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00:00JANET MARGIN -- JONATHAN: MARGINS UNDER PRESSURE. STOCKS RIGHT NOW. > > EVERYTHING YOU NEED TO GET READY FOR THE START OF U.S. TRADING. THIS IS BLOOMBERG DEAL BEEN WITH JONATHAN FERRO. JONATHAN: WE BEGIN WITH THE BIG ISSUES. > > IT IS A GOOD EXAMPLE OF CONSUMER IS PUSHING BACK ON PRICES TO SAY YOU CANNOT RAISE PRICES. > > PEOPLE ARE SPENDING LESS. > > SUPPLY CHAINS ARE UNDER A LOT OF PRESSURE. > > WE ARE TRYING. > > WE WANTED TO SEE DEMAND COOL OFF A BIT TO BRING INFLATION MORE UNDER CONTROL. IT IS A LITTLE CONCERNING ABOUT HOW MUCH THIS RAISES THE POSSIBILITY OF RECESSION. JONATHAN: LET'S GET STRAIGHT TO YOU, JULIAN. HOW MANY TARGETS AROUND THERE? > > IT IS VERY CLEAR THAT YOU ARE INTERFACING WITH CONSUMER, LABOR-INTENSIVE INDUSTRY, YOU ARE GOING TO ENCOUNTER THESE ISSUES. BUT WE TAKE AWAY FROM THE MORNING REPORTS AND YESTERDAY IS THE GLASS HALF-FULL ASPECT. THE CONSUMER REMAINS STRONG. YES, THEY ARE GOING TO BE PERSISTENT, BUT THE WEAKENING THAT MANY EXPECTED IS NOT MATERIALIZING JUST YET. JONATHAN: TARGETS ARE DOWN. > > AGAIN, THAT STOCK PRICE REACTION, IN AN ENVIRONMENT WHERE YOU SAY ANYTHING WRONG -- WHATEVER IT IS, OBVIOUSLY, MARGINS AND LABOR COST HAVE BEEN THE KEYWORDS TO OBSERVE PRESSURE ON STOCKS. YOU ARE GOING TO GET THAT REACTION. MORE IMPORTANTLY IS THE IDEA THAT DESPITE THE FACT WE SAW WHAT WE SAW YESTERDAY, DESPITE POWELL DOUBLING DOWN, THE REST OF THE MARKET TREATED OK. JONATHAN: I THINK WE ARE ALL SURPRISED THAT HE IS SURPRISED. THROUGHOUT THE QUARTER, WE EXPECTED UNEXPECTEDLY HIGH COSTS RESULTING IN PROFITABILITY THAT CAME IN LOW -- WELL BELOW EXPECTATIONS. ARE YOU SURPRISED THAT THEY ARE SURPRISED BY SOMETHING THAT WE HAVE BEEN TALKING ABOUT FOR 12 MONTHS? > > IT IS A LITTLE BIT DISCONCERTING BECAUSE WE HAVE BEEN DISCUSSING THIS FOR SOME TIME. AS WAS MENTIONED, IT IS KIND OF IDIOSYNCRATIC, CERTAIN COMPANIES. OTHERS HAVE MANAGED BETTER. I AM NOT A STOCK PICKER. YOU ARE ACTUALLY HAVING AN OPPORTUNITY TO DIFFERENTIATE BETWEEN COMPANIES THAT ARE ABLE TO MANAGE THROUGH THE PROCESS AND COMPANIES THAT ARE NOT. MARKETS SHOULD REWARD THOSE THAT DO AND PENALIZE THOSE THAT DO NOT. ON A BROADER PICTURE, I WOULD NOTE A COUPLE THINGS. WE HAVE JUST GOTTEN THROUGH EARNINGS SEASON. EARNINGS REVISIONS INDICATORS ACTUALLY TURNING UP, ACCORDING TO JP MORGAN. IT WAS NOTED THE OTHER DAY THAT FORWARD SALES ESTIMATES FOR THE S & P HAVE RISEN 5% YEAR TO DATE. THERE IS A REASON THAT THE OLD SAYING IS THAT STOCKS ARE A DECENT INFLATION HEDGE. IT IS BECAUSE THEY ARE ABLE TO PASS THROUGH CERTAIN INCREASES IN PRICES. I THINK THAT IS WHAT WE HAVE SEEN. EARNINGS ARE HOLDING UP WELL. THE ADVISORY IS ONE OF THE THINGS THAT KEEPS US CONSTRUCTIVE. JONATHAN: FINDING THE RIGHT BALANCE IS REALLY DIFFICULT RIGHT NOW. CERTAIN COMPANIES HAVE TOO MUCH INVENTORY. ARGUABLY, WE SAW IT AS WELL. YOU CAN DO THIS AT AN INDUSTRY LEVEL. THINK ABOUT INDUSTRIES THAT ARE CONSTRAINED AND HAVE BEEN REALLY STRICT ABOUT CAPACITY. HOW SUSTAINABLE IS THE SUCCESS OF THOSE GROUPS THROUGH THE REST OF THIS YEAR? > > EXCELLENT QUESTION. CERTAINLY IN THE COMMODITY COMPLEX, WE HAVE BEEN BULLISH. SINCE LAST YEAR, WE HAVE THE VIEW THAT THEY HAVE BEEN VERY FOCUSED ON NOT INCREASING CAPACITY. AS DEMAND COMES THROUGH, THEY ARE ABLE TO USE THAT CAPACITY FULLY. WE WERE TALKING ABOUT THE MARGINS IN THE ENERGY SPACE. ON THE AIRLINE SIDE, WE HAVE BEEN VERY BULLISH. FOR WELL OVER A YEAR, IT HAS COMPOUNDED OVER THE LAST COUPLE WEEKS BECAUSE OF JET FUEL PRICES . THE BIGGER POINT IN MY VIEW -- WE HAVE TALKED ABOUT THIS BEFORE, BUT THE REOPENING FROM COVID IS OCCURRING PRETTY MUCH EVERYWHERE ELSE ITEM CHINA. PEOPLE HAVE MONEY, THEY WANT TO SPEND IT AND TRAVEL. NOT JUST EQUITIES BUT ACROSS THE BOARD, OPPORTUNITIES TO BE SELECTIVE. I CALL IT A GOLDEN AGE AND I THINK IT SHOWS WHO HAS THE CHOPS AND WHO DOES NOT. JONATHAN: I HAVE A QUESTION I ASKED ALMOST EVERY SINGLE DAY LAST YEAR. THE STORY WAS, WHEN