Governments are ready to slap rusher with more economic sanctions, prohibiting the export of Energy Restoration technology, and russian response says the penalties are not working. The sanctions are not working in political terms. They might be having an effect on both sides in the economic area but not politically. Well economically, you just saw russia cut their Interest Rates. Talks are set to continue in belarus over the count conflict in ukraine. The treasury 10 year yields fell three basis points in london. In the u. S. , s p futures falling along with the dollar. This is ahead of the gdp numbers, will get the latest read on the strength of the u. S. Economy. A beat for amazon, and a miss for google. Jeff bezos showing he can pull out a profit following two straight periods of shocking losses in the Third Quarter. A very different story at google. The search giant missed as the advertising business faces more competition on mobile devices. Revenue climbed almost 7 to 14. 5 billion dollars. Analysts were looking for 14. 7 billion. Alibaba looking to advance on it Public Offering as soon as next year. The chinese companys affiliate is valued at 50 billion. I want to get more on the Market Reaction behind russias rate cut. Chief markets correspondent scarlet fu is at the breaking news desk with much more. The ruble slid on this news. It slid in value, but if you look at the chart, it actually moved up. This was a surprise to economy because the central Bank Economists because the central bank had raised rates six times in the past year. The government is signaling that they are willing to sacrifice some of the rubles value to stabilize the economy and pull it out of recession. Lets take you inside of the bloomberg terminal to show you the dollarruble strength rate. The dollar is moving up in value, the ruble is weakening. This is over the last six months. As the line goes higher, the dollar is increasing in value. This is todays move. This was back in middecember, when the government unexpectedly raised Interest Rates by a huge amount, and that pushed the ruble past 80. That was shortlived at the time because there was talk of government intervention. Perhaps the central bank came in to stabilize things. We saw the Exchange Rate find some kind of equilibrium in the weeks following. This move indicates the government is willing to once again let the global the value. In terms of the effect on equities, this was a move by the central bank to support the real economy. You are seen a bit of a reaction a positive reaction in russian stocks. Thank you, and while you were talking, more earnings coming out. Mastercard releasing their earnings. Fourthquarter earnings at . 69 per share. That looks like a slight beat against wall street estimates of 67 . . 67. Now to the big stock story of the day investors are hungry for shake shack. The highend burger chain pricing its ipo and 21 apiece above the proposed range of 17 to 19 a share. The stock is excited to begin trade today on the nyse. For more, i want to bring in an analyst for Bloomberg Intelligence who covers restaurants and food retail here at bloomberg. Jennifer, can we gauge how shake shack is going to do by other ipos in the food world. We can look at other ipos. Berger b had their ipo with a similarrgr offer size, pricing in the middle of their range. They are comparable. They operate in the same segment and they should be a good indicator to request a good benchmark. Exactly. We have had several ipos. Not just burgers, but food overall. Exactly. We also had dave and busters. Dave and busters, right. There has been great appetite for investors from that for restaurant ipos. For investors for restaurant ipos. Pardon the pun, people are lining up for shake shack. People know it they love it and they are willing to bank on it. It seems that way, but when you look at the sales we only have them over the last several years. I know they have actually seen sales growth slowing over the last couple of quarters. Why is that . Same store sales are declining, the part of that is because they wait two years for a comparable base. Because it is a growth story, a lot of recent development is not part of the numbers and you expect over time those numbers would shift up over time. Jennifer, thank you so much. Jennifer bartbashus. Tune in for my interview with the ceo and founders of shake shack. Amazon Beat Estimates google came up short. The stock is only up about 1 . I want to bring in paul sweeney of bloomberg intelligent intelligence, and my guest host susan lyne the former ceo of Martha Stewart on the media, and guilt group. Set the stage. The jeff bezos get his hand slapped and now he has learned his lesson to put earnings in a report . I do not expect that he has changed his strategy big investment for the longterm. It is not just his distribution centers. I think investments will continue. He will also make Big Investments on the media side of the business. I do not expect that to change. However, we got a very rare eps beat, and i think that is what the stock is reacting to. What do you think that is about . Is bezos listening to shareholders . The stock has underperformed in the last two or three quarters. We have seen this is the magnitude that we have like in the Third Quarter. Exactly. We might see a little bit of that. They are probably more sensitive to shareholders, but i do not expect jeff to change his course strategy. Our job is to tell people what happened at amazon last year. Susan and paul, lets bring up a list, guys, of what exactly jeff bezos did in 2014. I thought we were busy, but he was busy onehour delivery, free music streaming, a settop box, the production with woody allen, drone delivery vehicles and im not even mentioning everything else. He is getting into moviemaking business. The movie making business and he has to write down the phone. Susan, what you make of that list . I think they are trying to make amazon the place you go first for everything. It is very hard to do. He was really smart for a number of years looking at the areas that were close to their ecommerce business that he could get to and dominic. That is where dominate. That is where full full came from, and prime. He might have gotten in a little over his scheme with things that are not necessarily going to be amazon. On the other hand, google is maybe going to be punished for getting a little over there skis. You saw the miss, and there were certainly currency issues there. They are a global company. Clearly, with the issue is where their growth is coming from mobile usage and emerging markets. That is great for growth in users and overall usage however the challenge is it is hard to make money in those emerging markets and on mobile devices. Advertising rates are lower on mobile devices than they are on the pc. Like all copies, as they migrate from the desktop to mobile, it is great for growth and usage but the pricing and the monetization just is not what it was on the pc. All of the companies are doing with it, and certainly google is as their users migrate to mobile devices. Aol. Ahead