a drop of 14 basis points. the short and repriced aggressively, but 30-year paper does not believe that the fed has really got a grasp on inflation. let me show you the futures trading on 30 year paper, the highest close in three years in 30 government bonds. what you got his two year yield prices dropping ever so slightly. the 10 year paper trading lighter by two 30nds. we get an opec-plus meeting today, so you are looking at nymex crude one await. 19. -- at 108.19. the dollar index flat on the back of the jumbo rate hikes. dani: a little bit of breaking news. unicredit coming in. it's the start of the italian banking season, loan provisions driven by russia 1.3 billion euros. this is what analysts had looked out for. their ratio of health at the bank 14%, after that hit from russia. their net profit excluding russia coming in at 1.2 billion euros, excluding russia. they are still committed to distributing at least 16 billion euros through 2024, still trying to give something back to shareholders. manus: let's

so, the consensus is that, the reserve bank, they will move 15 basis points now and 25 basis points in the coming months. >> we are seeing money markets betting big on how much the rba could do. andrea: yeah, that's right. we are seeing the diversion between what the money markets are expecting and what economists are expecting. we know that phillip -- has been quite timid when it comes to interest rates but the markets are pricing in a much much more aggressive move. overnight index swaps had a cash trade target as 2.5 by the end of the year from the record lows. and that could be the sharpest increase in -- sincce 1994. it also implies two occasions of the central banks that raise rates by more than a quarter-point. at the same time economies are expecting the cash rate at 1.5% by the end of the year and is already mentioned because they rba has more flexibility, meeting more often than the fed. that only has meetings compared to 11 from the rba. there is this potential from us trillion bond markets to outperform each of the markets -- >> we are seeing already the market reaction. bo

they are expected to hike by 25 basis point. we are hoping for more clarity on what they plan to do. focus on getting 1.4%. sector by sector, bank earnings, with broken that down for you. many of those banks have some kind of russia exposure. overall, you're looking at volatility within the trading reducing higher revenues across the banking space. technology at the topless in terms of sectors and yields coming up, getting more than 3%. don't forget the oil story is also part of the story. that's all drawn up, about 3% in terms of brent on the back of that move. francine: the interview of the day, binance, the largest crypto exchange has received regulatory approval from the french government. it is the first major approval from a g7 country. joining us now is the chief executive of binance. thank so much for coming on to give us an insight into what you're up and ambitions are. congratulations, approval from the french market, what does it mean to the timetable for what other european countries will do and what you want to atta

taking 75 basis points off of the table? >> promising thing is a couple of 50 basis point moves or possibly more than that by the end of the year. i think that is still low. they said the neutral rate is 3%? those are putting upward pressure on inflation. we do have a higher rate. that is beneficial and it creates a drag on inflation and we cannot have an inflationary and have a successful economy. >> you are holding your monetary policy conference this holiday. the theme is how monetary policy got behind the curve and how to get back. what got the fed behind the curve? was it politics? the to not be confirmed yet? was it politics of them having promised they would not start raising rates until the labor market was hot? >> i think they got so used to the pandemic and the right cut and it is hard to get back to normal. there are so many indicators even a year ago that says they should start to think about raising rates and did not do it. this is a lesson to keep with the basics, things have to be rule-based. they have to be p

now you have a 125 basis point spread, 275 basis points in u.s. yields, so that is starting to look attractive. the other market we love is emerging-market local debt, central banks have reacted, cheap currencies, that looks attractive as well. tom: and maybe you get to neutral from the dead. we will take a pause, or a deep breath. francine: are we breathing through this? tom: we need this at this time of volatility. bnp paribas has done well out of this, posting a bumper first quarter of earnings. we will hear from the french banks cfo. this is bloomberg. ♪ francine: welcome back to the open, 25 minutes into the european trading day. we are holding on to some gains, the ftse .2% lower. but if you look at the dax, gains of .6% just like the stoxx 600. there is a bit of debt buying -- dip buying. tom: banks are the leading sector at this point, helped in no small part by bnp party bus which are quartered first quarter net income that smash through estimates. despite results, the lender said the short-term outlook was anything but positive. bnp's

two year yield decline 15 basis points, to 63. five-year down 12 points. 10 year, 291. 30 year at 3%. re-steepening of these yield curves underway. tim: back to that moment really moved to the bond market and equity market when the fed chair said 75 was off the table. chair powell: it is not something the committee is actively considering, assuming economic conditions evolve in ways consistent with expectations. there is a broad sense on the committee additional 50 basis increases should be on the table for the next couple meetings. tim: the chairman of the fed, jerome powell. he continued to say we will make decisions at the meeting. we will be paying close attention to the evolving outlook. romaine: ok. can we get something straight? is he driving the ship? remember, 25 basis point hike at the last meeting. he told us everything was fine. i understand communication. why he would talk down 75. at the end of the day, the fed is not driving the ship. inflation is driving. if inflation is out of control by the time you get to june,

