said to make progress. stock futures are in the green. it is a hopeful sign that central bankers and finance ministers gather in japan for the g7. we speak exclusively with treasury secretary janet yellen this hour. meanwhile, jamie dimon warns that u.s. default would be potentially catastrophic. we will hear more from yesterday's interview. francine: if you look at the futures, they are in the green for the moment. investors are looking at it and yields. investors are looking at the cooling u.s. job market. tom: slivers of optimism coming through on the geopolitics in the debt ceiling. on the geopolitics, wang yi and jake sullivan having a meeting. the ftse 100 currently gaining four points in the session.

we continue to look at the pressure coming through for commodities and that fuels the energy sector and basic resources. on the inflation front, the spanish ibex currently up .4%. we continue to watch the details in data coming through from the euro zone as the ecb members debate how far to go in terms of the rate hike cycle after adding 25 basis points. the cat getting 6/10 of a percent in france. in the u.k., the ftse 100 up .2%. let's look it over and see how things are working out cross asset. on the data front, last night, seems to think lining up with the fed in terms of supporting that view potentially around a pause from the federal reserve. particularly when you look at the jobs claims, the highest numbers in 19 months. that's good news ultimately for the fed in terms of their work to lead to softness in the labor market. he also had producer prices coming in lower than expected

suggesting that inflation is heading in the right direction esparza central bank this concern. the cpi from spain rising 6.6% for the month of april year on year in line with the estimate. it is an increase of 6.6% in terms of inflation out of spain year on year. zero dollar trading at 1.09. it has barely broken above 1.09 the last is currently up .1%. francine: we are getting breaking news from michelle bowman saying it is not clear if fed policy as restrictive enough. she is also expecting rates or a saying rates need to stay restrictive flirt sometime. there was a big interview that she gave to our colleagues at the news agency. she said inflation rates remain much too higher they will need further tightening. she is basically saying that there is a lot more that the fed could and should do.

she is one of the biggest members and is quite hawkish. we will keep a very close eye on the market reaction to that fantastic interview. tom: traders are still pricing in cuts and there's pushback from the market down .2% by the end of the year. that official bowman's comments being weighed up. u.s. president joe biden says the debt ceiling meeting with house speaker kevin mccarthy and other congressional leaders has been pushed on friday to next week. speaking exquisitely to bloomberg, jp morgan ne-yo jamie dimon warns of the dangers of a u.s. default. jamie: actual default. that is potentially catastrophic. and you can go through a one million ways, but everyone knows it is potentially catastrophic and i don't think it's going to happen because the the closer you get to it, you will have panic. the market will get volatile. maybe the stock market will go down. the treasury will have their own problems.

it's amazing you already have certain t-bills trading at 3% and right next to them 5%. this is not good. tom: joining us now is claudia panseri from ubs global wealth management. good morning. you heard the warnings there from jamie dimon. not surprising but of course we take note of his words. how do you position around these debt default risks? claudia: good morning. i want -- our positioning is pretty defensive since march. we agree with many things that are being said about interest rate remaining very high. we don't expect the fed to cut rates this year just because the economy is still very strong. you mentioned before about the inflation coming down, but the overall inflation is still very high versus the target. the central bank and especially the fed usually cut rates when

there are two situations. when inflation is low which is not the case. it is falling but still about the target. secondly, when we are in recession and you mentioned before the on appointment rate is at the all-time low. clearly, those two conditions for having the rate cut are not there. at the same time, you have u.s. stocks which are trading at 18.8 times which is a multiple consistent with expansionary economy or alternatively, with cutting rates. i see the market environment pretty difficult to read, but i also think that the rally we had recently is overdone. francine: good morning claudia. we look at the concern over the debt ceiling we spoke to jamie dimon and he said they talk about it and meet up once a week and they will meet up much more. if we have a u.s. default, it will reprice all contracts, all treasuries.

