>> the countdown is on in europe. this is bloomberg markets, european close, with guy johnson and alix steel. from london, i am anna edwards alongside kailey leinz in new york. let's take a look at the markets as we come toward the end of the trading session. half an hour away from the close of the european equity market session. down by 1.6%. we are seeing a couple of things going on here, catch up of the u.s. from yesterday. making it explicit that 50's on the table when it comes to fed meetings. that has been spooking european

stocks all day today. added to that, losses in the u.s., confusion around earnings season. there have been high points and low points, the market not finding in itself to go how your. the u.k. assets story is interesting. the pound is weaker by 1.4%. this comes on the back of some really gloomy data, a reminder of the tight rope at the bank of england is trying to walk this year. consumer sentiment also out from the u.k. the consumer side of the economy is substantial in the u.k. and plays a big role. those data sets look gloomy, weighing on the pound. the pound has been reflecting expectations, so we will see hikes, but hiking into that economic weakness is something the market is focusing on. i put on the french to year yield. a couple days away from the final round of the french election.

this pricing telling a more global story, more european story. the narrative has been gradually adjusting to higher expectations of rate hikes in the euro zone. that is what the market has been dealing with. just a reminder of the political risk that could be upon us depending on the results. what do we have in u.s. markets? kailey: it is not a great end to the week for u.s. assets because you have the concern around the federal reserve, jay powell solidifying the market expectations of a 50 basis point hike in may, but that is not only what the market expects. we see 50 basis points in may, june, july, and maybe september. that is taking risk assets lower. the s&p 500 down by 3%. you are seeing to year yields, the and controlled by federal

reserve expectations, 2.71 at the moment. the u.s. dollar also around its strongest for a while. oil down on the day by about two percentage points. of course, this speaks to the higher prices consumers are facing at the pump, not just here in the u.s. but elsewhere. that showed up in the u.k. data today. anna: let's pick up on that data having an impact on u.k. assets, the pound moving lower as a result. retail sales fell more than expected in march, the pound hitting its lowest level since november 2020. consumer confidence plunging to as low as the 2008 recession. with us now is the bloomberg editor for emea. the u.k. data is pretty weak,

sentiment the weakest since 2008. that is not surprising when you consider the cost of living, higher energy prices, that has been a dominant theme in the u.k.. >> absolutely, and this is a great example of that cost-of-living crisis starting to bite the u.k. consumer. when you look at what is happening in markets in the u.k., if anything screams policy mistake, it is what is happening here. the pound is weaker, u.k. yields market. it is an interesting juxtaposition because we heard from catherine yesterday saying there could be some consideration of a larger than 25 basis point rate hike for the boe. the u.s. economy is not the u.k. economy. kailey: i wouldn't want to be in andrew bailey's shoes. that is on the monetary policy side. what about fiscal? what role will that play?

kristine: that is the big question. there were hopes for more fiscal support as the u.k. spring-loaded but that was disappointing. this is why consumers are facing the cost-of-living crisis on their own. there is not a lot to be had with fiscal support. then we are facing the precipice of multiple bank of england rate hikes potentially. you can understand why consumers are feeling vulnerable in the u.k. i suppose there is a lesson to be learned for the federal reserve and other central banks as they consider the multiple rate hikes, what that can do to sentiment on the ground. anna: if consumer confidence is anything to go by. let me ask you about the comments andrew bailey has been making at that imf event, saying there is a huge amount of uncertainty on the path for policy. we are on a tightening path but it is a narrow path.

you mentioned policy mistake. what is it about the market reaction that makes you think a policy mistake could be made here? kristine: the pound is weakening on the back of this repricing in the u.k. rates market for intentionally more aggressive rate hikes from the bank of england. that juxtaposition does not necessarily scream this is a tightening cycle. normally you would expect, if markets are expecting tighter monetary policies, the currencies could get a boost from that. but we are seeing the opposite here. that is reflecting the broader economic sentiment in the u.k. which is negative at this point. kailey: on the subject of wheat currencies, we are getting some comments from governor kuroda in the boj. he says the u.s. must keep "aggressive easing" even as the japanese yen drops.