YOU'RE FACING DOWN A STRONG POSITIVE MANNED, PRETTY MUCH EVERYBODY HAS THE PRICING PATH. IT GETS A LITTLE HARDER AND MORE DIFFICULT TO ANSWER. WHERE DID YOU FIND IT? > > THIS GOES BACK. IT IS SOMETHING THAT YOU AND I HAVE TALKED ABOUT IN RECENT WEEKS. LONG-TERM, THIS IS IDENTIFYING STOCK IDEAS. THEY EXIST. THEY EXIST ACROSS ALL INDUSTRIES. NOT ALL ARE CREATED EQUAL. YOU REALLY HAVE TO DIG DOWN. WHEN YOU LOOK AT TRANSCRIPTS, MANAGEMENT IS TELLING YOU WHO HAS THE PRICING POWER AND WHO HAS MARGIN PRESSURES. THE STOCKS THAT HAVE HAD POSITIVE COMMENTARY HAS OUTPERFORMED CONSISTENTLY AND WE THINK THAT IS LIKELY TO HAPPEN THROUGH THE SECOND HALF OF THE YEAR. JONATHAN: THEY ARE DOWN 24%. THAT STORY DEVELOPED A COUPLE HOURS AGO. FEATURES DOWN BY MORE THAN 1%. THROW IN THE FED. > > WHAT WE NEED TO SEE IS INFLATION COMING DOWN IN A CLEAR AND CONVINCING WAY. WE WILL KEEP PUSHING UNTIL WE SEE THAT. WE WILL NOT HESITATE, AT ALL TO DO THAT. > > THEY ALWAYS SAY DO NOT FIGHT THE FED. DO NOT QUESTION THE RESULT TO FIGHT INFLATION. FUTURES ARE LOWER NOW. UP TWO BASIS POINTS. EVEN IN THE FACE OF THE MOST HAWKISH REMARKS, RAISING A QUESTION ABOUT WHY IT WAS NOT MORE DRAMATIC. IT IS REALLY A QUESTION ABOUT WHERE THE FED IS GOING TO GET TO. CHARLIE EVANS AND SAID IT WILL HAVE SLOWED ITS PACE BEFORE DECEMBER. IT IS WORTH NOTING THAT HAWKISH EXPECTATIONS DO NOT STOP. 111 FROM THE ECB. A WEEK FROM TODAY, THE MINUTES FROM THE MEETING. WHAT CLUES WILL THEY HOLD? JONATHAN: A LOT OF FED SPEAK THROUGH THE WEEK AND NEXT WEEK AS WELL. THIS IS WHAT GOLDMAN HAD TO SAY. WE DOWNGRADE AND REMAIN OVERWEIGHT FOR 12. IT MEANS MULTIPLE ASSET PORTFOLIOS ARE LIKELY TO REMAIN VOLATILE. I WANT TO EXPLORE AN IDEA WITH YOU. THIS IS THE IDEA. SOME PEOPLE BELIEVE THAT THE FEDERAL RESERVE IS WANTING TO SEE A TIGHTENING. IT WOULD BE PERCEIVED AS A LOOSENING OF CONDITIONS THAT THEY WOULD HAVE TO PUSH BACK AGAINST. DOES THAT PUT A LID ON IT AS WE WORK OUR WAY THROUGH THIS SUMMER? > > GOLDMAN SACHS HAS BEEN SPLITTING HAIRS THE LAST COUPLE WEEKS, GOING BACK AND FORTH. YOUR QUESTION IS A GOOD ONE. OVER THE NEXT COUPLE OF MONTHS, WHAT WE ARE LIKELY TO SEE IS DECLINING INFLATION. AS WELL AS STABLE GROWTH. THE MARKET IS DIVIDED INTO TWO CAMPS. ONE BELIEVES THAT INFLATION IS OUT OF CONTROL AND THE SECOND ARE WORRIED ABOUT A CONCESSION. I THINK THERE IS A MIDDLE PATH WHERE INFLATION COMES DOWN, GROWTH IS OK AND WE TAKE THAT VIEW, EXTENDING IT INTO YEAR-END. NOMINAL GROWTH OF 7%. I THINK PEOPLE ARE NOT UNDERSTANDING THAT NOMINAL GROWTH IS DOUBLE RATES THAT EXISTED PRE-COVID. EARNING ESTIMATES ARE GOING TO BE EASY TO BEAT. WHETHER THE FED ACTS AS A CAP, THE MARKET HAS PRICED IN AGGRESSIVELY. I THINK IT IS PRICED IN. THE GROWTH QUESTION IS WHERE PEOPLE -- THAT IS WHERE IT IS STARTING TO GROW. JONATHAN: 10-YEAR JUST SHORT OF 23. YOUR VIEW? > > IF YOU THINK OF ALL THE NOISE FROM THE LAST WEEK OR SO AND YOU LOOK AT THE FACT THAT YIELDS BASICALLY BACKED OFF AND HAVE BEEN REASONABLY CALM, GIVEN THE VOLATILITY, I THINK YOU CAN ARGUE THAT THE MARKET IS COMFORTABLE WHERE THE FED IS AND WHERE IT IS THINKING, BUT WE DO NOT BELIEVE THAT THE FED IS SPECIFICALLY TARGETING STOCK PRICES AND ANYWAY BECAUSE IT DOES NOT HAPPEN ALL THE TIME. BETWEEN TOPS AND MARKETS, THE FED DOES NOT WANT A RECESSION. THAT LINKAGE IS FAR TOO ROBUST TO TARGET STOCK PRICES. JONATHAN: THE YIELDS WERE ADVISED TOO MUCH. THERE IS JUST A BELIEF NOW. THEY BELIEVE IT IS SELF LIMITING. DO YOU DISAGREE WITH THAT? > > WE DO BECAUSE AGAIN, THE CHAIR COMMENTARY IS COMFORTABLE WITH TIGHTENING CONDITIONS, HOWEVER IF THE INFLATION NUMBERS STARTED TO COME DOWN TO A LEVEL THAT MADE THEM SIGNIFICANTLY COMFORTABLE -- THIS IS A PROCESS. WE ARE STILL LOOKING FOR 3% NEXT YEAR AND MOST OF THEM ARE AS WELL. IF INFLATION STARTED TO COME DOWN , THAT IS AN ENVIRONMENT THAT THE FED COULD LIVE WITH. JONATHAN: LET'S GET A LOOK AT SOME OF THE STOCKS. 