>> the fed is finally getting dancers on monetary policies. it is marketing with is what is happening. >> we are getting closer to a lot of things. >> inflation is here to stay. iras rates are here to stay. >> this is bloomberg surveillance, jonathan ferro, tom keene and lisa abramowicz. >> six days of losses on the s&p. it's about to become seven. live from new york city, worldwide, good morning. this is bloomberg surveillance. i'm alongside tom keene and lisa abramowicz. futures are down 2%.

the tenure is 400. >> they are deciding it is the same as it was. it was a crisis two or three days ago. my head has been spinning pit i've been up since 1:30 a.m. watching asia and europe unfold. i will point out two things. the euro gives way and it is subtle, but a weaker euro, and the 10-year is not part of the bloomberg this morning. >> a 10 year treasury market up six basis points to 4%. we go back to november 2020. that is where we are at. just think about that. all the vaccination gains of the last two years are wiped out. i was going to call it a draw crater, but it is down 4%. down 20%. the nasdaq is really getting some tension. it is down 32%. the equity is giving way. it is a different story.

truly, -- you have dan eyes for the night. this will be great, but we have a global sense of this. we're going to talk about this later, but that imf statement. >> don't get me started. >> i was in a school open house last night, i was at a school open house, and that is what people were talking about. >> you got me started. lisa talk about this. of all of the things in the world, white house to see the economy in 2021, the fed hiking 300 basis points the war in ukraine, the market turning upside down, and upside again, and the imf, is calling out the u.k. on fiscal policy. we can have a conversation about fiscal policy, but to make this the focal point of the policy right now, i think that's

absolutely bizarre. >> and want to give you a chance to go crazy because there's a lot of discussion about it. let me give you the statement. given elevated inflation pressures, we do not recommend large and untargeted fiscal packages at this point. it is important that it does not work in cross purposes to monetary policy. it is a shot across the bow. the demonstration is saying what you doing? this is not working. why now. why are they concerned that this is a pernicious policy, or are they just waiting -- waiting into politics and their reputation has less partial. >> destiny in the worst bit. the worst bit is the upcoming budget. it is an opportunity for the government to consider ways to provide support that is more targeted and reevaluated, especially those that benefit high income earners.

we can have this conversation, but to make it the focal point of what is happening in the economy is ridiculous. >> you could argue this is ultimately a dollar story. ultimately, this is a u.k. story with respect to fiscal policy, but we are trying about the euro. talk about the japanese yen that is weakening so rapidly that you're talking about intervention. it is windowdressing. it will lead to the sales of treasury. >> on going to go to a band called devo. they were the clash with style. i think i'm turning japanese. i really think so. the bank of england will carry out temporary buying of log data in the u.s. bonds. i think i'm turning japanese. i really think so. >> a dated u.k. bond. we are down 26 basis points on the u.k. 30 year. we see a surge in the last week or so.

on the 30 year, we have bonds surging in the market off of this headline. sterling is rallying. the bank of england is carrying out temporary purchases of long dated u.k. bonds. we were waiting for killed sales from the bank of england. they deleted -- delayed the starts. >> that works great, john. this is brilliant. the afterthought is going as liz truss. >> if you're just tuning in, the bank of england carries out temporary purchases of long dated u.k. bonds. it is down on a 30 year by 22 basis points on the back of it. bonds are searching. sterling is sort of doing ok, but lisa, what are we talking about? they went through some form of qt. it can't do a rolloff because

the average maturity in the bond market is 15 years. they're not absolutely abandoning that, but they're delaying that. that is in october, and i wonder what is next. >> just from a market response, the pound has given any gains up immediately after that announcement. one of six. it gives a sense of the market response. it's not going to do that. this goes to the credibility issue. they basically said, there is going to be a question about whether the central bank has the conviction given the fruiting that's floating nature in the shot of the economy that england will not stomach, that is why you are seeing a loss of credibility. >> you've talked about this time and time again. lisa nails this. this is her wheelhouse. this is how you a nobel prize. the answer is they are beholden