what are we to make of the divergence in central bank policy? on the one hand, you have japan saying easy, china will be easing. the boe is a question mark at this point, but the fed will be hiking this year potentially. kristine: i am personally interested in the story because that throws up a lot of potential opportunity for investors. a lot of potential divergences in markets as well. we are already seeing in currency markets, though central banks are emphasizing easing, in a world where a bunch of other central banks are heading toward a tightening path, their currencies are being punished. the yen a prime example of that. a weak currency is not necessarily a bad thing for economies struggling to recover from the pandemic, but it is a short-term negative when you're also an energy importer,

grappling with a sudden energy jump in inflation, which japan is. anna: thank you so much. coming up, france issues an international arrest warrant for former nissan motors chairman carlos ghosn. we will talk with him in a few minutes, get his take on the arrest warrant, and ask him about the auto sector right now. this is bloomberg. ♪ ♪

anna: welcome back to bloomberg markets. barclays says first-quarter earnings of better than expected so far. let's bring in emmanuel cau, head of barclays european equity strategy. better than expected this quarter, we don't have all of the quarter yet, but what are the early signs? emmanuel: early days but the market was nervous in this reporting season. we had seen a lot of de-risking, but about 10% of the market has reported in the u.s. and europe. not bad. good numbers in tech, cyclicals, industrials in particular. the companies which have reported so far, the economy is

still going. it has been a relief to the markets so far, even though there are some worries about inflation, central banks. but the earnings are a support to the market right now. kailey: let's talk about the macro store you just alluded to, the idea that we have potentially a european central bank that could hike rates in july. how would that impact the equity market? emmanuel: the equity market has been constrained for some time by this repricing in the bond market. to some extent, we see equities holding up quite well. the bond market has been the one hurt the most by this unwind of central-bank support. that has been helping equities to hold so far. in this moment of tighter policy and liquidity, earnings fundamentals will prevail.

it is very hard to expect these bonds for very long if earnings don't support equities. that is why so far the early reporting is important. earnings are still supporting equities. going forward, the unwind of liquidity will challenge investors and will force investors to focus more on fundamentals. anna: you think stocks can continue to rally? or they can withstand higher yields at least. as you point out, stocks have been resentment given what has been thrown at them from the bond markets, but some people have a nervousness around that, saying maybe stocks have been using up that slack in valuations and now there is none left to absorb these higher yields. emmanuel: to be clear, we don't see the markets going up a lot from here. thinking about the dislocation in the markets, adjusting

positioning. within the market, we see meaningful de-risking. ultimately, the unwanted of liquidity in the rebound in rates will force the investor to focus on fundamentals. we don't want to be paying too much for stocks anymore with reducing liquidity. you need to be careful how much you are paying for stocks and also make sure earnings are a support. kailey: with that in mind, where is good value? emmanuel: we like some of the banks which are not immune to macro risks, but have been pressing insignificant downsides to the economy, which will still get the support of higher rates. we like some of the stocks in

autos, which do price significant weakness in the economy. but we also like some parts of the offensive. utilities, for example, can give us a hedge in this environment. we like energy on the back of this inflation hedging, the risk around russia and ukraine. we are seeing valuation constrained by this pricing in interest rates, tighter liquidity. anna: if you want exposure to energy, that sometimes take you to u.k. assets. the story is interesting in terms of monetary policy dilemma. how is that uncertainty playing in into how long the bank can keep tightening if the u.k. economy will rollover. emmanuel: they don't have too much do with the u.k. economy. they are at exporter, so they care about the weaker currency.