of a certain trend god ahead of a certain trend Programmatic Advertising and that a lot of students in you growth quarter over that allowed us to continue growth quarter after and that is what allowed us to continue growth quarter over quarter. For a company that does not have a strong global strategy such as yahoo , they are playing catchup. What about twitter. Twitter is a huge mobile play. Yahoo is playing catchup and they have been punished. But in the last report their mobile ad revenue increased quite a bit, over 20 . It did. Marissa mayer is playing catchup, but they did make some inroads trying to catch up to the facebooks and googles of the world. Thank you, paul sweeney of Bloomberg Intelligence. Susan lyne stays with me through the hour. Much more ahead. So much for a boys club a series of new startups could give tech and makeover could give tech a makeover with women. That is exactly what susan is talking about. We will talk about that in a moment. It is 15 minutes past the hour. Lets look at our world News Headlines. The fate of two hostages held by the Islamic State not known at this hour. Japanese officials are in jordan looking to save the japanese journalist and jordanian pilot. In europe, the spanish economy defined expectations and posted its fastest growth in seven years. Gdp rose. 7 from the prior quarter and 2 on a yearearlier basis. They are believed to be due to increase Consumer Spending. A new ally in the skies Qatar Airways has bought a 10 stake in iag the Parent Company of british airways. That is the latest world news. We will have another update at 45 minutes past the hour. Down to an American Company that has set its sights on global domination. That is shake shack. From a hot dog stand in 2001 to 63 Stores Worldwide today, some in the middle east some might call shake shack story a viral story. We are joined by steve carell. Still with me as my guest host susan lyne. Steve, first to you look, you kind of compare were talking burgers versus this other thing im about to say, steve jobs and apple. You say danny meyer has had a Steve Jobsesque singular vision make something people want and they do not even know what they want, but when you make it they wanted and that is the gourmet burger that he has perfected. Thank you very much, and good morning. Danny and his group are dedicated people. They have come up with the right formula. They recognize they created a burger, french fries a shake, that blows people away as they tasted consume it. They do it with a staff of people that are not only highly motivated, but engaged with their customers. They wind up with a phenomenal formula. When people first go in they think what am i going to get out of this, and once they consume it, they recognize they just had something they did not expect. Ok so, i am going to be the diner dash down her here. Susan, downer here. Susan you have seen the lines around new york city. When i see them, i start to think is this another fad i mean, come on. They have been doing this for years now. Yet. One of the things that is interesting is it is evidence of the great creation story, and they started this business shake shack, as a food truck when Madison Square park was reopening, and everyone was excited about it lots of press. Danny was looked at as a savior with this little thing that ultimately ended up with long lines of people coming. By the time they started rolling it out more places, it was a story that everybody knew that you waited for one hour to get the hamburger that. Then you want to go and try it out. It was almost the story was unappetizing as a burger. Absolutely. Great story. Stephen, the unknown question is can Steven Carvell the unknown question is can shake shack create this outside of new york and outside of the country. Outside of new york there store sales are half of what they are here in new york. That is going to be a purely volume issue, of course. The density of the population is not nearly what manhattan is going to be, but they will still outpull any competitors. There are two parts to that in one part is, of course, just getting people in, but then growing sameunit sales, and once you hit a certainty shake shack is going to hit those peaks pretty quickly. That is their strength. The problem, the risk, will be held you keep the growth going . Right. How do you keep the growth going . Keep it going, keep down on your cost, and at the same time keep the quality, right steve . Right, those are supply issues. They will probably be less of a problem in the United States than globally. I think they will have a good handle on their supply chain and alternative routes for things that they need, but on the other hand, one of their big bonuses is their human resources. They just have a great teambuilding model. The people that work there are tremendously motivated. That helps to keep costs down. They do not have a lot of waste a lot of obviously, spoilage in their market, the Business Model. Yeah. I am not concerned about cost control given the supply chain and the team and the net estate. Globally, that is another issue. Steven carvell thank you so much, the dean. Susan lyne staying with me. A reminder, tune into danny meyer and andy joining me at 10 00 a. M. First. Bloomberg. You are watching in the loop , live on bloomberg television, and streaming on mobile and bloomberg. Com. Good morning, i am betty liu. Here is a look at the morning headlines. Fxcm wants to make sure no one can take control of the company they acquired. They are trying to claw back losses on the swiss franc. Jpmorgan made money, they did not. More bad news for beleaguered airbag maker toccata. It is the fifth u. S. Death listed linked to the safety devices. According to the lawsuit, the victim was killed due to a honda accord he bought in april. Costco spreads the wealth. They are getting rid of excess cash by report returning to . 2 billion to shareholders through a special dividend. The one time fivedollar share payout, is the first of its kind since december, 2012. In about two minutes we look at the latest raid on the strength of the economy as read on the strait of the economy as gdp numbers for the final quarter of 2014 are released. I jobs growth, high jobs growth, a foreign implement rate, a strong dollar is america rolling back . That is the question posed by the Bloomberg Economics editor in his cover story in bloomberg businessweek. Peter, is it . I am arguing yes. I am eager to see the numbers. I am sure people are glued to the Television Set to watch the gdp. They are glued to watching us. Things are looking good, partly in comparison to other companies. In the rest of the world, they are not looking so good. Europe is mired in the problem of deflation. Japan has good quarters here and there, like it probably had a good Fourth Quarter, but overall, deflation is going on there. You have special cases like russia, of course. Brazil is not doing well. One person i talked to adam from the Peterson Institute likened it to we are winning the least ugly contest. [laughter] all right, we are not beautiful, but