let's go back to the fed. earlier, you were saying that you thought the fed would have to start hiking again. in 2020. in a cut how can the fed manage that change without causing dislocation in the bond market particularly? paul: going into 2019, everyone was expecting more hikes. then we got more cuts. the bond market will move around. i think what was very clear in that conversation, the neutral rate. we are well below. they believe we are at an accommodative stance and below neutral. the economy is more robust than is expected. they will want to at least get up to neutral. the market will start to price that in. that is what we have got to think, as fund managers, where is it going? i think they would eventually move for that, economic data. of trade some sort deal, the market will start to press that in. nejra: you are underweight bonds. what is your position on equities? manus: we are underweight --paul: we are underweight equities as well. u.s. equities but overweight more of the -- the asian emerging-ma

the feds repos a member in gold as $2000.00 an ounce. the feds repos operations are rapidly increasing in size and scale should we be operations are rapidly increasing in size and scale should we be alarmed at what's going on we don't know exactly or be alarmed at what's going on we don't know exactly or are those actually but it's obvious there are some insolvency there's banks going to liquid the need to borrow those actually but it's obvious there are some insolvency there's banks going to liquid the need to borrow and no one wants to go to the discount window of the fed for the borrowed money blasters are 0 and no one wants to go to the discount window the fed for the borrowed money of last resort means something is drastically wrong so let's unpack on a bit now the worst it or that means something is drastically wrong so let's unpack on a bit now the worst is saying there isn't a solvent sitting there somewhere in the system right and so why would they just saying there's an insolvent thing somewhere in the system and so why would a

the fed has done its bid and the economy is being stimulated by the fed, some watch. it is accommodative. that is where they will stay for now as long as the economuy performs as it has. there are still threats particularly in trade and the slowdowns and other countries, and they will keep an eye on those things, but for now, they will sit and wait. shery: and yet, president trump relentlessly criticizes the fed. yes yesterday, he compared the u.s. and central banks here to other countries. michael: a couple of interesting things that powell said, he was explicit in saying that we do not think that chinese economic data is accurate, but it is what we have, so we follow it. and he was asked about whether we should have negative rates and this country, and he was very dismissive. powell: our economy is in a strong position. inflation a bit below target, so the very, very low and even negative rates we see around the world would not be appropriate for our economy. michael: that is because you have negative rates, your economy is in trouble. our economy is not in trouble.

mike: maybe the bar for action is tied, but last year, the fed hiked. two weeks later, powell had a bad new year's party or something, the whole tone changed. was there an actual shift? no. but the markets reacted. jonathan: are you implying i had an opinion about a policy decision from the federal reserve? coming up on the program, the auction block, featuring the biggest investment grade debt deal of the year so far. abbvie is coming up. this is bloomberg real yield. ♪ jonathan: i'm jonathan ferro. this is bloomberg real yield. i want to head to the auction block and begin in europe, where the primary market is showing few signs of calling, deutsche bank raising 500 million euros, helping weekly sales to past 30 billion. no shortage of supply on this side of the atlantic. the junkyard market set for its busiest week in two months. finally, the big one, abbvie selling $30 billion in bonds to finance its acquisition of allergan. a piece of theuy biggest debt sales so far in 2019. the second-biggest week of 2019. rates are cheap. why would you raise as

alix: the president makes it clear where he stands on the fed. >> today we will see what the fed thinks about the economy from his perspective. alix: in a few hours, we hear from the fed chair jay powell, set to testify on capitol hill. in the markets, you can really see what happened yesterday. you had risk on rally, trump speech, and we are continuing that into powell's speech. s&p's off about 2.5%. you're seeing some buying coming into the treasury market. yields down in the u.s. by about five basis points. joining me for the hour, michael mckee, bloomberg international economics and policy correspondent. we can be serious and talk about powell or really get into it, but can we just talk about how cold it is? have you even left your house? it is really cold. michael: it is really cold. i know alix went outside and said, we'll prices are going up. alix: i thought more about natural gas prices, but that's fair. we are going to hang on every word here? big events got two today in washington, the impeachment hearings starting and powell speaking. for the markets, it is a short-term move.

