bonnie: we think treasuries hold bonnie: we think treasuries hold more value. bunds are more distorted. jonathan: greg? gregory: same answer. jonathan: brian? brian: no question. jonathan: everyone will be sticking with us. gregory peters, bonnie wongtrakool, and brian rehling. coming up, it is the auction block. a big week for high yields. the market sucked it all up. this is bloomberg "real yield." ♪ ♪ jonathan: i am jonathan ferro, this is bloomberg "real yield." i want to head to the auction block now. the u.s. treasury with three main offering so far this week. i want to focus on the $34 billion 5-year note sale. it had a ratio of 2.67. 23% of t total, e least in about a year. look at the moody, the pipeline for those bond sales dropped. it marks the lowest number in two months. it continues a borrowing slow down in the moody market. where there has been no slowdown was in the u.s. high-yield, the biggest week for issuance since march. the year to date total more than $120 billion. here with me in new york is greg peters and bonnie wongtrakool from western

what will that do on the treasury market?rian: in an average year, the 10 year treasury trades at about 120 basis point range. either the higher or lower getting taken out some point this year. we will see which way it moves, but i do not think we will trade in between those levels for the rest of the year. in terms of your other question, yes, absolutely, international yields have been an anchor. the ecb, i think they have learned a lesson from the taper tantrum in the u.s., so look for them to be very cautious and measured as they slowly roll back their language, and eventually taper into next year. i do not look for quite the market reaction we saw in the u.s. because i think they have learned some of the lessons. bonnie: we would agree with that at western asset. we have seen growth improve and the eurozone. european credit, especially with respect to the banking sector but with respect to ecb action, they will be very cautious. medium-term stability at or below 2%. the rise in inflation they have seen, they view that as

hundreds of millions of dollars off their balance sheet treasury and banks have doubled the treasuryngs. what are they going to do if we do see some deregulation which i think that is one thing that is certainly reasonable to expect. jonathan: what is the balance sheet unwind. look at the end of the year? what is the actual policy look like? be aa: i think there will lot more conversation around it. i think it is hard to put any kind of specifics around it, especially in terms of how it will affect the market. generally, the market stands toward the fed. it has been somewhat this missile. jeff: i think the fed has been sensitive about not disrupting markets that i think the balance sheet on wind will be gradual and i think they will not simply let whatever matures runoff, but my expectation would be that they would set a monthly limit that they would allow to runoff and that will be much more gradual than letting the $650 million -- or billion over the last -- next year runoff. jonathan: greg davis, is that how you view it? almost a nonevent? greg: i would not say a nonevent, but the

because when this was aggressively short treasuries, it was time to go long treasuries, and now the positioning changed. do you have to go the other way to think about where the positioning is? >> on balance, you need to think about positioning, but it does not change the fundamentals of the trade, so you are talking about 10 to 20 basis points. that is real money, don't get me wrong. but at the end of the day, the longer-term trends are in place that i think serve as a range bound type of existence for 10 year yields. jonathan: what do you make of that, the consensus reflected in the speculative positions has often been wrong in the treasury market over the last couple of years. will it continue to be so? >> yeah, i mean probably. right now, i think the market will be relatively calm for the balance of the year, as to the other guests, but the market has a funny way of surprising us. jonathan: i ask this question on almost every show. have we seen the low? the 10 year yield low? the print of about 2.16? have we seen that yet? i am going to ask you the other way, have we seen the high on the 10

he wrote "lousy 10-year treasury auction. are all the investors that turned bullish in 2015 talking about 150?" apparently you are meant to buy low and sell high. let's bring in our roundtable, greg davis. oksana, the itr account raised a lot of eyebrows. i want to ask you to respond record in mr. gundlach. but the story really is that the market has changed in terms of positioning. if you're looking at futures, coming into the year, huge sht, now a marginal long. what do you make of how the market is set up in treasuries? oksana: the market is still massively long, this kind of risk generally. long, traditional, interest rate-driven fixed-income risk. let's get that very clear. any amount of open short interest out there that fluctuates is meaningful and important to follow. generally, if you look at individual portfolios, institutional portfolios, and think about the risk parity funds, there are volatility driven. think about the amount of leverage they are probably amassing. they arerobly at or about max leverage and any k