the u.k. small caps is something that we don't like because we are nervous about the u.k. economy. the boe is facing a challenge to unwind liquidity, titan liquidity when you already have soft demand destruction, pressure on the economy. we don't want too much exposure to the domestic u.k. market. the currency macy pressure down the road. kailey: you don't want exposure to the u.k. market. what about france? how is the case different under a le pen presidency or a macron one? emmanuel: the outcome of the election has been a source of risk for the markets. in the last couple of days, we have seen folks moving more toward macron, about 10 points lead. we have been writing that a le

pen when would be a shock to the market because it would introduce significant uncertainty for france and the eu. the status quo and a macron victory has sentiment on europe, may bring more move toward fiscal integration, eu integration, fiscal spending. if we have an unexpected outcome tonight, i would expect equities, financials to be down significantly. pretty low risk for now. kailey: we look forward to sunday. thank you for joining us, emmanuel cau. just two days ago until that french election. i want to welcome in our bloomberg tv and radio audiences worldwide. france has issued an international arrest warrant for former renault ceo carlos ghosn.

others are sought for helping him siphon millions from the automaker. ghosn joins us now. also joining us is matt miller, who will participate in the conversation. thank you for your time. i want to get your reaction on the timing of this considering there is a french presidential election in just days. carlos: surprising. that is the only way that i could describe that. kailey: do you think this was politically motivated? carlos: i don't want to speculate about that but the timing is surprising, and particularly the way it was done usually when you have an arrest warrant the first person to be alerted is the person like me if there is an arrest warrant, i was expecting the prosecutor who announced it to me or my lawyers.

we learned about the arrest warrant through an article in an american newspaper, which was rather surprising. matt: to me, the surprising timing issue is the renault move to sell shares in nissan. you have always maintained that you were framed in japan because you refused to let the alliance fall apart. now on the morning of your arrest warrant, when france tries to bring you to court as well, renault says they are selling shares in nissan. is this a sign of an alliance in shambles? carlos: i told you two years ago that this alliance became a zombie. at the heart of the alliance is trust. trust between renault and nissan, mitsubishi, the trust between the japanese authorities and the french authorities,

which happened to be a major shareholder inside renault. this trust was broken. when trust is broken, there is no meaning for an alliance like this to continue. we heard a lot of stories told by the new management of renault nissan that everything is ok, everything has been done in a brotherly way, all the issues will be made in consensus. this was baloney. no cooperation has taken place. there was some kind of ridiculous long-term plan announced to the press, but the bottom line is, today the alliance is in shambles. they sold shares in daimler. now they are dismantling shareholding, which frankly makes a lot of sense, if you don't want to work together. don't forget, when the alliance was shined, the reason for the cross-border sharing was that they would be sharing technology, working together,

buying together all of this stuff. it worked well for 18 years. since 2018, they stopped, and there is a kind of apparatus of collaboration that is frankly not taking place. you can see it in the results of both countries -- companies which are extremely weak compared to even the recent past or the last 15 years of each of the companies. matt: one of the problems was that the japanese were always reportedly unhappy about the fact that renault owned more than 40% of nissan and had voting rights, while nissan only owned 50% of renault and didn't have voting rights. is it possible that selling some of their nissan stake, renault can make the playing field a little bit more level, and maybe even improve the strength of the alliance? carlos: first, i would like to

tell you, yes, there was satisfaction from the japanese side all along the duration of the alliance. because of this unequal situation, which was compensated by the fact that nissan was a bigger company, was a much more profitable company, more global company. but this became totally on acceptable by the japanese following the vote in 2016 in france that doubled the voting rights of shareholders owning the shares for more than two years. when we start with the position where the french state has 50% ownership of right, nissan has 50% ownership of renault, you have 50% voting, 50% nonvoting. but then you have 30% nonvoting

and no good for nissan. this became unacceptable and was the beginning of the derailment of the alliance. that was maintained until the renewal of my mandate in 2018 by renault. the japanese thought that i would become an accomplice of the kind of control of nissan by renault, and this was on acceptable for them. the only way to get rid of it was to make sure that they would keep me totally out of any responsibility in the alliance, and they used the legal arm. anna: you have made the connection between your predicament. let me ask where renault may look to make alliances in the future. do you think we are looking at a situation where other alliances, other technology sharing comes to the fore? does that kind of thing makes sense to you? matt: -- carlos: for an