not as ugly as the rest of them. Pretty much. The comeback has been wonderful. You cannot beat that and as you said in your intro, the economy is Strong Enough that the fed is starting to talk about raising Interest Rates and the same time the ecb is going into emergency measures that we dealt with years ago. They have been much slower to act, and that is the single biggest difference. I heard Larry Summers give a talk in davos where he said what the u. S. Did with a discontinuous process in 2009 thats that that set the stage for what we are now. Susan, you speak to a lot of investors. How confident are they to invest . You think they feel good, like the way peter is describing . I think they do. What is good is you see Consumer Spending coming back . That is the new piece of this. Investors have been confident for a while for a wild to consumer confidence, a sense that your jobs are going to come back income is going to grow, that is very new. Where did you see that . The consumer numbers show that. I do not want to be triumph is here. The u. S. Economy has a lot of problems. Median Household Income adjusted for inflation is lower now than it was in the year 2000. It is really unusual for the u. S. To go through a period of 15 years in actually going backward in terms of the purchasing power of the american household. It is a familiar story but a true story, it is rising to the top. I try to end on a positive note that says the u. S. Is a Creative Company that learns from its mistakes, and the hope is innovation can oh care that will bring prosperity cano kerr that will bring prosperity can occur that will bring prosperity. It will take a while. That is the hope, longer than we hoped, longer than we expected but eventually it said that should start accruing to the general public. The gdp numbers are out. Peter, i do not know about the eagle. 2. 6 is the first read. A little bit below expectations of 3 . Scott scarlet fu has some of these number is. The first gross best the first brush is the first brush is 2. 6 , lower than what analysts were looking or. They were anticipating 3 . Personal consumption came in higher than what economists had been looking for 4. 3 , when the consensus was for growth of 4 , and certainly a pickup from the prior quarter of 3. 2 . The adjustment for inflation no, 0. 04 . The number that people were fixated on the implement cost index, a broad measure of wage growth, and the Federal Reserve has really decided to scrutinize this because they want to see evidence of wage growth in the economy. Looking at that, 0. 6 matches the consensus. It is a little bit of a slowdown from the prior quarter read of 0. 7 . Scarlet fu, thank you so much. Scarlet fu at the breaking news desk. Peter, and susan, this is interesting it kind of goes into what you are saying, at least personal Spending Continues to rise, right . Economy might have been softer than expected, the Consumer Spending here, 4. 6 , that is not bad. No. Thats the number i am latching onto the number i am latching onto is the consumer index, which includes benefits as well as wages. It is probably a truer measure than the average Hourly Earnings number. To see that actually lower than the previous quarter is not strong pay growth. So, it is good if you are thinking that will postpone the fed raising rates, but it is bad if you just care about getting money into the hands of the public. Exactly. Getting this growth going and in a jobs market. One thing i was going to ask is how much of that was because of Seasonal Workers . I am not sure, but i think they are just for that. I know scarlet fu has some Market Reaction. I do. The 10year yield is heading lower. It was below 1. 7 before the release of this gdp number, and it is low of 1. 681 percent, the lowest since 2012. Peter, more detail on the implement cost index we gave you, 0. 6 for the Fourth Quarter, if you look at the civilian wages and salaries, it was a read of. 5 , which is a slowdown from. 5. 8 in the prior quarter, and even the previous quarter of 0. 6 . The wage increase that the Federal Reserve wants to see is not showing up in this implement cost index. I think the eagle is still roaring. [laughter] i think peter is going to stay the optimist. It was not just economy, guys. A military issue the grab a lot of attention lets bring you to vast these are not great numbers in the economy, but a little bit of joy. Interesting action on capitol hill. Senator john mccain hosting Henry Kissinger and Armed Services hearing, when protesters shouted out for Henry Kissingers arrest. The public in war veteran had this response. You are going to have to shut up, or we will have you i will have you arrested. If we cannot get the Capitol Hill Police in here immediately get out of here, you lowlife scum. Oh, boy. The guy is like i am not running for president again i do not care. I will say what i need to say and get these guys out of here. Peter, thank you. Peter coy economics editor. Susan lyne staying with me. Coming up, back to the u. S. Economy and the gdp numbers. I will sit down with jim bullard, the Federal Reserve president of st. Louis. And 4. 5 million how much advertisers pay for a 32nd spot 30second spot in the super bowl. Is it worth it is millions have seen it for sundays game . Welcome back to in the loop. We are staying on the markets. We had the first glimpse of fourthquarter gdp, a little worse than expected, 2. 6 , compared to the economist expectations of 3 . Scarlet fu has more on some of the stocks moving on these numbers. Expected, not just lower than expected gdp growth in the last quarter, but slower wage growth as well. A 0. 6 read. That start with a 10year treasury. The yield have come down. They hit the session lows. They have come up a little bit in that they are now at 1. 69 percent. It is the lowest level since may, 2012 and it reflects the global bond rally underway. Consumer prices plunged in europe. Wage growth in the United States has slowed down. It is not picking up. It is raising the threat of deflation. Investors are searching for any source of return. U. S. Treasuries on their own are not attractive, but the most appealing out of the rest of the world. If you look at the 10year yield across the globe, the united kingdoms 10year yield, 1. 68 . The night states with a 1. 694 percent yield looks pretty good the United States with a 1. 