unclear when that day is. tactically, when you play the markets ahead of a possibility like that? claudia: we think volatility will remain high but we don't think about a default of the debt. we still believe and they will be in agreement a few days before for the next day but we are cautious and the way we are playing these is for instance, being underweight equity versus high rate bonds. investment rate high quality in u.s. because we believe that the volatility in the equity market to low. why some weakness and some risk are priced in the treasury. clearly, the low positioning on u.s. equities is a way to be positioned for such an event. tom: underweight or reduced exposure to u.s. equities, looking at high-grade credits around this potential event. of course, jamie dimon also speaking to francine about the

bank crisis, bank pressures for regional banks in the u.s.. do you see that event as behind us and doesn't now move on to commercial real estate? what is the next shoe to drop? claudia: unfortunately not. we are slyly negative on u.s. banks. we are neutral and european banks. we don't believe there's the same risk in europe as the u.s.. u.s. bombs have more regulation, more rules, more requirements. as jamie dimon was announcing yesterday, so less profitability in earnings. rates remain at a high level and new deposit outflows are risk. this is why we are cautious on the u.s.. there are plenty of elements which are not fully priced in the u.s. market. even if the breath of the u.s. market is very high, so you have plenty of segments which price very low multiples, the risk of

having -- commercial real estate and u.s. banks but the auto market is still too expensive. volatility should pick up and is very low. i would be very careful also on this rally on the tech, which people have been seeing as a way to run away from cyclical high debt companies in the u.s.. but i want to remember that back in the u.s. it is cyclical and exposed to consumer spending. so it is at risk when trading above 20 times. francine: claudia prince harry -- claudia pam seri from ubs global wealth management. coming up, don't miss our was a conversation with janet yellen. annmarie hordern will do that from japan at the g7. it starts at 845 london time. this is bloomberg. ♪

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tom: welcome back to the open. 11 minutes into the european trading day this friday. gains across the european benchmark of close to .4%. futures in the u.s. pointing up. the pound appearing earlier losses in terms of the growth picture, the u.k. actually notching up a slim growth in the first quarter. the euro-dollar trading at 1.09 and weighing out jobs claims data out of the u.s. suggesting there may be a softness coming through for the labor market in the states. francine: jp morgan chief executive jamie dimon says regulators will do whatever they need to do to and the banking turmoil. in his close of interview he says what policymakers will take away the wrong lessons from this year's of people. jamie: the debt ceiling is potentially catastrophic. that is a whole different issue. hopefully, it won't happen. the banking crisis i still believe will sort its way

through, and it's not anything like '08 or '09. only a couple of people on all sides with all these various things would know about it. hopefully, it will be near the tail end of that. francine: if you are janet yellen right now, what would you do differently? jamie: i don't know. i think we need to finish the bank crisis. we have had uncertain policies. mergers, the first horizon deal. we have to assume there will be more. whatever the fdic, the occ, the federal reserve, whatever they need to do to make it better, they should do. be thoughtful, forward-looking and not be surprised constantly. some of these things we have known about for quite a whil,e and we have handled three: svb, signature, first republic. i think it's very important. the regional banks who i've been speaking to every day for the last week, they are quite strong. they are quite worried because of the run on deposit, but their financial results are good. there financial results will be okay next quarter.

they are earning money and have very good clientele, very diversified. they are quite strong. francine: what is the comprehensive solution? if you're asking janet yellen to get the job done, what does that look like? >> i'm not asking for comprehensive solution. just be prepared for problems. we don't need a comprehensive solution. francine: what do we need right now? regulators to look at short-sellers of banks? jamie: yes. my folks were telling me that is not the problem. the shortselling band. if you analyze stocks and short sales, it's not that big of a deal. i think they may partially be wrong because, as you know, some people are unscrupulous and use other means to go short. if you look at the detail, the sec has the enforcement capability to look at what people are doing by name in options, derivatives, short sales. if someone is doing anything wrong, people in collusion or people going short and making a tweet about a bank, they should go after them, and vigorously.

they should be punished to the full extent the law allows. i think it is possible it is taking place. we have no evidence of it, but my experience in life has been don't assume too much. francine: do you think things will change because of this? is it a catalyst? jamie: it will get worse for banks. francine: what do you mean by worse? jamie: more regulations and more rules and requirements. i hope they do it very thoughtfully because we love the community banks and regional banks. we are the biggest banks of those folks but if you overdo certain rules, requirements, regulations, some community banks told me they have more compliance people than loan officers. they make it harder for them to do business. there are already hundreds of rules in place, and it is the mix of rules. if you change the liquidity, maybe not capital. if you change capital, maybe not liquidity. if you add the last maybe do , something with deposit insurance. they should sit down and have a very thoughtful conversation about what those things are and what we want the outcome to be. if you look at the present outcome, a lot of people are leaving banks and they should.

