how will janet yellen leave her mark on her last fomc meeting?hael mckee is back from montrÉal to answer the questions. does it become a more hawkish fed? >> it does, you have three new voters, but not at this meeting. there is no reason for them to raise rates and it would be difficult to make the case given inflation figures have not moved. they do track inflation expectations, so you may get a change in the statement, because the consumer-based side has stayed steady but the market based site has picked up here and -- picked up. the idea that the inflation rate is stable, they may be able to tweak that a little bit. a chart showing you what is happening with inflation and the unemployment rate. i have to wonder if we will shift into -- they will shift the tone given the tax cuts we got and how that could spur price growth. >> that is a wait and see issue. we do not know how much stimulus we will get out of it. economists think maybe 310 of the gdp over the year but it depends on how quickly that hits. not right now because they have not starte

janet yellen's last meeting. we talk about her legacy.start with the big issue, dalio's warning resonating from davos to new york. >> a 1% rise in bond yields will produce the largest bear market we have seen since the 1980-1981 period. >> are we in it? >> there will be a time of the bank of japan and ecb begin tightening. that will be the time when bond yields increase. i don't see that now, unless i'm wrong on inflation. i don't believe the federal reserve will tighten before suggested. >> i don't think the bear market is starting. since 1990 we had many, many predictions but it has not happened. lisa: joining me in new york is subadra rajappa, and rachel , and coming to us from london is luke hickmore. i want to start with you, subadra. forthe selloff just begun, is this the extent of it and will people pile back in? subadra: that's a good question. i think there is still more room for bonds the selloff from here. they seem to be pricing higher over the last -- in the last few months. i think we could probably go a little higher. it de

as jay powell comes in, this is all about janet yellen leaving. given some space to explain how she feels about the economy and she will go off into a different realm. i am pursley never particularly interested in the numbers for nonfarm payrolls. it will be very volatile. lisa: what is the biggest indicator, rachel, that you are looking at that affects more broadly the u.s. credit and frankly emerging markets? because the dollar has been the story of the day, of the week. what could make it go stronger and actually disrupt a lot of the consensus trades right now? rachel: a single indicator, i would cheat a little bit and say the financial indications indicator. it combines a bunch of things. i think the signals we have gone back to as loose financial conditions as we have seen since 2014. we think this means party on for the near part of the year. but as we go into the back half of the year watching volatility, which has begun to move off the floor. if it does more so, it will be decompress assets. lisa: it is time for the final rapid fire. we as

federal reserve janet yellen is due to step down when her term expires at the end of this week yet it was the first woman to head the federal reserve took up the post in february twenty fourth teen legacy includes slowing down the quantity of easing regime which have criticized ben bernanke introduced in twenty fifteen she also raised interest rates for the first time in seven years jerome powell will succeed yellen and he's not expected to rock the boat too much with his views aligning closely with yemen's. well let's bring in our man on a wall street now yes quarter is standing by for us as ever and always nice gains we've also had that meeting all of the fed today what came out of it. the federal reserve knowledge that the u.s. economy is continuing the past of grows and they did change the tone slightly from moderates to solid solid growth when it comes to the job market when it comes to overall growth when it comes to consumer spending and old so business investment still no changes in interest rates but that was expected we might see the next interest rate increase at the next m

let's start with janet yellen's legacy.t people rate are very highly when it comes to managing the economy in managing the transition back to normalization or however you want to define it. but there are criticisms about how janet yellen performed in the politics of a role. from an super accommodative policy and said we don't need a super accommodative policy. when she came in with us you is going to be dovish because she was which was president of the san francisco bank, and she wasn't. but what you brought up things to congress like typical physical type of things like income inequality for example, she was criticized for that and i think that damage to reputation with the damage to reputation with some members of congress. jerome how is coming in and me -- coming in any might have a friendly congress this year but maybe not after the elections next year. tom: d agree that there's a mystery in chairman powell? >> even when he was just the governor he had sparse public comments. , veryis some degree regulatory-based. what

that picture we ran at the top of the show of janet yellen.t there is a tribute going on at the fed where everybody is walking around with their popped collars. so i thought i would join in like everyone else and we can salute janet yellen. collars is true, her are popped. we got a posting on social media so you can join the party. i don't think i can pull it off like mike can. scarlet: is going to be her last day. she's not going to give any kind of speech, right? its very quiet. >> by now they have finished their meeting and sent over the press release that they will give to the reporters. they have already given it to them and we will get the data in about two minutes and they will tell us what happened. but its done for her now, and it is going to be jay powell's fed. >> where the raising rates today? somebody people are saying we have to wait until march? >> its a nonconference meeting but there are no inflationary y are not, the pushing up right now. going into march they will have more data and they could do that. she also doesn't want

