Statement the fed held back from changing its line on the balance of risks. A number of Committee Meetings were edging in that direction. What did they do . It seems a compromise here. They do not change the balance of the risk statement but they add that word further a couple of times in the statement. That change was explicitly in the context of the brightening outlook that fomc officials have for growth in 2018. Said they agreed to update the characterization of the expectation for the evolution of the federal funds rate in the postmeeting statement to point to further gradual increases. It appears this was a half step by the committee in january. Ok. Towards signaling a quicker pace of increases but a half step. Lisa thank you so much for that. U. S. Markets close in two hours. We are getting so much reaction and bond markets to the fed meeting minutes. Lets get a check on where stocks are trading. Taylor we are seeing highs of the day. Gains accelerate going into the meeting. We were up anywhere from. 6 to 1 . Over 1 a bit of an acceleration. Lets look at the 10 year index to see where we stand. 2. 90, Holding Steady now. Not a huge reaction. The same in the bloomberg dollar index. Looks fairly stable. I want to look at some of the build we are seeing and dig into the macro level. Celgene just received antitrust clearance to buy youy juneau. Both companies and investors happy that the antitrust hurdle was cleared. Baker hughes and ge shares moving. Ge confirmed today at a conference that it has no plan to divest its majority stake in baker hughes. It owns 52. 5 of the chairs. Clearly happy they wont divest the majority just yet. A lot going on in chipmakers. Nxp. Dcom, qualcomm and an for nmm raised its offer xp. Broadcom said that offer was too high. In response, they lowered their bid for qualcomm. Lets get some more perspective here. We are joined by jeremy siegel, university of Pennsylvania Wharton School professor. Got one surprise increasingly comfortable that inflation will pick up, albeit gradually. Jeremy yes. One has to remember that meeting was three weeks ago. It was before the stock market selloff. They were seeing much stronger gdp growth than some of the later data. Retail sales were very disappointing. The people i follow say that the first for gdp is now looking just a bit over 2 when they were looking at 3 or more. Away, theres dated month from today, march 21 is going to be an extraordinarily important meeting. The first meeting that jay powell will preside over. Also a new look at the dot plot and their expectation of future fed funds rates. The markets should shrug off a lot of what theyve seen because theres been so much that has happened subsequently and that will happen in the next three weeks. Lisa can you talk to us about what is more important right now for the Federal Reserve . Inflation, which is something they talked a lot about, or the fact that at some point, they may have to drop rates down again if the economy does stop. They want ammunition to do so. Can you way these two issues . Sure. Lets raise them now so we can lower than later always seems strange. Theres been talk about that for a long time. Low inflation low Interest Rate world, that socalled zero lower bound which we saw europe violating being a constraint on the market. Overwhelmingly, i think its the inflation data. Even though the real Economic Data hasnt been there in the last three weeks, inflation data has been higher than what the fed and the market expected. I expect the dot plot to be stronger for and of year end of year. We saw in december the median estimate was three increases. I wouldnt be surprised to see four increases. However, again, we have three weeks of data until this very important meeting. Julia lets type as to what they are saying. Fed officials cautioning about Financial Market imbalances. The gyrations weve seen in the markets, three weeks has been a long time as well. Can you put the movements weve seen in the stock market into perspective . Overall, the returns are pretty consistent on an annual basis. Right. December, i said we would get a correction this year. We did get that 10 drop. Yes, the fed does look at those financial conditions. I think we got through this correction very well. Brief,ere was that sudden downward movement that we had two weeks ago. Trades were going on, the market certainly has recovered, selling at a much more reasonable p e ratio. We have shaken off a lot of those momentum players. We do look at the Financial Markets. That does summarize everything that is going on. In marchgest concern is going to be how the inflation data plays out. And what kind of inflation data we will be getting in these next three weeks. Julia for investors, too. Lisa weve been getting a bunch of treasury auctions this week. We had a weaker than expected threemonth and sixmonth auction yesterday. Today, you saw weaker demand. How much does this way into the feds decision . Clearly, we do see a lot of bonds hitting the market. This week, over 100 billion of bonds. We see rates pushing towards 3 . That means to me that the fed could be more aggressive. One of the items the fed has talked about in previous meetings is the fear of flattening the term structure. Flat an inverted term structures are very bad signals for the economy. With that 10year now moving up almost a 3 , the fed has a lot more breathing room to bring that short right off without fearing that in version. They will look at the market