cycle, weoverall fed would anticipate the fed should steepen somewhat. >> you're seeing late micro cycle -- market cycle behavior. >> it will keep the short and suppressed, which everyone expects. >> a market priced for recession, but it is telling you there are no risks whatsoever. that is not a tenable situation. >> the launchpad controls are in the hands of politicians right now as opposed to central banks. >> if you see these deals go through, you could see a steepener. youf it happens, we think create the conditions for an upside to expectations on inflation and we think it gets manifested in the yield curve steepening. lisa: joining us, ian steely from jp morgan, and james from standard investments. from bmo capital markets. we seen a shift with a growing number of strategist saying they expect the yield curve to steepen next year. what is your take on that? >> good to see you again. essentially we've been running the steepener all year. it's essentially the combination we like for long duration and steepening risk, we prefer the duration risk at the front end of the yield curve. c

and the reason it has reacted the way it has is because of the fed made a big about turn that the fed were very focused on domestic events last year, then they may this be changed to focus on global events, and that shift coincided with rhetoric that, from the president, which was attempting -- guy: it means that the fed is not impervious to the president's comments? coal --here is some correlation. unfortunately, that has been borne out in recent history. i think the market has a tendency to react to it i am not sure if i agree solely on this. what the fed has made a point of is that they will be data-dependent. really, the data trajectory over the next one to three months, i think, is in the president's hands. does he do a phase one deal with china? -- ifllar would go up not, does this mean there is some uncertainty and trouble on the negotiations? vonnie: the fed definitely making sure it got its statement up before the president put out his tweet. would you sell dollars on that tweet? peter: no. [laughter] ishink, globally, there still too much value associated with the dollar. th

economy delivering stronger-than-expected jobs growth, validating the fed's pause. clarida says the economy is in a good place. just as the u.s. and china look to close out phase one. we begin with the big issue, an unexpectedly solid jobs report. -- solid payrolls report. >> pretty solid report. >> solid report. >> really strong. >> the jobs number did not disappoint. >> pretty impressive. >> we not only had a strong report but we had a revision higher for the prior number. >> don't write off the economy just yet. it has a lot of fundamental strength. >> the u.s. economy is resilient. >> they are a lot stronger than people think. >> the fed is in a good spot with where the data is. >> i don't think the fed does anything differently other than

into this deal is considering whether or not hipaa laws have been broken now we know this that the feds have required that medical records be digitized but that is not what's happening here in fact all the records that google is obtaining are already digitized so one you have the issue of the records being put into the cloud which already puts them at risk of hacking exposure but to google is collecting these records to build future business products how does that fit into hipaa laws. well it does fit in the hipper laws and what's really interesting about this situation is the u.s. government is investigating them but it's a health and human services civil rights division which is investigating them specifically to determine whether this information will be used to make insurance to terminations that is when you apply for an insurance policy will something that occurred in your background influence that decision now in my opinion what they're building is what i call a life style index which is where they take your medical records and integrate it with all the other information google ha

we have already priced the fed out of the market. krishna: we are getting monetary stimulus, it is the expansion of the balance sheet. they can call it whatever they want. it is stimulus. if you expand the balance sheet by $50 billion a year, call it what you want, it is stimulus, for its impact on the various channels. jonathan: is it stimulus if it focuses just on bills? not stimulus if it focuses just on bills, if the curve is steep, because of term premium. term premium, again, is nonexistent. in that regard, the impact of stimulus is going to be minimal anyway because term premium is low. i think you are right, that we have had a sea change. ecbou rewind six months, thought that they would be done buying, could be raising rates, the fed was raising rates, rolling up their balance sheet. japan has been kind of constant in their purchases. they are injecting liquidity. they realize they have to keep up with the liquidity needs. ecb is fine. what we have seen when you have that liquidity injection is better risk as performance and