17 MINUTES AWAY. CHRIST WE HAVE TO START WITH THE ONE YOU HAVE BEEN TALKING ABOUT ALL MORNING. I HAVE GONE THROUGH THE PRICE ACTION BY HAND AND IT LOOKS LIKE IT IS VERY SIMILAR TO WALMART. A SIMILAR STORY, REALLY OPERATING. RISING COSTS. THE DEGREE OF STOCK DECLINES SHOWS HOW OFF GUARD THEY ARE CAUGHT. IT SEEMS IT IS FINALLY UNABLE TO MANAGE THE RISING COST OF INFLATION. SMALL SALES THERE. IT IS BLAMED ON THE SLOWDOWN. NETFLIX DOWN 1.9%. I DO NOT KNOW HOW MEGA CAP IS AT THIS POINT. THEY DID FIRE PEOPLE YESTERDAY. A BRIEF REPRIEVE FROM THE SELLING, BUT STILL NO DEAL WITH ELON MUSK. JONATHAN: THANK YOU, AS ALWAYS. RAISING THE COST OF LIVING AROUND THE WORLD. > > IT WOULD COME ONE AFTER ANOTHER. IT WAS UNPRECEDENTED. JONATHAN: THAT CONVERSATION, NEXT. > > WE SHOULD ALL ASPIRE TO ENCOURAGE CHINA TO DROP THESE PRACTICES. IF WE DO SO, WE WILL STAND A BETTER CHANCE OF COMPETING WITH CHINA ON A LEVEL PLAYING FIELD THAT WILL BENEFIT OUR BUSINESSES AND CONSUMERS. JONATHAN: THE PRICE PRESSURE WE ARE FACING IN THE U.S. TAKE A LISTEN. > > THE REASON WHY WE HAVE THAT CHALLENGE IS THE DECISION TO INVADE UKRAINE AND IMPLICATIONS OF TAKING RUSSIAN SUPPLY OF CRUDE OIL AND NATURAL GAS, BUT ALSO A RUSSIAN REFINERY CAPACITY, OFF OF THE GLOBAL MARKET. REFINERY CAPACITY WAS TIGHT PRIOR TO THE INVASION BUT THE STRESS THAT WE ARE SEEING RIGHT NOW IS A DIRECT RESULT OF THE WAR IN UKRAINE AND THE IMPACT ON THE ENERGY MARKETS. JONATHAN: GAS PRICES. THAT IS THE BIG ISSUE. > > IT IS. ANOTHER RECORD, $4.50 ON THE AVERAGE. ONE IN CALIFORNIA IS LOOKING AT HIGHER THAN SEVEN DOLLARS PER GALLON OF GASOLINE. JONATHAN, WE ARE NOT EVEN AT THE START OF PEAK DRIVING SEASON. GASOLINE PRICES ARE ONE BIG PROMPT FOR THE ADMINISTRATION. THE AGRICULTURAL DEPARTMENT TALKING ABOUT FOOD PRICES RISING 5% TO 6%. ALSO READY -- REALLY HITTING FAMILIES IS THE INFANT FORMULA SHORTAGE. WE ARE GETTING TO THE BOTTOM OF WHY FAMILIES ARE FACING THIS. DEALING WITH EVERYDAY AMERICANS KITCHEN TABLES. THIS IS REALLY IMPACTING SOME OF THE HURDLES THE ADMINISTRATION IS FACING. JONATHAN: THERE IS ONE NUMBER THAT WILL DOMINATE THE CONVERSATION LATER THIS EVENING. 9%. > > IT IS AMAZING. WE HAVE NOT HAD INFLATION THIS TYSON 1982. WE HAVE NOT HAD INFLATION THIS HIGH AND IT IS GOING TO GET WORSE. EVERYBODY IS POINTING THE FINGER AT EVERYBODY ELSE, TRYING TO BLAME THEM FOR WHAT IS HAPPENING HERE. THIS IS INTERNATIONAL AND RISING ENERGY COST. THE BANK OF ENGLAND THINGS. EVERYBODY IS POINTING THE FINGER AT EVERYBODY ELSE. CENTRAL BANKS HAVE MISSED THIS. YOU HAVE TO WORRY ABOUT THE CENTRAL BANK'S ABILITY TO MANAGE THE SITUATION. WE ARE WAY OFF BASE. THERE WAS A PRODUCTION THAT IT WOULD BE HALF THE LEVEL WHAT WE HAVE NOW. WE ARE HEADING FOR DOUBLE DIGITS AND IT IS GOING TO GET WORSE FROM HERE. JONATHAN: I AM LOOKING FORWARD TO THE COVERAGE WITH YOU AND ALIX STEEL. MORE FROM J.P. MORGAN ON GAS PRICES. THE AVERAGE GAS PRICE IS ABOUT $4.60. ACROSS SUMMER WITH U.S. GASOLINE PRICES, TYPICALLY, REFINERIES PRODUCE MORE GASOLINE AHEAD OF THE SUMMER TRAVEL SEASON, BUT SINCE MID APRIL, INVENTORIES HAVE FALLEN. IF NOT DEVELOPED, WOULD YOU HAVE TO CHANGE YOUR VIEW? > > I DO NOT THINK SO. ONE THING THAT WE NEED TO KEEP IN MIND IS THAT THE AMOUNT OF MONEY THAT PEOPLE SPEND RELATIVE TO DECADES PAST IS MUCH SMALLER THAN IT USED TO BE. IT IS NOT ANYWHERE CLOSE TO PREVIOUS PEAKS. I THINK -- I AM GETTING CONSTRUCTIVE ON ENERGY PRICES BECAUSE I THINK IN EUROPE, THERE IS A DEAL BETWEEN THE EU NOT PUSHING TO ELIMINATE COMPLETELY AND IMMEDIATELY RUSSIAN SOURCES. BECAUSE THEY FEEL THAT UKRAINE IS DOING WELL ENOUGH ON THE BATTLEFIELD THAT THEY ARE NOT GOING TO GET THE PRESSURE OF BEING TOLD THAT THEY ARE FUNDING VLADIMIR PUTIN'S WAR MACHINE. THEY SELL THEIR ENERGY WHERE THEY CAN. ALL THIS TALK IS GOING ON AND NATURAL GAS PRICES ARE DOWN ABOUT 50% FROM THEIR PREVIOUS HIGH, EARLIER IN MAY. BRENT IS DOWN. TO ME, I THINK PRICES AT THE PUMP MAKE A GOOD STORY. FROM AN EQUITY INVESTMENT, I DO NOT THINK THAT IS THE BIG PICTURE. THE BIG PICTURE IS THAT WE ARE SETTLING INTO A