Skip to main content

tv   Bloomberg Markets Balance of Power  Bloomberg  January 31, 2018 1:00pm-2:00pm EST

1:00 pm
were watching this hour. trump addressed the state of the union, then many thought president trump was going to deliver a roadmap for insert thatcher, however details trump will -- rebuild the nation's roads and bridges, and the president was light on details on trade with the sixth round of nafta talks on the box and how canada feels about the pace of negotiations. ♪ david: president trump talked last night about working with democrats on issues like immigration, but he also linked ,he gratian -- immigration
1:01 pm
including dreamers, make was a threat to the rest of the country. duty in thismp: my chamber is to defend americans. to protect their safety, their andlies, their communities, their right to an american dream because americans are dreamers too. david: we welcome back larry from the university of virginia, larry, will come back to the program, and take us into the might of the president and what he is trying to do here. the president said he wants to reach across the aisle on immigration but he up the ante -- it is not the dreamers we have to worry about the rest of the country. >> i think the whole
1:02 pm
presentation prior to the statement telling the media the speech was about national unity faintpartisanship was a -- there probably isn't any hope for unity or bipartisanship. other than a few words tossed in here and there without substance that meant nothing out of don't think there was anything unifying about the speech on immigration or anything else. it was particularly divisive. david: you have terrible stories of this gang and parents and daughters were killed, and it touched her heartstrings. does that give the president a ground? political high >> it gives him high ground with his base, and that is what this is all about.
1:03 pm
that was the hidden purpose of his speech that wasn't articulated in advance. trump rationally, and his advisers realized there is virtually no chance of trump expanding his coalition. there are going to be democrats supporting him in the war of congress, and independents for the most part have decided against him. including in november, when congress is on the ballot, is getting the base enthused enough to have a disproportionate turnout. in 2016 tot occurred put him in the white house, that is what happened with trump. shery: it is the house that jack jfk,, about the life of and delivering the democratic response, which adjudicative it -- what did you think of it? >> think it is great to see
1:04 pm
someone below the age of 55 representing the democratic party. the image of the democratic party to the front runners of the 2020 democratic nominations is frankly a nursing home. at least they have a young democrat, there actually are young democrats. i thought he did reasonably well. young enough to be in my classroom to tell you the truth. a wholet his speech as was pretty good, and he represented the democratic philosophy. let me predict flatly from someone who predicted the kennedys for years, this young man is going places and will be a contender in the future. not the next time or time after that, but late 20 20's and 2030, something like that. shery: so many gop lawmakers retiring.
1:05 pm
saw more than 40 house gop members and five republican senators leaving this election cycle. themuch does this boost democrats chances to take over the house and maybe even the senate? in the house it doesn't hurt, but if you look at districts -- good luck to the democrats. i don't see a democrat to win their. alabama and other races of late, it is too high a mountain and too many seats on the ballots across the country that are available to the democrats. yet to be careful to not take the total number of retirees and say they are all leaving because they're going to lose. otherf them are going for reasons, but on the whole, i don't think anything changed last night that would transform the prediction that november will be a democratic year. we don't know how democratic. david: put aside democrats
1:06 pm
versus republicans, let's talk about extreme as his moderate. with all of these retirements and people stepping down, is it likely we will move to the senate where the house of the present us hasn't been for a long time, or could it exacerbate a movement to the left or right? we'llanything, i think move towards very liberal for democrats and very conservative for republicans. when you get incumbents who have havein for a while and you central liberals, it will be replaced in their primaries i somebody who is further to the right or further to the left, so i think you put your finger on something. the fact we have new people coming in doesn't mean much. meet the new boss, same as the old boss, even more conservative or liberal. david: let's come back to this
1:07 pm
year before november, given the weight the president appears to be moving forward, are we going to get anything done in congress? for are is still room relatively modest agreement, compromise on immigration. i'm not giving up on that. it is not going to be these radio schemes that you hear from schemes.s -- grandiose the democrats don't want to give trump a win, and that is the formula for defeat among other things that are coming up before congress. larry, at theou university of virginia joining us. let's get a check of the markets, and we are seeing a selloff of equities halted, but the bond arc its continues. at least paused, if not
1:08 pm
halted. a rebound from the two days of selling, not recouping the losses, even yesterday or the past two days. we are seeing a strength and earnings, and some we noticed as well, if you take at the vick in particular, it shows you the vix versus the future, and at times over the past year, when you saw a spike in the vick versus futures, you saw stocks selloff and then rebound. likewise over the past couple of sessions, perhaps we could be seeing a bottoming equal. perhaps we have to see if that emerges. part of that meeting into today's session is e-commerce in particular. and is ahead of earnings, not only are the stocks up but they are trading at records. closing at 20
1:09 pm
have percent, and alibaba before the opening bell, and amazon after the close tomorrow -- a lot of king up of earnings related news to come particularly with technology. and then finally turning to bonds and the set up going into the final fed meeting for janet yellen. here --the back skate the fed funds target rate and blue here, we have talked about the flattening of the yield curve as we continue to see the 10-year move higher. we still have the flattening happening, the tenure at its highest in almost four years. david: many thanks, julie. coming up, president trump has manufacturing a priority in his white house. next. this is bloomberg.
