Suggests growth has picked up after slowing in the winter because of weather conditions. Labor market indicators are mixed but showed employment showed improvement. Unemployment remains elevated. Household spending appears to be writing quickly rising quickly. Recovery in housing remains slow. With appropriate policy accommodation, Economic Activity will expand at a moderate pace and labor Market Conditions will improve gradually. Isk inmmittee sees the r the economy and the labor market is nearly balance. With regard to forward guidance, no changes in the statement. Viewed reaffirming its that a highly accommodative stance of Monetary Policy remains appropriate. The same language with regard to what could happen to Interest Rates over the long term. It is likely to maintain the current target range for the federal funds rate after the Asset Program ends. Longerterm Inflation Expectations remain well anchored. Vote was unanimous, even kosher lakota even kocherlakota was on board. Modest changes, tapering down to 45 billion a month. Thank you very much. Michael, ira. I have to ask you, he just mentioned that it was unanimous, are you surprised . Necessarily, we have had others say my defense is not going to change anything, what there is no point. I suspect that is where kocherlakota is coming from. What is interesting at the statement is that they do seem to see a stronger economy beginning to take shape. The slowdownt of in the First Quarter on the weather, which we have not seen before. They know the adverse weather conditions. The rest of it, not a lot of change from where they were six weeks ago. Theye of the things that focused on here was the fact that the more recent data from march and april has really been better. The date of january and february were worse. A weak gdp numbers today but consumption was better. Inflation is still tame. The april data, confidence is higher than expectations. The current data is picking up. Maybe they are hanging their hat on that. Josh, what is your context for what you have just heard . I agree with all that and i think that fed is getting away with things. They have not been forced to provide any more detail on forward guidance. They are probably enjoying that. The fact that they are able to retain as much discretion as they want. And it remains to be seen whether they will be forced later on. There is always the tension between being transparent and sharing information, but the more you are transparent less discretion you have to respond. The less flex ability you have. They are continuing to enjoy that. Ira, former coceo Mohamed Elerian wrote that one of the things to keep in mind from the fomc during this weeks meeting, context. What is the feds context . Their approach is caution. They have to be cautious because they are worried if they go too early and they wind up taking back some of the monetary stimulus that the economy will not be able to stand on its own two feet. They are going to be cautious. That does not mean they think things are going to go badly. They both continue on this pace and they will continue to taper, 10 billion a month. They will wait and see how the economy and the markets respond. The they will move on. For you as a market participant, the question is going to be because the members do not add up neatly, do they end in october or december . Do they change the 10 billion amount every month. Inwe think they will end october, they will just do an extra 5 billion at the october meeting. Day thethe end of the market is already pricing for this. The bond market has been basically pricing for the end of qe since last summer. I think that is still the petition still the expectation. Is the market still keeping an eye on inflation . Longterm Inflation Expectations remain stable. Inflation is the new unemployment rate. We were looking at the 6. 5 , we are basically there. Our expectation from our Economics Team is 6. 6 unemployment this month. That was the old number that used to be quoted. And there goes the threshold. When the threshold does not exist anymore at 6. 5 , the new threshold is inflation moving higher im a core inflation in particular. They would want to see wages move higher, the general economy and the people we are supposed to support are being helped, not just corporate profits. Let me ask in a different way, the fed has made it clear that are not going to change Interest Rates, it is market rates that are going to change. They affect borrowing costs. What matters to you in fixed income . What would break the 10 year out of its range . Higher inflation and better payrolls would be two things. I think a change in fed policy. We have been present for that dot. The fed has try to deemphasize the dots. The dots are important and we price for them. If they were going to say we are not going to go every other meeting in 2016 but every meeting, you would see 5year note selloff quickly. The dots, you do not know which ones are voting members. Voting versus nonvoting would be a nice touch. We try to handicap who each of the dots is. Hawks and doves. Try and weight them in influence on the fomc. You can figure out where the policy path is going to be. On friday, what kind of stronger number would you need to say . , where the market is, would be good. Especially if you had decent payrolls and maybe a tenth upt ick in hours worked. With aggregate income, that like the aggregate income. You can have a 200,000 payroll with wages going up that is good for the economy. Julie hyman, hows the market reacting . We saw a little bit of a move upward and now we are right back to little change. If you look at the inner day chart of the s p 500, we are, we up and then move we came right back down. Feelingtill seeing this on the part of many investors. They want to continue to get that support from the fed. At the same time, if the fed is more optimistic on the economy, goodis theoretically a thing. All of that is still a cooling some indecision in the market. On the