that's all for this edition of "dateline." i'm andrea canning. thank you for watching. good morning. welcome to "street signs." i'm frank holland with civil va amaro. these are your headlines. orders come in with new expectations. revenue falling short. fed chair jerome powell says rate cuts are not likely to

happen. >> they instead indicate it's likely to take longer than expected to achieve that confidence. the ecb speaks saying it won't wait for the fed as christine lagarde tells cnbc the central bank will cut rates soon barring any major shocks. >> we have to be independent. we have to look at our own work. we're very steady and focused on what we are seeing, and we're applying judgment at the end of the day. dressing to impress. the stoxx upping its forecast for the end of the year while q1 sales reassure investors about the health of the sector. ♪ good morning, everyone. we start today's show looking at the tech sector over here in

europe with asml keeping its full year outlook and change despite weaker than expected net sales in the first quarter and a worse than expected of new bookings. looking for easing at the shares, they are moving so far in the session. looking at some of the other peers in the sector, they're all down in premarket trade. but let's see how the story will continue to play out. first and foremost, i would like to get to arjun. arjun, you've been following this company for a long time now. i'm just wondering why is the mood so negative on asml so far today, and is it more about the company or the geopolitics. >> you saw the net sales falling, but in particular that new book number down 60% in q1 versus q4 as well. it's a little bit of concern here, but there's a few factors that play behind this story.

last year was a pretty tough year for the consumer electronics sector, which means some of the companies that sell chips to thinks like laptop makers, smartphone makers suffered as well. asml customers are some of these as well. the chip sector right now is going through a cycle. many believe we're near the bottom. that's what asml feels as well. the company says it's in a transition period going forward and it believes growth will return in the second half of the year into 2025 as well. they're hoping for a little bit of pickup as well. of course, there are a number of headwinds the company faces in terms of geopolitics. there are a number of airport restrictions put on, which means some of asml's equipment can't be shipped to china. it accounted for 49% of the system sales, up from 39% in the fourth quarter. so perhaps a little bit of

strength there in the china numbers, but overall i think given the fact the stock has had a huge run-up in stock so far, in terms of the sales and new bookings, certainly disappointed as far as the market goes. turning back to the markets right now in the u.s., fed chair jerome powell has warned it will take longer to hit the 2% data tar get. inflation came in higher than expected at 3.5% while the american labor market remains robust. powell said officials need greater confidence before they ease policy. >> inflation, of course, declined quite significantly over the second half of last year, over the whole year, but particularly in the second half, but 12-month core cpe inflation, which is one of the most important things we look at, is estimated to be of little change in february and march, and the

three- to six-months are at a greater level. we want to make sure they're moving sustainably toward 2% before we begin easing policy. we took that cautious approach and sought that confidence so as not to react to the string of low inflation readings we had in the second half of last year. the recent data have clearly not given us greater confidence and instead indicate that it's likely to take longer than expected to achieve that confidence. >> and u.s. futures just a bit mixed ahead of that, but we're now going to move on to the uk and inflation. consumer prices have risen 2.3%. core inflation slowed to 4.2%. while services inflation, that eased to 6%. traders now cutting their boe rate cut bets now pricing in at

34 basis cuts by december. bank of england governor andrew bailey says the uk economy is disinflating at full employment, but he stressed falling inflation is working its way through. speaking of imf, bailey also addressed possible policy diversions between the bank of england and the u.s. fed. >> i think it's rather different between europe geographically now and the u.s. i think there's more demand-laden pressure that i think we're seeing. i think the inflation dynamics are different. we're still seeing an extension of the process coming out of the big supply shocks that we had, the impact of the war, the impact of coming out of covid. with the latest comments from the fed, the boe, and now we look at our fed.

