>> right now it is a fed pivot party and we are all invited. >> we are seeing inflation slowing, and it's consistent with what the fed expects. >> we have hit peak rates and peak fed. inflation is slowing. >> i don't think we are going all the way back to where we were in 2019. >> as we move the counted page into 2024 we see a little bit of an uptick, that could force the fed's hand to take one final rate increase. >> this is bloomberg surveillance with tom, jonathan

ferro, and lisa abramowicz. jonathan: this is bloomberg surveillance on bloomberg tv and radio. i am jonathan ferro. your opening market on the s&p is positive 5.1%. a three-part story this afternoon. statement, projections, news conference with chairman powell. will he rsvp to the fed pivot party? tom: in the last 24 hours people were writing notes, you know they put statement up. then they put up the guesstimate statement. this is what they actually said. i am more focused on the dispersion of the dots. i'm usually wouldn't say that. this time around, i think that everyone has to recalibrate. jonathan: that is refreshing. thank you, t.k.. tom: i was shocked.

jonathan: the 2024 dot. lisa: he's wrong. tom: tom is wrong? jonathan: the 2024., how many cuts will be implied by the 2024. raised on where we are in the market? how much daylight will there be at the end of the day between the market and the federal reserve? lisa: if they say, as many expect, that they will cut rates by 50 basis points, there will be enough for the full year. very different than 100 basis points that the market is pricing in. thus the market discount the fed's projections saying we will go with our estimate. tom: we have a bull coming up. jon ferro, i'm looking at the bloomberg financial conditions index. chairman powell goes into this with a screaming accommodative statistic. jonathan: you say we have a pole and we are looking for people

looking for a 10% upside in 2024. the s&p 500 is up 10%, never mind bullish for next year. the last month has been absolutely ridiculous. tom: i thought it would be 4.22 or 4.25. it doesn't want to go higher yields. jonathan: chairman powell pushing back later? lisa: if he doesn't come how much does that signal, let's go, bull market, game on, go further? the expectation for today's meeting is that he will push back. if he doesn't come how much will that surprise the market to say, you want to be the most accommodative since we started raising rates? that is probably ok. tom: someone will ask a rude question. this go with gina of the new york times. she will probably get taylor swift into it. he will go to a prepared statement. madame lagarde is the same way.

bailey, the bank of england? probably not. they will read from a prepared statement. the three of us could write that statement right now. jonathan: he has spoken recently. just repeat what he said recently, too premature to engage in a conversation about interest-rate changes. governor waller has already gone there. that is the question that people will ask in the news conference. we know that. if i was mike mckee i would call governor waller and say, thoughts? lisa: even if he repeats what he said, that will be viewed as really dovish. the only thing that he could say now is say categorically we don't think that it's appropriate for people to be celebrating victory at this point. we have not reached it, we are not on board with it. if he pushes back on some level and says, you can theoretically talk about all the cuts you want but we are not there and the

market is getting ahead of itself, that will be a signal. anything barring that is a firing gun for the next rally. tom: the statistic yesterday was flat-ish, not disinflation-y. he can lean on that. lisa: if chairman powell pushes back, how credible will it be with this market, which is on another planet looking forward to 2024? in the equity market, we are positive. the yield slower by single basis point. 4.1852. the euro, a touch weaker, 1.0774. lisa: 8:30 am, u.s. november ppi, this will be key to understanding margins. we basically saw a disinflationary trend. does it hold?

surveillance, the fed decides, we are back on air, you will be there. bill dudley, the former new york fed president and a host of others to give the drumbeat to this rate decision and commentary after. 2:00 p.m. is the rate decision. i am less interested in that. i am more interested in the statement of academic projections. then the news conference by jay powell. how much does he push back? it matters if people believe him, but even more, if he doesn't find it necessary to explicitly push back how much will that be taken as confirmation of the moves we've seen in the market already? jonathan: the last working day of the year? is that official? no? tomorrow morning? lisa: the bank of england, we have -- jonathan: we are doing

second-tier central banks tomorrow? lisa: i am embarrassed. they are not. they matter. jonathan: rising 13% next year to 5200. we look for 2024 to be the year of transition as markets navigate what we expect will be the feds pivot from a restrictive monetary policy setting to an easier start. john, i think that your call is original in the sense that i don't think that it is too dependent on rate cuts next year in the same way that it ills -- that it is elsewhere. can you go through your framework? john: it is great to be on "surveillance" as always, jon. when we look at it, we think that the traders right now are pushing this dream of for rate cuts next year. we think that the economy is showing significant resilience in the face of what is 11 hikes and three pauses thus far, or

skips as the fed prefers to call it. the fed has showed remarkable sensitivity as it works to keep inflation in check. all in all, we think that this looks good with cuts likely to happen in the second half of the year and probably maintain mostly, if it's going to happen, mostly in the fourth quarter. and then only once or twice. tom: there is a shift going on. the great chart guy at fidelity, there is a shift to earnings analysis. we are moving away from fed navelgazing to omg look at revenues and earnings. we have seen this before. how does the market react? john: we think that the market is actually well-positioned to react positively to it.

it is not only about traders, it is intermediate longer-term investors and traders who create the environment. the markets are like music. it is math and emotion. it is fear, greed, and need. some invest for need, other invest for the short term, the fear and greed aspect. it creates -- i don't want to call it a cocktail because that sounds too volatile, but it creates an opportunity where if we focus on earnings in an environment where it is the end of free money where bond issuers have to pay for the privilege of borrowing money and bonfires get something in return, this looks like a more normalized environment and we like it. lisa: does make you nervous that everyone seems to be agreeing with you these days? john: it does. we saw a lot of the bears telling us about the pending recession and massive unemployment coming and all of

this stuff that was negative. they took the negative pitch book sold last year and we believe that is what caused the market to decline as it did last year on things that were never realized. the bears have pivoted. when they pivot you get the feeling if you are on a boat all of a sudden everyone is on your side of the boat and you start looking for little balance. that might be in terms of taking advantage of some of the diversification fixed income offers as well as other areas of the market, the equity market, that have yet to participate in the rally. lisa: are you broadening out to small caps and less loved areas away from focusing on big tech? john: lisa, we have been working with better quality small caps on an alpha basis. on terms of a beta basis, we are using passive indexes, using the

s&p 600 atf versus the russell 2000 for that purpose for quite a while. it has hurt us in terms of overall performance, but it has given us stability. we can't help but notice on days when there's volatility in the market, it is caused by nervous money pulling out of the large caps. usually these days they are going into the s&p 400 mid-caps or s&p 600, or when the tide comes in and all ships are floating they roar into the russell 2000. tom: what is a comfortable price to earnings ratio? we are 21 spx. obviously, there has been multiple expansion. what is a historically comfortable pe for viewers and listeners? john: when it comes to historical, you have to think generations. i can't help but lean on the cooperman's ratios. probably 12 times.

for most boomers it is around 16. as you get younger, the generations keep pushing that multiple up. some of that is probably because -- some of them, it is a more aggressive positioning, but it also has to do with the need that people are beginning to realize. social security will not be at the same stead that it was for many decades for generations to come. people need to invest. it is like real estate in new york. in 1978 you could buy a co-op really cheap.even today with all of the problems that the city has, if you look at the prices on co-ops the ask is -- you pale looking at it given a historical perspective. probably 21 to 22. i am not a gunslinger. it is just that the demand for equities, when private equities has taken summary stocks out of the market it creates demand

that is chasing supply. jonathan: co-op fees another day. love that. oppenheimer asset management have a wonderful christmas. he has had a wonderful year. the last two years have been bruising. 22 wrong, you better get 23 right. the equity market is back where it started. tom: the smart people is not so much that they were right or got a statistic right. john at deutsche bank would be an example. they didn't go to cash. market timing. there has been a lot of academic work on this. umass leading the way 20 years ago. there has been a lot of academic work. --, i'm in. cache, i'm short. it is a tough game. lisa: how much was underpinned some of the faulty decision-making, this reliance on fed monetary policy is a guiding light versus that is

less of a game then the profits and other things in a normalized type environment? jonathan: did you notice we already had the fed meeting in washington with chair yellen and vice chair biden? lisa: pretty awkward. jonathan: yes. didn't go unnoticed. things to say on inflation and the path back to 2%, soft landings. quite a team, ay? right now and the equity market, the s&p 500 futures are positive. from new york city, good morning. this is bloomberg. ♪ \