signal of those long bonds. Certainly if they rise above 3 , it means the market is concerned about it and the fed has to take cognizance of that in its decision this march. Im sure its going to be a one 25 basis point increase. Plot could push towards four increases this year instead of the three we saw in december. Jay powell will be leading the meeting and q a. I will be front and center for that performance. Wont weat we all all. Thank you, jeremy siegel, professor. Ool we have seen a brief spike higher, trading at 1 for the dow, outperforming the financials, industrials supporting leading the gains that we are seeing here. We have seen some flattening of the rate curve. We have had more supply in the session today. Lets get a look at whats going on as far as the first word news is concerned. Mark President Trump will hold a listening session about School Shootings today. He will meet with parents, teachers and Students Affected by last weeks shooting and the shootings in columbine and newtown, connecticut. The white house says hes willing to listen to gun control proposals. Thousands of students who converged on floridas capital to urge legislators to pass covered gun laws tougher gun laws 17 people were killed a week ago today. Their friends were among those present. Son needs to know how to protect himself from being murdered. Afraid to send my 10yearold brother to school. The day after the shooting, he said im going to school, im not afraid, i wont die, i promise. Mark the students also met with state lawmakers. Newlyis, liberias elected president met with Emmanuel Macron on his first state visit outside of africa. The two announced the creation of a fund to support sports related projects and never got. He hopes the deal can advance the interests of liberian youth. The government said the people use the resources to benefit the people. This is where we are. Of dollars billions to liberia you cannot blame anyone but us for not investing them into our own country. Liberia is one of the poorest countries in africa and relies on funding from the united states. France is planning to provide Additional Development aid to the country. Antonio guterres is calling for an immediate end to the violence in a rebel held suburb of damascus where 400,000 people are living in what he calls how on earth hell on earth. Syriaghting in must allow humanitarian aid to reach all in need, including Urgent Medical treatment. This is a human tragedy that is unfolding in front of our eyes. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Julia lets move on that coming kashkari helps decode the feds language. From new york, this is bloomberg. Lisa this is bloomberg markets. Julia lets get a view from minnesota now. Michael mckee sat down with Neel Kashkari. He weighed in on the wording from the fomc january statement. We debate each word change in the statement. A lot of debate goes into those. Yurther is intended to sav furthering the path we are on. Julia mike mckee joins us from annapolis with more highlights from his exclusive interview. The decoding of the word further here the tax overhaul. Get a specifict number on how much theyve marked up there forecast forecast. The fed will continue on the right path theyve already announced but they arent ready to raise the number of rates this year. Heard from the Philadelphia Fed president who suggested he is still in favor of two rate hikes rather than the three that is the consensus forecast. The fed not changing it statement. Go, more months of data to thats where we are at the moment. Fed president lis Neel Kashkari isnt exactly a consensus member of the fed. Is that right . Michael he certainly wasnt last year. He voted against all of the rate increases. He suggested today hes more willing to consider the idea buildingation may be in the economy and the fed might have to do something about it. He wants to see the data. I did ask him whether or not a breakout of inflation in the fed response would bother wall street enough that the fed would have to step in with the socalled fed put. He was pretty adamant they wouldnt. Wall street overreacts to everything. We overreact to the upside and the downside. We cannot make policy based on market blips up and down. We have to focus on the longterm Economic Outlook and the mandates congress has given us. Michael kashkari is with the middle of the pack, i would say, looking for data of whats going to happen and open to the idea that the fed has to move if we start to see an outbreak of inflation. Lisa did you talk about this idea that because you are seeing higher 10 year yields that gives the fed more room to be more aggressive on the short end . Michael he didnt talk about that. He did talk about the idea that maybe at this point the markets are beginning to catch up to the fed. Beginning to see what the fed has been concerned about. The idea that down the road, we will get something if you are regular ande predictable and slow, gradual moves are the best thing for the economy while we wait to see what happens with the stimulus, whether more people come off the sidelines. Neel kashkari is of the view that there is still slack in the economy that could be taken up by some of the stimulus we will get. Julia the comments they made about the market gyrations we had a market blip from kashkari, small potatoes from dudley and the most predictive selloff from james bullard. Do you think theres a reaction function that makes them think we have to be more cautious