yields still grind lower on ten-year treasuries. why?gory: you look at the balance of data, it has been mixed. there has been an upward revision of the first quarter but it is still at the same kind of trajectory we have seen the past few years, 2%. i don't think that changes. i think the inflation number is key. in my mind, inflation peaked in february so the fed is doing anti-qe. we have had all of this stimulus thrown at the u.s. economy and we grew 2%. what happens in an anti-qe type of environment when inflation is subsiding and coming down and growth is not on the same track that many thought? i think that is your answer of why yields are where they are. jonathan: does that mean the are going tos have a tough time for the rest of 2017? brian: i think so. i think we are range bound. the previous guest was spot on, it is the inflation story. while the survey-based measures are ticking up, you look at the long-term market-based measures of inflation and they are starting to trend a little bit lower, from a quite low level so i am not

treasuries. -- treasuries, specifically in the trading of securities, the head of treasury options.we reported this morning was that several banks have been subpoenaed recently, last month, as part of this investigation. the banks that we disclose today have been subpoenaed, bnp, rbs, and ubs. vonnie: what exactly are they being investigated for? being investigated -- the justice department began as a pretty broad look at whether there was manipulation in this market, similar to what prosecutors found in libor and currency rates are they took a bride look to see -- broad look to see in terms of collusion and any type of fraud, whether that was occurring here. now that we are seeing subpoenas, that usually is an indication that prosecutors are sort of now come up with the type of theory for potential -- for a potential crime. it doesn't mean they found any crime at this point, but now that they sort of entered a new phase. oliver: do regulators need to see a profit made or some kind of a value gains by the folks they are looking at, or is it enough to say they are talking in ways the

we pull back from that 3% handoff on 30 year treasury. on the program, it is the final spread. we also have the week ahead with trump talks in europe. the federal reserve releases minutes. you're watching and listening to "bloomberg real yield." ♪ ♪ jonathan: from new york city, i'm jonathan ferro. this is "bloomberg real yield." it is time now for the final spread. president trump makes its first -- makes his first overseas trip, which includes nato and g7 meetings. the fed will come out with meeting minutes from its last meeting, and we will of course get a g7 summit a little bit later in the week as well. back with us for our roundtable, matt hornbach, lisa abramowicz, and jim barrineau. matt, next week, we had the opec meeting, and the fed minutes. e d minutes, what are you looking from that? matt: we are looking for more details on w the fed intends to wind down its balance sheet. will they go at treasuries and mortgages? will they cease reinvestment on only mortgages? we will get more details. hopefully, we will get more details on

as treasury secretary. it will cover issues from tax reform, the rollback of dodd-frank and china's role as currency manipulator. mark: we will be watching to see if steven mnuchin addresses the latest from administration -- latest trump administration. we will bring good in his testimony as it begins. vonnie: that is him taking his seat right there. open statements set to begin in a few moments. first, the markets fell off in the u.s. yesterday. bloombergs julie hyman is here to bring us up-to-date. julie: it is moderating to some extent and that isn't unusual. we looked at the last 10 times ofsaw stocks fall 1%, eight the 10 times, stocks are covered and closed higher the following day. the stock market in the u.s. lost half $1 trillion in yesterday's session but is looking next today. a lot of focused today isn't just on the big picture and washington it continues to be on retail. there was a sigh of relief at the result of walmart, with the benefiting from their online sales strategy after the acquisiti

we find that quite a bit has come out of the treasury market. little more than you would expect if you just look at the 10 year treasury yields themselves. one of the things i like to do is looking at our 10 year treasury premium measure. you can see here is we have taken out quite a bit of the postelection jump in term premia. two-yearn look at the tenure spread and see the narrowing. it is at the narrowest since the election. that igood like at how the trump trade has been narrowing. markets have not bought into the trump trade as much. jonathan: we will get to the spreads and the curve in a moment. in june.e move we ought to move in september. is fading the fed the right thing to do on the back of political drama through the week? >> i think it is too soon to say for sure. stories are hitting the tapes with a frequency we are not used to. i think it is probably too early to hit the fed. our theory is the fed will hike rates in june, and continue telling the markets that they will probably try to get another one in this year. broadly, for em m