1:10 pm
1:11 pm
1:12 pm
a check of the bloomberg first world news. mark: white house says president trump has been fully briefed on this morning's crash involving a train carrying republican lawmakers to a policy retreat. there's reports of at least one fatality when the train struck a garbage truck in charlottesville, virginia. family members were also on the train. sarah sanders released a statement which said there are no serious injuries among members of congress or their staff. the train was en route the green
1:13 pm
bar resort in west virginia. gowdy, chairman of the oversight committee is not seeking reelection, he released a statement saying that he will not be seeking any other political or elected office but rather will be returning to the justice system. prosecutor federal and led a panel investigating the 2012 terrorist attack in libya. it brings to 64 members of congress opting not to seek reelection. that number includes 46 republicans. government prosecutors have decided not to retry new jersey senator bob menendez on corruption charges after a judge threw out some of the counts last week. the first trial of menendez and his eye doctor ended in a hung jury. menendez was charged with trading his political influence for gifts and campaign donations
1:14 pm
from a for former longtime friend. to keept trump's move guantanamo bay open -- the director of law and policy called the detention facility a stain on america's reputation. >> this is a disgrace. people have been detained for over a decade without any prospect of any fair trial. and now president trump is proposing to increase that number. mark: president trump signed an executive order to keep the prison opened while re-examining the military policy on the tension. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. presidentt night, trump said the state of the union is strong and the first thing he cited as evidence of that strength is that since the
1:15 pm
election we have created 2.4 million new jobs including 200,000 new jobs in manufacturing. -- more oned manufacturing -- the largest manufacturing association in the united states, and mr. timmins has said that the president has made 2017 the year of manufacturing. welcome to bloomberg. explain to us what the president did to make 2017 the year of the manufacturer. >> it is the change of direction and we have an administration that wants to see manufacturing succeed and they are willing to make sure that government is a partner where the then antagonists. have seen the recent tax bill passed, which really is rocket fuel for the economy and certainly rocket fuel for manufacturers who want to invest and hire new workers. now we turn our attention to infrastructure investments, so we are excited about the path forward. david: let's talk about the
1:16 pm
indicators -- the president invoked 200,000 new jobs, and if you look at the chart,, but they came down a long way. they have a long way to go before they catch back up again. you see a world in which we employ many people in manufacturing as we did in 2017? we have ways to go. we do have ways to go, but i am a huge fan of manufacturing employment because as we mentioned, we are turning attention to making american manufacturers more competitive. that means more investment and more job creation. our own survey shows that, we do and itrterly survey -- showed a 95 percent optimistic outlook of manufacturers. that is the highest level in has been in our 20 year history, two
1:17 pm
thirds of manufacturing says they're going to invest, and over half are going to raise wages and benefits. measure is how effective those people are, and our study saying we are slowing the growth in productivity rates. what is going on in productivity of may fracturing -- of manufacturing? >> you see the infusion of technology and robotics and artificial intelligence. as new technologies entered the workforce you see fluctuations and ecb increases and a slowing down. -- you continual growth see big increases and slowing down. -- more jobs in and manufacturing really is the lifeblood of any successful economy. this is good news for america. david: let's talk about the life
1:18 pm
blood pumping and humans should -- and you mentioned infrastructure. there seems to be a big divide not whether we should do infrastructure or how we should do it. you have hopes that this year democrats and republicans will come together? >> let's look back a year ago. we could have said the same thing about tax reform. so many people said there is no way we could get tax reform done, and i will the mid, tax reform was accomplished in a very partisan way because of various processes and procedures on capitol hill. infrastructure has bipartisanship board -- support. the administration has decided quite often and laid out a number of different funding options for infrastructure improvements.