now . Just in light of what we saw with the volatility. Do you think the commentaries interesting . Michael they dont want a fed in, but there has been one. They held off on a rate move in 2013. We saw it after the Chinese Markets melted down in january of 2016. There are times when the fed fears what the Market Reaction is going to be or may be to a fed move because they dont want to destroy business or consumer confidence. It has more to do with volatility than actual levels. Today, they cannot make policy based on that kind of fear. They have to make policy based on whether they see the economy what the circumstances are. Julia now, its more potatoes. Michael mckee, thank you so much for that. Still ahead, the etfs report. Etfy, we look at the inspired by the investing strategy of warren buffett. More on that to come. From new york, this is bloomberg. Lisa this is bloomberg markets. Julia time for our smart beta etfs report. Volatility can be coupled investors but helpful for smaller etfs for increasing liquidity. Discuss, eric. Talk us through it. We had a list of upandcoming rising stars from the smart beta. New ag is smart beta on the bond side. The big complaint with the ag, it doesnt give anything. You can get more with a 10 year treasury. Tos reorganizes the ag squeeze out more yield at 3. 4 . People like it for that reason. Im not surprised it saw a lot of va volume. Why money isn being pumped into these smaller etfs. People haveselloff, an excuse to sell their mutual funds so they can realize some gains. They are looking for etf to buy. This more liquidity and volume this took a lot more money. Its only 20 basis points. Its possible to fire a bond manager and highere this etf. Lisa another rising star, x pyg. In the past year, it has returned 25 . They are buying it because spidr cut their fees on 14 etfs. Its the cheapest on the market. If you cut your feet and you are the cheapest by a basis point, billions will pour in. Its barely growth. It takes the 250 side of the growth s p and market cap w eights it. Julia talk about u. S. Infrastructure. How it pays. A good figure for the u. S. Oneastructure this solves the problem with other infrastructure etfs. A lot of them have international exposure. This one is only u. S. It does this thing where it doesnt have any utilities. Thats the problem with other infrastructure. This tries to correct the problem of other infrastructure etfs and people are responding. Etf every wednesday, catch iq. From new york, this is bloomberg. American olympians will be saving some green in their pursuit for the goal during the 2018 Winter Olympics and pyeongchang, south korea. This is thanks to a president obama era law that prevents prize money from tax. This amounts to potentially tens of thousands of dollars in savings for victorious olympians. Julia that was one of the highlights from tictoc, streaming live on twitter. This is bloomberg markets. Im julia chatterley. Lisa im lisa abramowicz, in for scarlet fu. Lets get a check on the headlines. Mark survivors of the Florida School shooting met with state lawmakers and held a rally at the Capitol Building in tallahassee. They demanded legislative action at the state and federal level to deal with gun violence. One speaker at the rally said the 17 students and adults killed a week ago today in parkland are not statistics. They were family members and friends and loved ones who died because a former student was able to purchase an assault weapon. People who witnessed a collision between an amtrak train carrying republican congressman and a garbage truck in role in virginia last month told investigators the truck entered the Railroad Crossing after safety gates came down. A preliminary report was issued today by the National Transportation safety board. The probable cause of the accident hasnt been determined. One Trust Company employee was killed. Several people were injured. President trump is attacking his predecessor, suggesting he should have done more to prevent Russian Election meddling. On twitter today, the president said why didnt obama do something about the meddling . President trump also took a swipe at his own attorney general. During the 2016 campaign, president obama called on russia for political interference thats called out president obama called out russia for political interference. Between the two koreas must be kept alive that she hopes continued talks lead to reconciliation, piece, and the denuclearization of north korea. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Lisa Commodity Markets closing in new york. Heres todays biggest movers. Net gas having another big day on forecasts of Colder Weather in europe and the midwest and east coast. Take a look over at lumber, its up almost 18 on the year on a positive outlook for the u. S. Home market. A quick note on grains, they are approaching strong gains year to date. Corn and wheat have plenty of room to run. Lets end on metal. Silver rising today is the dollar slips. Cobalt gaining 70 since last year. It is used in lithiumion batteries. Thegrowth in electric vehicle space has sent cobalt soaring. Julia apple is in talks to buy the metal directly from minors for the first time. The company is worried demand for cobalt could threaten its own supply which it needs for iphones and ipads. For more, lets bring in mark gurman. Great to have you with us. Set the scene for us. To what extent does apple require cobalt for its iphones and ipads . By the amountrfed needed