what did janet yellen's committee tell us and what did it do? rates by hence that suggest that the reserve is getting more confident and inflation in a statement that they said we see more signs of labor compensation starting to rise. they also talked about doing further rate increases, adding that word to a key sentence, solid growth all around. this is what led many, it isn't that they changed the path, it is clear that janet yellen is powell, by jerome so now let's bring in someone was part of that path for many years. dennis lockhart, who was the president -- we are glad to have him back to share his view of where the fed is going. it, when you look at the policy statement coming is it reassuring that powell is going to follow in the footsteps or are things going to pick up and do for rate hikes instead of three? get your question exactly, but what is in the mind of people is really whether we four,ing to see three or which is a possibility, or fewer than three. i think the likelihood is that if it is not three, it is more likely to be four

marty greenberg is still chair, yellen has not yet been confirmed. well for friday's jobs are? the dollar is still down by the lows. the beating of drums of a solid labor market. you can see it like at the edwin you are there. to what extent moving forward not just passing new laws, but things like the stress test, something you created as i recall? daniel: it is possible to make the stress test more stringent without a lot of fanfare. you can change the severity of the economic scenario. more opaque lee, you can change applied bynctions the model to certain asset classes. if a fed leadership wanted to, they could certainly dialed down the severity of the test without any legislation. by the same token, if too much information about the model is given to the banks, they will effectively be able to massage out -- balance sheets the dave before admissions and the stress test will make them look perhaps somewhat more highly capitalized before than y actually are. these are somewhat subtle ways that there could be an impact on the capital level in partic

janet yellen: wage increases our modest. >> we do not see tightness in the labor market.anet yellen: the labor market and economy are not overheated. >> no sense in overheating the economy or a tight labor market. janet yellen: inflation has been below are 2% objective for most of the past five years. >> inflation has been below our 2% objective. or maybegle month every month but once since i joined the board of governors in may of 2012. janet yellen: the fomc has indicated it intends to carefully monitor actual and expected progress toward our inflation goals. >> is a transitory or are there more fundamental things that work? we are watching carefully to see and we will have to be guided by the data. isnie: joining us now somebody with many experiences in decades. shared, the language is language that is particular to the fomc. what do we know about jerome powell's views? >> he pointed out very well, he does not seem to differ very much from the chairman -- the current chairman for the next few hours, from her point of view. quite close,e different backgrounds but not a

yellen is in her last week of the fed.ots of data including jobs data and a state of the union address i president trump. the metal price for you, this is zinc. we could have shown you others, the zinc is up 2.3%. because of the week's dollar affect, lme inventories coming down and that's something that is focusing on how much higher, how much stronger can these metals get. this in the context of the oil rice which has dollar weakness. manus: it just keeps racing away. a jamboree week in terms of jenna yellen and the jobs data, but one market that is absolutely in jamboree mood is the equity market. 94 24, the monthly accumulation of wealth. the size of the market is pretty germanic. -- dramatic. that's the best month ever, $30 trillion market. think of the wealth trickling down. sitting on cash, deli of says it would be stupid to hold cash in this kind of environment. , one of thet week lines that came from him. of course they have vested interests. if you think about what's going on in the world, this is to trillion doll

. —— joe the central bank, succeeding janet yellen.ucceeding janet yellen. —— joe powell. he will hold thejob forfour years. and before we go, let's have a look at the markets. as you can see, most of them are in negative territory. this is after the dowjones industrial average finished in negative territory overnight. thank you to spending time of us. president trump has denied that new us import duties targeting mainly asian companies will spark a trade war with china. the us attorney—general, jeff sessions, has become the first member of president trump's cabinet to be questioned by the special counsel investigating alleged russian interference. the trial of darren 0sborne, who's accused of driving a van into a group of muslims outside a mosque in north london, has heard that he received direct messages from far—right groups before the attack. 0sborne denies one charge of murder, and one of attempted murder. 51 year—old makram ali was killed in the incident injune last year, as our home affairs correspondent daniel sandford reports.

