u.s. central bank raises interest rates again hard. that's right it's the highest it's been in a decade now the u.s. federal reserve has raised its key interest rate by a quarter point to between one point seven five and two percent it's seen as another sign of a more aggressive stance ahead head for the u.s. central bank it's already the second hike this year and it's unlikely to be the last the fed signaled they'll be two more raises before the end of the fed chairman jerome powell said the rise reflects the economy's resilience the strength of the job market and inflation finally nearing the fed's target level it also means consumers and businesses will pay more to borrow money over time the european central banks monetary policy committee is meeting today as well and unless i'm sure the e.c.b. will take a cue from the fed. i'm not joined by five yelena from the macro economic policy institute at the hands of brooklyn foundation and welcome to the studio dr was european politics emerging market turmoil is on shaky ground right now is

u.s. central bank it's already the second hike this year and it's unlikely to be the last with the fed signaling they'll be two more races before december fed chairman jerome powell said this rise reflects the economy's resilience the strength of the jobs market and inflation finally nearing the fed's target levels but it also means consumers and businesses will pay more to borrow money the european central bank's policy committee is also meeting today and analysts are not expecting the e.c.b. to take a cue from the fed and also raise rates we'll have more on that in later shows. folks are now has agreed to pay a one billion euro fine as a direct consequence of the diesel gate's the comic or accepted an order by german prosecutors which saves the company a battle in the courts the emissions trading scandal has already caused v.w. a total of more than twenty five billion euros many in fines to u.s. authorities. v.w. is reeling after being slapped with another billion euros in penalties on top of that the company must pay in the u.s. as a result of the emissions cheating scandal around eleven mill

u.s. central bank it's already the second high in twenty eighteen and it's unlikely to be the last with the fed signal signaling they'll be two more races before the end of the year federal reserve chairman jerome powell said the rise reflects the economy's was illions the strength of the job market and inflation finally nearing the fed's target level but it also means consumers and businesses will pay more to borrow money over time the european central bank's policy committee is meeting today and analysts are not expecting the e.c.b. to take a cue from the fed and also raise rates. has agreed to pay a one billion euro fine as a direct consequence of diesel gate the car maker accepted an order by german prosecutors which saves the company a battle in the courts the emissions cheating scandal has already cost v w a total of more than twenty five billion euros mainly in fines to u.s. authorities three v.w. is reeling after being slapped with another billion euros in penalties on top of those that the company must pay in the u.s. as a result of the emissions cheating scandal around eleven mill

got to pay attention as piece says to what's going on in europe because we've got central banks that are out of sync u.s. central bank. and it doesn't matter it will provide opportunities. >> it's a big catch here integrated we've got refineries. >> i'll still buy chevron. >> okay. >> i continue to like it i'd buy exxon as well. >> i'm extremely overweight, unfortunately. i don't like as much weighting as i put into this sector. i am in it -- >> that's just because the sector went up far faster than you thought. >> well, i think it's because it didn't track with oil. whether it's exxon or search ron, they didnro chevron, it doesn't move the way you expected to move even if oil grinds, mel, for some of this to rise higher even throughout that grind. i'm so exposed it's going to be showing up later. >> that's a tease. >> that's a tease but i'm in the service games, emp names >> number one pick in your portfolios? >> of all of them? >> yes >> of all of them, exxon >> in the group there i think we finallyhave a supply-based market upside is fine oil prices we can take the world needs 7% less toil produce th

step with is out of measures taken by central banks in the u.s. and europe.re than 2700 journalists and analysts in more than 120 countries. you.: thank the big news now is the tariffs we are waiting for out of washington. they may reduce the number of items on the list am a focus on take quite a bit. to retaliate. >> the u.s. is implementing a 25% tariff on chinese imports. we have the headline now. i am waiting for more specifics. list.y have just the you have to cross-reference with those actually are. the 2025y do include plan. >> this was the plan to dominate industries. a lot of them high-tech. the president put out a list of 1300 products in april and narrowed those 28 or 900 focused on the tech area. we don't know exactly what they are looking at. flap of tv's, centrifuges, things that go into other products that would help. we are waiting for that to be cross-reference. 50 billion, and the chinese have said they would retaliate quickly. we could have a couple of hours of trade wars underway. john, we want to welcome he was a deputy united states trad