in electric vehicle batteries . Mark great questions, as usual. Its the most important component in any mobile product. It is the batteries. Theou look at the industry, rampup of technology over the past 10 years, Battery Technology is so far behind the technology that makes things work wirelessly, augmented reality, Artificial Intelligence there seems to be a breaking point when theres not going to carmakers,ecause the dozens of companies eating up the cobalt technology, which is easier and more lucrative to produce for cars than for smartphones and whatnot. A creative predicament for the smartphone companies. How can you explain to me this is a different arrangement thean what apple currently has . How are they locking in the agreement with their cobalt miners . What are the miners getting out of the agreement . Mark when apple builds a new device, they go to their suppliers and say we need this many battery packs, we need them shaped this way. They buy a bunch of these battery packs. Samsung and the other battery component makers are sourcing the cobalt. And are marking them up selling them to Companies Like apple and google. Apple wants to go deeper in the supply chain. Versus just buying the battery packs from whoever and installing them in the iphones, they are going down to the mines to work with those people whichng the cobalt, is one of the key ingredients in making these lithiumion battery packs. Julia i cant help but feel they are a bit late to the party. Theres all sorts of Companies Close to signing some sort of get direct supply. To what extent is this a demand story or supply story . You pointed out the kind of demand we are talking about. Two thirds of the supply comes from the democratic republic of the congo mark its really a demand story. Apple has a history of striking these huge longterm deals for key components. One of the biggest deals in apples history was a deal they made around 20032004 for these flash storage chips. They let you store things on ipods, macs and whatnot. This is another key component. You, letse we have take a look at the performance of amazon shares. Shares briefly touching 1500 for the first time. Amazon is now worth 2. 5 walmarts. Give us some perspective. Mark 1500 per share. Amazon has been the feelgood story for the last year. They announced this big second campus. Matthew boyle had a good story yesterday stating that as walmartss margins are dropping, amazons are increasing. Last seven sessions for amazon have resulted in stock price increases. Theres a lot of general optimism around amazons margins, their new campus, their new integration. Lisa thank you so much. Amazons share price going into the stratosphere. Julia look at the bounce back weve seen from the breed selloff brief selloff. Lisa hard to call that much of a selloff. Epting no substitutions the president of fc barcelona on why players like messi will never leave his team. Julia this is bloomberg. Julia welcome back to bloomberg markets. Ets focus now on futbol contracts for elite footballers playing for the wealthiest european clubs can be hundreds of millions of euros. In neymars case best it was so high that nobody would pay that close. Its a lot of money. That means the market is growing. Theres inflation, of course. Also in this industry of football we will receive 220 Million Euros the purchase would not have been possible without selling neymar. Josep impossible. I know liverpool they have teams they want to improve and leagues. Wn they decided to sell at a high price. You said we saw the 16 billion josep 225. There are some variables produced in the following seasons. This season, we spend this money we have 60 Million Euros to expand on the players. Last summer was a different summer for us. German want him to playing fr has the market peaked . Josep i would like to say its not going to stay. Clubs belonging to very rich people are investing a lot of money in football. This money comes to the clubs. We try to keep our players. Towant to have a Good Team Win titles. Summer someonet will come to buy our best players. Messi josep hes the best player in the world. 200 million in value . Josep we did something last june. We renewed his contract and we put a clause of 300 Million Euros. We increased it to 300 Million Euros 700 Million Euros. When youre the president of the club, a balancing act squad and thest Financial Decisions of the club if someone came in with 700 billion euros, you still wouldnt sell the n. Llionel mesi. Josep we want to have good football. We would like to practice this unique way of football that we play. Messi is our key player. Messi doesnt want to leave barcelona. Thats more important. He likes the city. He came from argentina when he was 12 years old. Bank rolese as many as possible but if a player doesnt want to leave, he will stay forever. Lisa that was the president of fc barcelona. Time for our stock of the hour. Trading lower is pandora, even on an up day. Abigail doolittle joins us with details. Pandora with a lot of competition. Right now, getting whacked ahead of the earnings report. The stock will move by 22 up or down. It could be up going against todays action the stock is having its worst day. Relative to the possibility of upside, earnings have been revised down many times. We can see just how much this company has been hit by competition. Spotify them apple music this is the earnings estimate graph. We see in white the stock going with the earnings. Investors are looking for nine cents per share. Estimates are coming down. What if they put up a surprise two years ago, investors were looking for . 