is, in this risky environment, how much do we want to be aggressive? >> the fed has been given a good indication of where it has been and where it is going. >> this is bloomberg surveillance. jonathan: it is fed decision day . this is bloomberg surveillance live. here is the price action, up 22 on the s&p. we advance 0.5%. fading into negative territory. tom: it was a nice fade. we've got to get an update on

evergrande. nobody in greenwich, connecticut was talking. fed decides. washington and politics have gotten in the way of jerome powell. jonathan: some great work in greenwich connecticut. you going to move out there? tom: could you see me in greenwich? jonathan: chairman powell, do you think he will be able to talk about the forecast, or will he be overwhelmed by questions about what certain presidents have been doing with their money on the side? tom: that's is going to come up. i am sort of surprised that we are talking about this. i totally take your point. jonathan: we will be talking

about china. two interest payments. we have of heard about one. kailey: kind of is right. statement from evergrande, saying their privately resolved payments. there is another payment due within the next day. that is unclear. china seems to be prioritizing china and the chinese players involved. all that offshore, maybe not so much. that will be interesting to see play out. jonathan: if we do and evergrande special, we should just call it, china decides. tom: there is a lot of different opinions. i and with scott minerd on this. it is wednesday. their goal is to get to our

friday evening, really china's goal is to get somewhere in the vicinity of our 6:00 p.m. friday evening. jonathan: equity markets look like this. it is fed decision day. a news conference coming up with jay powell following that decision. coverage here on bloomberg startup 1:30 eastern time. yields unchanged. tk, yields are basically where they were after chairman powell gave that speech at the jackson hole conference. tom: we are weighing the difference between risk and uncertainty. risk is measurable. uncertainty, we have not a clue. jonathan: euro-dollar, 1.1730.

kailey: you are seeing strength across a commodity complex. you also sought in i/o -- iron ore futures. as for what is ahead, we will get some economic data at 10:00 a.m. with existing home sales. we are expecting a moderate decline. inventory is still tight. what is out there, prices are high. supply issues when we think about oil. we will get data at 10:30 eastern. we saw inventories last week dropping. this week, if we see the drawdown, it will be the lowest level since 2018, feeling the impact of hurricane ida. 2:00 p.m. eastern is the fed decision. it's not just a language around tapering. it is also the summary around

economic projections. will we see the medium and dodge pulled upward? if that happens and we get taper language, has the fed lost its ability entirely to pullback bond purchases. we'll hear from jerome powell at 2:30 eastern. jonathan: less has kickoff this morning with rob schneider. what are you looking for from chairman powell? >> the timeframe for them to do this press conference might require slightly more than an hour but there are two main focus points. one, you had the propensity for this to be a slightly more hawkish event than people are expecting. when you have this transitory inflation pressures, which continue to linger, it is

probably going to be a requirement that people we calibrate their expectations. ultimately, need one vote to move for the 2022 fomc dot plots to move higher. ultimately, some of these devilish voters, being jerome powell -- dovish voters, being jerome powell one of them. perhaps it is a repeat of the more hawkish sentiment that we have seen in june. the second thing is is advanced notice of discussion. advanced notice is similar to what i would categorize as the new --. when you hear the turn, it is a very familiar tune. if it comes across as familiar, that is exactly what jerome powell wants. from that perspective, this advanced notice should be in on a bench.

but as you highlighted, the tension for investors is in the digestion mechanism, between ultimately bringing on the tapering event and when rate hikes occur, which there will be required air room and breathing room to get to those hikes. do not expect rates to change much, but expect the calibration of the said to ultimately change . ultimately, we are making further progress to that substantial further progress paradigm. tom: the history book on the shelf is always repeating itself. we thank -- for that economic theory. liquidity, expanding ever larger. how does this fed deal with the jerome schneiders base? the overnight money?

jerome: money market funds have seen a good amount of information this year, about 200 billion. but we are now seeing a gentle rotation out of any market funds , into short-term bond funds and even equities. that is a natural habit we have seen in previous episodes of zero interest rates. what is important now is in fact that you have $1.2 trillion sitting on the sidelines earning a simple five basis points. the five basis points is simply the cheapest option to invest cash. most are trading well below five basis points. is not a cyber's -- a saver's paradise. the debt ceiling is going to have a profound effect on liquidity conditions.