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pres. biden:, i have had conversations with netanyahu and i want to make sure that we don't forget what we are doing here. we have to support israel, because they are an independent nation. i think we've made it clear to the israelis, the safety of innocent palestinians is still of great concern. jonathan: president biden speaking at the white house after comments at a fundraiser in which he alluded to israel losing global support for indiscriminate bombings in gaza. we knew that there was some divide behind the scenes, but publicly we are starting to see

it more in. it started a few weeks ago. the last couple of weeks with vice president harris. now you're hearing it from the president himself. tom: the last 24 hours, it is shocking over 12 months to see the difference in mr. zelinski coming to washington as before. i didn't expect it and lisa: here we are. lisa:i also think when it comes to israel there is the question about engineman netanyahu didn't have a lot of support. he was more on the right wing and how he will position going forward given the fact that he's taking a different stance from what president biden would like to see. a lot of people are saying that the bottom line is that it has to wrap up in a couple of weeks and that seems to be what people are saying collectively. jonathan: the polls are screaming. t.k. is screaming. in opposition to the president's stats. from the latest poll half of those surveyed said that they approve of israel's military

action in gaza. 45% of americans disapproved. the key part of the survey is 63% of democrats disapproved. we are going into an election year. it's no shocker to me that the president is changing his tone. tom: i was thunderstruck yesterday and the day before of the polling of the mayor of new york city, mr. adams, getting low polls, much because of the migrant debate in new york city. that brings it to the border debate that is tied into the ukraine debate. the polling on the border is distant from the zeitgeist inside the beltway. lisa: this fight into the air. aid to ukraine and israel, cutting spending, doing something about the southern border. tom: into the new year, the beginning of the presidential election, look for our coverage in january as we look to iowa and new hampshire. it is a good time to check up with someone steeped in the

political history of america. wendy schiller is the director . providence, rhode island. her textbook definitive on teaching the civics that we have forgotten. if you look at our civics of 200 years, in the mess that we are in now that jon beautifully stated, what have we most forgotten? wendy: when you think about the american ideal, it requires tolerance. it requires saying you disagree with me, but you and i are both american and we share in these first amendment values. the 10 bill of rights values. this is the system of government that came from nowhere. the founders pulled from lots of history, but nonetheless we agreed that the price we pay, the ticket of entry into this democracy, is tolerance. we can disagree.

we can win and lose battles politically, but we all have legitimacy. that is fraying in a way that is different than historically. tom: on ukraine in the border, the migrant debates, do you see us engaging this debate in 2024? or do we engage the first wednesday of november 2024? wendy: i think that we engage it the minute that donald trump wins a primary or caucus and gives an acceptance speech that is covered by everybody and donald trump becomes our daily ghost, we get a diet of donald trump every day multiple times a day. how does he speak? we already see kevin mccarthy, who i know is leaving, saying that revenge and retribution won't work because it is antithetical to what people want to believe about america.

let's go back to ronald reagan. we are old enough to do that and that's good theoretically speaking. understanding which messages work in times of difficulty. the 1980's wasn't fun. 16% interest rates come the hostage crisis, the world was becoming less stable. ronald reagan said we could do it, we are exceptional, we can do it. bush, same message. does donald trump go dark and negative and still managed to win? lisa: president biden's decision not to step aside and let another democratic candidate take his place? wendy: i am still dug into the idea that he won't step aside though i'm starting to waver a little bit. he believes that he is the most experienced candidate, the only person who has already beaten donald trump. you have to shake him of that belief. if there are poll numbers that show that someone else can do it

more easily and definitively, i think he would listen. but clearly, there aren't. at least no one is showing it to him and no one is claiming ownership of those poll ratings. gavin newsom, california is very liberal with its own problems. he may look and sound good on tv, but it's a difficult sell to say that he has a better chance of beating donald trump than joe by then. lisa: a poll had a generic democrat against donald trump, and that generic democrat won. at what point does it behoove the democratic party define the person who can step in? maybe there hasn't been the ground research? wendy: it would be a much -- it would be easier for the biden administration to find a different and vice presidential candidate. if there was someone younger, more dynamic who was more

popular, like a governor like raphael warnock from georgia. if they could announce that transition saying we are looking to a new team, that may move the needle. that may say to voters, he is looking ahead and understanding that we want to know what succession looks like because we are concerned about his age. jonathan: thank you for your input. high-definition, one of the most experienced. he was elected in 1972 to the senate. for a lot of people in this country, that is a weakness and not a strength. tom: it is the great divide as a lot of people say. too much washington. another group is saying, what do we have other than that experienced? it comes back to the jerry and sea and the age of the two key candidates. i was saying to this yesterday when someone cornered me, do you work with lisa abramowicz? i said yes. jonathan: they get very excited about that. tom: what is she really like?

jonathan: mean. lisa: a raging diva. tom: the thing that we don't understand about the december fit meeting is that january is here. wendy schiller's providence is now. amory is in iowa -- anne-marie is in iowa in three weeks? jonathan: i personally don't see any good reason to think that the last mile is going to be especially difficult. the last mile of the inflation push. here is vice chair biden on friday following the jobs number. the sweet spot that is needed for stable growth not encouraging the fed to raise interest rates. the biden-yellen fed meeting of the last few days. lisa: a little awkward because you will hear from fed chair jay powell and we are not there yet. the last mile could prove to be difficult. there is a political sell in the message is not getting through

and there is a frustration and you can hear that consistently. people are getting more forceful. janet yellen and president biden saying the prices are coming down in certain areas and inflation is coming lower. it is not breaking through. tom: i have adored her work. where in god's name is her voice in this? jonathan: a nice blog post that is worth the read. not invisible but silent a lot of the time. tom: i enjoyed when she speaks. jonathan: two very sharp individuals in the economy. don't hear from them often enough. from new york, this is bloomberg. ♪

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jonathan: a three-day winning streak on the s&p five date -- day four. we are looking at an equity market that's around 10% since the fed last met at the start of november. what a move we've seen between fed meetings. let's switch up the board and get to the bond year, two-year, 10 year, 30 year. the two-year is down about 30 basis points, the 10 year down about 70. 41833 on the 10 year. tom: the 4.18 has my attention.

i will call it quiet sent. if we go back to equity levels, you mentioned the three-day tear because we are all addicted to the short term, i will call it the 14 month tear from october of last year. 4700, 30 7000. -- 37,000. give me two cups of coffee and will be 17,000 on the nasdaq. i don't have -- i won't speak for other people -- i don't have perspective on these levels that we are at. jonathan: the market has moved quickly to price and rate cuts for 2024 which tease up the fed meeting. do we get pushback later on? lisa: if we don't get pushback we have talked about how that will ignite the next leg of the rally in the bond market. it asking for a long time, rightly so. is there another reason why the fed may need to cut rates?

if there is, is that concept being priced into a market that has discounted the bearish playbook that we came into this year with that was offended and wrong? jonathan: not all rate cuts are created equally. the fx market, the euro against the dollar, the euro and 1.0 780. the federal reserve this afternoon. tomorrow, the ecb. overwhelmingly, the people we speak to suggest if they cut they are going before this fed. lisa: the economic backdrop is looking worse over there than over here. the disinflation story is global. if they confirm that, is the biggest move going to be in the currency pair? jonathan: let's get to your top stories this morning. we are counting you down to the final fed decision of the year. investors will be looking for

clues about cuts next year. jay powell saying it is too early to speculate on the timing of the first rate cuts. citi writing, and our base case the first 20 five basis point rate is delivered in july followed by cuts at each subsequent 2020 four meeting cumulating to 100 basis point total cuts next year. tom: you get back to a quarter-point ballet, and you don't want to do it until you can get persistency of cuts, a sequence of cuts. i go back to a more traditional view of why don't you cut rates itty-bitty, and then say we will stop and reassess.25 basis points . jonathan: is that not what we are talking about? tom: no, they're talking about sequences of rate cuts and we don't want to move until we can initiate sequence. good luck with that. jonathan: we will have that conversation in a moment.

tesla, recording 2 million vehicles and offering a software update after u.s. regulator said that not enough is being done to prevent misuse of the autopilot system. the national highway traffic safety association calling tesla controls to keep drivers engaged in adequate.it is the second recall this year involving the tesla automatic driving systems, which are coming under scrutiny following hundreds of crashes, including fatality. the stock is down about 1%. lisa: it has been brutal. since the end of october tesla shares are only up 20%. i'm sure they are struggling. you are seeing a lot of skepticism. we saw that with general motors with their autopilot vehicles in san francisco. i understand it. it is the idea of a robot driving for you that is scary. at the same time, to editorialize, would you rather a robot or someone texting, on the phone, or driving for half of the year?

tom: wrapped up in all of the things that mr. muska is doing. tesla, 76. general motors 8. jonathan: we are more critical of a new technology, as we should be. but recalls of 2 million sounds like a lot. you remember the airbag fiasco? something about 40 million defective airbags? do you remember that? that's brutal. tom: you have this engineering and technology. the truck is out. are you test driving it? jonathan: i think the guys at cop 28 would like us to. officials agreeing to transition away from fossil fuels for the first time. the meetings president warning that an agreement is only as good as it gets implementation. we must take the steps necessary to turn this into tangible action. an agreement to face coal usage

two years ago has seen little change with coal consumption continuing to rise. what you say is one thing at what you do is the important thing. lisa: yes. that said, the fact that there was a commitment and rhetoric from the leaders in the oil world in particular, was a notable shift the fact that it was in dubai was a notable shift. i don't really follow this because it has been a nonstory for so many years and disappointment. there were concrete things said, which was interesting to me. tom: mike bloomberg signs our paychecks here and his leadership is simple. he is looking small. all of the stuff is 60,000 feet, and i think that the small path is the only path that we got. there was no agreement at cop 28 from what i could tell. cop 28. joining us now, the chief u.s. economist at citigroup. this fed meeting that we will see today, the boardroom, lots

of history there, including world war ii. what is a war that will be fought there today? andrew: they are trying to come to some kind of consensus about when they will guide more clearly towards cuts. it is pretty clear that is the direction of travel. we heard from governor waller the idea that in his public comments in three or five months he would be convinced it's time to start cutting rates. i don't think that that is where the committee's overall. powell said it is premature to discuss rate cuts. we will probably hear something similar today. i don't inc. that that is a message that will be believed by markets. i don't think it is meant to be believed by markets. a little bit of an awkward position, because clearly the next move will be a cut. technically, the bias is a hiking bias. that is what they have to navigate today.