u.s. central bank is expected to raise interest rates. the fed intends to hike rates three times this year,all street looking for any sign it might change plans. the u.s. budget deficit widened to 23% during the first eight months of the fiscal year. the deficit tracks the difference between how much money the government spends and takes in. the total, $532 billion. why the big jump? lower corporate tax revenue coupled with ramped up spending. >>> elon musk wants tesla to be profitable, so he's laying off 9% of staff, several thousands jobs. he said the cuts will affect salaried positions. he's consistently missed production deadlines for the first mass-market car but promises to reach its goal by the end of the month. >>> "early start" continues right now with a big winner and the big loser from the trump-kim summit in singapore. >>> president trump lands at ins fresh off his summit with kim jong-un. can the president deliver a verifiable deal to denuke the korean peninsula? >>> back the president or pack your bags. voters sending a clea

u.s. central bank. the feds are expected to hike rates today to the tune of 25 basis points.is a good reaction, bercetlive from london, thank you. >>> coming up, axios' jonathan swan has a look at this morning's one big thing. and on "morning joe," president trump turned salesman over his sit-down with kim jong un. the president pitches the korea summit as a win for the united states as critics point t ck of specifics in the agreement with pyongyang. >>> senate foreign relations committee members democrats chris murphy and bob menendez along with democratic congressman tim ryan weigh in as whether the summit was actually a success. >>>nd former homeland security secretary jeh johnson joins the conversation. there is no going back. everything's changed. we're not on an island anymore. genetic power has now been unleashed. we've entered a new era. welcome to jurassic world. [ scream ] rated pg-13. >>> welcome back, joining us from washington with, a look at axios a.m. national political reporter for axios jonathan swan. jonathan, good morning to you. good to talk to you. tell u

u.s. central bank is expected to raise interest rates.o hike rates three times this year, but wall street is looking for any sign it might change those plans. >>> the u.s. budget deficit widened 23% during the first eight months of the fiscal year. the deficit tracks a difference between how much money the government spends and takes in. and the total -- $532 billion. why the big jump in lower corporate tax revenue coupled with ramped up spending. >>> elon musk wants tesla to be profitable so he's laying off 9% of his staff. that's several thousand jobs. in an e-mail to staff, musk said it will afft salaried positions and not touch model-3 production stuff. tesla has consistently missed deadlines for the first mass-market car but has vowed to meet goal by the end of month. >>> paul marciano will step down following an investigation by guess into his behavior. it was found that he exercised poor judgment with models and photographers. marciano verbally harassed and touched her inappropriately. marciano denies the accusation. >>> breaking o

u.s. central bank continues its path towards normalization. the fed is widely tipped to raise overnight borrowing costs next week, which would bring it close to its inflation target, and this means that for the first time in almost decades, the cost of borrowing dollars will no longer be essentially free, and jan hatzius, chief economist with goldman sachs, is still with us. i want to ask you but next week's payroll numbers, because i find it interesting that the economy is creating 225,000 jobs a month at a time when we're close to max employment. it suggests to me perhaps we're nowhere near max employment. >> well, i think we are -- my view is we're probably a little bit beyond full employment i mean, there's always a range of uncertainty around these estimates. this is not precise. but when i take all of the different signals together, it seems to me that we're a little bit beyond the stainable level of the unemployment rate or the employment rate. and we are still creating a lot more job long-term trend, for sure, which we would put at abo

investors are keeping a close eye on central banks. the u.s. federal reserve and the european central bank are said to have their policy meeting this week. european stocks are comfortably in the green at midday led by london up 4/5 of a percentage point. some more of the business headlines. f found newsaid it's problems with jet engines. impacting the durability of its engine that carry dreamliner's have been found on another type of engine. the company has asked for more inspections on aircraft. it is already caused plans to be grnded. united arab, the emirates, and kuwait have pledged to have billion dollars in aid to jordan. leaders metame as with jordan's kim -- jordan's king abelllla and mecca. -- in mecca. shares of china's biggest battery maker software 4% on their first day of trading. the company sold 10% of its capital as partrt of the inititl public offering and now has a market capitalization of $12.3 billion. 2011, it has bmw and volkswagen among its customers. finally, it was originally meant musk's flamet elon floors are real. the