treasury front, they yields do not really move at all after the statement. Really seems as though the markets are treating this as status quo. All right, julie hyman will be back in 26 minutes past the hour with on the markets. Josh, you are back in atlanta. Julie mentioned, they seem to go up and down, what were investors looking for . What did they hear from the fed . The markets are already looking forward to the june fomc meeting. There will be a lot more information. Are at thatwhere we point. We will have a couple months of not only acceleration of growth out of the winter slowdown. We will have a better slow down of what is going on in the Housing Market. From what i recall of what peter mcs assessmentfo was that housing recovery remains slow. That is notable. Normally ring is the selling season and you expect a bomb normally spring is the selling season and you expect a bump. Michael mckee, is that what they have been talking about . The winter drag. That is what we do not know in the Housing Market. The Housing Market has slowed more than people thought. There were a lot of optimists going into the spring selling season. One of those things in the markets, i reckon speech us ira can speak to this. Mye speculation that fed cutback less on mortgage bond buying because they want to simulate the Housing Market. We have not seen Mortgage Rates move at all. Look at housing data, one of the things some of the surveys have suggested is not a low supply. You had a very late spring and you have not had places on the market. In my town, the last two weeks since easter you have seen a ton of forsale signs. There was no supply and then there is supply now. Maybe part of this malaise in the Housing Market is just because of lack of supply. We will continue our discussion in a moment. Ira will be staying with me, michael mckee, josh joining us from atlanta. Thank you so much. We will have more of our special coverage of the feds rate decision. Politics and the economy in just a minute. Watch Bloomberg Television all day tomorrow, betty liu goes inside pepsi. How do they get the chicken and waffle flavor . Inside the facility where pepsi puts star athletes to the test to find to gatorade. It all starts with an exclusive interview with the ceo, indra no oyi, 8 00 new york time on in the loop. They get that flavor . Lets resume our discussion. Joining me now, gray, chief political strategist at potomac research. Still with us, ira from credit suisse. Greg, let me get your thoughts about the feds action. Allou have the best of worlds for the financial markets. A very dovish fed for another year. And you have fiscal restraint firmly in place. These things have legs and could last a year or two. Should we be concerned that the fed board of governors, that all the seats are not filled customer hopefully the nominees will get confirmed. Hopefully they will get filled soon. We have not operated with a full board for many years. As long as you have good quality people who understand the economy and the regulations they have to go through, we are in good shape. It would be nice to have a few more voices. G, you mentioned fiscal restraint. You are in new york from d. C. What are you hearing . If you want more spending, you are not going to see much. I think this congress will not extend unemployment benefits. They will replenish funding for the highway trust fund, they have got to do that during the summer. It is a very stingy house. The house will stay republican, i dont think theres any question they will keep the house in the fall elections. Restraint will continue. One quick point. I agree the fed is shorthanded, what worries me is a lack of diversity of thought. You have so many governors, with Stanley Fischer going to be confirmed, you only have one or two hawks left. I worry it is monolithic in terms of thinking. To the point where what are does itg from the fed, affect transparency or the way they go about business . Leavingnk stein, who is at the end of may, was very articulate and talking about a Balance Sheet of 4 trillion or more has risks. It runs the risk of bubbles or market dislocations. Now i think that with new confirmations, you do not have a lot of diversity of thinking. Were mentioning about todays treasury refunding announcement. How does that affect the paradigm . The fiscal restraint just mentioned is causing budget deficits to get much better. Better than the cbo estimated, the omb estimated and even our theyll ares, pretty optimistic. The Federal Reserve is actually billionown debt, 80 this quarter. Int is the largest paydown quite some time. They are cutting the amount of twoyear notes and three year notes they are issuing. Something they started last fall and they will do that for the next few months, reduce the amount of treasuries. Action on capitol hill earlier this afternoon, the Senate Republicans to block the legislation to raise the minimum wage. It is currently seven dollars . 25, republicans say the measure is going to cost jobs. This is not going to pass this year. Is really an issue for the states. A lot of states are increasing their minimum wage. For congress, no. We will not get a deal. Going to affect the voter this coming fall . Is it going to be one of those where the charge is going to be you are playing class warfare . Pulls wells think it for them. Maybe they are grasping at straws because it does not look like a great election. I have talked to some democrats who feel that obamacare might be less of an out of trus less of an albatross. Democrats who think that by labor day if we have an economy growing at 3. 