treasury yields grind down. will the chaos in washington throw it off course?s it a wake-up call for em? if you don't one impeachment in brazil was dramatic, markets break for three in a row. we start with the big issue. a week of messy politics finally breaks the calm on wall street. >> ultimately, you want to have a functioning washington. we are still the most important government and economy in the world. if that all comes to a screeching halt because of these issues, that is not good for anyone. >> that is the thing we have to gauge. do people have confidence that this administration will not only get the big themes out there, but deliver on them? >> if you want to keep everyone happy, he has to do real policy stuff and not just send out tweets. >> this trump trade that we have embraced and that has driven the market to new highs in equities is coming to an end. >> the trump trade is great for news and is like reality tv playing out in politics. reality tv tends to have a short-term nature in terms of politics. i think investors will take this in stride. j

are you treasury and fha working together to prevent another draw on treasury by the gses?so, how are you doing that. >> what was the question. >> are treasury and mell watt and you working together to prevent another draw on the treasury by the gses and if so, how are you going to do that. >> no, my conversations with mel watt have been specifically one around the dividend and that we believe the dividend payment should be paid and two, that we are willing to work with him and with congress on housing reform. those are the conversations we've had. >> okay. thank you for that. >> thank you. >> senator warren has come back and she wants to briefly ask a few questions. we do that and then we will be done. >> i will not ask about glass/steagall. i want to ask about the tax proposal that the administration released a few weeks ago. it proposed slashing the rate on all pass-through entities, partnerships, ll cz, s corps to 15%. i just want to take a look for a minute who that benefits. 70% of all income from pass-through entities goes to the top 1% of taxpayers. that's household

from the treasury department crimes enforcement network.orted at the time that not only had senate intel asked them for help with their investigation but the financial crimes enforcement network at the treasury department said, yes, they would turn over financial records for which they are a repository agency. if they had any records that would be relevant to the trump/russia investigation. that request by senate intel is part of how we knew that around the time the white house started freaking out and doing things like firing the fbi director, there was also this shift in the trump/russia investigations at the same time about checking out potential financial ties and business ties. it's part of how we observed that shift hang. now we can observe that something appears to have gone wrong there. we first got an inkling of this last week. senator mark warner let it known that even though the treasury department was cooperating and handing over these records, in reality, they weren't handing anything over. >> we requested documentation that wo

jonathan: bunds or treasury to sell? mike: treasuries. priscilla: treasury. luke: bu all day long.jonathan: we finally have the trade on the table. special thanks to mike swell from goldman sachs, priscilla hancock from j.p. morgan, and luke hickmore from aberdeen. thank you very much. bloomberg tv and radio will bring give special coverage of the french election this sunday. from new york, you have been watching "bloomberg real yield." ♪ >> 12:30 in new york, 5:30 p.m. in london, 12:30 a.m. in hong kong. i'm vonnie quinn. welcome to "bloomberg markets." ♪ vonnie: from bloomberg world headquarters in new york, here are the top stories on bloomberg we are following. a rebound in payrolls after a week march report. u.s. sales gaining more than forecast. spot in the soft report. we will examine. in commodities, oil is paring losses after a sharp selloff. the head of commodities research says that the oil's love is driven by tentacles -- boils slump is driven by technicals more than fundamentals. and giving berkshire hathaway investors something to talk about at the annual meeting this

treasury the hearing is two hours 15 minutes. [inaudible conversations] [inaudible conversations] >> the hearing will come to order we will have testimony from the secretary treasury on domestic and international policy issues thank you for attending today. this is the first hearing since being sworn in as treasury secretary in february in record to our discussion many of these priorities ball to the jurisdiction of the department including housing finance reform to encourage a healthier economy. we look forward to working with you and your staff to improve the lives of americans housing finance reform is most significant piece of unfinished business following the crisis and it is important to build bipartisan support we received a hearing last week that it we were advised congress needs to iraq to determine the future of housing of finance reform by the conservatorship is unsustainable mainly gse having zero capital taxpayers on the hook for losses in the government taking all risks. the number of groups that receive proposals f