and certainly now, what the fed has done is raise the bar for hiking rates ridiculously high. it will not happen anytime soon. when you have two-years trading above the funds rate, historically it tells you the market is expecting hikes, which is not likely to happen. so there is a massive asymmetry towards being positioned on the front end, and the combination of being long on steepeners, that can profit in a number of different scenarios. one of your guests in your clips was concerned about steepening the yield curve that way. i would say, even though i running the steepener, i find am that difficult to believe , when you just look at the oil price and the base effect, notwithstanding the end of december, which will be an upside for base effects. it seems like unless we have a massive oil rally, it will struggle to make any headway higher over the next 6-12 months. for that reason, we are not expecting any inflationary steepening of the curve but we've seen recently with bond markets, it doesn't take much of a push upwards to see the curve getting dragged steeper in a bearis

we have already priced the fed out of the market. krishna: but robert, we are getting monetary stimulus. it is called the expansion of the balance sheet. the non-qe qe taking place in the marketplace. they can call it whatever they want. it is stimulus. jonathan: why is that stimulus? krishna: it is stimulus. if you expand the balance sheet by $50 billion a year, call it whatever you want, it is stimulus for its impact on the various channels. jonathan: is it stimulus if it focuses just on bills? krishna: so i think -- it is not stimulus if it focuses just on bills, if the curve is really steep, and if the curve is steep because of term premium. term premium, again, is nonexistent. so if the curve is a steeper it's because of inflation expectations far more than term premium. in that regard, the impact of stimulus is going to be minimal anyway because term premium is low. that is what is unfolding. robert: i think you are right, that we have had a sea change. i mean, if you rewind 6-12 months, ecb thought that they would be not only

we are staying on the fed. jay powell isn't the only official reinforcing the rate cut pause message. san francisco fed president mary daly also said the fed has done enough for now in an exclusive interview with our policy editor kathleen hays. did mary daly add anything new for you when it comes to the fed policy picture? reporter: she absolutely did. of course, she started it by carefully and repeatedly laying out all the reasons why the fed, after three rate cuts, has done enough for now. yes, there are downside risks, the fed's eyes are open, she is a data dependent fed official act the rest. economy is in a good place. for now, rates are where they should be. let's listen. hashe policy accommodation put policy stance in a very good place to make the baseline come out where we needed to, which is slightly above trend growth and continued move in inflation to target and further progress on full employment. i think of that as the economy in a good place. of course, we continue to be data-dependent and look a

fed chair jay powell says the u.s. economy's glass could fill up even more any policies could benefit all people. and $70 billion worth of m&a. we speak to kirkland's ceo after gold in one of the biggest mergers of this week. welcome to "bloomberg daybreak" on this tuesday, november 26. we had a record high yesterday, and now taking a little bit of a pause. s&p futures pretty much going nowhere. not a lot happening in the bond market. not a lot of movement in the commodity market. i feel at this is a theme going into a shortened holiday week, also headed into the end of the year and the month end squaring. frombuy numbers coming up retail earnings over the next couple of days. third-quarter earnings better than estimated at $1.13. they see their full-year adjusted earnings raised from what they saw before on the $5.91.d, looking at . it looks like on first blush, a beat and a raise for the rest. global exchange -- for the rest of the year. time now for global exchange, where we bring you the news from all around the wo

fed chair jay powell will be addressing the u.s. congressional joint economic committee tomorrow at 11:00 new york time. we will bring that to you live as it happens. coming up in the details on the largest on sale this year as abbvie announcing it will sell $30 billion of debt to purchase its -- fund its purchase of allergan. this is bloomberg. ♪ shery: this is bloomberg markets. i'm shery ahn in new york. amber: i'm amber kanwar in toronto. is selling what could be $30 billion worth of bonds to finance its acquisition of allergan. it could be the largest on sale in 2019. the drugmaker is capitalizing on some of the cheapest borrowing costs of the year. for more, let's bring in molly smith. let's talk about the bond market conditions that are making this such an attractive offer for investors. bloomberg reporting this is a deal that has attracted more than $70 billion in orders. molly: that's right, and we found out the deal has launched at a size of $30 billion, so all of than the $20 billion we were expecting, which shows you w