694 yield looks pretty good right now. Lets look at futures. They are pointing to a lower open. They hit the lows of the session after the gdp number came in. They bounced off of the lows a little bit, but it does look like we are set up for a weaker open this morning. It looks like we are. As we told you, google reported they are spending a lot on new ventures highspeed internet, Driverless Cars digital payments, and google glasses. Innovation pays, but it also costs. Our guest host, susan lyne, the head of aols arm that invests in womenled companies. How far into this venture are you . Five months. Next just five months just five months . Yes. What are you seeing . One of the things we are seeing is there is a flowering of womenled startups. There are a lot of weaning onto doing very interesting things. That was our premise going when in doing that women doing very interesting things. That was our premise going in. So, we thought by going after the 50 of the founder base that was not being focused on by the Venture Capital world that we would find a lot of opportunity, and that is exactly what we are saying. What are the companys you mention some of them. What are some of the ones you are most excited about now . Im excited about the companies that are building on top of the mobile ecosystem, which i think we will see for a period of time now. Obvious it, smartphones are ubiquitous now. That has created a whole nuvasive Service Organizations a whole new base of Service Organizations. Uber is one of them, but Something Like glam squad that is an area that will be very fertile. We are certainly seeing women valuing the time they can save. So, all of these things are built on mobile that do save you time. Another company that we invested in called gracious eloise has worked out a way to ingest, map, and then digitize your unique handwriting, so that forever after, you can send an email and he can be output as a lovely card. For people that care about personal correspondence, and i know a lot of us do it is handwritten . Perfectly handwritten. The thing i wonder about not just these companies, but others that i see get funded and funded to a great amount they all sound like great ideas and have great angles, but are they really great is this is businesses . Are they Great Companies . That is what we look for is there a really strong entrepreneur here who understands what it takes to build a company, and there are plenty of people that we see who say they have a great idea, that they have not built anything yet, and they do not have a track record so we definitely look for those things to see whether this person actually has the staying power. It is hard building a successful company. It is never a straight line. So but, is the trend now that a lot of great ideas get funded no, no, no. There might be good lines of a business, but is there an Actual Company that will flourish into an aol . That is another thing you need to look at is this a tool that should be part of a larger company, and will never really, get the kind of traction you need in order to build a brand and the business and is it something that you can actually defend, or can 100 other people build the same thing very quickly . Right. Those are all things you take into account when you are looking at whether to invest. Susan, stay with me. Were talking real estate. Susan lyne of bdg ventures. We will also talk about new York Real Estate and a classic question should you rent, or should you buy. We all think about that here in new york. We will be the. Lets take a look at our world News Headlines this morning. A group linked to the Islamic State has taken credit for an attack in egypt. Egypts president has cut short an afternoon in summit to deal with the attacks. Highlight air might have caused pilot error might have caused the crash of airasia flight 8501. There was a cut in the system shortly before the plane plunged into the java sea. All people on board were killed. In paris, a traindriver strike brought chaos to the busiest commuter lines. All of the trains on the line that cuts across the french capital were suspended. Drivers called the strike after one of their colleagues was assaulted by a passenger on wednesday. That is the latest world news. We will have more coming up. Turning back closer to home, anyone who lives or works in new york has noticed the rising grain count crane count with new apartment buildings going up, from highend condos to the more affordable, new york city is under construction, and is my next guests job to sell new york. Ryan serhant is a Real Estate Broker whose team at nest seekers sold half 1 billion worth of homes in 2014. He is with me this morning. Susan lyne is with me as well. She is a longtime new yorker. As her condo here in new york city. Good. Right, good. There are more condos coming up. Is that a worry here . Quickly depends on who you are asking. If you are asking it depends on who you are asking. If you are asking buyers, no because instead of looking at one new development, they can look at 15. We had about 2500 new condos come to market south of 96th street in 2014. Is that doing something to prices right now, or have we not seen the increase impact yet . Not yet. People are talking about it and thinking about it. Thinking about it. We represent development. People are taking their time. We brought a project to market in the far east village, seven street between c and d, where you were not see that much activity, but an in to an half weeks we have put 1500 people into contract. That is incredible. When i worked moved to new york, that was an area you just stayed away from, and the fact that it is now a destination for a highend condo is proof of what has happened to the city. Susan, do you ever want to say i am going to cash out and go . You must have made money on your condo, right . I did, it is actually a coop. I live in the upperupper east side, carnegie hill, which is landmark, which means you do not get a lot of these very highend new condos moving in there, but i adore my apartment. What happens when another bubble burst, ryan serhant . We saw the financial crisis and wall street burst. People are saying the tech bubble might blow up pretty soon. What is when you happen to prices here then . I think you might see a miniature get for a moment bit for a moment because of the ripple effects because people will say what do i do but there is always something going on in the world whether it is the ruble, the euro, the price of oil, something happening on the home front. New york city is this big. If you want to be in soho, theres only one so how in new york city soho in the world in new york city. You just bought in soho right . . I did. Thank you for mentioning that. I have a fiance that has very expensive taste. I cannot believe i just said that. [laughter] you talk about being in cardiac hill. We are bringing a lot to a market in the far upper east side. One of my developers does a lot for boutique condominiums. We have one on 82 and east end, and we are keeping droves of people away so that we can show the apartment in a timely fashion. It is four units, where you can get a fourbedroom for 4. 7 million, where around the corner, you could get a two bedroom 44 . 