he'll -- powell will be pore friendly to that than yellen was.ellen was more of a proponent to dodd-frank and not going away from that. powell will be happier to change things >> thank you very much for joining me >>> japan's fuji film is buying a stake in xerox lan land h landon dowdy has more. >> fuji film will take over xerox and combine it into their joint future called fuji xerox the new entity will be 51.1% owned by fuji film and keep xerox's listing on the nyse. share holders will receive a 2$2.5 billion cash dividend that's about $9.80 per share the deal comes amid sluggish photocopier demand and a drive to cut costs in a news conference the fuji film ceo says the deal does not deplete our cash saying the company will continue to pursue mergers and acquisitions aggressively the deal comes as xerox has been under pressure from carl icahn and darwin deesen to explore a sale shares of xerox up 6% in early trading. back over to you >> thank you very much for that. >>> let's check back in on the markets. futures pointing higher today. we got a

l.l yellen's term has been successful. and as hang??? ..we l .l; so we i leel; so we expect a increasing wages. so we expect a positive story. the only caution is whether he announces anything around trade policy, any protectionist agenda. in the meantime, stock markets are agenda. in the meantime, stock markets a re pretty agenda. in the meantime, stock markets are pretty negative. we had a torrid time on wall street. asia was all red. your thoughts? in the grand scheme of things, it has been a great start to the year. there has been a bit of red, but it has been a strong start. so it is reasonable to expect a bit of a pull—back. overall, the backdrop is still supported. corporate earnings are strong, so we expect the market to continue to climb higher. we are going to talk about amazon go and that supermarket later and whether it is too easy to shoplift. and too easy to spend! let's move on. in a few hours, the government will launch an inquiry into construction giant carillion, which collapsed two weeks ago, putting thousands ofjobs at risk. j

i want to start my comments by echoing the comments by janet yellen. she has done a wonderful job in a difficult situation when she came on board and she needs to be recognized for that. governor powell, i appreciate you being here today. the debt is about $20 trillion. could you give me any idea on what additional $2 trillion what impact, how that would impact the economy? >> holding olive sequel? >> higher interest costs obviously. if you hold all of sequel you have higher interest costs and they'll either go to pay for that are even more debt and that will crowd out private capital. >> is there any numbers you have one potential impact of the economy and the higher the debt goes is that half% from a quarter%, 4% per trillion? >> i don't have that handy. you make the reason it is important is because a third of their current diet, the last tax cut during the bush administration and we need to get the right information. i don't know if anybody on this side of the aisle that doesn't want a more simplified tax code that doesn't drive the economy across

janet yellen coming in about here. fischer calling this altra accommodative. -- ultra-accommodative. up but nowhere near where we need to be. haven: no and they should started three or four years ago and they cannot make up for lost time by jacking up the rate at a fast time. we not go measured quarter-point by quarter-point but 38 of a point move? martin: that would be ok but if they say, we started three years ago, we would be up not one point to five but at 3%, so let's just jump to that. we cannot do that without upsetting markets, but we have to get there. the danger is, the equity markets will not like it. the equity market so far has been fine with the hike. we did not have the temper tantrum we had last time. why are you worried for the next 12 months? martin: because i think the equity markets are priced way out of line with historic experience. the s&p price-earnings ratio was something like 70% higher than its historic average. if it goes back to a normal price-earnings ratio, that would be a very big drop.

. >> i imagine janet yellen is doing cartwheels behind the scenes at how well the market has taken thehole balance sheet reduction plan and announcement. >> i think people are going to rightly interpret that the fed can move and go in december. and go two to three times next year. >> i think they would view jay powell to be continuing over the policies we have experienced over the next several years. >> the bond market has been in a trendr bowl trend -- bull right now so that has bailed out , a lot of bond investors. yields keep going down and returns are good. >> the 800 pound gorilla is whether or not this building corporate leverage which have seen over the past three or four years -- is that sustainable or leading to something less benign? >> if equities are doing well, credit spreads are doing well, and if the economy is doing well, i think there will be some willingness to look past the flatness of the curve. julie: joining me today in new york is kathleen gaffne, and from pasadena, california is julien scholnick, portfolio manager at western asset management, and in princeton, n