if that is what they want, so be it, but it should be done with forethought. it should not be done just because rules and regulations are being put in place and you don't know what the consequence . tom: always fascinating with jamie dimon. let's bring back claudia panseri from ubs global wealth management. he talked earlier about the opportunities in bonds. as the window closing on being able to lock in these yields? claudia: not yet. there are some space to see central banks essentially is in the euro zone and u.k. to keep on hiking interest rates. but we are very close. we are close in bond yield in the short term which should remain at a high level according to us. we are not expecting any rate cuts in europe. i think for clients which have been facing negative rates for a

long period of time the opportunity is really impressive. when you look at the return's in the coming five years, this is an excellent opportunity to lock in the good performance. francine: when you look at where you want to be invested, we also asked jamie dimon what he would do with $1 million of his own money. he said i would not defy sovereign bonds but you see certain opportunities imparts a fixed income? claudia: yeah, for clients who want to reduce volatility and have concerns that the economy is slowing, having some bonds makes a lot of sense now after a year of very low yield. for clients that have a long-term view which look after 2023 in the beginning of 2024, volatility may still say hi there's plenty of opportunity

there as well is in equities. but outside the u.s.. across the sector, there is one which is cyclical which may face volatility in the months to come but huge opportunities industrial. there is a huge amount of spending --capex spending which is benefiting from energy transition. the sector is not expensive but underperforming. people are to secular growth and tech while u.s. sickler desk cyclical growth opportunities at the regional price. tom: what you of commodities in this environment? you are seeing iron ore 100 per ton. wti at $70 a barrel. it has a commodities trade run its course? claudia: we are positive on commodities. the positive element of the commodities is more driven by energy and oil, which is

undersupplied. there is still rising demand and increased in traveling across asia. clearly, we don't think it will count with cutting potential production in the months to come. we still expect a pickup side in the months to come. for the other commodity price, i think we need to wait probably a bit more to see the upside which is linked to the china recovery. so far, china recovery is mainly focused on the recovery side. we need to see improvement in production and manufacturing is still very weak. i think commodities will benefit from the second stage of recovery in china which is not something we expect in the short term but focusing over part of the year. francine: if there's more dollar weakness to, how do you take advantage of that? claudia: there are many ways to look at the weakness of the

dollar. in the currency space, it has been exposed to currency which are very cheap. this is the case for the japanese yen. it is also a relative term the euro looking still attractive. the swiss franc is also very attractive in the long term. it is a good currency with volatility picking up. if you're looking into equity, the falling dollar is positive for emerging markets. emerging market in china performs in line with other regions it, and with the depreciation the dollar you make it upside on emerging markets. also gold has been performing very well but if the dollar continues to depreciate, we may have further upside on gold. there are plenty of opportunities which claims they look at with the dollar weakening. of course, dollar weakening means be aware of and stability of some -- earnings but also

means that people need to be doing extra work to see the depreciation of the swiss franc or euro on corporate's. francine: claudia panseri, head of equity strategies at ubs global wealth management. let's get to the bloomberg business flash. here is sarah halls. sarah: sources tell bloomberg that at least eight senior credit suisse bankers are leaving the firm for santander. mergers and acquisitions chief steve geller is set to be amongst them. we are told the moves reflect how santander is expanding in the u.s. representatives for credit suisse and santander declined to comment. the wall street journal reports that linda yaccarino, nbc universal's head of advertising is in talks to become twitter's new ceo. elon musk tweeted he is transitioning his role at the firm to executive chair and pto where he will oversee product, software and system operations.