alliance to take place, you need a partner to find a positive into other partner. if you want to consider an alliance with renault, they need to see some kind of benefit for them. so, if they are considering a chinese company, they must see some kind of advantage to making an alliance with renault. it is still to be seen what kind of advantage is seen, if the situation is with a company that is weak, which has difficulty to imagine itself in the future. the vision that was taken recently is not very credible. and with a company which is selling its assets in order to maintain itself. this does not preclude very well about the attractiveness of this kind of partner. we will have to wait and see

about who would be interested in making an alliance with renault in the years to come. anna: as you say, pointed out previously, that you thought the alliance was a zombie alliance. the renault chairman says the alliance is totally unbreakable. do you see this news reporting today, is this the first part of breaking up the alliance? is that inevitable? carlos: the difference between a ceo of a company and any other person responsible is that the ceo of the company can measure promises. we heard a lot of promises from the management of renault. unfortunately, nothing was delivered. we heard they would be concentrated on profit. they had no growth and no profit. that means all of this is a kind of, you know, verbal statements that are not backed by fact. saying that the alliance is

unbreakable is easy to say. showing it is different. the main thing, why do you want to have an alliance if you are not making it work to the benefit of each company? the benefits are not showing, either in the bottom line of renault or nissan, or even worse, and the bottom line of others. kailey: one of the factors at play, if they would sell a state, they could raise billions of dollars that they could reinvest back into the transition to electric vehicles. are they prepared to do so if they don't sell a stake in these funds? carlos: unfortunately, as you know, renaud has an advance on all the industry with the electric car. what is interesting is what came of these advances. now we are saying we need to catch up, but you were already in pole position at the

beginning. when we started the move to electric cars, you had renault, nissan, tesla. there was nobody else. we started with the first mass-market, affordable cars in the electric car market. what happened with this advance? it was still here in 2017 and 2018, but lost steam for the last few years. now they want to sell assets and make alliances in order to cut shop from everything they have lost over the last few years. it is pitiful. matt: it is true, and i remember talking with you about it at the time. in a sense, you are one of the most storied auto executives in history with henry ford and lee iacocca. you are the original thinker of the let's work together, pull our r&d, we are going after the same results. we can keep costs low and maximize profits. is renault nissan still doing that investing in electric cars? are they working together,

working with other partners to save money and bring better products? carlos: they say they are doing it. unfortunately, it doesn't show in the results. neco will say it, will have to, in a certain way, be seen in the company short-term. unfortunately we are not seeing any of that. we are just seeing companies with historically low levels of growth, historically low levels of profit. when i say historically, just going back to past 20 years. we have a lot of statements about the future and results. how can you trust any statement like this when it is not backed by any performance? that is where my skepticism comes from. i'm amazed by the tolerance of the shareholders, amazed by the tolerance of the stakeholders, amazed also by the fact that there is not a lot of voices denouncing the script and see

between the lavish statements and the mediocre reality. matt: if you are just joining us on bloomberg television and radio, we are talking with carlos ghosn who is in exile in lebanon after france issued a warrant for his arrest. of course, an election coming up, a lot of people are thinking this is political. and what is it right now in europe with the invasion of ukraine by russia? you were also famous for investing in really risky places, going into iran, going into turkey, russia, making a deal. how do you feel about those moves now in hindsight, especially since we have seen the moves that putin has made in ukraine? carlos: look, i still think the russian market will still be there. russia is going through some tough times because of the war,