it will not be. >> 75 basis points are still feasible? >> i think they are and i think the fed, powell, a move that markets are trying to see with this, do not think it should have taken 75% basis points off of the table as many people have interpreted. i think they need to be on the table. they are to have that option. -- they ought do have that option. >> how they got themselves a bigger hole in terms of market expectations? >> they may have. they had a big hole when they initiated the new strategy that inflation was not going to be a big problem and keep interest rates at 043 years. -- at zero for three years. they begin tapering their purchases and getting all of the rate increases. they were not swapping margins at rate increases. step on the accelerator to boost the economy and only to have you slam on the brakes to stop inflation. that is the policy that is being practiced. >> is it possible for the federal reserve to slowly -- slow the economy? getting inflation down is challenging, there is a chance of a softer landing? can the f

we will get two 50-basis-point hikes. that's 100 basis right there, so if you're looking in september, maybe another 50. it remains to be seen, but one thing for sure -- jay powell has made it clear that they are worried about inflation. they know is it's causing pain to the american people. this is now their number one priority, bringing it down. let's look at what he said. >> inflation is much too high, and we understand the hardship it is causing, and we are moving expeditiously to bring it back down. we have both tools they need and the result it will take to restore price stability on behalf of american families and businesses -- the resolve it will take. kathleen: the fed has not done a 50-basis-point rate hike since the year 2000. now it will do 1, 2, 3 in a row. that 75-basis-point hike was only done once in that history back in 1994 when they had to catch up after pausing just ahead of the november election that year, so it made it bigger rate move. it does not usually happen. it is also interesting, the policy s

the fact they did a 25 basis right -- 25 basis point rate hike. that's a big move that central banks tend to make. central banks around the world. now you wonder if they will do 15 and get it to 50, will they do 15 plus 20, will they do the 40 and get back in the mode? for now, it's clear that they are concerned about inflation, isaac it also helps justify the expectation that the markets have, that investors and traders have, that the rba is going to do several rate hikes this year. this gets them in steps with the federal reserve. the ecb is in really there yet, but the bank or korea, reserve bank of new zealand, other banks that are on the path because inflation rates are high and rising. australian inflation did take a big jump. all of a sudden up to 5% 5% and change. they are looking at 6% this year. i have been saying the inflation is so much lower than the u.s.. u.s. is at a .5%. but when you look at 6%, that the high rate for a country that has had low and stable inflation for so long. definitely the low says at this press conference, tons

yields higher going into this one by four basis points. 3.08%. the euro showing a little bit of strength after showing weakness yesterday. 1.0568. some of the estimates out there, 380,000 is the payrolls estimate in our survey. unemployment, 3.5, down from 3.6. tom: some huge dynamics, the state of the labor economy this far along in a wonderful recovery from a pandemic. our jobs are and 11 minutes. the university of chicago booth school, professor of economics, randall kroszner joins us. i want to go alan greenspan on you. chairman greenspan really cared about confidence. george at deutsche bank points out that business confidence and consumer confidence have never been farther apart. how do you believe that dynamic will work? will business confidence go gloomy as consumer confidence does? randall: i think that's right. just put all the issues with the fed aside, raising rates quite significantly. there are so many shocks out there whether on the supply side, sanctions, war, continuing uncertainty about that. naturally the economy would be slowi

not only a 50 basis point rate hike, but a 75 basis point rate hike. kathleen: the 50 basis point rate hike, every federal reserve official including jay powell has at least open the doors and endorsed a 50 basis point rate hike. it is starting by mid-may and that is expected. but i want to get to the 75 basis point argument, this view. the idea is shock and awe is what is needed. it's not expected to happen at this meeting, but could powell open the door? number one, there is no federal reserve official that has called for a 75 basis point hike. joe bullard from st. louis said yes, it could be an option if needed like alan greenspan said in 1994 but, "not his base case." he's not expected to have to do it. lori mester wants methodical moves, she does not favor a shock move. charlie evans, the chicago fed president sees the need for 50 basis points but not more than 50 basis points. i think this market expectation has cooled off a bit as we hit the end of day one of the meeting. bloomberg economics says there is a decent chance of a 75 basis move becau

the ten year about 20 basis points or thereabouts. let's go to bob pisani as we wrap up this abbreviated addition of "power lunch" before we hear from the chair. >> we're just above where we started with the s&p there are two problems with the markets. it wants to believe powell can engineer a soft landing and he has to maintain the possibility of even more aggressive rate hikes are on the table that will keep people on edge. the second problem is the fed will not be deterred by this argument that inflation might be peaking in march and april as powell said earlier, at various roundtables, we don't know if inflation will be peaking right now and we cannot count on that and because of that, you're going to see people who will be out there arguing the market -- the inflation is peaking and therefore the inflation will back off. powell has said we can't do that we can't rely on that and we have to make sure we're fighting inflation and that's why he's not going to take more aggressive rate hikes off the table at the 230 meeting and that