jonathan: let's talk about governor waller who said that something is giving at the state of the economy. andrew: if you look at the data on hand, everything looks strong with a strong jobs report. gdp growth in the fourth quarter surprised everyone. in the fourth quarter it looks like between 1% and 2%. it is hard to look at that economy and say that things are falling apart. if you look at the more forward-looking indicators like the unemployment rate coming up -- it came down last week but it is still up off of its low, credit card delinquencies are rising. if you talk to businesses and people, there is a sense that things are slowing down. we are hearing a lot about may be the fed will be cutting interest rates because of inflation. i think the fed is ultimately going to be cutting interest rates because of activity. slowing. economic weakness that is contrary to what waller

said. he was talking about should we be cutting in three to five months? he explicitly said, i'm not talking about growth, about recession. we are not trying to save the economy. i think what they are seeing is this narrow path to a soft landing. they think that they are on this narrow path to a soft landing. if they don't start bringing out these cuts they aren't going to be on that path anymore. they have to contort themselves to move from the fed that was fighting inflation and was focused on inflation. super court was going to be the guiding light. super core is still high. now they want to cut rates. we are getting an awkward transition today. jonathan: i want to be clear on the journey that you and the team have been on. i remember when you and bank of america came out how big this hiking cycle would be. when i quoted you work a lot of

people almost laughed. they didn't think the fed would go this far. you have changed your views. a couple of months ago we were looking for another move or two. you were talking about inflation going into the year in. surprised to the upside again. next year, where are you on inflation? andrew: we see inflation that is staying stubbornly high. it is slower -- it is lower and that is where waller and the rest of the community is seeing the opportunity to be more flexible where inflation has come down faster than expected. most of that surprise has been on the good side. goods inflation has come down making sense when you think about the global context. slower inflation globally because goods inflation is lower and that is a good thing. what is holding up is service sector inflation. we saw that in the inflation report. we are running so-called super core services. shelter is getting less attention then it should be

because there is a strong expectation that that would have slowed by more than it has. it looks like it is bottoming. we look at the ford--- forward-looking rent data and the shelter prices could be picking up. we could have sticky inflation here that could even accelerate if the economy keeps expanding. in our base case we think the economy will slow down and that will be the key inflationary force. lisa: the cuts that you have gamed out for next year priced against stagflation? andrew: i would not call it stagflation in that our base case core inflation is 3%. we don't want to compare that to the 1970's when we had double-digit inflation. there is an element of that. if we didn't have this kind of inflation that jon is talking about with the fed saying we are getting concerned about activity, they might be cutting already. they might cut earlier and faster. part of the reason we have the

first rate cut not until july and 25 basis points at each meeting instead of 50 basis points or 75 basis points is the idea that you are coming at it with inflation to hide. tom: you had one of the higher rates based off stimulus from covid. is this a covid fed meeting still? andrew: great question. on the good side we are largely beyond the covid distortions which is why we've gone back to a goods disinflation. we might be this inflating -- disinflating from the covid prices. what is looking less covid-related is the labor market and the service sector. we were seeing this covid distortion where every restaurant was trying to

reopen so we had rapidly rising wages and prices at restaurants. that has normalized now but that's the problem as we see it. the fed looks at it and says, good, things are normalizing. we say that things are normalizing. it's not like one or two years ago, but we still have a tight labor market and wage growth that is inconsistent with 2% inflation. it isn't clear to us that this is converging to 2%. maybe something like 3% or 4%. jonathan: you think chairman powell cares that stocks are up 10%? andrew: ideally he wouldn't have wanted financial conditions to loosen this aggressively. it was only at the november f1 see meeting when tighter financial conditions would do some of the work for the fed and that is why they could be less hawkish. those financial conditions have almost fully reversed with 10 slower with equity prices higher. because of what is happening in

the economy, it is hard for powell to strongly push back against this. we get the symmetry where financial conditions tightening. with the fed we had policymakers in general who worked very hard to stop the acute tightening of financial conditions. the financial conditions have loosened. in powell's mind he says what is the risk? we run higher inflation. if we see that in the data we will deal with that at that time. jonathan: this is great. it is good to see you, it always is. the equity market up something like 10% since the fed last met. regional banks are up 20% since then. from new york city, this is bloomberg. ♪

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see an exposed weaker hand over the first six months of this year. jonathan: those the head of u.s. microstrategy. the federal reserve later this afternoon, a three-part story. statement, projections, and a news conference with chairman powell. then, for many year over though as bramo will remind you the ecb if that takes your fancy. futures are positive on the s&p. a minor, no drama move this morning, but over the last month or so, since the fed last met, we have seen a move of about 10% on the s&p 500. if you want to look at the regionals, the kr ee, the banks in america, up by more than 20% since early november. tom: i looked at the charts, and the two basic indexes that they have, and i get the bounce up, but it's stunning how far we went down and how far we have to

go to get back. it is a long ways away. jonathan: all of this off of the back of the bond market move. it has been phenomenal. tom: the bond market move is correlated in. there is a feeling out there that someone will save everybody. is that still out there? i remember they shut down 10 banks in a weekend. i remember in the 1970's bob seeger on the radio, you could see through the floor of your car because you are broke, you look at a bank, are they going to be in business on monday? there is none of that tension. jonathan: we had a little bit of that stress in the spring. we don't have that stress in quite the same way. tom: kbw are the institutional investor. do you look at j.p. morgan or do you ignore? >> you have to look at it. tom: mid-caps, i want to go to tacoma, washington.

i don't even know where to, is on the map. columbia banking system. where are they going to be in a year? where are the mid-caps like columbia banking going to be in five years? >> consolidation is part of the question. columbia has doubled over the past two years. we think that scale is important in this industry. we have done a lot of work and there is a strong correlation between the size of your bank and the degree of profitability and market rewards scale. they also punish scale and regulation is one thing we have to deal with out of the covid. jonathan: have you been surprised by how little consolidation we've seen between the stress of spring and now? chris: no, i think it is an evolution. spring was forced consolidation. failures, three or four failures. as spring picks up the failures, we will see consolidation. the industry still has 4000

banks.that is the only developed country in the world with this level of fragmentation. one of the consequences of failures in stresses is that we need to pick up the pieces and move forward. lisa: what is the right number of banks? chris: fewer. what is important about the number of banks is that we need more competition for the top three or four. the biggest are the most regulated in the world. there is a general hesitation by the regulators to let the bigger banks get bigger. the regionals, they need to be bigger to compete more effectively with the jp morgan's and wells fargo's of the world. we think that once the rules are written on regulation, there is a lot of pushback on regulation. that is an opportunity over the next several years. lisa: where is the growth going to come from? deposits, consumer lending, with from where they have competition from private equity firms? chris: in the near term, i don't

think there will be a lot of growth, to be candid. they had credit first and deleveraging second. we are deleveraging, shrinking balance sheets, raising capital and liquidity. going forward that will be a challenge for the next one to two years. tom: your shop covers the larger regionals. when do they finally merge to compete with the larger banks? we used to have five or six or seven major banks and now we have four with an asterisk. we have to get more major banks. when do the pnc's get to play? chris: basel three is a big development being debated now. near term, with a credit uncertainty in the economy, pencils are down for m&a. over time, there will be more consolidation. jonathan: we have to get more major banks. does anyone in washington agree? tom: no, no.

every other nation has done this. jonathan: i am with you. i get that. do we have to figure out why we are sitting here in this sole lonely developed nation with 4000 banks? someone wants us to be here. chris: from 2000 eight, the global financial crisis, the systemic level was putting a line in the sand. that was walked back in 2016 after the trump administration. without getting political, there is a level of political consideration to think about. tom: being in london as paperback writer was released by the beatles, i remember there were no banks.there is a bank in america on every corner. jonathan: you are bringing up a different conversation. the footprint on high street and main street have changed. chris: you are seeing smaller

and fewer, but there is a lot of regulation and you have to pay attention to fair lending and making sure that a bank has exposure in certain pockets of the economy in different markets. lisa: what is the advantage to having strong regional banks? there is a question over whether banks have been saved again and again, particularly on the smaller ends, that did not hedge appropriately to interest-rate exposure that invested in commercial real estate that was faulty. those activities are moving to other investment firms. what is the argument for beefing up this industry? chris: the smaller banks are the lifeblood of the economy. jp morgan, citigroup, wells fargo, powerful institutions. you do need the local, small bank to give customer service. a lot of mistakes were made with interest rate risk and management, and though shareholders and those companies paid the ultimate price. i think for a healthy, thriving economy you need more scale and

size across the gamut. tom: the three of us, we have not been in a branch since the red sox were in first place. jonathan: speak for yourself. tom: we do everything digitally, zelle this, zelle that. how does tacoma, washington compete with the digital investment of the major banks? chris: the smaller bankschris: -- the bigger banks are going to move first and the smaller banks will adapt. second, they have built out capabilities to compete effectively. maybe not to the sophistication of international banks. tom: what is a capability that they have in the coma, washington where they don't want brian moynihan to come in from the bank of america? chris: turn and online speed for deposit capture. i have not been in a branch either in years. the capabilities for you and i

as a consumer, the smaller banks can accommodate that. they may not have the budget initially, but they will. jonathan: we are still down 25% from the highs of the year. any reason to believe we reclaim those highs next year? chris: we are market weight the u.s. banks. this is the one-year anniversary of moving to market weight. what we have seen over the past 12 months is a 30 point divergence between the s&p and the banks. the spring was about net interest margin, net interest deposit. that leg of the relay race has played out and stabilized. what we are feeling now is, what is credit going to look like as interest rates have risen? how much of a credit normalization process will we go through? how much will this way on earning estimates going forward? the key for us is earnings take the direction of the stocks. jonathan: not the 10 year yield? it has been amazing.

