that's all for this edition of "dateline". i'm andrea canning. thank you for watching. good morning, everybody, and welcome to "street signs." i'm julianna tatelbaum, and these are your headlines the imf slashes its immediate term look. market turmoil has poised a rethink. >> the discussion has shifted as you pointed out. it's less about growth versus inflation and now about

financial stability versus inflation. >> it's added an extra layer of uncertainty to the global economy, but swift regulatory action restricted the potential impact. >> the contagion that whennet out from the credit suisse episode, you know, what's quickly mitigating, and the cost was, you know, fairly minimal. so i do think we saw some of the benefits from all of this work on resolution that was realized in this episode. >> swiss lawmakers issue a symbolic rejection after the takeover of credit suisse by ubs. social democrats tell cnbc the public is taking on significant risk. >> it's a risk that we cannot know exactly what will happen. if it goes bad, the population will pay a lot if it goes well, it's still positive it's exactly what you said ubs will make the deal of the

cen century. >> and the buffet effect our u.s. colleagues will speak to the berkshire hathaway chairman later this morning. a very warm welcome to the program this morning we're keeping a close eye on happenings in dc this week global growth is expected to decline to 2.8% this year before rising to a modest 3% next year. that is according to the imf's latest report following a, quote, rocky recovery. they're holding their spring meetings this week in dc while it's expected to stabilize, the imf warns the global outlook remains fragile in the wake of the banking crisis they're the lowest in an imf report since 1990.

the imf sees the u.s. economy expanding by 1.6% while the eurozone is expected to grow half that. the uk is expected to you the worst, contracting 3.6% this year. global inflation, meanwhile, is expected to normalize this year, according to imf projections, but it could be slower than normally thought despite a lowering in food prices, there's still a growth a return to growth will be slow. >> we have economies basically recovering from two powerful blows in the last two, three years, the pandemic, the russian invasion of ukraine that has disrupted energy markets and has raised prices of energy and food around the world we're on a mending path.

we're still convalescing if you want, so growth will still be slow we have an inflation problem and it requires monetary policy to tighten and simple banks have been doing that. that's why we have this broad trajectory around that, we also have the financial instability we've seen in the last month. we've seen a little bit of it in the last year as well n the second half of the year, and that is creating some downside risks for our global trajectory. >> he also said higher inflation will be here for some time. >> inflation has been stick yerk especially when we look at core measures of inflation. it excludes the very component of energy and food price in many countries, it's still going up headline prices have gone up, but energy prices have been falling, food prices have been going back down. that's the concern, because that underlying inflation is what central banks are looking at it's a more stable measure

the fact that it's still high, in some cases even increases, banks need to work to try to cool off the economy and so going forward, this is what they're doing, and we can anticipate they're going to keep doing that in terms of the wage price spiral, to be honest, there is not something we're overly worried about. we see prices rising very rapidly, but wage increases have not increased as much. people find that their income in real terms has been going down so we should expect wages to catch up eventually and people's real income to recover that means at some point wages will have to go up, and that's perfectly normal the question is whether this would trigger a second round right now we don't see much signs of this. why? in part the corporate sector has been sitting on pretty comfortable margins. when prices rise faster than wages, your revenues rise faster

than your costs. and as a result, the margins have been quite healthy in the last year, so they have room to absorb. >> about six months ago when central banks really started aggressively tightening monetary policy, a lot of the discussion we had was about the trade-off between growth on one side and containing inflation on the other. when you fast forward today and what i thought was really interesting about your report is you don't see a recession in the u.s. for the calendar year 2023. if anything, you see a mild recession in germany, minus 0.1% and also in the u k, minus 0.3%. does that mean there's not as big a trade-off in growth and inflation as we throughout was going to be? >> there's still a trade-off in the u.s., we expect a slowdown in growth in the u.s. this year and even next year we expect unemployment to be increasing under our baseline, unemployment

