chair yellen: we have many people studying inflation models. i try to -- let me express some humility about them. i do not think that they are perfect. onetary policy is based economic forecasts. there are theories about how the economy works that govern many aspects of economic forecasting. consumer spending or residential investment or inflation, the underlining theories are not perfect and they are subject to uncertainty. this is true in all aspects of forecasting. is why we -- which change our forecast and a models that are persistently not working. we're always trying to develop better models. i am not aware of a different model of inflation that would be superior to the one that we employ. verify that inflation is moving in a manner that will be -- and if it is not we will adjust policy accordingly. >> jeremy, then nancy. with --, are you concerned that your decision could have an impact on situations abroad that could impact the u.s.? chair yellen: we are constantly monitoring for development, especially in emerging markets. we understan

let's turn to janet yellen and her testimony. jobs, confident about inflation goals are attainable, making no promise of a december rate hike. there is nothing yet in her testimony that is different, correct me if i'm wrong, from what we have heard before. >> it is the same as the speech she gave yesterday to the washington economic club. there is a danger in waiting too ,ong for rates to go higher setting congress of the same way she set the markets up yesterday. she has to explain to members of congress who do not want the fund to move, why they are doing that. she will get some questions fedt that politics -- about politics. how the you think the fed and chair yellen have been communicating? >> i think she has been pretty clear. it is likely that rates go up in december, but the much more important message from the fed and janet yellen and her colleagues is that the rate hike path would be very different from furious cap -- from previous paths. along, janet yellen is now beginning her testimony, so let's listen in. >> since th

chair yellen: it is a risk that we monitor. itould not at this point say is a very serious risk to the u.s. financial system. >> this is not meant to be a one were attion, but we data about a month ago. we will call it dollar-euro contracts. the movement away from their being settled in new york. some of that is because of regulatory situations. they were not being settled under our regulatory environment. does that movement of all or denominated contracts -- dollar-denominated contracts being settled overseas have any threat or difficulty to the federal reserve's ability to see regulatoryfluence movement of those resources? chair yellen: i am not aware of such a trend, but i will try to look at that and get back to you. >> that is one of those technical written questions. i yield back. members --o a four inform members the chair has a need to leave at noon. we want to honor that. i just talked to the vice chair and she agrees. i want to give everybody a chance to get a question. could we limit it to one question and keep it to

so yellen is setting the stage there. as far as pace goes, she says, and i'm quoting here, the committee anticipates after employment are near consistent levels, economic conditions may for some time warrant keeping the target federal fund rate targets level below the committee's views as normal in the longer run. she has mentioned this before, neil, she is reiterating and making it clear once again that if indeed a rate hike does come down the line that the pace might not be as dramatic as some might one wish or some might call for. and i want to read to you, neil, the very last line she gives or will give in this 14-page speech just moments from now be with it's a wink and a nod. a little smile on her face. she says and quoting beginning to normalize the stance of policy will do so being a testament to how far our economy has done in recovering. she goes on to say in that sense speaking of a hike potentially it is a day i expect we are all looking forward to. again, janet yellen said to speak here moments from now and f

yellen's commentary.heless, the short answer to your question at the beginning, are we seeing a big reaction anywhere? yes in the bond market, yes in the dollar, but big is relative. not that big of reaction. scarlet: great context, julie hyman. the emerging markets index had been declining in the lead up to janet yellen's comments. if you look at the bloomberg terminal, you can see the losses in the lead up to yellen's speech. we are off our lows, but still, a drop of .4% for one day. the setup was fairly negative on expectations that janet yellen the fediterate that would proceed ahead with liftoff as long as the data supports that, and it does not seem to have changed the tone. alix: we are seeing some thing similar ripple through the currency market as well. you go to the bloomberg terminal and you can see the u.s. dollar against the ruble, the dollar gaining in strength, which means the ruvell is declining against the dollar. 11:00, thery, 11:30, bottom put in for that part of the session, and then a

we have yellen, draghi, yellen and then draghi again tomorrow. much is the euro dollar exchange rate interfering with growth, policy mistakes, now that expectations weren't met with the ecb and how carefully do you think janet yellen is watching it? >> and add to that the fact that we have apparel tomorrow morning as well. there is a lot going on that is going to be moving the markets. i think yellen is carefully listening to what draghi has to say and looking at the exchange rate movements. is it the case the ecb is setting policy that's appropriate for the economy? in that respect, i think, the jury is still out. the ec bcht is stib. >> thank you, michelle myer and samantha azzarello. >>> they are gathering in new york to discuss the role in technology and health care cost. meg turelle is live with a special guest. >> good morning, carl. thank you so much to ken frazier, the ceo of merck for joining us. you met with president obama recently to discuss this topic. you talked about it on your last quarterly earnings call. could you tell us about

