Transcripts For CNBC Street Signs 20170616

Program walks on two legs, the leg of policies and the legs of debt sustainability. Autos power ahead at the open after european car sales get back into gear with a near 8 rise in may, while the steam comes out of the tech selloff. Nestle loses its sweet tooth as it looks to sell 900 million u. S. Confectionary business in a potentially significant effort to focus on its health strategy, sending the shares higher. Uk chancellor Philip Hammond is arriving in luxembourg. Lets get out to willem. Thats our main dominating theme today, it will remain so over the weekend as bodies are recovered, we start to get a sense of the scale of the tragedy. My presence here today is a sign of other continued engagement with the European Union while were members of the union, its a sign of our commitment to being close partners with the European Union after we left and i can confirm that as we enter negotiations next week, we will do so in a spirit of sincere cooperation, taking a pragmatic approach trying to find a solution that works both for the uk and for the European Union. Can you confirm a couple other things or give clarity, the negotiations are three days away many things are unclear from the uk side. Should we start with Single Market membership . Do you think the uk should be seeking Single Market membership we set out our position in the speech the Prime Minister made at lancaster house earlier this year and our long and detailed article 50 letter which we sent to president tusk. Thats the day wbasis on which give our negotiations. These are broad principles. Should the u. S. Be in the Single Market or not . We set out the broad principles, but we will negotiate in good faith. There will be an exchange of views and we will take that forward. You put yourself as an advocate for softer brexit, others in your party dont share that view, Prime Minister theresa may is looking to form a consensus. Do you think your view of softer brexit will mprevail, particularly with jobs versus immigration . Were just about to start negotiation. We set out clearly our desired outcome in the Prime Ministers lancaster house speech and in the article 50 letter that weve sent it is a negotiation. As we go into that negotiation my clear view and the view of the majority of people in britain is that we should prioritize protecting jobs, protecting Economic Growth and protecting prosperity as we enter those negotiations and take them forward. Thank you very much. That was the uk chancellor speaking at the arrivals at luxembourg well head out to willem marx in a few minutes time before that, a quick look at what the markets are doing. Were modestly higher to the tune of a half of a percent. The stoxx 600 is seeing 8 2 gainers as opposed to losers on the stoxx 600. When it comes to the single European Equity markets, were seeing reversal of yesterdays trade. The ftse 100 up by a quarter percent. The dax up by a third of a percent. Were also seeing some stronger gains for the cac 40 and the ftse mib a lot of it is drive bin whatn s going on in the sectors. All the sectors are in the green. Some outperformers here are food and beverage. Autos also doing well. European car sales rose nearly 8 in the month of may rebounding after a dip in april and nearing precrisis levels. Nearly all manufacturers posted gains with suzuki and toyota leading the charge with sales growth of 21 and 20 . Germanys daimler outperformed its european peers with a 14 rise in volumes. However speaking on cnbc earlier, schroeders fund manager said investors should be cautious about the auto sector now. People will start questioning closely the value of the residual assets, be it housing, cars or whatever theres no doubt that we are seeing a bit of a slowdown and o cheap credit now whats the value lets get back to the brexit talk cls are ss which are set tn monday david davis and Michael Barnier confirmed the talks after preliminary talks in bristles. Willem sat down with Christine Lagarde and asked for her view on the potential economic difference between hard and soft brexit i think its the big difference between the unpredictability, the uncertainty, and thats the crash situation that you describe, and a predictable transition towards a new status. Whats more predictable, more certain, can be calibrated, anticipated, transitioned, it will be more reliability and safer for the people and for the economy. You talk about certainty. With the uncertainty weve had in the last few months in the uk, weve seen currency volatility, weve seen rising inflation, weve seen a slowdown in job growth, Retail Consumer spending falling recently. Does the imf expect more of those kinds of slightly negative Economic Indicators as those negotiations start next week we need to better understand the terms under which this exit is going to take place for us to forecast the Economic Development going forward. Thats very premature for us at the moment essentially impossible at this point, isnt it difficult let get out to willem who is in luxembourg and did this interview. What else did she say . The big talking point was greece yesterday. Yeah. Thats right on the greece side of things, there was a positive development with this latest amount of money being released, 8. 