all of it pretty much off the back of this move in the bond market. lisa: and counterintuitive because usually higher rates were good for banks. now lower rates are better for banks. this is default risk. this is concern about withdrawals of consumer deposits. this is concern about breaking the system. if that is taken off the table people can get more opportunistic. jonathan: any reason for that to change anytime soon, the correlation between bonds and regionals? chris: the question of why rates are coming down, because inflation is moderating or growth is slowing? if we get a soft issue landing, kbw was in the camp of soft ish, it can work. if we see something break in the markets, credit is a big wildcard. jonathan: a big change in the last month in this market with more still to come on the equity market. coming up in the next hour, lack rock. stocks this morning a positive

0.1% on the s&p 500. from new york, this is bloomberg. ♪

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>> right now it is a fed pivot party, and we are all invited. >> we have hit rates, peak fed, inflation is slowing. >> inflation involved or moderating. i don't think that we are going back to where we were in 2019. >> if we see stability in inflation and we move the 2024,

we see an uptick, that could force the fed's hand to take one final rate increase. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jonathan: i get excited about the holidays. the last fed decision of 2023. good morning, good morning. this is bloomberg surveillance. live on tv and radio alongside tom keene and lisa abramowicz, i am jonathan ferro. your equity market positive by zero point 1%. this afternoon, chairman powell is staring down the barrel of a market pricing big rate cuts in 2024 following a massive rally since the last fed meeting. tom: you said you were looking at the testimony of vice chair by then and chair yellen as well as a little bit of political ballet in washington. this is not just about monetary policy. jonathan: this was chair yellen. can you imagine if chair powell said the same thing today? i can't imagine the last mile will be difficult.

a soft landing in the economy -- a soft landing and the economy continuing to grow. tom: all of these people with ucla and citigroup have a heritage. you mentioned waller. waller is bulletproof st. louis research studies, academic research. so is yellen. she is a voice on labor economics. chairman powell, not so much. jonathan: the party started, chairman waller shows up with tequila, off to the races. lisa: that is what we heard, it is a fed pivot party and we are all invited. i have been invited to a different party. there has been a lot of pushback. there is the feeling of a soft landing and now you can feel the frustration in the white house. come on, the rest of the population, get on board with the soft landing. chairman jay powell will not

comment at all but this will be the key question. will we get rate cuts for the right reason? will people start to question why they are pricing a bunch of basis points for rate cuts? andrew had the same year and projection for rate cuts as is priced in for the market but the reason why is different. tom: i wish that they would establish the reality, which is what the fancy people call ex-post, after the fact. he says we by code have to be after the fact. we don't know if it is this meeting or that meeting or the other, but everyone calm down because we will be late. that is the fact we have to live with. jonathan: statement, projection, news conference this afternoon. the s&p 500 futures are posited by .1%. on the 10-year, 4.1776. lisa: we have not mentioned cpi

want with -- ones which tells you how surprising it was, it wasn't. an interesting way to look at margins for companies. if you see a tick up in terms of inflation on products and you don't see the same in consumer prices, that is margin compression. 1:30 the fed decides begins, we will be back on air with the drumbeat to the fed decision. bill dudley, the former new york fed president. all giving some key indicators of what to watch and how to understand. 2:00 p.m. is the rate decision. we will look at the state of economic rejections. do they have 50 basis points of cuts? no one will really care. jay powell come out and try to do this dance. i don't know what chris while there is saying, we are independent, we will take things as they come. how the market response might be

more interesting. jonathan: fixated on the 2024 dot. if the dot moves towards the market, which most assume it will, the market can go one way. then chairman powell and the news conference can pushback as much as he likes. tom: a vic's print of 11 yesterday, i think that the market is getting in front of what you said. jonathan: something like 10% on the s&p 500 since the fed last-minute. good morning. let's start with a rate cut call. the back half of next year, what are the reasons that underpin it? >> the main reason is we don't think that the fed has talked about how much deceleration has taken place. i know that you speak about this a lot. are they good or bad reasons? bad reasons is a shock to growth.

we think that it will be for the good reasons. inflation coming down. we are already seeing that. lisa, you said no one cared about the cpi data, but we did. the six month annualized cpi on the core is down 2.9%, good news for the fed. i think that they will begin to recalibrate. that is about 50 to 75 basis points lower for 2024. they start doing that by perhaps the june meeting. jonathan: you said 2023? 2024? gargi: it continues to be a yield of dreams. fixed income did not -- at least in the beginning -- it didn't quite have the year that we hoped, but by the end of the year we started seeing yields move lower. i think 2024 continues to be the year of income, the year where bonds generate, especially high quality bonds, generate that return for you. i think 2024 is also the year

that investors step out of cash. that is what i'm the most excited about. all of the hoarding of cash that we've seen, the one trillion that we've seen. i think that this is the year that investors feel comfortable stepping out into the equity and fixed income markets. tom: my double major in college was ice hockey and led zeppelin. you have the best double major of anyone we've talked to, accounting and psychology. that is so warped i don't know what to do about it. the psychology that you nailed this year, and you bring it over to get out of cash, and what everyone is talking about but you are direct about, you have to find the lovable ledges that haven't moved. what is our psychology to finally buy those. gargi: the lovable laggards are some of those sectors or geographies that did not participate in the rallies. health care is one that we've been thinking about with good

earnings growth projected for 2024. when we look at some of the details for pharmaceuticals, we find that some of the quality characteristics, cash flow, balance sheet, cash strength are available. it did not participate in the same way that we saw the magnificent seven or the tech and communications services sector. we think that certain parts of the health care sector can be a really good lag -- laggard for 2024. it may not start immediately. we may need to see a little assurance from the fed that no more hiking is going to happen. i think that that could be an area of the market that catches up. lisa: i love your call that cash will no longer be the most important asset class. that money will start flowing out. what will the trigger be given that to your are 4.7%? gargi: this recognition.

we did this analysis that there has been a little bit of lack of urgency. there has been a view that rates are going to stay much higher for much longer. you are better off sitting in cash and thereby missing out on the rally in the equity markets. this year was the prime example of why you needed to step out of cash, because you missed this incredible rally in high-quality parts of the market. i think that the recognition that the fed is indeed done, that there is no risk of a 6% fed funds rate, no risk of them doing something shocking -- which continues to push interest rates higher or equity markets lower -- that recognition will help investors step out of cash into we believe fixed income markets, like we saw this year and etf inflows in fixed income, and high-quality parts and some lovable laggards. lisa: are we going to see big tech lead again? aside from the credit side, is

it going to be money chasing returns from 2023? jonathan: if we look at where the earnings growth is coming from, they tend to leave the areas of the market that have the lowest leverage and strongest balance sheet. jon, was talking about margins, that have the best margins. some of those are in the large cap part of the market. not just tech all large caps. it is not a tech story but and large cap story. there can be outperformance in the first months of the year. you have to pair that with some of the laggards. that is how we think investors should play this. tom: i remember going to some of the first etf meetings p they threw me out because it was a scam. it is not a scam here, it is

here and wonderful. what is the number one mistake people make in etf investment? gargi: the number one mistake that people talk about is the idea that etf's are ruining your liquidity. what we find out over and over again is that access to etf's is in fact adding liquidity to your portfolio. the number one mistake that people often talk about is this active versus passive debate. that's a long over. we are talking about ways in which active investors using etf's in their portfolio. we launched some incredible active etf's. tom: it is bottom core. jonathan: can i ask you a short question? is chairman powell going to push back later? gargi: i think he is. he has to push back a little bit on the amount of rate cuts that have been placed in for 2024 and

how quickly. i think the march cut is the issue, not the 110 basis points of cuts. jonathan: the market has had selective hearing. do we get a response? gargi: they have to be more forthright about the language, at least stronger than what he used in the spellman-goddard speech. it is time to bring back the not thinking about/thinking about. jonathan: if we are at that point not thinking about thinking about rate cuts. tom: i want to talk about earnings talk. the resilient american economy, the technological excellence. not only in technology shares but health care shares. the technology overlay, the suppose it ai revolution, bring it to unitedhealth. those kinds of questions. jonathan: off the back of the rate cut debate, move the something like 10% on the s&p 500 since the last time that the fed met. equity futures this morning are

positive. 0.1%. you had a final thought that you could share with us now. on the federal reserve? t.k. jumped in when we were about to talk. tom: the first time that has happened. gargi: i think that they push back given the trajectory of strength. but i also think that they're very cognizant about not preparing the markets for any more hikes. i think we will have this balance where they say that they are going to be on pause for a little while. it is all right for the market to stay on pause. what i'm excited about in 2024 is to not hang on every single word that the fed is saying for the first half. i think for the first few months i hope quite likely. let's wait and watch the higher rates do its magic. jonathan: i think we share the hope that we can move on from a lot of this. have a wonderful christmas. thank you. equities are just about positive

by zero point 1% on the s&p 500. if we get the pushback in the news conference, will the 2024 median dot compromise their ability to push back if it shows more cuts from the last time that they gave us projections? tom: great question -- lisa: great question. how do they understand the conditions for cutting rates if they don't ratchet back their expectation for growth and ratchet up their expectation for unemployment? tom: the good jobs market has to crack. it hasn't cracked yet. jonathan: on the surface. beneath the surface, little cracks. anne-marie in washington, d.c. on chair yellen and vice chair biden on the federal reserve meeting before the federal reserve meeting. this is bloomberg. ♪ (sfx: stone wheel crafting) ♪