1:19 pm
we have to accept the fact that this is going to be expensive. we have to pay for it, but if you look at the cost for manufacturers and the general public, manufacturers are being penalized by $70 billion a year because of our crumbling roads. course of the next three years star going to be penalized for over 200 billion because of infrastructure failures at our airports. this is an investment we have to see for america's business climate but obviously for individuals was spent literally millions of hours in small traffic on the roads. coming back to a bipartisan approach, they have to get democrats to go with them. whether republicans are saying 200 billion over 10 years -- it is just fine, but. democrats are saying it is not enough. who is going to move to whom? i think they are dead wrong,
1:20 pm
the president last night put a marker down. i was proud to see him do this, $1.5 trillion. that is the first time i have heard that number and i thought it is great look -- leadership to say that we have a problem and we have to solve it. we're going to be in our congressional districts and state to urge lawmakers to come together for a robust solution. we have advocated for a trillion dollars, but if the president wants to propose 1.5 trillion and he wants a american hearts, american grit the rebuild america, we be by his side to make that happen. david: it is great to have you here, j. ay. the sixthll ahead, round of nafta talks are in the box, what will the seventh bring from the canadian side? this is bloomberg. ♪
1:21 pm
1:22 pm
1:23 pm
david: this is bloomberg markets. president trump added little new details on his trade mission in the statement to be an address, saying he will work to fix bad trade deals. nafta talks wrapped up in montreal and were headed to talks in mexico city next month. mckee, andis michael what are we expecting canada to bring to the table? they brought creative ideas to the talks, and got rejected by u.s. rep additives. representatives. trump began his campaign about building a wall, but then
1:24 pm
elected the peso dropped and mexican markets dropped and he talked about putting sanctions on mexico. u.s. trade representative's were all about canada and all the bad things canada is doing, and it is a hit scratcher for everyone. -- head scratcher. it is thatout what canada once and how far canada is going to let itself be pushed around. shery: when are they meeting next? >> it begins february 26 and runs until march. everybody a great they make a little progress on smaller bright red line is how much auto content has to be made in the united states. the dispute mechanism that deals with lumber is a big trade irritant for the two countries. where they go from here is an interesting question. will canada make additional
1:25 pm
counterproposals? or do they wait for the u.s.? had a guest last week, an attorney talking about the real issues with canada instead of mexico city, including lumber. we also have to talk about the special duty, because it will be janet yellen's last meeting with the fed. are we expecting a hawkish tone? do think so, because this is her last meeting and it is no sign of a breakout of inflation, so they will try to get out of town with as little views as possible. market expectations for inflation has to a little bit, so maybe take week that language, but at this point, there's no percentage of tying the hands of powell, which begins next week. certainly no change in policy. shery: are they expecting a hike in march? >> they just don't want to tell
1:26 pm
jay powell you start -- yes that with her legacy. shery: mike's interview with the foreign minister coming up at 3:00 p.m. new york time. to watch will want that interview, and up next we will talk to the ceo of one of the largest engineering companies in the world and ask his thoughts on president trump's ambitions, mike burke of ae, will be here. my from washington and new york, this is bloomberg. ♪
1:27 pm
1:28 pm
1:29 pm
retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.