more 50 basis point rate hikes, i don't think we will get to a 75 basis point rate hike anytime soon. guy: the market reaction to the bank of england and the fed is fascinating. the market reaction to the fed was, as you say, relatively restrained inasmuch as -- the fed will be relatively restrained, and that seems to be the green light for stocks. stocks are turning over now and yields are higher. the bank of england despite putting out a double-digit inflation forecast was taken as dovish because growth will be a problem. gargi, does the market have a good sense of how to read central banks right now? gargi: i was listening to the conversation that you were having with the speakers before me. i think the market is trying to determine what is the most important factor going forward. for the fed is very clear, they have a single mandate right now. they are only focused on inflation and they are telling us that. they told us that in numerous ways yesterday. until they see the signs of inflation turning over, they are likely to continue to raise rates into neutral territory. we can disc

you start the hike, do 25 basis points, 25 basis points, see where you are then, and i think you are wise to point out they will see where all this upheaval that affects europe so much more than it does other countries -- they will see where it is then. yvonne: the fact that they are even exploring a 50-basis-point hike is interesting and something we have not seen for some time. we will have more with our interview with christine lagarde from davos, just wait about 10 minutes' time. david: to kathleen's point, it is really inflation and answering inflation that seems to be the point. i want to give you two lines to answer this quickly, that stabilizing inflation is the top priority, number one. economic headwinds are strong. they know the economy is going to run into some challenges, but despite that, they are looking to raise rates to an extent that might actually be the former -- labor shortages, and this might the a not wage inflation and the negative output gap, which i mentioned they are alluding to as well. labor shortages are now the major constraint to production. areas of r

markets expect the fed to raise interest rates by basis -- 50 basis points today. traders have not lived through inflation, they don't know what to do with it. tom: ask the boomers. paul donovan unpacking it for us. we look ahead to that next. this is bloomberg. ♪ what's it like having xfinity internet? it's beyond gig-speed fast. so gaming with your niece, has never felt more intense. hey what does this button do? no, don't! we're talking supersonic wi-fi. three times the bandwidth and the power to connect hundreds of devices at once. that's powerful. couldn't said it better myself. you just did. unbeatable internet from xfinity. made to do anything so you can do anything. whoa. francine: welcome back to the open. 30 minutes into the european trading day. here are your top stories. when the fed says height, traders asked how high-end how fast? russia looks to annex occupied ukraine, narrowing its objectives for the invasion. the eu proposes to phase out russian oil by the end of the year, and aims to cut out sberbank and other lenders from swift. tom: the oil pr

made it clear they strongly expect 50 basis points, that is what the market is price exactly 50 basis points. that is a given. then the question is, what is going to happen going forward? going forward, the fed has mostly been saying, it is not just about raising 50 basis points now, we need to get back to what they see as being the neutral rate, powell has made it clear he wants to tame inflation without a recession. the first step toward taping inflation has to be to get from extremely accommodative policy, which is what you have your central-bank rate is -- the target rate is 25 to 50 basis points. you need to get back up to something like 2%, most people think is going to be neutral, you want to do that rapidly, inflation is still so high. the optics are going to be about that. there's a danger if they signal too much aggression that that might hurt bonds and stocks. if they signal not enough aggression, that might see long-term yields in particular expecting even higher, that would be a bigger problem for equities than a reasonable level of aggression. haslinda: u.s. real yields

almost 13 basis point move in just a couple hours. when we talk about those interest rate differentials, it means one thing and one thing only, a stronger dollar bouncing up against those key technical levels. we are going to monitor all of these markets, but for now, let's get some reasoning and bring in bilal hafeez of macro hive limited. how much of the selloff that we are seeing now is sibley a function of the removal, retracing some of the moves that we saw in the past three days of the market ahead of the fomc, versus actual fundamental drivers? bilal: very good question. a large part is this reversal of the markets initial interpretation of the fed meeting being dovish. in the end, if you step back, with the fed has done is raised interest rates by 50 basis points, started quantitative tightening, qt, which will likely see happy trillion dollars on the balance sheet be reduced. that is still hawkish in the grand scheme of things. in the middle of a hiking cycle that could go further than people think. in the grand scheme of thi