it's clear that everyone on the fomc respects chair yellen very highly.was her leadership decision to move ahead. i think it was a good thing for the fomc. chair and hasard, said that she understands there and be dissent sometimes, that could be a someone thinks they should tighten the margin go they don't, or that they ahead in march and a couple members of the committee think that is a mistake. mity is ahink the entit permanent characteristic. scarlet: ok. thank you so much for joining us today. we have somewhere breaking news, this time from aig. it will buy back an additional $3 billion of shares on top of its current authorization of $4.3 billion of stock buybacks. the back story with aig is that carl icahn as a pressuring them to boost returns. his suggestion is to split up the company. aig succumbing to some pressure by saying that it will buy back an additional $3 billion of shares. we will be right back. ♪ scarlet: i'm scarlet fu. "what'd you miss?" it's time for the bloomberg business flash, some of the biggest business stories in the news right

>> well, chairman yellen gave herself an out. she also said that they would be data-dependent and they would review the data right up until the moment that they meet. so, she left that door open, i guess as any good fed chairman would. at our table and at other tables, people were checking the stock market before she began speaking to see where we'd end up after the speech. a lot of her notes were released just before, actually, she started speaking. her text became public. the stock market rallied as the text was released and as she started speaking, but by the time the beige book came out later, it ended up lower. she was clear that what she didn't want to do was see any sort of bankrupt hike if they wait too long, and i think that was the important part that steve -- the important point that steve liesman just made. markets never like to be surprised. it looks really clear, i think, that the fed's intent on this december meeting. also, don't pay too much attention to the timing of lift-off. basically pay more attention to the

julie: waiting for yellen. betty: waiting for janet yellen.ing at the average is, -- averages, things are a little more negative than stocks looked earlier as investors await the speech from janet yellen. i know that he will delve more into that in a few moments. if you look at the s&p, what has already done in this early session, we have seen a lot of bouncing around, albeit in an euro range, but definitely not -- in a narrow range, but definitely not decisive. if you look at the bloomberg terminal, only two groups are on the green, technology and health care. energy shares, utility shares are doing the worst by a longshot, both of them down. betty: we have inventory numbers, oil numbers up? julie: crude oil in particular. energy stocks, when you look at oil prices today, we had a pullback. and officials are meeting, despite a report we mentioned the there was some agreement on production cuts, the agreement did not include saudi arabia, so it essentially might as will not be an agreement. there is widespread pessimism about some sort of agre

yellen: we will try to avoid that. --le we have set gradual said gradual does not mean comingcal, equally timed equally sized interest rate changes. that is not what the committee means by it. economy is that the will progress in a manner that is not sufficiently even, that decide to make evenly spaced tykes. we want to do what is appropriate and i recognize that is a danger. i do want to assure you that we will be debit dependent. if the outlook evolves, we will respond appropriately. i strongly doubt that it will mean equally spaced tykes and it is not the intention of the committee to follow any mechanical formula of that type. you just mentioned that it may be possible that structural factors are holding down inflation as well and the dynamic that is happening in topline inflation is happening in core as well. wasmedian projection revised down and this is happening in other central banks as well. additionally, markets seem much lower inflation in the future than central-bank models do. within the fed, how are you a

today, get yellen said she was confident about the strength of the labor market. a donedecember lift off deal? exxon's tobacco problem. comparedompanies being to big tobacco. the latest campaign to take down big tobacco. in talks to sell its main internet business. what could a sale mean for ceo marissa mayer? a snapshot of regional economic conditions is out. i want to go to mike mckee with the headlines. the color, what do we know thus far? mike: it is reasonably vague. janet yellen just finished speaking and said the fed is ready to raise rates. the economy right now described as improving on a modest asus, a description they have used for quite some time. they know the robust sales of autos helped by low gasoline prices. they talk about manufacturing being mixed, held back by the dollar and week exports. know manufacturers expect improvement in the coming months. that was what janet yellen was delivering today. broadly supportive of the idea the fed can move. david: an uptick in temple warner -- temp workers. we will look at market reaction so much as there is