but how long will this last? at a certain point in time, reality will prevail. russia is one of the largest countries in the world. this is a country with a lot of assets, larger market with more than 150 billion consumers. this is also potentially one of the largest car markets that exist. one day, this will end. those getting out from russia now will i always believed in russia independently of the political hiccups because at the end of the day when you go to the market, it is to serve people and consumers. you can't just eliminate them from the map on the because there is a difference, no matter how tragic it is. so somehow i think a lot of the decisions being made are understandable under the reality of today, but in a certain way,

russia will not disappear from the map. anna: matt mentioned the charges you are facing in france. you are a lebanese national, but lebanon does not extradite to other places, so you won't be forced to leave the country in that sense. do you see yourself playing any role at all from there or in any other way in the charges that now face you in france? carlos: no, the charges facing me in france at least now, i am not able to access the charges. i heard about them from leaks, even though there is supposed to be secrecy. there was absolutely no secretly -- no secrecy. once the french investigating judge came to lebanon, i answered the questions they had and i thought i had answered all

of their concerns. but for all of the questions i received and all of the leaks i am receiving today, i know that the major accusation is my relationship with the distributor in oman. that is obviously at the heart of the warrant issue. i have one question for you. it really you thought these accusations were solid and material, how do plain that both renault and nissan have continuously continued to work and sell their cars through the same dealership in oman, the same shareholders with the same management? it is something which is very difficult to understand. if you have doubt on a dealer, the first thing you can do is suspend operation, but they continue the operation and the contract has been renewed by a nissan last year for many years to come. it is really unbelievable what is happening kailey: mike -- what is happening. kailey: my question is will you

go to france to face these charges. carlos: i cannot. i'm sitting in lebanon, but i have no passport. matt: that did not stop you from leaving japan. carlos: people ask me the question like i am sitting down in a place where i am free to move. let's not forget that japan practically positioned me in lebanon until this red notice is moved up, unless it is removed i cannot move from lebanon. i am under the lebanese justice system and lebanese jurisdiction. matt: you are somewhat of a hero in lebanon, and the government has been very accommodative to you so far. not to mention the fact that you figure out a way to get out of japan without using a passport. isn't it possible that you could get to paris or get to france and face charges there, in a place where the justice system

is considered much more fair? carlos: first, when i left japan, i left with my french passport and entered lebanon with my french passport because japanese authorities maintain lebanese and french passport in their home. i traveled outside of japan without the passport. i had the french passport. the second point is i moved out from japan by myself because you probably have seen what happened to greg kelly. it took three years and a half to obtain a verdict on one single charge, which was complicity in not declaring the compensation. it took three years and a half. you can imagine how many years it has taken the so-called justice system to judge me on multiple charges brought against me.

at least 10 to 15 years. so you can imagine me in the situation, with the way i have been treated, of being able to talk to my wife, to talk to the press. they think, nothing is going to happen with this guy. we will maintain him a new pan forever. he will die in the country and no one is going to hear about him. fortunately i was able to extract myself from japan and now i am able to defend myself. let's not forget that both renault and nissan forbid me any access to my files, any access to present the proof of my innocence, but then what is happening to me frankly is a tragedy where you have a masquerade of justice in japan, and what makes me very sad is that in a certain way, france has been a comp less of this. matt: i hear what you're saying. in france, there is a higher probability that you could be found innocent.

it is not like japan, where almost everyone who is prosecuted is found guilty. and i know that you want to clear your name. can you imagine another way in which to participate in a french trial? could you do it from lebanon via video, for example? carlos: i think the best way is cooperation with the french authority and the lebanese authority, the two countries which are extremely attentive to their sovereignty and to respect of the rights of their citizens, and collaboration between the two states can put an end to this ordeal by allowing me to defend myself in a court of justice. because i believe that the court of justice in lebanon or in france would be much more fair than anything i would have faced in japan. kailey: carlos ghosn, former chair of nissan and renault, thank you, as well is bloomberg's matt miller on tv and radio.

