the spring in august and paired on is how some of them professor of literally studies at the university of fed on and been in ali for the national and founder and director of the center for middle east and global order. and in bethlehem, i'm on shy with alto, mean a research fellow of the middle east forum of special expertise on i so very well welcome to all of you, mr. via and from what we know about this attack so far. who operates in this 9 to 2 bombings in quick succession targeting civilians. now there hasn't been any office of talk on this or an official announcement. obviously there is investigation ongoing to figure out who and how it was pulled off. i'm but, but so far we don't have any official announcement on the issue. but of course, yvonne's original policy and poster has put it in recent decades at loggerheads with the 2 prime suspects in the eyes of the way the ends of those are. so i, so senate sister organizations and these really isn't their back cuz these are the 2 prime suspects, especially when it went in analysis coming out in different outlets. and i think because these

of fed as hands. the government and their insatiable spending. lydia, thank you very much. >> you got it. charles: we bring in universitynd economist peter morici. peter, let's start with that, fed, fmoc, interest rates, everyone that influences yields these days as well? >> yeah the important thing to remember it is stability in interest rates that matter. before the global financial crisis, if you take the 40 years prior, the treasury rate averaged about 7.4%, but inflation, you know was significant. so that the real rate was about you know, three. my feeling is the treasury rate at 10% right now, sustaining that would be a good thing for the market and a good thing for the economy. you figure 2% for inflation. if you hit your target rate. 2% equals the real rate of growth in the economy that is the social return on capital. it should be a good equalibrium rate. my feeling is the market wants stability much more than it wants rate cuts for the long term. and i think that would be better if the fed just went fly fishing to be honest and just took a vacation. charles: all right. sort of like how people feel with congres

fed executive -- as president, assuming the post on april 2 replacing james bullard who is stepping down to become dean of purdue university. he will become the first hispanic person to lead a regional fed bank. most recently served as the ceo of events asset management -- evince asset management. on the docket we have at tendon a.m. u.k. time the preliminary reading for euro area cpi, that is for december. there's also an italy reading do at the same time as we were just discussing with oliver crook. 1:30 p.m. u.k. time it is the u.s. nonfarm jobs report. 3:00 p.m. do not forget to watch out for u.s. factory orders and ism services. key indicators to the strength of the economy. coming up on bloomberg, former arrests and convictions to rallies. it is never a dull moment in the crypto space as we await a decision from the sec. stay with us for that conversation. this is bloomberg. ♪ >> what has happened is those risks still are present. the yield curve is still inverted. this is one of the longest 10 years -- tenures of yield curve inversion since the early 1940's. it is really problematic that you see the markets are figh

just the little bit of a disconnect between the wall street sort of fed crew and then ordinary americans. university still relatively low compared to the fundamentals in this economy and that gets a lot of attention because, first of all, it could have political implications and second, we wonder if it's going to have an economic effect if people don't have a lot of confidence. the fact that we do still see inflation is part of the story. >> yeah. i mean i'm not sure if we want to see outright deflation as a general practice. it's not a good sign about any economy. luckily, we have fuel oil down 14 year on year, utilities lower year on year. gasoline has been a boom to the consumer. used cars continue to chip in. the airfare i thought was interesting. >> higher. >> up 1% month on month that's been a pretty good contributor to inflation, disinflation, that thesis in the last 12 months. >> medical care costs and insurance through premium, insurance costs kicking in at a higher level. motor vehicle costs surging 20% over the year. the most since the 1970s. there's still some pockets which painful, wisc

university of michigan has jumped in the past two months. pretty good, decent read. survey by the fedank of new york, america's inflation expectation are hitting a low. still inflation all in 17.3%, caroline. and you know what's interesting when you look at the factors behind it? it's the working class voter, the middle class voter, caroline, they see their electricity bills up 33w %, energy bills up 25, 30%. so that, when they see that president saying electrify the entire u.s. economy, get rid of oil and gas, it's hitting them. final word. >> yes. no, despite the biden administering's constant insistences that inflation's tempering and just give it time, bidenomics needs time to really kick in, nobody is buying that. elizabeth: yeah. how much time time to do we need? [laughter] caroline downey, you're terrific. thanks for joining us, it's good to see you. still ahead, senator ted cruz, california senate candidate steve garvey, americans for tax reform, he is grover norquist, legal eagle hans von spakovsky and aviation expert mike boyd. we're going to stay on this story, president bi