musk says of the new ceo is slated to start in about six weeks. carl icahn's holding company has authorized a buyback equaling almost 27% of his shares trading , on the open market. this potentially boosts the stock price as the financier fueds with hindenburg research. meanwhile, the short seller has hit again at icahn enterprises. it says they failed to disclose enough in response to questions raised in its earlier reports. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm sarah and this is bloomberg. tom: thank you very much. a couple of lines dropping from the recently appointed new head of the ubs which is combining credit suisse. sergio ermotti is giving details around the time for closing that deal. he is saying they are on track to close the deal within three months from the announcement, saying that all off corner --

earners integration is important. sergio ermotti says merger does not create a bank that is too big for switzerland. that remains a concern. francine: we heard from the chairman who has always been plain speaking with the markets saying it takes months for the transaction but the integration and you figure out what happens with swiss banking and some of the wealth management will take 3-4 years. it will not be a simple task. if you are: cal hair you are basically -- colm kelleher you are basically driving a plane while trying to build its. tom: three months to complete and then three have been for to ensure the integration is finished and wrapped up tied up with a bow. we know that credit suisse staff and some top leaders in parts of the world like asia are moving. we have stories of some of their

staff moving to santander. coming up, we had to turkiye to discuss fresh uncertainty with the presidential election this weekend. that is next. this is bloomberg. ♪

tom: let's check in on stocks on the move. gains across european equities. socgen coming in with a beat in terms of the thick part of the

business particularly strong. socgen up .2%. richemont coming in with strong sales boosted by china up i percent. thg group different story. they break up talks with apollo currently down 14% below their ipo price of back in 2020. francine: don't miss our exclusive interview with u.s. treasury secretary janet yellen. that will be live from the g7 in japan and about 20 minutes from now. 8:40 5 a.m. london time and this is bloomberg. ♪

francine: welcome back to the open. 30 minutes into the european trading day. there are your top stories. debt ceiling optimism. president joe biden house speaker kevin mccarthy postponed today's meeting as the staff

level talks are said to make progress. u.s. futures are in the green. it's a hopeful sign that central bankers and finance ministers gather in japan for the g7. we speak with treasury secretary janet yellen this hour. jamie dimon warns that u.s. default would be potentially catastrophic. we will have more from yesterday's interview. when you look at the markets, time, they seem to be more upbeat than they have been of late. tom: there is friday optimism creeping into this. there will be talks from the debt ceiling but also talks starting between china and the u.s.. will it lead to the two presidents finally having a conversation after the risks in tension between the two sides? gains a .4% across the benchmark. in the u.k. meager growth in the first quarter. we had the upgrade visions to those forecast coming from the boe after the 25 basis hike today. the dax hosting gains 58 point u.k.. was he 100 gaining .4%.

across your sectors, leadership coming through from consumers with good news around luxury and banks. socgen coming in with a beat particularly around fixed income trading and lower loan loss provisions. u.k. banks performing well around fixed income. lower loan loss provisions which has been a story across that sector. consumer up 1.4%. retail also gaining. francine: turkish voters had to the polls the sunday for the general election. the race is expected to be tight with growing economic concerns. let's head straight to yousef gamal el-din was in istanbul for us. what should we look out for this weekend? yousef: fran, there is a lot at stake in these are the most tense elections i have witnessed over the past 15 years for sure. on sunday, the voting stations are going to open at 8:00 a.m. local and will close at 5:00 p.m. in the afternoon.

if we don't get a clear where this goes to a runoff on may 28. the real question is what happens with the remaining presidential contenders? initially there were four and it will down to three. muharrem ince dropped out because of a sex tape but he nonetheless leaves the race which leaves two main contenders and a third one. the two main -- two main ones are erdogan the incumbent in an incredible threat emerges from kemal kilicdaroglu. there is a lot at stake for the economy. the turkish lira is at a record low and foreign investor participation has eased evermore. on the political side of things, you look at how the government has responded to the earthquake and that is a big debate on the ground with many of the people i speak to, 50,000 people died in the earthquake and a note on the currency because a note from hsbc and jp morgan and they are

seeing potentially more weakening from existing record loss. maybe 2425 against the u.s. dollar over the next three months. regardless of the outcome, the top priority is going to be execute swiftly to save this economy. tom: yousef gamal el-din setting out what is at stake domestically for turkiye but internationally as well and for investors looking at that economy. he is in sample for us previewing elections. jake sullivan in one he met in vienna as both sides work towards improving relations. u.s. and china describe the meeting as extensive and constructive. let's bring in bloomberg's senior asia economy report prepared put these latest talks into context. we know there has been a lot of outreach from the u.s. side to start conversations. are there reasons for investors to be optimistic or are we jumping the gun a bit? michelle: it may be friday