anna, while we have been talking , stocks are closed in europe for the week. anna: stocks finishing off their day of european trading week while we were having that sedating conversation with carlos ghosn in exile. let's get back to the markets, regrouped, and think about where we have been through the past few days. this is the stoxx 600 over the past five days. what is really interesting is the way we have been having a lot of conversations in the last hour and a half about how resilient stocks can be or not in the face of rising yields, and it has been a week where we talked about rising yields, we have seen rising yields. we have had a lot of rethinking around the fed and the ecb, and to some extent the bank of england and some gloomy data there. with all of those moves higher in yields, we have seen quite a lot of resilience from stocks, so this is the extent of the losses over five days, done by just 0.8%, but does that continue? have we work through the space that there was a valuation to

allow that to happen? a lot to think about as we go into that earnings story. let's show you a broader take on where we are on this european earnings story. this is five days as well, five days of sector performance. you can see construction materials moving up by two point 2%. one stock in particular, a cement maker putting up some really good numbers, and the help that sector do really well. interesting in the context of inflation protection and higher commodity prices we talked about so much during the start of the invasion in ukraine. done by 7.75% for the past three days. as a result, i really interesting reminder that just because it is often talked about is a good inflation hedge does not mean it has done all that well this week. this is going to be on a host of other assets. the euro down by 0.4%. this is the pound. both of those down against the u.s. dollar today. the pound down because of that data we talked about earlier on. we had data coming through on the retail sales side of things

and consumer sentiment. the french two-year yield, we have been talking a lot about france. we had the election taking place on sunday, so a lot to focus on when it comes to the french election. not necessarily what has been moving to your yields this week, but it could dependent on the results. kailey: absolutely. let's talk more about sunday's runoff election in france. the latest polling still shows a wide golf between president emmanual macron and his contender, marine le pen. jonas is -- joining us is a senior fellow at the l'enfant. where you put the odds of victory on sunday? >> i pride myself and never giving any predictions, but looking at the polls, it looks like macron will win, but the question hinges on the far left candidate who managed to rally over 20% of the french electorate that has not really

endorsed macron. he has certainly called on his voters not to vote for le pen. the question is how they will vote because they will make the difference on sunday. anna: good to speak to you. one of the interesting things about the way the pen, where her support base comes from from a european perspective, perhaps internationally as well, is that a lot of younger people have started voting for le pen. typically you often see younger people leaning towards the left, and yet here we have her being quite success what pulling in younger age groups. is that a feature of french politics that we need to be aware of? georgina: it is definitely a feature we need to be aware of going forward because what we saw in 2017 was a fragmentation of the political landscape, where we had a centrist candidate and le pen in the second round, and at the time we were thinking, is it going to be a blip or the start of a new trend? what we are seeing is the

mainstream failing to galvanize voters, and if you look at yearly at french voters between 18 and 24, their top candidate was the far left, then macron, and then le pen. so clearly the centerleft and center-right are struggling to rally those votes. kailey: looking beyond france, we were speaking with the spanish finance economy minister earlier today. i asked her what is at stake for europe more broadly, and she said it is the future of populism in europe. how are other european countries viewing what happens in france on sunday? georgina: i think probably with a lot of anticipation. he saw olaf scholz, the german chancellor, the spanish prime minister and the portuguese prime minister writing a feature in "le monde," calling on french voters to vote for macron, so clearly they are concerned. until very recently it looked like macron was going to win in any case, so perhaps other eu countries that we can be up bit more relaxed about this, but

there is an important question about populace and because marine le pen, but she has successfully managed to do is really made herself look like a much more moderate centrist candidate, but also made her party looked more moderate as well. if you speak to people in paris, they say, does it really matter if she wins because her views now are very different to her views and 2012. anna: what would a strong performance by le pen mean for the euro project? she has in the past talked about taking france out of the euro, but that is not in her current speaking points. georgina: when you look at her program, she does not advocate for that at all. what she does call for is a revision of the fiscal rules, but even then, she has not really touched on the euro as much. her proposals were about being able to impose and bring in

