finally here. we have expert analysis of what the fed could decide and should decide on interest rates. stay tuned for a major global cable tv with a huge deal with very big implications. republicant 15 presidential candidates think of the administration's iran deal. we will talk about this very hot topic. ♪ matt: good morning, i'm matt miller. there is not a lot of action ahead of the fed decision at 2:00 p.m. you see equities unchanged across the board. take a look at treasuries. here is where you would expect to see more action. yield down only one

basis point. let's take a look at what is making news. while aftera little the decision, the computer traders turn they'll out rhythms off on days like this because the computers cannot understand what we may not be able to grasp either. but we talk to you about unemployment benefits. claims, i should say. they fell to the lowest level in two months. july.west level since the latest reading on the housing market indicate it might be leveling off. revisedigures were downward. housing has been gaining most of the year.

opec is bullish on oil in the long run. the cartel expects oil to rise steadily. goldman sachs says otherwise. crude prices low for the next 15 years. 10 republican presidential candidates took aim at the front runner last night. they squared off at the reagan library and donald trump was the focus. jeb bush was asked if you would be comfortable with donald trump in charge. it requires a steadiness, an understanding of how the world works, an understanding and appreciation of american leadership. talk about this stuff and insult leaders around the world and expect a good result. you have to do this with a steady hand. pimm: he did not --matt: he did question. the

>> we don't need an apprentice in the white house, we have one right now. he has told us all the things we want to do here back in 2008. we need someone who can actually get the job done. matt: trump said he would be foreignnd tough in affairs and would find experts to help him, though he did not name any of those. some of corporate america's biggest names will be on hand to hear chinese president xi jinping next week in seattle during an exchange program between u.s. and chinese companies. warren buffett and jeff bezos as mary barra are expected to attend. those are just some of the top stories we are following for you ahead of the fed announcement

today. coming up in the next hour, highlights from tom keene and michael mckee's exclusive lastrsation with ray dalio night. plus, stay tuned for the acquisitionltice's of cablevision. new yorkers may finally get a better choice of cable. the second republican debate left note weston's about what many candidates think about the iran nuclear deal. we will hear from bill cohen. those stories and more are ahead on the bloomberg market day. for the faton day after nearly a decade of historically low interest rates. today could be the day the chair yellen announces it could be time to start normalizing. aboutst guest says it is time. he joins me with a look at why

he thinks a rate hike would be good for markets. would be a surprise, wouldn't it? right, we are about 25%-20 8% in favor. , the expectation for a rate rise will be much higher. if you go back a couple of months, the bond market will reflect a much higher expectation. what we have had in the interim some worrying development in like the emerging markets.

things that are normally not the purview of the fed and its input into raising the federal funds rate. to ask ourselves, what are they looking at and what should they be let you as it relates to the u.s. economic health and financial markets ability. matt: we know they are looking at unemployment and instability. why with the fed need to raise rates if it were to hold back inflation, which is just nonexistent. >> it is a great question. they are all caps on a long bookshelf. fieldmarket is very much -- healed. under the fed funds target. as it pertains to inflation, one has to wonder if, given what is going on right now, keeping his zero interest rate policy has

any affect on that at all. as danny blanche flour and a bit have said, this is of pushing on that proverbial string. leaving interest rates at zero has benefits and risks. by leaving zero interest rates for longer, we run the risk of miss allocating capital. we have different and more prolonged kinds of pain in financial markets for longer periods of time. acting now gives a soft desk gets is off the starting point. even ray last night said 25-50 point is not a big deal. it is not going to affect the economy in any meaningful way. matt: his concern is what they have to do at the next downturn.

he thinks they will have to go back to qe. becomes,estion then could you do a qe with a fed funds rate. could you leave one of the policy tools alone that monetary policy is not affecting? will we pointed out yesterday int with the fed has done terms of qe is move the money to .rivate banking sheets but it has been trapped there. assets stuck at those banks are not getting the multiplier effect in the public or private sector. matt: i just found the taylor rule function. there are a fuel variables you could plug in.

