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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot Com, the Radio plus mobile and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: Futures are higher this morning. Let's go to the First

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Speaker 1: Word Breaking news desk for today's morning call, and here's

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Speaker 1: Bill muloney. Good morning, Bill, Good morning Karen. US futures

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Speaker 1: are maintaining their games. Since the last time we spoke down,

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Speaker 1: Futures currently hired by eighty seven point says futures gained

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Speaker 1: ten and as at futures rise by twenty three. The

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Speaker 1: US ten yield at one point eight eight percent. In Europe, France, Germany,

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Speaker 1: Italy and Spain are hired by at least one percent,

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Speaker 1: and global bond yields and crude features are also trading

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Speaker 1: higher this morning. On the US economic front, at ten o'clock,

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Speaker 1: hostale inventories and a ten thirty energy inventories. After de

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Speaker 1: Bellas night, Bill Ackman raised the possibility Valley may sell.

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Speaker 1: It's Bausch and Lome Steak and Shapulti close at Massachusetts

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Speaker 1: restaurant after workers became sick. In other news, is rail

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Speaker 1: CSX SES macro economic challenges persisting through finally some of

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Speaker 1: your Wall Street upgrades and downgrades, ross stores, cutting neutral

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Speaker 1: Colman Sacks fire, I raised overweight over at Piper bah

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Speaker 1: B built and cut a hold of Jeffreys Yelp and

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Speaker 1: group On cut the cell over at Ubs, and finally

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Speaker 1: CBS raised outperform over at Wells Fargo live on the

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Speaker 1: first Breaking News Desk on Bill Maloney. Karen, thanks Bill

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Speaker 1: and to hear live breaking news over your Bloomberg type

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Speaker 1: squawk a goo on your terminal, that's s Q you

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Speaker 1: a w K go when that's a Bloomberg business flash.

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Speaker 1: Tom and Mike Churn, thanks so much. Bloomberg Surveillance brought

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Speaker 1: by Investco. Have you considered all of your investment alternatives?

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Speaker 1: your goals? Find out more at investco dot com slash alternatives.

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Speaker 1: Too short a time this morning with John at writing

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Speaker 1: of r d Q Economics to go back X number

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Speaker 1: of years to your great phrase, where's the pudding green? Well?

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Speaker 1: Just for negative, Just for those who aren't amongst Tom

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Speaker 1: is referring back to two thousand four piece when the

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Speaker 1: Federal Reserve was raising rates at the quarter point of meeting,

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Speaker 1: and we argued that they were not getting close to

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Speaker 1: uh the green, they were just starting off on the

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Speaker 1: path and manage neutrality. Look, we've had one move and

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Speaker 1: now we've see installed by the FED and by all

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Speaker 1: logic that the FEDS laid down in data dependency, they

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Speaker 1: should be raising interest rates next week, but it would

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Speaker 1: be such a shock to the markets. It's not in

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Speaker 1: this Fed's DNA, I think to do that. So, um,

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Speaker 1: we know the pudding green's out there, but the FED

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Speaker 1: is still just got out of the clubhouse and there's

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Speaker 1: it hit the ball once maybe on the And I

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Speaker 1: gotta give that new headline to John's next essay. Are

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Speaker 1: we on the golf course? This is well? I mean,

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Speaker 1: what are we going from punch bowl to putting green

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Speaker 1: to golf course? Here? Um, you just don't want to

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Speaker 1: be out of bounds. Uh. The economy, the is at

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Speaker 1: least matching what the FED said it would do uh

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Speaker 1: this year. Um, but the FED is not matching what

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Speaker 1: it said it would do this year in terms of

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Speaker 1: of interest rates. We've talked a lot about the markets

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Speaker 1: and the economy, the markets and the FED not being

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Speaker 1: on the same page and having to come together. What

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Speaker 1: about the Fed in its own forecast. Well, that that's

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Speaker 1: the real challenge next week. Look, any one move doesn't matter,

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Speaker 1: but the Feed is laid out the path of raising

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Speaker 1: rates about a quarter point per quarter UH for at

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Speaker 1: least the next two years, and then a little bit

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Speaker 1: more after that. UH. And we have to ask, has