and chair yellen, welcome again. i want to kind of return to this line of questioning that senator klobuchar and chairman coats had touched on with infrastructure in particular. and i want to thank you for very diplomatically describing why it's a bad idea to pay for things in this way. i might be less diplomatic in my characterization of those types of pay force. but i think it's very important that we in our effort to pay for things as important as infrastructure have honest payments. one of the changes that was made along the way had to do with the exemption of community banks from that sort of structure. and at this point, fed member banks with assets less than $10 billion will be exempted from the changes in the fed-shared dividend rate included in the highway trust fund bill. community banks in new mexico and across the country depend on the fed share dividend for its solid return on capital investment. and i've been very vocal about how misguided it is to ask small community institutions to finance our nation'

yellen,that for janet can she look at one america or is in a quality so large now that janet yellen iswo americas in our analysis? -- in her analysis? >> inequality is a growing problem in america. i don't think much of what janet is thinking about at the moment as she looks at the rate increase -- i want to congratulate you guys. you have managed to arouse an awful lot of suspense about a move that i think is pretty much a foregone conclusion and better telegraphed that almost any move the fed has made. tom: i'm going to start crying . this is fantastic at you have done this. we try to make it as suspenseful as we can. what will you listen for in the press conference of today does not matter? not say today does not matter. i think they will raise today and i think it's the right thing to do. it would not have mattered a lot if they had done it at the last meeting or they do it at the next meeting. to gok it's important ahead and raise and they have telegraphed pretty clearly that they are going to do it today. i think their motivation is mainly to get back into a more normal range. th

we are awaiting janet yellen's speech, and awaiting the ecb tomorrow. the macro highlight of the day was the euro area's latest inflation report. consumer prices just rose 0.1%. economists expected 0.2%. that is reinforcing that the ecb has to do something tomorrow to accelerate inflation. don't forget, inflation has been way below the ecb's goal of 2% over a two-year horizon for the better part of three years. betty: ok. so staying on what is going on right now, mark, the worst-performing european stock today was steelmaker arcelormittal. what prompted this 12-year low? mark: check that out, betty, down 9%. a big iron ore producer today said steel prices are heading lower next year. citigroup says arcelormittal's earnings have further to fall next year. they cut their recommendation to neutral from buy, and said they jumped the gun in upgrading shares in october. they are facing a double storm. china is flooding the market with cheap exports, particularly in europe and the u.s., arcelormittal's big markets. the other side, iron ore prices have sunk to

futures point higher as janet yellen is ready to speak in washington. dell is selling assets and the facebook ceo mark zuckerberg pledges to donate 99% of his company's stock while announcing the birth, congratulations, of his first child. >> speaking in an exclusive interview with cnbct spanish economy minister says he has faith in the central bank. let's get back out to julia in madrid. >> thank you so much. you're absolutely right. he has faith in the central bank but what i asked him was ultimately is he concerned that there's too much expectation baked into the cake here for mario draghi? listen to what he had to say. >> i think that it's a position that has to be taken by the ecb but i think that, you know, they have been -- they have increased with respect to t you know, to the targets. and to their willingness and and for sure, monetary policy because i think they are doing a very good job and they know perfectly what kind of instruments they have to use. >> do you worry that expectations are too high though? even now? if we look at equity marke

chair yellen tells us that it is an average, not a ceiling. so, certainly the core of that committee wants to get into. to me it's critical in the statement that they use the word monetary actual inflation. were a young lad, we measured monetary policy by the angle of arthur burns pipe. are we going to get ever more convoluted as we move this out to 17, 18, 19 and 20? is your cosmic science becoming ever more verbose? the trade-off is that everyone wants the fed to be transparent, but transparent in the yellen said is longer and longer statements. don't get me wrong, i'm thrilled she's doing the press conference, but absolutely, it's a long cry from the days when the fed did not ignore knowledge that they were moving to fund rate. tom: i've never seen michael mckee look more intense. what are you looking at? mike: they call the market the very definition of as expected. slight flattening, no real movement. markets got this right, which is exactly what the fed wanted them to do. tom: do we end the show now? scarlet: we're not even close. mike:

chair yellen: these are risks when we look at financial markets. over at been discussed the last year or so is the fact in manyvate companies emerging markets have taken on dollar denominated debt. my sense is the banking systems and financial sectors of those emerging markets have been much more carefully regulated in recent years and are less vulnerable and have themselves less dollar denominated and short-term debts. the dollar denominations in these countries -- >> are you seeing risk from developing countries and debt loads in those countries that would affect our economy? it is a risk we monitor. it's a serious risk to the financial system. this is not meant to be a one-off question, but we were looking at data from about a month ago. from the wayaway they are being settled -- some of that i did not know was because of regulatory or cost situation being settled under our environment. does that move to dollar denominated contracts being settled overseas? does it have any threat or difficulty to the ability to see data and influence regulatory