up for basis points. up five basis points. that is the last three months. we are also talking about curves from march. that has been pretty relentless. it has called a lot of banks and strategist out. the 30 year's 316. i want to talk about foreign exchange. pound sterling with the biggest one-day for yesterday. going all the way back to 2020. we looked at the 122 handle a little bit earlier. 123 53. the bank of england and the ecb's future. just look at the inflation forecast for the euro zone. and ecb official, after ecb official, talking out the higher interest rates. lisa: is there anyway to hike into weakness? that is what the bank of england had to do. in my point -- it might be more of a move coming up. jonathan: just ask the fx strategist. euro positive or euro negative? lisa: it's a great question. does that slow growth and lead to an even lower euro? at that seems to be what a lot of people are seeing in the near future? jonathan: just short of the dollar. 106 to 105. tom: that is the one pivot point we've seen. i went to go back to sterling. as y

you've had three going for a 50 basis point hike and six going for a 25 basis point hike. so more on the 50 basis point hike side than anticipated, less on the let's keep things as they are camp. we are seeing a tick higher in sterling as a result of that, and a tick lower. we were moving up and now we are moving down. we have seen a significant move higher in terms of yields on the u.k. two-year, which is what you're looking out on the screen right now. now we are going to look at where we go from here. the market is pricing in hikes at every single ratesetting meeting between now and the end of the year. we are looking at a terminal rate midway through next year of around 2.65%. is the bank owned to deliver on that i think is the next question we have to ask ourselves. then we have to ask a question around what is happening with qt. when is it going to start? how's it going to be sequenced? what is going to look like in terms of the pace of sales on a monthly basis? all of that is still to be decided. i'm looking for details on exactly what we are going to see. but at th

that's an almost 16 basis point moving one day. that is the volatility of mixed growth stocks not that attractive. the dollar index higher and higher, testing key levels of 2016, 2020 and perhaps bursting through. crude a little bit of a lower move but down .4% in line with the broader chris got picture. here to break it down is gina martin adams. walk us through what you -- what is driving the trade right now. gina: i think it is a little bit of both. a lot of what we are seeing reflects happened yesterday. we have a rough market today after an extraordinary gain yesterday. the longer-term scheme of things, lower lows and lower highs. the trend is breaking down. why? interest rates, even with the commentary yesterday, interest rates are going higher. expectations did not change. we expect to see the treasury yield above 3% two years from now. the equity market has the price for that. at the same time inflation is very strong. we will find out next week if we finally passed our peak. investors are concerned inflation is trading a d

on a log basis, they surged across any serious. jonathan: what is important is where we are and where we are going. have a great hike, set to get another two. lisa: enter the bank of england to follow. i am struck by philip lane saying europe is likely to blow a target in the future. it makes the shift -- it makes for a shift in information -- target inflation in the long term. jonathan: this is bloomberg. ♪ ritika: elon musk has more equity commitment lenders for his twitter deal. they provide some $.2 billion in new financing commitments. -- $7.2 billion it is the federal reserve's most aggressive action in decades to fight inflation. they raise interest rates .5%. they will -- powell implied the moves could hurt economic growth. expected to ratify another small increase in oil production when they meet today, a day after the eu announced a plan for a face to ban on russian crude. it sent oil prices surging. shell posted its highest quarterly earnings and more than a decade. high prices more than offset an accounting charge on

kathleen, a 50 basis point hike now expected. what about a 75 basis point hike into the future? kathleen: traders waiting to see if jay powell opens that door. the door is wide open. a 50 basis point hike, since the march meeting, every a fed official has talked about it and endorsed it. definitely ready to go for the 50 basis point hike. in fact, they are now looking for a 50 basis point hike. if you look at the two subsequent meetings, two more 50 basis point hikes for a total of 290 basis points. that would take you well above the fed's view of a neutral rate at two and a half percent. now, in terms of that 75 basis point move, what will jay powell signal? well, let's set the table with this. number one, so far, no fed official, including the st. louis fed, has actually set i am in favor of a 75 basis point rate hike. we could be an option if needed. they said it in 1994. i don't want to shop loose, let's move methodically. that sounds 25 to 50 at each meeting. i am ok with 50 basis point hikes because he does not see them needing to get any bigger than that. very important,

the rba with the 25 basis point hike. what is the start of the tightening circle mean for your business? does a change for growth and conditions? what is the rba trying to signal here? >> it changes the outlook and we have been through quite a significant point. it is quite a big pivot. we are talking about a new world of inflation. our customers, it is an extraordinary number of australian homeowners that have -- it is a significant shift in the conditions. it is good for banks and a general observation, it is generally positive for margin outlooks. but the counter to that would really be what will the positives do, what will consumer businesses do? as they contemplate a difficult decision in an already difficult rate environment. haidi: that question of what will consumers do is a big one when it comes to loans growth. it has lagged competitors in that area. there is processing capabilities, but have you kind of miss to the window now that the tightening cycle has begun? -- missed the window now that the tightening cycl