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Speaker 1: the Fed laid out a new rationale for running monetary

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Speaker 1: policy other than looking at the labor market and looking

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Speaker 1: at the inflation numbers. And you say, labor market numbers

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Speaker 1: four point nine unemployment, we've averaged tunes from twenty and

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Speaker 1: jobs per month over the last three months. On inflation,

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Speaker 1: core inflation is now one point seven percent. It's not

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Speaker 1: at the one point three percent level it was back

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Speaker 1: in December. So the Fed, unless they roll out a

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Speaker 1: new rational, if they don't move next week, they should

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Speaker 1: on their own logic. But it seems very unlikely. They

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Speaker 1: can't change the outlook too much. Except there's if you

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Speaker 1: look at the speeches by stan Fisher, probably the lower

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Speaker 1: the neutral rate of interest, the rest of the neutral

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Speaker 1: rate of interest nudget down maybe a quarter point maybe

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Speaker 1: take one move out of that. But a radical move

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Speaker 1: would require a radical new form of policy something of

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Speaker 1: the kind. I don't believe the argument. But the only

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Speaker 1: person is really laying out that case right now as

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Speaker 1: Lyle Brainerd, which is saying we can't have this great

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Speaker 1: divergence between US manager policy and eat easy be in

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Speaker 1: the Bank of Japan. And I disagree with that for you,

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Speaker 1: because I don't think we're a small open economy. We're

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Speaker 1: a large still relatively closed economy, and U s should

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Speaker 1: set monetary policy based on the US needs. But there's

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Speaker 1: no one else really out there in the FED who's

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Speaker 1: laying out a different way of looking at monetary policy.

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Speaker 1: So I can't see how they changed the dots too much. Well,

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Speaker 1: what when do you think they act? And how are

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Speaker 1: they gonna be at the end of the year force

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Speaker 1: to act more quickly? They could do UM. I if

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Speaker 1: they don't move UH next week, I think it's June.

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Speaker 1: The problem with Judie is what happens on June. We

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Speaker 1: have a vote, We have the Brexit votes, so you

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Speaker 1: have another potential global thing for the FED to worry about. UM.

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Speaker 1: The markets are saying one move a year, the Feds

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Speaker 1: saying one move per quarter. UM. That is a huge divergence.

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Speaker 1: And I really hope that those of you who are

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Speaker 1: at the press conference next week ask press the Fed

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Speaker 1: on that divergence, because it's not trivial. I want to

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Speaker 1: talk to you about productivity. We spoke with Dominique Constant.

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Speaker 1: He was at Cambridge as your city, Sussex. He was

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Speaker 1: at St John's, and he's adamant that this time is different.

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Speaker 1: It's not a nine nineties dearth of productivity before the

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Speaker 1: technological progress of the Internet. There's something different now. Are

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Speaker 1: are you concerned about low productivity and should it amend

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Speaker 1: or adjust what Cherryellen does. I'm very concerned about low productivity.

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Speaker 1: We're running the lowest productivity growth over the last five

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Speaker 1: years that we've done since and that was in the

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Speaker 1: depths of a of a really deep procession um and

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Speaker 1: without productivity gains. The wage increases that people at the

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Speaker 1: FAT and elsewhere in government want to see and workers

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Speaker 1: want to see can only come at the expense of

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Speaker 1: profits which would undermine the expansion, or at the expense

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Speaker 1: of higher inflation. There's no free lance. You cannot higher

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Speaker 1: wages and maintain profit margins and keep low inflation and

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Speaker 1: have this low productivity growth. And for so long people

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Speaker 1: people people talk about economy and slow growth and things

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Speaker 1: a demand problem. We really have a supply side problem

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Speaker 1: and we don't understand it. But stam Fisher said, it

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Speaker 1: doesn't like its measurement. Tarry. You gotta come back. We

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Speaker 1: need a longer time with you at some point. You're

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Speaker 1: John writing for for to shorter time today with already

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Speaker 1: two already Q Economics just fantastic. We're gonna look at

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Speaker 1: politics next. I believe there's a horse race yesterday. This

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Speaker 1: is Bloomberg's surveillance coming up there. With all due respect.

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