20. Lisa we got the announcement of the Restructuring Plan last month. What details do we know already . Restructuring plan is a coat for plan for profitability. Users continue to slide. We look at pandora subscribers, this is pretty remarkable. Back in 2013, they had 73 million subscribers. They were going in the right direction. They flatlined and spotify and apple came back to where they had been in 2013. They want to improve the picture enough so they can make sirius,es sellable to which has made at 480 million investment. They would get the scale, the advertising if they were to buy pandora. Pandora would have to clean up the Balance Sheet and financials to make themselves attractive enough. Lisa thank you for that. Coming up, lets take on the treasury market. We are getting closer to a fine point for u. S. Debt. We will have that, next. From new york, this is bloomberg. Julia this is bloomberg markets. Im julia chatterley. Lisa im lisa abramowicz, in for scarlet fu. Bonds are starting to get exciting. Thats the view from mark kiesel. He spoke with bloomberg about his favorite that market earlier. Mark its some of both. When we look at developed markets, we think the u. S. Bond market and australia are the two most attractive right now on a relative basis. This is a story where the rest of the world is catching up. Live in three years behind the u. S. Economic cycle 23 years behind u. S. Economic cycle. Their economy is finally picking up. The ecb will gradually taper their Balance Sheet. Couldimately think japan ultimately move their target upward over the next year or so. As these other economies start to gradually pick up their growth rates, we should see their bond yields rise and that spread between u. S. And those rates narrow. Overall, and highlights the u. S. Treasury market looks attractive andtive to bonds in germany jcps inthe u. K. And japan. On the underpricing risk at the moment . Mark whats happened really since 2012 and 2013, we have seen a significant tightening in those peripheral spreads. Thats been the result of an improvement in Economic Conditions and Massive Central Bank support by the ecb. The issue we have now is those spreads are quite tight. We are not taking significant risk in italy because we think longerterm those peripheral spreads are at risk of w idening. We are more conscious at these levels. Nejra we got a 30 year offering in spain and longer dated offerings here, too. How do you decide whether you want to be in a market where the easing . Bank is still u mark a very good point. It highlights our preference for some select emerging market exposure. Unlike in developed markets where the inflation rate is rising and if you think about it five years ago, 0 inflation to now hopefully 2 , the emerging markets in contrast, those countries have seen 4 inflation. Now, they are below 3 . Theres divergence in inflation trends. We think some of the emergingmarket risk looks pretty interesting now, specifically in brazil, mexico and even south africa where you can see the potential for inflation to come down in their Central Banks to lower rates like weve seen in brazil in contrast to what we are going to be seeing in the u. S. , the u. K. And even the ecb, higher rates over time. Looking for mexico to raise a couple of times before the election. What is the greatest risk to having a diversified bond portfolio where you have meddling in emerging markets and europe and here . Mark overall, you want to keep those emergingmarket exposures relatively small in scale, which weve done. Ultimately, the risk is higher rates with bonds. In japan and europe and the u. K. , those countries have a higher risk of seeing higher rates over time. In contrast, in the bond market, we think u. S. Rates are getting near that 3 level on tenyears. And emergingmarket, you have the potential for some of these countries to see lower rates. We think a diversified approach does make sense. Julia that was mark kiesel speaking earlier on bloomberg. Time for the Bloomberg Business flash. Bank of England Governor Mark carney looks to reassure lawmakers that the standard of living in the u. K. Will improve this year despite uncertainty over brexit. Once we get towards full employment we are not there figures areatest about that we are seeing a variety of indicators that are consistent with wage pressures. Wage growth has been subdued in england despite unemployment dropping to its lowest in decades. Owned byan team chain yum brands is the fourthlargest restaurant brand in the u. S. Co bell past burger king last year passed burger king last year. Anmorga building a new headquarters. More on that story, next. This is bloomberg. Into 6 00 p. M. In the it is 3 00 p. M. I am julia chatterley. I am in for scarlet fu. Welcome to bloomberg markets. Julia we are alive in bloomberg World Headquarters in new york. Here are top stories were covering on the bloomberg and around the world. Covering on the bloomberg and around the world. Yellens farewell gift. Stocks rise and dollar which is gain after the final minutes. Jpmorgans getting a brandnew building in the big apple. But that move means for the employees in midtown manhattan. And we speak to the largest producer of crude oil in oklahoma. s go check on the marquee equity market with abigail doolittle. Have games for the major averages especially with yesterdays