1:30 pm
reports. health care is dragging down the s&p 500. it is a still up 3/10 of 1%. the nasdaq is gaining ground. we have facebook and microsoft reporting up to the bill. look at the what the bond market is doing. treasuries continue to selloff. the 10 year yield is at the highest since 2014. the curve is also continuing to flatten, as we usually see with treasury's quarterly refunding announcement. the dollar is holding steady after that drop following president trump's state of the union address. let's get to first word headlines with mark crumpton. mark: japan is praising president trump to put -- president trump for his pledge to put maximum pressure on north korea. a cabinet secretary said today
1:31 pm
the country is pleased the present has sent a powerful message to correct -- to korean president kim jong on. last night president said north korea's reckless pursuit of missiles could threaten our homeland. turkish officials say the turkish president and russian president vladimir putin has agreed to accelerate efforts to establish turkish observation posts in syria. they also said a peace conference held monday in russia was an important achievement. at that conference an agreement was announced that would have drafted a new constitution for syria. hundreds of people staged a protest in the capital of kosovo today, asking the government to do something about extremely high pollution. an error-quality monitor installed in the united states embassy there measured here -- measured air pollution is very unhealthy. the city has severe air pollution problems due to
1:32 pm
outdated coal plants that -- outdated power plants that use coal and exhaust fumes from old cars. the moon put on a rare cosmic show today. super bright, and is the first time in 35 years that a blue moon has synced up with a total lunar eclipse. luckof the u.s. was out of for the eclipse, hawaii had the best view along with australia, alaska, and the yukon. this trifecta won't happen again until 2037. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ shery? shery: mark, thank you. infrastructure was a significant part of president trump's address last night. the president, calling on congress to pass legislation to stimulate at least $1.5 trillion
1:33 pm
in new infrastructure spending. >> i'm asking both parties to come together to give us safe am a fast, reliable and modern infrastructure that our economy needs and our people deserve. with that call comes a question of how realistic it is and how it will be funded, since the president was a scant on details. in los angeles, joining us is mike burke. provides consulting and construction services. mike, investors don't seem convinced. cement stocks are falling right now. how worried are you that we didn't see more details on funding? mike: thank you for having me. of course we would like to see more details but we are first of all delighted the president made
1:34 pm
it a part of his state of the union, this $1.5 trillion plan. this plan is long overdue. on to thegreat follow tax reform we saw at the end of last year. now that we have the tax reform taken care of its time to turn our attention to infrastructure and turn our attention to infrastructure in a bipartisan way. discussions i've had on capitol hill indicate there is broad, bipartisan support for an infrastructure bill. so that gives me a great deal of confidence that the details will come forth. we have been having discussions aboutolks in washington three really important pillars to that infrastructure bill. first of all, to address the long-depleted highway infrastructure fund that is expected to go bankrupt in 2020. to spur private sector investment in infrastructure. and third, to reduce the regulatory burdens are so those of the three real important
1:35 pm
pillars of that plant and we expect details to be fleshed out soon. a $1.5you call that trillion plan but it isn't really. it boils down to $200 billion of federal money and the rest depends on states, localities and private investments. how confident are you that we will get there? mike: i'm very confident we will get there. we have historically had a system where 77% of all infrastructure in this country has been paid for by state and local municipalities. the federal government has always been a small part of it. what we think is important is to unlock the trillions of dollars of private money that is sitting on the sidelines. we get phone calls on a regular basis from sovereign wealth funds around the world that are very interested in putting their capital into long dated infrastructure assets in the united states. we just need a mechanism to encourage that and we need a mechanism to expedite that. the challenge we have is that
1:36 pm
today it takes a most 10 years activate an infrastructure asset. it takes a most of seven years for an environmental impact study. he would like to get that two years -- get that down to two years, maybe even when you're. that is achievable because we've seen it done in more developed companies like -- more developed countries like germany and canada, that have had their development process reduced to two years. >> in your opinion, is it just the permitting issue, the regulatory hurdles that is keeping these early and dollars in potential investments away? because there's a lot of money sloshing around both in the united states and globally, as you say. and we hear its very attractive. wise into going in there now -- why isn't it going in there now? regulatoryot just decisions but that's certainly one thing. when i tell essential investors at the tenure process the response is something along the lines of, come back and talk to me when you shorten that cycle.