of that growth is going to disappoint with a downward risk. this comes against the universal romance with the self of all soft landings, and secondly a recognition that the fedgoing to validate what is being priced at right now in terms of cuts. >> when does that phrase recommend? >> my own gut feeling is that it will come in the beginning of the summer. so call it june, maybe july, and it will be 25 basis points, and not only do i think that is going to happen. i think that is what should happen. david: there we go, if it does going to summer some of these traders positions are going to get called out. mohamed el-erian speaking with annmarie hordern and jonathan ferro. we will get you guys an update with these markets. it is a split between onshore and offshore china yields. 73 above zero on your japanese 10. 20 more -- plenty more ahead. this is bloomberg. ♪ were you worried the wedding would be too much? nahhhh... [inner monologue] another destination wedding? why can't they use my backyard?! with empower, we get all of our financial questions answered. so we don't have to worry. empower what's next. david: a couple of sectors we are tracking, we start th

this comes against the universal romance with the softest of all soft landings. secondly, a recognition that the fedt going to validate what is being priced in right now in terms of cut. >> was the first rate cut coming, mohammed? >> might win feeling is that it will come -- my gut feeling is that it will come in the beginning of summer, colic june, maybe july. in that it will be 25 basis points. not only do i think that is what is going to happen, i think that is what should happen. paul: that is bloomberg opinion columnist mohamed el-erian speaking bloomberg's annmarie hordern and, in farah. time for some morning calls ahead of the asia trading day. one of last year's best majors in emerging market debt is getting a fresh boost, the federal begin cutting interest rates. the u.s. investment manager gmo is bonds are already attractive in e.m. with, cheap currency valuations and the ongoing disinfection process. bassy headset when the easiest article is likely to start could be -- a catalyst for even -- they say that hints of when the using cycle will start could be a catalyst. that is on the back of

this comes against the universal romance with the softness of a soft landing and secondly a recognition that the fednot going to validate what is being priced at right now in terms of cuts. >> when does that first rate cut come in? >> my own gut feeling is it will come in the beginning of the summer, so call it june, maybe july, and it will be 25 basis points. not only do i think that is what is going to happen. i think that is what should happen. annabelle: that was mohamed el-erian speaking with annabelle her dern and jonathan ferro. coming up, we will have the debt laden property developer china evergrande renewing a risk in court. the hearing kicking off in annabelle: you were watching "bloomberg daybreak: asia." taking you to live pictures in the court of hong kong where evergrande's fate is going to be decided just over an hour's time from now. it will be trying to fend of liquidation. we have seen a decision on liquidation deferred before, but the judge overseeing the case making it clear that the chances for reproof are over, and the decision is due. to focus on never's restructuring plan, t

prices and the prospect that recession may have been avoided while the fed could soon be cutting interest rates. on friday the university of michigan reported the biggest one-month surge in consumer sentiment since 2005. now it remains, as you can see there, below the 2019 level, but it's now rocketed up for two straight months with big gains. there were some areas of concern and the survey and hiring catches were muted while wage growth is expected to be strong. those wilchallenges with busine and consumers and it's a better way to take a challenge. >> you have business looking more upbeat and you have consumers in the michigan sentiment survey looking more upbeat and you have inflation coming down. i wonder to inject politics into this, yet biden administration isn't claiming more credit here or isn't getting more credit for this economy, not that they necessarily deserve it. a lot of it is coincidence. it's not directly tied to policies, but i can well imagine if the tables were turned that a trump administration would not be bashful about claiming credit. >> it's true, but of course, there are differences between the c

time, university of michigan sentiment data, how strong is the consumer and what does that mean for fed policy? the fed's mary daly speaking, we will see if she diverges from the general take. plus, we're live from the world economic forum in davos all week long. bloomberg's francine lacqua moderating a discussion on the global economic outlook read panelists including the ecb president and the german finance minister christian lindner. plenty more ahead on this program. this is bloomberg. ♪ kriti: welcome back to "daybreak: europe" i'm critic up to "daybreak: europe" i'm kriti gupta in london. chinese travelers were once the biggest spenders when it comes to overseas trips. they are staying closer to home despite it being a year since covid measures eased. outbound airline capacity from china just 60% of 2019 levels during the fourth quarter. with us to discuss is asia transport reporter dany lee. walk us through the impact of this pullback. >> back in 2019, 100 70 million trips were made, that equates to 240 billion u.s. dollars of spending from chinese travelers on stuff like hotels,