danny blanche flour thinks it got thee four. you've inflation target. than you've got the neutral real rate. this is the most difficult variable for me to understand. what do you think i should plug-in here. these variables, we should be a 2.75%. >> the real rate should probably be closer to 1.00. i plug that in and i get 1.75%. >> that is probably ok. 100 basis points would get us back to an equilibrium. this is really the function of the fed funds rate -- to get capital allocated more less in ways that

would distort asset prices. ofhave seen huge amounts corporate buybacks, debt issuances. we have seen no real investment in long-term productive kinds of activity, like infrastructure and thinks that the current administration and you have bipartisan support for across the board. thank you very much for joining us. join us later today for live coverage of the fed decision. actually, don't change the channel until 2:00 p.m. eastern time. we will broadcast janet yellen's press conference live. if you do have to leave your screen, you can turn on sirius xm.

we will be right back with complete coverage of that day. ♪ are worried too much about the short-term debt cycle and not enough about the long-term debt cycle. so i don't get it. ♪ elio on theas rate surveillance special. stay with us. ♪

matt: good morning. welcome back to the "bloomberg market day." for now, let's see what is happening on the streets. julie hyman has an update from the newsroom. pretty exciting day in the markets. is not exciting quite

yet, but it will be exciting. do you tend to see investors sitting on their hands until we get the fed decision. until then, we are seeing very little change. we are seeing change among individual movers. let's take a look at best performers on the s&p 500. united is one of them. they have amended their credit card marketing pact with chase bank. this new credit card deal could be 10% accretive to the company's earnings. the shares are up by 3.5% as a result. has been upgraded to buy from neutral by goldman sachs. the stock is attractive after a recent selloff of the company should see margin expansion. , we have into it

-- intuit. they did pointed -- disappointed investors. the shares are down more than 2.5% after it said its fiscal --nings amidst endless analysts' estimates. when other one that caught my eye is verizon, especially given the big telecom deal happening today. verizon commenting on a conference at a conference that 2016 earnings may plateau at the , in partl as 2015 because of the sale of more operations. he said he is not interested in buying a cable company. matt: we eagerly await the action sometime after 2:00 p.m..

stories ofo the top the day. migrants are looking to another into europe after they were blocked by hungary. the search started after hungary shut its borders with serbia. hungarian police are using tear ganz -- tear gas and water to turn them away. eight people are dead after a powerful earthquake in chile rock to the northern coast. more than a quarter of a million are without power. president obama will meet three young americans who foiled an attack on a french train.

they surprised a gunman who had ties to islam. those are some of the top stories we are following for you at this moment. the federal reserve rate decision is the most important for us. we will have full coverage and i think it 2:00 or starts at 1:55 on radio. we will have a press conference with fed chair janet yellen. you can go to bloomberg.com for any information and live coverage. as for opinions on what the fed should do there are many. the opinion of what

michael mckee heard from ray dalio last night, really how bearish rate is about this sort of medium-term economic future of the economy. he thinks the fed will have to go back to less effective qe. mike: it was quite interesting to get his perspective. question we put to rate lio. -- ray da in the primetime special on bloomberg radio and tv last why hehe explained thinks what the fed does today is not as important as what it is going to do over the longer term. >> i don't care whether they raise 25 basis points. i just don't see the reason for

it, frankly. 2007, i was watching this incredible asset bubble happen. it was financed on a lot of debt . it was an obvious bubble. just give attention to the gdp gap and they missed the whole bubble. situation in which we are in the mid part of a cycle. are worried about and we had a lot of liquidity around. there are little glimmers here and there. there are always little glimmers of something. i think they are worried too much about the short-term debt cycle and not enough about the long-term debt cycle. look at the world. we are in a world economy. tell me to countries outside who should be tightening monetary policy. he thinks maybe they could go 25, he doesn't care, but they

are going to have to come back and do some qe because the world is slowing down. he also told us it is going to be a world of much lower returns going forward. he does subscribe to the idea that the united states is in a bit of a stagnant keyword -- period. you are not going to make as much on your portfolio over the next decade. he likes his wrist parity strategy. a lot of people said that might have been behind some of the volatility and he said that cannot be. got it. thanks very much. us dalio and the rest of will find out the plan for interest rates this afternoon. our special coverage begins at 1:55 p.m. this afternoon.