christine lagarde said the ecb will cut rates soon barring surprises. it's steadily moving toward its target, adding that officials just need to build a bit more confidence before cutting rates. sara eisen asked the ecb president as well whether three rate cut this year is a reasonable expectation. >> i wouldn't comment on that because if you had asked me two or three months ago, i would be expecting more than three. and i think we're better off than our central bank perspective, of course, looking at what they anticipate because they're big boys -- too many boys, but they're big boys. they run their models, they observe things, take risks, assess, you know, term premium, but we have to be deta-dependent. we have to look at our own work, and we're very steady and

focused on what we are seeing, and we'll play judgment at the end of the day day. what is produced has to be taken into account on our part with the help of the governors. >> she says the ecb is not set on cutting first. >> we are data-dependent. our data came down in march. we have had a little bit of data in april, but it's on that basis we have to make our decisions and not on the basis of any central bank in the world, be it the fed, which is the largest and with the largest economy measure by gdp. we cannot make a decision on that basis. hence, we're not fed-dependent. >> karen also spoke to the governor and asked how much further evidence was required before he would back a rate cut. >> i think we're pretty close to it now.

before christmas, in my view, we had -- i mean, i wasn't ready to rule out going further in the hiking cycle, but i think we've now over the last few weeks seen enough data to say that we've reached the top of the ladder. at our last meeting from my perspective, we've got greater confidence that we can start to reduce the tightening on our manager policy stance. i would expect all things equal that we will see a change in june unless there's something completely surprising and a shock that we don't expect. >> we're all fixated on getting the starter's gun going, getting the rate cut cycle going, but what comes next? we're hearing three, possibly four. what seems feasible to you over the course of the year. >> one thing i am pretty clear on, i need to be open-minded about the rate path and the

approach we've adopted at the ecb, which is a meeting-by-meeting data-dependent approach. i think that will allow us to be cautious, and i certainly will rule out how many moves there will be. there may be none. there may be more than one. but i think meeting by meeting is the way to do it. there is too much uncertainty, and certainly inflation numbers today, we're still seeing enough in services inflation to make us cautious. so i would not predict how many cuts there may be at all. >> a lot of comment so far from central bankers. let's look at what this all mean. morgan stanley has scaled back its expectations for its ecb rate-cutting cycle. the wall street expect more cuts from central bank down from 100. and the chief european economist at morgan stanley is joining us

now. good morning. it's good to see you. first and foremost, e understand one of the reasons behind the change for rate cuts from the ecb is related to the data out of the united states. yesterday we heard from jerome powell is saying the progress from bringing down inflation has been basically as strong as he would have liked to have seen it. so my question to you is really what is the rumor from downward positions of rate cuts from the ecb, given the latest comments from the fed? >> good morning from frankfurt. it is related to the changes from our colleagues on the u.s. team that moved the fed cut from june to july and also took out one cut there. and so, of course, there is this big debates about how much divergence there can be. of course, there's a different inflationary backdrop.

it's clear that the ecb -- and i think you just had president gillard saying there is very likely enough confidence to go toward june. that's fundamentally different from the fed, where this confidence hasn't yet arrived. at the same time, the moment you go ahead and go too quickly ah ahead, you get pressure on the exchange head and you get pressure on europe and then you go through the back door, which means the divergence, you can't afford it to be too large. you can go first, but you can't go much quicker, much faster. that's the main reason why we have basically said it's 75 basis points now down from 100 for 2024. >> so with that in mind, what is the limit here? is it a certain level for the exchange rate? for how long do you think the ecb can basically withstand a significant difference from policy compared to the fed? >> yeah, i mean i think it's

always sort of good to see this through the lens of what the ecb has for its projections. we have just published a piece on this one, looking at that in greater detail. what you see relative to the march projections that have the inflation rate coming down 2% by mid next year, what you see in the oil price, the increase that we had, it doesn't really change that picture because the oil price is relatively quickly in and quickly out again. but off the same size, say we go from where we are now to parity, would be more or less what the ecb had presumed in the massachumarch projections, that would endanger what we had for 2025. to answer your question, if you took your goal to, say, parity, and lose another 7% on the

