1
00:00:04,040 --> 00:00:08,360
Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

2
00:00:08,440 --> 00:00:13,480
Speaker 1: d C. Bloomberg to Boston, Bloomberg Well Underis to San Francisco,

3
00:00:13,600 --> 00:00:18,600
Speaker 1: Bloomberg to the country, sees Exam General one and around

4
00:00:18,640 --> 00:00:22,000
Speaker 1: the globe the Bloomberg Radio plus appen Bloomberg got gone.

5
00:00:22,280 --> 00:00:26,759
Speaker 1: This is taking stock. I'm Kathleen Hayes. Along with pim Fox.

6
00:00:27,040 --> 00:00:30,040
Speaker 1: We see a sell off in the US Treasury market

7
00:00:30,080 --> 00:00:33,360
Speaker 1: after the Feder Reserve makes it pretty clear that they

8
00:00:33,479 --> 00:00:36,760
Speaker 1: are watching the data and looking to see if they

9
00:00:36,800 --> 00:00:39,680
Speaker 1: will warrant the next interest rate increase that they're meeting

10
00:00:39,720 --> 00:00:41,720
Speaker 1: in June PM. I think that significant. Is not like

11
00:00:41,720 --> 00:00:43,960
Speaker 1: the Fed is looking for reasons to slow down. It

12
00:00:44,000 --> 00:00:46,600
Speaker 1: looks like a number of members are ready to make

13
00:00:46,640 --> 00:00:50,520
Speaker 1: the move if the data supported and Lindsay pexa chief

14
00:00:50,560 --> 00:00:54,360
Speaker 1: Economists to stifle fixed income from Chicago, Will Pete joining

15
00:00:54,440 --> 00:00:56,840
Speaker 1: us coming up right now, Let's go to Charlie Pellett

16
00:00:56,880 --> 00:00:59,080
Speaker 1: and the Bloomberg news room for a Bloomberg business flag

17
00:00:59,200 --> 00:01:01,040
Speaker 1: and I thank you him, I thank you Kathleen. Since

18
00:01:01,040 --> 00:01:04,080
Speaker 1: our last duct optate, we now have Neztack turning Laura

19
00:01:04,120 --> 00:01:07,960
Speaker 1: so Badal the SMP nastac all trading down. This update

20
00:01:08,000 --> 00:01:10,760
Speaker 1: brought to you by Sector Spider et f S. Why

21
00:01:10,800 --> 00:01:13,360
Speaker 1: by a single stock when you can invest in the

22
00:01:13,520 --> 00:01:16,440
Speaker 1: entire sector of visits sector s p d r S

23
00:01:16,480 --> 00:01:20,200
Speaker 1: dot com or call one six sector e t F

24
00:01:20,360 --> 00:01:22,400
Speaker 1: if you're just joining us. We got minutes from the

25
00:01:22,440 --> 00:01:25,920
Speaker 1: Federal Reserve today, just about thirty one minutes ago, policy

26
00:01:25,959 --> 00:01:29,679
Speaker 1: makers signaling a willingness to raise borrowing costs in June.

27
00:01:30,000 --> 00:01:33,679
Speaker 1: The SMP five hundred index now lower after advancing seven

28
00:01:33,720 --> 00:01:37,200
Speaker 1: tenths of one percent. Stocks favored for high dividend payouts

29
00:01:37,240 --> 00:01:41,080
Speaker 1: fell as treasury yields spiked, banks rallying on the potential

30
00:01:41,120 --> 00:01:44,040
Speaker 1: for higher rates to boost profits. The tenure down twenty

31
00:01:44,080 --> 00:01:47,840
Speaker 1: six thirty seconds. Zeal one point eight six percent, most

32
00:01:47,880 --> 00:01:51,080
Speaker 1: Federal Reserve policy makers set in April, and interest rate

33
00:01:51,120 --> 00:01:55,360
Speaker 1: increase would be appropriate in June if the economy continued

34
00:01:55,400 --> 00:01:58,400
Speaker 1: to improve. Matt Bosler covers the Federal Reserve for Bloomberg

35
00:01:58,480 --> 00:02:01,360
Speaker 1: News sentence that ms out at me here is Several

36
00:02:01,400 --> 00:02:05,560
Speaker 1: participants were concerned that the incoming information might not provide

37
00:02:05,600 --> 00:02:09,520
Speaker 1: sufficiently clear signals to determine by mid June whether an

38
00:02:09,560 --> 00:02:11,560
Speaker 1: increase in the target range for the federal funds rate

39
00:02:11,600 --> 00:02:13,960
Speaker 1: would be warranted. So yes, they did say it was

