Would be more aggressive raising rates. That is hurting interestrate sensitive groups. The sale is also starting to other groups as well. There are some stock specific stories as well. All three major averages are selling to some extent after the big advance yesterday. Take a look at yields as we talk about whats happening in the rates market. Five basis point increase in the 10year yields. 2. 91 . Still not above the recent highs we have seen or that but still hovering around those highs from january 2014. The advance very clear when jay powell was giving his testimony. We have the market implied rateility of four increases this year. That has been increasing, now at its highest at 30 . Still only a third of a percent of a chance that it will be priced in. 34 , to be exact. Nevertheless, an increase. Some Company Specific stories we should talk about as well. They have to do with deals that may be will not be happening. America source bergen and walgreen foods, there were talks. Reporting that deal talks have fallen apart. Both of those stocks trading lower. Acorn, which is set to be acquired, that deal could now be in jeopardy after fresenia sparked an investigation into data sharing, possible breach at acorn, a cancer drug developer. 37 . Plunging almost we are also watching autoparts stocks. Autozone, advance auto parts. Lower thanported expected forecasts and that is pulling down the rest of the group. A quick check on lions gate. A report that they came close to being bought by hasbro last year but those talks fell apart over price. Shares spiking, hanging onto a gain of 3 . Huge coincidence, then bernanke he yellen are speaking right now in washington. We will bring you those highlights. Lets get a check on the first word news with Mark Crumpton. Mark House Republican say they dont plan on pursuing new legislation to ban on assault weapons or to expand background checks for gun sales. Speaker paul ryan said he is more interested in protecting the rights of lawabiding while majority with steve scalise, himself a victim of gun violence, focused on the lack of preemptive action on the alleged Florida Shooter nikolas cruz. I think the most important thing we can look at is what about all the laws already on the books that were not enforced , that were not properly implemented . What angers me the most is when i see britain downs with law enforcement. The fbi had this guys name on a silver platter. House previously passed legislation making modest fixes to the gun purchase and background Check Systems but the package installed in the senate because it also expands other gun owner rights. In the days following that shooting at the florida high school, administrators turned to someone who knows all too well what they are going through. The principle of Marjory StonemanDouglas High School spoke with rick deangelis, the former principal at columbine, where two gunmen killed 13 people in 1999. Deangelis said he gave administrator some advice including making sure there are no balloons at the schools welcome back ceremony. Some balloons had popped at the columbine reopening, sending students diving for cover. Students at the Florida School are expected to return to class tomorrow. Puerto rico says delays by the u. S. Treasury department in getting disaster release release to the island has put the island in a dangerous financial dilemma. The governor outlined his complaints to a letter to congressional leaders. That letter was reviewed by bloomberg news. He says the treasury imposed restrictions that made it difficult puerto rico to access the funding it needs. As you saw live on bloomberg, Jerome Powell today delivered his first testimony as fed chairman before congress. He said fiscal policy has become more stimulative and indicated the fed may consider four interestrate hikes in 2018, thanks to the strengthening u. S. Economy. He also plans to reexamine the volcker rule which restricts u. S. Banks from making certain types of speculative investments. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I Mark Crumpton. This is bloomberg. Stick with Monetary Policy, a big day for fed watchers. Janet yellen is at the Brookings Institution in washington for a conversation with her predecessor ben bernanke. We will be bringing that to you very shortly. Earlier today, as mark mentioned, Jerome Powell expressed optimism about the economy. Outlook or the economy has strengthened since december. Again, each member of the fomc set be writing down a new of projections and estimate of appropriate Monetary Policy as we go into the march meeting which begins three weeks from today and so i would not want to prejudge that new set of projections. We will be taking into account everything that has happened since december. Julia we may only have one and a third hike priced into 2018, but there are those that are looking at his tone, saying it could open the door to a total of four rate hikes this year. Joining us now is jim mcdonald from northern trust. You actually think they only go twice in the next 12 months. What do you make of jay powells comments today and the reaction in the markets . Its a reaction to his more of the view on growth. The phrase that headwinds have become tailwinds is a reflection the economy has gained steam. We thinko for times, it will only be for the right reasons, which is that growth is good, inflation is not out of control, and in that environment, that would not be that for risktaking. Scarlet would that change financial conditions . The new chairman made clear that he has no interest in changing the plan or gradual reductions in the Balance Sheet. A lot of people say any change in that schedule with tighten financial conditions. I think they will stay to their preprogrammed plan on