fa, weree treasury and together to prevent treasury by on the the gse? >> my conversations with mel watt has been one around the dividend and we are willing to work with him and congress on housing your form. those are the -- housing reform. those are the conversations we have had. >> i want to ask about the tax proposals, itax want to take a look at how that fits, 70% of all income from past comes to the top 1% of taxpayers. that is households making more than $450,000 a year and according to analysis of the nonpartisan tax policy center, this would put over $1 trillion in the pockets of the top 1% of households while 95% of middle income households would receive zero in tax benefits from it. other than creating new tax reductions -- tax reduction for yachts, it is hard to come up with a more targeted tax cut that goes to the rich other than --s cut on the rates with working families struggling ends meets, wife administration giving the ultra wealthy this tax cut? >> i can assure you we are not going to allow all pass-throughs to get that rate. thate go

investment-grade spread treasuries are already too tight.'re talking about a double whammy potentially for emerging-market credit spreads. we focus on the u.s., and we think at some point the bell will told for u.s. investment-grade debt. jonathan: what do you say to them about em? jim: there is not an asset class on the plan that is really cheap. we still have a relatively robust spread to the global government bond. we wiped out a lot of currency overvaluation in em. now we have not percheap currencies, but cheaper currencies. look at real yields emerging markets versus developed markets, there is a tremendous gap. there is still value. jonathan: i keep going back to 2013, can they really get on a balance sheet reduction path at the federal reserve without jim's world seeing significant trouble? matt: i think the fed's view of the balance sheet is a tool they want to use in a passive way. they want to set it and forget it. if we get a couple more rate hikes this year, that is what they are going to start doing in 2018. i think the fed will

>> is a will. >> for the treasury and f.a. working together to prevent another draw on treasury, how are you doing that question right >? >> are you working together to prevent another draw on the treasury by the gse's, and if so, how will you do that? >> my conversations have been thecifically around dividend and we believe the dividend payments should be paid. and we will work with congress on housing reform. those of the conversations we have had. >> ok. thank you for that. warren has come back and she wants to briefly ask a few questions. we will do that and then we will be done. >> i want to ask about the tax proposal that the administration released a few weeks ago. a proposed slashing the rate on all pass through entities to 15%. i want to take a look at who that benefits. 70% of all income from pass through entities goes to the top 1% of taxpayers. that is households making more than $450,000 a year. according to an analysis this week from the nonpartisan tax policy center, this change would put over $1 trillion in the

treasury yields didn't.ds have been an interesting reaction because this is not what you would expect the treasury yield to have following a disappointing set of u.s. economic data released overnight. defense favorite measure of -- theon slowed in march fed's favorite measure of inflation slowed in march. yvonne: before we let you go, when did we start repricing the that bet? -- the fed that? guest: right now, money market have fully priced in a 25 point basis rate hike this year. we think there is a likelihood that the fed will raise rates to more times this year and begin tapering its asset purchase program. in u.s. economy is still good shape despite the slowdown in q1. ofency pick up in the pace average early earnings on friday -- we should see pick up in the pace of average early earnings on friday. this means the fed is on track to raise rates to more times this year. that could potentially provide the u.s. dollar with some support throughout the years and. yvonne: thank you so much for joining us. sen

treasuries.ve mnuchin providing the clearest signal yet the possibility of issuing ultralong bonds, saying on bloomberg tv that it could absolutely make sense. it pushed yields higher across the curb, and they have held those gains today, yields holding above 3%. we are seeing some curve steepening, the gap between five-year and 30 year yields reaching its highest since february. and i want to show you oil, brent has also fallen below the 200 day moving average, along with wti, oil trading near a one-month low, the u.s. gasoline supplies causing concerns. anna: thank you. in an exclusive interview with erik schatzker, citadel ceo ken griffin says he would be both really excited to see a breakup of the big banks to increase competition and boost the economy. this follows comments from president donald trump, about bringing back a version of the glass-steagall law. the globalpoke at conference in beverly hills. >> it is way too early to tell. feet,of all, at 100,000 the move to reduce regulation in

without the consent of treasury? >> yes. i also want to assure you my first option obviously would be to work with the secretary of the treasury. these are contractual agreements, not legislative agreements. it is a contractual agreement between us and the secretary of treasury. modest changes is the first and most prudent, the responsibility for that risk falls on me as the consumer. >> why you believe you have any authority, without getting agreement from secretary of treasury and dealing with this. >> you talk about potential and swat impending concerns about tax reform and short-term losses. the corporate tax rate, and others come to that, you don't know yet, and f hfa limits, they retain capital, as you spoke about, prohibits capital next year. and what it would do to access to mortgages in the broader housing market. if you would dig down a little deeper on what tax reform goes. >> >> they can range, from our analysis, $5 billion up to 25, $26 billion. obviously the extent of those tax reforms, that is a short-term imp