volatility. Solid gains for the s p 500 and the nasdaq. To the point, the major averages all up 1 . Amajor averages especially with yesterdays volatility. Solid gains for the s p 500 and the nasdaq. Mirror of bigger volatility we saw a few weeks ago considering yesterday, week post down. The dow down 1 with small gains. This is an intraday chart of the s p 500. And then around the time the fed out, the fed did say they have a strong view for the economy, the Economic Outlook. They see themselves reaching the inflation mirror of bigger volae saw a target, that there could be more rate hikes than personal than expected. The net of half of 1 . The tech trader earlier hitting 1500, above 1500 for the first time. Apple, facebook, alphabet. There was weakness. Tech has been a big driver for the rebound. Walmart down for the second amro in a row. Not liking the outlook shares down 10 . 1 bitcoin some weakness in energy. Take a look. Is 2008, it is on pace. The 10 year yield had been meandering between trading around the time of the minutes being released. Points,up five basis 2. 9 . Believe investors are referring are refreshed are reflecting that. Btv 5957. In blue, we have the 210 spread. A true look at inflation. Coming down last year at the big rally, that helped stocks. We have seen the repricing of risk. Higher, now down before. That could pressure stocks. Stocks are now coming off the highs. Isa definitely a notable move back at the highest level since 2014. With mark crumpton. Special Counsel Robert Mueller filed new charges in a case against President Trumps Campaign Chairman paul managed and his deputy, former deputy rick gates. In washington, the federal court does not specify the charges. Were indicted in october for Money Laundering and failing to register or Political Consulting work performed in the ukraine. In tallahassee, a call for action on docking gun violence. , bantudents biggest wish assault type weapons such as the ar15 paired the Weapons Police say was taken off the table the previous day in the state house. The people who deny this, if they want to claim only the godgiven right of their second amendment, we are trying to take away all of your guns p just the ones being used to kill innocent children. Attempted to get a bill to ban assault rifles in march, and florida tuesday. Republicans dominated the chamber just missed it. U. S. Lawmakers are urging the state department to restore embassies to hold last year in response to mysterious ailments among diplomats and families. I got the impression the cubans operated discovering what if anything happened. They have the advantage to do something. The result has in relations between both countries. Mark Rex Tillerson says symptoms resulting from what he called targeted attacks could end by 60 in september. Tillerson is supposed to outlined by march 4 whether he will continue staffing the embassy at reduced levels or consider sending some diplomats diplomats back. Calling fors is restraint in syria and better in and aroundg damascus. In a statement today, the organization said medical personnel in eastern are unable to cope with the high number of injured and the area is short on medicine ands lives. At least 260 people have been killed since sunday night. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am mark crumpton. This is bloomberg. Julia jpmorgan gets a facelift. Its headquarters does. The largest Bank Planning to consolidate offices in 15,000 workers in the new manhattan headquarters. Lets bring in ship jason, executive editor for global television. Great to have you. Jason a big story in new york. Huge. This is a whopper for jamie dimon. We are right here in midtown manhattan. It is nice enough, but 3500 people. They buffed and polished it to. Ittle bit ande of 275 stories high 15,000 employees. Presumably what present what and 15,000they expect these days. Julia shifting already from big is this. Jason wells fargo, this largely feels like jpmorgan really committing to midtown east. 70 acres right here. To both higher and more modern. Where are the workers going to go . Amongst other jpmorgan acrossgs huston street, the other street, jpmorgan took over back in 2008. Up landmarkbuying buildings nearby quietly. Plan to demolish these and expand the footprint. It will be interesting to see what comes to play. Everyone likes modernization. Not everyone does. People also hold on and park avenue, obvious week, one of the most famous avenues in the world. Cmis probably not go seamlessly. We also expected there would be more of this coming down the pike. Little renovation they actually want to remain in new york city, Goldman Sachs moving people for push back. People want to be in new york city, as expensive as it is. All of these things play in. This is new york city at the end of the day. Is going on in brexit and london, talking of my bureau chief. Having pingpong tables and open bars to cable to the younger, cater to the i do not think it will be opposite this way. Banker, clearly they will do a lot of the inks they need to do to attract younger workers. One thing we have heard is there are open designs certainly that are being adopted. Blackrock, i would expect this would have some of the more modern ells and whistles. Out not quite see it making between them. Bloombergs new york editor in chief. Thank you for that. Abouting up, we will talk the topping earnings estimates for a twoweek low. E will discuss from new york, this is bloomberg. Julia this