fed chief pushes back against the 75 basis point hike, calling

basis points single meeting this year, which means we can price in another 7500 basis points worth of hikes by the end of this year. it is pretty hawkish in general and something like you just heard bill dudley talk about that the fed needs to be more hawkish. i think that is the first thing the fed will do. they will hit that we will go 50's and do not go anymore. tom: welcome worldwide. a stunning inflation report. nasdaq 100 now approaching -27% on drawdown. -1.7 percent on the nasdaq 100. spx -40 points. the vix goes the other way. 34.30. the vix touched a 35 level days ago forget lisa: there is more volatility but how to play that is a hard call given the people are looking at pricings that might be reflected in the vix. i struggle with the idea of longer-term interest rates being pinned in a yield curve that is inverting as we hear bill dudley and others talk about the fed losing the plot, losing the narrative, possibly losing faith because they continue to be behind the curve. what is your view on when that kicks back in? because right now it seems like there is a haven bid for

basis. 3 . , . and what they are dealing with on a dail basis. �*, . _ , i. daily basis. it's a system where you aet a daily basis. it's a system where you get a certain _ daily basis. it's a system where you get a certain amount _ daily basis. it's a system where you get a certain amount of _ daily basis. it's a system where you get a certain amount of money - daily basis. it's a system where you. get a certain amount of money every yearfrom the government get a certain amount of money every year from the government as long as you do a certain amount of work, and thatis you do a certain amount of work, and that is reported in a points—based system. you get one for a checkup, three for a feeling and 12 for a crown. but if you've managed to have a patient who needs ten fillings, root canals, extractions, you get activity dolomite you get rewarded for one item, not the entire course. what is the solution? is an overhaul of that payment system about what distance are paid for?— distance are paid for? absolutely. it's chronically _ distance are paid for? absolutely. it's

the 75 basis point question. >> shifting goals. russia looks to annex occupied ukraine. >> tech takes a plunge. the hang seng slides. >> inflation is pretty calm but that belies the fact that it could get pretty wild and chaotic today. >> calm for now but for how long? let's get our market check. i want to look at aussie assets. this could be a preview of what's to come for u.s. assets. three year yacht -- aussie yields high, bonds sliding after the rba decision yesterday which really amped things up, hiking more than expected for the rba. today, strong retail data. the rba opened the door for more rate hike so the market is taking that instep. will that happen with the fed? we are seeing brent crude and wti move higher, up more than 1%. europe is contemplating a russia oil embargo, looking at annexing more of ukraine. the slowdown in china, the embargo story winning out. >> the dollar, pretty steady. when you speak to a lot of people on the trading floor, some traders don't know how to trade inflation. it will be interesting to se

we ease until march than a symbolic basis point increase at the march meeting another talking 50 basis points. that's just now getting started. after the summer and the lag effects will have to catch up. they are a ways ahead that's much tighter policy i suspect. in comely faults going to be much more difficult in terms of the demand issues being suppressed. i think that's where the real challenges come for the fed. they maintain a policy to bring inflation back down to the 2% target that's going to be a real challenge for them. >> i think you make such an important point in terms of this calendar of where we are. let's not forget, right before the fed started raising rates they are still expanding the balance sheet. the wind is 9 trillion-dollar balance sheet, how tough is this going to be not just about raising rates it's unwinding the balance sheet, right? >> i think that is a challenge is not in the kind of attention it should have. after three months they start taking $95 billion reducing the balance sheet $95 billion a month the tightening of liquidity. going to start putting the

he nixes 75 basis points for now , i had take off the for now. i mean, he was very very serious about that, and it feels like that's what the market heard as well, so, how then do you alter your stock-picking strategy, bob? >> i don't know that it changes a lot as a result of this meeting. maybe the concern, the fed would overdo it too quickly. they want to see what the reaction is going to be. we're seeing some signs of economy slowing, many of us believe and the chair reiterated this , that inflation will peak here in the second quarter. the question is how far does it drop? my view is it's not going to drop enough and that will cause more issues but in the meantime we get some relief. liz: and by how much to that point? by how much, let's just say you have a couple of years of ability to keep investing, and that's your time horizon. by how much would you have to be invested in stocks to beat inflation, bob? that's the question. i mean the old 60/40 that's kind of dated isn't it? >> yeah, a little bit. the 40 has been really tough, not that the

they are 20 to 25 basis points, may be heading towards 50 basis point. during that time we think value can outperform growth. shery: what about value in the bond space? mona: i think that one is where we see a lot of interesting risk reward right now. i think bonds have had -- although we have felt it in equity markets, we felt it even more meaningfully in bond markets. the adjustment over just four months as been dramatic. keep in mind 10 year yields have doubled. we started in the u.s. at about 150 and we are close to 3%. the two-year part of the market has more than doubled, up 3.5 times. so do we think that will annualize? do we think that rapid rate of increase will continue the rest of the year? probably not. a large part of adjustment in bonds is probably behind us, so we think the risk we wore it is a lot more interesting now that we have seen in the past. shery: mona, it was really good catching up with you. you can find a roundup of the stories we have discussed throughout the day. get to daybreak, dayb on the bloomberg. and you can find a