jonathan: there is a treasury market. let's bring up the 10 year treasury over the last month. 217 or 218.w as it is now at 224. we have granted lower on the tenure. how much has this been a risk off move and how much of it has been fading in the reflation story? >> i think it's a combination of both. -- ie last week, it's been would argue that at 225, the market is already priced out of trade. the equity market had not. if you look at pricing, the market still has a 70% chance of the june hike. they are comfortable with where the fed is. if equities fall as the trump trade gets priced out, it is largely the fear that the equity market is going to be where it is. if we do not get this, there is still this showing up. at,than: whatever you look it is a flat curve. what is the message coming out of the spread for the federal reserve? >> i think it's telling you that the market has priced out the trump trade. the market sees to hikes between now and next year. we have only priced into fed hikes. that, if you get significant

they go part to hud and part to treasury. so we don't have any control over the disposition that has been made of those funds, but we did have the authority to make the decision to fund -- to -- to reverse the decision that had been made not to fund the housing trust fund. and we made it, and i think it hopefully is served the useful purpose. >> i want to thank you for making that decision. as you pointed out that was consistent with the statute. i appreciate your moving forward and i just want you to know that maryland is using its allocation of those funds effectively. so thank you. appreciate it. thank you, mr. chairman. >> thank you. senator warren. >> thank you, mr. chairman. good to see you again, director watt. i'm glad this committee is tackling finance housing reform again. i'll push the same point i've pushed since i joined the congress in 2013. we need to end the government conservatorship of fannie mae and freddie mac. and we need to do so in a way that protects taxpayers established and explicit government guaran

we've had a very large group at treasury working on this. one of the things that i emphasized to the team ahead of time was we wanted to make sure we reached out to many different groups and got feedback that this was not something that treasury was designing on its own. i know certain people refer to this as a review of dodd-frank. that's one of the things we're looking at put it's much broader than that. in looking at the core principles. we have met with over 16 different groups, many of them having 50 to 100 people. we've had community banks, we've had small and medium-sized banks. we have reached out to each one of the regulators and had working groups with each one of the independent regulators to make sure we have input from them. and we will be issuing a series of reports, the first one coming out shortly which will be on banking and i will say, one of the big focuses will make sure that as we have different regulators, we have proper coordination between them, and this is something i've also been working on at fsoc where i take my r

so it appears at the moment, if you look at how the treasuries have been trading, although the treasurycked up a little bit by a day or so, it looks like interest rate risks or increases are less likely, and that even more so forces people to focus on the chance to take credit risks because it looks like we will have a continuation on the economic side. >> what you start to see when liquidity dries up is all of a sudden people start going down, companies have problems. this is the beginning of the chinese credit crisis. >> you believe we are seeing it now? >> sure. >> we've been talking about the inflation of the bubble, but the timing is hard. >> this is 10 years in the making, and i'm not good enough and very few people are adept enough to decide exactly when it happens. but if one were to say the system is running out of money, what would you see happened? -- see happening? well, one of the charges i gave you is the charge on the interbank corridor. in march, you saw a rate spike over 9%. when the corridor chop is 3.45%, so what happens when you have maxed levered system with interba

in the treasury secretary told bloomberg news that they like the idea of a treasury, of a 50 year treasuryng end of the curve sold off quite substantially. we don't like it so much. i'm wondering how much the market can absorb in the fed is looking how much to put into the market each month. how much can the market absorb right now? on a monthly basis, it is tens of billions. it is initially not really the set that matters but what is the path of issuance that it has to be because of budget deficits? we have this issue coming up where a lot of baby boomers are retiring. increases ofbe deficits just because of the increases in social security and medicare payments. will the bond vigilantes come back soon? i don't think so. in a year and a half or two years? perhaps as deficits start running away regardless of what the fed does. tom: i don't think it's a secret to anybody that i needed help speaking to mr. bernanke. carl riccadonna saved the day. carl, i asked your princeton colleague about the buffer needed for higher interest rates as we did our ballet with the balance sheet. need does the