40
00:02:14,040 --> 00:02:16,680
Speaker 1: likely if the economy did what they wanted, but it

41
00:02:16,720 --> 00:02:20,239
Speaker 1: sounds like several were concerned that they might not get

42
00:02:20,240 --> 00:02:22,760
Speaker 1: the info they needed. He was interviewed right here on

43
00:02:22,880 --> 00:02:27,000
Speaker 1: taking stock Gold downtounce now a drop there of one

44
00:02:27,000 --> 00:02:30,200
Speaker 1: point one percent to twelve sixty three. Crude oil giving

45
00:02:30,240 --> 00:02:32,800
Speaker 1: up earlier gains, down twenty cents the barrel now for

46
00:02:33,320 --> 00:02:36,800
Speaker 1: ten on West Texas Intermediate, a drop there of point

47
00:02:36,840 --> 00:02:39,880
Speaker 1: four percent. SMP again down eleven, a drop of six

48
00:02:39,919 --> 00:02:42,400
Speaker 1: tenths of one percent to thirty two on Wall Street.

49
00:02:42,440 --> 00:02:46,240
Speaker 1: Now a look at other news. Charlie, thank you from

50
00:02:46,240 --> 00:02:49,280
Speaker 1: the Bloomberg news room. I'm Mark Crumpton. This news update

51
00:02:49,360 --> 00:02:52,160
Speaker 1: is brought to you by a New Jersey Institute of Technology,

52
00:02:52,400 --> 00:02:55,000
Speaker 1: investing more than a hundred and ten million dollars a

53
00:02:55,080 --> 00:02:59,040
Speaker 1: year and applied research to solve problems and improve life.

54
00:02:59,400 --> 00:03:02,440
Speaker 1: Learn more at Stories of Innovation dot j I T

55
00:03:02,800 --> 00:03:06,320
Speaker 1: dot DU. It was a split decision Tuesday night for

56
00:03:06,400 --> 00:03:09,400
Speaker 1: Hillary Clinton and Bernie Sanders. The Vermont senator won the

57
00:03:09,400 --> 00:03:13,400
Speaker 1: Democratic presidential primary and Oregon, while Mrs Clinton claimed victory

58
00:03:13,480 --> 00:03:17,360
Speaker 1: in Kentucky. Sanders supporters like this woman in California, say

59
00:03:17,520 --> 00:03:20,600
Speaker 1: they'll continue to back him even when the delegate maths

60
00:03:20,680 --> 00:03:23,280
Speaker 1: suggests otherwise. I'm worried that a vote for her is

61
00:03:23,320 --> 00:03:25,440
Speaker 1: a vote for Trump, because in all the polls he's

62
00:03:25,480 --> 00:03:28,320
Speaker 1: been there. The next big tests are June seventh. There

63
00:03:28,360 --> 00:03:31,920
Speaker 1: will be primaries in California, New Jersey, and four other states.

64
00:03:32,280 --> 00:03:36,480
Speaker 1: Cybersecurity officials are sounding the alarm, warning lawmakers today that

65
00:03:36,560 --> 00:03:41,920
Speaker 1: hackers are becoming increasingly sophisticated. National Intelligence Director James Clapper

66
00:03:42,080 --> 00:03:46,080
Speaker 1: said one group in particular poses the biggest threat. EIS

67
00:03:46,240 --> 00:03:50,680
Speaker 1: is by far the most capable, most sophisticated user of

68
00:03:50,720 --> 00:03:54,760
Speaker 1: the cyber domain for lots of purposes, for command and control,

69
00:03:54,840 --> 00:03:57,800
Speaker 1: and of course our challenge there is the increasing trend

70
00:03:57,960 --> 00:04:01,480
Speaker 1: towards encryption, which is make it much more difficult from

71
00:04:01,480 --> 00:04:05,520
Speaker 1: a content standpoint to understand and have insight into their plotting.

72
00:04:05,760 --> 00:04:08,560
Speaker 1: It could be another tough commute this afternoon for Metro

73
00:04:08,720 --> 00:04:12,000
Speaker 1: North customers. The railroad says writers traveling into and out

74
00:04:12,040 --> 00:04:15,200
Speaker 1: of Grand Central could experience delays of up to eighty

75
00:04:15,240 --> 00:04:19,040
Speaker 1: minutes following yesterday's fire underneath the elevated tracks near One

76
00:04:20,000 --> 00:04:22,960
Speaker 1: Street Global News twenty four hours a day, powered by

77
00:04:22,960 --> 00:04:26,000
Speaker 1: our two hundred journalists in more than one hundred fifty

78
00:04:26,000 --> 00:04:28,760
Speaker 1: news bureaus around the world. From the Bloomberg News Room

79
00:04:28,800 --> 00:04:31,880
Speaker 1: by Mark Crumpton. Charlie, and we thank you. The losses

80
00:04:31,920 --> 00:04:35,400
Speaker 1: on Wall Street intensifying now the Dow down one hundred

81
00:04:35,520 --> 00:04:38,040
Speaker 1: one points, to drop there of six tenths of one percent.