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>> we will continue to supply ukraine with critical weapons and equipment as long as we can, including $200 million that i just approved today. without supplemental funding we are rapidly coming to an end to our ability to help ukraine respond to the urgent operational demand it has. jonathan: president biden speaking alongside volodymyr zelenskyy at the white house yesterday as the political fight over aid continues with speaker johnson. good morning. the price action for you going into the federal reserve decision later this afternoon, treading water as you may expect. futures positive 5.1% on the s&p

end yields a touch lower. still sub for 20. in between 4.1 and 4.2. 4.1795 on the u.s. 10 year this morning. tom: of most single data points, the four key data points, on radio we throughout the four key data points on tv, i am stunned with a 4.1 810 year, which tells me that people think that this is massively baked in the cake, inflation jonathan: friendly. which is why i would save you get pushback from chairman powell how credible is that pushback given what we seen in the economic data? even president biden coming out on friday. we have been joking that it is vice chair biden of the federal reserve with his premeeting meeting. not encouraging the fed to raise interest rates. it takes a certain degree of confidence to come out and say those things, even if it's one part economics and 10 parts politics. tom: i'm putting up on the

bloomberg right now -- i have the key to do this. january 31 march 20, may 1. do we assume that it is like a july action by the fed? i don't think that they have that luxury. all of those choices, all of those moments. they will get there sooner rather than later. lisa: the way the fed chair could push back and be credible as if he highlights key reasons for being bearish on the economy. if we are seeing real signs of slowdown that are perhaps leading indicators that people are not focused enough. that would get the markets attention and perhaps not in the best way possible. jonathan: i think we have to frame it like this. think about how ridiculous this conversation sounds 12 months ago. 12 month ago into the new year and we are talking about where the fed might be. three months later in spring we have banks failing. people are talking about the cycle being over and the fed

needs to start cutting interest rates. six months after that we are in a third quarter with 5% gdp growth. this year did not materialize in any way, shape, or form in the way many people thought. plus, when you started getting the outcomes that people did not predict, you did not get that that outcome the people thought that we would see either. let's frame 2024 with a little bit of humility after the ridiculous 2023 we just had. tom: the question, think it is pandemic-reduced? on a pandemic service sector basis for not. that cacophony of 2023 was living with the debris of the pandemic. that is not in the mandate of the central bank. jonathan: the second half we have rate cuts at citi. the longer that goes through 2024 you think about the maturity in leases world in high yield. a lot of companies need to come to market and raise some debt. they hope we get those interest rate cuts soon.

we will see if we do. tom: it will be an issuance frenzy, right? lisa: which is the problem with bullish credit calls and why everyone is hedging saying "high-quality." tom: 1:30? jonathan: show starts at 1:30. you can show up late if you want. tom: our bloomberg washington correspondent joins us this morning. i have to go to this moment. i will give you an inflammatory statement and i want you to amend it because it is an emotional zeitgeist now. america will allow vladimir putin to win. take that inside of the beltway, that a motion. where will we be -- inside the beltway, that emotion. where will we be in weeks and months? >> he is claiming republicans are holding hostage the ukraine aid that would help vladimir

putin. that is what volodymyr zelenskyy said. this will help dictators like putin. this is the push and pull that we have amongst republicans and democrats going into the holidays. their set to leave town this friday and it looks like they won't have a deal. lindsey graham could not be more direct about it when he spoke to reporters after he was briefed by president zelenskyy. this is an individual who is a defense hawk. "i told president zelenskyy my number one obligation is to secure my country as well as help yours. publicans want a strict order policy or there will not be ukraine aid." lisa: how much is that muddying his domestic message? we were talking about how he is vice chair to janet yellen's chair to the federal reserve.

progress lowering costs with inflation down two thirds from its peak but many still find too many things unaffordable. how much is this a frustration in the white house? the lack of breaking through on the message of where the economy is right now? annmarie: a massive frustration. they are looking at an incredible labor market, under 4% unemployment rate for 22 months now. what you have is poll after poll showing especially swing state voters prefered donald trump over president biden's policies.. if you look at the pol lster, it is almost 2:1 in swing states they don't like biden omics.this is why he always pivots that he understands

american families are still struggling. the fact that you have everything when it comes to economic data now colored by the fact that when it comes to pre-pandemic to now, a household is spending 600 to $700 more on basic goods. but the latest inflation report, we are seeing things have really dogged this administration, like gasoline, are coming down handsomely. you have gas prices just above $3 a gallon. the timeline provide and potentially going into november could be on his side. jonathan: thank you on the latest. more to come through this morning. distracted by an email.tipping season . 15% of u.s. adults increase how much they tip this holiday season compared to last year according to bankrate. 44% plan to tip the same amount.

13% say they are decreasing holiday tips this year. 23% did not tip last holiday season and do not plan to this year either. tom: i was standing outside of a cab and a guy was getting out of the car. i don't know what the fare was but i noticed he did not tip the cabdriver. jonathan: i don't like that at all. tom: there are places where it is painfully obvious tips is how people survive. i've been in that position six lifetimes ago. to me, this is cultural in new york city. lisa: i think that people act with more impunity now because there is a suggested tip for everything, even when you buy groceries. they flip around the ipad and it is a suggested tip, which has created anger. that said, people do live off of tips and if you are not tipping -- tom: unload the dishwasher and

she is looking for a suggested tip. jonathan: 25%. doorman tip is where people get confused and they don't understand how much to tip the doorman. what is the right amount? i say 30% of your monthly rent distributed across the staff. for people who have been there longer, usually you get a decent amount compared to the people who have been here 12 months or so. that is my approach. tom: the answer is to live in a walk up like me where there is no doorman to tip. jonathan: equity futures on the s&p from a beautiful new york city just about positive.

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jonathan: just got an from jonathan. tipping now is for 2023, it's for 2024. tom: it got a huge response. people are fired up about this. jonathan: everyone wants to make sure they are generous but they're not sure what generous is in new york. tom: i get upset at the zero's.

you don't know jonathan: what to do. jonathan:you pay as much as you can. tom: i have been at jobs where all the money i earned from tips was lined up on the dresser. a lot of people don't know that feeling. to me, that is important. jonathan: the price action, s&p is positive by .11%. the two year, 10 year, two year has been around 5% and down to four point 71. the 10-year is down at 4.18. since the fed last meant we have how to move down 10 percentage points. the 10 year is something like 70 basis points. lisa: for all the right reasons.

this is something we have to keep harping on. it's the acceptance of the fact. ernst & young is laying off a number of people. people are not quitting because there isn't the kind of robust job market that there used to be. jonathan: look at hasbro, two weeks before christmas. cutting 20% of the staff. the fx market with the euro against the dollar, it looks like this, the euro out 1.07. a classic fed day performance. tom: what we see tomorrow, do we see fireworks? jonathan: they're going to go first.

the pushback from lagarde. she had the luxury of going the day after the federal reserve. it just gives you a little more luxury to get that message across. tom: at the ecb meeting you say, how about that tax? jonathan: you only get to follow up questions at the ecb. it's a little more civil. let's get to the top story, the fed is expected to hold great study. the focus will be on chairman powells news conference as investors try to figure out when the fed will start cutting. the projection showing to rate because next year. that seems to be the consensus, anywhere between 2, 3 cuts. lisa: does it matter?

at this point i'm more interested in the unemployment rate and growth figures than the dot plot. the why of it will take on more importance where financial conditions have become more accommodative than the first rate last year. if that is the case and they don't push back where they say it's because the economy is going to be weakening. that will have a bigger impact on the market in the dot plot. jonathan: president biden giving his sharpest review of benjamin netanyahu in the fight against hamas calling the bombing and discriminate in the course of the war must change or israel risks losing global support. ukrainian president trying to secure a deal despite meeting with president biden and mike johnson.

israel, we knew there was division behind the scenes. we knew the administration was lobbying netanyahu privately. indirectly from kamala harris and now the president. tom: at the beginning of the year i have no idea how this will work in the apparatus of all the allies and how this will work. jonathan: tell me where the polls are in a month and i'll tell you where we are. the polls are going against the president in a major way. lisa: which explains the harsher rhetoric. he has tried to push in that direction. jonathan: the economy not too bad but in argentina, a different story. the president begins his drastic plan to overhaul the economy.

with the announcement of massive spending cuts. adopting the dollar as the currency. tom: bloomberg has done great work on this. you parse the argentinian peso which is being priced from 3.66 to 800. you look at the blue blue dollar which is the black market argentinian peso. the devaluation, 64% of the black market peso. lisa: they made some real cuts. political and budgetary cuts.

the question is, he is not he ig as far as the people expected and radical candidates have become traditional and the people thatjonathan: are there c experiments taking place? tom: i can't get used to the banner, michael schumacher joins

us now. we are on the down escalator or a down elevator. what does 24 look like? am i on the escalator or the elevator? >> you are on the escalator, a slow move down in yields. i think it's interesting to hear the move down in terms of equities and bonds that we think the market is a little overdone. we like the direction, we think it makes sense but the slow path is our preferred route. tom: how do you fold these economics into your study? is it a study of global weakness? or can there be a surprise resiliency? mike: there is a potential for a

surprise. china is a good example expectations are so long so it's not difficult to surprise to the upside. the goal backdrop is not that great. europe, canada looks like it would be going into recession. u.s. probably lagging behind. it's not a pretty picture but that is what you want from a policy standpoint. lisa: you said the move is overdone and i'm curious which may in particular. the fact that we won't get as many rate because for the fact that we will have a strong economy that persists where we are in this economic cycle or that this inflation could continue with the pace we have seen? mike: i was talking about the yield move up and then down. we think the volatility and bond has been extraordinary. thinking about other things that are overcooked as well.