exchange rate, then this certainly would slow the ecb further down, and so through this channel the banks are connected, it's limited. the ecb can go, but it would be much more measured in case you get sustained pressure on the exchange rate. >> let me get your nuanced version. does that assume strength in the eurozone economy? we saw zew come in far stronger than your forecast, far stronger than expect? and then how does oil play into all of this? christine lagarde says she's being very attentive to all of that yes. we have it already. it's there, and so we have looked at the numbers. it's significantly higher, so that gets you more inflation near term than i just said. i think it's indeed right. what you're saying, we head to 50 basis points. we discuss with a lot of our

clients. two reasons. one reason, in december the ecb adds 2027, another year in its forecast horizon, and that would have been a year on our calculations where it could show actually some signs of inflation. most significantly, the 2% target, and that gives rise to a greater willingness to cut larger and larger increments. also a second lag of that is, indeed there's an economic weakness that we think 2025 still correctorizes that only at the occasion of the december productions, you look at ecb. the 2025 numbers take into account to some extent what was in q3 and q4. i want to talk about currency. the strength of the-dollar, how does that go into your mind? looking at the dollar recently, it's gained ed 4% year over yea

>> exactly. you have to look at what ecb's projections are. they had one in march. now we're roughly a bit more than 1.5% below that number, and then, of course, that adds inflation. but, of course, it also gets you increasing external strength and de demand. that's the other leg the president referred to in the other conference. you have that backdrop for essentially our u.s. team's exchange core here. more external demand. you get the dollar that has more inflation, but also more external demand as an outside risk to your own projections, and all of that together lead us to g to go down from december. it's a backdrop that i see makes for a very rapid succession as

we have heard from some governors in july and september. three cuts in a row, much more unlikely. i want to look at the other banks. it's essentially pushing back expectations of a rate cut around the november time, but we have also a likely election taking place here as well. when you think about all of that and the recent comments from andrew bailey suggesting that he's also monitoring what the fed is doing, what is the future? what is the outlook for the bank of england in terms of potential rate cuts? >> so we still entertain a may rate cut. our economist just published also a review of the inflation numbers, which are pretty much in line with what the bank of england had forecast. so essentially it's not a downward is up priors to that. so she's looking at the merits of that may rate cut. i think in general, the central banks are to some extent in the same book.

you're here facing the situation where the disinflationary process is bumpy. it's not fully secured. so you want to go it slow and go at the measured pace. at the same time, i think for both the uk and the ecb, it's clear that the rate cuts are coming. the fed there's a little bit more of a weight still here. >> very clear. thank you for the conversation. all right, coming up here on the show, adidas makes a surprise announcement following a stronger than expected first quarter. we'll have all the details coming up right after this break. 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

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see why comcast business powers more small businesses than anyone else. get started for $49.99 a month plus ask how to get up to an $800 prepaid card. don't wait- call today. welcome back to the show, everyone. so at the start of the week, there were basically three main themes when looking at the markets. we had earnings, geopolitical tensions, and naturally the expectation of higher rates in the united states. today as we are midweek, the third trading day of theweek, the story is a little different. investors seem to be a lot more

focused on the corporate earnings but also on the commentary from essentially policy makers across is ten montreal banks. at this stage we have the stoxx f 00 currently up by 0.4%. we had the stoxx 600 ending the session down by about 1.5%. but let me show you the boards just to understand what's the picture like across. you can see the green across all of them. i would highlight the ftse 100 at this stage, by about 0.4%. data basically showed any improvement in bringing down the inflation levels, however, the rate for march still came in slightly above what markets were expecting. nonetheless, an important development, and indeed we also heard from andrew bailey saying there's been progress when it comes to bringing down the level of inflation, but the question for the bank of england is really to what extent they need

further evidence to start cutting those rates. let's see what the bank of englajd will do. in the meantime we have the cac by 1% and in germany, 0.5%. we have basic resources outperforming the market by 2.3%. household goods, up by about 1 pnl pn 1.7%. we'll be speaking in more detail in a moment. at the bottom we have the tech sector down by about 1.4% on the year. at the start of the show, we mentioned there's a lot of dynamics, but one of them is the latest message from asml. frank. continental posted 9.8 billion euros. that also fell short. the german ought motive supplier

said it's seen lower buying in particular in europe but has kept its full year guidance. quite a different story for ad adidas. it hikes its profit after a better than expected first quarter. in an unexpected announcement, the german sportswear giant raised its currency-neutral forecast. this after if firm posted its first annual loss in more than 30 years last month. and with much more, annette we eisbock is here. >> we had the termination of kk kanye west.