essentially telling us if in the middle of this year we saw a major in europe,f demand in the u.s., central bankse ecb, the fed could simply signal to markets they will delay the pace of normalization. that should be enough to's for on confidence and expectations that liquidity will be ok, and that should then boost demand. if central banks indeed acted and the ecb, say, extended kiwi beyond thextended qe horizon, that would be a major boost to global demand. they could still act as a buffer, but they can do that only and if inflation is below target. >> speaking a ce banks, asian banks have been trying to stay ahead of the curve. are they in a good position right now ahead of the fed ecision? >> i guess the fear is that if the fed hikes interest rates, it puts a lid was strength on the dollar, some asian economies may come under some pressure -- it puts a little more strength on the dollar. the federal reserve is very direct and they are normalizing policy. the worry for me would be the fed would have to step on the brakes so much that u.s. demand would slow. that would matter more than anything

u.s. and european central banks. ns the recent weakening of inflation, but policy may help downside pressure on the yen, assisting the boj inflation campaign. mike pompeo says the u.s., china, south korea, and japan, agree that sanctions on north korea will not be lifted until kim jong-un has shown complete disarmament. penaltiesconcern would be relaxed. mike pompeo briefed foreigners on the summit. the sanctions and the economic relief that north korea will receives will only happen after the complete denuclearization of north korea. paul: the u.s. economy has become the world bright spot as china and europe cool, at least 4% in the current quarter. retail sales beat expectations on thursday. this is being boosted by solid consumer spending. criticizedin has forecasts. >> humor guards are outlook as pessimistic and i hope he is right and we are wrong. that would be good use for the united states and the global economy. aul: the world's rich keep getting richer and they are doing it faster. global personal wealth reac

central bank on the road to raising interest rates. >> progress toward a sustained adjustment. >> and part of the u.s. pean central banks, investors will be focusing on that. helping japan's exporters and assistinghelping japan's exportd assisting the boj inflation campaign. they might be able to stay in the block past march 2019. talks are stalled on the irish border and the future trade deal. privately questioned whether they can finish on time. british prime minister theresa withn parliament next week eu lawmakers. >> we allow parliament to instruct the government. undermines my three guests. kit would be constitutionally unprecedented. >> the u.s. security and it weighedmmission currency.ond it bitcoin had the biggest rally in almost two months. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thanks for that. let's get you a quick update on the market where we had to the final trading session. headwindsing some coming through when it comes to manufacturing. expected weaker than and suggesting a manufacturing sector. also out for the kiwi dollar as w

u.s. central bank, the european central bank, the su looked at merging markets with boat loads of volatilityemerging market etfs, the currencies, if you looked at what was going on in corporate spreads, the riskoff feel in the the at euro-dollar out of nowhere we saw treasury yields get skiddish and go from almost 3% down to 2., back to 2.94%, but the notion that everinespeciall we rise into those, so volatility is key, but rates are not done with the 3% or 3.03 level, and, finally, if that's not enough, you have the euro currency looking for its fourth day up, meaning dollar index is own, a althoug ri off trades in fx, it could not bail out the dollar today. >> caleb, what's your take on what it means for equity markets? still encouraged by what's out there to buy u.s. versus rest of the world? >> that was a long laundry list of events occurring. we add the opec meeting, and we watch what's happening underneath the surface in the markets. italian 10-year sells off, so that bond loses 8.5%, and we're seeing emerging market currencying weak as well pushing -- it just is pressu onnterest rates

central bank all-star panel. ♪ jonathan: i'm jonathan ferro, this is bloomberg real yield. we get another round of data on u.sing and some central bank decisions from the bank of mexico and brazil. plus, the opec meeting to look forward to. plus, -- are all together on a panel on central bank policy. a lot of stuff you don't want to miss. still with me, colin robertson, andrea di censo, and alan higgins. i want to wrap things up with a conversation i've been having through the week. whether you want leverage loans or exposure to high yields. the debate seems to be either/or. andrea: really, it comes down to rate sensitivity. less duration, more sensitivity -- more attractive in a rising rate environment. we think there's value in the bank loan market itself, but i think what we've seen is net issuance on the high side, whereas in high-yield markets, you have the market technical of it doing roughly over 20% less issuance this year than in previous years. that is a boost to high-yield markets. what worries me in the leverage loan market is this covenant-light conversation. that's going to come to fruition in t