Balance Sheet adjustments. The reason for them to alter the time of that. It only raises uncertainty. The good news is there will not be any Inflationary Pressure that will be viewed as a sustained risk that would cause it to accelerate off the Balance Sheet. Julia we were looking at a backtracking slightly of the u. S. 10year yield. We talk about it approaching this 3 level as being key. Forhat extent is that a cap the 10year yield, talking in a demand from outside of the u. S. , with the likes of the ecb and japan still stimulating their economies and people still requesting yield . Cap we think there is a over the next six months, a big interest differential with overseas markets. It is expensive to hedge the dollar, not as clear as big of a differential as many may think. We have seen and expect to continue to see good demand from overseas investors for fixed income. Eyelet we are keeping an on janet yellen speaking with ben bernanke, a conversation at the Brookings Institution. Bit ofts talk a little the risks going forward. The fed chairman mostly avoided any debate over what the tax overhaul, what fiscal plans the administration has, will mean for the u. S. Economy. He did say that the u. S. Was not on a sustainable fiscal path. How do you see him folding that into Monetary Policy when the time comes . Jim i think he was careful not to prejudge what the committee would do. He did a good job getting out of the hearings today without making great news about changes in outlook. They want to assess what the increased fiscal stimulus actually does to growth and whether there is any risk to inflation. We think the core pce, which is their favorite measure of inflation, is unlikely to have a big uptick here. That is what would cause a change in their pace. Julia a lot of the discussion we are having is to what extent rising wages, if we see a pickup in wages, filters into the inflation picture. To what extent, if we look at companies and the Rising Profit ,argins they are achieving actually can they absorb the rising wage cost without passing them on . Jim its a great point. The last three weight cycles we have seen in the u. S. Have been incident with Rising Profit margins. It is our view that companies will only give sustained wage. Ncreases if profits are rising in that environment, the economy does well, profits do well, the stock it does fine. Scarlet put it all together. What is the strategy here, how do investors position themselves for the next month, for the rest of this monetary tightening cycle . From a bige moved overweight in the u. S. To equities outside the u. S. Being increasingly favored. Cheaper markets, have not had a level of performance that u. S. Stocks have. We think market globally will do well but even better outside the u. S. In the bond market we think it will be a coupon clipping environment. We dont expect people to lose money. The current yields are not a bad proxy for what you should expect. We are still positive about taking risk over the next year. A and,overweight underweight the short end . Jim we want to be overweight credit and underweight treasuries. Scarlet jim mcdonald, thank you so much. We willntioned, continue to monitor and review headlines from janet yellen and Ben Bernankes conversation in washington. They have been talking about productivity and efficiency. You can watch the entire event on the bloomberg at tv. From new york, this is bloomberg. Scarlet this is bloomberg markets, im scarlet fu. Julia i am julia chatterley. Lets get back to washington where janet and ben bernanke are speaking together. How did that happen . I have heard it does happen but interesting transition. Chairwoman yellen its a good question, i never had any policy experience although i had a stint working as an economist and International Finance division at the fed. Always been interested in holding a policy post of that sort. Phone rain, its was the spring of 1994, there were several divisions decisions on the board of governors. It was someone from the treasury asking if i would be interested i asked them to hold the phone for a couple of minutes and decided maybe i should talk to my spouse and see how he would feel about moving to washington with my son. Said, of course we will make it work, this is something you probably would like to do. I got back on the phone and basically said, if you offer me the job, i would be delighted to take it. Waited a couple of months, lo and behold, i was nominated, along with alan blinder, who was nominated at the time as vicechairman. I thought the research i have , you the background i had know, were reasonable basis to try to contribute to Monetary Policy. During the time i spent there, of course and im sure you had this experience as well learned a lot about other responsibilities at the fed including supervision and regulation, some of the operational responsibilities that the fed has. Delighted to be offered the opportunity to do it, learned a lot when i actually assumed the job. Chairman bernanke when you were there it was peter greenspan. What was it like working with greenspan . Chairwoman yellen i did work in 19 94, leftnt and then went to the council of economic advisers at the beginning of clintons second term in 1997. I did not know alan before i went. With hislly impressed intellectual strength, with his originality. No one knew the data, understood the idiosyncrasies of the data, and could make better use of it to provide insights on the economy than alan could. I thought he was a very original thinker. I enjoyed talking to him, i found him to be very open to debate. I did not agree with him on everything but i did agree with him on a lot of things. I guess i had the opportunity to debate with him, the question of whether or