what we have seen from fed we would have seen some fed speakers try to recalibrate expectations. they haven't. they've tried to reinforce the suggestion we are on hold. nejra: it's amazing how quickly sentiment has turned given we haven't got a phase one trade deal between the u.s. and china yet. are you saying that what the fed has done so far has worked and is enough? >> has it worked? to a point. i would point to the fact that financial conditions began to ease in the u.s. economy in the middle of december last year, just after the federal reserve raised rates. already, the market had gone ahead and started to lower the 30 year mortgage, lower corporate debt interest rates on the anticipation of a plateauing and an easing. whether policy caught up with events or whether it led offense, the history books will be the narrative. i would argue the market already interpret this. now is the market has assumed a stage one deal. it has got ahead of itself. the risk is that this will break down and everyone's position is in the wrong direction for may -- for what may come. that a deal

david: let's go back to jay powell's testimony, the fed chair. he did not say much about monetary policy saying if things keep going well, then we are in a good place. but one of the issues that has come up including in jay powell's testimony was the trade uncertainties. we are from president trump yesterday about the china trade a deal and one of the issues that came up was do we know how strong the chinese economy is. this is in part what was said. powell: i think it is difficult to understand china. it is very hard for me to really feel like you understand the way the economy works, the way the society works. i think you have two, as a general matter, just except that it is hard to know. david: it is very hard to know what the chinese situation is. president trump tells us that they really are struggling and he has the upper hand. do we have a read on the strengths of parties in that dispute? terry: short answer, no. personally,mption, i think it is a reasonable assumption, whatever the chinese are telling you, you should probably shave off an

the new york fed added $112000000000.00 to the financial markets via temporary operations tuesday the. liquidity additions came in 2 parts one was an overnight repos totally 76400000000 and the other a 35000000014 day repo this was all done in order to help maintain the fed funds rate was in its target range now when the fed 1st started pumping billions of dollars into the repo markets back in september they said this would be a short term liquidity injection that this was a technical glitch due to the end of quarter and tax obligations yet 2 months later the fed continues these emergency interventions if this was a short term plumbing problem why is it still continuing then when the problems still persist as the fed announced that it would resume pomo injecting 375000000000 each year for the next couple of years apparently this is not to eat because the fed will do so organically but language games aside it's q e on steroids the fed's bailout operations have increased its balance sheet by over for $250000000000.00 since september and now it's not just the short term liquidity that ha

and we get a .4% q-4 and the fed said we're still on hold. is there a possibility of a january freakout >> not qe so the expansion of the balance sheet going on right now and we have had 300 billion in 3 months with 3 rate cuts that should be lifting financial assets and doing its job does the consumer come in in q4? does the holiday season deliver? for now we are not overly optimistic we are staying with high quality companies, good cash flow. infrastructure as a side play on that as a defensive idea and then moving up in quality on fixed income is late cycle things to still look at here. >> i think the market telling you it's a trough whether it's half a percent in the fourth quarter or not the clear message has been of an inflection point that would be a head fake if it turned out that it wasn't. >> how important, jeffrey, is a trade deal here in order to get over that next hump? >> it is really important. obviously, that is what's driven a lot of this slowdown one thing to focus on is ten years looking for a turn in housing to mark the lo

of another you tube ad from them being fed to them so that's. their number is to make it look like people with still care about c.n.n. and m s n b c but again this is that cycle of those that out of control crybabies in that room and if you open the door into this daycare center you've got the wall street bankers over there screaming at the fed. turn into cable news you see rachel maddow like. russia russia russia then you see on the political you know you tune into congress on c.-span and you see. you know. nancy pelosi like saying like oh you've got to impeach this guy and so this hysteria at the top the rest of the country the 99 percent the vast majority are not because the democrats don't control a foot and there you go baby. they resort to the other weapon of the baby group their parents right so it's either the republicans who get me more free money from mommy or the democrats threaten to put their pants that's the entire political debate in america today and unfortunately millions are dying from know from overpriced health care starvatio