5 million on the fourth floor. For the viewers that are not in new york, those saying this is getting to minute, what about other cities around the country i have heard miami, for instance, is also getting to frothy levels. At some point, will we see a reversal in some of these other cities that have seen prices skyrocket . I like to look at history as a pretty good indicator of what the future will bring. History shows that whatever market we are in, it is never just like this, even though people wanted to be. There will always be dips, and people buy and sell in every type of market. Miami is very big right now. There are people from all over the world coming to miami, because there is beautiful product, but once it becomes too much of it will slow down, just like it will in new york, los angeles. Miami has the one thing new york does not the nice weather. I am always reminded of that. Ryan serhant thank you. Million dollar listing new york. Also, susan lyne president of aol bbg ventures. We will be back in two minutes on in the loop. Coming up, st. Louis fed president jim bullard is in the loop. We will ask him how patient he is when it comes to the deadline for raising rates. Will he be watching the super bowl or the commercials . Advertisers might be more nervous than the players. We will tell you why, next. Welcome back to in the loop. We are 30 minutes away from the opening bell. Futures indicate stocks will open lower this morning and the u. S. Economy expanded at a slower pace than advertised than expected. Economists expected a three point zero percent a 3 advance. Interest rates were cut by the ecb citing concerns over a looming recession. Russian rates were cut by the central bank. They said it concerns over a looming recession. The most in the ruble lower against the dollar. Net income at the secondlargest u. S. Payment Network Jumped 21 to 881 million. Eps of . 69 came in ahead of estimates. Analysts expected 67 . Senate republicans have approved the keystone xl pipeline. The vote sets up a longawaited fight with president obama who promised a nadal. Nine democrats joined. Differences have to be resolved before a final version is sent to the president , which he has said he will veto. It has been a bumpy week on wall street with investors looking for earnings and clues on fed policy. Policy makers call expansion solid and the central bank remains on track to raise Interest Rates this year. The one caveat is a renewed focus on international development. For more perspective, we are joined by jim bullard, the president of the Federal Reserve bank of st. Louis, and also Bloomberg Economics editor Michael Mckee joining me as well. Jim, starting with International Developments as we have heard for the first time, it seems that policymakers are aware, and more aware of what is going on overseas in terms of factoring that into their own forecast, right . You see what is happening in russia. Russia surprise virtually every economist by cutting Interest Rates two percentage points. Would you make of that . Well, i do not know about the russian move in general, but certainly the fed paid a lot of attention to Global Development all the time, and we made a small wording change in the statement. I think that is just reflective of the fact that we are always talking about the global economy, and how those factors are going to come back and affect the u. S. Economy. If you look at past minutes from the meetings, there will always be talk about various economic developments globally. So, i think the changing of the statement on that phrase is just a reflection of the reality of the discussion around the table. You have gdp lower than forecast. Inflation low and unchanged. Market expectations are falling. Turmoil in europe. Why is the fed still on track to raise rates . Quite tough travel. Boy, tough travel. [laughter] exactly. That seems to be the feeling. 2. 6 on gdp is fine. That is the tracking estimate. We will see if revisions move it higher or not in the coming month. I think there is a lot of underlying momentum in the u. S. Economy, and that shows up in the jobs numbers, which have been strong. We have had one of the best years for job growth in 2014 since 1999. Unemployment all the way down to 5. 6 . I now think unemployment will go down to below 5 by the Third Quarter of this year. There are a lot of good things going on in the u. S. Economy. I think the gdp number is one morning a string of positive developments for the u. S. Can you raise rates with headline inflation falling, or even stable at around 1. 5 . I think as long as we feel confident that inflation will go back toward target, and right now that is my baseline projection that in inflation will go back toward target, i think we are certainly able and willing. Zero Interest Rate is not the right Interest Rate for this economy. We are much closer to goals that we have been in a long time. Inflation is a little bit low, but it is not low enough to rationalize the zero Interest Rate policy. That inflation gap could rationalize somewhat lower Interest Rates, but he cannot get you are going on to zero. To zero. Zero is a long ways away from normal. That is why i think there is some pressure to come up off of zero. Even if you came off of 0, 50 basis points, 75 basis points he would still be low level, extremely accommodative, and mean moving back for the inflation target. These are unusual times jim. Is it possible the dollar might be doing the work for the fed right now . What is the dollar doing, do you think . The rapid strengthening over the last several months, right . Sure. That has an effect on camping any type of Inflation Expectations, right . I think the dollars move over the last two years is not surprising giving the given the specter of the ecb quantitative easing. Not a lot of people expected this dramatic of a step care the probability kept rising that the ecb staff. The probability kept rising that the ecb would come up with a largestyle program. That has cap global bond yields down. That is an unmitigated good for the u. S. It means lower Interest Rates in the u. S. On top of the momentum that we already have in the economy. We have Lower Oil Prices coming in. That is helping the u. S. Economy. I think there are a lot of bullish factors for the u. S. The natural consequence of that is the euro will be weaker the dollar will be stronger, but that is reflective of good Economic Conditions in the u. S. Markets are pricing in that the fed waits until, some people say, 2016. What happens if you wait until you see the white of inflations eyes . Do you risk a bubble . It is a hard decision this year, and i do not envy our chair, janet yellen, having to pull together all of the disparate voices on our committee. One of the risks would be you get later this year, unemployment come down below 5 inflation has stabilized, and started to move back up. If we have not moved by that point and inflation is pretty close to 2 , unappointed is below 5 , unemployment is below 5 , people will say we are behind the curve. We will have to aggressively at that point. That kind of dynamic is not a good one for the central bank. If i were going to play it strategically, i would just say i would rather get off of zero sooner, and then have more flexibility to go slower and react to data. I think that would be the more prudent way to go about this but i do not know how the committee will go down. What possibly could change your outlook, change your mind on this, jim . I am concerned about Inflation Expectations. I do take them very seriously. I think right now, the Oil Price Decline has been so dramatic, and this is no