market expectations for easy, pick your favorite central bank. they seem pretty aggressive to us right now for next year that's not to say the central banks won't get there but the markets are ahead of the policymakers. the fed is price to ease for, five basis point by next years but we think the market is running too far ahead of jay powell in the team right now. lisa: do you think that the economy will remain strong for that disinflation will come down enough to justify rate cuts will not come through? mike: what's going on a risk markets, they are reacting to what they inc. central bankers will do. as it becomes less likely that they will hike, more likely they will cut pretty soon and risk

markets like that. it's been about that simple. tom: part of this is what the dollar will do in all of this comes back to the assumption of a weaker dollar. is that your call? mike: the dollar probably we can somewhat that there is a consensus and we disagree. the basic thesis is that the fed has hiked a lot and they have the highest policy rate so they will see the most dollar weakness. but it's all driven by the idea that the fed goes first. why should the fed go first? why not the ecb or canada? we see a bit of weakness but

massive weakness, no. jonathan: just priced in massive rate cuts with the bank of england, who do you think goes first? mike: let's say the candidate is are fed, bank of canada, boe, i will put the ecb first, bank of canada second, boe is a strange one to handicap. jonathan: is not a collar disinflation called? mike: it's an inflation comfort call. how certain are you as a policymaker that inflation is not just down but out? that will dictate the pot. jonathan: thank you mike, you're one of the best. happy christmas. mike shoemaker of wells fargo. looking for the ecb to go first. how many times we heard that? lisa: it's consensus. it raises the question of how

many people will get on board? jonathan: from the 1.07, 1.08 that is not currently. if you just waking up with us your market is up. we have the perfect guests to talk about the sahm rule. everybody is talking about this. tom: it's like stephanie kelton was, and original economists. to her immense credit, she pushed against the certitude of it. she should be on the tonight show talking about these things. jonathan: the labor market

report change things a little bit. unemployment coming in a little lower. lisa: she came up with the idea that if you see a half percentage point in the vast majority of cases, recession. now you have to wonder, are we in a different period of time. she herself is said it's not really a rule is just a historical correlation. this is one of the reasons people are saying we could be going into a tougher period. coming up next, someone who has seen it all jacob frenkel. here is the set up this morning, the federal reserve later. the last decision of 2023 for the federal reserve committee. equity futures are positive

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>> to this point about whether the fed cuts are not marked, it's not realistic. in the last 18 months the market has been overly optimistic on when the fed is cutting. if our call is right, were more likely to have a soft landing than a recession. not cutting in march 2024. jonathan: from new york, counting them down to the federal reserve decision. on the s&p positive by 0.1%. yields coming in at four point 17. the fx market unchanged, the euro at 1.07. an interesting 24 hours for foreign policy. the president of the united

states labeling the bombing done by israelis indiscriminate and they risk losing global support. israel is calling for a cease-fire is a gift to hamas. the minister of israel saying they will continue the war with or without global support. that's the indirect pushback. lisa: the consensus about continuing this is pretty concrete because it's an existential threat to the nation. there is a question about the divergence about the election cycle in the reality on the ground. jonathan: that's the latest. tom: this dovetails into a three hour conversation with someone who deserves a four hour conversation. jacob frenkel was born in mandatory palestine.

his leadership for his israel is former bank of israel governor jacob frenkel. i have to ask you, your perspective on israel, their economy, their domestic place after these hostilities? how will israel come out of these facilities? jacob: i am very optimistic about israel but we are in the midst of a crisis, a war. after an extraordinary attack on israel and israelis have to defend themselves. the cost is very high in terms of casualties, resources and in

terms of political support. it is going to be over and once it is over the record of israel of rejuvenating after wars is very clear. we are picking it up quickly and once all the reservist are released and coming back to business, israel will know how to reemerge. the technology is still there, the comparative advantage, expertise are all still there. the important thing is to cross this crisis. tom: as a special relationship between israel and the u.s. changed? jacob: the special relationship is key to israel. and israel, with the only democracy in the region and sharing values with the united states. we are very grateful to those

support given by the united states. of course, the united states has its own political cycle. but israel is findings -- fighting for its existence and it will need to complete the job with the most professional and careful way. we are not dealing with the normal army. it is terrorism. against terrorism, it's difficult to have a polite way to deal with it. lisa: i want to segue into your experience as the former head of this is really central bank and at the crossroads of understanding how to operate economic policy when dealing with fiscal policy that is inconsistent and lacking in certain areas. you wrote in your piece, central banks cannot solve all of our

ails. do you think there is some leadership to be able to take the helm away from central bankers? jacob: the important point is that leadership is rising to the challenge and if central banks are stepping into each crisis it becomes overwhelming. once it becomes overburdened becomes less clear, transparent. what we have seen in the past few years is that were operating in a complex economic environment. we had fight inflation with interest rates. the fragility and speed of transmission, expectations, makes it much more complex and therefore, we should be careful not to assume that the central

bank knows more than what it does no. it should specialize in the areas that it has a comparative advantage and tools that are protected by the law. the competence is about achieving price stability and securing the fundamental of the financial markets. i enlarge, this is the mende. we have seen a real crisis that if central bankers were good citizens and rose to the challenge. when they go into regions that are not exactly their competence, we call for a call back to basics. lisa: it's interesting that were

talking about rate cuts in march even though we're seeing this rate in the united states. there was the simple mandate, is there a political overlay and protecting something else by cutting rates at a time when inflation is still well above the target? jacob: there are two things he mentioned, we are talking about not current inflation but expected inflation in the medium term. what you do now will have an impact over the next several quarters. number two, we should not speak just about rate cuts are rate hikes. that is the way we are all focusing on every day. will it be at 2:00, 3:00? are we on the trajectory to stability in the central bank can contribute to this objective by securing price stability in

the median term. the political support comes from the credibility of the central bank has earned and will have to earn in order to secure its actions. needs to be clear, transparent, accountable and it needs to charter the way. we will deal with the budget deficit, the central bank should not deal with it. jonathan: is this the end of the activist central bank? jacob: activism means get out of the lane you are driving or make sure that you are driving carefully within the lane and being able to navigateithin that lane. activism does not mean a detour. it means, keep your eyes open and your steering wheel is only go to the right.

the important thing is to make sure you are sticking by your guns. if you do, the median term will be simpler and better than central banks will not behave like i will take the governments off the hook. the governments have their responsibilities in central banks of theirs. jonathan: a fantastic review of the central bank over the past couple of decades. tom: could you see jacob frenkel talking about the dot plot? jonathan: would you get rid of the dot plot? jacob: i'm not sure. tom: oh please. [laugh] jacob: what do you do with it? lisa: what you do with that? jacob: it is important that the central bank does communicate

with markets. not dictate the market but are part of the system. they are not even the conductor of the orchestra, just a major player in the orchestra. you are a part of the interaction. jonathan: you are a deeply thoughtful man. the former governor of the bank of israel. this is bloomberg. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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>> he has a sufficient arsenal to bring inflation down. it will give the fed the ability to go on pause. the fed will probably signal that is done but don't expect recoat soon. i don't think that the risk is that the fed doesn't tighten too much but rather not enough. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: good morning everyone, today on this fed day. make it 1:30 this afternoon. a lot going on in a supercharged stock market. we go into this next hour,

getting ready for this meeting and nobody has a clue. jonathan: let's make it really simple, this market has done a ton of work. a 10% move on the s&p 500 since early november. the 10 year is down 70 basis points. there is only one question, since chairman powell push against that in today's news conference? does easing financial conditions bother him? tom: this statistic doesn't matter, zero .63 but the answer is we go into the press conference screaming accommodative. we walked away from the hope of a restrictive policy. jonathan: this market is screaming rate cuts. how much will there be between the median dot plot. most people assume that the fed

is coming towards this market. tom: what an honor to have jacob frenkel with us. the former governor of the bank of israel. you were busting his chops and he said we should connect the dots. lisa: this will be the nuances of how you parse all the potential words. we are talking about how accommodative this market is and we are still looking at average yields that are above a percent. investment grade bond yields that a relatively high. when we stop with all of the dogs, how do we look at the scenario and say are we heading into a period of growth and our we accurately pricing all the aspects of the market that are

accommodative? tom: it is about the job economy. in west today, wednesday? tomorrow is claims in continuing claims. it has not cracked. lisa: isn't it fun to analyze every nuance of the market moving in a way we don't understand. we are in a moment of transition and we don't know where were transitioning to. tom: i look forward to the fed meeting and there will be some blistering questions here in nuance and then we go on to the ecb and they're all facing the same thing. this is all original territory for central banks. jonathan: who goes first, most people assume it's the ecb. don't worry, i keep forgetting the data week as well. tom: every day is friday.