82
00:04:38,360 --> 00:04:41,760
Speaker 1: The SMP five hundred indecks also declining six tenths of

83
00:04:41,800 --> 00:04:46,040
Speaker 1: one percent. Law now by eleven points, Tenure down thirty seconds,

84
00:04:46,320 --> 00:04:49,760
Speaker 1: l there one eight six percent. I'm Charlie Pellett, and

85
00:04:49,880 --> 00:04:54,400
Speaker 1: that's a Bloomberg Business flash. You're listening to Taking Stock

86
00:04:54,520 --> 00:04:58,440
Speaker 1: with Kathleen Hayes and Pim Fox on Bloomberg Radio. A

87
00:04:58,560 --> 00:05:02,080
Speaker 1: majority of Federal Reserve officials are they prepared to raise

88
00:05:02,160 --> 00:05:06,480
Speaker 1: the Central Banks benchmark interest rate in June as long

89
00:05:06,520 --> 00:05:10,000
Speaker 1: as the recovery remains on track. Let's find out more

90
00:05:10,000 --> 00:05:13,640
Speaker 1: from Lindsay Pieza, Chief Economists Defill Fixed Income, joining us

91
00:05:13,640 --> 00:05:20,160
Speaker 1: from Chicago. You can follow Lindsay at Lindsay PEXA on Twitter. Lindsay,

92
00:05:20,120 --> 00:05:22,760
Speaker 1: all right, so give us your thoughts on these uh

93
00:05:23,120 --> 00:05:27,080
Speaker 1: these results. These the release of the minutes and the

94
00:05:27,560 --> 00:05:32,720
Speaker 1: takeaway about June and potential rate increase, Yeah, they were

95
00:05:32,720 --> 00:05:35,120
Speaker 1: pretty exciting f o MC minutes. Now we know the

96
00:05:35,160 --> 00:05:39,159
Speaker 1: market has continuously discounted the possibility of an additional rate

97
00:05:39,200 --> 00:05:41,560
Speaker 1: increase until the end of the year. But as we

98
00:05:41,640 --> 00:05:45,920
Speaker 1: see in these April minutes, SET officials are increasingly optimistic

99
00:05:46,000 --> 00:05:48,320
Speaker 1: regarding not only the state of the U S economy

100
00:05:48,640 --> 00:05:53,200
Speaker 1: but their ability to continue to remove accommodation under these conditions.

101
00:05:53,240 --> 00:05:56,640
Speaker 1: So really a hawk ish stilt in the April minute

102
00:05:56,839 --> 00:06:00,279
Speaker 1: uh hawfice silt that has been affirmed by more decent

103
00:06:00,360 --> 00:06:04,279
Speaker 1: comments from individual BEETE officials talking about not only a

104
00:06:04,320 --> 00:06:08,520
Speaker 1: near term rate increase, but the possibility of many rate increases,

105
00:06:08,600 --> 00:06:12,880
Speaker 1: maybe two, maybe three, still within the bounds of twenties sixteen.

106
00:06:13,040 --> 00:06:16,760
Speaker 1: So certainly SET officials are well positioned at this point

107
00:06:16,800 --> 00:06:20,160
Speaker 1: to vote in favor of a near term rate increase,

108
00:06:20,240 --> 00:06:23,440
Speaker 1: potentially at the June meeting. But it all depends on

109
00:06:23,520 --> 00:06:26,320
Speaker 1: the underlying data. Now the set is set. We don't

110
00:06:26,360 --> 00:06:28,680
Speaker 1: need the economy to get back to strong. We don't

111
00:06:28,680 --> 00:06:32,880
Speaker 1: need solid or robust. We need modest or moderate growth.