ordinary oil shock. It is a 50 drop, and it looks like it is going to be very persistent. That huge drop in oil prices is probably contaminating the measures of Inflation Expectations coming from the tips market. You would expect the oneyear the twoyear to be affected, but this is affecting way out, five years forward. That should not happen. We will have to let the oil market settle down, stabilize at some level. Once that happens, we will go back i will go back and look at longerterm Inflation Expectations, and see what happened. I would expect them to gradually come back up. We will see. If that does not happen, i would get concerned credibility was eroding and markets were starting to doubt our ability to hit 2 inflation, which they should not do, because we will hit 2 inflation. Quite without simplifying without supplying this too much are you saying giving the oil shock, it is clouding the outlook on inflation and causing some uncertainty for you . It is clouding the outlook on inflation itself, which we can talk about, but also clouding the outlook for the implementation Inflation Expectation measures. The fiveyear oil shock should not affect prices today. It will have sorted itself out by that time, but it is being affected. I want that affect to get out of here, go away, and once that does, we will see if expectations go back up. You have said that the past is what matters with Interest Rate right now. What is the terminal rate a normal fed funds rate or market rate for you know . You now . I think it might be slightly less than 4 , but i would not go a lot less than 4 . Really . You have a lot of people saying there is a new neutral in the country. The idea that we know, all of a sudden, the longterm real rate is lower for decades to come i do not think we really know that. So, the best thing to do is go by Historical Data maybe shade it down a little bit, and then add the 2 inflation to that. You will get something close to 4 , maybe a little under 4 . Given your forecast for unemployment, how fast do you need to go up . That is a great question, and that will depend a lot on the data on inflation and Inflation Expectations. So, we will have to play that, i think, by ear as we go along. How confident are you in your forecast given the crosswinds out there . Very confident. [laughter] forecasting is always as it is. You have to keep in mind, no matter who you are, you put out a forecast, you know youre going to be wrong, because that is the way the macroeconomy works. You have to learn, in which direction where we wrong, and how should i shade to learn from that. It is a wild, bucking bronco, to try to forecast the u. S. Economy. You hope to be less wrong when you put out these forecast. Less wrong, yes. Thank you a lot, jim bullard, st. Louis fed president , and also thank you to Michael Mckee our economics editor. We will be back in two minutes on in the loop. Welcome back to in the loop. We are about 15 minutes away from the opening of trade. Lets count you down on the top headlines. Matt miller and alix steel germany. Amazon pulls out a profit. Jeff bezos made no promises he would do it again next quarter. Results sent the online retailer shares shall soaring. I have to credit my dad. He is the perfect example. For the profit . He signs up for amazon prime, forgets that he has to pay for it, but he has to pay for it because he really likes transparent. I do not think they are making that much money on prime. The truth is they are not making money at all. 30 billion in revenue and you make 200 million . That is a profit . Technically, it is a profit. For the full year, they still made a loss. If you bring home 30,000 in salary, and at the end of the year you have 200 in your wallet, do you feel you have saved a lot of money . That is the same proportion. Except when you are amazon. They are not making money. No, they are not. That is true. Google missed estimates largely due to stiffer mobile competition. Companies like facebook are eating into googles advertising business, driving down the average price of ads by 3 . Did you read the Bloomberg View article today where katie compared it to berger murders . She set burgers . She said you go to room service it is ok, but if you want a really good burger, you go to in and out. If you want a company that is really sexy, you do not go to google. You go to a company like grow a startup like go pro. That sounds interesting. I will check that out. What is interesting is google is getting knocked for spending too much on that project like google glass. Google spent almost 7 billion in capx. A lot of people have been waiting for this corporate shoe to fall, but we see a lot of investment. Amazon always does that. Google is doing it here a lot of companies are getting a disappointing bottom line because they are investing a lot in 2014, and they hope it pays off in 2015. What is not paying off is the currency market if you are fxcm or the currency brokerage lost more than 200 million after the surge in the swiss franc potentially making the for more vulnerable to a takeover attempt. Yet another fall out at they lost a whole quarter of amazon profit. [laughter] that is exciting. This is a huge company. Onethird of the loan they got from leucadia, with a coupon of 10 , that goes up to 70 , so citigroup analysts said the stock is worthless. 17 , sioux city so citigroup analyst said the stock is worthless. Who will want to buy them . Why . This is a Business Model that is convincing you you can make money daytrading currency. I then message if you are a we tell investor, you cannot. That was really good timing. On that note, the Global Market bond market is starting the year off with a bang. U. S. Treasuries and european securities have gained 1. 7 this month, making it the best january on record. Is it going to hold in the bond market . Betty, you keep bringing this up, how all the Central Banks around the world doing Different Things make it a risk for investors and you keep asking people where are they seeking safety. Do i keep asking people that . You do. You see yields go down because people are so scared. I was shocked to hear tom keene this morning on surveillance in the data check quote the 30year bond, and he said i am not talking about the 10year. This is the 30year the long bond, 2. 