look, if you look at the 30 year treasury able yield around 3%. the benchmark treasury is 2.3.rrange on the 10 year treasury lately has been between 2.30 and 2.3 6 -- 2.60. if you think at some point the fed, given the economic data and the stimulus from the government comes through and they get to 1.5%, you need to get paid a little bit more to own assets. 2.30 seems fair to be slightly rich and 30 year treasuries at 3% seems slightly rich. a little bitpaid more so expect those to rise over the next few months. >> -- yousef: does that mean you agree, don't join the , itd paid -- the stampede can be blinded times. >> it is. people are talking about credits. you have a great credit under two sections. saferve to think about companies, safer borrowers, banks, default risk is low. you have to worry about high-yield or junk bonds. if you look at the high-yield sector, things look expensive. they have had a big rally. yields are not very high. investments great is not that great but at least you get liquidity. we will tread very carefully into high-yield. we do not own any high-yiel

department of the treasury. this unit was created in 1990 basically as an anti-money laundering law enforcement agency. after 9/11 its power was boosted, controversially, in part by the patriot act. after 9/11 this was the unit of treasury that went hard and fast after the financing of al qaeda. all over the world. they tracked and disrupted formal and inform am funding streams that were supporting al qaeda, not just in afghanistan and pakistan but everywhere al qaeda operated. so this is a power. capably, tex nickally mined investigatory agency that tracks money laundering. they have a fearsome reputation. they got a world wide agreement. and a story that just broke in the "wall street journal" is this unit, this enforcement unit at the treasury, these money laundering cops, basically, have decided to hand over what they know to the trump-russia investigation. quote, a treasury department unit that specializes in combating money-lapdering will share financial records with an expanding senate probe into possible

treasuries rally with gold.pdate from our senior markets correspondent, julie hyman, shortly. ♪ nowt, the memo written by former fbi director james comey. the reporter who broke the story

we want to listen to the treasury secretary, steven mnuchin. >> -- for the first time as treasury secretaryrk with congress to create and maintain prosperity for all americans. i want to reaffirm that commitment to you today. let me begin by discussing the treasury's recent report on foreign exchange policies of our major trading partners. ensuring that american business, consumers and workers face a level playing field is one of the essential components of this administration's agenda. when foreign governments engage in currency manipulation, it makes the playing field uneven which is why we regularly monitor these practices. after careful study, the treasury department has found that no major trading partner met the criteria for currency manipulation during the current reporting period. we will continue to follow this important issue and have accomplished a monitoring list of economies that warrant close attention. this list compromises china, germany, japan, korea, switzerland and taiwan. additionally we are committed to rethinking our foreign agreements and trading practices to ensure t

that is something we are considering at treasury.k: an wilbur ross shares his thoughts on what needs to happen with nafta. >> nafta is an old agreement, and obsolete agreement. it does not reflect the current status of either the mexican economy or the american or the canadian. ♪ ♪ erik: welcome back to a special edition of "bloomberg best." from the milken institute global conference. i am erik schatzker. president trump has promised to overhaul financial regulation, health care, and the tax code as part of his vision for america's future. john micklethwait spoke with treasury secretary steven mnuchin about the administration's plans to spur growth and enact reform. mr. mnuchin: i think there are a lot of things we need to do to create economic growth. the tax plan is one of them. we think reform of the tax plan, middle income tax cut, making businesses more competitive. we also need regulatory relief. too many businesses are held back from making investments because of excess regulation. we also need fair trade. john: firstly on th

the pspa is a contractual agreement between us and the secretary of treasury. so modest changes tots pspa would be the first and most prudent way to address this issue. >> understand. >> but if that fails, the responsibility for that risk falls back on me as the conservator of these enterprises and we cannot afford to run that risk. >> well, thank you. my time has expired and so i would just like to ask if you and your staff could provide us with your legal analysis as to why you believe that you have the authority without getting agreement from the secretary of treasury and dealing with the third amendment. >> be happy do that, sir. >> thank you very much. senator brown. >> thank you, mr. chairman and director watt, again, thank you. your testimony you talked about the potential and who knows what impending concerns you have about tax reform and short-term losses. let me start with that. the president's proposed tax reform plan that would cut the corporate tax rate from 35 to 15, if the finance committee and others would come to that, we don't know yet obvious