central banks and beyond. chinese markets and heighten trade tensions with the u.s.. haidi: and central banks, how trade could sway over monetary policy. this is bloomberg. ♪ rishaad: the ecb forum taking place, mario draghi will speak alongside the bank of japan and the reserve bank of australia, that will be live on bloomberg .v, radio, and live u.s. treasury secretary larry says central bank should be wary of raising interest rates just to stop inflation running perhaps slightly hot. president said optimism around business has fallen, largely on concern that u.s. trade barriers would disrupt go -- disrupt growth. the committee upgrading its forecast to four hikes based on a better outlook for the economy itself. us,jarman is still with with the central banks, they are going in different directions. what does that mean for the global economy? it does make the global expansion more fragile. it's a situation where the fed is essentially shouldering all of the burden here. we know that can create some fairly disruptive dynamics, particularly when real rate and fina

. -- u.s. 10 year. central banking stepping away from extraordinary monetary policy. despite all of that and the rhetoric around trade, we haven't moved very far in the u.s. 10 year. with oil prices moving higher as we anticipate for the news, a good time to talk about what is calling him a desk what is coming up on the oil story. -- what is coming up on the oil story. we will be talking to christof ruehl. manus: he is the chief economist a -- adia. we look forward to the first word news debra mao is standing by. debra: thanks manus. creditors struck a deal in an effort to ease a mountain of debt and could the way for it to exit the lifeline that is kept it away just kept it afloat since 22. athensstice -- just as -- the deal has been seen as a key ingredient as the countries healthy return to help. opec and its allies have reached an agreement in the face of strong opposition from iran to boost production by one million barrels a day. although the actual increase will be smaller as several countries are unable to raise output. in a night of drama, the committee reache

u.s. companies in areas such as new energy vehicles. china' us central bank announced a reserve for carmen ratio cut -- reserve requirement ratio cut. this is the third reduction in 2018. for all of this, let's get straight to end the current. -- endo curran. great to have you on the program. onk about these curbs chinese investments. we have seen this in the past. is it different this time? >> good morning. you are right. just the next or degree of scrutiny when it comes to chinese investment, not just in the u.s., but anywhere overseas. that is what is happening in the u.s. they are pushing back on this with these proposals. they are making the point they have their own national security concerns. for china, it goes to the heart a their strategy to develop world leading economy based on technology. they need to source a lot that technology from the u.s. and if they're not able to buy those assets, that could put a break on curbing their economic ambitions. from the u.s. point of view, they are concerned about national economic security. francine: are we see

the private banks the biggest private banks in any one country in the jurisdiction of that central bank so the u.s. intersection of the fed over the u.s. banks like j.p. morgan chase bank of america goldman sachs and in europe other banks for example the e.c.b. european central bank has jurisdiction over door to bank or u.b.s. the swiss bank and so forth so all of the biggest banks yes have colluded with the central banks by the central banks have also colluded with each other to keep the overall level of money available to these larger banks or larger corporations that they select in their various countries motivated by extra cash basically as opposed to using that money in any other purpose or simply not giving it to them right let's talk about the role of the central banks basically in terms of an overall relationship i mean really when we talk about the g. seven meeting sure the presidents will show up and kiss and shake hands but give the day this does seem to be a very tremendous financial implication and sort of motivation to a lot of the deals being made there from these major companies co

the private banks the biggest private banks in any one country in the jurisdiction of that central bank so the u.s. intersection of the fed over the u.s. banks like j.p. morgan chase bank of america goldman sachs and in europe other banks for example the e.c.b. european central bank has jurisdiction over door to bank or u.b.s. the swiss bank and so forth so all of the biggest banks yes have colluded with the central banks but the central banks have also polluted with each other to keep the overall level of money available to these larger banks or larger corporations that they select in their various countries motivated by extra cash basically as opposed to using that money in any other purpose or simply not giving it to them right let's talk about the role of the central banks basically in terms of the overall relationship i mean really when we talk about the g. seven meeting sure the presidents will show up and kiss and shake hands but they're the day that does seem to be a very tremendous financial implication and sort of motivation to a lot of the deals being made there from these major compani