9 . As scarlet fu pointed out significantly better than german balloons german bunds. I feel like i refinanced my house too early. Yeah. This is a question a lot of people are wrestling with right now. Do we refinance again . If you refinanced a couple of years ago and you got down to 3 flat, four and three quarters do you do it again . Hes a great times to be a homeowner, to be borrowing money. You can get a loan. We are staying on the market after Russias Central Bank unexpectedly cut their benchmark Interest Rate to full percentage point. The ruble is sliding on that news. We will bring you the latest. Time for a look at how Global Markets are doing today. Here, stocks have declined. The rise is due to the russian centralbank cutting Interest Rates. The rate is also hitting the ruble, sliding lower against the dollar. Greece down despite the new antiausterity Prime Minister promising not to spring any surprises after a volatile start to the week. All right. Look, i mean we have seen well, equity futures are a little bit lower. You know, it has been a volatile week so far, given what has gone on overseas. It has been a volatile week. There was a slaughter on the day of the great blizzard of 2015 and the next day we were also down 200 points. Yet yesterday, we thought we would see a dead cat bounce, or little bit of a bounce, but down again. I am not sure if russia is cutting all of this, a rate cut from 17 to 15 . I look back to last thursday with the announcement from the ecb were stocks turned lower. What is that same question what we look at this liquidity, perhaps not see the bank lending . Ok. Our top story and the opening bell that is next. Welcome back to in the loop. Lets get back to bring you the most important stories you need to know before the opening bell. Matt miller and alix steel joining me. Number one, who does not like a good buger . Burger . I am so hungry. Shake shack pricing and 21 a share, above the range of 17 to 19. We will talk to founder danny meyer and ceo randy garutti. I am super jealous. The New York Stock Exchange has proven itself to be among the best venues if not the best venue to ipo and raise money, but the secondbest thing the new york state the New York Stock Exchange does is eat. I love it when a Company Dunkin Donuts goes down there and brings hundreds of boxes of donuts i guarantee they bring thousands of burgers and fries. Not to make this too nerdy, but speaking of burgers, to if you look at what happened with mcdonalds and shake shack, it is fascinating because mcdonalds started their own business on burgers, then they got so big. Now it is about those companies that do one thing really well, like shake shack, like their burgers. The income inequality disparity issue, it is amplified by the idea of mcdonalds and shake shack. On the onething issue i think you are right, because the shake shack menu has 40plus items or so. The problem with mcdonalds is their menu is now 120plus. Also, the burgers are delivered already cooked. They hand them to you straight out of the delivery truck. They are not fresh. Why are there so many mcdonalds haters . I will give you a mcdonalds burger, you do a sidebyside david, we just heard from his jim bullard. She told us he told us he thinks the economic fundamentals in the United States are for a rate rise in june and july. A do you feel confident that is going to happen . Im not confident it is going to happen but i do think it is probably the right move. I do agree the rate of growth in the u. S. , which we project to be 3 this year, justifies the beginning of a liftoff. After todays gdp number and the latest round of monthly data, the fed can justify post coding it as long as they want. I june or july would be appropriate. Amazing we have been talking about this for a wild. Maybe if they do it at all this year, why would todays gdp data and the other spending information we got in really worry you . Considering the job considering the strong gdp quarters, dont you expect a big bounce back to the u. S. Economy from this not a very weak report . To me one of the big bulls is going to be what happens with wage pressures . I agree the decline in Energy Prices is making the drop in cpi i think wage pressures is going to be a, bigger variable especially as you drop below 5. 5 . The fed understands that these things get baked in. I think they want to be a little bit vigilant. At the very least they want to move the ball of normalizing should forward. Going from 25 basis points to 50. Not going to have a big Economic Impact that it does allow them to begin the process of restocking their ammunition. I have to wonder, will the fed be successful in diverging what the ecb is doing and helped inflate the u. S. Economy, or do you think it will be tracked down . I think they certainly will lend themselves to a firmer dollar. If we can get the eurozone growing, it is eight tenths. If they can do 1. 1 this year and gain some traction then that is going to help us. Isnt that the goal to lower the euro at the end of the day and inflate the u. S. Dollar . Them i think that is part of it. The euro has dropped quite a bit. It is a question of making sure there is enough liquidity in the system and theres confidence that enough financial activity can take place. We have seen a big drop in the euro. Werent you much more bullish on stocks several months ago . You have a price target of 22 50. I get the sense that maybe you are sticking to it but a little less sure about it. Im. As we are starting to see earnings expectations come down. In the aggregate that may knocked down my expectations for Earnings Growth this year. We had very good Economic Activity in the u. S. Not a very good aggregate Earnings Growth. If earnings continue to come down, that is going to be a point of adjustment. Concern that the drop in the oil price will be in negative for the u. S. Economy, rather than an overall positive . We see the counts down 15 from their september peak. That is a small part of the economy in the u. S. The benefit to consumers more than offsets that. The cbo said a net positive of 3 10 of 1 . I think it is decidedly a net benefit. Thank you so much. Im going to head down to the New York Stock Exchange. What am i talking about . Alex is going to be taking over to talk with danny meyer about shake shack and the ipo, which is going to the first price will come out at any moment. We will keep you updated on which stocks are moving this morning. Between the halftime show and the ads, who is watching the super bowl anymore yet go we are going to get behind the money going to get to the money behind those ads. Welcome back to in the loop bang two in the loop bang to inin the loop. Our chief market correspondent scarlet fu has more. A mixed day so far. Only to members are higher. America next rest just rarely. 28 members down and only two members higher. All this perhaps a sign that the global slowdown is a drag on the u. S. Amazon bucking the trend by 12 . That is the biggest rally since april 2012. Earnings coming in higher than anticipated. Amazon likes to underpromise and lowball the forecast. A big blizzard tumbling in the early trade as it cut its forecast. Let me just mention this really quickly, treasuries are rallying across the globe. It was 1. 72 . Got as low as 1. 