we've got ecb, janet yellen speaking once again.om:will ecb unveil echo the announcement out of the press conference. all of surveillances morning, on television and radio. lift into difficult news, starting with news in new york city. >> good morning tom and caroline. the two suspects in california have been killed in a shootout with police. this happened several hours after 14 people were killed at a center for the disabled. the police chief spoke late last night. >> we put out we have information there were three shooters. right now as we continue to drill down information and the witness statements, it looks like we have two shooters. we are pretty comfortable that the two shooters that we believe went into the building are the two -- farouk -- art site our site need farouk -- syed farouk and his wife. british warplanes have carried out their first strike on islamic state in syria. not long after parliament approved the action. the defense ministry says it would release details later. arrest in theof worldwide soccer corruption

in yellen we trust.mium you want to hold 10 year government bonds versus two-year government notes. it is going to be one of the most dovish tidings it -- tidings. her objective is not to quell our views about a rate hike. wouldn't it be good to see a rate hike? what, -- jonathan: we got richard jones here. we got the blue curve up for us as well. .- i got the bund curve up i'm not pricing and inflation, that successive qe is going to be when bund sells off. richard jones, what does that chart look like? i don't think is going to look out -- i don't think it is going to look a lot different. they are struggling to get any traction on the upside of inflation. they are going to act aggressively. there is a lot of work to do. jonathan: janet yellen a little bit later, what is coming up in the program? manus: we're going to talk -- we're going to talk about where we are with an inflation expert. polluting the entire newsroom with the swiss yield curve. david lee joins us. there is a vote going on in the hous

europe trading cautiously higher ahead of expected easing from the ecb while fed chair janet yellen sounding her most hawkish going into next week's anticipated rate hike. >> when the committee begins to normalize the stance of policy, doing so will be a testament also to how far our economy has come in recovering from the effects of the financial crisis and the great recession. >> the san bernardino police force says terrorism is not ruled out in the motive behind a shooting in california that left 14 people dead and 17 wounded. >> based upon what we have seen and how they were equipped there had to have been some degree of planning that went into this. i don't think they just ran home and put on these clothes and grabbed guns and came back on a spur of the moment thing. we have not ruled out terrorism. >> tkey will regret what it did. strong words from vladimir putin that said the world will not ignore turkish aiding of terrorists. >> brazil house improves impeachment proceedings against rousseff. assets moving higher on the news. >>> now the latest on the mass shooting in california. 14 p

janet yellen, an important speech at 12:30.oomberg markets." ♪ ,rancine: i am francine lacqua in london with tom keene. a rare occurrence. not only is tom keene in london, but the sun is out. it is a trio of prayer and good events. tom: that is lovely. it has been very gray, hasn't it? francine: it has, but it hasn't rained. tom: from boston, massachusetts and london, with the esteemed eaton vance, eddie perkins. providing leadership in equities and value. after a four year bull market. edward: i think it is outside the u.s. i say that as a u.s. value investor. marketsomy and emerging offer a good value, but there is no near-term battles without the u.s. dollar weakening that i was talking about earlier. gdp, all boatsl rise when a nominal gdp -- bring up the chart. the basic idea is that we had an r.o.k. nominal gdp that has gone soggy. what is that do with the top line of blue-chip stocks? edward: the top line revenue of multinational companies draw from the economy. when a nominal gdp goes soft, it hurts the top line and cor

that was pretty much in janet yellen's comments today.ything, this gives us a good pop to get in now. abigail: the s&p 500 slice to write through its first 200 a moving average for the second time in three weeks. what do you make of that? >> what i look at is a direction of the paper today, direction of the put call ratio. it is barely up to 20. it backed off a little bit. i would expect the volatility to be much higher given the news we have seen today. again, i think this is a beleaguered place for those investors waiting for this pullback to get there -- the technicals are there and very important. the last couple times we have gone through, we have snapped right back. abigail: thank you. moving to your trade, ultra asthmatics -- cosmetics. >> revenue year over year expected still in double-digit growth. everybody is piling on this easy trade. not that i think the stock is not going to go up but i want to sell a put spread because if the stock happens to drop i'm ok with that because i would want to buy the sure is below 158 anyway. th

