Equity markets included, but by the time he got to his press conference and said some things that people were not crazy about, we saw it go the other direction. As you see, this is not a dramatic move. Scarlet European Banking stocks was dramatic, no better place did you see the euphoria, then the letdown. A. M. , thenfore 7 45 it peaked 15 minutes after mario draghi started speaking, but then it moved toward deflating, closing down at about. 5 . Joe if you look at the german spread, we have been talking about the u. S. , you can see a similar story. There was a lot of flattening. Then at the end, after the announcement, you saw shortterm rates pick up, but in the semi to the European Bank stock rally erased itself, it is essentially wereflat, so these moves reversing themselves after the press conference. Scarlet the one i was fixated on was the dollar, less than 90 minutes for the euro to reverse losses sparked by the ecb stemless package, but then after that it was off to the races, with the euro building all afternoon, up 1. 6 , the question now is whether the trend has ended or is near the end. The dollar index was sinking to a four week low. Joe it did fall. Weakness with the dollar. D did do well, they like it like to the market volatility. The ecb having a solid day. Goldl people getting into this year and it is having a fantastic start, and part due to the ecb move. Scarlet now we will take a deep dive into the bloomberg and you can find all of the following charts using the function at the bottom of this screen. Joe one thing that the ecb did today besides the package, they really wanted to aim stimulus at the European Banks. Weve been talking about the ongoing weakness in the banks and what it means for lending. Remember the cocoa bonds we were talking about. Everybody has forgotten. I want to take a look at two of the ones that were in the crossfire, Deutsche Bank and another. You can see these instruments got as high as 14 . They have come in quite a bit. Including further shanking of the spread today. If are yielding a lot, just over 10 each. They have come in a lot. He can see that they are trying to help the banks, they are buying with credit, strong corporate credit, tried to get the corporate channel flowing. There is still a lot of work to do. These instruments have really eased. As the panic has scarlet absolutely good i am looking at the commodities and in, appearing to be recovery, so that means drivers will be paying more at the pump. And the white line, think of that as the wholesale price. The orange line is the price at the pump according to aaa. There is a seasonal power, you tend to see these spike in early march. You can see it in 2014, 2015. So far, you have this seasonal rise, but you have not seen tons of a and according an expert, that sets up for a surge in the retail price during the second half of the month. That could be a big headwinds for consumers. Drivers it will omnimous foris drivers. Right now, we are joined by a guest good guess. Joe it looked like the ecb unveiled the agency today. It announced a new tro and that it would buy investments for credit, then we got the press conference and all of the gains we saw in the market originally, they all reversed. What is your take away from the ecbs actions, why did the market react like it did . Guest if you look back at the last five big ezines, counting today as the fifth over the last couple of years, the ecb i would argue in terms of Market Reaction is batting maybe one for five. I think that the bank of japan, the easing moves to negative rates at the end of january, so a negative reaction with a lot of focus on how did we get this negative reaction . I think if you look back at all of these ezines we have seen over the last couple of years, this is much more common. I would say that the hit for positive reaction is closer to 20 . Todays impact should not really be surprising, i would argue. Scarlet we will dig a little deeper into that batting average of. 200. If you look at a chart to show how three of the four ezines easings have come, they have been associated with deflation. They were rising for in a while, so did the ecb way too long . Wait too long . Guest i would say that for quite a while, the ecb argued that this was the way to think about and measure, basically progress on the target. And the decline was a big concern. You can see from the chart that the very first moved to negative rates, the expectations were flat. Rates wentone, where further negative, that sparked basically the next leg down. Especially if you look at the december meeting, it caused the move down. I would argue that this is coming from an indirect impact, coming from the ecbs impact on the euro, therefore the dollar, therefore oil prices. Joe people say that basically, this is about Central Banks around the world, they are out of ammo. Are they really out of ammo, or just using the wrong ammo . You think that negative rates on the consumer, but is there something they could be doing instead . Guest i would say that the meeting today shows very clearly what mr. Draghi wanted to show, that the ecb is not out of ammo or instruments, they threw the kitchen sink at it. We will wait to see what the impact will be, but i would repeat or reiterate my point the witches we have had which is we have had five of these and one of them has been positive. You would hope the number five would be positive, but it might be time to start questioning whether, if you do in experiment and it produces the opposite reaction, it is time to start to question whether or not you are doing it the right way. Scarlet and the ecb takes action and of course it is not to the desired reaction in stocks, whether it is emerging markets, or the u. S. Market. Guest the one line is the orange line is european stocks, so you can see again, the vertical lines with major policy action, you can see the first one, the european stocks go down. The blue line, u. S. Equities, they are highly correlated, c can think of this as the anchor so you can think of this as the