this is something we will determine on the basis of our projections, on the basis of our forward guidance. i think there are good reasons to believe that all three conditions will be satisfied in june and during the summer. francine: where are we in the third quarter, could we be above zero in terms of interest rates? >> we will be out of negative interest rates most likely before the end of the third quarter. francine: how do you see inflation is developing. there are some of the unknowns because of the war. >> there are lots of forces and some of them counteracting against each other. you have the war, which in and of itself is a massive drama and has massive impact not just in ukraine and for russia but for the rest of the world. we have energy prices which have gone up significantly and represents a big chunk of inflation. we have food prices. there is a whole series of things that are weighing on growth down and pushing inflation up. francine: how likely is it that the eurozone goes into recession? >> we do not have that as a baseline. we also do scenarios. we have the negative, the

aussie rates up by 11 basis points. chris waller makes it very clear he is not taking 50 basis points off the table, he wants to frontload and go early, though often. that narrative has double spooked the bond market. but as one of our opinion columnists set, and less it is the chair, vice chair or the new york fed, you are a backbenchers on the fed. ♪ so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's g-o-l-o.com.

voices are getting louder about 50 basis points. guy: 50 basis points, how big a shift with that be? would that be 50 basis points and then expecting the market to extrapolate more? what would be the message? jana: it is certainly not the mainstream scenario. the plane has been cautious lately, but if you look closely at what president lagarde has said, she has said left off in july, at the end of negative rates by the end of the third quarter, whether that is zero 4 --, both is possible and will depend on data. guy: how big a concern would fragmentation risk be? you get a big reaction in dtp. jana: that has been a concern for the past month -- fragmentation has gone up. policymakers do not seem extremely concerned about the spreads. they have widened, but not to the extent we have seen in previous episodes of crisis. the vice president said last week that spreads are nowhere near levels that trigger similar responses than in the past. it is contained, but there is a risk that the situation will deteriorate. that is something they w

to be clear, we're anticipating an announcement of 50 basis points today, an additional 50 basis points in june if we look at the growth slowing and the risk of recession rapidly rising, i think it's going to be difficult for the fed to justify even this current pace of increases, let alone accelerating the pace of increases. so i do expect the back half of the year, four 25-basis point increases. that would give us a total of 125 in the front end and the back end and taking the target rate by 2.5% by year end. >> is there any way the u.s. economy can avoid a recession or can the fed engineer that so-called soft landing for the economy if it decides to purssu its expected rate over the next few years. >> it's a difficult question they tap down consumption, tamping down investments at this point the economy is not overheating. argue at best. we're still struggling to grow organic legs in the aftermath of a crisis for the feds to engage in such an aggressive pathway as they've laid out, it's going to be difficult for them to lead us into extremely weak growth or worse outright recession.

are we expecting 25 points or basis points. kathleen: 25 basis points. inflation has doubled compared to what the bok would be a couple of months ago. however, growth is expected to take a hit. they had lockdowns, they are facing higher prices around the world. it also hurts demands and businesses. so we are expecting the hike. what we are looking at is this jump in inflation, up to its fastest pace in eight years now. that is where we are expecting to see yet another -- they have already done four rate hikes, this is going to top it off. another interesting element here is that they have a new head who was the imf's asia division chief, the director for all of asian research. when he was just going through his hearing spent being confirmed, he was asked a question about 50 basis point rate hikes and he acknowledged that was something they could do . he had to walk that back and said that was just a broad prospect of what might happen. 25 basis points is what everybody expects. haidi: andreaa, how are markets going to take this question mark we are seein

nomura thanks 50 basis points today, 75 in june, 75 basis points in july. they see the fed funds rate at 4% by the middle of 2023. nomura taking a different view of things. they think a more aggressive fed coming out of this one and into next year. tom: we will talk about that with greg staples but i cannot convey enough, and static analysis versus dynamic analysis . tom: it will be very difficult -- jonathan: it will be difficult to reflect a committee consensus that does not exist. after that, the future, there is division. the question that a lot of people are waiting for is a 75 basis point hike. bank of america and others, very little scope for surprise on the hawkish side today because where will it come from? if this is a market pricing for a frontloaded view. lisa: the only surprise that could come from is a response to the question of whether the fed can get back to 2% inflation quickly. if they think that is the case you might see a hawkish surprise. jonathan: wti and brent to this morning higher by 4% across-the-board the back of any eu plan to f