112
00:06:33,000 --> 00:06:35,760
Speaker 1: But even getting back to a more moderate pace of

113
00:06:35,800 --> 00:06:39,760
Speaker 1: expansion from the current slow activity level will be a

114
00:06:39,800 --> 00:06:44,719
Speaker 1: sizeable challenge. Well, lindsay, Uh, you are in the camp

115
00:06:45,080 --> 00:06:49,360
Speaker 1: that has been more cautious on the economy, more concerned

116
00:06:49,520 --> 00:06:54,760
Speaker 1: about the economy. Are you concerned then that there's a body,

117
00:06:54,920 --> 00:06:58,039
Speaker 1: perhaps a majority on the f m C now that

118
00:06:58,320 --> 00:07:03,000
Speaker 1: see enough strength and um and not inflation, maybe far

119
00:07:03,080 --> 00:07:05,880
Speaker 1: from targ target, but moving in the right direction. And

120
00:07:05,880 --> 00:07:07,560
Speaker 1: the other thing they like to talk about. I think

121
00:07:07,600 --> 00:07:10,360
Speaker 1: John Williams of the San Francisco Fed stress this when

122
00:07:10,400 --> 00:07:11,720
Speaker 1: we spoke to him just a couple of weeks ago

123
00:07:11,760 --> 00:07:14,800
Speaker 1: in an interview. It's normalization, it's not tightening. You know.

124
00:07:14,920 --> 00:07:19,160
Speaker 1: Ester Georgia said that, does that concern you? It really

125
00:07:19,200 --> 00:07:21,560
Speaker 1: does concern me because typically when we talk about the

126
00:07:21,560 --> 00:07:24,760
Speaker 1: FED removing accommodation, So you're right, not yet tightening, but

127
00:07:24,760 --> 00:07:29,880
Speaker 1: but normalization, removing accommodative policy. The Fed weights until the

128
00:07:29,920 --> 00:07:33,679
Speaker 1: economy is on solid footing, strong footing. This time around,

129
00:07:33,840 --> 00:07:39,680
Speaker 1: they're raising rates in anticipation of improvement rather than realized improvement. So, yes,

130
00:07:39,800 --> 00:07:43,560
Speaker 1: we have seen continued hiring games near seventy consecutive months,

131
00:07:43,560 --> 00:07:48,160
Speaker 1: but the pace of hiring remains very modest without upward momentum.

132
00:07:48,240 --> 00:07:53,120
Speaker 1: In wages, business investment remains negative, the consumer remains under pressure,

133
00:07:53,520 --> 00:07:57,200
Speaker 1: so the state of the US economy is still very fragile. Now,

134
00:07:57,240 --> 00:07:59,360
Speaker 1: certainly we can sit down and argue with Set officials

135
00:07:59,360 --> 00:08:03,520
Speaker 1: regarding the consistent inaccuracy of their forecast, but I think

136
00:08:03,840 --> 00:08:06,440
Speaker 1: it raises a big red flag when we are basing

137
00:08:06,520 --> 00:08:10,840
Speaker 1: monetary policy on expectations alone, rather than waiting to see

138
00:08:10,840 --> 00:08:16,320
Speaker 1: that improvement filter through into the data. Lindsay. The President

139
00:08:16,320 --> 00:08:19,240
Speaker 1: of the Federal Reserve Bank of Minneapolis, Neil kush Kari,

140
00:08:19,760 --> 00:08:24,880
Speaker 1: previously has said that investors obsession with interest rates is

141
00:08:25,000 --> 00:08:28,080
Speaker 1: misguided and that they should be focused on more important

142
00:08:28,120 --> 00:08:31,840
Speaker 1: economic issues. What's your react? I think I think that's

143
00:08:31,840 --> 00:08:34,040
Speaker 1: exactly right. But I think the FED has no one

144
00:08:34,080 --> 00:08:37,440
Speaker 1: to blame but themselves. Uh. The constant will they won't

145
00:08:37,440 --> 00:08:41,080
Speaker 1: pay saga has been drawn out for years with the

146
00:08:41,120 --> 00:08:43,480
Speaker 1: market sitting on the edge of their seat, and had

147
00:08:43,520 --> 00:08:47,280
Speaker 1: the FED actually begun this normalization process back in two

148
00:08:47,280 --> 00:08:49,640
Speaker 1: thousand and eleven when they had a wide open window,

149
00:08:49,960 --> 00:08:52,200
Speaker 1: we certainly would be in a very different place this

150
00:08:52,280 --> 00:08:55,200
Speaker 1: time around. So I think the feed in good part

151
00:08:55,280 --> 00:08:58,160
Speaker 1: can be blamed for all of the hype surrounding even

152
00:08:59,280 --> 00:09:01,839
Speaker 1: basis point and great. Of course, as you pointed out,

153
00:09:01,880 --> 00:09:04,360
Speaker 1: what's significant here also, it's just not that it's one more.