5 and unemployment and 6 , that will help. This does not feel like a good election for the democrats. A disappointing growth number that came out today but there was a gain in consumer purchases, they rose 3 . How do you explain that . One of the reasons that has occurred is that we can set our computers and buy things online. If you are snowbound, that is what you do. You do not think about building your house. Those are things like residential investment spending, much lower than some peoples estimates. You can sit there and you cannot bill your dock. You can buy a next or parishes. Pair ofn extra shoes. Janet yellen said the fed has a continuing commitment to support the recovery. What is that if the economy does accelerate . Ira was mentioning it is almost like you have the three legged table if the fed takes away that bowl, can thech economy stand on its own . She thinks there is still slack in the labor market. Some studies content maybe there is not that much slack. The one thing that has impressed me as i have traveled around the country is that big areas of this country in the sun belt are going like crazy. If you go to houston or the south bay and san francisco, silicon valley, many areas that are not as depressed as the northeast. I would worry by midyear that labor slack is going to diminish. Coming up in a couple minutes, we talk to the mayor of san jose, california about expansion. Ira, adp said today the u. S. Economy added 220,000 dollars in april, up from 209000 and march. March. Rom 209,000 in what do you expect friday . 15,000 is in line with the consensus, i dont see why that would change with the adp number. We are looking at aggregate income. What is going on with wages and hours worked. If those are up, the fed might be in play. Ira and greg. Joining us here in studio, thank you both. Up next, we check back with julie hyman as we focus on the fed. Bottom line continues in just a moment. Welcome back, this is bottom line. Streaming on your tablet, your phone, and bloomberg. Com. Coming up on 26 minutes past the hour. Bloomberg is on the markets. Here is julie hyman. Another check of the markets and how they are reacting post fed. Or not reacting. Little change in terms of where stocks are trading. I was looking at some notes that came out after the announcement. Many repeated the same language, as expected, no surprises. As evidenced in what we are seeing in stock action. Little change before and after the fed. If you look at what happened in the wake of the announcement some up andyou saw down action but that is a very of arange of about. 2 percent. If the treasury market, Holding Steady at 2. 66 on the 10 year 42 . 0. And gdpar moving lower came in worse than estimates. Most investors are looking forward. It seems the fed is slightly more upbeat on the economy. More on the markets and 30 minutes. More bottom line in two minutes. Welcome back to the second halfhour of bottom line. The 12 nation regional trade pact noted known as the transmit may have to proceed without japan, which continues to open its agricultural markets. Aber groups and even members of president obama pots his Democratic Base have come out against the agreement. Firm ofner in the law mcdermott, will, and emery served as a trade negotiator in the office of u. S. Trade representative from 20032008, and we are joined from the washed and bureau. Welcome and thank you for your time today. Class i am delighted to be with you. Lets begin with the opposition here at home. Much of the criticism involves concerns that the tpp could leave American Workers vulnerable to competition from countries and lower labor costs. Are those concerns valid . Class for years, they have faced the challenge of lower labor costs. This agreement, once it is implemented, our key trading partners in america and in southeast asia, that is really of critical importance to u. S. Labor and to manufacturing. And really bringing countries into the modern trading world with modern train rules. I am sure you heard one of the criticisms that folks still had a little bit of apprehension. Some folks are still not convinced that was the right way to go and they see that as a possible template. Are there any comparisons to be drawn . In any trade agreement, there will be some companies, that do not end up as advantage is a situation as others. An whole, in Agreement Agreement is that it will be a huge benefit to u. S. Farmers and u. S. Industry and service providers. Lets not forget 95 of the worlds consumers lie outside our borders. The agreement would include 11 other countries, 780 million global and 40 of global gdp. There is always a bouncing act and u. S. The gauche raiders always try to get the best deal they possibly can. This is a huge win for all sectors for the us economy. In the transpacific partnership, the question is, what is in the United States for American Companies and american consumers. Is a really important question, one that the administration has in doing a very effective job at conveying to organized labor. Let me kick off a couple of things i think are the most important aspects for what is in it for the United States. Lets start with japan. Japan is the thirdlargest trading partner, the Third Largest economy in the world, and an economy and country which we have faced for decades, Major Barriers to u. S. Agriculture, u. S. Automobiles, trucks, and for the first time in literally 40 years, we have an opportunity to break down those barriers and for agriculture and industrial goods and for the service center, which has been close largely to u. S. Service providers. If i could just that, in addition to that, there are also important added value take a country, i mentioned vietnam earlier. It is becoming an important trading partner. They are a key linchpin in our economic and geopolitical arrangements in southeast asia. It offers the promise of Market Access into vietnam for u. S. Industry and u. S. Agriculture, and to bring the rulesbased trade regime to many of our important trading partners in southeast asia. Is one of the key components of president obamas socalled asia pivot. The deal is not finalized, what might that mean for americas influence for regent currently witnessing chinas ascendance . I hope what you are describing does not happen. Ofhink we are as a result the meeting between the Prime Minister and president obama, we