chair yellen, welcome. in the summer of 2008, responding to rising consumer prices, the federal reserve told markets that it was shifting to a tighter monetary policy. this in turn set off a scramble for cash, which caused the dollar to soar, asset prices to collapse, and cpi to fall below zero. which set the stage for the financial crisis. in his recent memoir, former fed chairman ben bernanke said the decision not to ease monetary policy was, quote, in retrospect certainly a mistake. do you agree with chairman bernanke that the fed should have eased in september of 2008 or earlier? >> you're talking about 2008 or 2007? >> 2008. >> i mean, i think the fed responded pretty promptly in easing monetary policy to the pressures that were emerging. and i mean, i don't -- i don't disagree about -- with his analysis of a particular decision. but i -- i certainly wouldn't say that that decision is what caused the financial crisis. and by december of 2008, the federal funds rate had been lower to zero. >> so when yo

guide all odespite all this, january it yellen decided to raise interest rates. we live in a world where people who own financial assets have enjoyed this country far more than people who rely solely on their paychecks. and that is the divide that has played the timing of this rate like so contentious. mary snow has more. >> reporter: june 2006. wall street cheered the last like in interest rates thinking they might stay put for a while. what it didn't see coming is the worst economic crisis since the great depression. 8.7 million americans lost their jobs during the great recession. and to help boost the economy the federal reserve cut interest rates to near zero in 2008. it was only this month, when fed chief janet yellen indicated the economy might be healthy enough to change course. >> i anticipate continued economic growth at a moderate pace that will be sufficient to generate additional increases in employment and a rise in inflation to our 2% objective. >> people over profit. >> reporter: but anxiety over the como economy has thrust the federal reserve int

we just heard janet yellen speaking about the risks of waiting too long. do you think there's a risk of the fed going too early. >> i'm more concerned about this inflationary pressure. we're talking about not meeting the expectations for the last four years. you have seen a report about the whole middle income. it's shrunk first time in a minority compared to 1970. the largest cycle points to disinflation and my view is that -- let's say fed doesn't go now and it makes a mistake it can always go next time but if you go now and then if you have it you can't put the same thing back the way you did now. so i would earn more in the signs that i'm not concerned about inflation. if there's a concern about inflation it's that we don't have one. >> that's a failure on the part of the central bank. and not just the fed. is it realistic to assume through qe through the stimulus that the central banks can still reach inflation of 2%. >> i doubt it. what you have done is why i keep coming back to the whole middle income. the middle income really supports the growing g

fed chief janet yellen indicates further rate hikes are ahead. german chancellor angela merkel says germany has a special responsibility to protect the achievements of european integration. she has been talking about migration and head of hers day's european summit. as you watch our next report, imagine a young man in the prime of his life languishing in a prison cell, his health failing and his dismal routine and she agonizing beatings. his crime involves a bold act of courage -- during to speak out for religious tolerance and freedom of speech in the oil-rich and archconservative kingdom of saudi arabia. incarcerated for that courage, he has been awarded a prize for freedom of thought. >> as she accepted the prize on behalf of her husband, she told the european parliament that freedom, like air, is essential to human existence. >> he is a man of these. he did not want to be part of the heard that blindly follows religious scholars that do not live in the present. reporter: in 2012, a saudi court sentenced him to 20 years in prison and a thousan

could janet yellen have backed off again? not really. you are saying the markets do like this. they like the clarity. stephanie: yes, it is a good thing. it is like you are set up to fail. you are obligated to give every last detail and information, you leave yourself no wiggle room. john: does any republican or democrat have a reason to attack janet yellen? stephanie: janet yellen nailed it. they have enough time to attack one another right now. john: bipartisan happiness. stephanie: no such thing as that. john: we will roll that videotape from yesterday's debate. ♪ consistent --ty broad consensus that be debate did not change some rank order. we will start with a man who hearly ate some nails before had breakfast. bush.ould be john ellis jeb bush: he is a chaos candidate. he would be a chaos president. dealing with the islamic terrorism. this is a tough business. donald trump: you are a tough guy, jeb. mark: you suggested this was his last gasp. trump seems to agree with you. what did you think that no one else on the stage even tried

manus: that was fed chair janet yellen speaking in washington.er comments come as the latest sign that the committee are ready to raise interest rates for the first time since 2006. still with us is george and bloomberg's chief international economics correspondent, simon kennedy. are we there yet, george? george: i think we are. time, wasor the first quite clear, i thought, so i think we should expect that they will tighten. manus: dovish forward guidance compounded yesterday, which was the rate rise pace will be down to actual progress on inflation. simon: you are going to see more and that if and when they do hike this month. it is not the hike, but the pace of future hikes next year. quite a disparity in the market and economists about how aggressive the fed will the next year. forecasters say one more hike, but not until june. manus: what does that say to you about the u.s. economy? -- what, 1.5% by that end of next year? george: i think this idea that the federal reserve is setting out to raise interest rates once or twice and then they are