janet yellen has pretty much told us what they talked about. there has been division on whether we are going to see inflation rise more quickly as resources get used up. group of fed officials feel that way and others have blamed temporary factors. we are not going to see anything different in the minutes now. if there is a rethink it hasn't started yet. alix: let's go to break even that was my chart of the morning. the two-year has had a huge jump at 1.6%. if the fed is worried about market inflation expectations not living up and they start to live up what does that mean? where talking about minutes of a meeting that was held december 13. we are three weeks away from that now. 2% markets only just crossed yesterday. none of that is going to be factored into what we learned from them today. david: history happened yesterday. he willtch decided that retire. he is the longest-serving republican senator and this is how he is explained his decision. knows whenod fighter to hang up the gloves and for me that time is soon approaching. that's why aft

fed the janet yellen era has come to an end.just a few more weeks and janet yellen is out of there. are piling in, they stocks, thatn with ripped in the u.s. permeated the emerging markets, some are trying to figure out who was meeting who but i want show you one indicator here, this chart that gives you a sense that the and may be coming soon. 2717 measures the breath of the stocks. about 80% of the s&p 500 stocks are now trading above their 50 day moving average, that is usually a sign that bull run may be ending. you can see that this has happened a few times during this bull run. we have not seen any and to u.s. stocks. you just ignore the technical's, we have seen these red alarms before and we see rallies continuing on forward. people say 2018 is that risk where we see these trade tensions escalate and we did see that from the president today. >> let's check the u.s. markets and how they close in reaction to others headlines, you had the snp of about 2/10 of 1%, the dow trading unchanged, the nasdaq getting tech momentum e

janet yellen's last meeting there. she is passing the baton to jerome powell and the indication is that they are going to continue moving forward with this rate hike process. that has some worried that rates will be moving higher in the foreseeable future. it actually sent yields, if we show you the 10-year yield higher today, as well as 30-year yield. see if we pull those up, as we got the news from the fed we saw them trading just under a yield of 3% on the 30-year. we'll work on that. we'll bring it back for you in a minute. but 26,068. there is a little bit of concern in this market when you think where we started the day. we still have about an hour and seven minutes to go. gerri willis is on the floor of the new york stock exchange and, gerri, this came on rather suddenly pretty well. now we're moving in into negative territory. >> we're down, down 0.2.2 arrows traders don't like federal reserve. we're not raising rates. what the fed look, this economy looks strong to us. we could be seeing some inflation in the

we will have a continuation of what we have seen on the yellen said. that is the thing to what -- yellen fed. that is the thing to watch. mark: thank you so much, richard jones. bill gross shares his outlook on the global financial markets. coming up, 2:00 p.m. new york time. don't mess it. -- don't miss it. let's check in on the "first word news." ma: states will be able to impose work requirements on their medicaid programs. critics say that could increase the number of americans without health insurance. a sign that inflation pressures in the u.s. are easing. for the first time in more than a year, wholesale prices fell last month. one big reason, lower prices of gasoline. we will get another look at inflation tomorrow. in southern california, rescue crews are searching for survivors from devastating mudslides earlier this week. at least 17 people were killed, another 17 are missing. one of the architects of the u.k.'s departure of the -- from the european union says the company should take -- says the country should take a second vote. a second vot

this is janet yellen's last press conference. i'm sure there will be a lot of person.a sentimental i would be making a sentimental statement while i asked her my question. hawkish statement. may be inflation rising and the in thatpushing direction. again, if you are a bond trader, this is the week when you are going to be watching every headline on the bloomberg. thanks very much. kathleen. let's get to our guest from ubs wealth management. what are you making of all of this? what about the bond market, historic events coming up? the state of the union address and janet yellen's last fed meeting? >> we have been negative on the bond markets for quite some time. our view has always been that if you don't have to be in a high-grade government bond space, don't be. there are a lot of factors coming into play that are not likely to be positive for the bond market for quite some time. we think it's going to hit close to 2.9% by the end of the year. still more to come. rishaad: absolutely. that begs the next question. this meeting of t

from here but will an untested fed derail the entire thing the fed rate drop in one hour and janet yellen final meeting as chair i'm brian sullivan "power lunch" begins right now >>> good afternoon i'm tyler mathisen, thanks for joining us we begin with breaking news on the amtrak train crash involving gop lawmakers outside of charlottesville, virginia. we are from west virginia near the greenbrier to which these gop members were decamping for their annual summit. ylan >> tyler, one person has been confirmed dead in that accident. the train hit a dump truck the person who died was on the dump truck and another person on the truck was critically injured. the washington reports that jeff flake of arizona carried one of the injured into an ambulance with other lawmakers now we could also tell you that one member of congress has been taken to the hospital. we don't know who it is or what that person's current status is. other people who were on the train were treated for minor injuries now as you mentioned, lawmakers are coming out here to west virginia in the allegany mountains for the winte

