The end of may if thats the biggest youre going to get, hey, well take it big moves in bunds yields on the tenyear note falling below 10 . There you see it at 1. 99, if my eyes serve me. And gold marching higher prices up 10 so far this month. Sixyear highs on gold more on the gold trade ahead kelly. Tyler, thanks lets get to the comments from fed chair powell he was speaking in the past hour about the economy and fed policy hes still speaking right now because its still the council of Foreign Relations part of the q a. This is, again, Federal Reserve chair jay powell saying the Federal Reserve will act as necessary, as needed to sustain the economic expansion he says that uncertainty over trade and Global Growth have increased. But hes grappling over whether these uncertainties will actually continue. Still, though, jay powell, the fed chair, saying the economy has performed reasonably well this year, and that the baseline outlook for the fed remains favorable, and that policy should not necessarily overreact to any one specific data point powell also hinting at potential insurance cuts, pointing to research that shows its best to act sooner and more forcefully, an ounce of prevention worth more than a pound of actual action now, this comes after st. Louis fed president james bowlered spoke on bloomboard earlier, regarding his dissent vote in last weeks big federal Interest Rate policy meeting. He said it now seems like a good time for an insurance rate cut but that a 50 basis point cut may be overdone. He does see, though, 50 basis points worth of total cuts by the end of the year. Bullard said he hopes fed action will straighten out the yield conser curve as well. Interesting because it seems that bullard, one of the bigger perceived doves on wall street is now slightly more hawkish jay powell considered one of the more hawkish folks out there, saying maybe more accomodation is needed and preemptively. A muddling by two sitting and voting fed members you can see the Market Reaction there dow is down about 150 at the session lows down 118 dom, thanks. Thank you very much powell saying trade and Global Growth are among the uncertainties. We have fresh data showing Consumer Confidence in the u. S. Has fallen to near twoyear lows home sales also down gold prices, sixyear highs, and the tenyear treasury falling below 2 once again. Whats the signal and is it time to get cautious. Evan brown is at ubs asset management, and gabriella is global strategist with market funds. Gabriella, do you agrew with mr. Bullard that probably in total a half point cut by the end of the year is likely in order, called for . We do we think one or two rate cuts by the end of the year, probably one in july and then september or december is up for grabs. And thats really because we agree with their characterization of the economy. The consumer is the life fest, so things are still okay, but its clear that the uncertainty is weighing on Business Confidence and Business Investment would a rate help cut the u. S. Economy would it help the Global Economy . I think thats such an important point because we are fixated on what the fed will do. But really what we should be asking ourselves is will it matter will it actually help this characterization of a downshift in u. S. And Global Growth . And we really dont think so because its happening because of Economic Policy uncertainty, not because of tight Monetary Policy so we really dont think it changes the picture. Then why do it . I think as draghi has said as well, we have to do something. We have to try to help we cant just throw our hands up in the air and give up but is it really going to help not so much. Maybe it puts a floor on growth. It puts a floor on the market, but there is no big acceleration coming evan, what do you think i think we have seen a full shift from the fed to Risk Management mode, where in the average ahead of every recession, the fed cut has been about 5 they have 2. 5 of ammo and the argument is, lets act really early to make sure that were ahead of this. Because the worse thing that happens is you cut 250 basis points, youre back to zero, and everyone thinks youre behind the curve. So insurance, it does make some sense, and it makes some sense in light of the data were seeing today the software Consumer Confidence and home sales how much of a downturn are you predicting our view on the economy is bend dont break were undergoing a midcycle slowdown, same as we did in 2011, 2012, 2013, 2014 ultimately, its the consumer, the labor market, that is what will make us hang tight. We have to watch that data really closely in those cases, there was never a fed cut outright they might have paused for a little while, gone slowly here and there. What makes this episode worthy of a bigger response so i think its, what theyre saying to us is that that Risk Management point its that they are they really want to act fast and aggressively to kind of get the economy making sure that its stabilized and support the market so we dont think that they are restrictive right now. But providing a little bit more accommodation is not necessarily a bad thing with inflation levels do either of you expect a recession in the u. S. Between now and the end of next year not this year. We usually say there has to be a reason for that usually its Monetary Policy thats too tight that seems to be off the table otherwise, its some sort of shock that occurs. Now, of course, its by definition hard to see that shock on the horizon we do think this trade issue could potentially become a shock if we see further escalation in tariffs. You dont expect there to be a breakthrough this week at the g20 no, and i think the best we can expect and what the market is expecting is just a truce lets just keep talking and postpone further tariffs, and then that cloud of uncertainty hangs over