fed policy next year. as we heard last year -- last week from powell, the situation is balanced, not favoring the fed to move in either way. shery: in australia, there was an interesting analysis from goldman sachs that shows if qe is needed in the country, the stock market may not get the sugar hit it needs. what is that about? a veryeah, it was thorough analysis. as we have seen from a number of different banks and companies over the last few weeks, this qe planning is clearly taking place to a very large amount of detail. the base case for goldman sachs as we do not get to this scenario. if we do, they alluded to other problems of buying securities when things are already quite expensive. if you compare their forward price earnings, multiple on australian equities today, around 17 on a forward number, that is significantly higher than the valuations you saw when ecb began their program, when the fed also, and the bank of england did there's. for the case of the bank of england into thousand nine, you we

consumer when it comes to the feds looking at? >> everything else, things sort of move in focus the old story is that 70% of the gdp is the consumer. driving down the variable part, you get down to around 30% it is very important now because that is the read on which the fed out look rests the consumer is very much dependent on the equity market the one interesting aspect of the whole recovery is the increasing net worth it is the first time you had that kind of increase with household borrowing. the balance sheet holds much more capital market assets than they do in real estate if the market goes down, that clearly triggers a sharp drop in consumption. to the point about the balance sheet, this is all an operation to keep the equity market afloat the fed has been able to do that >> that's household wealth despite the ever improving, we are not seeing weight increase >> you are but not as much as historically. can they get closer to target. when is that going to happen >> it is not going to happen next year. the wage and price num

side of new york fed outside of swift and we're going to blow the u.s. dollar out of the water is something like that do you see something like that happening because it seems as you point out that trade wars lead to currency wars like the hot wars i believe that's one of your observations were on the cusp of a hottest type war like situations are all your thoughts i agree with you 100 percent and also what china just did now recently announcing that they're going to be doing more with the euro and using that as their reserve currency and not the dollar they're all tired of the dollar being the dominant currency but at this point it's going to take something like that to be the black swan event like you're pointing out so to also get be all of a sudden doing it already no more petro dollar we're not going to buy oil in petro dollars and we're going to buy it in our own currencies and it's already happening with russia and other countries and china and iran so yes it's going to be again go back to the british pound it was the it was the premier currency n

because the fed will do so organically but language games aside it's q e on steroids the fed's bailout operations have increased its balance sheet by over 250000000000 dollars since september and now it's not just the short term liquidity that has dried up but it has spread to the c.l.o. markets the collateralized loan obligations market fell 5 percent in october while the equity index has soared to new all time highs these declines in the $680000000000.00 market could be a warning for the one trillion dollars junk bonds market as c.l.o. bonds are made up of just below investment grade or leveraged corporate loans traders are worried about the health of the market as the double be rated c.l.o. bonds are now just about 5 percent higher than the yield of similar junk bonds and that is the widest spread since early 2 $1016.00 when declining oil prices triggered a massive sell off in leverage loans and with more we bring back. of economics and on patriotic and author of can we avoid another financial crisis so steve we're seeing some unprecedented growth in central bank's balance sheet rig

and the fed was actively involved earlier this week. can you tell us what's causing the liquidity issues that are causing the fed to intervene? you said they're technical and i'm not disputing that. i'm wondering, can you tell us what's underneath that that's causing that activity? >> sure. these are not things that will affect economic outcomes. >> i'm not implying that. i think you're trying to do the right thing. i need to know what's causing it. >> we've been allowing the balance sheet to decline and we stopped that process back in july and it really comes down to the supply of reserves, which are something that we create. and we surveyed all the banks and said, how much -- what's your lowest comfortable level of reserves, we added and put a buffer. we thought we were well above the level of scarcity. and then in easterly september we had a situation where the liquidity -- where banks had much more liquidity than they said they needed and it didn't flow into the repo market where rates it gone up. it would have been nice returns for

romaine: we did get that fed support, and there are some that would argue the fed wasn't so much trying to boost the markets as much as it was trying to pull people back away from that flight to safety that we saw earlier in this year. they appear to have accomplished that, or at least that seems to be the residual effect. but as people push out onto that risk spectrum, at the same time we are still seeing people cling to treasuries, cling to some of the safe haven currencies and some of the other safe haven assets. what kind of signal does that send to you, and what type of signal does that then send to the fed in what it has to do or not do next? lucy: well, risk appetite is higher than it was a couple of months ago, but it is not yet really dangerous. i think you could say that looking at the premia being paid in the m&a deals we are having the previa they are paying are not much higher than they were a yard. is notk appetite dangerously high, i think. guy: the effect that central bank have had this year on valuations, there's clearly the rate cutting story, but there's also the liqu