there was a repositioning o of t the company. what we see now is actually some bottoming and perhaps also slow gaining of momentum of sales as well as development. they're gaining market share, and that's the first time actually they're growing faster than puma does. of course, that's mostly attributed to the new ceo who actually joined the company from puma. what he does is to refocus adidas back to its origins, the sporting business, and that seems to pay off. what do analysts say? they're approaching the cross-profit margin, which is closer to 50%. it's much higher than expected, especially despite the strong headwinds from the currency front. this is not going to have adidas during the course of the year because clearly the ecb most likely moving faster than the fed on the rates for the euro

exchange rate. that's not positive for adidas earnings going forward. in a nutshell, it was a pleasant surprise, and some analysts do even say the outlook for this year, even though high, is still very conservative. >> you know, annette, obviously a very big surprise. just curious, what did the company say about the remaining yeezy inventory after the break-off from kanye west? that seemed to weigh on the stock. >> it did, but they made the decision to sell it and auction the stock of the product, which helped adidas already last year. there were several positive surprises, and that's actually already in the stock price. if you look back at roughly when they started the stock trade, we were below 100 euroand now we're up at 216.

it was a huge rally despite the difficult market environment. also the last quarter, they sold the inventory down, which helped them by roughly 130 million euro in operating profit, and they're also saying they're planning to sell more. they still have product in stock. but this should be bottom line neutral as they call it, but should still bring them revenues of roughly 200 million euro. >> investors clearly like that. adidas shares up over 6%. annette, thank you very much. coming up on the show, the shine comes off lsvh as they announce their first quarter growth since 2020. orcongp xthato bring you tt sty mi une.

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welcome to "street signs." i'm sylilvia amaro with frank holland and these are your headlines. chip stocks come under pressure after first quarter orders come in way below expectation and revenues also fall short. the fed chair jerome powell

says inflation is likely to delay rate cuts this year and cautions against moving too soon. >> the recent data clearly has not given us greater confidence and indicates it's likely to take longer than expected to achieve that conf confidence. the ecb sticking to its guns saying it will not wait for the fed. christine lagarde says the rate cuts will happen soon barring any major shocks. >> we have to be data-dependent. we have to look at our own work. we have to look at what we're seeing, and we apply judgment at the end of the day. dressing to impress. adidas tops the stocks while increasing its forecast for the year while lvmh adds sparkle to its year after they reassure investors about the health of the sector.

so european equities have been trading for basically an hour and a half so far in today's session, and you can see it's basically green across the major forces. we have the ftse 100 up by 0.4%. we spoke earlier in the show about the recorrect data and the improvement when it comes to bringing down the inflation. we saw cpi coming in at 4.2% from march and that's an improvement from 3.4% we had seen in the previous month. we're seeing stronger moves over in france with the cac up by 1%. one of the stocks we're monitoring is lvmh. we'll speak about that in just a moment. over in germany, the stocks are up 0.5%.