he is said to be officially installed as janet yellen's excessive.oklahoma, five employees missing after a natural gas well explosion. the owner, patterson-uti energy is pledging a full investigation happenedblast which monday at a drilling site about 100 miles southeast of tulsa. avos, speaking at the world economic forum, they want against isolationist measures by some of the world's biggest nations saying that we must accept globalization is slowly losing its luster. he believes the indian economy could hit $5 trillion by 2025. and illinois senate -- senator tammy duckworth has told us that she is pregnant. she is expecting her child, this will be the first time a senator will have a baby while serving in the chamber. i am a alisa parenti, this is bloomberg. after five: 30 p.m. in washington, it is 6:30 a.m. in hong kong. we are joined by david a glace -- david ingles. id: i am looking at some of these markets, these futures contracts, most of the markets sayunderway and suffice to we have had a massive run-up in equity prices, especially in hong

atty: we have got a lot this week, earnings, janet yellen's final fed meeting.alk about some of the eco-numbers, jobs numbers coming out, expected to show an increased, also jobless rates maintaining at about a seven-year low. spending numbers will be out. consumer spending numbers will be a major reflection of the holiday sales, which are expected to be firm and showing increased. we also have manufacturing activity, which is continuing to be robust according to economists surveyed by bloomberg. in thealk about trump, spotlight this tuesday in the u.s. as he delivers his first state of the union address. he is expected to highlight infrastructure, a plus for him and has moved the market. also to strike more of a bipartisan tone even though he came in rather roughshod. he is realizing the last run through with the budget negotiations that you really need a bipartisan consensus. that is the tone he will hit and we are interested to see what he has to say about nafta and other issues, the immigration front. on wednesday, we have janet yellen's swansong, her final

the senate voted 85-12 to have him a janet yellen when her term third.ruary the trump administration candidates for the vice chair position. it has been vacant since stanley fischer retired. the new york fed president bill dudley quit in the coming months. the most active volcano in the philippines has burst into life, sending thousands of -- sending lava and ash into the sky. 56,000 people living nearby have there are away, and fears of a more violent and corruption. authorities warn of localized earthquakes and a pyroclastic cloud, where gas vaporizes everything in the area. >> in singapore, checking , it is a lotssion about the dollar weakness. the spot index falling to a three-year low below 90. we are seeing a surge in the japanese yen, up 4/10 of 1%. no surprises. you are seeing japan past nikkei index down by .8%. the topics -- the topix retreating. there is still lots of value in japanese stocks and we are starting to see the decoupling coming through from the relationship with the yen and stocks. 200 coming, asx back. let's have a quick look at the stuff we have been watchin

that said, janet yellen did a spectacular job.e should all be thankful for what she did in her tenure at the fed as well. >> can the pace of deregulation pick up once the new appointments are in place? >> no, the pace will continue to pick up as we get more and more of our people through the senate and approved into their seats. the first year of an administration is really a big personnel year where you're nominating people to run agencies, you're nominating board members and it takes you an enormous amount of time to get those people nominated, get them through the process, get them into the seats. i think year two of the administration you're going to see a lot more reg reform than you saw in year one. >> gary, there's been a lot of speculation that if you could succeed on tax reform, which you have, that you would step down afterwards you have succeeded what's keeping you there now >> andrew, i don't understand why you guys keep asking me this question i did get tax reform done with the president. >> you should be proud >> i'm