could be increasing in the 4%, high 4% by the end of next year. so there is the a slowdown the path to avoid a recession is narrow, but we cannot guarantee that one will be avoided. >> joumanna also caught up with tobias adrian and asked him about the impact of the higher interest rates on the banking sector. >> in the banks we have seen some of the stress it was badly managed, had risks on the asset side and the liability side of the balance sheet, and when inflation surprised to the upside, those risks were triggered, and, you know, the bank imploded very quickly. you know, other banks have these exposures, but most of them to a lesser degree. the good thing is that capital and liquidity is much higher today than it was in the 2008 crisis, and we have not seen a sharp rise in credit risk at the

moment but we also worry about the known bank financial sector, so the ldi is one example. in the other aspect we saw that there could be other stresses in the financial segment as well. >> elevated stresses right now potentially. the big question that market participants are asking is whether these episodes that we saw in the u.s., obviously in switzerland as well has been a focus in europe are idiosyncratic events or systemic events i looked at a couple of charts you published today. in the case of the u.s. banks, it seems to me there are potentially unrealized losses that could hit u.s. banks that could mark to market on the interest rate sensitive portfolios how worried should we be about that given the potential for a systemic episode >> so i would frame it in terms of inflation going forward

so what is priced in markets is that inflation will come down, you know, fairly quickly, and interest rates are going to decline as well. yield curves are sharply inverted and that would be positive news for banks with unrealized securities, because the market to market value of the securities would go back up and the unrealized losses would disappear. this is how banking works. they'll hold for maturity and they might lose for some time, and then they might win and nothing happens. of course, there are a number of banks with exposures to these unrealized losses, but we also have a very strong safety net, in particular in the u.s so the systemic risk was used in the u.s. to backstop the deposits, even the uninsured deposits of the banks that were under stress and that contain the problem. so i would expect that the

policy tools of the central bank, the federal reserve, and the deposit insurance are strong enough to contain those stresses. >> meanwhile imf warned about the rise of interest rates. >> there was a substantial increase in the advanced and developing world we've seen a little bit of back-off from the top. some of it is because of higher interest rates and a drop in the nominal value, but it's still quite large relative to the size of the economies, and it has to be serviced, and it's going to roll at a high rate. so it's something we watch and watch closely, and i think markets need to pay attention. and in the u.s. you have a discussion about the debt ceiling. if the gold standard, risk-free asset globally, if we see rumblings of a potential fault here, imagine how that filters through the system hopefully the u.s. will do the

right thing. >> fascinating conversation coming out of dc. as to the markets, we're off to a fairly muted start. the stoxx 600 up about a third of a percent a quiet week a four-day week for most in europe in terms of what we saw yesterday, european equities outperformed their u.s. counterparts we were closed from last thursday it was the first time european investors had a chance to react on the robust jobs report on friday no doubt about it, that cpi report is taking center stage due out in the united states we're looking at the minutes from the fed's march meeting and they'll deliver some fresh commentary plenty on the macrofront here's a picture from a regional perspective. it is green for the most part. the only region trading in the red is the swiss market.

xetra dax up 4%. similar for the italian market ftse 100 up 0.6% and cac, about half a percent we've got media, utilities, industrials in front on the downside arc bit of a pullback in technology we're down about 0.7 %. the tech-heavy nasdaq fell about 0.4%, the fifth negative session in the last six. the tech sector very sensitive as we brace for the cpi printout due out later today. we saw bond action sovereign bonds selling off amid growing expectations that the fed will deliver another rate hike at its next meeting the french 10-year bonds and others saw a high yield rate this morning we've gone the 10-year italian trading at 4.16%

and the bund around 2.3% u.s. futures, here's the picture from wall street we've got to a similar story to what we're seeing here in europe modest gains indicated across the board. all three of the majors pointing to a strong start after a fairly muted day yesterday. s&p closed essentially flat on the day. the tech-heavy nasdaq falling about 0.4% the faang stocks were hit most heavily. i'm very pleased to say i'd welcome our next guest thanks for joining me this morning. n first question, are we in a bad data regime when it comes to markets? >> i think what's changed so far this year is that the fed has been data-dependent for some time, but it's been only