something you don't want to miss. bloombergt it all on television, radio, and bloomberg.com. still ahead, the latest in the cable industry consolidation. patrick drahi making a major push into the u.s. cable industry. ♪

matt: mark consolidation in the cable industry. agreeing toi acquire cablevision in a deal worth $17 billion. joining me to discuss is alex sherman. is it a surprise? did you expect this to happen? alex: it is not a surprise that acquireould cablevision, but the timing is a surprise. the idea that this would happen now is a surprise, partially

has been veryrket much expecting cablevision to be acquired and there was some built-in m&a premium into the stock, which might prevent a deal. they felt the market probably pushed the stock too far out and then altice might buy it. almost $35 perof share, way higher than a lot of analysts expected. the cable provider has a large overlap with verizon fios. have to go through fierce price competition every day. fair for you to say that verizon fires as a product of considerably higher quality than the other cable providers? alex: i think that is more marketing than anything, honestly. there are some things they do better and some things they do worse.

cable companies have a faster high-end broadband speed. if you are wanting to pay up for it -- matt: i'm getting five megabytes per second with verizon fios. a lot of it is marketing. it depends on where you live. matt: in that case, i might switch. alex: from a tv perspective, they pretty much offer you the same stuff. matt: from a tv perspective, it does not matter much since i watch everything on apple tv or the xbox. what is next for the new york cable seen? this is the most problematic area, i would think. alex: it has had a total turnaround in the last five months or so with charter buying time warner cable and altice buying cablevision. there is a good question of what

does this mean for cable subscribers? ist you hope it would mean that we are going to get better customer service, the companies are going to be run better. altice has a reputation for getting companies -- gutting companies in europe and that is how they get their synergies. but they are saying is we can come of this company is bloated, and we can back it through and get all of our savings there. matt: thank you very much. alex sherman giving us the skinny on cable. ♪

matt: welcome back to the "bloomberg market day." state suicide bombers

target police in iraq. at least 21 are dead after a pair of explosions today in baghdad. 76 more were wounded. attacks happened at security checkpoints. the militant group is claiming responsibility. decideng underway could whether bowe bergdahl could stand trial for desertion. he was subjected by the taliban and and held for five years. he was freed 15 months ago in a controversial's top for prisoners -- swap for prisoners at guantanamo bay. jimmyy clinton visited fallon at the "tonight show." she could not escape donald trump. he had some advice for her. campaigndonald, a long , traveling across our great nation, i'm listening to people's stories. i'm confident americans will see

i can deliver for them. >> you sound like a robot. does not compute. [laughter] >> you want to win, here's what you got to do. first, yell. [laughter] >> i yell all the time. this was her first late-night talkshow appearance as a presidential candidate. i'm sure will see more. general motors is settling the criminal investigation of its faulty ignition switches. gm will pay the justice department $900 million to end the case. no individuals will be charged. gm lawyers and engineers knew about the flaw for years. 100as been blamed for deaths. the company scheduled a press conference at precisely 2:00, when we will all be paying attention to the fed and ignoring everything else. amazon is selling its new tablet in a sixpack. the fire tablet costs $50.

amazon is selling them by the half dozen. meaning you get one free. it has twice the processing power of the samsung galaxy tab light. let's take a look and markets quickly. obviously, the fed decision is in focus. typically on said day, maybe not so early, but you don't see very much movement in the markets. it is pretty astounding how little movement we are seeing in the at the market. 0.05%. 500 is down .he dow is off similar picture in treasuries.

coming up on "the bloomberg the second" republican presidential debate quickly plunged into controlled chaos. we will recap that for you. october is national pork month. all prices are going haywire. salesforce posturing force is underway. what would it be without a cruise ship or the foo fighters? more ahead on the "bloomberg market day." last night, it was round two of the republican presidential debate. many hopefuls were outspoken about iran and foreign policy. >> we don't get along with china, the heads of mexico, we don't get along with anybody in the end, at the same time, they rip us left and right, they take advantage of us economically and every other way. >> if i'm elected president, on

the very first day in office, i will rip to shreds this catastrophic iranian nuclear deal. >> wouldn't you want to know if they had complied? matt: with us now is william cowan. bill, thank you for joining us. what was your take on presidential candidate foreign policy views last night. >> i credit him for standing there for three hours without a break. i think you must be careful what you pledge during any campaign. say, beays tried to careful what you promised during a campaign. you may have to break the pledge in then you undermine your own credibility. i think it is wise to say, i'm going about it very here he is leave the first day of an office.