jonathan: futures 0.09%. tom: there's oil, west texas under 70, brent crude at 73. can you imagine a global oil price of $69? how that changes politics? jonathan: is change the debate around this with levels we haven't seen since june. tom: we will begin in this hour our analysis of what we will do off the fed meeting. one of your analyst had a spectacular chart out about what the markets do after you get a

peek in yields in the question now is cash. what are we going to do with all of that cash once the 5% yield comes down? >> i hope everyone who was not constructive about cash comes into next year with a little humility. with cash outperforming bonds and that rhetoric around what investors and markets do after a peak in rates is rooted in hiking cycles that were accompanied by a lack of inflationary backdrops. it would be instructive to look at the hiking cycle of the 90's. inflation stayed around 3%. it is not a given that we're

going to see those ultrashort rates drop but at the same time, you want to have optionality to take advantage of what lisa was referring to the higher cost of capital finally pushing to have to realize the reality that they have to refinance at a higher cause. are there companies that should not have made it past 2020? all of that is in the mix and i think it's interesting that you said you were trying to read the tea leaves to a market we don't understand. i don't think the fed understands what's happening. the fed is saying we're not doing anything at best in the market is thinking you're going to ease 110 points. this is the why of probably we have seen and dramatic easing of financial conditions will fizzle

out as the fed does not deliver cuts because inflation remains above target. labor market is strong, equity markets doing well. jonathan: i'm thinking the 363 basis points doesn't get you excited? oksana: it should not get anyone excited because when we think of the higher rate cycle and who that impacts is the lower rated credit operators. we have a credit market that is low-quality credit skewed. this is the product of many years, decades of lower and lower rates. just like the interest rate reckoning took its time to arrive, the credit reckoning may take it's time to arrive but it will arrive with pricing.

lisa: you expressed a little frustration about people who push back against your cash call. oksana: i thought i was being subtle. lisa: if all of those people, should have some humility before condemning my calls. when did they start to put that cash to work? when do they start shifting it into other asset classes at a time when there is potential distress and you expect spreads to widen? oksana: where do they want to put it to work? when we talk about fixed income and credit. we make a call on the credit side, it's just not enough composition to take that risk and that spread is somewhere in the low 500's.

until he gets there i would be cautious. there will be pockets where you could do some things and interestingly price positions. on the interest rate side, you have to consider what is the 10-year treasury yield? it's essentially gdp plus inflation plus monitor premium. let's assume is positive, gdp plus inflation gets us into the mid-fives and so from a fair value standpoint, that is where that part of the curve will look attractive. lisa: that's a pretty bold call. you are not buying 10-year treasury yield's until they go over 5%? oksana: correct but there are pockets of the market that are interesting to buy. investment grade floaters. our theme coming into next year

's stay high-quality but do it in a floating-rate matter. manner. because this fight is not going to be pricing in these aggressive cuts. so north of 6% that reset daily, that's a great trade. you are not exposed to all of that while gyration related to interest rate risks we've seen this year. the bloomberg aggregate was down 3% and now it's up 3%. that's a 6% swing, this should not be happening with fixed duration. jonathan: what is the rate cut call you really don't like? oksana: there is nothing fundamentally underpinning it. there is nothing we can point

to do say this is why we need a rate cut in the calls of pricing in an aggressive cut is based on the fact that the fed is done hiking. perhaps that's true but the data will tell us. just because it's not hiking does not mean it needs to move the cutting and certainly not cutting as aggressively. history tells us that as inflation remains elevated the fed is not free to cut. jonathan: is this based on real rates? as inflation comes down you don't want policy to get tighter? oksana: surgical cuts being the key. can we see the fed going through a couple of cuts at the end of 2020 four? perhaps. but the more important question is, higher for longer.

a 25, 50 basis point cut is still higher for longer at what is that due for corporate balance sheets that have relied on cheap money and i think there will be a dramatic repricing there. jonathan: i always appreciate your pessimism. oksana: it's just a great opportunity for investors. for those who are willing to be realistic. that scenario can unfold without a broader recession in the economy. i don't think that view is pessimistic. you can have specific industry recessions that could create opportunities like we saw in the regional banks. jonathan: lisa's going to quote you for the rest of the morning. lisa: 100%. jonathan: if you are just joining us, it is fed decision

day. s&p up .11%. the dot plot and the news conference with chairman powell. tom: we've talked about the news conference, he will stop politely with a prepared statement. at the news conference i think he's going to throw it into the next sequential set of meetings. he has to stagger it out until the march meeting. jonathan: give an assessment of inflation whether he thinks it's sticky you're not pressing against that hope of a cut? it's a really interesting meeting. coming up at about 20 minutes we will catch up with claudia sahm. we will talk about the fed meeting later on this afternoon.

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>> if we see stability and inflation and as we move the calendar page and 2024 we see an uptick, that could force the heads hand to take one final increase to convince the market that three is not the new two.

jonathan: that right there is your pushback going into the news conference later on this afternoon. tom: our team is gifted. they absolutely nailed it and for everyone out there, they are really pushing back against the zeitgeist. jonathan: we have had a 10% move on the s&p. we been pricing in a hundred on the dot plots. the direction of the data is encouraging but do you think chairman powell consent there and give a ringing endorsement of what we see in the market? lisa: she said it's going to be easier in that last mile so you can say what she said. jonathan: with what secretary

galen said, if you repeated what they said after the payroll report, that is a ringing endorsement. tom: this is richard timberlake and alan meltzer and bernanke teaching in princeton, the liberals and conservatives agree, they have to wait in the job market has not given them that signal. jonathan: the stock market does not wait. tom: expectations out there and the only thing i'm waiting for a people watch anything besides netflix. jonathan: what's your new show? tom: it's low horses, it's about

spies, is really well done. there has been a bombshell for hollywood overnight. above the getting out front. we all watch the same 200 movies, how does this change the technology of entertainment? >> it gives us transparency on what were watching and with the proximity we have had to the strikes. we have wanted to know what he was watching what on netflix and what volume. to see overnight the market complain about the data we've got but it shows that the spend netflix is doing on their own content versus the titles are buying from others and it tells the actors, are they being paid

enough for the work being done. tom: i'm going to go back to the winter of 1964 with the stones and beatles did this and that. are they going to be profitable as an industry? when you look at the analysis overnight is there any indication of future profitability? >> at least the data can guide netflix what and where people are watching it and what not to spend on. for the last 18 months there has been an argument if this model will ever be profitable and everyone has followed suit. there has been a big pullback. netflix has a hybrid model where it has to keep turning out libraries of content to keep the eyeballs coming and when you

look at those watchlist it's interesting to see it dominated by what they produce themselves. lisa: i would watch a dramatic series about elon musk and i would be curious what the episode would look like with these potential recalls coming out giving the fact that tesla filed a new recall affecting two million vehicles having to do with the self-driving system. ed: the stock is down 1% premarket. i don't have a bloomberg in front of me. it's a recall in name only. yes, 2 million vehicles are impacted. the fix is not over yet.

there's an argumentthere's an aw fantastic is it that tesla after a multiyear investigation -- approach to self driving? in this case, this is autopilot. the basic driver assistance it does not relate to the full self-driving data. the one that tesla has currently in testing. you cover this and this is my real question. are you surprised by the skepticism? ed: it's more commonplace to see a legit robotaxi on the street. but the end market feedback is

that people really like these products and therein lies the date -- debate. who are they regulating for? safety investigators have found that the crash was related or partly caused by the use of autopilot and in some case the self-driving beta. but those are small cases and the degree of accidents linked to those technologies is significantly lower than those linked to human error. if you're a tesla customer he was benefiting from this we feel that we've improve safety on public roads relative those accidents caused by human mistakes. jonathan: we've had a bit of a reality check. what was your take away from what ford his side in the past couple of days? ed: the demand pocket has been

and gone. the pocket of the market is willing to pay a higher price to claim that there first. the demand picture is in question. it's an economic story after your mortgage and rate payment the financing of a car is the most expensive outgoing for your household. there is tangible evidence of that picture. november was the best month for the lightning and then four weeks later they cut their output for next year so what are they know about the consumer that we don't? jonathan: ed ludlow on the west coast, one of the headlines of the week, ford cutting production in half for the f-150 lightning truck.

tom: mostly what it is is marketing, studying year end consumer i really wonder if they have a knowledge about what's really going on in the showroom and what's going on during the football game when you see four ads in a row. jonathan: i guess he found out pretty quickly. coming up, kathy jones, bob michele of jp morgan, a fight to stick lineup ahead of the federal reserve. chairman powell, a statement and attentive production -- productions. from new york city, good morning. from a beautiful new york, this

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of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. surveillance exclusive excited about cpi. jonathan ferro had a four has nap like he is want to do. cpi, it's not cpi is it? lisa: if you get some kind of surprise, michael mckee would know it.

mike: were getting a little bit of surprise. we have a flat reading after half percent decline after october. court coming in at 0.0 lower than the twos-tens forecast. 0.9 on ppi for demand and cor at 2%. one inflation number is a 2% with another below that. the real core was up .1 but lower than anticipated. year-over-year at 2.5%. ppi is performing as it has been

coming in lower than cpi. tom: don't go away we want to come back to you. markets are moving on this. all little move seemed to be disinflationary. futures are up 47 but in the bond space, four basis points we come in on yields on the two-year. lisa: you see this consistently, all of the cuts are in the same direction. we can see a 40% chance of a rate cut come march. ahead of a meeting where jay powell will tell us if they're planning to cut or not. tom: how does the fed use our business inflation, our producers inflation? mike: they look at it as an overall trend, an overall trend, and accumulation of evidence.