5 billion euros that will allow the greeks to enjoy their summer somewhat, but said there was quite a lot of work to be done before they could agree on what debt relief would look like. The imf, though theyre involved in the final year of this particular bailout, they will not get involved in lending more money unless the europeans can get the greeks to agree on the debt relief theyre talking about. What we just saw this morning was the british chancellor, Philip Hammond, walking in with other European Finance ministers. He was asked a direct question about british membership of the Single Market and he completely dodged it refusing to answer the specifics as to whether it was now a guiding principle for the uk that they would or would not remain in the Single Market at the end of these brexit negotiations clearly wanted to keep his options open following the election very frustrated that he cannot be pinned down on specifics about Single Market membership is it because he simply doesnt know i know hes a defender of the softer brexit approach but he probably simply doesnt know whether the uk at this point will or will not be remaining a member of the Single Market should the uk be surprised when we hear from Michael Barnier that theyre not clear what the uk position is if the uk is not able to expound on that here. It was a remarkable moment for me to see him not give any clarity just three days away from negotiations that have been months of preparations ahead of the them he also said we will lead a pragmatic and cooperative approach to brexit talks does that sound conciliatory to you given that no real government is in place yet, no real government with clear majority and we have not heard the queens speech yet do you think that maybe these tones are a bit more conciliatory towards the eu . Its a long way from theresa mays comments about no deal is better than a bad deal he definitely made no illusion to that kind of outcome. Clear lit government seems to be hedging its bets it makes it difficult to be sitting across the table from them as we lead up to the queens speech to get consensus within the cabinet and the conservative government about their position, im sure well ourselves get more clarity by next week. Lets hope so willem, thank you very much for that enjoy the sunshine in beautiful luxembourg email the show streetsignseurope cnbc. Com you can also find us on twitter, streetsignseurope cnbc you can tweet me directly as always i love seeing your tweets, carolincnbc we will go for a quick break. Well revisit the topic of greece a deal with creditors is struck, but theres still a lot to be discussed. Stay tuned for the details after this short break whoooo. Youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if there was a single site where you could find the right hotel for you at the best price . There is. Because tripadvisor now compares prices from over 200 booking sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. The future isnt silver suits anits right now. S, think about it. We can push buttons and make cars appear out of thin air. Find love anywhere. 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Investments in other product areas the nestle ceo told cnbc in february that he was open to strategic m a opportunities. The new ceo is no stranger to m a based on his previous role at the german healthcare company. Greece and creditors reached a deal to release the next round of its bailout the agreement struck in luxembourg will unlock 8. 5 billion euros in loans, but a decision on debt relief was put off until next year i want to bring some comments from mr. Tsipras i sahe said the european outcome is a step to end the crisis. He said it helps to instill confidence in the markets. Also that we must work for the recovery of the Greek Economy. Willem smopoke to the European Commissioner commissioner, pie year moscovici earlier this morning everyone was ready for taking decisions that are positive as well for greece and the eurozone we had to see that the efforts made by greece to reform its own economy were really important. I would even say impressive. So the review had to be concluded. Then it had to lead to disbursement, but disbursement only made sense if it was accompanied by a plan to foster growth, strengthen growth in greece and the comission is there to help for that finally on that we have found also a good agreement, even if it is in principle for the imf, which puts the imf on forward, and it is the best agreement weve had for quite awhile and it gives us the perspective now to end the program in time and then go to a Greek Economy which would be a normal country inside the eurozone, postprogram country and more than anything what we have in mind is the fate of the greek people, there should be a perspective for them for growth, jobs, social fairness. Yes, today we see the light at the end of the tunnel of uncertainty. Thats good news for greece and the eurozone. Willem also spoke to Christine Lagarde in luxembourg and asked how greeces debt sustainability could improve debt sustainability is defined by the service of the debt, the growth forecast that we have for the major and longterm, and the primary surplus that they are committed to delivering. Its a combination of that that defines the debt sustainability of the country was we feel will be needed is deferral of interest, extension of maturity. Mechanism by which there is an adjustment based on growth which is interesting and certainly compliment well the proposal that we had. This is where further discussion and negotiation is needed. Let me show you how this is impacting the bond market in greece and actually were seeing yields lower across the board. The tenyear yield dropped by as much as ten basis points 5. 