without consulting with allies, without plumbing the depths of what this would mean in terms of the consequences. i think it is one thing to promise, i'm going to teradata and it is another thing to say what happens once you do teradata. up.ear it i think it is a mistake to do that. i would say those who urge some caution. matt: rand paul seemed to be the only one urging caution. to keep to thes agreement at least for the time being because he wants to check to make sure that iran is complying with the agreement. is this the kind of thing where we will be able to know if they

are complying you to an everyday? isn't compliance something that needs to be checked years after the agreement? >> that is one of the challenges. i believe that jeb bush also urged some caution, as did john kasich. yes, i think initially there will be an effort on the part of iran, assuming that it votes to confirm this deal, that is something that is now being debated within iran. assuming it goes forward with his agreement, they are likely to comply. as time goes on, the compliance will be less intense and they may seek to circumvent it, so it will require more intensity on the part of the international organizers. -- now toe do dow

really sure up the capability of saudi arabia, uae, cutter, and the others to make sure that they are much more secure than they are today to prevent iran from using their new power to present a threat to them? i think the focus has to be on the inspection of that also will we can do right now to bolster the capability in the gulf region. matt: what did you think of lindsey graham arguing for a buildup? carly fiorina arguing for a significant military buildup? have we let our defense forces i think it is embarrassing that this country would be faced with another government shutdown. that signals to the world that we are not a serious country. to the extent that we would shut the government of the united states down does not send a signal of strength or that we are providing leadership.

number two, it is embarrassing that congress does not have a budget. about we arealk going to do this with iran, we are going to confront china, you don't have a budget. you are going from resolution to resolution and you cannot plan for building a strong military unless you have an agreement up on the hill. i think it is an embarrassment that we don't have a budget and we don't have a consensus on the way forward. that is something that other countries are looking at. they are making their own assessments of u.s. leadership you especially our military capability, our state department. if we cannot agree on that, we are not going to be successful in having a strong for policy we will not have the wherewithal to enforce any kind of strategy. matt: thanks very much for that.

bloomberg's world affairs contributor billc cohen. the gop debate, we are going to continue on that. the trap attack and trump on the attack. >> rand paul should not even be on this stage. he has 1% in the polls. there are far too many people anyway. matt: downright mean, the billionaire takes more jabs at his gop opponents, but they give just as good as they get. ♪

matt: welcome back. time to get you caught up in all the action around the world.

the shanghai composite finished down 2.1%. the hang seng fell 0.5%. story out of the region was japan's trade deficit. slowdown, this report was filed from hong kong. >> it was a miss all around. in august.3.1% japan's trade deficit is the whitest we have seen in seven months. exports to amendment china fell 6.4%. heelsfigures come on the to a cut of japan's credit rating from aa negative to a plus. matt: no, let's get to europe where ryan chilcote is standing

by with a look at all to europe -- all of the action. >> happy that day. kind of a mixed scene. ftse is down. the ibex 35 is up 1.5%. why? they would be a real outlier today. check out spanish banks -- on fire. both hsbc and morgan stanley said they have been punished a little bit too much by investors. we have a little bit of a relief rally going on. let me go over to the stock of the day. altice. they agreed to by cablevision, creating the fourth largest in the united states. the shares of the acquirer popped at the open this morning. they went up almost 13% and then gave up all of their gains.

pretty interesting. euro is up a little bit. 0.02%. everyone is rating to see what the fed is going to do. and waiting to hear from janet yellen. that is what traders are watching. julie: of course, that is what they are watching in the u.s., as well. head of that, we are not seeing much change in the major averages. want to take a look at volatility. this is the past month for volatility. , buts been trending lower it is back to more of the historical average for volatility. we have seen a pickup through

the year ahead of the fed decision. the interesting chart was brought to my attention by dave wilson and brought to his attention but pavilion global markets. looking at the s&p 500's 30 day volatility. a little bit of a complicated chart. the brown line is after 1999. the green line is 2004-2005. the blue line 1993-1994. there is not that clear of a historical pattern. we did see the 30 volatility dropping to a low after the initial increase and then it rose for at least three months, but outside of that window, we saw different behavior. it is difficult to predict what is going to happen.