it, but theres no downpour that drives us lower. The same question to you, recession by the end of next year trade solution coming . Or postponement more likely . Immediately, no trade resolution coming. We hear the white house already out today lowering expectations. The best we can really hope for is talks continuing. And that uncertainty will be with us. The key is we dont get escalation if we get escalation, the risk of recession spikes dramatically without escalation from here, we think about a 1 in 4 chance over the next 12 months or so if the fed is acting the way it is, then that lowers that probability of recession thank you very much nice to have you. Great to see you to the blockbuster deal today in health care buying botox allergan. And check out abbvie shares down 16 on the news. Allergan soaring theyre up 26 lets take a closer look at whats driving this deal and who might be the next takeover targets. Joining us is david maris, securities analyst at wells fargo. What was your first reaction to the news this morning . Why abbvie . Interesting youre looking at it from the allergan point of view i covered allergan longer than anyone who covers allergan, back about 20 years ago, sat in an office when david piet first joined the company so to see it go out here to the company that makes humira and raises price a lot is a little disappointing. Why disappointing well, first, the stock the premium was a lot to where the stock had been trading but the stocks underperformed a lot. So its really off a low base. The other is that i can see why abbvie wants to diversify away from humira. I dont know why an allergan shareholder would want to diversify into humira. Do you think theres a risk the deal doesnt get done because of all that . From what i can tell, theres no vote so its nothing that could be broken up easily. If abbvie share goes down enough that the premium doesnt look like enough, allergan could step away and say this isnt a big enough premium but i dont think someone is going to step in to bid above just because this has been a process, allergan has been looking at Strategic Alternatives for a little while. Dont think someone bids more and i dont think an activist gets involved. What do you think this augers for the whole area are there other is it a target rich area that this deal could spur so there are really two types of pharma deals, i think if i had to classify them. One is were behind in science, and we need to buy the newest science thats coming on to the market those are a lot of biotech type deals. Then theres i have something going wrong in a few years and i should fill in this hole or try to augment or diversify away from this problem. This kind of falls into that this fall into the pfizer Warner Lambert deal from years and years ago. This is a consolidating industry as pricing becomes tougher as the administration continues to put pressure on things, youll see more consolidation. Does this deal do that in and of itself i dont think so, but again, this is a sign of the times. What youre describing in the business broadly absolutely. You mentioned the price hikes. Why is that significant here in particular do you think . I think theres a bit of a culture clash. Putting two companies together on paper is easy actually integrating them and making sure they get along, so you have a company that has its roots in irvine, california, and new jersey, allergan, and then a chicagobased company. Finding the synergys and getting them to work could be difficult. Theres not a lot of overlap, either theyre going to have to come from somewhere they say 50 are coming from rnd. Now, all of that said, you have, if humira, abbvies ceo was testifying recently before congress on price hikes to humira allergans ceo had come out a couple years earlier about a social contract of limiting price increases for drugs. So is there a culture clash . Maybe there will be. Are these two companies too closely associated with single products for their own good . I think allergan is a little more diversified and again, i dont cover abbvie so im taking it from an outsiders view. They have a very big pipeline on products coming onboard, but allergan is pretty diversified but you think of them as the botox company. You do. Yeah, the botox company they have a few billion dollar products. They are botox, they have fillers, and they also have restasis who else does this put in play then . Because its such a unique deal, i dont know if it has broader implications i think there will be more consolidation. I dont think this will pull other people in, but do i think over the long term, if you look at the Major Pharmaceutical Companies as channels, then you have to ask yourself, does it make sense for there to be two swiss companies. Does it make sense for a company who is very focused on diabetes to only be focused there i think there will be more consolidation, but this in and of itself doesnt drive that david, thank you. Coming up, the fallout from the trade war with china well speak with a republican governor who opposes the tariffs, and were watching shares of lunauennar. And well take you to vietnam for a look at how that country could benefit from the trade turmoil. Power lunch will be right back after this carvana is six years old this year and is the Fastest Growing place to buy a car in the nation. Its because we have thousands of people working hard to make our customers experiences the best. Its because we have tens of thousands of cars ready to be delivered to your doorstep. And its why hundreds of thousands of happy customers have ditched the dealership and bought their car online, earning us an average 4. 7 stars in the process. So if you didnt know about us before, you do now. Were carvana, and we want to give you the car buying experience you deserve. