and what do you think volcker has taken such a stance what game is he trying to play with ukraine and its partners. well i mean the problems for any government in the ukraine a pretty a pretty serious economic problems remain very bad i mean really the phrase reform that you just used there in your reports and it's very halts what the vote actually means what they mean by you know this is a language that was used 20 years ago during the during the you know the collapse of the former soviet union and the whole issue of reform just became a kind of. a code word for privatization deregulation and you know basically theft on a grand scale so when these people use the word reform. or raise my eyebrows because of course there's the risk that there is no real reform in saudi crane in terms of that they've been pushing the policy of malts as asian products are essentially just possibly not in the interests of the older folk for many years and whoever is in power will be forced to carry on down the road because of the debts that the country has and on the weak position that it saved in geopoli

ambassador volcker was a senior member of the foreign service. his postings include ambassador to nato and principal deputy assistant secretary for european and eurasian affairs. he served on the national security council, as depply ty director of the private office then-nato secretary general robinson. ambassador? mr. volker: thank you for the pportunity to testify today. i have a statement to submit for the record and i'll try to speak candidly about the situation in ukraine. it's an honor to be here, thank you for that. i want to thank all of you, senators from both sides of the aisle, for your commitment and dedication to ukraine. it is critically important. and if i may, let me just say a few words about why that matters, where ukraine is today and a few suggestions looking forward. why ukraine matters. let's start with the people. ukrainians are people who seek and deserve freedom, democracy, market economy, root of law and security just like other people in europe. the united states has led the development of nato and a strong nato for dec

paul volcker broke the back of inflation. jay powell needs to break the back of the strong dollar.lor: we will be hearing that moments away. that was our u.s. economist for bloomberg chief economics. let's look at how markets are faring as we await the fomc decision. these are patient markets. we are mostly unchanged. the 10 year yield hovering above to 10. this is bloomberg. ♪ >> i am here with tom keene. we are waiting the fourth and was consequential fed decision of 2019 due out in just minutes. after that, chairman powell will host a news conference where his every word will be scrutinized for how the central bank will proceed in the coming months. the fedexd meetings rest on a simple idea, which is "do no harm." tom: let's get a data check. jeffrey rosenberg with us to get started. the doubt -10, yield, as taylor just mentioned, $2.09. i am watching yen. yen has been a focal point over the last eight hours. let's move to the next screen. we need two screens on said day. -- fed day. scarlet, because of the chase here, i am watching curve flattening over the last 24 hours. reall

president emanuel micron in one of the us state department special representative for ukraine could volcker has accused europe of preferring zelinsky rival the defeated president petro poroshenko. and so i think there is a little bit of frustration in europe did drive to the show you know engagement with the u.s. did not do that very pleased with this in fact president poroshenko was complaining to us that we weren't doing enough to support. our response was consistently we don't pick people and selenski won a landslide victory with 70 percent of the the u.s. embassy was 1st congratulated also thanked poroshenko for his efforts to further democracy in ukraine the u.s. claims it was new to him regarding who would win join the election campaign the ambassador was asked if selenski was the right person for ukrainians to unite around and his reply and it looking very much like an endorsement. is vladimir is lenski the former actor who is now the front runner in the presidential election this month the person around whom ukraine can coalesce it's an candidate who has established himself as again

they had been eliminated or heavily regulated out following dodd-frank and the volcker rule.of our large lps and saw a interesting and unique opportunity to take advantage of that dislocation. carol: what are the opportunities for you folks? >> we are seeing a number of market dislocations across the background. one of the interesting things is that we have a flexible investment mandate. we can invest in any industry or any part of the capital structure. we are finding unique opportunities. not looking at common equity or debt, but looking at preferred or other heavily structured securities. carol: does it matter the industry? >> across the board. jason: one of the flexibility to have is that you have is these partnerships with investors -- flexibilities you have is these partnerships with investors. >> slightly different than the traditional equity funds, but you are right. we can hold for a longer duration, we can do things that are slightly different, one of the benefits. carol: i think about how much time we talk about these big macro issues, whether it is trade, the fed,

they had been eliminated or heavily regulated out following dodd-frank and the volcker rule.e partnered with one saw a large l.p.'s and interesting and unique opportunity to take advantage of that dislocation. and tech ops was born. carol: what are the opportunities for you folks? are you buying new companies to add to the existing portfolio, what is the environment like? >> we are seeing a number of market dislocations across the background. one of the interesting things is that we have a flexible investment mandate. we can invest in any industry or any part of the capital structure. we are finding unique opportunities. not looking at common equity or debt, but looking at preferred or other heavily structured securities. that provide us downside protection. carol: does it matter the industry? >> across the board. ason: one of the flexibility to have is that you have is these partnerships with investors that are different, right? >> we have separately managed accounts which are slightly different than the traditional equity funds but you are right. we can hold for a longer du