>> i think the challenges she faced were more nuanced than bernanke faced yellen had a different set of challenges, she has succeeded in that in general, we're skeptical around policy americas ability to manipulate the economy to do what they want at some point in time we'll see a setback. >> we've seen a shakeout in equity markets the last couple of days, this comes on the back of a strong start to the year on equities do you think that this market is due for a correction and that it could be quite sinister? or is this just a healthy correction in the market that has gone up every single day for a month? >> i think it's much more of the latter of curse we could see a correction nobody could forecast the short-term direction of markets. and in terms of a more significant one, we don't feel conditions are in place. we have not seen a lot of speculative success. some areas of the market are looking frothy we've not had that excess that precedes significant market correction >> want to ask about one u.s. stock, alphabet. you want to talk about frothiness is that a company when you look

big events on the front with janet yellen and donald trump.e earnings and the direction question. the market again, the dollar coming off the worst week in eight months, he s&p was up the fourth week, can it do it again? earnings have been fueling the rise, and let's go into some of earnings in the spotlight, mcdonald's, mark, boeing to name a few. mcdonald's in the spotlight because it is expected to continue to gain market share for a fast food giant, and of about 5% in the fourth quarter, same-store sales domestically. boeing in the spotlight, one of the leaders in terms of market rise leicester, up 16% year to date, and industrials is the sector investors are calling into right now. they are expected to report big increases. and deutsche bank, will they continue to be reporting some of the gains we have seen with other u.s. banks? that will be interesting, u.s. banks have reported tax windfalls. let's go on the bloomberg, tax reform is a big question. this is 9149. tax reform snapping a two-year trend, it is a question here. one of the big

what to expect from outgoing fed chair yellen. that is next.loomberg. ♪ ♪ vonnie: that is a lovely shot of midtown manhattan from bloomberg world headquarters in new york. i'm vonnie quinn. shery: i'm shery ahn. this is "bloomberg markets." let's get a check of the major averages. passion across the board as u.s. stocks are heading for the biggest decline since august. the down it -- the dow is down more than 1%. moving 340 points. nina added health is. health care shares slumping after amazon and j.p. morgan announced a collaboration on healthcare services. the dow is also falling the most since may. the s&p 500 down for second consecutive session. nearly once rising is the nasdaq. vonnie: let's get to the first word news. here's mark crumpton. mark: thank you. speaker paul ryan is defending a vote by republicans on the house intelligence committee. to release a classified memo on the russian investigation. that memo appears to show improper use of surveillance by the fbi and the justice department, which ryan says could be in violation of ame

michael: as far as anyone is yellen boardhe is not going to do anything. powell was confirmed last night, so he will take over. will they raise rates faster notuse of the conditions tightening, the fed is not having an effect on the market? the president of the new york fed said he is leaving, but we might have to move faster because financial conditions are not tightening. a similar situation might be confronting mario draghi tomorrow, because the stronger euro has a suppressing effect on inflation potentially. goalel: and if your main and only mandate is to raise inflation, that is not helping you. plus, the euro zone is very dependent on trade, so it does not help to have that. there is something called the j curve that suggests it is a delayed effect. we will be waiting for that. david: many thanks to mike mckee. we want to go back to davos, where we are joined by erik schatzker. erik? erik: good to see you, good morning -- good afternoon, excuse me. on your way into davos, you published a linkedin post about what you called the market economy -- a vis

and powell's leadership will likely mirror yellen's. he praised her patient approach, gradually raising interest rates and slowly unwinding the $4.5 trillion balance sheet the fed acquired during the financial crisis. powell says he'll find appropriate ways to ease rules on banks while preserving core pieces of dodd-frank like annual stress tests for banks. yellen steps down february 3rd. she was first woman to lead the most influential bank. the first chair in nearly 30 years ton get a second term. >>> a 15-year-old student facing murder and attempted murder charges after police say he opened fire at marshall county high school in western kentucky. two people were killed. police identifying those victims as 15-year-olds bailey holt and preston cape. 14 others suffered various injuries. the victims range in age from 14 to 18-years-old. >> these children belong to this community and to specific families in this community. this is a wound that is going to take a long time to heal. >> mourners held vigils around the area last night. studen

more "squawk on the street" coming up. >>> as you know by now, it's janet yellen's last policy meetingn d.c. hey, steve. >> the fed ex pekted to leave interest rates unchanged for the last meeting but they'll likely upgrade their assessment of the economy and continue to signal graduate rate hikes coming as jerome powell takes office in the next several days. yellen leaves his successor a pretty solid economic record to start on there were 9.7 million jobs created. unemployment falling by 1.4 percentage points. gdp averaging 2.5% inflation 1.17 on headline year over year. how to get inflation back up to the fed's 2% goal. how much rates should rise if inflation remains low. another challenge, how powell should think about the lofty market levels and process all of the stimulus coming from the tax stimulus the markets went up five times to 1.25 to 1.5%. ten year yield didn't move much. started off high and went low but came back to being 2.70. there it is, 70% on the dow up to 26.076. you can debate at home on who is responsible for that here's yellen when she became the first chair in