optimism you're talking about what it was a low bar. they had not had a high level meeting since the spy balloon incident, which seems like ages ago now. this has a first step to it to the groundwork they were talking about for a call between xi jinping and biden. our colleagues in washington had a great story earlier this week about the u.s. pushing those invitations to talk on all levels in the hopes that if china remains rejecting these calls that they will like the recalcitrant one and the ones been difficult. we will see how that goes. it sounds like a desperate dating reggie there but investors look kindly on the meeting and pointing to it being reassurance that things will not get control -- get out of control. others pointed to the calm before the storm because there's a lot going on with the tech space and other geopolitical strains and a u.s. presidential election cycle that will be heating up with more counter

china rhetoric. francine: the u.s. said a flurries of talk -- set a flurry of talks and meeting invites happening. when we know if we actually achieve anything? michelle: it's hard to tell. there are so many developments talking not russia, ukraine, all the thick geopolitical issues in this meeting between jake sullivan and wang yi. these are all level of talks between the two countries and staff. china has been assisting these imitation -- invitations because i don't want to kowtow to u.s. invitations before they are ready with all this other stuff going on. that other stuff including what is going on this week at the g7 finance meetings where there is not so thinly veiled effort by u.s. led group to propose this supply chain partnership that is going to make its way into the statement at the end of this meeting about reducing country's on china for things like nickel

minerals and sensitive technology materials. in the atmosphere, it's easy to see where china might not be so eager to jump on the phone just yet with the white house. francine: thank you so much. bloomberg's senior asia economy reporter. coming up, is the end insight for the boe's most aggressive hiking cycle yet? it bring you more of our interview with the governor andrew bailey coming up next. this is the bird. -- this is bloomberg. ♪

tom: welcome back. let's see if friday optimism holds. gains of .4% across the european benchmark. gains in term of u.s. futures up .3% as well. let's get the first word news with sarah halls. sarah: joe biden's meeting with kevin mccarthy and other leaders has been pushed on friday to next week. according to white house officials, the postponement is a signal that talks are making progress in a push to avert the looming fiscal crisis. the president will instead meet with congressional leaders early next week. the largest banks face billions of dollars in extra fees to replenish the u.s. government's

deposit insurance fund. the assessment from the fdic stems from the regulator's work -- decision to insure all deposits at silicon valley bank and signature bank. the fdic estimates that move cost it's deposit insurance fund around $15.8 billion. thailand's consumer confidence in april has risen to the highest level in more than three years. the index climbed to 55 from 53.8 in march. university of the thai chamber of commerce says spending and forced tourist arrivals are reducing spending. consumers are estimated to have spent up to $886 million in the run-up to the election. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm sarah, and this is bloomberg. francine? francine: sarah halls in dubai. coming up, don't miss our inclusive interview with the u.s. treasury secretary janet yellen next.

this is bloomberg. ♪

tom: welcome back to the open. gains of .4% across the european

benchmark. futures in the u.s. higher by .3%. consumer products leading the charge with gains of 1.3%. a boost for luxury and on the earnings front as well a good picture coming through from socgen. the cl looks to step down after 15 years. the big picture one of the key headlines for the day is it seems there is traction in terms of the staff level around the default ceiling. we are a long way from a resolution but the meeting that had been penciled in friday between the president and his republican counterparts has been pushed back. you spoke to jamie dimon and he had strong comments. . francine: people want to know what happens if treasury runs out of cash. when does it run out of cash and what are the contingency plans. jamie dimon said he looked at contingencies. the chief executive officer of ap morgan said they are meeting once a week and i asked him whether he was in touch with