borders and about diluting the eu. she says she does not want to leave the eu, but she once to reform it, but what this means would mean the end of the eu project as we know it, so certainly for people who are worried about this, we need to look at how, whether she wins, she will have galvanized the right parties across europe, and that will matter for the parliament elections as well. kailey: i would imagine that also matters for the french part of entry elections in june. how does the presidential election influence that? georgina: in the early 2000s there were two important reforms introduced. one was to say that the mandate of the president is no longer going to be seven years, but five years, and that parliamentary elections could happen the same year. since those reforms have been introduced, the president has always been able to secure the majority he needs in parliament, in that mix it much more easier to pass policy. this time there are lots of

questions whether he would be able to secure that majority regardless of who wins, whether it is macron or le pen, and that could constrain president macron if he is elected again on sunday to do what he wants to achieve. we know he's got lots of ambition to the eu. if he does not have the majority at home, will he be able to push as much? i think that remains to be seen. anna: and what about the role of the war in ukraine? this could be something that analysts might say benefits incumbents, but there are also connections with president macron has been keen to point out between marine le pen, the commentary she has made in the past, and president putin. how is all of that going to play through? georgina: if you take the war in ukraine, it has overshadowed a lot of the earlier weeks of the campaign, and that is quite understandable, but actually it has not really heads and implications on the way people cast their votes. we see when we look at polling that french voters are mostly

concerned about cost-of-living, rising energy costs. they are not really thinking about who can we have who would be able to whether this war if it does continue, and for however long it continues, so it has not really had as much implication as many people thought it would. kailey: georgina wright, thank you so much for joining us ahead of the french elections sunday. coming up next, treasury secretary janet yellen will be joining david westin on "balance of power" on bloomberg television and radio. this is bloomberg. ♪

♪ >> from the world of politics --

>> i've been super impressed with the way nato has come together to really help the ukrainians in every way they can come up both in terms of defense systems, also on the defense side. >> -- to the world of business. >> most important to me is making sure that our ratio with our customers is very high, and we did not meet that standard in the first quarter. >> this is "balance of power" with david westin. david: from bloomberg world headquarters in new york, welcome to "balance of power." we have a very special edition of our program today featuring secretary of the treasury janet yellen. thank you for joining us. i know you're coming off of a long week of meetings in washington, the world bank and imf. talking about the united states specifically, we know the

federal reserve says they are going to do every thing in their power to try to get in place and under control. what are your projections given what you expect may the fed might do over the next 24 months, not just this year, for growth in gdp and for inflation? sec. yellen: the imf just issued its most recent world economic outlook, and they are projecting growth this year of over 3% for the united states, which is, given that we are almost fully recovered from the pandemic, is a good, strong performance to the united states and consistent with a labor market that will remain very strong. i think, judging by the u.s. unemployment rate now and other measures of the performance of the labor market, it has been decades since we have

excellent employment opportunities for people. you can see that in the in norma's level of -- the enormous level of job openings. the fed is concerned about inflation. they have made clear that they will be removing accommodation to try to get it under control, but i know they will try to achieve the soft landing, and with some skill and some luck, we will have a very good year for the u.s. economy in terms of the job market this coming year. david: i know it is the fed's job, part of their mandate to control prices, and i know you really respect the independence of that organization that you ran, but are there things the ministry should can or should be doing? there's a peterson institute study that says if you took off the so-called trump tariffs, that would reduce inflation right away, 1.2%.

under that is being studied, but in place and is here and now. why don't you just do it? sec. yellen: we want to do everything we can to lower inflation, and the president has announced an unprecedented release of oil from the strategic petroleum reserve that is serving to hold down oil prices. i think gas prices peaked and have now come down some from their peak. we are working very diligently on supply chain issues to get our ports working better. we are doing what we can to bring down inflation, so that is very important. we are re-examining carefully our trade strategy with respect to china, and i think it is worth considering, we certainly want to do what we can to