. >> you are listening to janet yellen. earlier today, mario draghi .ecided to cut the deposit rate joining me now is michael mckee. michael: she made the same point she made yesterday, the economy you wouldo the point want to raise rates. unemployment is close to its neutral rate. she made the same point to congress that she made to investors yesterday. the sed cannot -- the fed cannot afford to wait longer. here's what she had to say. betty: we do not have that available. michael: if they wait too long, they will have to raise rates faster and perhaps farther. away that a lot of people looked at yesterday, why they believe the fed is going to go into summer now is because she is signaling they do not want to wait longer. she did hint that the fed might be behind the curve. michael: it is much easier. they know what to do to respond to inflation breaking out. they would like to get started because they want to have ability to respond without additionalesort to qe, which they feel has lost its ability to stimulate. the othe

yellen. i look forward to your testimony in advance of the congress meeting in which you will decide whether or not to raise the federal funds rate. i am interested in hearing your perspective on the following issues and others. what current trends do you find most important do youin helping assess the finances of our country? how do you not hurt american families? thirdly, what do you think of the legislation recently passed by the house of representatives that would compromise the independence of the federal reserve? before i turn to these issues and others, i think it's important to put this hearing in perspective. at the end of the bush administration just a little less than seven years ago, we faced what former fed chairman bernanke called, and i quote, the worst financial crisis in global history, including the great depression, end quote. we have come a long way since economic crisis and that bold statement was due in part to the critical federal reserve. in the month that president bu

janet yellen and policymakers hike interest rates.arkets around the world go into rally mode. good morning, i'm nicole petallides. >> cheryl: good morning, i'm cheryl casone. the dow soured over 220 points yesterday. the dow pointing higher by 55, s&p by 5 and three quarters. >> nicole: on the camp taken trail donald trump talks to the commitment to the republican party while hillary clinton doubles down on taxing the wealthy. >> cheryl: defense secretary ash carter in hot water after the pentagon admits he used personal e-mail. >> nicole: city of baltimore on inch after judge's declaration of mistrial in the first case charged in the death of freddie gray. >> cheryl: and in sports soccer star abby wambach puts up the cleats. fbn:am, first look at morning markets and breaking news and what to expect on the day ahead. >> nicole: that hike coming seven years to the day after the central bank cut its benchmark rate to near zero levels. traders are applauding, but the rate hike is drawing mixed reviews from economists. >> right thing fina

yellen is increasing interest rates. it is a tragedy.t is a complete joke. ♪ scarlet: you are watching "bloomberg best." let's look at back at some more important business stories, starting with mixed economic growth in europe. mark: earlier, we had eurozone p rmb i data to 53.1. that follows figures from france and germany. let's go to hans nichols in berlin for some analysis. , a very good morning to you. what sort of reaction are we seeing to these figures? hans: we are not seeing a huge reaction in part because the figures are basically in line with expectations. we see the service number coming in at 54. it is modest, tepid, monotonous growth. overall, we will have a sub 2% growth in germany for the year. that is the best numbers we might get in the quarter eurozone but we have disappointing numbers at a france. in some ways, we are ending the year similarly to how we started it. growth but not really growth. i mean, it is so low you can barely proceed it. mark: hans says we have growth but it is not explosive. that is probably aski

janet yellen is overly concerned about inflation. that is just -- not the issue. >> it is about looking through the windscreen or looking in the rearview mirror. i know when you look at the inflation prints it looks like it is not an issue. we see headlines, we all know because of base fx that that headline rate will move up substantially. we know the core inflation is rising. in the u.s. it is at target. if you might want to be the opposite of bill gross, what are they doing with interest rates at just a quarter to a half a percent? they should be moving quicker. he is on one side of the argument and there is a spectrum. you would expect that. the fed's job is to go down the middle, and it seems to me that most markets with the exception of the treasury market, she is going more at the right speed. >> we got some more clarity but as we look ahead to 2016, there is still uncertainty as to when they are going to hike again and the asian markets, and implications there. >> and the greek mythology, a tragedy is a hero who destroys himse