inflation data-dependent. that's important for multi-asset investors. we've seen over the past couple of months, weaker economic news and particularly what we've seen in stress from the banking sector is starting to feed through. so in terms of today's print, clearly markets will be hoping for another relatively soft number on cpi to allow the fed to build this narrative that a pause is near, but ultimately i think growth data today is effectively as important as inflation data. >> on that front, what was your interpretation of friday's non-farm payroll support and how that will factor into the fed's decision making? >> i think you're right. to me, the jobs market we had on friday was cooling gradually, but when you think about what's driving inflation now, it's really shelter, one, and core

services, which is closely linked to the jobs market, number two i think the fed can be looking at the data and understanding that the case for them to pause is strengthening because there's a danger if they were to keep hiking over the summer, they'd end up doing so not because of what's happening in the economy today and what we're going to be seeing going forward, but looking back three, six months ago and saying, the labor markets with strong then and the housing market was strong then and we're going to keep hiking for your me, i think there's one more fed hike to come, but that pause is gettinger closer. >> what would tit take the fed o pause? >> i think an inline cpi print is probably enough to hit pause when it comes to may ultimately why do they need to keep going when we know the leading accounters is suggesting that both shelter and services are going to start cooling you can look at some of the higher frequency rents data and

housing data that the shelter is going to come off. the wage growth number we had on friday was also cooling as well. so i think there's enough of a case for the fed to hit pause. the case we cut is a different story because we're still looking at inflation at pretty elevated levels but at least we can look at the markets and their feeling is the work is pretty much done. >> fascinating even if we get an inline print, that could be enough to warrant a pause. how are you thinking about the prospect of the cuts is that something on the radar for 2023 or 2024 probability >> it's still a 024 story. let's be clear inflation has broadened, and we're still looking at a number probably in the fives. that is still a long way above target given everything the fed can see in terms of the economy, it makes sense in terms of any kind of forward guidance. they don't know how far credit conditions are going to tighten. they don't know how far the

economy is going to slow in the second half of the year. they're saying we're going to sit back and wait to me makes sense. for them to be comfortable in cutting, you need to see a much sharper deterioration number in inflation than i'd expect. i think it's more a 2024 story than a 2023 one. >> what do you do with stocks where the fed pauses with rates at 5% and keeps them there for some time. do you see a rally or do you begin to fade it >> the question i would ask is how much more upside can tech stocks see from the markets discounting the fed. clearly it's been a slow start for the growth you're up 12%, 13% in u.s. growth stocks so far primarily because markets have been saying, well, the fed is done, and not only are they done on hiking, but they're now turning to cutting that's not my view when you look at the market composition, i'm getting up

comfortable as they're trying to roll out the playbook of the last decade. it means the economy is going to start coming back and multiples can expand that's not where we stand today. we're talking about a fed that's looking at higher rates for longer and multiples are already pretty expensive for me i think at the very least investors need to be thinking about values i think some value sectors could prove to be a little more defensive over the next few months because they're not going to see the same kind of multiple exception. so it's places like staples, utilities, energy, some of the more defensive parts of the equity market that i think could actually hold up a bit better. i would be wary of chasing this tech rally. >> very clear. so what does this mean for bonds then you talked about the historic correlation between equity and bonds returning. what does this mean for position or strategy when it comes to

bonds? what would you advise? >> absolutely. the key message is bonds can work again in the way they have done historically in terms of diversifying against growth risks. what's interesting is when you're follow the market it feels like investors are almost wanting to be buying duration 20 to 30 bits higher than where we are. when ten-year treasuries hit, it was, well, maybe it's 4.25, 4.30, now it's back to 3.4 then they would say once it gets back to 5, people will be attracted again. it adds to duration because in a world where the growth risks are intensifying and where inflation is beginning to slow, that negative correlation between stocks and bonds returns and, therefore, duration can return in the face of multi-seattle directors. >> thanks for joining us coming up on "street signs," swiss lawmakers debate ubs's

takeover of credit suisse in a special session of parliament. we'll bring you the outcome of their late-night vote next. and novo holings the controlling shareholder posting negative portfolio return in a tough 2022 we'll speak to the ceo kasim kutay xtne when we started our business we were paying an arm and a leg for postage. i remember setting up shipstation. one or two clicks and everything was up and running. i was printing out labels and saving money.