is bloomberg markets. It is time for a look at some of the biggest business stories in the news right now. Stickf america plans to with london for the long term despite the fact the u. K. Continues to finalize plans to exit the european union. The u. S. Lender has extended the , well after years britain exits the block. The second concerns big Financial Companies out of brexit p other banks including wells fargo and dilutes of Deutsche Bank glencore is free to attend the haskell hostile takeover after the expiration of an glencore reported an annual profit that was a record today confirmed the existence of that agreement this week. Aboutis speculation whether the finance minister of south africa will keep his job. We have been speaking with the finance minister who says he is staying focused on economic and not political challenges. A thing where he will take personal charge and will take companiesharge in our and giving the structural lysing will i think all of those do a lot for us not only to downgrade, but also to realize a change in the in the outlook given the s p. Moment,cast at the taking away from any downgrade and beginning to improve the outlook. That is the set the finance minister of south africa speaking to bloomberg today. That is your bloombergs newsflash update. Julia you can catch all of our interviews on the bloomberg with function tv. Abigail talking to us, those earnings out after the bell today. You can find breaking news, charts, and related functionality. You can see these popping up again. From new york, this is bloomberg. Julia this is bloomberg markets. Lisa lets get more from our exclusive conversation. Mike mckee spoke with him about what kind of the federal is having. A lot of debate goes into those. Say,er intended to continuing the further path we are on, that is the debate we are having. We are focused on what is the outlook for inflation, wage growth, is there still in the labor market. And i think the markets can read those and interpret what the views of the committee was as opposed to one persons view. Out this morning saying only to rate increases. He doesnt see inflation moving. Moving. t see inflation do you see that changing in 2018 . Not want to overreact to one jobs report or the latest numbers. We do not want to dismiss the numbers but i do not want to overreact. Inflation actually building toward the target. Years, the fed is been undershooting the inflation market. Read around the border, it disappoints us. My reaction is to take the time and allow it to come as come to us. We have limited tools if the inflation comes to low. Stressed reacting to inflation with the powerful tools can have side effects, certainly in the markets. If you saw inflation breakout, are you concerned you see wall street overreact perhaps to moving too quickly . Wall street overreact to everything. We cannot make policy based on market lips up and down. We have to focus on the outlook and the mandates that congress has given us. To achieve those on average over the longterm. Wall street will do what wall street will do. Onit could have an effect the economy. The fed will step in because to collapse int business. To collapse in we care about financial stability. For we said arent targeting today, we will move the dollar down. We care aboutwe pay attentios or the stock market. We are not trying to engineer a certain level of the stock market. Differentiate the tech bubble, which did not leave lead to a financial crisis. Very hard tork prevent crises but within that, we should allow them to price up and down. Equity valuations, a rapid rise in bond yields . Rise in bond yields . I am not seeing those signs personally in the stock market or the vix as we have seen. Personally in the stock market or the vix as we have seen. Most importantly, we are seeing massive leverage up the way they were in housing in 2008. 10 to one, maybe 20 21. 2006personally and 2007. Generally speaking, investors are in the stock portfolios. List levered in housing. Important. Julia it is time for options insight with abigail doolittle. Opposite ays options insight is a chief market strategist. Volatility is the word. We had really big volatility. Can you keep track of it . We had more like a whackamole. It went back down as we see many times before in the last eight years. It has been a dramatic decline. Itle there is still angst, is a big decline. What about something other experts are talking about. Some people are of the opinion it is different, i dont think so. There are Major Concerns about Interest Rates moving higher. It is only a natural and healthy phenomenon. Talk about the flattening of the yield curve and the emergent of vix. Thing, corporate profits. Stock basis. Corporate growth was 16 . Stocks, and the pe has declined. Talks are fairly valued. That is interesting, what youre saying. Lets take a look of the stocks abroad. German etf . Yes. The stock increase in the last couple of years. The nikkei has outperformed the s p in the last five years. Stock markets around the world. Yes, profits unwinding. Dwg, it is 10 off the highs, sitting around 33 right now. I am looking at a longterm call as i often do. 300 in the money. The option will gain 50 . Great stuff. Back to you, julia. The fifth of the majority , we havehe likelihood also seen the u. S. 10 year, take a look at that above the 2. 9 mine. This is bloomberg. We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . 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