HIGHER PRICE POINT AND ENERGY THAT WILL PROBABLY BE SUSTAINABLE, BUT IT WILL NOT BE SUPER VOLATILE. > > THE PSYCHOLOGY OF THE CONSUMER. EVEN THOUGH THEY ARE SPENDING, THE PSYCHOLOGY REMAINS FRAGILE. IF YOU GET A FURTHER SPIKE HIGHER, THE AVERAGE PRICE IS $4.50 NOW. IT COULD TIP US TOWARDS A SLOWDOWN. WE WILL BE WATCHING IT VERY CLOSELY. JONATHAN: THANK YOU. COMING UP, WALL STREET FINDING SOME COMFORT IN HEDGING AND THIS SURGING VOLATILITY. THAT IS JUST AROUND THE CORNER. JONATHAN: EQUITY FUTURES. EXPECTING GROWTH TO WE ACCELERATE. CUTTING THE PRICE TARGET. FINALLY, DOWNGRADING TARGET. EXPECTING SHARES TO REMAIN UNDER PRESSURE. WE HAD DOWN THERE BY ALMOST 25%. COMING UP, VALUATIONS ARE NO LONGER THE PROBLEM. THE OPENING BELL IS JUST AROUND THE CORNER. JONATHAN: WE ARE ABOUT 20 SECONDS AWAY FROM THE OPENING BELL. TARGET IS ABOUT TO GET ABSOLUTELY HAMMERED. WE HAD DOWN BY ONE POINT. THE OPENING BELL RINGS IN NEW YORK. YIELDS ARE A LITTLE BIT LOWER, ABOUT A BASIS POINT. THE EURO-DOLLAR -- AND SEND OF THAT STORY, 53. ALONSO LOOK AT AROUND THE OPEN. > > A VERY BRUTAL DAY FOR TARGET, THE WORST SINCE 1987, PLUNGING MORE THAN 24% ON A MASSIVE OPERATING MISS. RISING INFLATION. THEY ARE NOT ABLE TO MANAGE. THE FULL-YEAR GUIDE TAKEN DOWN BY 2%. A MASSIVE MISS. TJX COMPANIES, A BRIGHT SPOT. INTERESTINGLY, THEY MISSED SALES, SLIGHTLY. THEY RAISED IT BY 20 BASIS POINTS. YESTERDAY'S BRIGHT SPOT, BIG TECH IS NOT REALLY HAPPENING TODAY. THAT IS THE BIG ANCHOR, YESTERDAY FOR STOCKS. TODAY, IT IS DRAGGING THE WRONG WAY. JONATHAN: WE ARE DOWN ABOUT 1.2%. ABBY JUST POINTED OUT. TWITTER IS ALL OVER THE PLACE, ONCE AGAIN. LET'S GET TO THE WEST COAST AND CATCH UP WITH ED LUDLOW. > > TRADING THAT HE $7.94, AS IT STANDS. THE BOARD OF THE COMPANY ISSUING A STATEMENT TO BLOOMBERG SAYING THEY ARE COMMITTED TO THE DEAL AT ITS ORIGINAL TERMS. VALUING THE COMPANY AT 44 BILLION DOLLARS AND THEY RECOMMEND SHAREHOLDERS THAT THEY GO WITH THAT DEAL. YOU LOOK AT THE SPREAD ON THIS DEAL. IT IS WIDE. IT GIVES US AN INDICATION. LOOKING AT THE STOCK, WE HAVE REVERSED THE DIRECTION THAT IT WAS GOING ON TUESDAY. WE SAW THEM REPORTING ON TUESDAY THAT HIGH-LEVEL MANAGERS HAVE LEFT THE COMPANY. ONLY EIGHT OUT OF THE 37 ANALYSTS HAVE RAISED THEIR TARGET. ANOTHER INDICATION OF HOW WE FEEL ABOUT IT. JONATHAN: A COUPLE MOVING PARTS TODAY. A HEADLINE FROM SECRETARY YELLEN OUT. LET'S CATCH UP -- CATCH UP WITH ANNE-MARIE. > > WHAT WE ARE HEARING IS THAT THERE IS NO FINAL DECISION JUST YET. IT COULD IN AND IF THIS IS TRUE, WHAT SECRETARY YELLEN IS SAYING, THAT THE TREASURY DEPARTMENT WAS LEANING TOWARDS THIS. THERE HAS BEEN A CARVEOUT. WHAT THEY POTENTIALLY WILL DO NOW IS NOT ALLOW THAT TO LAST. IT WOULD BE ENDING AND RUSSIA WOULD BE AN A DIFFICULT POSITION. THEY OWE MONEY TOWARDS THE END OF JUNE. IT COULD BE PAID, NOT IN U.S. DOLLARS. WE HEARD FROM THE FINANCE MINISTER SAYING, THEY WILL PAY THEIR DEBT. IT IS A VERY GREAT -- GRAY LINE. RUSSIA IS CLOSE TO GETTING A DEFAULT. THEY HAVE A LITTLE TO PAY, BUT WITHOUT THIS, IT WILL MAKE IT DIFFERENT -- DIFFICULT. JONATHAN: WE LOOK FORWARD TO YOUR COVERAGE ON THIS STORY THROUGHOUT THE DAY. WE ARE ABOUT FOUR MINUTES AND. TODAY IS TARGET. IT IS DOWN BY ABOUT 23%. THINGS DO NOT LOOK GREAT FOR THAT NAME, AT ALL. > > IT IS LOOKING BRUTAL. WE SAW WALMART POSTING ITS FIRST DAY ON THE BACK OF ITS OWN OUTLOOK CUT. THIS IS JUST MORE DRAMATIC COMING FROM TARGET AS THEY CUT THEIR OPERATING TARGETS ON THAT MARGIN. THEY PREVIOUSLY THOUGHT 8% OR HIGHER. IT IS ACTUALLY CONVERTING THOSE SALES INTO PROFIT. THE AVERAGE TRANSACTION TOTAL WAS DOWN BY .6%. IN PART BECAUSE TARGET TOOK HEAVY MARKDOWNS ON ITEMS TO GET INVENTORY, WHICH BUILDS UP 43% HIGHER. DEMANDS HAVE RECEDED FOR SOME OF THOSE BIGGER ITEMS. IT IS A MATTER OF THE MIX AND WHAT THEY ARE SPENDING ON. FOOD AND GAS INFLATION IS DRAWING MONEY AWAY FROM DISCRETIONARY MERCHANDISE SPENDING. YOU CATER TO A LOWER AND CONSUMER, IT RAISES COST TO OFFSET SUPPLY CHAIN AND LABOR