1:37 pm
in the meantime i'm going to invest in brazil where i can invest that money in two years, or in canada. clearly the money is available, and permitting is a problem. sheryk about what mentioned, the $2 billion -- the $200 billion that the president talked about and the $1.5 trillion the president talked about last night. how much of that comes from private funds and how much of it comes from state and local? because you said in the past state a local governments have contributed but a lot of those balance sheets are not as healthy as they were in the past. mike: that's a fair point. we don't know the details on how much is expected to come from the private sector and from local municipalities. but we do know that the general funds that you are speaking of our a challenge. have seen as a trend.
1:38 pm
in places like los angeles where we implemented a measure m 18 months ago and the city raised the local sales tax to create a $100 million fund dedicated to infrastructure. in los angeles that measure passed by 72% voter approval. that's a very high rate, telling us taxpayers are very interested in raising sales tax and other types of taxes if they are w holly dedicated to infrastructure. so even if balance sheets are challenged, specific measures are available. let's move away from the infrastructure plan and talk about the totality of the administration. the 2018 budget right now proposes significant cuts to transportation spending. how supportive is this administration to your business? mike: i think this administration is very supportive of driving the u.s. economy, and it started with the tax bill, where now we expect
1:39 pm
that there is over $1 trillion of low-tax to earnings offshore that a come back to the u.s., that will be invested in the economy greeted the part of that will be in capital expenditures that will benefit our industry. a big part of that will drive jobs and growth the gdp of this country, it'll produce more tax dollars to achieve the kind of infrastructure that we need. what we know is that we cannot have an america first strategy if we continue to place infrastructure last. this will be a stumbling block for the continued growth of the economy if we don't address it right away. and we fully expect that this administration is focused on building the infrastructure, building the economy, and that will inevitably suits our industry quite well. will we address a gas tax increase anytime soon?
1:40 pm
mike: the highway trust fund is expected to go bankrupt by 2020. we have to address it. we have not had a gas tax increase since 1994 but we have to find a permanent solution. whether it is a gas tax or whether it is some other type of user fee or a permanent funding for that, but we do need a funding solution for the highway trust fund. we cannot have continued short-term fixes or did these are long-term infrastructure assets and they are not well-suited to short-term fixes on a year-by-year basis. make awe as a country decision without really knowing we were making a choice, between tax cuts on the one hand and infrastructure on the other. we already occurred what could be one point five chilean dollars, but a significant deficit on the tax cuts. your country, i'm sure will benefit from that going forward. can we do both? can we incur that kind of additional deficit spending for infrastructure now that we have done the tax cut?
1:41 pm
ane: first of all, its not either/or, and its not just our company. the entire economy will benefit from the tax cut as we are starting to see already. but that increase in the gdp of this country will fund the infrastructure growth. the private sector has plenty of capital it is willing to dedicate to this problem. by that is why we can get with just a $200 billion a location from the federal to leverage it into a $1.5 trillion program. so it is not an either or. we can do both. taxpayers are very interested by way of the los angeles example of the los angeles example i just gave you, to pay for this infrastructure. so we are well on our way and we just need to get to the details now and congress needs to take action immediately. aecom ceo mike burke. mike, thanks for your time today. shery: coming, major trump back trump barrick -- major barrack speaks to
1:42 pm
bloomberg about robert mueller.