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welcome back to "street signs. the lower house of switzerland's parliament has rejected the swiss government's rejection plan from credit suisse. the late-night vote came after the upper house approved the government's plan to provide funds to take over the u.s. rival. the debate will continue in both chambers followed by another round of voting, although, this is important, it's largely symbolic since the funds have been committed and account be blocked. we were told the burden shot not fall on the swiss taxpayer. >> if it goes bad, then the population will pay a lot.

if it goes well, there will be the deal of the sensetry billions and billions will flow into the ubs and we don't think that's fair. there's a de facto guarantee for the bank what happens is when there's a problem, so if the risk is a problem and we lose a lot of money or the bank has huge problems, then the swiss population would have to pay hundreds of billions, but if all goes well, then the population won't see any of it. and people won't understand that. >> tobias adrian says that he was optimistic about the progress made to prevent big banks such as credit suisse from failing. >> i do think that the outcome was fairly good from a financial stability point of view, right i mean, there was a bank that had been under pressure for some

time it had been making losses. there were structural issues, and there was an acute crisis in this particular market circumstance the government helped but sometimes the net cost is fairly contained, i would argue the financial stability is very sizeable, you know the contagion that went out from the credit suisse episode, you know, was quickly mitigating, and the cost was, you know, fairly minimal so i do think we saw some of the benefits from all of this work on resolution that was realized in this episode. >> hsbc says it has hired more than 40 bankers from silicon valley bank following its sale to first citizens. the u.s.-based hires will establish a nubanking team in other corporate news,

shares are under heavy selling pressure again after the scandinavian airline announced it's seeking equity bids as part of bankruptcy proceedings. traffic figures are also scheduled to be released today nova holdings has posted a negative return of 6% on its investment portfolio for 2022. total returns came in on the back of a strong performance of others we're very pleased to say the ceo of nova holdings joins me now, ka seesim kutay. i think it would be helpful for viewers for you to give us a quick overview how nova holdings is structured, the difference between nova group and your investment portfolio. >> thank you for having me it's a pleasure to be with you this morning so nova holdings is a holding

and investment company responsible for managing the assets and wealth of the nova fortis foundation, one of the largest philanthropic foundations. all of their assets sit within nova holdings. those assets are in two groups we have what we call the holdings, which is our controlling shareholding in the pharma company and the other is in another company which recently announced a merger with another one of our important shareholders, christian hanson the other part of our portfolio is what we call the investment portfolio, which as you just noted was down minus 6% for 2022, which on a relative basis is a performance we are satisfied with and at the end of every year, we send dividends up to the nova foundation for them to do a lot of the great work they do for

medical research and other charitable and philanthropic causes. >> fantastic let's talk about novo group. you mentioned you've got a controlling stake. it's one of your biggest positions. and novazime announce d it what would you say to those shareholders who are skeptical about this deal? what is the strategic rationale? why do you support these two companies coming together? >> it's a very powerful strategic rationale, and what i would ask shareholders is to look at the world the way we do, which is with a long-term lens so this is a combination of two bioindustri bioindustrial companies.

it's a biotech-based solution for industries it's a b-to-b plan it's within a broader context part of the decarbonization efforts, which we believe and i think most people believe is not only important for our societies and the sustainability of the pleasant but is an area that we think is going to generate very exciting long-term returns so the strategic ration yale ist put two companies that bring together a lot of complementary strengths. they're very strong on the enzyme side, christian hansen being very strong on the bacterial side to have both of those technologies under one roof will allow more holistic solutions to their customer base and to, as i said, move the ball forward and move the need terms of decarbonization and