ISSUES. IT IS NOT LIKE THINGS WILL GET BETTER. LOOKING AHEAD, IT IS CLEAR THAT MANY OF THE PRESSURES WILL PRESENT IN THE NEAR TERM. I NEWS FOR TARGET, BUT WHAT KIND OF WARNING DOES THAT SEND? JONATHAN: WE HAD BEEN TALKING IF WE SPEND 12 MONTHS DISCUSSING IT, HOW IS IT A SURPRISE? IT IS GETTING HAMMERED DOWN. NOT MUCH GOING ON HERE. YOUR YIELDS ARE DOWN. YOUR TWO YIELD UP ABOUT A BASIS POINT OR TWO. DOWN FROM 322 TO ABOUT 298. THE EQUITY MARKET, BE PULLED BACK JUST TO GIVE YOU A SECTOR BREAKDOWN. THE GUESSWORK ABOUT 1.8%. YOU GET A LITTLE BIT OF OUTPERFORMANCE BY ABOUT .1%. TRYING TO KEEP IT SIMPLE. THE S & P 500 IS CURRENTLY AT A CROSSROADS. WE THINK THE EQUITY MARKET WILL BE TELLING US THAT IT IS STARTING TO PRICE IN A RECESSION. LET'S GO THERE. WHAT ARE BE PRICING IN? > > WE ARE PRICING IN A GROWTH SCARE AND A NEAR-DEATH EXPERIENCE, WHERE EVERYBODY WORRIES VERY DEEPLY AND LEGITIMATELY. WE HAVE SEEN A NUMBER OF THESE CYCLES BEFORE. THERE HAVE BEEN FOUR DIFFERENT ONES. REMEMBER, THAT WAS THE DISCUSSION THAT DID NOT RESULT IN AN ECONOMIC RECESSION. WE HAD THE 2018 DEBACLE WHERE WE HAD TIGHTENING FROM THE FED AND FEAR THAT CHINA AND THE TRADE WAR WOULD FORCE A RECESSION. WE HAVE GOT TO THAT 20% THRESHOLD. I THINK THAT THE MARKET IS TRYING TO FIND A BOTTOM HERE. THERE IS A LOT OF UNCERTAINTY ABOUT WHETHER THAT WILL COME THROUGH OR IF IT WILL BE A NEAR-DEATH EXPERIENCE. WE HIT TELL. THE MARKET IS JUST TRYING TO FIGURE OUT WHAT THE NEXT STEP IS. JONATHAN: YOU WENT THROUGH THE PERFORMANCE OVER THOSE PERIODS. TELL US THE KIND OF NUMBERS WE HAD TO DROP TO. > > IT DOES FEEL LIKE THAT THEY TEND TO BOTTOM OUT IN VERY DIFFERENT PLACES, AND DIFFERENT CYCLES. WHAT WE FOUND TO BE THE MOST USEFUL EXERCISE IS TO LOOK AT FED TIGHTENING PERIOD AND MAKE SURE THAT WE HAVE SEEN SEVERAL INSTANCES. I THINK WHAT THAT IS TELLING US IS THAT WHAT THE FED ITSELF HAS PRICED IN. THEY ARE A LITTLE BIT ALL OVER THE PLACE. WE SAW MULTIPLE CONTRACTION AROUND THE 91 RECESSION. THEY WERE OBVIOUSLY MUCH DEEPER AND THE PANDEMIC WAS MUCH DEEPER. I THINK THAT WE LOOK AT THE MULTIPLE CONTRACTIONS THAT WE HAVE SEEN AND IT HAS BEEN BETTER. IT IS RIGHT IN LINE WITH THOSE EXTREME TIGHTENING PERIOD'S AND I THINK THAT IS WHAT THEY ARE PRICING IN ON THAT PERSPECTIVE. IT IS GOING TO TIGHTEN THINGS IN A HURRY, BUT IT IS NOT GOING TO THAT NEXT STEP YET. THE PROBLEM IS THAT YOU HAVE TO FIGURE OUT WHAT KIND OF RECESSION IT WILL BE. THAT ONE WAS ONLY ABOUT A 20% CONTRACTION. IF IT IS SOMETHING NASTY HERE, THERE IS PROBABLY A LONGER WAY TO GO. IF WE HAVE A RECESSION, IT WILL BE SHORT AND MILD. JONATHAN: THERE ARE WAYS OF MEASURING SENTIMENT. CAN YOU WALK ME THROUGH THOSE ISSUES RIGHT NOW? AND TELL ME WHETHER YOU ARE SEEN SUFFICIENT CAPITULATION? > > IF YOU PUT THIS TOGETHER, THEY ARE ELEVATED, BUT IT IS NOT THE WHERE'S THAT WE HAVE SEEN. WE TALKED TO OUR DESK ABOUT THAT AND WE THINK THAT ORDINARILY, THEY HAVE BEEN HEDGED, SO WE ARE NOT SURE THAT THERE WILL BE A WASHOUT THERE. IF YOU LOOK AT CRYPTO, A LOT OF DISCUSSION ABOUT WHAT IT MEANS FOR THE EQUITY MARKET. WHAT I WILL TELL YOU IS THAT WE DO SEE A CORRELATION BETWEEN STOCK PRICES AND BITCOIN. IT COIN HAS BEEN A LEADING INDICATOR. UNFORTUNATELY, THEY ARE PRETTY MUCH COINCIDENCE. I DO NOT THINK YOU CAN LOOK AT CRYPTO TO GET YOU BACK IN THAT LEAD. IT IS NOT REALLY TELLING US MUCH NOW. THERE HAS BEEN SIX YEARS -- SEVERE DECLINE. IT DOES END UP BEING A SAFER ASSET. I THINK IT IS TELLING YOU THAT IT HAS CAPITULATED. HE CAN GO INTO MORE DETAIL, IF YOU WANT. THEY ARE GATING VERY CLOSE. JONATHAN: ONE PARTICULAR NAME IS DOWN EVEN HARDER. TARGET. I KNOW YOU CANNOT OFFER ME SPECIFIC INFORMATION, BUT I'M TRYING TO FIGURE OUT IF WE HAVE A REAL EARNINGS STORY HERE. WE SAW IT HAPPEN WITH WALMART YESTERDAY. THE MARKET IS VERY SURPRISED BY THE OUTCOME. ON A STORY THAT IS SO WELL UNDERSTOOD, YET APPARENTLY, CERTAIN PARTS OF THE MARKET ARE POORLY PRICED. WHAT DOES THAT TELL YOU? > > I THINK YOU HAVE TO DIVIDE DIFFERENT