rachel: a new report is revealing how fed up millennial's and genet's the art with a woke of capitalism for ca survey from stanford universityrt for companies aligning with environmental social and government principles esg pretty specially that negatively impacts the bottom line. so we thought we would ask an expert eight millennial for more insight. strategic wealth partners mark joins us now. mark, so it millennial's are turning their back on esg. i thought they were the big climate activists i guess what hurts their bottom line there like no thanks. >> without a doubt. when you think about esg it has been exposed. it is a fraud, it is a scam, it is a lie. it is a marketing ploy or investment firms charge higher fees they don't actually advance any real esg initiatives just cost investors more money and the interesting thing is the g and esg requires ethical business practices and transparency when you look at that esg funds they are transparent alright investors can now see right through them. so look i'm going to give you two examples. the first one, out court mr. global warming has his global equity fund which is an es

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fed's been raising interest rates. and it also captures consumer expectations. and it's a merge between our measure and the university ofichigan's been running lore than ours, so it averages it out to be lore. but, you know, it doesn't really capture services or liquidity, and we know that. so it certainly leaves room for us to improve. charles: so that in mind, right, you get a number like today, consumer incomes, you know, just sort of plodding along are. but spending spikes. now, there's one thing, you know, i'm one of these people, i don't fall for the old trap, it was better than expected so it was strong. sometimes expectations are too low. but that was a shocking number, 0.7%. what the hell's going on? the savings rate is at 3.7%. it feels like we're not living for tomorrow, and i don't know if that's more of a psychological indicator than an economic indicator. >> well, i think you have a couple of things going on. number one, many people are still working. you've talked about this. companies are not laying people off. they're hoarding labor. so if you don't have a fear of getting let go, you might go out and sp

universe including a play in london's west end. kelly, back to you. >> tyler, thank you very much. >>> shares of birkenstock hitting an all-time high after the fed's dovishs have underperformed and one analyst says investors are sleeping on the rate cut baeneft for birk and he'll tell us on "the exchange." stay with us. back in hay moment. >>> welcome back to "the exchange." consumers are getting more positive about the economy with new york fed inflation expectations falling to their low of the since january 2021 and after the fed signaled at its last meeting that rate cuts could be on the table this year the stocks are off to the races, but my next guest says the fed won't lift all boats especially in retail could hurt earnings for the majority of his coverage. joining me now is simeon sealingel with bmo capital markets. simeon, if only everyone would do a note like this. i love hearing about the nuances in terms of the top-level rate cuts we talk about and the impact on your coverage universe. what jumps out? >> hi, kelly. good to see you. everyone hears rate cuts and they think companies and people have more money in their wallets and therefore every

of where this whole thing is going. the fed today's very short-term and just keeps on repeating data dependent, data dependent. tom: this is really important. el-erian demands at queens college a university5. >> let's finish on fed policy. expectations, they go in much. what your gauge of what the threshold is to be able to reduce interest rates? >> there's no reason we should go in march. i think the market is overoptimistic, both in terms of timing and in terms of the amount of cuts we are going to get. i think the market should listen to the fed when it says signals around three 25 basis point cuts and starting later than march. i think it will be the summer when they start. >> appreciate the update and congratulations on the award. thank you. it's good to hear from you. mohamed el-erian of queens bridge college, -- of queens college cambridge. tom: i go back to the phrase i was saying. the facts have changed. the single sentence today that shows you how things have changes from sonali basak, who summarizes a power point from jane fraser. they are pumping from 240,000 employees down to 180,000. that is 60,000 bodies out the door over the next number of medium-term years. onlybasak kno

landing and if the fed can deliver and continue to deliver an economy that is full employment and the claims numbers are stunning. it sees inflation coming down and we saw the university ofhigan numbers and the consumer feels good that inflation is coming down. do you want to own big tech or is an environment where the market should broaden out? >> i am a believer that at some point, the market does brighten out. there are a lot of rate companies that are trading at discounts in some cases significant discounts to the market multiple. i think small and mid-cap companies have been left behind a little bit. particularly that's the case when you think that small and mid-cap companies tend to have a little bit higher proportion of their sales in the u.s. the u.s. economy is clearly the outperformer. i'm not sure i necessarily am a huge supporter of this but the trend is definitely more trade barriers, less flow of goods and services across the border. that's something that should benefit the russell 2000 relative to the s&p and the nasdaq 100. alix: if i am at the fed, is it a possibility that there won't be a landing but it won't necessarily mean the fed will have to hike o