janet yellen. there was a rumor that she had called him and said what happens? this is a modeling of game theory because it would hurt contracts and treasuries. he did not want to disclose it and said it was a private conversation but they are meeting on this every week within jp morgan. as a deadline gets nearer, maybe twice a week and then three times a week. tom: that is a fascinating detail in terms of how the biggest bank in the land is working to isolate themselves are build out contingencies for a potential risk. you have to wonder if other banks are doing the same thing. june 1 is one the treasury secretary flagged as the x eight and you have the likes of the previous pimco had bill gross in you may want to buy into the shore and because it ultimately will get resolved. of course, the gathering of g7 central bankers and finance chiefs comes at an awkward time given all that with you as. as america projects is leadership on the world stage in

japan different story is unfolding at home. politicians in washington unable to agree on that debt limits. the country is at risk of defaulting for the first time ever. annmarie hordern joins us now from japan alongside a guess for and exclusive interview. not just any guest. >> that's right, tom. we are pleased to be joined by u.s. treasury secretary janet yellen. thank you for joining the -- bloomberg tv and japan. what is looming over the g7 meeting as these concerns coming out of washington. the debt ceiling negotiations as well as still tremors in the banking industry. i want to start with the debt ceiling. of course, wall street is very concerned about this. there is the x date approaching that you laid out potentially as soon as june 1 but there is a an assumption on wall street that if there is no negotiated deal

after june 1, treasury will still maintain payments on the securities. is that assumption correct? janet: look, all i can say is that there is no satisfactory solution for the united states. a solution that will be good for the economy and financial markets other than congress acting to raise the debt ceiling. there are potential different paths that could be taken if that does not happen, but there is not a single thing that can be done that will save the united states from considerable economic and financial damage. annmarie: this plan was outlined back in 2011, and you were there at the fomc meeting about it and it said that treasury principles insecurities would be paid. is this something that had these for contingency plan has been discussed with the president?

janet: i understanding, i was at the fed in 2011, is that this plan was never presented to the president and never approved. annmarie: would you presented now? -- present it now? janet: we are working full-time to work with congress to raise the debt ceiling. that is where our focus is. we know that the only good outcome is one in which congress acts as it has many times, almost 80 times since 1960, to raise the debt ceiling. what global markets and households in america and businesses need to see is that we have a congress that is committed to paying the bills that we have incurred as a consequence of our legislation,

that we are not a deadbeat country. if congress fails to do that, it really impairs our credit rating. we have to default on some level whether treasuries or payments to social security recipients. that is something america has not done since 1789, and we should not start now. so, we have not discussed what to do if that does not occur with the president. our focus is on getting it done. annmarie: treasuries are the bedrock of the global financial system, and the asset managers i speak to end investors, they don't have the luxury of not contingency planning. should they assume that debt may not be's serviced there's no deal? -- if there is no deal? janet: if congress does not raise the debt ceiling, we face economic and financial catastrophe one way or the other.

and that is why our focus is on making sure the congress does raise the debt ceiling. i feel that that is something we are going to succeed at doing, and we are working hard to make sure that that gets done. annmarie: as we get closer to june 1 will you alert hungers and a more precise date? janet: yes i will update congress as we have billable information. what i have said is early june and potentially as early as june 1 as we get closer, and may be able to provide more refined guidance. but there is a lot of uncertainty about the exact level of cash ounces and payments that we have to make from day to day, and so there remains a level of uncertainty about precisely when we would run out of cash to be able to pay the government's bills. annmarie: jamie dimon said he

set up a war room for contingency planning. are you actively speaking to executives? janet: i have talked not within last two weeks but earlier around the time in january when i sent my first letter and i talked to a number of bank negatives. more recently, i have talked to leaders business, businesses in different sectors of the economy, and i will be meeting with your bankers next week when i get back. but i want to understand how they are thinking about the debt ceiling, and what i am hearing is that it is a grave source of uncertainty that is one of the things that businesses really are concerned about, one the biggest sources of uncertainty in terms of many big american businesses. annmarie: that is what we are hearing at bloomberg. how frustrated are you that

these bank executives are not putting pressure on congress, particularly republicans? janet: well, wall street executives and american business people have always spoken out about their concerns about the debt ceiling. i think it is appropriate for them to talk about how they see the debt ceiling is impacting the american economy and the global economy. so, those voices we want to hear voices of people who will be affected by this. annmarie: there are still tremors in the banking system. in two months almost to the date we have had for u.s. lenders fail. but the administration continuously says that the banking sector is bound in resilience. is that fair assessment when you look at the regional banking sector? janet: the regional banks have been under some stress, but i

think the banks that have failed have had some very unique characteristics that have made them vulnerable. the banks that failed tended to have substantial losses, market to market losses on their home a truly debt maturity portfolio. although the regulatory capital was impaired, their tangible equity was diminished, and they simultaneously had a very high proportion of uninsured deposits. that profile is not very common, but a lot light of banks particularly regional banks, are seeing their earnings come under pressure. the amount that they are having to pay for deposits is rising and in many cases, their investments are at lower interest, and their stock prices are coming under pressure.