PARTS OF THE MARKET IN TERMS THAT YOU ARE SEEING THERE. I THINK WE ARE IN A STRANGE POINT IN THE MARKET RIGHT NOW. I WILL GIVE YOU THE MARKET, BUT BACK THEN, RIGHT AROUND THAT PERIOD, CYCLICAL SECTORS AND SICK THEIR GROWTH SECTORS -- WHAT WE HAVE SEEN IS THAT SECULAR GROWTH IS ABOUT 50% OF THE MARKET CAP. WE KNOW THAT THE CYCLICALS -- THOSE ARE THE ONES THAT HAVE BEEN UP AND TO THE RIGHT. MY POINT IS, WITH INDIVIDUAL NAMES, SOME OF THEM HAD NOT BEEN TAKING AS MUCH IN THE PAST AS THEY COULD HAVE. THERE WERE SOME MISSTEPS IN THE PAST. THERE ARE SPECIFIC NAMES THAT ARE HAVING TROUBLE. THE RISKS WERE NOT PRICED IN. WHEN WE THINK ABOUT IT FROM THE MARKET, YOU CANNOT OVERLY FOCUSED ON A PARTICULAR SECTOR, A PARTICULAR INDUSTRY, ESPECIALLY IN THE MARKET. THE EXACT SOFTWARE COMPANIES ARE SO MUCH MORE INFORMATIVE. THEY ARE REALLY BUFFERING THEM. JONATHAN: THAT FINAL POINT IS AN IMPORTANT ONE. IT IS GREAT TO CATCH UP WITH YOU. WHAT A DIFFICULT MOMENT IN THE MARKET. 15 MINUTES IN AND DOWN ON S & P. ON THE NASDAQ, DOWN ALMOST 40 FULL PERCENTAGE POINTS. TWITTER IS NOT LETTING GO OF THE DEAL. > > IF A DEAL GETS DONE, IT IS SIGNIFICANTLY LOWER. JONATHAN: BETWEEN WHERE THE PRICE IS AND WHERE THEY WILL AGREE. THAT CONVERSATION, NEXT. THIS IS BLOOMBERG. > > IF A DEAL DOES GET DONE, IT IS SIGNIFICANTLY LOWER. THE 5420 AT THIS POINT IS AT THE WINDOW. NOW IT JUST COMES TO, CAN WE RENEGOTIATE ON THE ISSUE, OR DOES HE WALK? JONATHAN: THE BOARD SAYS THE FOLLOWING, WE INTEND TO CLOSE THE TRANSACTION AND ENFORCE THE RECRUITMENT. IN THOUGH HAS MORE. ? TRADING DOWN. PRETTY DISTANT FROM THE OFFER THAT ELON MUSK HAD. THE GAP BETWEEN THOSE PRICES IS AN INDICATOR OF HOW WALL STREET ASSESSES THIS DEAL. A DIFFERENCE BETWEEN WHAT IS HAPPENING IN PUBLIC AND WHAT IS HAPPENING INDOORS. BASICALLY EXPLAINING, ACCORDING TO SOURCES THAT ELON MUSK IS JUST CARRYING ON AS NORMAL. THE NEGOTIATIONS THAT THE DEAL WAS GOING SMOOTHLY. ONE KEY POINT OF REPORTING, THE PROXY FILING OF TUESDAY WAS SIGNED OFF BY ELON MUSK, ACCORDING TO SOURCES. THE PROXY FILING ON TUESDAY ADVISED SHAREHOLDERS TO VOTE FOR A DEAL. THERE IS THIS GAP THAT WE ALL FOLLOW AND WHAT HIS BANKERS AND ADVISERS ARE DOING IN THE BACKGROUND. ANY INDICATOR FROM THE MARKET -- IF IT DOES, PROBABLY COMING IN AT A LOWER PRICE. JONATHAN: THE CRUDE PRICE IS 64 20. THANK YOU. I HAVE NO IDEA WHAT HAPPENS WITH THIS DEAL, BUT I CAN GUARANTEE ONE THING THAT LAWYERS AND BANKERS WILL MAKE A LOT OF MONEY. > > YOU HAVE MORE THAN $100 MILLION. SOME OF THAT HAS COME UP FLAT. THEY DID OPINIONS AND IT CAME TO THE TWITTER DEAL AND WHEN YOU LOOK AT THE FILINGS, WHAT IS INTERESTING IS THAT THE IDEA OF A LOWER PRICE, NEITHER BANK THOSE BELOW $50. IT POINTED A LOT OF THIS -- IT IS HARD TO GET MUCH LOWER THAN THAT. MOST COME AFTER THE DEAL CLOSES. THAT IS A PAYOUT THAT WOULD COME FROM GOLDMAN SACHS. AS YOU KNOW, MORGAN STANLEY IS ADVISING SEPARATELY. THERE ARE MORE FEES ON THAT SIDE AS WELL. IT WILL BE VERY INTERESTING TO SEE WHAT THAT NEW DEAL PRICE WOULD BE, IF YOU EVER GOT ONE. I TO POINT OUT HOW MUCH THEY MIGHT BE TIED TO THE DEAL, REGARDLESS OF THE BREAKUP FEE. IF THIS DIDN'T GO TO COURT, THEY WOULD STILL HAVE TO CONSUMMATE THE DEAL. JONATHAN: YOU MENTIONED GOLDMAN. WHAT DID HE HAVE TO SAY? > > DAVID SOLOMON HAS BEEN HITTING THE NAIL ON THE HEAD FOR A LONG TIME HERE. HE SAID IT WAS AT THE FOREFRONT OF EVERY CONVERSATION THAT HE HAS WITH INVESTORS. HE CERTAINLY SEES THE RISK OF IT. HE SAYS CLIENTS ARE PREPARING FOR LOWER ASSET PRICES. THE THING TO WATCH IS CREDIT SPREADS. THAT WOULD BE THE ONE THING HE IS WATCHING FOR. > > THANK YOU. FROM NEW YORK CITY, THAT DOES IT FOR ME. UP NEXT, MIKE MCKEE WILL BE SITTING DOWN WITH AN OFFICIAL THAT YOU NEED TO LISTEN TO. FROM NEW YORK CITY, THIS WAS THE COUNTDOWN TO THE OPEN. THIS IS BLOOMBERG. > > WE HAVE A SHOW GUEST, THE CHICAGO FED PRESIDENT JOINING US NOW. THANK YOU FOR COMING IN. IT IS NICE TO SEE SOMEBODY IN PERSON FOR A CHANGE. A LOT OF PEOPLE QUESTIONING WHETHER THE SAID IS GOING TO BE DEBATING MONETARY POLICY OR WHETHER WE ARE LOCKED IN FOR THE REST OF THE YEAR. THE FED HAS SAID AND JAY POWELL HAS SAID 50 BASIS POINTS AT THE NEXT COUPLE OF MEETINGS AND WE ANTICIPATE SOMETHING LIKE THAT RUNNING THROUGH DECEMBER. > > WE HAVE THIS TIME AND COMMITTEE HAS COALESCED AROUND MOVING OFF OF THE EFFECTIVE BOUND. WE HAVE BEGUN DOING THAT AND WE WILL BE MOVING EXPEDITIOUSLY TOWARD SOMETHING MORE LIKE A NEUTRAL RATE. MY ASSESSMENT IS IN THE 200 QUARTER TO 200% RANGE. THE CHAIR HAS SAID LIKE WE HAD 50. 