this is janet yellen's last meeting. think the last thing she would want to do is create volatility. doing her best to reassure markets that we are all on the same court, the wretch arises in interest rates, we heard from powell, his testimony and i think it is going to be very much a continuation of the same course. the need to put rates up. i think there will be some reiteration affect but certainly a big surprise. smartne: andrew, what a dangerous? remains to be seen or if it suddenly comes round at 2.3%? andrew: neither. that inflationto train it is hard to get out of. certainly in the u.s.. pressure is picking up. much more skewed to, what do we need to do in terms of setting policy to prevent inflation expectations from rising. you talked about the jobs market coming up on friday. the key indicator. to me a job's last year. the unemployment rate, all of those things are going to put pressure on wages. rates leadhat wage to inflation. francine: are the markets underestimating the fed? i do not know if you think it i

also the final fed meeting for janet yellen.rom singapore to take a look at some of this week's key drivers. swansong, we are expecting continuity terms of that hand over. mark: i don't think that will be the big event this week. certainly there is a full expectation there will be a march hike and maybe a slightly hawkish statement from the fed, clarifying the march hike is on track. i don't think the fed meeting will be the big one. as you mentioned there is trump's state of the union where he might elevate some trade risks or a potential trade war, and that will worry markets. more importantly there will be the commencement of the schedule for supply from the u.s. treasury. yield breakingar multiyear highs again this morning and the whole trend of global yields pushing higher following those treasury yields, i think that will be the be given to watch. rishaad: we have opportunity for seeing dollar gains looking set to jump at the moment. is that significant? does it have a read through for easy -- for asian currencies more gen

does better and transparency yellen does better. powell has four years to work at this he's not been at the helm. the overall grade here, take a look -- the next -- yeah, overall grade for yellen is a "b," i believe yes, that's correct. for powell, a b-minus. not bad for an incoming chair. take a look at the outlook for fed's fund rate. 2.2. that's a bit higher than we previously forecast. the markets starting to build in that fourth rate hike. 3.2 for the long run what's happening right now is very clear the market baking in better expectations for growth and along with that, better expectations for higher rates along with, perhaps, a little more inflation, wilfred. >> yes, indeed thank you for that let's get reaction to that and today's market selloff chris wolf from first republic private wealth management joins us chris, good afternoon to you thanks for joining us. as steve just said, the markets pricing in higher rates, whether that's the fed fund rate or the longer end of the curve. do you think that's a key spot for the equit

her four year term federal reserve governor jay powell was selected by president trump to replace yellen and the u.s. senate has confirmed him to be the new chair there are a lot of questions about what it will take not only now but this year and going forward by the federal reserve with regard to the economy plus other central barks are charting their own course while they stick to their plans admits some signs that an economic correction is on the horizon we'll get into it all tomorrow with daniele de martino booth at the f o m c wraps up. and it has been just over a year into the trumpet ministration time now for an economic report card look at year one here with a closer look is our team's nicholas o'donovan. donald trump came into office under the promise of puts in america first on every front and obviously the economy was and still is an important part of that message and we're going to start spending here we're going to start spending. and with that being said we're going to protect our country over the past year the stock market has boomed g.d.p. growth has improved and unemploy

yellen. isn't it nice we don't have to rely on the fed's hot air in order to improve the markets anymore. >> it's true, we've gotten so far away from that, remember we used to hang on every word. there you have it. "risk & reward" starts now. >> i think the democrats realize that the position that they had taken was indefensible. and that they had to focus on first funding our military, protecting border patrol agents, funding vulnerable children through the chip program. these are things they didn't disagree with. president stayed firm, republicans stayed firm and democrats realized they had to move past that piece of legislation to focus on the conversation they're desperate to have. >> we'll call it the schumer flip-flop. he offers more than $6 billion to pay for the border wall. now senate leader chuck schumer is back out of the deal. >>> more violent offenders to the u.s. all because it's feeling the heat of the trump crackdown. more stunning revelations involving peter strzok, the top f