to floating rate mortgages which will cross the middle class. >> we have seen the mortgage market get ripped up. rates are moving so quickly, and there are two ways you can have this kind of crisis. one is if you have a load of foreign-currency damage that you do not have in the u.k.. they have debt in their own currency, and they own the printers. that is not the issue. the other is if you believe the bank of england is not going to fix this, which were there talking about, can they really find the data. market pricing right now. it is so aggressive. not just over the next 12 months, but over the next month. >> what you are seeing in the pricing is conviction that maybe they will back off and sell their holdings. it really goes to a question of, are they going to tighten enough to offset the inflationary pressures and the deterioration

of foreign investor confidence in the station budget. >> we've been following all of this, the ceo with data study. we are joined right now. we are talking about what the bank a big and it's up to, here. >> this is extraordinary. this is the bank gearing up in a hawkish way, for the last several months, and pricing into the market direction. now, we have a e.m. type crisis in the making them and it is forcing the bank of finland to backtrack and say there is a quantitative tightening which is un-feasible. it is an extraordinary situation. watching the pound today is going to be crucial because if the pound cannot take this announcement, maybe the bank of england has to make another announcement soon to deal with the pound. they'll be jumping back and forth between those two tons.

>> sterling is giving way right now at 106. 52 on sterling. you are one of five people world or talk to right now. you have the definitive book on this. the fall of the euro. let's get out front of the fall sterling as well. would you suggest that the trust government survives? >> what is extraordinary is the ideological and fiscal policy in a situation where the market is right on the edge, and potentially tipping over the edge. this could have local repercussions. essentially, the pound is going to potentially determine the future of the company. >> we are looking at a u.k. story. it is also a dollar story across the world. how much are people in the u.k.

and beyond pointing fingers at liz truss. at the world bank. some of the other central bankers are pointing at the federal reserve and saying look, you are creating serious issues and everyone is playing catch-up. it will reverberate back to the economy. >> the fed is dealing with major inflation problems in the united states. inflation is way above target, but the fed has no choice. when the bank of japan intervened the first time, for the first seven decades, there was a lot of talk of ok. we could have an -- a coordinate action to make sure the dog doesn't get too strong. the problem is that from a monetary policy perspective in the united states, you need a strong dollar. how do you get the dollar down when the u.s. needs to fight inflation here. it's all tied to the inflation

we had in the united states, and as long as that is not out of control, it is essentially the fed having his hand tied behind his back. it is hard to step in. until the cpi numbers turn, that will be the problem of dealing with the u.s.. >> help me out with this statement. the talk about dysfunction in the market. the fact that it could affect financial stability and it could lead to an unwarranted tightening of financial conditions. it's a difficult question to answer. can you draw a distinction between what we've seen of last couple days that is disorderly and isn't in line with the fundamentals. it's leading to an unwarranted tightening of financial conditions. how do you strip that out when the bank of england is trying to make a targeted and time-limited movement, doing whatever it takes to correct dysfunction. this is confusing step. how can they sit here and understand what is out of

filter, and what isn't? >> what they are looking at is a short and of the yield curve is adjusted on the basis point of 200 basis points. that is a basis for monetary policy. but what we are seeing over the last couple of days or week is the long and of the u.k. bond market. that is causing immense losses in the portfolios that have those losses. it is down 50%. if you think about insurance companies, they are petrified with all of these bonds, and clearly those are from the bank of england. price action has been actually stunning. we were thinking about the 30 year chart. i was unsurprised at the bank of england is pretty concerned about that. it is really the long and versus short and. >> we've got a squeeze to sin. the boj, and the bank of england

last week, intervention. who is next? >> this is a new era. we might have a dramatic chinese currency change before we go on strange -- on screen. will try all kinds of things we've not seen before. we'll bring back to the 70's in terms of the policy steps. brace yourself if something happens. >> we are braced. brilliant that data, tk. what a couple of weeks. >> what a couple of hours. china is acting as well. all i can say is we will treat this on a global basis. we will use every resource to make the system mitigated -- the sophisticated form. williams of people with her head spinning in this original post-pandemic crisis. >> an interesting start to the warning. good morning.

equity futures are off the lows. we are off .4%. yields off the highs. three and 93. were down 4% from your. this is bloomberg. this is bloomberg.