154
00:09:04,400 --> 00:09:07,920
Speaker 1: It's a fact that Dennis Lockhart again told told us

155
00:09:07,960 --> 00:09:10,200
Speaker 1: that in an interview about three or four weeks ago

156
00:09:10,600 --> 00:09:12,760
Speaker 1: then and John Williams as well from the San Francisco

157
00:09:12,800 --> 00:09:16,560
Speaker 1: fat there's not just two interest rate increases. Maybe it's three. Right,

158
00:09:16,960 --> 00:09:19,199
Speaker 1: So this is I think what maybe the market starts

159
00:09:19,200 --> 00:09:21,599
Speaker 1: getting concerned about the FED is going to start normalizing,

160
00:09:21,640 --> 00:09:24,240
Speaker 1: raising rates, whatever you want to talk call it that

161
00:09:24,440 --> 00:09:27,120
Speaker 1: they are now on a path. And once the FED

162
00:09:27,160 --> 00:09:29,319
Speaker 1: gets on a path, I think there's still that that

163
00:09:29,520 --> 00:09:34,000
Speaker 1: idea looking at the past FED moves that the path continues. Now,

164
00:09:34,200 --> 00:09:36,560
Speaker 1: I think you're exactly right there walking a very fine line.

165
00:09:36,600 --> 00:09:39,720
Speaker 1: They're trying to convince the market that they will continue

166
00:09:39,720 --> 00:09:44,520
Speaker 1: along a very slow, tepid or quote gradual removal of accommodation,

167
00:09:44,640 --> 00:09:47,360
Speaker 1: but at the same time, by raising rates, each additional

168
00:09:47,440 --> 00:09:50,440
Speaker 1: hike makes the market more nervous that we will get

169
00:09:50,440 --> 00:09:53,200
Speaker 1: back to a two thousand and four style tightening cycle.

170
00:09:53,559 --> 00:09:56,840
Speaker 1: For the FED raised rates basis boids at every meeting.

171
00:09:57,160 --> 00:09:59,559
Speaker 1: So on the one hand, the FED is trying to communicate.

172
00:09:59,600 --> 00:10:04,040
Speaker 1: It's very a slow, tepid, still very accommodated level of policy,

173
00:10:04,440 --> 00:10:08,520
Speaker 1: but also moving closer and closer to a more normal level.

174
00:10:08,640 --> 00:10:11,160
Speaker 1: So it is a very delicate line, and the FED

175
00:10:11,280 --> 00:10:14,720
Speaker 1: is desperately trying to communicate to the market. And whether

176
00:10:14,760 --> 00:10:16,280
Speaker 1: we put the blame on the FED for the lack

177
00:10:16,320 --> 00:10:18,640
Speaker 1: of communication or simply on the market for the lack

178
00:10:18,679 --> 00:10:21,600
Speaker 1: of listening, I think there's a blame to go around

179
00:10:21,920 --> 00:10:25,000
Speaker 1: for both sides. Ten seconds, are you gonna? Are you do?

180
00:10:24,840 --> 00:10:27,600
Speaker 1: What is your view today? Hike in June? I think

181
00:10:27,600 --> 00:10:29,880
Speaker 1: they certainly are well positioned to go if the data

182
00:10:29,960 --> 00:10:32,320
Speaker 1: continues to improve, I think they're going to be hard

183
00:10:32,320 --> 00:10:36,000
Speaker 1: pressed to bypass June. However, the data disappoints and the

184
00:10:36,040 --> 00:10:39,400
Speaker 1: ongoing volatility surrounding the Brexit begins to wratch it up.

185
00:10:39,600 --> 00:10:41,640
Speaker 1: I think they have more than enough excuses to wait

186
00:10:41,720 --> 00:10:44,760
Speaker 1: until September. Lync PSA, thanks so much for joining us,

187
00:10:44,760 --> 00:10:48,160
Speaker 1: giving us you had another view on the FEDS Minutes

188
00:10:48,200 --> 00:10:51,679
Speaker 1: from their April twenty seven meeting. She's chief economist is

189
00:10:51,720 --> 00:10:56,360
Speaker 1: Stephen Nicholas and Company. Kathleen Hayes pim Fox taking Stock,

190
00:10:56,400 --> 00:11:02,000
Speaker 1: Bloomberg Radio, The FED in focus is brought to you

191
00:11:02,000 --> 00:11:05,160
Speaker 1: by Willoughby's since eighteen ninety eight, New York City's boutique

192
00:11:05,160 --> 00:11:08,640
Speaker 1: camera store for precision craft at Hazelblad and Like A Cameras,

193
00:11:08,679 --> 00:11:12,679
Speaker 1: plus a full selection of GoPro action adventure cameras. Willoughby's

194
00:11:12,679 --> 00:11:14,360
Speaker 1: corner Fifth Avenue and thirty first Street,