economists are evenly split about whether we will get an increase today. let's take a look at the dollar. we have economic data as well, today. the philly fed coming in worse than estimated. the dollar is off by a little bit. thanks very much for that market roundup. searchers in utah located the bodies of six hikers killed by a in a park. firefighters in california find two more bodies in homes consumed by wildfires. the blaze inled by

this era nevada southeast of sacramento. officials fear there may be the body of it -- there may be more missing. oracle's first-quarter revenue estimates. their move to the cloud has hurt revenues. the 11 republican candidates are licking their wounds this morning. aty slung attacks lines each other. donald trump was the focus of the night most of the evening. this was billed as a heavyweight --ht between job trump donald trump and jeb bush of the latter did not come out swinging until the end. >> that's right. there were plenty of attacks

directed at donald trump last night. wanted him to be aggressive. he was very stung by donald trump continuing to call him low energy. up to about two hours in, nobody felt like he had a foothold until he got on him on a personal story. had somee guy that special interests that try to get me to change my views on something that was generous and give me money was donald trump. he wanted casino gambling of order. you wanted it and you did not get it. i have posed casino gambling before, during, and after. i >> promise. if i wanted it, i would have got it. no way, man. jeb bush was right about that story. that is going to make up campaign ads. jeb bush's team feels confident and whena key moment

he was able to carry the rest of the debate. the moderators did everything they could to try to stoke the flames of a fight between donald trump and each other candidate on the stage. they then shifted their focus to foreign policy. it was heavy on social issues. you find it was limited on economics and tax policy. >> that's right. singleours and not a interest of fomc decision rate day? it is almost insulting to anybody watching bloomberg tv over the last few weeks. the one area that they tried to delve in a little bit was tax policy. has changed is the unlikely focus of those to action. >> we have had a graduated tax system for many years.

what i would like to do is a major reduction in taxes, a major reduction for the middle classed. the hedge fund guys won't like me as much as they do now. once again targeting the hedge fund guys. jeb bush also going after the so-called carried interest. this is one you were going to hear a lot more about going over. who was the winner? carly fiorina? >> she was head and shoulders above the rest. if you look at how she responded across the board, she had clear, coherent answers. she knew her stuff. -- key moment of the night if you recall, donald trump reportedly said that she did not have the face to be president.

she had a pretty clear and concise response to that. take a listen. i think women all over this country heard very clearly what mr. trump said. [applause] >> matt, that kind of underscore night for carly fiorina. sharpe, to the point, she is the clear winner according to just about everybody i have talked to in simi valley. matt: thanks. we are going to take a quick break. when we come back, hogwild. pig prices surging 40%. it is not another swine virus. we will tell you what is driving up the price. ♪

coming up later today,

the fed decision. that is followed by janet yellen news conference. you can follow on long live on bloomberg.com. welcome back. i'm matt miller. hog prices have gone wild. october the means -- pig up.iums pumped it is interesting because this comes after all of this concern about hog prices plummeting in europe and we are talking about over here, lean hogs gaining in price. >> hog prices have been on a roller coaster for the last couple years. last year, we had the swine virus that devastated supplies. then we have seen a big plunge in the past year or so. lately, prices have been supported just a bit.

china continues to buy pork and that is supporting the market, even though farmers have issues with what the price may be down the line. that is inflating the near-term price more so than down the line. matt: there is no concern about a swine flu, just to be clear? are there issues like that? >> you are still seeing the virus. , bute are monitoring it the vaccines have been effective. you see higher supplies now than they were a year ago that has pushed down the price and you are seeing higher demand. inventories are being depleted. they are expecting big depletion next year and it is national pork month. there will be specials and grocery stores. matt: it is always national pork month for me. demand is growing globally, isn't it? >> it is. half the world's pigs are in

china and they have to import because it is such a staple food. folks are thinking that maybe there would be less demand, but china cares about the food security of its public. porkare making sure that is still supplied for chinese citizens. that is supporting u.s. prices. matt: hopefully those farms treat their pigs right. coming up in the next hour, would stevie wonder, satya nadella, a cruise ship, and the foo fighters have in common. stay with us for dreamforce. ♪ . .

matt: it is 11:00 in new york and 4:00 in london. pimm: it is the count down to

the fomc. matt: general motors will pay to settle the government investigation of all to ignition switches, but they will hold a press conference to give details at exactly the same time as the fed announcement. pimm: crude oil prices are main the subject of debate. prices from opec. details ahead. matt: good fed day morning. i'm matt miller. pimm: i'm pimm fox. we are 90 minutes into the trading day. let's look at how markets are trading right now. ..s. stocks a little higher