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>> returning stability of prices is that mission of the ecb. this is the primary objective.

as i've just said, this is what we have to do. returning inflation to 2% in the medium term. we will do what we have to do, which is to continue hiking interest rates in the next several meetings. >> christine lagarde, the ecb president. this is bloomberg surveillance. equity futures are down 4/10 of 1% on the nasdaq. we are down .8%. the main event is in the u.k.. the bank of england is announcing a guild market operation to buy bonds at the long and. yields are down by 40 basis points. that is 4.8%. a big statement from this bank. there are couple of things here that i guess don't add up to some people. the purchase will be carried out on whatever scale is necessary to affect the outcome. then in the final paragraph, these purchases will be strictly tied -- time-limited.

can you reconcile those two things? >> that's a key question. i don't want to walk into a time of this, but this is the x axis. these banks are all worldwide. there were more combined right now. i would point out for our american audiences, the u.s. yield comes in as well. why is that happening? the bank just blinks. when will the fed blink? >> that's the question being asked. who is next? for working with a producer out of london. >> i did know you are on speaking terms. >> it is now qc. quantitative confusion. >> all go with that. that is the tank -- i will go with that. >> that is that take. we will go from the end of october. we've a budget in november, and we will hear from parliament before then. from this government as well. were going to get the bank of england decision.

does anyone think they can wait until november? >> weaker data. will try to get to 9:00 a.m. again. i want to point this out. dan ives will be an important conversation. that respected foreign policy magazine, really quite adept, i love their headline. liz truss is making britain look like argentijoining us is guy j. how close is luncheon -- london to bring us aris? >> i think we did take a step back with this. as john said, this is a confusing picture. i think the bank is adding to the confusion this morning. the market reaction speaks to that confusion as well. look at what is happening at the long and. you are getting a big move there. the three year interest rate is in front of me. i get the average. this is what mortgages are priced off of. it is incredibly elevated. the pound is not moving lower. you can argue this is negative,

and therefore it continues along the track of positive inflation which is ultimately what the bank needs to deal with. it is talking about disorderly conditions. it is the tightening of financial conditions, but at tightening is in many ways still existing after this. three year went down briefly and came up, but even over the last five days, you are coming off a 4.2 up to 5.7. this is not fixing the problem we are addressing. it is the short-term. the ball is firmly in the treasury's. we are taking short-term remedial action to try and manage the situation, but at best, that is what they're doing. >> we could talk about this all day. we could talk about these problems. a conversation about them broadly. deutsche bank is said the actions of the treasury in this government last week was the trigger and not the cause. the causes we had 300 basis points. a tightening from the federal reserve six months.

the dollar is surging. there is no sign of it backing away. it would be a mistake to get bogged down in the bank and everything that is going on. at some point, the central banks just start screaming. at the federal reserve. they say, you need to back off. >> listen to the treasury secretary, but we are not concerned about the situation. there is no need for applause. were not going back to 1985. the language is coming out of washington. it is not an indication that were moving in that direction. but i hear what you're saying. there are smart people in london. there are smart people who work in the treasury. there are smart people who work in the bank of england. these are the markets with the dollar surging for a while. do you want to take brave policy action in the words of sir humphrey, in a moment where the market is as febrile as it is. that may be a mistake, but i will not talk about the judgment

of this, but you are introducing a new policy into a febrile market environment. that is maybe where the challenge lays. getting that bit rate is the difficult part. >> we are expected to meet with the number of wall street executives today. bank of america, citigroup, j.p. morgan, and morgan stanley. sky news reports they're going to ask for them not to bet against the pound. is that really true? is that it being poured out? what does that mean in terms of the bank's willingness to do this, and the desperation in an administration that is going to do it does? >> to be fair, that has been denied. but test balloons often get loaded. and, i wouldn't like to necessarily suggest that was the case. there been a number of headlines over the last few days. they've been running them, but they are being pointed as a

fingerprint there is significant criticism for betting against the pound. the u.k. has a long memory of george soros and the chaos that was caused by the exit from the erm, and the history that is fairly fresh with the recent anniversary of that event. if these are disorderly markets, then you could point the finger and say we need to stabilize them by any means necessary, but the moment we are struggling to figure out how to do that with, as john says, there is an incredibly strong go up. and currently hawkish reserve. >> great catching up a few times this morning. guy johnson out of london. lisa, i'm not here to say we should have a conversation about the u.k., we should. i said that the top of the program. i just think for us to sit here and talk about only the u.k. with what is happening worldwide in the markets, that is not where this risk lies. >> even if you take a look at