737. Some people say that greece will return to the markets once the costs for the tenyear fall below 5 i guess were not far away from that point for the twoyear and the fiveyear weve seen drops in the yields of 2 and 5 basis points quite a a big market reaction. Lets get out to a professor from the London School of economics. He joins us on the phone thank you for joining us, mr. Pissarides whats your reaction to the deal its a good deal under the circumstances. Im very positive about linking repayments to Economic Growth which is a proposal that i and others have been making for a long time. Rather than requiring the greeks to repay a certain amount of debt independently, to link it to performance of the economy. If what la guard was saying, had that been adopted it would have been more positive payme we know germany has stronger position to that what they adopted is the next best thing, which is the french proposal now to link repayment im interested to hear what the economic commissioner was saying hes been there for a long time under Hollande Hollande wasnt saying positive things suddenly macron is there he started saying this positive thing. Then well help greece i think its the first example that we see from macron about his pro european stance that hes going to take what he said in the Election Campaign i think thats positive, not only for greece but for europe as a whole that theres now a french president who is prepared to present the alternative line about european and eurozone alternatives to the german one it will be interesting to see developments over the next few months theres been a lot of opposition in germany when it comes to debt relief we have german elections coming up in september. Do you think a final deal on debt relief between the eurozone and imf will really only come after september . I think definitely after september and in fact it may not be soon after september. Finally after september the deal will come at the end of the program in july 2018 if a change of government is there, then there will be a deal soon after, i think. How significant is it that the imf is on board, not fully yet on debt relief, still waiting for more details from the eurozone peers, but we have this 2 billion euro standby agreement. Something that the imf was not willing to grant over the last two years. How significant is that . Its quite significant because it is telling us that the imf really believes there will be a deal otherwise they wouldnt be there waiting. Its like they must have been given or expecting themselves of giving assurances by germany in particular but also the euro group that there will be a deal given the way that the greek government has been behaving i would interpret that as being positive not as positive as if the euro group had accepted immediately what the imf proposal is, but, you know, the imf is not its not an institution, particularly Christine Lagarde, they wouldnt be there if they didnt believe there would be a firm expe expectation of a deal and greece could come out of the markets in 2018 quoting mr. Tsipras this morning, it helps instill confidence in the markets. At what point do you think greece will be able to borrow from the market again . How many years are we away from that we are years away so in 2018 they wouldnt need another program. I think they have a good chance this time. Theyve done the structure that theyve had to do. Theyve done enough so that we should now be seeing some growth coming into the economy. What the economy needs is new investment and that is the biggest failure in my view of the euro group agreement, in that they didnt provide more funds at least they didnt relax the budget that they were imposing, so as to enable the greek government to invest in Infrastructure Projects following investors, especially the chinese who are including greece into the one belt one road initiative, they already invested heavily elsewhere, once those big investors come in, then greece will definitely be able to come out into the market and borrow that will not happen before the end of the program in 2018 im optimistic that there will be a kind of cattalyscatalyst a very big change investoror maybe europeans will be will be a good deal so that grease can reduce the budget surplus, investment will come in and the economy will recover and suddenly many people will be prepared to invest in reece. Sir christopher pissarides, thank you very much for your insights much appreciated we will go for a quick break check out World Markets live which is our blog that runs throughout the european trading day. Well be back in two hello. Welcome back to street signs. Im carolin roth these are your headlines pragmatic protectionism. Philip hammond says the British Government will negotiation brexit in good faith, but that safeguarding jobs and prosperity should be a priority another lastminute lifeline for greece eurozone finance ministers unlock a deal for 8. 5 billion euros of loans for athens. A lot needs to be clarified and improved as far as debt restructuring. I always said that program walks on two legs, the leg of policies and the leg of debt sustainability autos power ahead at the open after european car sales get back in gear with here 8 rise in may, while the steam comes out of the tech selloff. Nestle loses its sweet tooth as it looks to sell 900 million u. S. Confectionary business in a potentially significant effort to focus on its health strategy, sending the shares higher. Good morning its friday, lets look at the equity markets were seeing a fairly positive riskon friendly session in europe, the ftse 100 is up by 0. 