the space for the debt ceiling comes into play is going to be a variable to think about how liquidity conditions change and the cost of liquidity as we approach october and november. kailey: i would imagine the chairman is going to get questions on the debt ceiling later. do not expect much movement on the shorter end of the curve, but what about farther out? i have been looking at one .3 something on the tenure for what feels like a while now -- 1.3 something -- jerome: ultimately, that puts us into a point of thinking about the cpi topic out close to 5% in early 2022. if you have that, you will seek this recalibration of inflationary expectations say the above where we are now. it is probably enough to break

us out of this mold. higher growth trajectories get pushed higher into 2022. ultimately, when you get to this, the range bound that we see is not necessarily complacency but probably well grounded. the grounding is shifting below our feet. jonathan: i would say thank you, tom keene is going to be quoting up and now all morning because of you. when we think about abbott's, tom? tom: i never got it. the lyrics are deep. jonathan: how did you record so quickly? tom: abba is not perfect, but she is lovely. he is going to go in there and

talk about mr. kaplan and trading of debt ets. but he is going to do everything he can to get through this, maybe calibrate in a hawkish way . they need more economic data. i am not going to look at the dots. jonathan: i will go straight to the dots later. any communication around separating qe and rates could be disrupted by the dot plot later this morning. you're going to sing us out? futures up 25. yields 1.3294. tune in for the rest of the day. we've got abba. this is bloomberg. ♪ >> that u.k. government is set

to provide limited financial support to restart production of the country's biggest plant. the food industry had halted because of high natural gas to costs. government has also met with domestic gas and power supply. u.k. is said to be looking at the u.s. free trade agreement between the u.s., mexico, and canada. it is recognition that the biden administration will not start work on a bilateral deal anytime soon. boris johnson downplayed expectations of progress. he send agreement is unlikely before the 2022 election. the democrats have a built to suspend the u.s. debt ceiling into december 2022 and provide funding for the government passed the end of this month. republicans have vowed to block the measure when it reaches the

sentence. the political standoff raises the possibility of a shutdown and the default. they have approved a bill that would let banks do business with cannabis companies without penalty. sabia boost on marijuana companies. -- -- would be a boost on marijuana companies. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i am at ritika gupta. this is bloomberg. ♪

president biden: the u.s. will

double our financing to help developing nations tackle the climate crisis. i am proud to announce that we will work with congress to double that number again. >> the president of the united states at the you general assembly. alongside tom keene, i am jonathan ferro together with kailey leinz. s&p futures up 26. yields higher by about a basis point. as can he and i have talked about this morning, where you were on the last friday of august when you heard from chairman powell at that jackson hole meeting, we have not moved since then. tom: i use as a proxy to fix. rounded up to 23. getting over 20 is a big deal,

but we are nowhere near 20 five fourth 30. jonathan: looking forward to talking about airlines this morning after the decision to reopen travel you wonder if we can get -- if we can actually refuel. tom: the guidance on airlines is a movable feast. where also plugged -- all plugged into google flights trying to figure it out. it really plays up the idea of how quickly they will come back. there is a real optimism that planes will be loaded. jonathan: guy johnson is going to have an important interview with airbus. i would love to see how much more loaded planes are given the books we've seen. tom: greg vale yet nailed this

this morning. annmarie hordern is going to give us perspective. anne-marie, greg does not mince words. describe the level of chaos as the sun rises in washington. >> we are getting close to not having an agreement on funding and the debt limit before the treasury runs out to pay back our past bills. the house has passed the bill, that the senate, it will file -- fail. tom: for those not up to speed, but anne-marie, what is important is that there is a separation between the debt ceiling debate out there and the immediate debate right now. >> the immediate debate is stopping the -- passing the stopgap measure.

you hear mitch mcconnell saying they will have their own stop gap measure to keep the government functioning after september 30. this is one debate. i think the other question is about the reconciliation package. this is a separate democrat-only debate about the future spending the party wants to do. kailey: we are still a little over a year away, but looking out to the midterms, how much clinical covered as a give democrats if they say we have this package put together at the house passed it. it was republicans that shut it down. who wins? >> it is too early to say that what happens today on this specific measure, which is literally keeping the government operating, treasury paying back past bills, i do not think many americans will be thinking about that in november unless this

becomes a downgrade for the u.s. kailey: what gives you confidence it will not get that worst-case scenario? >> this has been a perennial football in washington, d.c. for years. at the end of the day, there is a sense that there will be an event. with democrats in control, they will be the ones that capitulate. tom: how was the president's day yesterday in new york? was it deemed a success? >> he outlined what he wants to do in foreign policy. he did not do diplomatic speed dating. he only met with scott morrison. our allies are scratching their heads and saying, we do not feel this is multilateralism and diplomacy. tom: is that what we do in