1:43 pm
1:44 pm
♪ david: this is bloomberg markets "balance of power" i'm david westin. shery: i'm shery ahn. falling on the day are many abigailshares, and doolittle joins us. these companies have become the new villains here. this really has to do with president trump at the state of the union, talking about the idea that drug prices are too high. let's listen to president trump. >> i have directed my administration to fix the
1:45 pm
injustice of high drug prices, one of my top priorities for the year. julie: -- abigail: to your point, around in the villain role of wall street companies. in terms of the biotech companies, whenever drug prices come into the conversation they take a hit. if we help on the bloomberg we can see what is happening not for --r gilead sciences sciences, but for other big names as well. sciences see gilead higher, higher, higher and it than really taking a hit. shares were also higher on the amazon, berkshire hathaway health care consortium. some of the other big names in the mbi overall are affected. shery: with midterm elections coming up i can imagine this would be an important issue. abigail: and for president trump its very important. because right now republicans have in place a drug pricing
1:46 pm
mechanism that keeps the government out of the picture. insurers are negotiating with drug companies but if democrats take the house, something that's possible, i see your eyebrows will want tocrats put in mechanisms where the government will be able to take more control over the pricing situation. if that were to happen, who knows, president trump could truly become a bipartisan president around this issue, at least. shery: this is going to the markets and what the stocks do. abigail doolittle, thank you so much for that. david. david: thanks, shery. president trump covered a lot of ground last night but one thing he did not address is the robert hisler investigation into administration. our colleague erik schatzker did bring up the issue when he sat k,wn today with tom barrac investor in northstar and a personal friend of president trump. he gave his own views of the russia investigation. mueller, there's
1:47 pm
nobody better. say whatever you want about this investigation, it wasn't mueller's idea to launch the investigation. but if you were to go choose an individual you could not find a better individual. princeton, marine corps, distinguished in everything he has done, 12 years and the fbi. so this man is not political, but he's doing his job and he's doing the mission that he has set out to do. i don't think, in spite of all the rhetoric you hear about the firing and the fbi witchhunt, it is what it is. >> do think the president has respect for the mueller investigation? >> absolutely. for sure. >> what if he does fire him? don't think its possibility. i honestly don't think its a possibility. the lawyers on both sides say there may be enough evidence in the public domain. forget for a moment about what bob mueller has compiled behind closed doors, to bring an obstruction charge. , thatrd that might happen
1:48 pm
that's where this is headed? tom: no, i'm not worried it will happen. what i'm worried about is all of process so engaged in a that's not fruitful for getting the agenda of america done. that being said, this needs to take its logical conclusion. its happening, its when you are going through hell you just keep on going. i think everybody is doing their job. i don't think its a witchhunt. the politics of both sides a very complicated and the sooner that we just address it, hit it head on, let them do their work and get on with life, it'll be better. and the lawyers are doing what lawyers do. look, the president would love, i guarantee you, to sit down with robert mueller and say let's hit it head to head. i have nothing to hide. i want to deal with a straight up with the american people. but of course the lawyers are lawyers and say every word will be picked.
1:49 pm
as a lawyer, you shouldn't do that. the president is saying, i don't care, have nothing to hide, looking hit it head on. ck in anwas tom barra exclusive interview with bloomberg. the house intelligence committee is looking into whether the fbi department of justice may have been biased in the way they investigated the trump campaign. the committee now wants the president to release a memo prepared that it says demonstrates that claim of bias. but just today there are reports fbi director christopher wray is directing, putting him once again on a collision course with the white house. to explain this complicated story we welcome numbers billy house on capitol hill. billy, its rather complicated but explain why this white house and this fbi can't get out of the way of one another, it seems like? billy: first of all, the underpinnings of this house republican memo are geared toward robert mueller but theged corrupt beginning of
1:50 pm
investigation by the fbi ended doj, and the use of evidence to get a surveillance warrant and whether they accurately depicted that evidence to a judge. a fruit of the poison tree argument that maybe mueller isn't doing a witchhunt but the roots of his investigation began with a corrupt beginning. david: trista for ray was appointed come after all, by president donald trump. time, president trump was on his way out of the chamber last night and reportedly set its 100% likely he's going to release the memorandum. how does this get resolved? billy: the fbi director said today he has great concerns about the accuracy of this republican memo. whether that's because it really is an accurate, or it exposes surveillance methods and sources, or whether the fbi is just embarrassed, i think the fbi director is protecting his agency, which he is trying to oversee even with the noise about him.