we have commentary from central bank. with that in meind, i want to show you this part of the market. we have at this stage the euro moving slightly higher against the u.s. dollar, up by about 0.2% at 1.06%. one of the dynamics is this commentary and the diversions to some extent between the ecb and the fed. we have the ecb saying thus far they're confident and comfortable with levels of the inflation so far, so if all goes well, they could be in a position to cut rates in june. however, when you hear what jerome powell said yesterday, he was basically not pleased with the level of progress of inflation in the united states thus far this year. when it comes to sterling versus u.s. dollar, we have the steering up by 0.4% of the percent. one of the changes so far in this dynamic is we have seen a stronger u.s. dollar in recent

times, but today we have the sterling moving higher off the back of that. when it comes to the bond market, let's take a quick look to see what's the picture at this stage. i want to take you to the benchmark. the yield on the german bund is at 2.47%. we're actually seeing this part of this market, the bund, actually reaching the 12.5 threshold yesterday after the comments from jerome powell. so we're seeing it moving slightly lower at this stage. but let's see. le it's continue to keep a close eye on the market. when it comes to what's happening in the uk, we have the yield on guilts at 4.30%. turning back to stocks, lvmh is adding a little bit of sparker. they hit expectations, delivering some relief to inv investors. they were concerned about the health of the sectorespecially with china.

fashion and leather was up 2%. w here with much more on the luxury life is charlotte. >> they came in a few week ago warning about their sales for the first quarter saying their sales would be down around 10%. we were closely watching lvmh, whether the trend was the same there. there was still growth in the numbers. again, the sales up 3% in the first quarter. looking at different regions. asia was down 6%. but, of course, comparisons compared to last year was very tough. q1 was the beginning of the -- end of the zero covid policy in china. so they had the boom there in the first quarter last year. but u.s. and europe still showing some growth as well. organic sales up 2%. japan up 2%. some of the chinese tourists are buying in that country in

particular. so looking at the details in that position, fashion and leather, just slightly missed expectations there, up 2% there. but still again some growth. wip wine and spirits down 20%. watches and jewelry also a little bit softer. but they continue to work on the integration of tiffany's and the brand and expanding it in asia. one interesting thing is, of course, they cater to a lot of aspirational buyers in the u.s., tiffany's. that's why you see a little bit of a squeeze because of inflation. that's really an interesting aspect when it comes to luxury and how prices have gone so much higher in the past few years and whether the inspirational buyer kind of left behind in that trend. all luxury players are doing the same. lvmh say they're not concerned about this. they say consumers will get used to the new level of prices, but it takes a little bit of time.

it's not the growth we saw after the pan dem uc in luxury, but still a little bit of growth there. >> with shares trading higher by more than 3%. thank you, charlotte. we'll continue this discussion on basically what's the outlook for the luxury sector with our next guest. he's head of luxury goods and sector research. good morning, charles. first and foremosting i want to pick up on the point charlotte was making, which is the aspirational buyer. do you think some of these buyers, not just lvmh, but some of the luxury brands have priced out of part of the market? >> yes. hello. thank you for having me this morning. on your question, it's true that it has been due to weak spots over the past few quarters and explained most of the sector

weakness. but yesterday the management of lvmh was showing a little let of mystique on the international forecast, which is sending positive signals and could indicate there's work behind the international brands and should soon see the likes at the end of the quarter. i would say it's pretty positive this morning. >> interesting. let's look at lvmh in more detail. it's surprising to see their sales in china were weaker for the time being, however, if you look at the u.s. and europe, their sales were actually stronger in both of those markets. i was just wondering, can other markets basically make up the shortfall and the weaker performance from china? >> well, when you look at lvmh

in europe and the u.s. was kwiets reassuring because the management was positive, applying growth there. asia was a little bit weaker than anticipated, down 6%. but i think it's worth highlighting that the 6% drop excluding japan is mostly attributable to the fact that we have a continued recovery of the chinese tourism and also the continuing recovery of europe, a little bit of europe, obviously into the u.s. and the number even yesterday, chinese have been spending 37% to 38% of their money offshore,

overseas, which shows a remarkable improvement compared to the fall, which was more in the 20% to 25% range. so the continued recovery of chinese, we continue to surpass the growth in europe and in the u.s. and should continue with likely demand from local customers. >> you're mentioning travel retails. we call in the u.s., chinese consumers buying things in the u.s. how sustainable is that for lvmh and other luxury players like hermes. how much longer do you expect chinese traveling abroad continuing to power companies like lvmh? >> well, the comparison in terms of the chinese offshore spending is easy, i would say because chinese used to spend -- so we