davos? diplomatic speed dating. jonathan: what would mrs. keene say? let us get over to london and catch up with guy johnson. guy will be catching up with the airbus ceo in just a moment. let us talk about things opening up across the atlantic. we finally going to see the business of these companies have wanted to see for 18 months? guy: the north atlantic is critical. we have seen a narrowbody recovery. will i be flying soon in hydrogen plane? that is another question we will be asking guillaume faury in a minute. i do not know whether we can draw a link between the submarine story and the outrage

in paris and what happened in the north atlantic. i would certainly they dry dock to line between one and the other -- a dotted line between one and the other. there is in my mind a fairly clear line. it was amazing help little detail there was available after the announcement. apparently, the astrazeneca vaccines going to be good for me to come and see you. airbus is holding sustainability day today in to lose. genome -- guillaume, welcome to the program. you said you are becoming more confident in your ability to deliver hydrogen airplane by 2035. the physics and chemistry is complicated. what gives you that confidence?

guillaume: the physics is complicated, but it works. hydrogen technologies are not new. they are used in other sectors. we use them in space on our rockets we do not need a lot -- the laws of physics to change to use hydrogen on our planes. every day, we become confident. we need to have a plane, the hydrogen available at the right place, at the right time. we need the regulations to be ready. we really need the work and collaboration of many around the globe to make it happen. that is why we has assembled to create that momentum and have the right level of collaboration. guy: what problems you need to solve? what needs fixing? what airpods are we thinking about? a smaller aircraft or a

replacement for that 823 family? guillaume: hydrogen will be introduced in aviation, so we will be national need to be able to deliver the fuel at the airport, to bernard or use it in a fuel cell. there is a lot at stake. we're looking at those technologies. it is not about sorting problems. it is about -- solving problems. it is about understanding the way we can use the technologies and selecting the right ones when it comes to the planes themselves, hydrogen has different characteristics. there is a higher weight density of hydrogen compared to kerosene. it takes more volume for the same quantity of energy. the planes will have probably a different shape. we will use less hydrogen in terms of weight than with kerosene. we want to start with short and

midrange aircraft for it was to longer distances. smaller airplanes at the beginning, which is something to consider when he looked at the investments that will be required. smaller investment for smaller planes. more convenient when it comes to the use of hydrogen. jonathan: we were just chatting about the north atlantic and figuring out exactly what kind of impact's is by's -- president biden's decision to reopen the north atlantic is going to have. when do you think that is going to translate for airbus? guillaume: you make a good connection between the reopening of the north atlantic and the water situation. what we see is recovery on domestic flights.

we are still at a very lopez. it is the beginning of a process. i hope that the opening of the north atlantic will figure other positive use when it comes to long-distance flights. it is premature. we are happy to see this milestone. it is most important and probably easier to get. on the long-distance situation. very good news for the industry. we need to get it right there it i think this is going to be ok. very important for the u.s. and european allies. it will help in the path to recovery. we are very happy with it. guy: some are starting to believe you will easily eat your target for this year. i am wondering whether supply

chain issues could have a negative impact. what are you seeing in the supply chain right now? any chip shortages? material shortages? what do you think the energy crisis is going to mean? guillaume: we continue to operate in a challenging, complex, unpredictable environment. we deliver roughly 300 planes in the first half. 600 for the full year makes sense. that supply chain situation is challenging. they are in a difficult spot. we are working very closely with the supply chain. we are happy with what has been achieved in the last 18 months against the backdrop of this crisis. now we see some difficulties of suppliers, of challenges in accessing raw material, the prices of raw material, to

reopen plants, to rehire people in this challenging situation. we are prudent when it comes to the speed of recovery of production. we believed that 600 target is realistic. jonathan: always a pleasure. thank you for your time and for sharing what you are thinking about. guillaume faury, the ceo of airbus. jonathan: tom, do you want to get on the hydrogen plane? tom: no. jonathan: what about you? guy: i think i would give it a go. the history is not great.

hopefully, we will make some progress. if you can launch a rocket with this stuff, i figure we will be good to go. jonathan: guy johnson out of london. good to catch up. price action. fed it decision date. after 24 on the s&p. the nasdaq advancing 0.33%. there are two interest payments due tomorrow. a local currency bond, a dollar bond. this is the dollar bond. it is trading at $.25 on the dollar. since hundred six $9 million in interest -- $669 million in

interest. we have heard little about the local currency bond. we have heard nothing about this one. tom: that maybe the physics of the bond world right now. i need to give you the physics of earthquakes. australia, moments ago as substantial earthquake of nicaragua. not massive, but right up there. jonathan: quickly, it yields are higher by a serious -- a single basis point. there has been no drop for a while. similar move on 30's. 1.8665. tom: you're really yield is that friday is going to be interesting. less negative. jonathan: have we got a positive