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. News out of the white house today ahead of the meeting between President Trump and chinese president xi jinping at the g20 summit. Lets get to eamon javers. Thats right. Heres whats going on a Senior Administration official just had lunch at the hey adams hotel across the street from the white house with a number of reporters. And in that lunch, the official sort of laid out some of the expectations forthe g20 you can read this as expectation setting for the g20 to make sure that the Global Financial community understands what might happen, what might not happen at the g20 this official telling reporters just within the past hour or so, ultimately, that the United States is not willing to come to the g20 with a list of concessions on trade and also that no broad trade deal is expected here at the g20. The official also saying ultimately that theres a possibility that the u. S. china trade talks could go on for months or years. So that is the downside of sort of what the official said. The official also suggesting, though, that this g20 summit could represent the rekindling of talks between the United States and china remember, those talks broke down later in the spring. Now, this Administration Official saying that the white house simply wants to restart talks. And seemingly setting that as a barrier for success here for this g20. No final deal expected this week, but ultimately, if they can restart talks, that would do a good one other thing this other said that you dont hear officials saying, that the president believes the u. S. Dollar is too strong and that the euro is too weak. You often dont hear the president saying anything other than they have a strong dollar policy and suggesting the president is going to begin interviewing candidates for the fed before too long. For the openings, not for the chair . For the openings, but this official also telling reporters that there are a variety of opinions inside the White House Counsels Office about whether the president has the authority to demote the fed chair. Theyre still keeping that as a live possibility, that the president could demote the fed chair if he so chooses and in the same breath, saying he doesnt so choose right now. Thank you very much backlash over the trade war with china has been intensifyi g intensifying fedex suing the u. S. Government, saying it shouldnt be held liable for transporting products that violate the trump administrations ban on some chinese companies. All this ahead of that big meeting between the president and president xi on saturday at g20 with us now to discuss trade and the economy and more is Iowa Governor kim reynolds. Governor, welcome. Youre a gop governor, we should point out just for the record. I am. But you dont love these tariffs. Tell us why. Well, no, i dont im a free market gal and i want to do what we can to continue to grow our economy 1 in 5 jobs in iowa is attributed to our ability to export our goods and commodities across the world we want to make sure, first of all, what i would love to see done is congress ratify the usmca. That would bring a great deal of predictability and stability to the market, and if we can get that done, we can join hands with our allies and really focus on china and see if we cant move the needle there. I assume you were very relieved when there was sort of a stay of those tariffs on mexico, because as i understand it, mexico is iowas largest export market. It is that was my message to the president. What do you send there, beans, poultry corn, pork, soy you name it. So a big market for us so is canada so anyway, my message was lets really focus, i was afraid it would impact usmca, and its time sensitive we need to get it done before summer break thats the big priority what about china how much business do you do with china . Its a big trading partner with us, but iowans are in it for the long haul. We cant continue to let them be a bad actor. They cant continue to steal intellectual property and technology transfer. We had seed stolen right out of the ground in iowa they reverse engineered it to get the technology we cant continue to let them get by with that or manipulating the currency we need to get it done were all hoping we can get it done sooner rather than later, but right now, especially if we can get usmca ratified and start to provide predictability there, our farmers are in it for the long game. The president did very well in 2016 with farmers are they hanging with him . They are. Especially, he was just in the state last week and was able to get done in two years what the Previous Administration couldnt get done in eight, which was to help us get e15 year round. Ethanol were the number one producer of ethanol it adds value to what we grow and produce and helps our economy in rural iowa, and theres tremendous opportunity around the globe to export ethanol and biodiesel, especially as more countries try to Bring Renewables into their portfolio. Youre also on a campaign to get jobs to iowa get people. Get people to iowa. Why does that take this kind of effort well, i think sometimes theres a misperception about what iowa is this is a great place to live, work, and raise a family we have not only great opportunities there, but we have a great quality of life. I think they forget about the amenities we have like great restaurants. Oh, sure, but tell me what your Typical Home Price is, fourbed, twobath, threebath 200,000, 150,000. Ill begin to cry now theres your message. Please go check out thisis iowa, our new campaign to highlight the wonderful opportunities in iowa. We set up a real estate shop here in manhattan, and new yorkers came in off the streets and were just blown away with the amenities and the opportunities that are in iowa you know the democratic debates start this week. Whats it like to have all these democrats in the s