6635. That looks a lot better than the german i want to talk about the surprise rate cut. It is still 15 Interest Rate. It is, but the move is what surprised analysts. They are willing to risk more inflation to stabilize the economy and pull it out of recession. You are seeing the ruble weakened against the dollar. That is the worst level since middecember following a surprise rate increase. The etf that tracks russian stocks is trading lower. It is almost at a fourweek low. If you look at the russian stock, it has risen about 15 in the last three months. The etf has struck 32 in that time. Them our chief market correspondent scarlet fu. Then he meyer and the company just rang the bell at the New York Stock Exchange. The highend burger chain of raising 500 million in its ipo. About 15 minutes away, on the burger he today. It is never too early in the morning for a shake shack burger. Think about the timing of this. Two days ago the company goes through the worst slump in a decade. Moving it fast casual is a hot ipo. People love what they got. They always talk about calories. Mcdonalds is so unhealthy. You want to tell me a milkshake and a burger from shake shack doesnt have a lot of calories . It is the speed and the small items. They want to eat hamburgers. Shake shack is a different option. You can look to the right and see a shake shack and look to the left and see a mcdonalds. People who are antigm lows, who want to give their kids the best thing they possibly can im not saying your kid needs to be vegan. If people have a healthier option they are going for it. You are still feeding your family mac cheese, but why not feed your family with that of ingredients . It is something mcdonalds has struggled with. You dont get the drop of the happy meal. Then im going to pretend that is not going to happen. Burger beat on market makers. Speaking with danny meyer in the next hour, the founder of shake shack. One of americas favorite stocks is hitting an alltime high. Scarlet who has a name. Take a look at apple shares. Beating the previous high of 119. 80. We are looking at brandnew highs. Of course it comes on the heels of blockbuster Earnings Report earlier this week. There is no shortage of people lining up to buy the apple iphone six plus. Super bowl weekend is finally here. This year 4. 5 million for a ready second spot for a 30 second spot. It is one of the mostwatched Super Bowl Ads in that amount of time. One of the creators of that bmw ad is the ceo of kbs. You put out the ad. 5 Million People see it. Do you care about sunday . Sunday is the day you have 100 10 Million People tuning in. It is the one time of year people are so engaged they care about the advertising. What is pretty funny is the beginning of it is old airtime from the 70s. We have a famous and fantastic creative department. You start with hundreds of ideas and you go through them. We sat there and we went through this. This one just stuck out. We found the clip on youtube. Then we started talking about how we wanted to end the spot. You go through many concepts that this one cap sticking out. When did you start working on this . Months ago. What is the risk in ads . You take a look at the go daddy ad. What is the risk . You have to do something that is on brand. You dont want to lose sight of what your brand stands for. That is what we want to be careful or. Bmw has a long history and heritage. Talk about bmw, 11 Car Companies advertised last year. Now it is only five. That says the power of having that 4. 5 million spot is eroding. You see cycles. You see the oems come in and out of super bowl. A lot of it has to do with what products do they have coming out . Lost super bowl is the most important marketing moment in the calendar when it comes to viewership, there are other agendas and strategies. Talk about strategy in terms of releasing this commercial early for the super bowl. We do holistic approach. We wanted to talk about this before the game and after the game. For us it has been successful. Google and youtube reached out saying this is moving at speeds we havent seen before. Lets start the conversation early. You have monfils coming out. That was probably the most talked about ad that year. There was a a lot of planning. There was a room full of people that were waiting. Agency folks were ready to take it vantage of something. There was a lot of preplanning that goes into Something Like that. Do you think that will erode your business . It is incremental. The media landscape has changed and people are on different channels at different times. You are going to try to support these ads in realtime . We have a really fun easter egg i will tell you about in the spot. People can reach out and there are fun prizes and engagement. People will be watching in realtime. Congratulations. It was pretty funny. Thanks first thanks for joining us. On monday, ken feinberg, the money guy, he is he joins us. We are going to get the latest on that compensation case. You can join us monday at 8 a. M. Eastern. Have a wonderful weekend. Bloomberg televisions on the market. It is the final trading day of january. Take a look at the Dow Jones Industrial average. U. S. Gdp came in weaker than anticipated in the Fourth Quarter of last year. Not a huge selloff. There is also buying into u. S. Treasuries. A global on the rally underway. That is a 20 month low. Returns are higher than 18 developed markets. The russian ruble weakening beyond 70. Lets move on to etfs. Investors plowed a quarter of a trillion dollars into Exchange Funds last year. 5 trillion in the next five years. Here to look at how investors can get a piece of that etf boom is bloombergs senior etf analyst. We joke around about how there is an etf for everything. Them it is true irony. There is an etf for smartphones, for cloud computing, but not for coming back from the big conference there is an etf conference. There was a talk that a lot of talk about growth. Double line was there jpmorgan, and what these big players are interested in is it took etfs three years to reach one trillion but it took four years to reach 2 trillion. There are estimates it will reach 5 trillion even faster. Investors are looking to play this. One way to do that is through single stocks. Wisdom tree is an an interesting one. Wisdom tree is the only publicly traded company that only does etfs. Thats it. This is a unique strategies the asset that unique strategy. Their stock prices followed. It is up to 700 . This year it is up 13 were the market is down. Clearly a lot of investors are getting in here. It is definitely a growth stock. This country has 17 etfs. Definitely a company on the move. Is a much bigger name in the business. Blackrock is a way to do this. One trillion of that is etfs. They are the big fish. Global reach. I will also give them a lot of fight. Vanguard took the most money of all providers. People thought they were going to take the most money from here on out. They taken the most flows this year. They are on the upswing of that. It is a growth area. Are there any nonus companies . Sources one of those. The reason i put schwab in their is a twodimensional play. 70 of the assets are in the u. S. They also have the Commission Trading platform. Waiting for the next big conference. Market makers is up next. It is like the 19th century. Americans are dying from measles. Find out about the risk to your health and economy. There is a new burger king in town. Shake shack is worth 750 million. He is going to be celebrating his ipo right here. Remember the budweiser puppy echo how do you follow the most popular Super Bowl Ad ever
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