and david faber and jim crame jim cramer with the stocks exchange a lot of news headed our way and yellen'sast fed meeting and the busiest week of earnings and a global bond sell off our ten year hitting 271 a slew of corporate news, the president's address and the monthly jobs number. >> we got shares of dr. pepper and keurig is buying the maker apple continues to move in the opposite direction of the market another report of the iphone weakness as the month heads into the home stretch, s&p 500 on track for the best january since '87 busy earnings calendar including results from all, you got the president's address tomorrow night, yellen's last meeting as chair of the central bank and the jobs number on friday. 271 is getting people's attention. there is some theory that yellen is more hawkish on this run. >> she ought to be hawkish i look for weakness in this economy and i cannot find it consumer is strong and corporate spending i got to tell you, tax reform is working. >> the more ceos that i speak to or everybody in the overall community lets call it the more you realize, there is still

yellen succeed janet when her term ends.istration is still assessing candidates for vice chairman. the most active volcano in the philippine burst. sending thousands of lava and ash into the sky. or than 56,000 people living nearby has been moved away. authorities are warning of localized earthquakes and the cloud where superheated gas vaporizes everything it touches. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. rishaad: being political, creating a robust. imposing after your tariffs on solar cells and washing machines saying the u.s. will not be disadvantaged anymore. the form is a champion for global trade. protection is a good thing to apply in this world of open trade. >> i think there will be here and there are some corrective measures. i don't see anything that is going to be leading to a heavy significant burst of protection. >> of course we are always concerned with protectionism. we realize in order for canadians or for

it is fed chair janet yellen's last meeting.is the conversation about inflation in the tax law behind those close doors? -- closed doors? mike: it plays into the idea that in 2018 we might see higher inflation. we are seeing slack being used up, labor markets very tight, commodity prices starting to rise. the feeling is that inflation will start to rise. over the course of the year, to the extent that we get stimulus from the tax bill, that just pressures. for this meeting, the president is going to take a pass, sit and wait. it will be interesting to see if they have warnings on that in their statement. probably not, since this is their last meeting. march,e focus turns to the expectation priced in. you, actually, just came back from montreal, to put on your other hat, at the nafta trade talks. compare that to the fifth round of talks. betterhey ended up in a place, because they are talking about core issues, but they didn't make any progress on those issues. worthre making progress continuing, but they have some tough negotiat

thirty first any insight as to what he might do that could be different from the previous chair janet yellen well listen jay powell has deep experience in the financial markets and he understands the banking system as well and he is going to be very aware more aware than pure academics the pure academics who preceded him that there is a lot of froth in the financial markets and i think that we'll see the financial person in jay powell come out much more in twenty eighteen and again this is going to be the first non ph d. in economics the first non academic to run the fed for thirty years i think people who say that powell is a yellen clone are in for a surprise because i don't buy that about him you know he's an attorney right. he's an attorney yes but his because davis' background has been in private equity yeah right ok and before we let you go one other area i want to talk about it it's about the world around us so let's talk about the other central banks around the world the big ones bank of england european central bank bank of japan what are they doing now on rates and quantitative eas

janet yellen steps down february 3rd. lead the most influential center bank, the first in nearly 30 terms ton get a second term. she goes out on a high note. a lot of praise for how the fed has handled itself the past few years. >>> a 15-year-old student facing murder and attempted murder charges after police say he opened fire at marshall county high school in western kentucky. two teenagers were killed. police identifying those victims as 15-year-olds bailey holt and preston cape. 14 other teenagers were hit by gunfire. four more suffered other injuries. >> these children belong to this community and to specific families in this community m. this is a wound that is going to take a long time to heal. >> mourners held vigils around the area last night. students attending a basketball game between two other kentucky high schools wore the marshall county high orange and blue as a tribute to the victims. police have yet to reveal a motive. >>> the alabama house of representatives has advanced the bill to eliminate special el

her four year term federal reserve governor jay powell was selected by president trump to replace yellen and the u.s. senate has confirmed him to be the new chair there are a lot of questions about what it will take not only now but this year and going forward by the federal reserve and with regard to the economy plus other central barks are charting their own course while they stick to their plans admits some signs that an economic correction is on the horizon we'll get into it all to morrow with danielle de martino booth at the f o m c wraps up. and it has been just over a year into the trump administration time now for an economic report card look at year one here with a closer look as our team is nicholas o'donovan. donald trump came into office under the promise of puts in america first on every front and obviously the economy was and still is an important part of that message and we're going to start spending here we're going to start spending. and with that being said we're going to protect our country over the past year the stock market has boomed g.d.p. growth has improved and u