address inflation, and there would be some desirable effects is something we are looking at. david: madam chairman -- madam secretary, forgive me, you mentioned china. you referred to that in a speech last week before the atlantic council, saying you really when it china to help the united states bring pressure to bear on russia to stop the trage -- the travesty going on ukraine. what can you do to persuade? what about secondary sanctions? could that urge the chinese to move in our direction? sec. yellen: i don't see china at this point as undermining the impact of our sanctions. as far as i can tell, chinese financial institutions are avoiding, they very much value they access to the u.s. financial system, to their

economic relations with the united states and europe, and i am not seeing them as taking steps to undermine sanctions. we have made clear that that would be unacceptable to us, and made clear that it would be unacceptable to help russia add to its stock of arms to conduct this war. we would like to see them do more to take advantage of their relationship with russia, to try to bring about age of emetic end -- a diplomatic end for this war. nothing would be better for the outlook for real growth, for the economy, or for inflation other than stopping this war. whenever we put secondary sanctions in place, any country or institution that provides

material support to a sanctioned entity to evade those sanctions, we would look to section ourselves. david: help me understand this a little bit because you say you don't see an indication there undermining it. at the same time we had a senior government official this week say we really do regard russia as our friend, and as proof of that, our trade with russia has increased by 20% so far in 2022. doesn't that undermine the sanctions? sec. yellen: we have not sanctioned chinese trade with russia. it is natural that, for example, with the price of russian oil in the global market, it is below the price of brent, that there would be some incentive for china or other purchasers to want to pick up their purchases, so i don't know if that is

happening, but it could be happening. at i would not regard as a violation of our sanctions. david: you also spoke out and called for modernization of some of the international financial institutions ahead of a meeting this week in washington. i would like to pursue that a bit. bretton woods, as we have referred to it. certainly the world has changed since 1945, and a russian invasion of ukraine has brought that home, but there are more fundament to changes particularly in the rise of china. are you talking about minor tinkering around the edges or is it time to revisit the fundamentals formed ring bretton woods? sec. yellen: i am not sure i want to say the fundamentals. i think the goals of each of the institutions are appropriate, but the world has changed in very significant ways, and i think that does require a re-think of the organization and some of the specific mandates

that we give the imf, the world bank, and the wto. the imf was originally designed to deal with country specific problems to help countries adjust and to help finance them during a time when they have limited access to global borrowing, and the last three crises that the world has faced have been global. there have been massive external shocks. the pandemic, the global financial crisis, the russian war against ukraine, that have caused many countries to simultaneously face problems. we really need to rethink the ability of the imf to respond to these global shocks. in the case of the world bank,

we have a need to address global public goods. we have had influential reports written since the pandemic telling us that the world is not prepared. we have a window, but the world is not prepared for the next pandemic. i see the world bank is but in julie playing a crucial role in arming countries with the public health resources, testing, vaccine development, the things that would be needed to respond quickly to a future pandemic threat, and really, the world bank was set up to do project specific lending. we are devising new trust funds and other programs to try to address these needs, but i think maybe a more fundamental rethink

of the mission of the world bank is appropriate. also with respect to climate change, we see clearly a need to deploy huge amounts of private capital. public capital will never be enough to deal with infrastructure and climate change related needs, so we would like to see all of the multilateral develop and banks play a key role in figuring out how to make it safer for private lending to take place to address these needs, to get the scale we need in addressing critical problems. david: you have had a long and sting wished career in public service and have a comp list an awful lot. a lot of people hope you will be there forever, but what are your priorities to make sure you get done before you step away? sec. yellen: sec. yellen: my first priority

is the american economy and to see it thrive. i have been very pleased to see the rapid recovery of the job market, from the stress is suffered, the huge toll of unemployment after the pandemic, and of course we need to get inflation under control. longer-term, i want to see us build the supply side of the u.s. economy. we need to have a fair and greener future in store for americans. i would like to see investment in people, investments that would make it easier for, particularly, women to participate in the labor market. and to really help children, to make sure every child born in the united states has an opportunity to