. >> what about volcker back in the 1990s? he didn't listen to bush when he didn't want to have tightening cycle continue. this time around -- neil: tightening rate when jimmy carter first appointed, one full percentage point at a time. >> the fed changed under alan greenspan let's face it. this is just a continuation of that, if you want to call it a metamorphosis or evolution, whatever. james is right to a degree, you know, before the fed was 1000% independent. someone like volcker said i will make you go through certain amount of pain. you will love me afterward but hate me while you're going through it. neil: or hate you after you go through it. thank you, we're up 21 points here a lot of sectors that would benefit, finance, utilities from a rate environment, like one they're envisioning are doing well. not so well. volume running 2/3 of what it was yesterday at this time. you can tell to susan's earlier point, a lot of people are waiting this out to see what happens. keefe watching. you're watching fox business. i switche

the last fed the kyl recover was paul volcker under ronald reagan.what we saw the last couple of days, how much of this could be attributed to central bank buying, particular out of russia? >> you made a good point. some central banks are buying gold, not just russia. russia made its big move a year ago. i think china has been buying gold for several months in a row. toon't attribute that central banks buying gold. they also lease it back to the market. is the central banks provide a bid, but i think it is really investors driving it. gold etf ort the powershares. this is where people are putting money right now as they take money out of the stock market and other low gilding assets. joe: what do you make of other safe haven currencies? 2012, people piling into the swiss franc, the japanese yen. are the same forces going to produce a rally for the swiss franc, which has not done much lately? >> the swiss are having a problem, sort of like brexit, a dispute over a whole set of treaties. be availablewon't for european continental traders is one of the

the case of what paul volcker did in 1988 with skyhigh interest rates, which crushed caused ad essentiallyecession. inflation was conquered by the time the reagan administration continued. the first time. the difference now is the growth is slowing, inflation is low and you can't just push money into the system to cause economic growth and inflation to rise just as you did in the other direction, making growth to come down. that is the point of that note. world, theround the european central bank and the bank of japan, they are both positioned if they need to to do more, cut negative rates further, i more bonds. is it something about the world? what has changed to bet rates are low and inflation does arise the growth is not bad if you look at japan and the u.s.? >> that is a great question. what has changed is the way in which the global central banks reacted to the 2008 financial crisis. if you go back and see how we reacted to the great depression and what changed after 1939 when the economy came back, we had access world demand which came from the second world war, demand for armaments

she is the founder of the volcker alliance. great to have you coming to us from washington.second round of the stress test out today. as we saw from the first, everybody passed with flying colors. this tells us how much capital is being distributed. let me put up a chart that shows something. when you look at the major banks and their net losses. they have been going down and down, which means the banks are passing more and more. is that because the banks are stronger because the stress tests are weaker? strongerhe banks are than they were prior to the crisis but i do not think they are strong enough. you get to the end of an economic cycle and the valuations are inflated, rates you have several years of benign economic activity. the stress test will not be an adequate reflection of how the banks perform in a downturn. staff itself has a knowledge this in the financial stability report. they say you cannot stress test enough to account for the cyclicality at the end of the cycle. that is what we are seeing. david: as i understand, the way the tests were designed was you cann

there are other regulations changing for the bank as well, volcker being one of them. will see him much real change there will be. administrationp came in saying we want to reduce the regulation and banks. the question is at what point is it to lose? -- too loose. the blue line is 10 year yield. some people say you have to indicate less growth. some are saying we should be more cautious. michael: is an ongoing debate about what you need in terms of equity capital? how much you need and how much is safe? how much of that is offset by regulation? i would not put all of this on the trump administration. it has been a debate within the fed because it went up to the great financial crisis and passed dodd-frank and through in the kitchen sink. now people are stepping back in saying what makes sense. to a certain extent that that has gotten better, they have raised their capital levels. li, the stress test scenarios will be the toughest ever. they do still have some hurdles to pass. the question is how much is too much and the various kinds of regulations, you need a suppleme

. >> she should not be trying to soak inflation first place documentary on money paul volcker said he called phillips curve low employment we have both the fe worships those why inflations targets ought to get in 21st century. >> inflation none existent. dagen: wore pce federal reserve looks at that is consumer inflation but still running 1.6% extremely, extremely low, it is important to see if there is any impact of -- again a bear market in oil prices, that is a top line inflation number but you want to see if there is any impact at all from the tariffs on imported goods into this country, if anything, that would change the fed decision people are again counting on the federal reserve, cutting interest rates. >> up 2/10 of one percent. >> estimate up one-tenth of one percent, added up 2 tenthss of one percent watching markets what this means for federal reserve for may we did in fact see a higher than expected showing up 2/10 of% versus estimate 1/10 of a percent it is only 2/10 ofa% but double expectations. >> i wouldn't lose much sleep over it key things investment more important

promotion, failure to reappoint, that was volcker under president reagan and agreement for mccabe, thenident truman who did not like what the fed was doing at all neither law nor convention fully profect the fed chair that comes from politics. another part of the chair and political protection, the belief among politicians that markets will react negatively to his or her removal. the question i have is, whether fed chair powell has that kind of support from the markets. >> other people, steve, said that it can't be done. and you say, you know, so it just depends who you -- i saw a whole piece on that, that trump cannot do that it is definitely gray area >> i don't find it in the federal reserve how to do it the idea is -- you can imagine outside of the federal reserve act there is some case law and that kind of stuff you can put that on. act itself is silent on the removal of the fed chair. >> the chairman has to have independence that's just treading too far >> we'll get an answer about that if we have time at the end of the show. to jim cramer who joins us now you usually don't like b

i remember volcker >> but we had inflation. >> so you have to get -- that's a whole -- >> but you don'tant japan either >> we had 20 years to learn that that shows you how far we've come >> that's 100% right >> i wish we could get up to 400% >> but that's one of the things that's come out of the fed's conference maybe the benefits of running a labor market hot are, you know, offset some of the risks of unanchored inflation >> tariffs if there's ever a time to -- you know, you got to -- they're a cudg cudgel you shouldn't use trade for immigration, but if there's a time you're going to do it >> the problem with tariffs especially with mexico is you're hurting your own company, especially the autos >> it's always like that >> you know, we'll see if these things go into effect. and it also raises uncertainty and i think one of the things when we think about the possibility of a fed rate cut this year, what are the sort of signs in the past the fed's done that well, in '95 the chicago pmi started off around 64 and ended it and by the time the fed cut in july, it was 45. and manufacturing is