janet yellen: job growth has been solid for a number of years.isposable income in spite of the fact that wage growth has remained in that 2%, 2.5% range, there's been a lot of job growth that is added to disposable income. david: she is saying she is still worried about slack, big jobs report coming ahead of the meeting. how bad a number would we have to get for there to be a bad number that would forestall the feds raising rates this month? the fedt does look that is heading to raising rates. 75% probability that the bloomberg showing amongst economists in the markets. i think they should not be doing that, because the number we should be looking at is the employment rate, which is 3.5 ts below what it was pre-recession. the proportion of americans in jobs is much lower than it was. the amount of slack in the andomy is really very high, the logic is that wage growth is nowhere. have a view that we are a long way from full employment, and these jobs numbers should not be pushing the fed there. the worry is if they raise rates, they have a negativ

so welcome chair yellen. i am so pleased you are here today for this important and timely discussion. i look forward to your testimony in advance of the federal open market committees meeting at which you will decide whether or not to raise the federal funds rate. i am interesting in hearing your perspective on the following issues and others. what current trends do you find most important in helping you assess the short and long term challenges facing our economy? secondly, how can the federal reserve tie future rate increases so we don't jeopardize the current economic recovery or hurt american families? thirdly, what do you think of the legislation recently passed by the house of representatives that would compromise the independence of the federal reserve? before i turn to these issues and others i think it's important to put this hearing in perspective. at the end of the bush administration just a little less than seven years ago we faced what former fed chairman bernanke called, the worst financial cris

listen into janet yellen. ms. yellen: we do not want to cause a recession through that type of dynamic. at some future date. it is prudent to begin early and gradually. also emphasized there was a lag between when the announcement takes place and it affects the real economy. the longer they wait, just to take you through the 15 year hikes,those are the rate 2006. that is when the crisis happened. and you had the zero interest rate holocene. riskonger they stay, the increases. that could tip the u.s. into a recession. they will be working with their primary dealers. the high and of the range. the amount not put in. that one goes into that one, at least that is the hope. these are the targets. what do you want to watch? these are the things you want to watch. are cominghen they out. eastern time. thursday, just after the lunch break in the u.s.. early morning in asia. that is when those will be published. these will show you how much demand there is for money with the fed at those rates. whether it works. let's go f

janetill incentivize yellen to raise rates.een watching this charlie brown game for years, and lucy keeps pulling away the football. >> 231, for the record, is my guess. it is a go. matt: i am submitting. the unemployment rate has been coming down steadily. i expect we will be 4.9% if it keeps up with trend. janet yellen has been promising to get off of the zero rate policy. in march see said it would happen mid-december. -- mid summer. i think we are down to the last excuse. i think you would be good policy to get that number up a little. david: are there some aberrations in a november numbers that might drive it up, for example, retail? we looked overseas and the other countries dropping their rates, and we feel there is so but uncertainty global, they are responding to the third having its rate low. we are in an international context and can help other banks if the u.s. central bank gets off the reserve. the other things, even the payroll-jobs number is a lot of numbers. the payroll rates may be one of the best barometers fo

stephanie: janet yellen nailed it today.ailed it because the last thing we need is more uncertainty and volatility. the street liked it. it was steady as she goes. why do we like that? the election is coming. 1.375% is where it should be by the end of 2016. the number is still very low. john: yeah. stephanie: what does this mean for the general economy? the number is still very low. it is about confidence. we finally have a sign that things are getting better. we saw the jobs number improve. as the slack gets absorbed, we can get some wage growth. think about middle america, all of those people getting behind cannelton's -- behind candidates like donald trump because they are frustrated. they might have a chance where they can start a business, get a job. john: the reason this happens is because the fed decides the economy is growing strongly and maybe there is some risk of inflation. stephanie: some inflation is good. john: for most people, the interest rate is a fact of life, but also a psychological thing. people have got

what does that signal to chair yellen?ing markets will hope, in the wall -- that, that the said the fed -- that hopefully will be done. now we can worry about politics and weak growth and all that other thing. but at least the fed emerging-market rate debate will be in the past. guy: you talk about the fact that the u.s. exists in isolation, but at the moment we are looking at u.s. companies paying more for oil relative to where they were previously versus the rest of the world. the rate is going up from the fed. the dollar is rising. you are seeing the chinese selling assets, and effectively that is a reverse qe that is happening. there is a lot going on in the intonational arena leaking the u.s. economy. bob: i do not know if it is leaking into the u.s. economy yet. i do not think china is selling that much in assets. there is capital flow going out of china into the other developed markets. we are talking about levels. i cannot imagine a fed rate that under 25 basis points to under 50 basis points will upset the economy