one anytime soon? tom: my job is not to give opinions. jonathan: we will see how things work. tom: it is going to be interesting, to say the least. we need to dive down into what is left of the theoretical debris of our monetary policy. we do this with julia. julia, what is the theory? julia: the theory of what the fed is going to do today or in general? the theory has been go big, go early, jump start the recovery, make it demand-driven, so goes

faster than last time and you do not lose the human capital that you lost last cycle. that is the theory. so far, that is on track. we have had a faster labor market recovery. we have workers that, while participation is well below pre-covid rate, they are still more attached to the labor market by a lot of measures. we have seen things like involuntary part-time work come down sharply and quickly. almost pre-covid levels already. so far that is working. it is come with unexpected twists and turns with the supply chain that has producing, combined with strong demand and inflation. that is something that i am sure chair powell will be asked about. the of heard his answer at jackson hole. i do not think it has changed

transitory make -- may take longer than thought, but it is still supply chain developments that are driving the boeck of this. over time, that should improve. but, we have made enough progress. the recovery is well under way. it is time to start the process of pulling back support. that is going to be the message today. it is coming. the process is going to get under way. kailey: we have made substantial progress. you mentioned how persistently low the participation rate has been. i was reading your research. you make this point distinguishing hawks from dots and whether or not is just going to be structurally lower participation, because we are seeing those unemployment benefits across states. you are not seeing the corresponding returns on the job

market. julia: some see this as a tight labor market. chair powell does not. there is a discussion around the baby boomers who retired early during the pandemic and whether they will ever come back. the thinking is perhaps not. but then the agreement is on prime agent workers, ages 25 to 54. the registration of those workers, there is no reason to think it cannot go back to pre-covid levels. it has not come close, but we have made up some lost ground. one of the unexpected developments this fall from the delta variant is that schools and the daycare economy is still highly disruptive. we are not out of the pandemic. we still have that inhibition,

that a complication for many workers grappling with childcare to return to the labor force. we need more time. chair powell mentioned in jackson hole that he expects that participation recovery to lag the jobs recovery. that is what research shows. that argues the case for a steady, gradual withdrawal of monetary support, rather than a panic over near high inflation. focuses on getting to a maximum employment. one other point chair powell will make is that is the distinction between tapering and ending bond purchases and raising rates. tapering and ending bond purchases, we are very close to the threshold need to see to start that process. it will be on a steady course, measured pace to somewhere middle to the third quarter of

next year, we will conclude this purchases. then the question will be when will the fed raise rates? the hawks might decide that 2022 is the likely timing of the next rate hike. we do not think chair powell is in that camp. he sees quite a distance between tapering and ending bond purchases and reaching that maximum employment nirvana required to raise interest rates. for him, that is in 2023. we may get a nudge higher in the median in 2022. but many are set to rotate off the committee anyway. jonathan: do you think that would complicate the chairman's effort in the news conference? when he is in a news conference, he is got to find consensus where consensus is difficult to find. how difficult will this conference be?

julia: we know that chair powell will get up there. he is not a fan of the dot plot. he will say, who knows what is going to happen next year or the next several years? we are just going to have to follow the data. chair powell has gotten pretty adept at delivering a dovish press conference. i am not terribly worried if it there is a rate hike in the median in 2022. tom: julia is a distinguished phd in economics. should mr. kaplan resign as president of the dallas fed over not so much trading but what he was trading, which were interest rate vehicles. julia: that is not for me to say, but you can tell that with

this decision to review these policies that chair powell is not pleased. it certainly is not a good look for federal reserve officials to be actively trading equities and interest-rate-sensitive securities while making sensitive monetary policy decisions. it complicates their messaging. chair powell has spent the last few years trying to connect the fed with the general public to assure the public that the federal reserve has their interests in mind. how can you argue that when officials are actively trading in million-dollar lots securities? it is not a good look for federal reserve officials and all. jonathan: got to the there. julia coronado. tom, that is going to be a tricky one for the chairman.

how is he going to deal with it? tom: that regional feds are controlled by their boards, governors, local people. i do not believe that governors in washington or the chairman can dictate the policies of the regional feds in terms of jobs. jonathan: we will see how he deals with it at 230 -- 2:30 eastern time. futures up 26, advancing 0.6%. this is bloomberg. ritika: xi jinping told you u.n. general assembly that his country plans to stop building new cars are brought.