fed chair jay powell says he sees expansion ahead for the u.s. economy and is unlikely to cut rates further. and treasury yields, the dollar and oil falling on the word of that trade deal. president trump is said to hold a joint news conference with the president of turkey. we'll take you there live when that begins. you can see that's due to start any minute now schedule was 3:10. josh brown, very good to see you. >> how are you, wilfred? >> very good, indeed. >> good. >> markets, as we look at things now took the fed conference fine but a bit put off by the trade headlines. >> we made a new high yesterday and today briefly. you take a look at the constituency making up that new high it's very encouraging for people who look at things like internals. xli is hanging in there, all-time highs xlf has closed higher in the last six sessions closed higher than the open. this is very constructive activity stocks are being accumulated then you think big picture what's driving the averages? the two biggest stocks in the world, apple and microsoft one is

>> there is two things going on, the fed is involved in this fed listens thing, it is rethinking the framework and part of that rethink fg ting of the framewora do we do with rates so low and they talked about that, and they talked about additional quantitative easing. i think they really like to see congress get its act together to have some fiscal space to move in the event of a downturn the next time around i will tell you, i'll check this while i'm talking, we went into this speech with a 2.3% probability of rate hike in december and you had to go all the way out to july, carl, to find a greater than 50% probability of another rate cut and so i don't see that changed here. what happened, i think, is we have settled into the fed being a kind of nonfactor here the fed is on the sidelines unless there is a material change in the outlook, and then you can go crunch your numbers on earnings and crunch your numbers on politics because the fed is going to remain on hold here and that's the market has baked that in. >> that goes right to your point about how the president no longer has h

within the fed. rosengren eric morning policymakers against putting financial policy at risk. we will hear exclusively from him. and now, back to sophie for a look at australian markets. higher.6 200 is opening a2 milk leading the pack. aining 17% after reporting better margin outlook. checking in on the aussie dollar. ahead of the rba. still clearly and a focus for the currency. 1% ancks are adding on hour into cash trade. futures holding steady in chicago. let's see how we are sitting up in hong kong. hans sang futures are under pressure after the rebound. speculation that chinese funds are providing support for the market. even so, there is some investor caution given they are rethinking their positions with the increasing violence in hong kong. we did have the hans sang in the hong kong index regain their 50 day moving averages. let's jump to the terminal here for a check on the offshore. steady around the 702 handle. after retreating on monday, trade and uncertainties. 100 day moving line may se

did the fed stop? well, because they provided what he calls meaningful support to the economy and the rate cuts will continue to provide support for the economy, says the u.s. economy's in a good place, growing at a moderate space. but there are risks and he lists them they include weak global growth, brexit and trade, disinflationry forces remain, he says, and negative yields abroad could reduce u.s. yield. kelly, basically, the blackout is over for the fed to start talking and now top deputies of the fed chairman are out there explaining the policy. >> steve, this is interesting because clarida, who is seen as probably the most authoritative voice on the fed other than the chairman himself is coming out after the jobs report this morning and able to, you know, respond to that for the first time kind of speaking on behalf of the fed now so what do you think his message here is? is it we're done it's going to take a lot, you know, a big increase in inflation for us to do anything now? >> i think that's

i mean, the fed, the fed speak today was very comfortable, didn't hear anything, i don't think we heard anything we didn't expect, sort of business as usual. corporate earnings have been fine, the u.s. economy is fine. a lot of the other background noise is simply that, political theater, i guess, if you will. and the lines of least resistance continue to be higher. liz: isn't that that the truth x., phil, you look at the ten-year picture, that would encompass as well president obama's reign. and so you look at how under democratic presidents and under republican presidents, at least after a horrific financial crisis, this stock market manages to move higher. you know, what can we glean from that, because we know trees don't grow to the sky, and we know this is the longest expansion in history. >> well, we also know that what preceded it was one of the longest slowdowns in history as well. and, you know, i would argue that, you know, we should have recovered from the financial crisis a lot quicker, you know, except i think we made some bad policy decisions when it came to, you know, reg