u.s. versus european central banks at this point? >> the sequencing is the u.s. is at forefront of this normalization of monetary policy the framework is that everybody wants to get into that normalization framework and move to higher rates. how quickly they do it is another thing. monetary policy is really managed tool to volatility management central banks are focused on how we focus on market volatility and they want to be subduing market volatility. as investors we have to think about ways to manage volatility. as long as central bank policy remains steadfast to focus on volatility, they will be slow to increase rates the first step we saw last week is what we'll see from everybody else, a methodical increase on how to manage volatility something investors need to be focused on now one reason why fixed income in the u.s. makes sense for investors given its low volatility profile and good high income >> very quickly, does that mean you're focused on the european end right now? right now we're more focused on the u.s. end >> thank you very much >>> coming up, t

u.s. rate european central bank says it's leaving its key your is a lending rate unchanged at historic lows erode percent lease through until next summer but it will halt its massive bond buying program from october and end it all together in december this year now after the financial crisis they see they started to buy your is a members government bonds to the chain of thirty billion euros per month to stimulate growth now says twenty fifteen month after month the e.c.b. has spent over two trillion euros on the program now with the bond purchases the e.c.b. his balance sheet has now swollen to over eleven trillion euro's about forty percent of economic output for the entire euro zone. the last several years have been expensive for the eurozone since march twenty fifth e.c.b. has acquired government and corporate bonds with a total value of around two point four trillion euros that poured lots of low interest capital into the euro countries the bonds were intended to fuel inflation at present the e.c.b. is pumping thirty billion euros per month into the market we anticipate that after septe

u.s. and international banks be next week we will get a lot more from emerging-market countries. will that have any impact on u.s. rates or u.s. investors? are they done with the centralanking news? john: for u.s. rates, they are potentially -- they potentially impactful actions come from the ecb. the endk they signaled of their qe program and gave a long-term guidance that rates would not rise until well into next year. you can see by the fall in the aso that that is interpreted mild, a dovish statement. we would say that right now we expect the ecb to have relatively little impact on u.s. rates. would be looking through opportunities probably well into next year, to be underweight or short on european rates, particularly the german curve. the other area affecting u.s. investors is china. they are undertaking a policy of deleveraging to reduce systemic risk in their economy. we have seen economic data slightly weaker than expected recently. they are very aware of that. mirrorek they did not the u.s. policy change. that shows they are symbolic awareness that there are risks to their deleveraging policy. if we were to paint a downside risk for u.s. economy spill over f

u.s. and not by central bank anymore. the fed is going to be selling their balance sheet. rely on things like pension funds, insurance companies in the u.s. and they don't have the buying power to match the supply. >> there is a lot to talk about when it comes to supply. in the that out for us divergent monetary policy we are seeing. in terms of the u.s. growth story, i have this conversation yesterday about how long in the tooth is the growth story in the united states. jpmorgan was saying it company start to invest, you can add another leg to the growth engine. does that work for you? happens when you get quite extensive physical expansion in an economy that don't need it. we got last year in the form of tax cuts the trump and magician put through. that hasn't set through through the numbers yet. it is great for business confidence. we could extend the cycle further. long-term was the neutral rate of interest. could be a little bit higher. nejra: thank you for joining us. jub hurren. that is it for "bloomberg daybreak: europe." the european open is up next. the former ec

u.s. rates, the european central bank says it is leaving its key eurozone lending rate unchanged at an historicrough until next summer, but it will halve its bond buying program in october and ended in september. after the financial crisis, the ecb started buying eurozone member government bonds to stimulate growth. since 2015, month after month, the ecb spent over 2 trillion euros on the program. with the bond purchases, the ecb's balance sheet has swollen to over 11 trillionn euros, abot 40% of economic output for the entire eurozone. >> the last several years have been expensive for the eurozone. since march of 2015, the ecb has acquired government and corporate bonds with a total value of around 2.4 trillion euros. they poured lots of low interest capital into european countries. the bonds were intended to o ful inflation, and ecb is pumping about 30 billion euros per month into the market. >> wind hyssop p after september 2018, subject to incoming data, confirming our medium-term inflation outlook, we will reduce the monthly pace of the net asset purchases to 15 billion euros until the end