the u.s. treasury response to the united kingdom, and the fact that we've heard fed officials point the finger at the u.k. further triggers and volatility. >> is nuts. >> there is a bigger story here. it is dollar strengthening and persistent. it will lead to intervention as pointed out. where is the next node of intervention? does it come in the form of buying or in the form of selling treasuries? >> it comes with disorderly market moves. >> not quite yelling. >> i wonder how long they will be in this market. yields are lower by five basis points. we look at 4% an hour back at 3.89. features are unchanged. the bond market is making a turn. the question we have to ask is will it stick? this is bloomberg.

>> live from new york this morning. what a morning already. equities are down. -.2% on the s&p and nasdaq. baking of the nasdaq, 1%. three or 4%. we are going lower on the 10 year yield at 14,010. up seven across the curve.

yields are lower by five or six basis points. the turnaround comes from this market right here. the bank of england announcement of a gilt market operation to come in and temporarily, for a limited time, by long bonds. a 30 year is dropping by 62 basis points. the u.k. 30 years today. the yield is 436. >> let's stay on this. we will talk about the impact in washington, but john, i am really going to go with what the telegraph is saying right now. this is flat out intervention, and maybe as said, an original intervention. ambrose evans of richard publishing -- liz truss should choose a u-turn to avoid a housing crash. we just got to this u-turn. >> i wonder if we are to complete uterine. this is an intervention that addresses some of the dysfunction or orderly nature of the market.

i don't think it addresses the underlying problem. for that, we need to work out the bank of england stepping up to validate markets. in the november meeting, we need to understand how far fiscal issues are going to go. >> that is a reason why guy johnson is correct it he says watch the pound. at the pound is lower. he's said the pound is that it knew 1985 low. if you are to close here on a closing basis, how do we know this is a pressure valve when we think the bank of england can't be followed through, and there isn't faith that these policymakers will back away from certain policies. i'm sure you have things to say about that. >> we can talk about that later. we have certain issues this week. the primary market is actually giving the scale of the moves were seeing in the bond market, and it is not just about the fundamentals. it is about how big the moves

are. 30 year guilt. it should not be moving 60 basis on any given day. >> for background, there was a two and five-year option. they were both terrible. the two-year was less bad than the five-year, and that was bad. today there is a seven year option. there is a theory out there that the biggest buyers are stepping away. the japanese government is selling treasuries to support the end. u.s. federal reserve is actually letting its balance sheet roll off at an excel rate at pace this week. how much does that take away the conviction we had from investors who see value in real yield. but they are not stepping in to stave off these declines. >> i can't imagine that. >> i can't -- you talk about analysis, but here's what were going to do. this is important to go from london to our challenges in the phyllis points. they are moving up 60 pesos per

dollar. how about washington? it is wonderful to have you with us today, but i want to talk about the central bank of the world. jerome powell in real yield. we are coming so far so fast. we measure a moving average of the real yield at 2.05%. we are not going to do that, but we are close to it. have the cards changed? is the dialogue change? does the math change for jerome powell because the real yield is in london, and everything else is moving so far so fast? >> i don't think the storyline has changed quite yet. as you heard from the chairman himself at the beginning, at the beginning of the tightening cycle, we are at a low level of what he considers to be a restricted policy. based on where we see inflation in the economy, there is quite a ways to go. no doubt, we are seeing dysfunction in the markets overseas. we are primarily focused on those inflation figures.