hud go parts to hug and -- and part two treasury. we did have the authority to to reverse theon .ecision that had been made we made it. hopefully, it has served. >> i want to thank you for making that decision. i appreciate your moving forward. i want you to know that maryland is using its allocation of those funds effectively. thank you. >> senator warren. >> good to see you again, director watt. i am glad this committee is tackling housing finance of form again. -- reform again. we need to do so in a way that protects taxpayers and establishes an explicit and paid for government guaranty and provides more affordable housing options for people in massachusetts and across the country. access, theion of current mortgage rules define certain loans as qualified mortgages or qme, and offer lenders equal immunity for ones that meet the standards. it also grants status to any mortgages eligible for purchase by fannie mae or freddie mac. it means that the underwriting -- at fannie any and freddie helped define the scope of the qme rule. acc

>> is a will. >> for t treasury and f.a. rking gether to prevent another drawn treasury, how are yodoing that questio right >? >> are you working together to prevent another draw on the treasury by ese's, andf so, how ll you do that? >> my conversations ha bn thecifillaround vidend and we believe e dividend paymentshould be paid. and we will work with coness onoung reform. osof the conversations we have h. ok. than you for that. warren has come back and she wants torieflysk a w questions. we will do that and then wwi be done. >> ianto askbout the tax propos tt the administratn released a few weeks ago. a proposed slashing the re on all ps throu entities to 15 i want to take a lk at who th benefs. 70ofll incomfr ps thugh entities goes to e p 1% of xpayers. th is households making more than $450,00a year. according to an analysis this week from the nonpartisanax policy cte thi change would put over $1 trillion inhe pockets t top 1of househol, wle 9 of middle inco houselds would receive ze in tax benefitsrom it. other than crea

much further there is to run on treasuries or treasury yields with the trump agenda being delay. much does the trump agenda matter to you? >> as we go further through time, this early in the presidency unless worried about it. we need to start seeing some fiscal measures come through the u.s. and europe as well. the agenda needs to start taking up the slack a little bit from monetary policy which is easing off. if you go into next year it does put risk on interest rates going up next year. treasuries, this is a ifsible place for them to be we see inflation recover again in the autumn, we push on to what we were seeing through the end of last year. and really tore 3%, would make a lot of sense if the trump agenda come through next year. were stuck in the 2% area. who knows, but it's not over 3%. matt: luke is going to stick with us. stay here to help us parse through a number of issues. the fed conversation continues throughout the day. we will speak inclusively to the ,anguard group ceo, bill mcnabb another interview you don't want to miss. is philippg us hildebrand at 9:30 londo

treasuries on offer at the margin.gainst the stronger euro with impressive economic data. six-year highs for manufacturing in the eurozone. 16% of the rally year to date has come from apple. what's the risk into earnings? analysts are estimated to dollars a share for earnings. you had ubs warning yesterday of a after iphone demand. he says it could be a cautionary flag. you have a super cycle coming potentially in the fall. it missed estimates s server chip sales really stalled. there was a bright spot. second-quarter revenue outlook was up 12%. we have murder tuesday for you. iac buying angie's list. trading well below that now. it's going to combine angie's list with home advisor and create a new spinoff company. 38%.ues up angie's list has been really hammered. our top story, president trump tells bloomberg he's at least taking a look at breaking up the banks. here is what he told us yesterday. >> we are looking at that. some people want to go back to the old system. we are going to look at that. we are looking at i

shorth commodities and treasuries?atic changes going on in the oil market. opec said he will be a cartel again. they have been making some changes. there are still questions if they will stick with changes in how compliant they will be. will non-opec members get involved? so the market is paying attention to these parables. , rebar, copper, nickel getting hammered as well. why isn't that in your opinion on brent and equities? thatlot of that is not surprising given that china has been pumping the brakes on its stimulus. when you look at what they have done going back a year and a half, it is the opposite. you saw china aggressive in terms of real estate, stimulus and other categories, and today they are slowing down, so the fact that iron ore and metals ve rolled over is not surprising. david: if it is no longer a marker for global growth, what are the markers for global growth? focused on to be fundamental drivers, the consumer in the u.s., export growth out of europe and how that trickles down. david: trade numbers a