u.s. and central european banks.ivergence in policy may ad downside pressured on the yen, helping japan's exporters and assisting the boj campaign. eu officials have discussed whether the u.k. may need to ify in the block past 2019 the brexit negotiations don't accelerate. talks are stalled on the irish border. officials have questioned whether they can finish on time. prime minister theresa may ay faces a showdown next week with pro-eu lawmakers. >> we cannot let the government instruct its steps on international conversation. such a move would be constitutionally unprecedented. >> global news 24 hours a day on air and on tictoc on twitter, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. ramy: thank you very much. thes do a closer look at u.s. market closed. that was offset by declines in financial and industrial stocks. su keenan is here with more. su: rate diagnostic and trade war agnostic. they are eking past these major issues. we also had big focus on media stocks. let's look at th

putting away from the u.s., allies that have been there since the second world war is really not the right way to go. yvonne: does this have any impact on the dynamics of the big central-banke for the u.s. and european central banks? >> well, of course it only adds more uncertainty to their environment. the environment is uncertain in two ways. the most obvious issue is politics. after what we've seen with trump lately, we can only expect to have a bigger fiscal deficit. how big, we don't know. on the revenue side. i think that is what is really off the table in this point in time with full employment, inflation impressions moving up, and this fiscal stimulus. but there is a counter risk from italy and a much weaker economy than what we were expecting at the beginning of the year. i would argue that if anything, monetary policy divergence between europe and the u.s. is going toe. we were talking about in terms of the market impact. we've seen this rush to safety in terms of treasuriesiving the life we've seen in italy, the em turmoil, as well, and we are about to get another treasury debt sale here. what do you think the direction of yields goes from here? >> well, short-t

the agreement, bank muscot contacted the office of forei asset control, which is within the treasury department responsible for enforcing u.s. sanctions. they did this on behalf of the central bank of iran. this is the ohman bank contacting the u.s. treasury department saying we need your help. they were going to convert $ 5.7 billion into euros on behalf of iran because the real was paid to the u.s. dollar, the most efficient conversation was through ale u.s. bank -- through a u.s. bank using u.s. dollars. iran was adamant getting this done quickly. despite his public stance that it would not provide iran to u.s. financial systems and u.s. banks on february 24, 2016, ofac, this didn't ofasury agency, issued a specific license to bank moscat authorizing iranian assets worth approximately $5.7 to flow through the u.s. financial system. today i heard some say this specific license was just a narrow exemption, or just a minor fix. to that i directly -- direct you to an e-mail from a bank moscato official who said that the license was a gigantic breakthrough which has assured iran of almost fl global financial inclusion. end quote. doesn't sound like a eurofix to me. anyone who

u.s. and china would prevail. manus: central banking titans by the banking panel. john, thank you very much for joining us. i want to come to you on one of the stories in our headlines that relates to this trade story , the nervousness expressed by central bankers. citing trade tensions in cutting the outlook, saying u.s. made vehicles will face tariffs going into china. an early example, i guess, of the unforeseen effects of protectionism. john: this is the way these episodes tend to evolve, they start with relatively small skirmishes and build up in response from one side and then the other. then you start hearing about the real impact it has on those companies and the people who work for them, ultimately. manus: we think about the flow of money at the moment, one day risk off, next day risk on. there is something going on and there seems to be a move to repatriate to dollars. we are seeing money flowing to etf's, up to for your paper in the u.s. are you noticing any kind of slow movement which would correlate that, to suggest that is right? would you see the mov

u.s. in shanghai. to india where the central bank on wednesday has raised its key interest rate by a quarter of a percentage point to six point two five as inflation rose following an increase in global oil prices it is the first interest hike in four years and it comes after the weak rupee threatened growth which the r.b.i. estimates to hit seven point four percent the rate increase is expected to hit barra's as interest rates on home loans car loans or personal loans i suspect is to go up just as the government's reforms seem to bear fruit. in four years prime minister narendra modi has revamped the indian economy last summer he introduced a national goods and services tax previously every state to decide to do its own rates leading to chaos the common domestic market with simplified tax regulations was well received by foreign investors the country's promotional campaign called make in india has also been a hit state investment in high tech sectors has bolstered domestic production some industries like information technology are now among the world leaders. but india still has major problems a lack of qu