4 tesco shares were up at the open the xetra dax is up by 0. 4 . In france, were seeing the market power ahead to the tune of 1 . By in large were seeing autos doing well on the back of these car sales figures out of europe. Up by roughly 8 food and beverage is doing very well on the back of nestle when it comes to the fx markets, seeing the dollar a touch higher given the jobless claims numbers yesterday. The dollar index is on track for a 0. 6 rise for the week you have the dollar yen paired, 1 111. 31 we saw a bit of weakness, and comments from kuroda saying its taking time to end the deflation mindset. Want to switch attention and tell you whats going on with u. S. Futures were looking at a fairly friendly start to the trading session. If the s p 500 could add 5 points the dow jones 43, and the nasdaq 13 points. This after the nasdaq fell yesterday with facebook, amazon, apple and netflix all closing lower. One of the biggest losers in yesterdays session, that was actually snap. Shares in the social Media Company closed out its ipo price on thursday with its stock hitting 17 for the First Time Since the Company Debuted it on the nyse the investors may be reevaluating tech stocks, but one man wholeheartedly embracing the sector is emanuel macron speaking at the viva tech conference in paris, he vowed to transform his country into a startup nation arjun got a chance to speak to him. I did, indeed we were speaking about what his plans were to change and revolutionize the Tech Industry in france. Of course all sorts of industries are talking about disruption in the future one of those is luxury and entertainment. A big one is Driverless Cars everyone has spoken about the potential of Driverless Cars theres a lot of hype around what the technology could bring. Not a lot of folks on regulation what happens if a driverless car hits someone who is liable . I caught up with the ceo of vallejo yesterday, and i talked to him about who would be responsible in a driverless car accident the carmaker will have to be at the center, which is the case today. We responsible for algorithm, if theres a failure in the algorithm, it comes back to us having a car delivered by a carmaker, you have to take part of the liability all the suppliers, the partners that will help him to develop the car, and they always work with suppliers, they will be together with the carmaker liable it cannot be the driver no more. Theres no driver it is still something to be organized, but im sure technology and regulation will move together in the same direction so lots of questions over what happens to regulation in the future of Driverless Cars, i discussed that and other topics about the auto industry, i have kevin shen, the cofounder of chj auto motive. Youre a Chinese Company looking to enter this competitive electric car market what are you developing now what is your product first of all, glad to be here thank you. Right now we have two products one product is Ultra Compact car, with a swappable battery pack why we designed this car, today, just in china, there are 340 Million People with bikes or scooters, so we want to upgrade them, but we cant imagine them driving cars so we give them something else, Ultra Compact car saving energy and benefiting traffic the second product is a sev sevenseater suv, you dont have socalled mileage anxiety. Normally you drive it as ev, but if you are draining on your battery, you can always put in gasoline how are you positioning these cars we know tesla is a Market Leader in the electric car vehicle. You are positioning yourselves as a fierce rival to the likes of tesla yes, but we are in different category for our Ultra Compact car, there is a norisk category. We are creating a new category of cars. This is something very different from tesla for our suv, it will not be having the competition to tesla, but it will be a more affordable and more pragmatic product for the customer what about your launch plans. When are you planning to bring these to market . For the small car, we will launch next year, march. For our suv we will launch in the first half of 2019 can you give us an idea of price . Where you are looking to position this kind of car . Sure. For the Ultra Compact car, the price will run between 7,000 euro to 8,000 euro for the suv, it will be around 40,000 euro. You are worried about tesla at the moment . Theyre making a big stamp on china as well. Last year they sold a billion worth of cars in china thats your home market as well. You are worried about their presence into the electric car space . I wont be worried too much about them yet because today is basically the e vushgs ver v versus traditional cars, rather than ev versus ev every year in china we sell 25 million, less than 0. 