but most banks now even including the ones that are seeing pressure on their stock basis have solid liquidity and would be able to manage paying off uninsured processors if they were to flee. annmarie: are you confident no other regional or small lenders will fail? janet: i don't want to talk about the situations of individual banks. what i see is a banking system that overall is well-capitalized, still has very solid earnings, and we have improved the available liquidity to the banking system. and we think that banks are going to be able to survive this, but we are monitoring the situation very, very carefully. annmarie: the other elephant in the room at the g7 meeting as china and you spoke about this

yesterday, how you are working with your peers to look at outbound investment essentially when it comes to china. this would add on to what the u.s. has already done with export controls and sanctions. he recently gave a speech about china and how the u.s. views economic policy. you made clear that national security concerns will be paramount, even if it becomes economic concerns. i am curious why the u.s. still has tariffs on china if that is an economic benefit to many u.s. consumers? annmarie: well, look, -- janet: well, look, there was a so-called 301 action that was filed against china for unfair trade practices china was found guilty of 301 violations, and those tariffs were put in place as retaliation for unfair trade practices.

the trump administration arrived at an agreement with china that might have led to lowering them. china did not carry out their part. annmarie: are there security concerns about clothing or poultry? janet: that's not a national security concern. that is unfair trade practices. that is not national security related. we do have concerns with some of the practices that china has engaged in with respect to trade and investment whether forced technology transfer, massive subsidies to industries that really distort patterns of international trade. annmarie: that will be a big topic when president biden meets with the other leaders in hiroshima, but also on china, i know that you are looking forward to potentially going to beijing. you said at the appropriate time. we now have your counterpart in

place, and he is been there for several weeks. are there any plans in the works? janet: i expect to travel there. i cannot tell you what the date is. we have a number of your american officials that are likely to go. we need to sequence them appropriately. annmarie: will you be the first? janet: i don't know who will be the first but we are working with the chinese and discussing among ourselves what the appropriate sequencing and spirit annmarie: in a phone call yet with fong are you waiting to see him in person? janet: no phone call yet. annmarie: you are staying on for the remainder of the biden administration but president biden announced he is running for 2024. would you consider another four years at treasury? janet: i was thrilled to be

asked to serve. i have really enjoyed the position i have. i have a lot of work to do and that is a topic have not yet given any thought to, but i would like to stay until the end of his first term and continue on the important agenda of work that we have at the treasury. annmarie: may be between four and beyond. janet yellen, u.s. treasury secretary. think you so much for your time. we are here at the g7 meeting and it is overshadowing all the work that she and her peers are talking about which is what is emanating out of washington. that is the overhang on the debt ceiling as we are now just three weeks away from as soon as we can hit the x date of june 1. francine: annmarie there with a fantastic interview with janet yellen who says the only good outcome is congress raising the debt ceiling. he spelled out what her department would do if congress

fails to raise the ceiling or suspend the debt limit before the treasury finds itself unable to pay a lot of their obligations. annmarie really trying to push madam secretary to give us some kind of indication that they spoke a lot with u.s. and china. let's bring in ross matheson. thank you for joining us. this was a great interview trying to figure out what happens with the debt ceiling. how much interest in us are we going to say from now until june 1 as we get closer to the debt limit? >> this is the main risk investors are facing right now. they are going to say what's going to happen with the debt ceiling? the problem is that we don't have too many examples of what happened in the past. we had 2012 and 2011 sorry and subsequent cases. one thing people are pointing to is the fact that in addition to what is happening with the debt ceiling negotiations also what happens with the fed balance sheet. if the fed balance sheet is