yellen: we will try to avoid that. --le we have set gradual said gradual does not mean comingcal, equally timed equally sized interest rate changes. that is not what the committee means by it. economy is that the will progress in a manner that is not sufficiently even, that decide to make evenly spaced tykes. we want to do what is appropriate and i recognize that is a danger. i do want to assure you that we will be debit dependent. if the outlook evolves, we will respond appropriately. i strongly doubt that it will mean equally spaced tykes and it is not the intention of the committee to follow any mechanical formula of that type. you just mentioned that it may be possible that structural factors are holding down inflation as well and the dynamic that is happening in topline inflation is happening in core as well. wasmedian projection revised down and this is happening in other central banks as well. additionally, markets seem much lower inflation in the future than central-bank models do. within the fed, how are you a

in three hours janet yellen will give a speech, testimony tomorrow.will have his press conference tomorrow. in 24 hours it should be clear we have more qe coming out of europe and we'll cut rates here. rates in europe and the united states will move in opposite directions for the first time in a long time which is being dub t dubbed as the great monetary divergence. >> out to seven year, it's been out to nine-year in the euro curve before, over 40 negative in the two-year in a euro note. if you wanted to intentionally create negative pricing pressures, deflationary pressures how would you do that? this is a great question. the economists will differ on it. i think the act of creating negative interest rates creates deflation. i think it sends a signal to the marketplace, negative interest rates means negative prices. this is key in a twilight zone world, if everything was normal like the '05 economy but you wanted deflation, you would lower rates to negative to accomplish that. let's fast forward to the world we're in. they want to create inflation, b

joe: janet yellen discuss of the carnage in her press conference. ceo, ousted from cheniere energy.e will get his take on the energy market. talk about the u.s. stark market giving back yesterday's rally. jerkeemed like a knee reaction from what we saw. the commodities selloff and the prospects for global growth taking center stage. the strong dollar putting pressure on commodities. i don't think anyone really knows why markets fell today, and i think this speaks to some good advice come no reason to aggressively interpret the fed great decision right away. we will be debating this narrative for a while. like gold, oil, copper across the board down. index takingrgy 16%, the etf that tracks the stocks. the commodity route is adding pressure to the market. -- commodity route is adding pressure to the market. part of the reason why commodities got it was because of the dollar trade. look at the strength in the dollar, a 11 year high versus the canadian dollar, almost 2% off the south african currency. joe, you can speak to that in terms of a fed great hike. the market said, ok, we can

we had janet yellen speaking.ugh, as you heard a couple of segments ago, she did not say anything substantially different than what she had been saying, we have seen stocks go lower. i am curious for your market perspective on that. dan: i think you have got other moving parts and what you're seeing is the anticipation for tomorrow's's announcement from the ecb. i think that is taking center stage. the magnitude of what might be initiated moving forward, as far as rates and deposits, the duration of the liquidity position, and the amount of liquidity provisions as well. markets are taking that into account. maybe if they hedge a little bit , the market has been thinking -- that is why you're seeing a selloff this afternoon. i know your trade today has to do with small caps interestingly here. the iw m is what we are talking about here. why are we looking at that? from a seasonal standpoint, the small caps typically outperform the larger caps into january. given the fact that if you believe the market will continue

. >> cheryl: investors will pay close attention to janet yellen today. her assessment comes about two weeks before the feds final policy meeting of that year, of this year, excuse me. first hike in interest rates in nearly 10 years. one fed official says he's a bit nervous of raising rates later this month but evans says it's more critical to focus to raise rates at a pace. november estimate is 190,000 jobs. that will be up from the 182,000 added in october. also, we will get the big monthly reports this friday. economists are looking payroll by 200,000 and unemployment to hold steady. >> nicole: bigger the number, the better it is for jobs. sources say the company's board will weigh a sale of core internet business this week. board to proceed yahoo investment in alibaba. 7% after hours on that news. you can see it on the spike. ceo faces more pressure over the company's performance. efforts to turn around yahoo now in their fourth year have been challenged by low morale with at least a dozen top executives leaving the company. >> cheryl: zuckerberg anno

fed chair janet yellen, set to speak any moment now.n take some questions, and as we head to break, take a look at the s&p sectors right now. tech is in the green. nothing else is. back after this. surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is? >>> hello. i'm sue herrera. here is your cnbc news update for this hour. a jury was seated in an opening statement started for the first police officer to go to trial in the death of freddy gray, a young black man whose injuries in police custody triggered protests and rioting in baltimore. ryan porter, who is also black and seen arriving in court, is among six officers charged. >>> chicago mayor rahm emanuel telling politico, his siste