his statement came after president biden announced a plan to double financial aid to foreign nations so those countries could switch to clean energy. one series in development is based on charlie and the chocolate factory. netflix is also working on an adaptation of matilda: the musical. the disney ceo is warning that streaming will be slowed by tv production. he blamed the delta variance. disney's streaming service has been a huge growth engine. former president donald trump has sued the new york times over

2018 story about his family's wealth. he accuses of mary trump of breaching an agreement. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> we have a lot of technology. not just a vaccine, but rapid

tests. we know how to take care of people who come in the country to make sure they do not harbor the virus. we are getting the tests to other countries. jonathan: from the johns hopkins center on health security on reopening travel. futures up 23, advancing 0.5% on the s&p 500. yields a bit higher. the fx market not doing much going into to the fed decision. tom: our coverage of afternoon, thrilled that the gentleman from princeton, alan blinder, is joining us. we will digress off of the pandemic right and all the curiosity of boosters and vaccines to the real world.

i do this because i sat on fifth avenue the other day looking at mount sinai where the ambulances lineup. they are key corner from 101st street, where there was oxygen. this course secret that we never speak about. -- core secret this is a crisis in africa, they do not have enough medical oxygen. > why? because of the infrastructure required. in the u.s., much relies on liquid oxygen. they require huge amounts of investment. in sub-saharan africa, we rely on psa plants. many health facilities do not

have the piping. high-pressure oxygen requires -- tom: filter that into the covid crisis, fears you have about africa, india, the rest bring it to covid. >> covid was an opportunity where we saw that this is a huge gap. we know these countries have high mortality in influenza season. long-term covid, with high numbers of cases, short amount of time to rip -- to prepare, this gap was revealed. many countries are reliant on their neighbors. now, there is a huge need, especially as we go into another viral season. we need to start building oxygen

ecosystem infrastructure, not just for this pandemic, but for future pandemics. kailey: we have heard that the pandemic cannot be over anywhere until it is over everywhere. there is some potential for new variants to emerge in places like africa. his delta still of most concern? >> it is still the variant of concern, but there are other variants that seem to have higher transmissibility. we do not know if they will result in increased deaths. kailey: the -- we are expecting a decision from the fda today on pfizer booster shots. do you agree that they should be given to us those 60 five and older but no one else needs them? >> i was kind of impressed.

we have had a debate about boosters that is like comparing apples to apples. it is broader than just individuals over 65. it is also those who are immunocompromised and at high risk of exposure, such as health care workers and teachers. i have a broad recommendation. i think it provides the opening for the recommendation to be universal eventually. tom: should the unvaccinated fly? we are opening up transatlantic flights. how do you feel about that? should the unvaccinated be on the same airplane with jon ferro? >> i would feel bad for jon

ferro. that puts the passenger to them at high risk. it is an avoidable risk, in my opinion. i think the idea of having a vaccine passport for travel is not unreasonable. tom: do you expect leadership from the airlines? are you looking for delta, virgin air, others to lead? >> if you are asking for my opinion, absolutely. this is a way you keep passengers safe. there is a challenge. that is one of equity. vaccines are more available in high income countries. there is additional equity question. what about countries where vaccines are not available? jonathan: got to the there.

johns hopkins, associate professor of emergency medicine. you can feel the nervousness of airline staff on flights. heavy fund domestic recently, tom? you can feel it. tom: yep. we took the family out to l.a. you can feel exactly what you describe from the staff. but they killed themselves to accommodate people. jonathan: that was not my sense. my sense was that people flying where an inconvenience for the staff. largely because they are so stressed and nervous. it is that interaction that you can go. it is pretty uncomfortable. it comes from being absolutely battered. tom: they are off their rhythm,

as we are. i am usually into the second scotch somewhere over pittsburgh. jonathan: the second scotch. yield is up a basis point, 1.33 62. chairman powell coming up a little later. we talked to julia coronado about it. it is very difficult to reflect the consensus when it is difficult to find a consensus. that is a challenge for chairman powell later. tom: i will dovetail off of what many said. you have legislative chaos. what is a central banker to do? jonathan: nothing. that is the base case. tom: i think that is what

michael mckee would say. jonathan: this is bloomberg. ♪

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>> this market has been a waste to rest and overdue for a pullback. >> 100 days from now we are worried we have a condition. >> how much you want to be aggressive? >> this will persist for a while and eventually the fed will have to normalize it. >> the fed has been giving us a good indication of where it has been and where it is going. >> this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. jonathan: for our audience worldwide, good morning. this is "bloomberg surveillance" live on tv and radio. lisa back tomorrow. futures up 22 on the s&p. it's a little bit of a bounce back, but as we have seen a lot over the last week, the best of the day cos