sustainability. >> okay. so you've got to have a long-term investment horizon if you do, this is the kind of deal that could pay off. that's essentially your message to skeptical shareholders. let's switch over to a company that's been huge the stocks nearly doubles in two years in large part thanks to its obesity treatments what's your take on their major push into this space and what is this company going to look like on a median term given the growth they're seeing in wegovy, and i know they've got a few more in the pipeline. >> i don't want to go into that too much because those are questions the management themselves should ask but nova nordisk has been focused on chronic metabolic diseases diabetes has been the focus for

a long time and related to that, of course, is obesity. obesity, as you well know, is a significant health care problem on a global basis and increasingly recognized as a serious illness and disease and not just some sort of lifestyle condition that unfortunately many people have looked at it for a long time. so to be able to come forward with a solution, with a drug that effectively deals with, treats obesity in the way that wegovy does as a glp-1 compound is obviously a significant market opportunity and that's, of course, one of the main reasons why novo nordisk has done as well as it has. >> as we noted for 2022, we reported a negative return on investments of minus 6%. what was the main drag on your

portfolio, and what kind of targets are you targeting for 2023 >> i think the first thing to say is minus 6% is a number that's never nice to report negative numbers, but on a relative basis, it's a very strong performance we did outperform our blended performance. considering the backdrop of 2022 is one that we are satisfied with as i said the key drag, of course, not surprisingly was on the public equity side, the general underperformance there, nothing new, and, of course we are a significant investor in biotech and growth sciences and life sciences side. the whole sector has suffered a huge correction. mitigating that and the reason we've done relatively well is the asset class and the geo graphic diversification we've

been pursuing over the last five years. that meant we had a very nice counterbalance in the portfolio and we managed to come out with the minus 6% and not worse and as i said, we beat our benchmark. the highlights would be in terms of the strong performance that mitigating against what was going on in the equity markets a very strong performance there. our infrastructure portfolio, very strong performance there. we had a very good year in credit so high-yield bonds. and then our life sciences buyouts, our health care buyouts both in the u.s. and europe were in health care sectors that have proved to be very resilient and have continued to perform exceedingly well and generate attractive growth and value for our portfolio. so the balance of all of those things resulted in the negativer taking our questions

coming up on the show, japan's nikkei leads wednesday's gains in asia as warren buffett announces his latest bets in the country. we'll discuss next

signs. i'm julianna tatelbaum, and these are your headlines the global economy is heading for its weakest growth in over 30 years the fund's chief economist tells cnbc market turmoil has forced a rethink. >> the discussion has shifted as you pointed out. it's less about growth versus inflation. now it's more about financial stability versus inflation financial banks keep tightening the rates. >> the imf says it's added an extra layer of uncertainty to the global economy, but they restricted the potential impact. >> the contagion that went out from the credit suisse episode, you know, was quickly mitigating, and the cost was, you know, fairly minimal so i do think we saw some of the benefits from all of this work

on resolution that was realized in this episode. >> swiss lawmakers issue a symbolic rejeksz of the takeover by ubs the vice president of social democrats tells cnbc the public is taking on significant risk. >> there's a risk we cannot know exactly what will happen if it goes back, the population will pay a lot if it goes well, the possibility is exactly what you said ubs would make the deal of the century. >> the buffet effect, trading houses pushed the nikkei higher after they upped its stakes. our colleague will speak to the chairman later this morning. all right. we're just about two hours into the trading session here in europe, and we've got green for the most part in europe. ftse 100 up 0.6% and the cac 40

up 0.4%. european stocks put in a stronger performance than their u.s. counterparts, but, again, we had not opened since last thursday a little bit of a catch-up after the jobs report last friday. as for asian markets in the overnight trade, we're seeing continued gains. nikkei adding another 60 basis points we also had a verystrong performance in japan a lot going on in the country. let's talk through it. japanese whole sale price grew in march from the previous 12 months that's a fraction more than expected but well below the february reading of 8.3%, this as the boj's deputy governor says they'll continue with monetary policy to achieve price stability. here's where the big gains came. japan's nikkei was the biggest move never asia in the overnight trade, boosted by comments from