not that should adopt an inflation target, and if so, what that target should be. He let me do that in the context of an fomc meeting, so it went into the permanent record. I was on record than saying i should we should adopt a numerical inflation target, and i thought it should be 2 . I think i articulated the reasons about the zero lower bound and nominal rate rigidity which later became central to our decisions. Alans view was that we should not adopt an inflation target at all. Of course, he was successful in nothing that from happening, until you and i worked together. Had long been your desire to see this happen, as it had been mine. Coming we knew especially proud, that you are able to put in place continue towill monitor and review headlines generated by ben bernanke and Janet Yellens conversation at the brookings is tuition in washington. Still ahead, waters on powell. Topill stick to the democrat on the House Financial Services committee on the new fed chairman debut. This is bloomberg. Julia this is bloomberg markets. Im julia chatterly. Scarlet im scarlet fu. Powell made his debut on capitol hill today, sound and up the note on the u. S. Economy, signaling the central bank may review the rate hike and that inflation concerns. We are joined by Maxine Waters, the ranking democrat in the House Financial Services committee. I want to get from you, first of all, the biggest difference you saw, that you took away from the new chair from his predecessor janet yellen. Let me say, we had chairman powell in committee today and he answered all of the questions that were asked of him, he talked about carrying on in the manner that janet yellen had done. He seemed very comfortable, and i think the members felt that he was cooperative for the most part. A lot of the questions that were asked of him were questioned that were not exactly Monetary Policy and he was able to try and help people understand what they do have the power and influence to do, and what they do not have the power to do. I think he conducted himself very well. Im looking forward to working with him. Of course, i will be interested in whether or not he is going to implement doddfrank reforms. That is what i think our charge and challenge is. Scarlet you had a specific line of questioning for the chairman, you were seeking to widen the perspective of candidates for the fed board, for the president s. What does the ideal candidate for the new york fed president look like . Bill dudley will be stepping down to. Rep. Waters let me just say that ive been interested in diversity, and all of financial services, but particularly with the fed. The question that i asked today is about the opportunity to do some outreach and seek out people of color, folks who have not normally seemingly have the opportunity to have that kind of a position. I wanted to know would he be supportive of that . If it did not appear that they had done the kind of outreach that they were looking for, the kind of people that would help bring about some diversity, would he reject it, not support it . He talked about the fact that he believed, even in the past, they have done outreach that considered people who came from various backgrounds. I challenged that a bit, asked about whether he could share with us the kind of outreach may have done. I also asked if we could make recommendations. He agreed to both. Julia i want to talk about some common that you made over the weekend, speaking to California Democrats at the partys annual convention. You said it was time to get ready for impeachment, that you were waiting and counting down for Robert Mueller to connect the dots here. I see democrats frustrated about the talk of impeachment and they want the party to focus more on its own issues rather than continuing to batter the republicans here. Your response . Rep. Waters i think what you are talking about is the approach that i have taken dealing with this president. I started early on identifying the kremlin clan, that we call them. Flynn, them, manafort, wilbur ross, all of these people were very key to what we felt was some sort of interaction with the republicans and with the russians. We also talked about the possibility that they had been involved in some collusion. We even talked about all the money laundering, we brought up , whatsue of Deutsche Bank we thought had been moneylaundering through the cyprus bank, etc. We have been on this for a long time. My staff, even though they are not equipped to do extensive investigation, have done quite a bit, learning about what we and thehe kremlin clan, individuals involved in the trunk campaign, some of whom are now in the cabinet, etc. I talked about that at the Democratic Convention and i did say that i am very pleased with what dollar is doing, that he is doing a good job. I believe he will connect the dots and it will lead to not only the revelation that there was collusion, but also obstruction of justice. Julia thank you so much for joining us, congresswoman Maxine Waters of california. We will be joined by a Top Republican on that committee, Jeb Hensarling, just ahead. From new york, this is bloomberg. Scarlet from bloomberg World Headquarters in new york, this is bloomberg markets. I am scarlet fu. Julia and im julia chatterley. Lets get the headlines on bloomberg first word news with Mark Crumpton at this hour. Mark a hearing against the suspect in the for the High School Shooting has been canceled. The Broward State Attorneys Office says the hearing has been canceled because an agreement has been reached for prosecutors samples, dna, and photographs of nikolas cruz. The 19yearold is charged with 17 counts of order for the massacre at marjorie Stroman High School in parkland news two weeks ago. Attorney general