the fed is not a political institution. jerome powell is not there to advance the president's re-election efforts. the federal reserve had its own statement. it issued a statement that powell told trump the fed will set interest rates based on nonpolitical analysis. and the meeting came at the president's invitation. a downturn because of slowing global growth and grinding effect of a trade war. >> of his own. what's the ice breaker there when you call someone all those things? is there small talk? >> a bigger enemy to the american public than china, is a pretty big insult. seems like jerome powell is a data guy. i'm impressed being able to do your problem with someone att k attackiattac attacking you so publicly. >>> a scary scene in illinois. a truck goes toward a state trooper. how this ends, next. their story. give the gift of discovery, with an ancestrydna kit. it's the sleep number 360 smart bed on sale now. give the gift of discovery, can it help me fall asleep faster? yes, by gently warming your feet. can it help ke

again this year barring a serious internet haha lesson by mccain lenses to handle the breakdown the fed's plans and how the economy may fare during the holiday season. in the wake of the venture capital is looking to safer investment for returns on their spending investigative journalist fans want is back today to show us the future for selling on bally and why this is an appliance just a fairy tale and later we take you to new york city where streaming has managed to save a movie landmark in the big apple but what consequences could this have for the film industry as theaters and production mergers artie's trinity chavez is on the ground in new york to bring us the latest on netflix to dive into the screening sector we have a lot on board today so let's get right to it. united states federal reserve chairman jerome powell on monday insinuated that there would be no changes in federal interest rates in the coming months comments came here which took place during an address to the greater providence chamber of commerce in rhode island come as the fed has cut rates by a quarter percentage p

the first review of its kind for the fed. with the u.s. economy operating close to maximum employment and price stability, now is an especially opportune time to conduct such reviews. throughout these events in the country, we've been hearing a range of perspectives only from academic experts but also from representatives of consumer, labor, business, community and other groups. it will draw on the insights that we assess this help you achieve and maintain the maximum employment and price stability. we will continue to report on the discussions in the minutes of the meetings and share the ensured the conclusions when we finished the review likely around the middle of next year. and the downturn will also be important for the fiscal policy to score the economy. however, as noted in the ceos recent long-term budget outlook, the federal budget is not run that is on an unsustainable path with high and rising debt. over time, this outlook restrained fiscal policy makers willingness or ability to separate the economic activities in the downturn.

i think the fed wants more data before they move again. our own forecast is that they cut twice over the next six months. we think both the fed and the markets don't appreciate what a 2% economy feels like relative to the 2.6% we've had for the last five years. that's a huge difference on a $21 trillion economy. we think that low growth environment and china slowing down as well continues this excess demand we've had for high quality financial assets. the fed is going to once again put it on the table, the risk of an inverted yield curve if it doesn't keep cutting. alix: what we have seen is the fed has impacted the mortgage market. if we take a look at consumer actually white line is consumer debt adjusted housing. that has really come down. they've been able to repay a lot of their housing debt with those low mortgage rates. if you take it out, the debt service ratio is actually much higher. at what point do you get worried about the consumer, about target being the second largest holding in your per folio? tony: the overall debt service

i would say no, i think the fed is done. i think the real question comes in july when they are done adding all of this liquidity into the system. do they just stop cold turkey? it?hey taper i think that is something they will deal with as we see what the world looks like come next spring. that is the biggest policy question in my mind. romaine: on that, though, you still have a bond market that seems to be testing the idea that the fed would stand pat through the next year. you have concerns about where the neutral rate is. you have concerns about market rate bumping up against either the top or bottom of the band that the fed has set. does the market pressure become a factor, where maybe the fundamentals, the economic fundamentals may beget diminished a little bit, and the fed has to respond to what the market is asking for? steven: that's always a possibility, but i think in the coming year, less so because by the fed putting this much liquidity into the bill market, they are anchoring the short end of the market basically