definitely believe the pressure of domestic spending from chinese will remain structurally higher, but still we see a sizeable and broad potential of chinese offshore spendings. if you look at the state of the chinese customers overall, today they still have excess savings, but the ush is that consumer confidence remains super weak. at the same time there's the effect of prices still sliding, stockmarkets still under pressure, the rate of use, which is obviously your key clients of brands remains quite weak. there's no doubt the appetite for luxury brands is still strong with chinese customers, however, the conditions are

spotty. >> you see demand fairly strong, but is there now a divergence between what we can call hard luxury and soft luxury? it's hard not to notice the wine and spirits margin. that missed by a wide margin. >> yeah. we got the price prints yesterday. i would not call out oa significant disparity. th it's more attributed to chinese exporters and shippers who are still struggling at the moment. so there's no big divergence between fashion and boots and watches and jewelry. when it comes to wine and spirits, i think the weakness is mostly explained by continued destocking in the u.s. retailers in the u.s. continue

to destock cognac and other spirits. it's remained particularly weak. >> charles, it's interesting. as people go out more, they stop buying at home. should they be a higher volume in business? shouldn't there be an increase in bars and restaurants where the premiums happen? >> true, true. that's why there's a divergence between trade and untrade. but, you know, as i said earlier, it will take time for international shippers to absolve the significant price hikes that have been continuing since the pandemic. and champagnes and wine and cog knack have increased quite significantly. it's likely creating price resistance with customers and weighing down a little bit on

volumes, but we think it will be only temporary headwinds. >> and, charles, we're expecting to hear next week. i wonder after their surprise warning last time, i'm wondering what are you expecting to hear from the company next week? >> mm-hmm. well, lvmh is at the peak of earnings season. what we expect is very contrasted and should look at the earnings season ahead. we look across the board between q4 last year and q1 this year. the history has still shown that clients tend to refocus on brands. the feedback we have gathered so far seems to indicate that the story is riveting itself now and clients are much more looking to brand shop.

so, again, we expect more in the sector with some brands still growing in the high teens and some struggling with high single digit or even a debilitating sales drop. we'll look at recovery in the back end of the year. >> lvmh shares up about a quarter of a percent. great to see you. thank you. all right, turning back to the imf meetings, karen caught up with a number of policy makers in washington and asked about their outlook for chinese growth. >> the first quarter numbers that have come out for growth for china have come in better than expected, so that has upside implications for our forecast. i mean, we have china, 4 p.6% ts year. the first quarter came in at 5%.

so that certainly has potential to raise our forecast. it was a broad-based expansion. >> domestic demand in china is still way down by the troubles in the property sector. the troubles in the property sectors are still there. we've got numbers. still you have new construction, prices jauftsing down. so that problem has not been tackling. it's weighing down on consumer confidence and weighing down demand. >> at the consumer level, it's relatively low, but there are some provinces that have relatively high debt levels and those are tightly linked to housing market exposures at the provincial levels. so, again, policy makers are taking aggressive steps to resolve those issues. coming up on the show, cnbc gets the first word with imf's top voices as they lift the growth of the forecast this

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signs." let's look at what u.s. banks reported yesterday. we have morgan stanley topping expectation talks for first quarter profit and revenue boosted by wealth management and investment banking. profit rose 14% compared to the previous year. meanwhile bank of america also beat first quarter top and bottom line estimates, mostly thanks to better than expected net interest income. even as profit fell 18%. now, the bank of america's ceo brian moynihan slared his outlook for the second quarter. >> the second quarter for us always comes down a little bit from the first quarter. it will lock in and grow from on out. it's a different path than others have. our deposits are growing. our lone growth is still muted because the economy is adjusting to all the things your colleagues have been talking about all day. quarter loans are down a little bit due to the credit cards. >> and the new financial stability report finds near term