1:51 pm
could the gop face the danger of a letdown if this doesn't really live up to the hype? yes.: and we already see some members kind of backpedaling, moonwalking some of their claims that this huge, yes. and there's a democratic memo that has been delayed, its release, that will purportedly expose the errors that this house republican document is filled with. shery: and is coming at a time when the fbi is going through its own transition. deputy director mccabe, resigning from his post. billy: absolutely a politically combustible time over there as they try to get their bearings and at the same time, republicans are going after robert mueller using the governmentsat the -- the confusion at the government hype foster fiesta top law enforcement agency.
1:52 pm
david: we just had trey gowdy say he's the latest of about 20 i think that he's not up for reelection. why are they headed for the exits? billy: its partly, obviously, pulling that shows the president is not that popular in some of those areas where republicans had been pretty secure and could now lead to losses. and i think many members are just worried about the tone of washington. mr. gowdy probably wants to be a judge someday and i think he's looking to his own future. billy howe, bloomberg d.c. reporting coming from capitol hill. thank you. straight ahead, the fed decides for the final time under janet yellen. special coverage of the decision just moments away. this is bloomberg. ♪
1:53 pm
1:54 pm
1:55 pm
scarlet: we are live from bloomberg world headquarters in new york. this is "the fed decides." ♪ in under five minutes the federal reserve will announce its latest monetary policy decision. here's what you need to know. janet yellen signs off. the fed chair has a flock -- has a hawkish note in her swansong. the world's most powerful central bank comes just in time for a fresh approach. how yellen's successor will tackle the inflation puzzle. plus a march move. investors place their bets on the policy action. we speak with bill gross of
1:56 pm
janice henderson. my colleague on every fed day is tom keene. tom, thank you for staying late. tom: good to be here on an important day, a historic day. very quickly before we get to michael mckee, and elevation of yesterday's equity prices. the dow up 152 points, the 10 year yield should be green on the screen, up a basis point. a little stronger of a dollar, and just a bit. michael mckee is with us, bloomberg's economic correspondent in montreal, the last couple of days on the nafta discussions. chief new jersey, our u.s. rates strategist for bloomberg intelligence, michael mckee with sartorial splendor this morning. that picture we ran at the top of the show of janet yellen.
1:57 pm
meeting and last 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
1:58 pm
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 to bind jay powell in the future with a decision today. so they will even up to him and leave their options open, and say as little as possible. scarlet: is there a potential for surprise? >> i don't think so. i grew up mike. one of the reasons the not going to hike today is that they hiked in december and he wants to go slow and he want to go measured. in order to do that at the pace they want to go with three hikes this year, if they hike in january that means that if there is a flip in the data they can't take that back in march. is the ideaof this of measure. we have chairman greenspan coming up later, a great honor to have him with us today on this last day for fed chair yellen. mike, tell us what measured actually needs? >> he's the one that said you
1:59 pm
want to raise rates slowly and inflation is flat as possible. not below 2% but you don't want a lot of volatility. that was the legacy of the greenspan years and some say it led to the financial crisis because those predictable rates were too low for too long. under jay powell we are probably going to have a rethink of the way the fed does its monetary policy. scarlet: will that rethink include a different way of looking at market behavior in market pricing actions? know howwell, we don't exactly he's going to run this fed. it'll be interesting to see his first press conference and his first meetings. it'll be interesting to see how the markets taken. did they take him at face value or read more into what he is doing? mentioned the market so let's get you a market check. the dow recovering after a three-day slide, the worst since september 2016 before donald trump was elected. let's look at the tenure yield. you can see the bond prices are moving higher, or i should say
2:00 pm
lower, therefore for the yields are moving higher. of two point 7% on monday, the next stop is 3%. let's go to chris condon at the federal reserve with the announcement on janet yellen's last day. chris: no rate change today from the federal reserve. no surprise there. the federal open market committee unanimously voted to leave the target range for the at oneds range unchanged and a quarter percent to one and a half percent. there were subtle but important changes in the statement, compared to december when they twice referred to expectations for a gradual adjustment of policy and to gradually increase the federal funds rate. this time they added some emphasis, referring to further gradual adjustments and further gradual increases. that doesn't seem really to change the meaning of those sentences but does certainly attract attention and perhaps emphasizes the e

20 Views

info Stream Only

Uploaded by TV Archive on