5 are ev cars so theres a still big, big market for everybody what about where are you planning to launch u. S. , europe, china . What are the markets thats the point. I want to bring that before this Ultra Compact car, we will launch not only in china but also here in europe. We will not launch it as a product, but as a Car Sharing Services this morning we signed the contract with local partner in paris. We have a joint venture to launch these Car Sharing Services in paris. Thank you, kevin. That was seven kevin shen talking about their plans to take on the electric car space i want to chat with you about this story the eu is ready to hit google with a fine in the next coming weeks. The European Commission has been investigating whether google abused its market dominance by skewing search results on its shopping portal. According to the ft, we could be looking at a 1 billion fine. That would be the biggest fine since intel was fined a similar amount in 2009 that will only strain the relationship between the u. S. And the eu further, isnt it yeah, absolutely. This is a conversation thats been rumbling for about six years now. It looks like its coming to a close. Google does have some time to come back to the commission and say, look, if youre this concerned about it, this is what well do so there is a potential for them to avoid such a hefty fine really everyone is coming to the conclusion that this is politicized. Its the eu coming after u. S. Tech companies lets look at what happened over the past few months. They fined facebook earlier this year, 1 122 million, they had a spat with apple last year, asking ireland to claw back 13 built onyou billion euros from apple as well on the surface the eu is going after the tech giants. The eu will argue were doing this at the interest of consumers and to keep our consumers and competition rife in the eu. I guess thats where a lot of the talk here at viva tech is making the European Union and countries like france and germany super competitive against the u. S. In order to create homegrown googles and homegrown facebooks thats the Big Conversation here dont expect this to end the battle between the European Union and u. S. Tech companies. That will continue the fight is one thing. Google is in a good position to stomach that sort of fine given its annual revenues of 90 billion, i wonder what does it mean for the operational side of google how many fix also they have to present to the Eu Commission well have to have a look at what the European Commission says to google if they say, look, you have to make these changes, then google could potentially make those changes, they need to present those to the eu and show evidence of them it could be a number of changes, or one or two small changes or a large overhaul of the Shopping System what seems to be clear is that google needs to come forward with some fixes. But well have to wait for the official European Commission ruling to find out exactly what theyre worried about at the moment arjun, thank you very much for that i should correct the number i stated before, 90 billion, thats the cash pile of apple, not annual revenues thank you very much for that moving on, President Trump is set to announce new policies tightening rules governing american commerce and travel to cuba in a speech in miami today, trump is expected to kooutline tougher approach to cuba, rolling back historic moves that the Obama Administration made. Andrea mitchell has more from havana reporter havana tonight open for business but now on edge afraid President Trump is about to shut the door once again to most u. S. Travelers. In a lastminute appeal cuban officials said they made america safer from Cyber Attacks and drug traffickers, taking us to what looked like a normal house but really a Cyber Command post. There we met exclusively with its military chief she told us in the past 18 months, cuba has handed over intelligence on at least 17 cybercrime cases tied to the u. S. Evidence like internet addresses used in a suspected identity theft. So in that case you did provide those addresses to u. S. Authorities . Translator yes, the addresses we traced to the United States for both the suspected attackers and potential victims. Reporter cooperation they say is now at risk the rollback hit american travelers hard. Last year nearly 300,000 came here, a 74 jump over the year before the white house complains that pumps dollars into hotels, airports and cruise ship terminals owned by the government, largely the military the problems say cubans we talked to is the crackdown would hurt Small Business owners including many women, the very people President Trump says he wants to help. Like julio de la rosa who owns a bed and breakfast, where americans make up two thirds of her customers. So what would happen to your bed and breakfast if the rules change and you get fewer americans to come . Im afraid i dont want to think about it. Reporter we heard the same story from other business owners. Going into the American Market is key. Reporter the owner of this dance school is counting on teaching salsa to a steady stream of americans but if the music stops tomorrow, Vladimir Putin is ready to step in. Russia forgiving millions of cuba debt and winning the bid to build cubas new railroad. And possibly reopening a Russian Military base only 90 miles from the u. S. Andrea mitchell, nbc news, havana. The u. S. Justice department seized 5 540 million in assets from the Sovereign Wealth Fund 1mdb the claims are financiers stole assets which included a picasso painting gifted to none over than Leonardo Dicaprio and the rites to the movies daddys home and dumb and dumber 2. Ahead, President Trump lashes out at the russian probes asking why his nondealings with the country are being investigated well bring you the story in two. With type 2 diabetes a lower a1c is a lot about choices. But it can be hard sometimes, cause different sides of you struggle with which ones to make. Well, what if you kept making good ones . Then . You could love your numbers. Discover