risk is starting to fade but vulnerabilities are start to crop up in the medium term. growth in cybersecurity incidents has concerns for financial stability. karen asked the imf's monetary and capital markets director whether this risk is reflected in valuations. >> about 12 months ago we had the banking turmoil in the u.s., in switzerland, and there was quite a bit of uncertainty, but since then, the inflation picture has improved. there is an expectation of a soft landing globally. and so the combination of an expectation of interest rates coming down across the globe, activity slowing a little bit, but being away from a global recession, that has really fueled optimism. we have seen quite a bit of upset surprises to earnings,

upset surprises to relatively in many countries, and valuations have run up. we do worry in some segments where valuations have become quite stretched, i would point to credit markets where spreads are very tight even though borrower fundamentals are deteriorating at least in some segments. so, you know, even riskier borrowers are able to issue new debt, and that's at very favorable prices. it has broadened, but at this point, it's really across the board. >> the imf updates the forecast setting, quote, a surprising resilient economy despite policy and sustained inflation. it's coming in at 2.1%.

the imf also saying expect central banks and advanced economies to start cutting rates in the second half of the year. the u.s. economy is now expected to grow by 2.7% this year. that's up 60 basis points from the imf's january forecast. karen asked the first managing deputy director about the hot economy and what that means, if the imf needs to roll back its expectations for three fed cuts this year. >> the u.s. economy firstly is doing really well in terms of the growth numbers. it has exceeded even the most optimistic expectations. and along with that we've certainly seen inflation, somewhat stronger than expected. that said, we've been saying this is going to be a bumpy road. the last mile is going to be bumpy, and we are seeing bumps along the way. given the strength of the u.s. economy, it makes sense to take a prudent approach, which is to

wait and see, make sure that the inflation numbers really are dutifully moving toward the 2% target. there is absolutely a reason to wait now and wait for more data to come before starting an easing cycle. >> karen also spoke with the economic counselor and director of the imf's research department. he sounded very confident that the new growth forecast was accurate. >> we have revised up a little bit. i mean, we're finding a very steady growth path for last year, this year, and next year, actually 3.2%. exact same number for all three years. and i think when we do the risk assessment around the baseline, the chances that we would have something like a global recession is fairly minimal at this point. it would take a lot to derail this economy. so there's been tremendous resilience in terms of growth prospects. we've seen the u.s. u doing very, very well. we've seen a lot of emerging market economies doing better

than expected. there's been a little more weakness in the euro area, but overall it's been performing quite well in the context of inflation coming down faster than expected up until very, very recently, and so it's a set of good news overall. >> so there's that word again, resilient. he echoed it. we heard it from so many different people. even in their forecast they called the global economy resilient, but there are challenges ahead. they cited the u.s. and china having an outsized impact on global economies, but at the saum time facing debt issues in the u.s. in particular. national debt rising neil 1 trillion dollars every 100 days. >> they've increased it by 0.1 percentage point. it's basically nothing. basically what we had back in january. the resiliency, i'm wondering where it's actually coming from. but more importantly it's what they said, i believe, when it comes to the fact that global ranges come up.

0.1%, higher, lower, ultimately we're looking at global growth compared to what we had in the u.s. >> here with higher inflation in the u.s. and here with the ecb, rates being higher, were your surprised they could raise it? >> keeping it high, hardly anyone blinked an eye. >> there's positivity, no doubt. it's important to look at what they said in terms of prudence. at this stage it's quite uncertain to some extent. what is the future for bank rates? i still am left with a couple of question marks really. >> that's going to do it for today's show. i'm frank holland with silvia amaro. "worldwide exchange" is coming up next. what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at

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it is 5:00 a.m. at cnbc global headquarter, 10:00 a.m. here in london. i'm frank holland. here's your "five@5." turning down the global market. this is ahead of u.s. inflation and new geopolitical unknowns out of the middle east. stock futures, they're trying to hold onto some gains. >> call it confidence crisis. fed chair jerome powell repeating his message to the markets that the central bank will maintain its current level of restriction until it sees a significant shift in consumer prices. shares of united, they