it is likely we do see an uptick in core pce which has pressure on policymakers to stay the course. >> critically, this dysfunction will continue to raise rates. >> well said. do you look at this pass as a massive frontload right now or do you see it as linear or curved linear out to 2023? >> let's take the fed at their word. they did want to frontload a lot of the tightening into the market. in order to catch up with the curve, there was a lot of criticism to the fed that it was behind maintaining the transitory language. they did need to accelerate the rate that would otherwise have been initiated in the move crisis level policy earlier. as early as the end of 2021, i think there is been a very clear acknowledgment that they would

frontload, but with the fed expectations, the forecast went out last week, there's a good number of numbers essay we will stay in this exhilarated rate with some anticipating a fourth round at 75 basis points. the fed moves in november. >> what does this do to india? >> what does it do to everyone else. that's where the u.k. comes into it. with the vernon room, and the fire getting around this. everything is fine. they're having a cup of coffee. in the u.k., it's a cup of coffee. this is too hot, it's scolding. the big problem is the flames are all around them. the way were talking about the u.k. is here's the u.k. with massive problems. we've highlighted them. the fact that we had a debate about them, out of time, about what could happen in the gilt market, and it is materializing. the bigger issue is 300 basis points are tightening. in just six months. throwing qfii on top of them. dollars absently surging, and in

the global economy, it is whipsawed from having the white house tuesday economy in 2021 the federal reserve in 2022. slamming on the brakes. they are the flames in the global economy. not a mug of hot tea. coffee. whatever your choices. what is playing on the u.k.. >> one of the most stabilized trends in the world is a 14% this morning. it will give you a sense of just the penny stack nature of these credits in the markets. the bigger issue at this moment, with a policy consideration is where to point focus right now from the market stability standpoint. what does it do when you suddenly get a 14% move as a stable instrument. what happens when you get this violent volatility and ill faith and credit around the world. what point does it break? >> do you think the federal reserve looks at this issue and says this is the uk's problem,

is the treasury problem, and someone could something about that? you do yield curve control with rising interest rates. this is your problem. you can do something about this. when does it become the fed's problem? >> i think the fed is making policy that they are properly focused on what is happening in the domestic market. that being said, they certainly can't make monetary policy in a vacuum. they are aware of what is happening. it's not just the fed entirely to blame for the market volatility we seem. obviously, the budget proposal has been a big factor, but we talk about these extreme policy accommodations that we seen. this is causing significant shockwaves in the market, and as a bellwether for the global marketplace, we would expect to see shockwaves fallout throughout the marketplace. it was aware and is aware of the contagion effect of monetary policy but that won't be enough to deter this federal reserve from their current pathway as

they are focused on reading and inflation and reinstating the bedrock of the economy which is price stability. >> with market the function what counts for? >> with large moves we are seeing on a day-to-day basis, we are talking about global markets moving 20, 30, 50 basis points off of one data point or one policy announcement. that in and of itself is an indication of dysfunction on uncertainty, and extreme volatility. i do think the fed is very aware of how quickly the tables are turning. we talk about monetary policy ill aligned overseas. that will become the case back at home. we do have a very important november election coming up. i think the fed is again with more than enough reason with frontloading to find ourselves avoiding the same situation as reported. given the fact the u.s. economy

is far from robust this point. >> a rock and a hard place. thank you. lindsay is at stake core. we have a 69 point basis movement. we can tell you that's where we were. on tuesday morning. don't yesterday. >> wonder these start blowup? when we get a systemic problem? it could trigger some sort of systemic problem. i don't know the answer to this. there's been some question as to why we haven't gotten an event credit market. why we haven't seen it for selling. this is going to be an increasing focus. we do the white house is looking into market volatility. >> they are looking at it. tom was right. you picked up on the potential issue in the united kingdom. given how much house prices have surged over the last couple of years, the fact that you can have rates move as quickly as they have to move. if we do validate market pricing in the bank of england.

there's so much in the mortgage market. it is priced off the rate it actually is. the banking the may turn out to be that. >> i did a mortgage calculation off of 3.10 percent. it spiked up to 7%. basically, you can buy 25% of a house this morning in america with the joy of a number of months ago. with the guardian, they wrote about the 19 and 22 committee. these are the conservatives that i guess, if they get upset with liz truss, and my right to think they will throw out the door? >> they can put some pressure on her. they can make her think about resigning. they can have a boat further down the line. i wonder if the limited nature of this intervention is going to go that way to give the government an opportunity to set her side. >> we need to clarify that. for people who -- with heads that are spinning, our heads are spinning, and were supposed to know what we are talking about. the bottom line is that this is a central bank intervention

today. >> not the government. >> it is limited. the options will take place today until the 14th of october. >> what did you call it? you see? >> qualitative confusion. >> i said that to my producer ali crook, and i'm going to run with it because that's what teams do. >> here it is. i take credit. >> the futures are changed on the s&p. what a turnaround. we were up 4% we started this program on a 10 year, we are back to 388 in america. at deutsche bank, were coming up. this is bloomberg. >> keep you up-to-date around the world with the first word. hurricane en has become a dangerous category for storm as it moves toward southwestern florida. it has maximum winds of 140 miles per hour, and it is expected to bring heavy rains and deadly storm surges when it comes to shore late today. more than 2 million people have been urged to evacuate.