50'S ARE ON THE TABLE FOR SOME PERIOD OF TIME. I WOULD EXPECT BY THE END OF THIS YEAR, IT WILL BE LIKELY THAT WE WILL BE AT A NEUTRAL SETTING. WE WILL ADDRESS AND IM EXPECTING THINGS TO IMPROVE, BUT I THINK IT WILL TAKE SOME TIME TO TAKES -- TAKE CARE OF THIS. STC ANY REASON -- > > I THINK IT IS USEFUL TO FRONTLOAD OUR POLICY SETTINGS. IT IS EXTREMELY LIKELY THAT IT WILL BE 50 AT THE NEXT MEETING AND THEREAFTER. ONCE WE GET TO A GOOD SETTING FOR THE FUNDS RATE, WHERE WE CAN AFTER THAT DO A MORE MEASURED PACE OF INCREASE AT EACH MEETING AFTER THAT, I THINK THAT WOULD BE A NICE, SHALLOW PATH THAT WILL GIVE US TIME TO ASSESS THE INCOMING DATA AND TO KNOW WHAT EXACTLY IS COMING. IF WE DO IT SOONER, WE CAN GET TO A POINT WHERE WE CAN DO THAT SHALLOW PATH. LIKE I SAID, I THINK SOMETHING LIKE NEUTRAL BY THE END OF THE YEAR, WHETHER YOU GET THERE SOONER OR EARLIER IS NOT THAT CRITICAL. IT IS BEING WELL-POSITIONED TO FACE THE PROBLEMS THAT WE EXPECT TO FACE. > > HELLFIRE THE WILL HAVE TO GO TO GET THE RESULTS THAT YOU WANT? > > A HARD QUESTION. NOBODY WOULD PORTS -- DEBBIE REPORTS WHAT IT IS. IT DEPENDS ON WHETHER OR NOT WE HAVE TAILWINDS AT OUR BACK BOARD TAILWINDS THAT WE ARE FACING. WE WILL BE FEELING OUR WAY AROUND THAT. I HAVE A BENCHMARK OF WHAT I THINK. IF WE GO BEYOND THAT, 75 BASIS POINTS BEYOND THAT. THE RESTRICTIVE SETTING OF POLICY SHOULD BE WORKING TO BRING INFLATION DOWN. WE DO NOT HAVE TO CONSTANTLY INCREASE THE FUND RATES TO BE RESTRICTIVE. WE CAN SIT THERE FOR A WHILE. MAYBE WE SIT THERE LONGER AT A LESS RESTRICTIVE SETTING AND IT TAKES A LITTLE BIT LONGER FOR INFLATION TO COME DOWN, BUT THERE ARE MANY SPECIAL FLAK -- FACTORS. I AM HOPEFUL THAT WE WILL BE FACING 300%. > > WALL STREET WOULD LIKE TO KNOW THAT IF THE ECONOMY SLOWS, YOU WILL BE WILLING TO SLOW TO KEEP THE ECONOMY FROM FALLING DOWN OR WHETHER YOU WILL CONTINUE TO BE AGGRESSIVE IF INFLATION REMAINS HIGH. THE QUESTION IS WHETHER YOU SEE INFLATION OR NOT. > > WE HAVE TO DO A MANDATE. WE ARE TRYING TO SET THE MONETARY AND FINANCIAL CONDITIONS TO SUPPORT MAXIMUM EMPLOYMENT AND PRICE STABILITY. THE OBJECTIVE IS THE ONE THAT IS MOST CRITICAL. IT IS MUCH TOO HIGH AND I THINK IT WILL BE COMING DOWN. THE LABOR MARKET WILL BE DOING EXTREMELY WELL. THERE IS DEMAND FOR WORKERS AND I'M HOPING PARTICIPATION WILL INCREASE. THE FIRST ORDER OF BUSINESS IS GETTING INFLATION UNDER CONTROL. I DO EXPECT THE ECONOMY IS GOING TO COOL A LITTLE BIT. WE WILL STILL BE HAVING GROWTH. I AM LOOKING FOR TWO POINT 2% AS WE CONTINUE TO HAVE NEUTRAL RESTRICTIVE SETTING. THAT IS CONSISTENT WITH GROWTH. IF WE SEE SOMETHING WEAKER THAN THAT, THE TRAJECTORY LOOKS LIKE IT IS COMING DOWN. WE WILL HIT OUR 2% OBJECTIVE. WE COULD HAVE A LITTLE MORE LATITUDE. WE NEED TO BE FOCUSING. > > I ASK IN THE CONTEXT OF WHAT YOU ARE HEARING FROM THE CEOS IN YOUR DISTRICT ABOUT WHETHER THEY ARE STILL FEELING PRICE PRESSURES, WHETHER THEY FEEL THAT THEY HAVE THE POWER. > > WHEN I TALK TO BUSINESSES AND INDIVIDUALS, THEY ARE FACING A LOT OF PRESSURE. THEY HAVE PASSED ALONG MANY OF THOSE PRESSURES. THEY ARE PROBABLY NUMBERED. CONSUMERS ARE GETTING FED UP WITH HIGH PRICE IS AND THEY CAN RESPOND BY EXPENDITURES, BUT THEY RAISED WAGES, AND IN MANY CASES, SIX MONTHS, NINE MONTHS AGO, WE HEARD THAT THERE WERE INTENSE PRESSURES. IT IS ACTUALLY SATISFIED AND IMPROVING THE SETTING IN THOSE PLANTS. HIGHER WAGES AND IT DOES NOT MEAN THAT THEY HAVE TO KEEP