oncedaily invokana®, a pill used along with diet and exercise to significantly lower blood sugar in adults with type 2 diabetes. Its proven to lower a1c better than januvia®. Invokana® works around the clock by sending some sugar out of your body through the process of urination. Its not for lowering systolic Blood Pressure or weight loss, but it may help with both. Invokana® may cause dehydration, which could make you feel dizzy or weak when you stand up, so be sure to drink enough water. Important side effects to know may include kidney problems, genital yeast infections, changes in urination, or potentially serious urinary tract infections. As is risk of fracture, or increases in cholesterol or potassium. Ketoacidosis is a serious condition, which can be life threatening. Stop taking invokana® and call your doctor right away if you experience symptoms. Or if you have an allergic reaction, with signs like rash, swelling, or difficulty breathing or swallowing. Do not take if you have severe liver or kidney problems or are on dialysis. Taking with a sulfonylurea or insulin may cause low blood sugar. The choice is yours. Lower your blood sugar with invokana®. Imagine loving your numbers. Theres only one invokana®. Ask your doctor about it by name. Welcome back to the show u. S. Vice president mike pence has hired an outside lawyer to aid him during the investigations into whether there was collusion between russia and the trump campaign. The attorney brought on attorney Richard Cullen who also represents sepp blatter in the ongoing probe into fifa, soccers governing body. This after President Trump unleashed tweets saying the investigation was a witch hunt Kristen Welker has more. Reporter tonight a major bombshell in the russia probe. Robert mueller is launching an investigation into President Trump for possible obstruction of justice the president ignoring shouted questions today. Do you believe youre under investigation now . But not holding back on twitter calling it the single greatest witch hunt in american political history and in a rare afternoon tweet storm trying to shift the focus to his former rival hillary clinton. Crooked h destroyed phones with hammer, bleached emails and had husband meet with ag days before she was cleared. And they talk about objection . But the fbi cleared clinton of any wrongdoing last week, ousted fbi director james comey was asked whether he believed the president s request to back off the investigation into National Security advisor Michael Flynn amounted to obstruction. Thats the conclusion im sure the special counsel will work towards to understand what the intention was there and whether thats an offense. Reporter the former intelligence source tells nbc news mueller requested interviews with top intelligence officials including director of National Intelligence Daniel Coates who appeared on capitol hill today in a closed session there is rarely a smoking gun so a prosecutor tries to string together a pattern of conduct to paint a picture of someone trying to stop an investigation. Reporter today trump surrogate Newt Gingrich tweeting should be clear, mueller is the anti trump counsel but other republicans depending the probe. Its not a witch hunt, no he has a job to do reporter the criminal inquiry coming 146 days into mr. Trumps presidency, starting earlier than any other modern day president , including Richard Nixon and bill clinton this now becomes more than drip, drip, drip, this is a torrent, and this torrent could continue in a way that is very perilous to this president the boj in japan kept its Monetary Policy steady and upgraded its outlook for growth and consumption. The Central Bank Governor said it is taking time to end the deflationary mindset in japan. Global investors continue to digest the federal reserves rate hike as the dollar continued its rally on the back of the policy decision Steve Liesman filed this report. Bond yields in the u. S. Were fairly steady after the feds announcement that many took more hawkish. The fed looked through inflation data and hiked rates to a quarter point. That was the Third Quarter point hike in seven months it forecast an additional hike this year and three hikes next year third, it announced a detailed plan to unwind its 4 4. 5 trillio Balance Sheet. Futures markets not on board with that third hike this year the probability ran at about 40 for that hike in december. Heres how janet yellen responded to the question of whether she would stay on after her term expires in january. What i said about my own situation is that i fully intend to serve out my term as chair, which ends in early february i have not had conversations with the president about future plans. Our cnbc fed survey shows 6 of respondents think fed chair janet yellen will not be reappointed by President Trump thats down a bit from back in december with more unclear after positive comments trump made about the fed chair. Leading the fed chair derby, the former fed governor, 24 think wirsh will be the new fed chair, taylor down 20 , and gary cohn at 20 Glenn Hubbard at 8 . Chair yellen said she understood the white house is hard working three vacant spots on the fed board of governors we dont know how much work is being done looking for that next fed chair. Steve liesman, cnbc Business News a lot to talk about with beth ann bovino. Thank you very much for joining us this time on this side of the pond lets start with the Monetary Policy outlook the fed is forecasting one more hike this