anchor. They underperform. Whether you are talking about expectations or just talking about confidence, impact or appetite, these meetings have had a negative impact. If you think about today, you should not be surprised. Joe ok, so that is interesting, but the eurozone needs help in some way, inflation is diving, unemployment is sky high, there is risk that they could have another recession since the crisis, should this be more on the fiscal policy makers . What should be done . Guest i think that, a good way of thinking about it, if you look at the u. S. Recovery, once you have a recession or financial crisis, that puts in motion recovery. If you look at a chart of the u. S. Market recovery from 2009, youll see that the labor market recovered in total hours, rather than in payroll. It is a tight Clear Channel and all of the various policy initiatives that Monetary Policy carried out in the u. S. , had no act it i would argue that impact. I would argue that europe needs to wait. They had a downward trajectory. Even all the flexibility that the u. S. Has and all the Monetary Policy action that the thattook, i am skeptical the way to get there in europe, i would say that weve had i think that the diagnosis that inflation is low, that is wrong. If you think about inflation and break it up into services and goods, in the u. S. For example services for inflation it is running a 3 and has been rising steadily for the last nine months. Scarlet last question, some it all up sum it all up, is mario draghi independent and all independent . Atst i would save you look all of the various initiatives that have taken place and the extent to which they have been positive, or negative, from direct impact or indirect impact , the dollar, the oil prices and highyield, i would argue that it is time for the Central Banks to take the hippocratic oath, we do no harm first before we get impetence. Nse scarlet thank you. Joe he is a doctor right . Here is Something Else you may have missed. The tight at mario draghi war wore today, it was the same 2012, maybe this is a sign of how big this thing is. Scarlet what is the Tipping Point for the Federal Reserve to raise rates, next. Lets get the first word news. President obama welcomed the canadian Prime Minister to the white house today, the two leaders looking to join forces to combat climate change. U. S. And canada issued a joint statement, the green to reduce emissions from oil and gas by as levels by , from 2012 2025. The Approval Rating for the president is at a threeyear high, according to the latest survey. The president is doing better than predecessors, george w. Bush, at this point in his second term. The commander overseeing the Missile System for the u. S. Has that north korea can send a missile within the range of the continent. He told the senate panel today, assess that north korea has the ability to send a Nuclear Weapon today. Attack is of such an that low probability. Opposition leader has avoided a showdown with the military and has decided not to nominate her to become the next president. Lobal news, 24 hours a day i am mark crumpton. Continues tosure build in the u. S. , but the next guest says, do not fret. The head of the said meeting ahead of the fed meeting, what is the Tipping Point for the fed to raise rates . Guest core inflation is tipping highest. The target is 2 , we are at 1. 7 , and janet yellen said that is holding down by a quarter and a half point. We are already above it. E question is, what will to tip and why havent they set a higher already. Joe are they estimating the risk of where you think the fed could go . Guest not in the shortterm. I do not think that they will hike next week. Volatility in the market has not subsided and they have given no hint that they will move. This is not priced in. June is a totally different story. By the time we get through the summer, wage growth will be approaching the 3 mark, which they said back in february what he didnt say is that 3 is the right that they did not want to see. We will get there soon. The pressure is building. Scarlet of course, the fed does not operate in a vacuum. Easing mean that the fed will have less of a need to tighten . Guest well, we did not get a big drop in the euro, well it reversed. The pressure is so different, the inflation picture so different, and of course a massive structural problem in the euro, we have to get used to the idea of enormous beverage between what the fed is doing and what the ecb is doing. Joe people are always blasting the most people agree that the rate hike is unlikely, but many people are always criticizing the fed about being behind the curve. But if inflation is rising and the Unemployment Rate is where, at the level of full employment, could this be an example of, how do you guys claim to be independent if you are not raising rates with inflation where it is . Guest i am baffled. I think collectively, they seem to be terrified of getting it wrong, in the direction of raising rates, but then it reveals they have these heavy fractures in the economy. That is the fear. My fear is the longer they leave it, the more they will have to do and the bigger the risk is for lenders. That is the thing they want to avoid. Triggering an unnecessary recession. At this stage them a denial to the states, denial point where you cannot deny it anymore. Scarlet if you look at the latest jobs report, the wage growth was not impressive. Guest there is a big technical problem in their favor, it turns out that every few months when the calendar falls in a particular way, we get them undershooting wage numbers. So, in the next couple of months , you will see a reverse and the true trend is probably north of 2. 5 . That is a significant change. The pressure that pushes it will push it further. I am looking at 3 by the end of the summer and maybe 3. 