you are doing 50 basis point or 25 basis point moves will not get us there and they need to take control. so what i think the market is telling you today, it doesn't think, the market thinks they have lost control. that they're not going, they will be further chasing it and never get in front of it. so the idea of -- charles: i was going to say. he had cover because if you were a looking at cme fed tracker, there was a 95% chance of a 75 basis-point hike in june. he had to cover it. it was laid out. it wasn't going to shock the market. >> exactly. charles: coming into the session i want to give you more props here, this overweight value thing you've been talking about, versus value, value versus growth has done extraordinarily well this year. the fact is nothing is working but you're losing a whole lot less money. what about here though? do you stick with this when nothing is really working, value names are getting hit? do you raise more cash? when do you start to pivot? >> at this level i would not be raising cash because i think we're much closer to the bottom than the top. i know it w

we heard from the cleveland fed basis poi -- that 75 basis points are on the table. consumer products leading the pack, followed by auto parts and technology. riskier parts of the market gaining in the session today. health care being suggested as a defensive player, but currently down 1%. we keep a firm i on that cpi data out around midday u.k. time. anna: that's the update picture for the moment. theo has drafted a 205 billion dollar plan to wean the continent off of its dependency on russian energy. it comes as russian gas flowing via ukraine will stop. it has stopped wednesday morning we understand as ukrainian forces disrupted operations. joining us is marc champion. do we know if ukraine is cutting off the gas by choice, or because something has happened? can they just not guarantee the safety of that pipeline if they don't occupy that territory? >> fundamentally we don't know. the ukrainians have said that it is force majeure. and they are vague about what that exactly is. they suggest one of the issues as they cannot guarantee of supplies. they do have some m

in particular i am not taking 50 basis points, 50 basis point hikes off the table until i see inflation coming down closer to the 2% target. >> mark graham feel joins us now, mark what you make of the comments? -- mark cranfield, what you make of the comments? >> is not a big change, they already got the idea that the federal will move at 50 basis point clips per jerome powell. when he speaks he usually speaks on behalf of the board committee. the only thing note really roil the markets is if jerome powell starts talking about 75 basis points it would be a much more serious matter. that is unlikely in short-term. people have affected that an already. the pressure markets in asia has been a bit exaggerated, the cash market in york was closed monday. very high inflation in germany, the european union has put more sanctions on russia as well. in terms of the fed thinking it will not change a strategy there. german inflation is important, but it does not actually affect what happens directly in the united states. that is the concern of the federal reserve they've already acknowledged that i

the 50 basis hike pretty much expected tomorrow. you are looking forward to the next meeting you want another hike in the next meeting and see where we are, but where do you think we will be if that happens? >> a great question, frank obviously, we have talked about the 50 basis point hike for several weeks now. i think it is baked into the cake at this stage what i'm looking for as we move throughout the summer is what the next meeting in june does. obviously cpi numbers and ppi numbers and pc numbers are really hot the concern around inflation and managing inflation going forward is obviously playing into the narrative today. i do think, you know, going into late part of the summer, i think the fed will be data dependent and see where markets are trending after they start, you know, front loading the policy obviously, they have to do it at this stage they have been talking about it for some time. they have to execute i'm really curious to see what the late stages of the summer looks like after the two hikes get under way. >> eric,

yields down a basis point to 2.92%. in the commodity market, just about holding onto 100 now, $100.96. the thing we are missing here as well is credit. that spread widening that you might expect given what we have seen in the equity market wasn't really there in a massive way. lisa: this is something morgan stanley talked about when they were talking about how a lot of the selloff has been driven by interest rates, and they see that shifting to now a little bit more of a gross concern being reflected with spreads widening out, even as perhaps some people start to see value in that rate story. i do wonder whether we start to see that be the main narrative as we look into the second half of the year. jonathan: let's get the global conversation with the global director of fixed income research at morgan stanley. i read your note a couple of weekends ago and you closed out a preference that has dominated much of this year. it was loans over high-yield bonds. set us up with what you are thinking coming into this year, how th

michael: nobody thought 75 basis points was a serious proposal. i think the market got ahead of itself in thinking that way. the fed does want to move expeditiously and 50 basis points was a big change, especially when you are going to do it for a couple months in a row. i don't think that will be an issue front of mind but everybody is king that maybe inflation has peaked. headline inflation -- but everybody is thinking that maybe inflation has pete. -- but everly is thinking that maybe inflation has peaked -- but everybody is inking that maybe inflation has peaked. if core doesn't rise as fast as the headline, that would be after news on the inflation front for the fed. kriti: i to ask about the 75 basis points mike was talking about. is there any chance that the 75 basis points despite him saying it is off the table, that would bring it back on? yelena: there is always a chance but i don't think it will. they will do the 50 basis points and then they will stop and evaluate and i think at that point we will see inflation has moderated. we think