it's in direct relation to the cpi with a lot of middlemen in between. it does suggest that conditions are in place for continued disinflation because of input costs are going down. lisa: does this speak to margins continuing to expand because consumer prices can expand faster than producer prices? mike: that's what you get out of that super court ppi that includes trade services. that's the way the bureau of labor statistics calculates that. of margins are expanding, it suggests that costs are lower. tom: thank you so much. leaving our coverage into the press conference with chairman powell. i was on the stage in marrakech

and we were talking about claudia goldin. she changed american economics. there is no other way to say it. she pushed forward and said we will do intelligent research, one of the leading women a generation before and it was extraordinary to see the nobel prize for claudia goldin this week. part of that leads to stephanie kelton's work very valuable and controversial and from there you can drag yourself forward to the 2023 claudia sahm. her work on the recession has just been

extraordinary. i want you to talk about what you got from claudia goldin, the idea that were going to play hardball and do that first order of research like you did at michigan. what did she mean to you? claudia: she's a leader, a scholar a hero to many women and it comes into the real world. she was an economist that said we need to think about women in the workforce and prime age women's employment rate has had an all-time high. it's about looking at what's happening in the real world. tom: you provided leadership on this. did we misjudge women in the economy, technology and the

economy which we have to have humility about the sahm role. claudia: we have overplayed with the fed means to this economy. we have seen workers come back. we have women, black men, people with disabilities and productivity. this is the holy grail of prosperity. we have had productivity numbers and technologies in place that help women that were on the sidelines or those with disabilities. we just have to keep pushing. lisa: you are saying the fed is not the end-all be-all, what are you so excited about today? claudia: i love the fed. the fed day is always a fun day for me. the soft landing is in the bag for next year. 2% inflation, unemployment stays

around 4% of my biggest risk factor outside of politics is the fed. what i worry about is them confusing markets and i'm not fully emotionally prepared for the economic projections because i don't think it will give markets clarity. there is no way were getting first quarter cuts from the fed and i worry they will create enough uncertainty does something breaks. we've been lucky so far. and that could put the soft landing in danger. lisa: we've seen markets become more accommodative and stabilization and bond yields. where is this potential of breaking coming from? claudia: if i had to predict the financial breakage, these don't , and an expected way.

svb came out of nowhere and a big picture sense in the market got an under control. i have a lot of faith. this is a risk i see, a low risk. we have had a pretty good run of not breaking financial markets. i'm a little surprised and thankful and i think were on the right path that i think the fed needs to stop injecting uncertainty. they need to get the message straight. lisa: this is the conundrum for fed officials and economists and people in the market. you say that the soft landing seems to be in the bag but what's the biggest policy error you see them committing? cutting too soon or too late? claudia: i don't think the fed

matters much next year. disinflation has not and about the fed. jay powell is not landing the plane. he needs to articulate that they're going slowly and they will not have enough data by march. they will be conservative in cutting because they don't want to have to raise again. they don't want it to look like politics. there have been a lot of communication efforts. when i listen to them, i think they are going to get it together. they know. tom: on linkedin you allude to volker and the emotion that

no one wants to be arthur burns. tell us what we want to avoid that arthur burns did decades ago? claudia: there were two things arthur burns stated that were seen as a mistake among monetary policy officials. whenever unemployment started to drift up, he cut. inflation came back even stronger and there were a few episodes of this. and then volker had to cause a huge recession. jay powell has long said volker is his hero. nixon really pushed on burns to cut those rates. tom: let me channel from jonathan ferro, chair yellen and vice chair by chair by then, ary

pushing powell to cut rates? claudia: no. thistom: remember matt lusardi's on the afternoon show. there's going to be a recession but not soon. that was the call of 2022. lisa: and now you have people gaming out that there is no recession at all. the thing claudia was talking about their, if i'm tom keene i

will raise my hand and say how about they shoot that spike in bankruptcies? that's what a lot of america is feeling. actual recorded bankruptcy like claims is countable, it's a big deal. lisa: why is there the surprise to the downside for inflation? is it because of the post-pandemic of fact or is this being driven by a price pushback by consumers and corporations? tom: the s&p advance up 0.18%. lisa: you've highlighted the financial conditions index become more accommodative.

deutsche bank pointing out this morning is the most accommodative since the fed first started hiking rates last year. is this a problem for the fed or is this fine because there is weakness they see coming down the pike that will do some of the work for them? tom: let's get out in front of 2:00 p.m. today. we are going to show up and there is the real economy dynamic, the financial economy dynamic. and then there is this whole labor society where janet yellen is the expert. they are all synced in after opposed pandemic and stimulus.

and edward penny said can you look at the physical side of things and will the chairman dress this? lisa: on the fiscal side they're worried about the deficit. but there is a lot of strength still. one area is home builders they continue to build homes, continue to sell them especially with people locked into their mortgages. tom: there was a nirvana print at 12.26. the fed decides, we will do that at 2:00 p.m.. coming up, get ready. this is bloomberg. ♪

♪ be ready for any market with a liquid etf. get in and out with dia. given the trajectory of oil and shall prices he has to push back on the amount of rate cut set up

and priced in and how quickly. the march cut is the issue, not the 110 basis points of cuts. it's ok for the market to stay on pause and not hang on every single word that the fed is saying. i think we can all get behind that. lisa: did you just bark tom? tom: no, i'm just fired up. lisa: as people get confident about a soft landing. you can see a little bit of nuttiness in the market this morning. s&p futures crossing 4700, up 0.2%. a bit of euro strength that 1.07 but 10 years coming in lower after the ppi data. tom: this just popped into my

head. do you think chairman powell will address the 6 trillion of liquidity looking for a warm spot? is that the fundamental issue in this market. lisa: it is a buffer and i don't expect him to address it. talking about the post-pandemic you are seeing that disappointment with postproduction chairs. the overall stairs coming in below the analyst estimate of 3 million. some are stuck with the pandemic .

tom: some mentioned that health is a comfortable place to be but someone say it is a laggard. in off of covid pfizer joins the lovable laggards. lisa: and as you look to a post-pandemic economy? though the pace of sales in november which is below the fed rates of 2021 and 22 most markets exceeded 2019 levels which represented a more normalized period. drew is joining us now. how do we understand this frenzy in home building that could be viewed as strength and on the other the lack of options in the market? drew: you framed it perfectly.

one of the reason why the new home market is doing well because in the resale market there's not a whole lot of inventory. looking back historically, we are a depressed levels. the other thing you have to recognize is that builders have been able to help buyers meet their payments in the way existing homes cannot. they've done not through financing incentives. now they're saving in the low 7% range. but someone in a new home is getting somewhere near of 5% rate. new home prices are down 15% from peak and factor in that 5.5 rate a new home is comparable to an existing home. lisa: if mortgage rates fall

will that be a good or a bad thing for homebuilders? drew: if rates come down to a 6% range, we are thinking we get somewhere at six .25, 6.5, we think that increases activity throughout home ownership. it will not be as strong for the builders, the new homes accounts for 30%. we would expect that to trend lower. we think the more activity you have within the market is good for all. tom: my experience is media people looking at housing, rent, multi family and the rest 90% of them are within three zip codes in manhattan. you look across the country. what is the biggest distortion we have in our study of housing that we just get wrong because

we live in new york? drew: that's a good point, the majority of homebuilding in the u.s. is concentrated in the south, and the southeast in texas. job growth has been stronger. there has been a lot of migration since the pandemic into the southern states. we have seen demand hold up well. we talk about the higher price markets like those in the west. those are some of the hardest hit. tom: what do builders do? do they build less houses outside of san francisco, los angeles and phoenix? drew: in the west in california it's a small portion of overall new-home demand that you see the largest concentration in the southeast and taxes. thus where you see a lot of builders starting to expand

their footprints. they will continue to build where the demographics supported. tom: lisa is thinking about moving to florida. has florida pete? drew: there are some markets that are coming off the boil where prices have risen the most. some of the largest markets for builders, jacksonville, orlando are still doing relatively strong. some of those markets on the western coast, prices are coming down. the other concern you see in these markets is single-family rentals. that's one of the concerns come up recently is that if the economy starts a slow and you see this inventory from short-term rentals come in from the market what is the dude in the market? lisa: i just learned something about myself. i didn't even know i was planning on moving. tom: i thought you loved coral

gables? lisa: i'm curious as you look forward, whether you're expecting home prices to go down substantially as you see a market normalized? it will be a time of price discovery and a huge swath of the market that has not had that because nobody has been moving? drew: we did an analysis and with mortgage rates at 7%, home prices would have to fall about 30% relative for incomes to fall back within the long-term average. this highlights a distortion in the market. we don't think that's likely unless we see a rising unemployment. even if we see inventory coming into the market that still will provide a buffer for housing prices in florida.

tom: we make a joke about florida pub people native to florida are moving out because fancy people have moved down and even orlando is being priced out. lisa: especially since it's become the warm wall street. tom: were trying to get the show to move down there next year. lisa: would you wear a bowtie on the beach? tom: i gave a speech in orlando and we were driving to the hotel and i was looking out the window and there was an alligator next to the road and then a mile down another alligator. it was the worst speech i ever gave. i was looking around to see if there was an alligator.

a homebuilder has set up been wrong on this for 30 years. lisa: nobody got this right. nobody understood that if you got mortgage rates high enough nobody will move in there is no inventory. so homebuilders come in with creative financing. tom: we are 8:55 getting ready for the fed meeting at 1:30. i am sorry folks, off ppi. lisa: are you really scared of alligators? tom: are you kidding me? lisa: you almost lost it and said something else. coming in ahead 1:30, more

alligator discussion. jay powell will also be speaking. ♪

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the said storm -- is it the calm before the fed storm? the countdown to the open starts right now. >> everything you need to get started for the set of u.s. trading, this is bloomberg: the open with jonathan ferro. ♪ jonathan: coming up, jay powell about to take center stage following doublg