warren buffett the billionaire told the nikkei newspaper he's proud of his investments, and they have increased their stakes to 7.4% and he's considering adding to his portfolio in the country on a programming note, they'll be joining our colleagues in a few hours live from japan for a special "squawk box" event. softbank's ceo is set to sign a formal i a agreement with nasdaq to list chip designer arm which says a tent active deal was on monday. they reeled out an initial agreement. london is now tied with new york as the world's leading financial center, according to a new report from the city of london nicholas lions, lord mayor of london, told cnbc he has a plan to attract more investment in the environmental. >> we want to make sure we

reverse this market which has undermined the success of the uk stockmarket for the last 15 years. so creating a big growth forngsd a $50 billi ion pound growth fu to put private equity into these countries can make a strong statement about our uk intent to keep these businesses starting, scaling, staying here in the uk. that will make a big difference. once we do that, we'll start to see a rebalancing of evaluations between north american market and the uk. >> the recent banking sector turmoil has uncovered many vulnerabilities in the global financial system according to the latest report it says market sentiment remains fragile despite interventions by policy makers.

they warn emerging kmeps can be particularly at risk even that they've avoided the worst of the spillover. it is looking go finance through debt yo joumanna has asked how much it will rise. >> we warned them by saying the condition at which this debt might be paid and refinanced in the future might be a worse condition and it affects the stability of the economy a lot of the bullet payments as we call them occurred eight years after the loans were made. we need to address that situation. there are different things we have done. the common framework, there are things we would put in place

we would assess the debt, not necessarily reflecting the borrowers. secondly, we need to ensure that growth is there because without growth you will not be able to sustain. third we need to look at a currency mismatch. a lot of the debt was in dollars when the country was generating income in current currency it would be very important for countries to be able to offset some of the seasonal dominant risk. >> joumanna also spoke to the kenyan bank governor and asked whether it indicates that the economies will have to get used to structures of higher levels of inflation. >> i don't think the central bank will allow that to happen i think from at least my perspective, the central bankers that we talked to, indeed around the world, they're committed to their number one mandate, which is price stability and the reason for that is without price stability, there

will be significant problems in terms of even financial stability or for that matter even the efficiency of the markets, et cetera so inflation is important to bring it back, to put the genie back in the bottle >> there was cited a broader range regarding the most current countries. >> it's very much related to the war on ukraine and the huge impact on energy prices which impacted strongly our countries and then saw the effect of inflation, effect of interest rates and the tightening of monetary policy. so this has quite a significant impact on the forecast we expect now to slowly recover and increase again in 2024, but

the level of sovereignty is very high. >> you raised a certain number of issues, primarily the ukraine war. can the region you cover do well in an environment where the war is still raging on. >> the war in ukraine has a different impact on the operations of countries. neighboring countries have been impacted by confidence effect of the war in ukraine because they're so close that foreign investors see that as a sort of risky region that was one important effect, for example, in countries like the baltic region or eastern european countries they have also been very strongly, as i was saying, impacted by the energy crisis, financial insecurities, and a number of them had to really

reorganize. coming up on the prague, investor attention is on the cpi print coming into the u.s. we'll have all you need to know next hi. i'm wolfgang puck when i started my online store wolfgang puck home i knew there would be a lot of orders to fill and i wanted them to ship out fast that's why i chose shipstation shipstation helps manage orders reduce shipping costs and print out shipping labels it's my secret ingredient

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welcome back to "street signs. tupperware has warned it could go out of business and is in danger of being delisted as it seeks new investors. it has hired outside advisers to help improve its capital structure. sales have fallen despite a resurgence during the pandemic as the company struggles to appeal to younger customers. big u.s. lenders that contributed to the $30 billion rescue of the republic bank. they could set aside $100 million each investors will be closely watching today's u.s. cpi reading, which is expected to show a cooling on headline inflation to 2.5% on the year according to a dow jones