GOING UP EACH QUARTER, EACH MONTH. I FEEL CONFIDENT THAT BUSINESSES ARE GOING TO GET ON TOP OF THEIR LABOR COST AND PRICING BEHAVIOR WILL BE MORE IN LINE WITH WHAT I THINK PRICE STABILITY IS. THERE ARE A LOT OF REAL FACTORS THAT COULD PLAY OUT IN DIFFERENT WAYS. THAT IS PART OF WHAT WE WILL BE LOOKING FOR. WE WILL HAVE MANY MORE MONTHS OF DATA TO SEE IF THE TRAJECTORY IS COMING DOWN. > > WE ARE TALKING WITH THE CHICAGO FED PRESIDENT. LET ME FOLLOW IT UP WITH A QUESTION. FOR THE AVERAGE AMERICAN, WHEN WHEN I -- WHEN WILL I FEEL LIKE MY PAYCHECK IS KEEPING UP WITH INFLATION? > > IT HAS BEEN DIFFICULT. FOOD PRICES ARE HIGH. WORLDWIDE FACTORS ARE AN ENORMOUS PART OF THAT. ENERGY SUPPLIES, THE RUSSIAN INVASION OF UKRAINE IS HITTING GAS PRICES, AGRICULTURAL PRICES. A LOT OF -- WE HAVE VERY STRONG DEMANDS. IT MAKES SENSE AND IT IS WHAT EVERYBODY IS DEALING WITH. YOU CANNOT GET EXACTLY THE PRODUCT THAT YOU WANT. IT IS A LOT HIGHER. I'M HOPEFUL THAT AS INFLATION COMES DOWN, HOPEFULLY SOME OF THOSE PRICES WILL COME DOWN. GAS PRICES ARE HIGH, AND THAT IS ALWAYS A NEGATIVE THING FOR CONSUMER CONFIDENCE. THAT IS NOT MONETARY POLICY. THAT IS MORE CONDITIONS. INCOMES HAVE GONE UP. LABOR MARKET IS GOOD. PEOPLE WHO WANT A JOB CAN GET A JOB. KEEPING EVERYBODY IN SCHOOL -- THAT WOULD BE BENEFICIAL FOR THE ECONOMY. > > IT HAS BEEN STRONG. SOME OF THAT IS THE FISCAL SUPPORT. IT IS HELPFUL FOR MANY HOUSEHOLDS THAT WOULD OTHERWISE BE IN THIS -- DIFFICULT SITUATIONS. MANY PEOPLE WERE DOING EXTREMELY WELL. SOMETIMES THOSE RETAIL SALES COME FROM A REDISTRIBUTION OF CONSUMERS. IT IS NICE THAT THE FISCAL SUPPORT PACKAGES AND THE STRONG LABOR MARKET, WHICH HAS HELPED LOWER INCOME -- WORKERS ARE GETTING BETTER JOBS AT BETTER WAGES. I HOPE THAT IT CONTINUES. > > WHEN YOU THINK ABOUT IT GOING FORWARD, HOW MUCH CONFIDENCE DO YOU HAVE IN YOUR ABILITY TO BRING INFLATION DOWN, GIVEN THAT YOU MENTIONED COVID, UKRAINE AND ALL OF THE OTHER THINGS THAT ARE GOING ON THAT ARE SUPPLY-SIDE PROBLEMS? THE FED WORKS ON THE DEMAND SIDE. > > THAT'S RIGHT. ON ONE LEVEL I'M CONFIDENT THAT WE CAN BRING INFLATION DOWN. IT IS AN EVER INCREASING PRICES OF ALL GOODS. THE SETTING OF THE FEDERAL FUNDS RATE CAN ADDRESS THAT. GAS PRICES WILL BE HIGH. LOW INFLATION -- THEY ARE NOT CONTINUING TO GO UP. ANOTHER SET OF PUBLIC POLICIES. FOOD PRICES ARE THE SAME WAY. I'M CONFIDENT THAT THEY CAN KEEP FROM INCREASING. THEY COULD STAY HIGH ON A CERTAIN BASIS. WHAT WE CAN GET INFLATION DOWN. IT WILL PROBABLY TAKE A MORE RESTRICTIVE SETTING IF THOSE FACTORS REMAIN HIGH. > > WHAT DO YOU ANTICIPATE HAPPENING WHEN YOU START LOWERING THE BALANCE SHEET? WILL WE SEE A RISE? IF SO, HOW MUCH? > > WE HAVE INCREASED OUR BALANCE SHEET DRAMATICALLY. WE CHOSE AMONG THE MOST AGGRESSIVE ROLLOFF THAT WE COULD. WE WILL GET IT DOWN TO A MORE NORMAL LEVEL. IT WILL IMPACT FINANCIAL MARKETS. IT IS THE SAME AS IF WE HAD INCREASED BY 50 BASIS POINTS, ON TOP OF WHAT WE ARE DOING. WE HAVE THAT RESTRICTIVE SETTING. I THINK MARKETS ARE FORWARD-LOOKING AND THEY PRICES IN PRETTY MUCH WHEN THEY KNOW WHAT IT IS. IT IS WORKING ITS WAY THROUGH FINANCIAL MARKETS. BORROWING RATES, MORTGAGE RATES GO UP. IT HAS HELPED SOMEWHAT WITH THE FRONTLOADING. WE ARE PROBABLY BETTER POSITIONED TO BRING IT DOWN BECAUSE OF THAT. I THINK THAT IS WORKING PRETTY MUCH HOW WE WERE HOPING IT WOULD. > > THANK YOU FOR JOINING US. THIS IS BLOOMBERG.

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'Bloomberg The Open' Full Show (05/18/2022)

Jonathan Ferro highlights the market-moving news you need to know heading into the opening bell on Wall Street. Stocks extending declines with investors assessing the growth outlook as monetary policy tightens and the impact of higher prices on earnings. RBC’s Lori Calvasina, Evercore’s Julian Emanuel and TPW’s Jay Pelosky discuss the future of Fed policy and the outlook for markets and the global economy. (Source: Bloomberg)

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