u.s. is getting weaker. other central banks are still neutral or even easing while we are tightening. this holding u.s. interest rates lower from its true equilibrium neutral rate. that is the question to answer. it is a tough question. we believe that the unusually low term premium that you see entirely at reflection of the u.s. growth prospects. it is influenced by foreign rates to some extent. chance that we could see a policy missteps amidst all this. >> we talked about one on the trade front, where do you get this balance right? other one would have to come from the fed. they project that the long-term funds rate will and at about 3%. there, withwe get no corresponding change in the 10 year bond yield. curve andt the yield that is a bad outcome. we believe this will not happen for two reasons. but the more likely one is that at some point the ecb will eventually begin to raise their rates and that should push up u.s. interest rates as well. we expect that the 10 year bond yield in the u.s. should trade around three and three quarters and a couple of years at that happens we resto

the boj is out of step with the taken by other central banks in the u.s. and europe. e new governor of argentina and central-bank. investors want the former finance minister to lay out a strategy to curb volatility in the peso. the currency has lost more than a quarter of its value since the end of april and is now at a record low, even though argentina is getting the biggest loan in the history of the imf. it talks between the u.k. and it messier, onen get of the options could be postpone ment. officials have discussed this. brexit negotiations are effectively at a standstill. it is day two of the world cup in russia. it is the renewal of the iberian peninsula rivalry, spain will take on portugal. go,everything you need to -- need to note, go to the bloomberg terminal. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am taylor riggs and this is bloomberg. tom: it is worse than march madness. saudi arabia-egypt, i have no clue. let's go to something i know about, let's check equity bonds, currencies. fx is fro

bank the u.s. arm has failed part two of the fed stress test this after the central bank noted widespread andciencies in capital spending controls. in a statement deutsche bank said it is engaged with regulators and it working to improve that part of the business the bank passed the first hurdle which tests capital levels during a severe recession. shares in deutsche bank fell to a record low earlier this week cnbc speaks exclusively to deutsche bank's new ceo, christian sewing later today. >>> european leaders in brussels brokered an agreement on the migration crisis after nine hours of talks despite initial reservations from italy. speaking after the marathon talks, the italian prime minister said that from today italy is no longer alone the text of the european coun l counsel's conclusions urged to prevent uncontrolled migrant flows. they are looking for third party migrant centers outside the eu and countries will also share responsibility for migrants rescued at sea while clamping down on smugglers. speaking at the conclusion of the talks at around 5:00 in the morning, french president emanuel m

you heard steve lay it out what exactly are you looking for from the -- i know the european central bank for u.scan seem wonky but they are incredibly important. what are you looking for today >> i'm looking for draghi to start giving a signal to the financial markets that not only are they going to end quantitative easing, but they'll do it gradually. so it won't be too disruptive. that means going from 30 billion euros of purchase bond purchases every month, maybe after september through december, lowering it to 15 billion euros per month. and i think they'll follow a similar playbook of the federal reserve. once they end quantitative easing, as steve liesman expects in december, then i think they start gradually tightening sometime around june of 2019 >> i want you to answer the question brian gave to me. how much is european qe, low european rates worth for the united states? how much is it keeping down our rates here >> i think it's having a dramatic impact. when you look at german bunds hovering close to 50 basis points, i don't think it takes a genius to figure out that ten-year yield wou

bank stocks, u.s. bond yield pushed up interest rates and that came afterhe eurn central bank, pe's version of the federal reserve signaled it could live off the interest policy in the nea future. f ecomic dataod unemployment. the dow risg 346, 146, nasdaq adding t7689. meanwhile the number of hom withoutand lion se. more than half have at least one wireless and no land line the second half of last year, up 3% om the previous year and 1132 million adults live i houses with only cell phones. 3% of homes have for phone service of any kind. how do they call their mom. cadillac will add hands-free system start g-2020. the driver assist feature debuted in the cadillac last year. it uses camera sensors, mapp data to allow drivers to whri onedr hands off the highways but has infrared came t make sure your eyes stay on the ro it's not cheap. thetem cost $2500 on stand on o 6the luxury model have you to buy the 3,50 package. >> i could just hav fd elbow me for keep your eyes on the road. >> good to see you, landon. >> good to see you landon. >> y head to walmart. walmart now offering its winemaker's selection, 10