forecast however, a core reading is expected to gain pace, rising slightly to 5.6% minutes from last month's fed meeting will be released giving further insight to 25 basis points despite fears over the banking sector let's take a look at u.s. futures and where we stand in the lead-up to the cpi print we've got green across the board, fairly contained in terms of the magnitude, however. yesterday was a fairly flat session for the s&p. we did see some heavier selling in some names into the close the nasdaq ultimately falling 0.4%, overall the fifth negative effect with the faang stocks seeing the heaviest selling. as for treasury markets, here's a picture of how u.s. treasuries are trading right now. not a huge amount of movement along the yield curve. trading around 3.4% or so. yesterday we saw sovereign bonds sell off across various regions including in europe. markets now -- future is now

pricing in a 74% chance of a 24% basis hike thanks for being with us this morning. markets now seem to be firmly expecting a 25-point basis hike out of the fed fund next month what will we need to see in today's cpi print to solidify that expectation, solidify a 25-point basis hike? >> first of all, thank you very much for having me on. today's print, i'll make an easy prediction it will be very volatile today the volatility has been an average of plus two or minus two on that given day. with the recent nonfarm payroll labor statistics being very strong and the private adp payroll has been strong, if this print comes in hot, which, you know, 5.6 or higher on the core, i think that's the key to the fed, then you will absolutely

see that 25-basis point increase there's going to be a big contraction in lending it's already taking place. it was taking place before the banki ing issues of last month. >> what are you most concerned about? what area of the economy do you see as being most vulnerable >> certainly, i think, in the cre sparks commercial real estate, we're kind of experts in the banking area what we focus on is what is the exposure to commercial real estate in the banks. i think we'll get some telltale signs of a little bit of that. that's where you're starting to see kraks. you see a big houston multi-family borrower basically threw the keys back to arbor realty, and you're going to see

more of that that's just a function of where rates are and that's, again, why we would argue that the better thing to do is to stand pat for the fed. i think they will increase 25 basis points as the consensus and market is telling you. i don't think that's a smart thing. i would go with staying where we are because the contraction in lending is going to be significant in light of what happened last month and the mini crisis we had there. >> i certainly take your point about the warning signals and what we begin to hear from the banks when we report on friday i wonder to what extent that downsize is pricing. it's down 207 year to date and the small and regional lenders are down even more steeply are investors already prepared for this situation that you just outlined >> i think in terms of the regional banks -- and the kre is the best that's down 40% from the heise

in february this year. that's incredible. i think that's bake. in i would argue it creates opportunity because now you have a lot of really strong banks that are trading and, again, i would kind of tilt toward the smaller banks as opposed to the regal banks which have more of these uninshurd deposit problems the smaller banks are more interesting, and i do think now that they're priced close to book or just above book and six or seven times kind of forward earnings, it's a good earnings point potentially. you have to have a bit of a strong stomach, but i do think there are opportunities. there's been a lot of problem in the kre and krw indices. there are a lot of folks jumping in who aren't experts in the space and i think it has oversold. >> really, really clear. definitely feels as though there's been a lot of tactical trading in the banking sector over the last several weeks. looking ahead to the summer, it's cropping up a little more

and more, the u.s. debt ceiling and what this could mean for the u.s. market. do you think this is a market-moving event, something to brace for this summer >> it's always a drama it's usually an overplayed drama because ultimately, of course, they're going to have to approve the debt ceiling it always happens. it's really weathered the extremes of either party, particularly in this case the republicans. if they really want to make a stink and make a point, they will try to do that. but ultimately they will agree to a debt ceiling. i think it will create a little bit of volatility, but it plays out as drama. >> we'll leave the conversation there. thank you so much, neal wilson a little more to think about. i just want to flag for you u.s. listed chinese stocks are

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5:00 a.m. here at global headquarters and here's your top "five@5. we begin with stocks fighting the grindout and gains seeking some sort of momentum as investors gear up for the critical cpi report. the latest numbers on inflation continuing cool with data coming weeks before the fed's rate decision. and one fed head calling for patience by colleagues when it comes to raising rates >> and this morning we have breaking news in fr. the biden administration when it comes to new rules regarding th