theier today, rob kaplan, president of the dallas fed, said given the fed's latest cuts, he thinks policy is at an appropriate level. you think the fed needs to be patient. clearly, entering into an era of wait and see. the fed is giving more signals that at least three rate cuts, early last year. now it is time to sit back and watch. i still say we don't know exactly what is going to happen in the trade deal. uncertainty and investment that has not been done. is everybody going to rush back and pick up to with the way they were a year-and-a-half ago? maybe not. maybe it will take the fed and other central banks longer to be decisive. they will probably start talking about hiking them. hays. kathleen let's get to the first word news. ritika: thanks. a senior trump administration envoy has testified that the white house did pressured ukraine to investigate joe biden in exchange for an oval office meeting with the country's new president. the u.s. ambassador to the eu contradicted president trump's repeated assertion that there was no quid pro quo. sondland said he believed the investigatio

the bond market watches the fed, will price what the fed is doing. whatever the fed says, they will do, so if we were to go into a recession, god forbid, and the fed cuts rates to zero, treasuries will come down to three quarters or 1%. it is really the fed in the driver's seat. the fed should put rates at normal and get out of the picture, like the old milton freeman, keep pumping out the same amount of money supply. do not try to oversteer the economy, keep rates normal, and get out of the way. that would be my preference. i am afraid fed policy will try to lead 10 year treasuries lower if the economy weakens in 2020. guy: what do you make of this brainerd idea about curve control? chris: bernanke he brought that up several years ago. -- bernanke brought that up several years ago. that would come into play if the treasury yields were not doing what the fed wanted, were not going down. they don't have to set a target. if they push the fed funds rate down for policy reasons, to 1% from 1.75% now, these yields will come down anyway. there is no guessw

that was a big taunt from the president to the fed yesterday in the fed testified. will he respond? >> i think he will tell us listen, if the economy doesn't pick up speed-- i should say business sales if they don't start again speed soon the fed will have to cut rates, no question. the way the press-- the president is wrong on this issue that we begin to see some very substantial meaningful pickup in the rates of growth for-- growth for business sales. stuart: what i'm looking for is where is the economy going in the future and are the good times going to continue to roll? >> i think the fed can afford to allow the good times to continue to roll right now inflation seems to be well contained. there's no reason for the fed not to go ahead and lower interest rates so we can keep moving. unemployment rate lower and we could keep expanding business activity. stuart: what you make of the president as he repaired yesterday to the europeans with their negative rates where the lender pays the barrio. >> there's a reason for these rates are cueto went it because it so lousy, those economies

fed chair jerome powell, he has just wrapped up his testimony on the current state of the economy saying this is the new normal, folks. and we'll tell you what it means for you and the market plus google coming for your data the tech giant will offer checking accounts to consumers and that's one day after it revealed it has been collecting health details from millions of americans. and later, nike dumps amazon as the new ceo and former ebay head john donahoe makes his first mark on that company "power lunch" starts right now >>> and welcome to "power lunch. i'm melissa lee. we're looking at the markets right now but this is not telling the entire story intraday, that's the story we went from session highs in fact intraday all time high on the dow industrial to a low. on a dow jones headline about u.s./china trade talks hitting a snag over farm purchases we'll get the latest and monitor the latest reaction for you. >> thank you, melissa. >>> we're going to go now to washington and kayla tausc

does the fed need to tap on the gas pedal again? let's see what forrest says tuesday. i think he's didn't a tresk job. his stock nearly up 20% of the year that's pretty impressive for an industrial however, i'm betting he will describe an environment that's tough to triumph over, which again verifies what the fed did. the same morning we hear from peloton. i believe this can blow away the numbers. this year ipo end zone have been the weakest in recent memory pinterest got owe bliv rated when they said it didn't grow enough if he says something good, it could help the whole cohort. or the picture of my wife's telecom with the underarmor and -- her bra and -- i mean, the towels the towels happy birthday, lisa i didn't mean that at all. wednesday morning we hear from c.v., that's victoresque, and this is one of the cheapest stocks i follow, selling for over nine times investor earnings that's absurd. let's see if the market agrees with me. when ceo larry merlot gives his take on the quarter. fast food group has been roiled since wendy's announced getting into the breakfas