it is going up 100 basis points by august and 200 basis points in the next couple months. >> it could matter it could matter whether people like paul tudor jones who was on the other day -- a whole class of people that think we sort of let it get out of hand and we need to get it under control sooner rather than later. >> right. >> it is weird you see a slower move higher embraced like that it could all be reversed >> the issue is you still look around and it makes sense from the perspective that we don't know what will happen with a recession coming on quickly and higher inflation prices. i like hearing they are still paying attention >> a group of people every day who think we are behind the curve. >> we will move and more decisively and look at the facts. that leads us to a bad place. i like they are watching and seeing how they will react >> steve, this ends up being just a respite from the down trend we have been in yesterday. we were behind the curve we need 75 >> i want to echo something that becky said right after the meeting, i called paul mcculley sometimes with a beard some

this is something we will determine on the basis of our projections, on the basis of our forward guidance. i think there are good reasons to believe all three conditions will be satisfied in june and further on during the summer. francine: where are we in the third quarter? could we be above zero? christine: when i'm saying, i stick to. we will be out of negative interest rates, most likely, before the end of the third quarter. francine: how do you see inflation developing? there are so many unknowns because of the war. christine: there are a lot of forces, and some of them, you know, counteracting against each other. you have the war, which in and of itself is a drama and has massive economic impact, not just in ukraine and russia, but for the rest of the world. we have energy prices which have gone up significantly and represent a big chunk of inflation. we have food prices. there is a whole series of things going on growth and pushing inflation up. francine: how likely is it the eurozone goes into recession? christine: we don't have that as a baseline. you must've heard that sentence b

look at the italian bcp, 11 basis point move there. what comes to germans, attend basis point move. in the u.s. 10 euros, nine basis point load, moving toward the back end. fields flattening, becoming more pronounced in the u.s.. concerns about recession. francine: we are joined by eddie. one of my favorite moments on tv is just before we go live symbol we see you at the desk of million screens and you say what's happened to the euro? you look like a pilot on a cockpit looking at all the markets. what are you saying that is crazy right now? -- seeing that is crazy right now? >> what you mean as you see a man in a constant state of panel -- panic. trying to make sense of it all. there hard, especially crypto lands up we are seeing a big draw down here, stable coins is where it's at. there's is worry about stable coins generally exhibit the algorithmic stable coins have been in a little bit of trouble. stable coins are integral to the health of the crypto economy. i think that is why we are seeing a panic care. we've broken through that support at 30,000, whether this drawdown continu

what we are doing, we raised 50 basis points today. we said that again, assuming that economic and financial conditions evolve in ways that are consistent with our expectations there is a broad sense on the committee that additional 50 basis increases, 50 basis point increases should be on the table for the next couple meetings. we'll make the decisions at the meetings of course and we'll be paying close attention to incoming data, evolving outlook and financial conditions. finally we'll be communicating to the public what our expectations will be as they evolve. so the test really as i laid it out economic and financial conditions evolving broadly in line with expectations. i think expectations are that we'll start to see inflation, you know, flattening out and not necessarily declining yet but we'll see more evidence. we've seen some evidence that core pce inflation is perhaps either reaching a peak or flattening out. we will want to know more than just some evidence. we want to feel like we're making some progress there. i mean, we'

boom right on the 75 basis points if you look at the time cue it's incredible. just when that happened, suddenly nvidia is worth 15 more points it's nuts. but it's how much the market cares about rates versus facts and it's hard to believe because it's just so stupid. one thing that's sure, by 9:30 tomorrow we will forget what powell said about the next meeting and focusing instead on some other thing that is equally as irrelevant. why? simple because people are unsure what a 50 basis points rate hike will do to the economy. starting tomorrow we'll once again prepare for the worst and expect the worst and people talk about how people will buy fewer homes or cars, whatever, that's what people do as long as money managers are unsure, which they are, they'll keep selling things they shouldn't. today's late afternoon rally notwithstanding, wall street's bias remains negative. i've seen this moment many times in my career, so i know what's going on through the head. i am going to give you a deep dive into their cranial structure and tell you not how stupid they are b

jumbo, jumbo rate hike. 50 basis points is on the table. it repriced the euro, up over 1%. 106 basis points by christmas time. we are not the -- the fed is not the only one with teeth. let me show you the impact across the bond market. was powell the most pocket sheave ever heard him? i don't think so. the dollar went up, the three year at the short end of the curve did go higher. bonds, 68% in the bank of america survey see inflation topping out again. the equity market is so bruised that it didn't really react. volatility dropped by 5% on the vix yesterday. there's no sign of capitulation there. we've got reporters around the world. our guest has the latest on the more in ukraine. dani: and we have juliette saly, and our finance editor jamie's -- let's stick with the u.s., jay powell has made it clear the u.s. is ready -- the fed is ready to keep hiking rates until it is clear about inflation. >> inflation is coming down, that's what we really need to see. if that involves moving past broadly understood levels of neutral, we won't hesitat