5 by the end of the year. Joe we will have to have you back to see how it turns out. There is a view it does look by various measures, whether it is wages, services inflation, that there has been an uptick lately. What is the rush . Why not wait longer . For so long, people have been calling for inflation. In 2010, it rose above the fed target. Wast what pushed it down obamacare. We had inflation, just structural changes in the business, but that is unwinding now. Really 20 of the core rent is going crazy. And stocks are not falling very much, despite a strong dollar. So the pressure is starting to build and remember, this policy works with a very long lag. What will happen tomorrow to the economy, nothing. For the rate hike to work, the pressure will build, that is why they need to get a move on. Scarlet the central bank telegraphed their intentions very clearly, what about using the element of surprise as a tool . It has been done in the past. What about the fed, should it have a surprise more . Guest i would love for them to do it next week. The fed as an institution is reluctant to deliver surprises. Scarlet it did. Guest that was a long time ago. I would love for them to do it, but the chance is low. Joe how much better is it to raise rates gradually, rather than to hold off, and then do a more accelerated hike . Do we need to slow the economy down now, so that we dont have to do it six months from now . Whatever we do today, it will slow the economy down in the second quarter, and it will set the scene for things to slow down next year, by which point we will need it. When it starts to move, it does not really stop until the fed gets in the way. Joe think you so much for joining us. Scarlet 3. 5 , he said . Joe we will check on that. Scarlet coming up, while dividend paying stocks in the s p 500 are getting by back stocks. That is next. Scarlet whatd you miss . , why dividend paying stocks are more favored, and rewarding through buybacks. Dividend payers do better. Investors like to Push Companies and companies off often off to buy back pain since last , the bluedividend line has done far better than the s p 500. And the buyback index, the purple line. Joe is there a theory for why that is . Scarlet i do not have one, but it is a case of investors favoring companies. Joe they should be the same, the dividend and buybacks should be equal. This is interesting. Scarlet perhaps it is boosted artificially and not a result of joe i want to talk about one of my favorite economic indicators. Has come up a lot lately. One of my favorite you look at, the 52week moving average of nonseasonally adjusted claims pity can see why it spikes claims. He can see why it spikes. The pink line averages out every year. Once again, we got a report this line hit thepink lowest level since the financial crisis. There is no recession that you can spot looking at this Economic Data, this is such a steady improvement at the rate at which people are getting laid off and filing for jobless claims. You expect to see this rates rise. But it continues to go lower. Was saying abody few weeks ago that this was the goto number for people in their assessment crowd. Joe we are rising earlier in the year. As you can see, this, even the seasonally adjusted is well below expectations. It is just not happening with terms of deterioration. Scarlet do we have full employment already . Joe it seems like we are getting more of the inflation side. Scarlet there is a 3 wage inflation. Coming up, when and how china decides to ease Monetary Policy again. That discussion is next. Mark lets get to first word news. An budging on is the republicans decision to block the Supreme Court nominee by president obama this year. The Iowa Republican says democrats were only criticizing the strategy to score political points and that efforts to change his mind wont work. A short time ago the u. S. Far the leading latest legal salvo in the dispute with apple. Prosecutors reasserting claims that unlocking the iphone of one of the San Bernardino shooters is legal. For marchis scheduled 22. A solemn anniversary in japan. It is the fifth anniversary of thatarthquake and tsunami devastated japans northeast coast. This week the Japanese Coast Guard resumed underwater searches for some of the 2500 body still missing. The disaster killed more than 18,000 people. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. Ecbs aggressive easing and start a big up and then down before ending unchanged for the day. Lets look ahead at asian markets opening in just a couple of hours. David is in sydney. David there was a time when you could expect that sort of central bank action. Index looksnd, the to have broken a nine day rising streak and is down about 8. 5 points at the moment. Australian Index Futures are also looking down. Areapan the nikkei futures looking to give up all their gains from yesterday. Not a great deal of Economic Data out of asia today but we will be watching india where there is also some possible bad news. Industrial production data its like its heading down for the third consecutive month according to economist estimates. Not far short of 1300 an ounce, what does that mean for the region . David we will be watching in australia. Some of the big gold miners tend to do pretty well when a lot of other people do badly. In terms of other results from the housebuilder in china that had a hostile takeover bid, we will be watching for annual results from them today. Scarlet china may soon ease again. Giving the pboc room for more supportive monetary policies. When and how will they act . Joseph, thanks for joining us. What is the next move from china policymakers . The news coming from the ftc meeting, trying to add a little more stimulus to the economy. As you said, scarlet, with the currency stabilizing a little bit and the pressure coming off it will allow them to ease their rates a little bit. Sometime soon within the next order were looking for another rate cut. Scarlet how much can re can we read into the latest numbers . February was a month when the currency markets were off because of the holidays. You dont want to over interpret that one month of february. Coming off to really big drops in december and january. Ist has been more important just getting the