fed when it does, signals around 3 25-basis point cuts and starting in march. i think it will be in the summer with a start/bloomberg opinion columnist and university of cambridgest president mohamed el-erian peeking to bloomberg's jonathan ferro. another central bank we are watching today, people's bank of china. we are acting that one year mls f to be cut. annabelle: may be the said is not likely to reduce in march as we were hearing from mohamed el-erian, but the pboc he could be first. they have a decision you on one-year policy laws. you can see it is it to for -- one-year policy loans. you can see it is at 2.5% right now. we could see 8-10's introduction to 2.4%. there is a lot of pressure when he gets to the economic weakness in china. but also the seasonality factor, perhaps the timing that played into it as well because many people have spoken to are saying that pboc is likely to frontload any sort of reductions, given we are approaching the national people's congress, the annual legislative meeting in march. that is when the growth targets are announced as well. that said, why we are seeing that pboc dating its interest rates lower, but also the acade

the prospect that recession may have been avoided while the fed could be cutting interest rates. a maybe on friday the university of surge in consumer sentiment since 2005. sentiment remains well below the 2019 level, but it has rocketed up two months in a row. there were some areas of concern in the nabe survey. 72% of businesses say they're passing along price increases to consumer. that'sup from 65% on the prior survey. hiring was muted and wage growth is still expected to be strong. there are challenges. they come with businesses and consumers more upbeat about the outlook than they have been. >> what else should we be watching on this front? what are we going to get the feeling over the next couple of weeks, steve? >> well, i think a couple of things. oil prices seem to be very important for consumer sentiment. if you care about consumers being happy, keeping oil prices down, i think is very important, and i think businesses are very attuned to inflation. i think as inflation comes down -- and i'll just say one more thing, becky. i've been covering these sentiment numbers for a lot of years. i don't care so mu

of that into the newsroom. happening today, undergraduate students who work as assistance at cal state university campuses are going to vote whether or not to begin a union student assistance say they're fed up with being underpaid and underappreciated as essential workers more than 8500 signatures were gathered last spring in the california public employment relations board certified those some 20,000 students citizens vote in favor of this, that would create the biggest undergraduate student union in u.s. history. >> well, the oversight committee on the martinez refinery company is expected to give an update soon in their investigation of that 2022. hazmat incident. this was when 24 tons of spent catalyst was released into the air and came raining down on the surrounding communities. residents found their yards. their vehicles covered in that metallic dust. initial testing of the substance showed elevated levels of metals like aluminum, nickel and zinc, which can cause respiratory problems. the contra costa county district attorney is also pursuing legal action against the refinery. the oversight meeting is set for 10 o'clock next thursday. and in the north bay, solano county officials

fed executive as president. he is assuming the post on april 2, replacing the man who is stepping down to become the dean of harvard universityd as -- most recently he served as ceo of evince asset management. haidi: the islamic state is claiming was possibility for wednesday's deadly bombing in iran. let's bring in bloomberg's michael keaton. we talked about the likelihood of this being the response from the party yesterday. michael: such an indiscriminate attack, it was unlikely this was a state-based one. the assassination tribbett it to israel -- attributed to israel of a senior leader of hamas, killing the individual they are targeting and there is limited fallout. where is this one, it is basically -- whereas this one, it is basically carnage. this is happening in iran. iran is the source of a lot of the financing and support of these groups fighting with israel, whether it is hamas in gaza, whether it is hezbollah in the north of israel or southern lebanon, the houthis who were firing on the ships in the red sea. this arc of resistance is supported by iran. to have such a high-profile attack in that country, it ratchet

this comes against the universal romance with soft landings and secondly, a recognition that the fed is not going to validate what's being priced in in terms ofonathan: chairman powell, what are you expecting? the one we heard in december at the news conference? mohamed: the one we will hear at the beginning of the press conference versus the end? jonathan: it has been confusing. mohamed: this is a confusing time. people i talked to privately, expectations are all over the place. people think they will not cut rates until summer and then people think they will start in march and they will frontload it because of the elections. there are people who think like me that they are likely to wait until the summer at 25 basis points. forward guidance has lost its power. the fed has been clear in terms of forward guidance of the market is saying sure, i'm not going to listen to you. jonathan: you say you are not in the business of predicting the future but can i get you to predict the future, when step first rate cut? mohamed: my gut feeling is that it will come at the beginning of the summer, soon, maybe july. it will be 25 basis points. not only do