. it'll be significant and it will create a lot of economic growth. >> at a joint press conference with italy's prime minister paolo genotiloni that would allow for a compromise of repeal of obamacare. we have a chance of getting it soon. i would like to say next week but i believe we will get it and

treasury whether it is aaa are aa+. also take the view that we shouldn't have a repeat of 2011. the treasuryou see is behaving. it there is no indication of panic or anything like that. do you agree that political risk is starting to inear in a material way these developed markets of way that they were in emerging markets? >> i think that is the case. if you look at the rating the u.k., and.s., the eurozone. much of this was not just based on fundamentals, but it played a role in some instances. was thehat we thought political institutional environment and structures that make predictive policies less certain than they used to be. there is great uncertainty. of thes is a reflection deeper divisions in society that will make coalition building harder to implement. the forward-looking and foreseeable policies. and of course the parliamentary elections are later this summer. thank you so much. on friday, we will have live coverage of the imf spring meeting in d.c. we will bring you interviews all day long from president ob

mnuchiny treasury steve speaking. walk us through the numbers.e 15% would apply to corporations and small businesses. corporations now pay about 35% and small businesses about 40%. bigger than what house republicans have proposed and they are little bit worried that it might be to date and they won't be able to pay for it. if they can't do it, it will be a temporary tax cut instead of a permanent thing. david: how does the white house one is to see this? they will get action that would lead to a 15% tax rate? >> they see this as an opening bid.- beta -- on the other hand, investors are really confident. they see something like this coming law this year. -- becoming law this year. david: from what we know, how similar is this to what he was describing on the campaign trail? the three-tiered tax system he did talk about on the campaign trail? >> you had larry tebow advising him as well as -- you had larry kudlow advising him as well as stephen more. a corporate tax rate cut to 15% a big went to the business andunity if they can get it no border adj

especially with your background at the treasury is that a good idea?ebt. if you want to pay for infrastructure with 50 year bonds, fine with me. i don't know we why stop at 30 year. there was a period that we'd eliminate the 30 year debt. i'm all for moving out the yield of. >> is that how they'll pay for the -- >> i don't know. i think what we heard from gary and mulvaney is public and private partnerships. private money, tax credits. some through the appropriations process. >> what are you hearing as it relates to the vacancies on the fed especially as they relate to bank regulation? >> sure, there are lots of names being kicked around, we hope we get someone pragmatic and doesn't come in with ideological perspectives. some of the names are very, very positive. >> was your industry happy about dan trujillo resigning -- >> he's an old friend of mine. >> very tough. >> he was very tough. but we had a great relationship. i understood his vision, but time to move on to a different chapter. >> tim adams, thank you for joining us. a staple here at the imf

treasuries up. yields up about a basis point at 223.r broadly weaker with the exception of one cross dollar-yen reclaiming a handle. everywhere else, the euro is firmer. up a third of 1% despite the election in france on the horizon on sunday. and a cable rate firmer at 128 flat. ma: virtu and k.k.c.j. holdings are joining forces. industry profits are shrinking. that deal is $20 a share. and virtu is going to issue some stock. about $750 million in stock. a 15.60 a share. going to be raising debt at $1.65 billion. virtu sees an 65% increasing on that deal. and pay attention to verizon. after a miss on every metric that you want, earnings as well as churn as well as revenue. that stock down by 2% as we wind up on the calling block. come on, disney. david: they needed a new idea. that's why they brought in yahoo!. jonathan: coming up, ken langone, home depot co-founder will be joining us. we're almost a full hour. and later, david zervos, jefferies chief market strategist will be here in new york. the man with a cause. this is bloomberg.

we'll hear from the treasury secretary, the head of the national economic council. they'll outline at least some broad plans for major tax cuts. >> i like what you said which is broad plans because what we're hearing is we're not going to have the level of specifics to determine whether or not president trump is making good on his campaign promise to help the middle class. here's what we know in broad strokes. president trump wants to simplify thetach code to take seven brackets down to three brackets. he wants to will the alternative minimum tax. that is a tax that's meant to make sure the wealthy pay their fair share of taxes but it has increasingly punished the middle class. he wants to eliminate most itemized deductions. all of that is very broad strokes. we need more details. and it's very much consistent with what we've heard on the campaign trail. and at that time when i was reporting on it, what i heard was broadly speaking, this will help the very wealthy, the top 1%. that's the conclusion that many economists came to at the time. and right now, that's all