year, three next year. The market is more dovish than that where do you stand were in line with the fed. I swear we didnt even talk to each other about it. We were not surprised about the 25 basis hike in june. We expect another in september we plan for the fed to move on its Balance Sheet. Next year were about in line. Why do you think youre more hawkish than the general market consensus . The rest of the market is seeing inflation, core ece is low maybe markets are suffering from separation anxiety. They like the low interest rates, that might be one reason why. The other factor could be in terms of the inflation story, we also do recognize that we have to watch what happens with the inflation. We dont want it to go down lower that would be a concern. If you look at some of the numbers, i think yellen mentioned that some of the i think it was cell phones and other factors that distorted it. Lets see if its a oneoff or we tee it around theyre optimistic that the oneoff also go away theyre talking about oneoff reductions in certain categories of prices. The oil price is an important factor, we are seeing that with the ecb and the boe. Do you think that the inflation profile, given that wages are still somewhat low, can actually pick up sustainably over the next couple months we think a couple things. Were surprised that Oil Companies in the United States are stepping in and starting basically exploration and drilling and this is at low oil prices. We do think oil prices, there was a dip, but it seems to be within a range that again were talking 2 , 4 , not 50 like we saw last year. Thats a positive. In terms of wages, we are disappointed that wages did start to slow. Now theyre 2. 5 year over year according to the bls thats a bit of a disappointment we have business job openings at record highs that suggests that wages will turn around. We look at the market for jobs as a worker basically its the workers now. How do you explain that wage conu ka nu conundrum. What is the explanation for this look at the underlying currents of the labor market it was nice to see an Unemployment Rate in the United States of 4. 3 you look deep down in that, the reason we saw the drop is because a lot of people left the jobs market not because people got jobs thats a concern that goes to a Skills Mismatch that we might be facing in the u. S. Those people who left the market that means theyre not getting paychecks. Those businesses are not seeing growth and that means longterm growth slows for the u. S let talk about the future makeup of the fed. A lot of uncertainty we cant second guess what mr. Trump will or wont do do you think he will reappoint janet yellen is a guet is a guess i think she would be great to continue in her position that kind of stability in the financial markets, particularly as the fed talks about inwind sn Balance Sheets, that would be a positive steady with the yellen camp. But we dont know. He flipflopped on that, said no, not at all, now is backing off. I would say probability for janet yellen, maybe 20s, 25. Thats not very high. According to recent reports, one report on cnbc. Com, trump would nominate three new members, one of them randall quarrels and Marvin Goodfriend would that change the feds monetary thinking at all or is that just a political view or would it impact banking regulation i think theres two factors one, the fed, assuming this person whom ever is hired is a strong economist, yes, they might have a political or conservative leaning, they still are going to look at the mandates the mandates are jobs and inflation. Theyll follow that if jobs are weakening or inflation is starting to go low, theyll have to pull back on raising rates. Thats one thing to take into consideration. I think the fed might well be aware of the change in the structure of the fomc, and that might be why theyre moving sooner on the Balance Sheet than later. Ask forgiveness rather than ask for permission always great to get your perspective. Before we wrap up this show for this week, lets have a quick look at u. S. Futures theyre actually looking friendly thats the european markets. Okay lets kick off with that ftse 100 oup by a third of a percent. Auto stocks outperforming given the rise in european car sales in may the cac 40 up by 1 . You also see that tesco did very well out of the gates. Now its paired much of its losses, even though results from the company were strong. Quick look at u. S. Futures, pointing to a slightly higher start to the trading session, even though the nasdaq sold off yesterday once again seen up by 7. 7 points. Thats it for todays show Worldwide Exchange is up next. See you on monday. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Livestreat the airport. E sport, binge dvrd shows, while painting your toes. On demand laughs, during long bubble baths. Tv on every screen is awesome. The allnew Xfinity Stream app. All your tv at home. The most on demand, your entire dvr, top networks, and live sports on the go. Included with xfinity tv. Xfinity the future of awesome. Good morning tech under pressure. The selloff in names like facebook, amazon bringing down the broader markets. Your trading day set up straight ahead. Cuba crackdown President Trump headed to miami to roll out a new policy with cu cuba. And commodities getting crushed. Gold posting its worst day of the year and crude continues to hold below 45 a barrel. A deep dive into the moves coming up. Its friday, june 16, 2017, Worldwide Exchange begins right now