u.s. starts to turn the market they had an extra frankenstein life i'm happy that our central bank is firstou. >> comcast taking on disney for 21st century fox assets. so what would a win for either side mean for the tax bill robert frank is back at hq with that story >> if the deal is done in cash, they could write the largest tech ever to the irs $4 billion to $7 billion the tax issue has taken center stage in this deal murdoch might prefer an all stock deal since he would owe no taxes with that deal, but fox shareholders want the highest price since they wouldn't pay taxes on either deal >> here is now the math breaks down comcast offered $65 presidentbi the fox assets so their pretax payout would be around $11 billion he would have to pay a capital gains tax on that and since he lives in new york he has to pay the city and state income taxes. so his total tax bill on the $11 billion would be as much as $4 billion. but there's more now the remaining fox assets would be spun off into a new company. murdoch and other shareholders would have to pay a dividend tax on the value of that new co

u.s. dollar. yet the european central bank coming tomorrow, and you have to wait for it as far as that is concerned. relatively unchanged overall for the dollar-yen come and i want to give you a sense because you talk about a more hawkish fed, and you have to watch what is going on in emerging markets. it is a torrid time in the last few weeks. you can see the argentinian down shy of 2%. you can see the turkish lira and the philippian peso. and the russian ruble. joe kennedy's by one of the out performers. joe can explain one of e out performers. -- i rememberdest the good old days when gold used to move and even on based the fed is acting and all this stuff is moving, little actire. it hasto look at lumber, been fading lately and has been at a six-week low. you see a straight up line for most of the year and finally vi ground. something to watch their. re. contextet's get some with the chairman who works at the federal reserve bank and th w york state banking department. who better to have this afternoon. at the face of it it was a significant upgrade given what we are pricing in terms of this yea

banking center from u.s. and china meets europe so they acted as a central clearinghouse for all of that and now we're seeing signs of banks leaving the u.k. but we do have a banking story in the headlines because all of those economies across europe whether it's now italy or prior to that greece they collapse because the bank and shenanigans let's call them that because of course we're talking about a british bank here and one must only say shit and sin and little mistakes. interest inappropriate behavior really terribly hard. well our friend neil mitchell is in the news neil mitchell friend of his report well lloyds under pressure as h s fraud report is published so there was an internal lloyds banking group report written by a former manager at the bank and published on tuesday alleges serious misconduct by the lender over the handling and disclosure fraud of this pos reading unit. report written twenty thirteen after the lloyd's manager had taken her concerns to the police alleges h. boss executives knew of the fraud as early as two thousand and four and failed to properly disclose it with far reaching im

u.s. as well. >> the european central bank chief economist and senior board member has confirmed the ecb will debate an exit from qe at its june 14 meeting. >> in making its assessment, it is important to consider the underlying growth of the economy and to what extent, actually, this growth assessment, the assessment that we make, is passing through to wages and price formation. >> is there anything in the central bank or politics space that could move the markets? for the moment, i don't know whether they have been complacent or cool. >> that is the surprise. we have the start of a trade war, which everybody thought would be a trigger for a market correction. we have currency volatility, so it is surprising the markets have not responded more than they have. the one explanation is that there is still a lot of liquidity around. it has not unwound in japan. we are talking about slowing down asset purchases in the ecb and the pace of fed hikes have been along market expectations, so that is probably why the markets are sanguine. >> this rally continues as momentum continues to drive stocks higher. th

u.s. inflation will move toward the central-bank target.ith inflation around 1.8%, he is comfortable with moving toward a neutral rate, which could be one or two hikes away. he also says the fed should determine a neutral unemployment rate and stick to it. one simple thing is don't ratchet it up. if we figure out where it is, maybe it is four and a half, maybe it is for, maybe it is three and, in the cycle, maybe it is really three to half. i say, and xm there is a recession, let's hold it there -- next time there is a recession, let's hold of ther e. mark carney says time is running out to remove the threat brexit. the contract continuity issue could cause havoc in financial markets when britain leaves the block next march. it isk. has announced working towards a solution but the eu has not reciprocated. apple and samsung have reached a settlement in various patent battle. terms of the accord were not immediately disclosed. the string of lawsuits started in 2011 when apple sued samsung for allegedly copying the design of the iphone. that f