according to one estimate, it could cause $45 billion is -- in damages. it will be one of the costly storms ever in the night states. in the u.k., inflation sets a record this month. the british retail consortium said shock price inflation accelerated to 5.7% in september. that group says retailers are battling the weak pound, rising energy bills, and commodity prices. also, tight labor market. wall street has been hit with $2 billion of fines, and it is called the whatsapp investigation. regulators reached settlements with a dozen banks for failing to monitor employees and their communications on unauthorized messaging app. goldman sachs and citigroup were all among those were penalized. elon musk has asked a federal meals court to throw out his so-called twitter deal. that was an agreement with the sec that asked them to screen all of his tesla related tweets.

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>> we have to balance that with full employment, and trying to navigate that with inflation, while we do so, that is as gently as possible, not to tip unnecessarily the economy into a downturn that is actually part of the full employment part of our mandate. it is a struggle. >> in san francisco the fed president. live from your, this is bloomberg. equities are lower by .2% on the s&p. the nasdaq 100 is down .6%. it was worse earlier. yields were 4% of the tenure. now they are down at 390 off the

back of this mess in the u.k.. the yield is lower on the 30 year by 65 basis points. potentially, history the making because we finish this but we haven't had a move this large, but is the biggest move lower in history on the bank of income. from just hour ago, they announced the market operations are bringing yields lower. >> a limited manner. >> excuse me. i didn't mean to cut you off. the most historic week, we will continue our coverage here on the international economics and turmoil. it is just a question about that with any were to go. we have to slide into our story the broken last night. edward is here from san francisco. he brisas now. how serious is this is an example of iphones not selling all that. >> you look at the apple trading, and the pew futures. it was carrying over to this morning, and it serious. we look to the small phone market, and it is always a leading indicator for what is to

come. rich people with iphones, and enterprise fans are in a recession. we are starting to see signs of apple's hopes of growth in those expensive products that aren't what they would be. >> remember standing on fifth avenue with larry haverty, a giant of this, years ago, and we laughed about how apple was going to die. is that where we are? >> it they're not going to die because they are you turning on expectations right now. that's what they've instructed their suppliers, going to sources. they briefly hoped to boost that by 6 million units. that is the same as they did last year. is just not the make it double digit growth of what would become accustomed to. particularly, over the pandemic era, we saw 2% sales growth on flat unit growth for apple. all things considered, in this environment, that's not a bad thing. we look at the sales side reaction,.

>> even talking about the international pain and what is happening in your. what is happening in asia. how it's being affected by the u.s.. on our bloomberg intelligence, we said that you can't believe the demand from europe the is hurting overall iphone sales in 23. they account for 22% of total sales. how much is this the beginning of a growing swath of downgrades for estimates and production because of global weakness? >> china is really key to the story because apple has 20% sales exposure in the region. that is a key region where there is evidence that the small phone consumer electronics market is slowing down. we've kind of gone off the rails. we talked about how china is a more crystal ball into the health of high-growth companies like apple. the problem with the iphone 14 is that they launched models that ranged in price, and according to sources, the

consumer is expected or showing evidence that they bring more expensive models. lower-priced models have historically been larger in bottles like china and europe. pain was felt for different reasons. for different story, china is all over the place. that is worrying because they want to see the actual volume on the higher end of weakness in the lower end of the market. >> it is awesome to have you in new york with us. weighing in on the sample story. let's focus down that by three point sent -- 3% in the apple market. how may times to become out, lisa, and we hear something different. >> the reason why this is different is they previously said recently that they were going to increase production, and this is an about-face akin to what we saw in fedex. it is affecting other companies. how much is it stemming from what were talking about europe,

or have been talked about in the making them? >> should we go back to the u.k.? >> this is the story. i don't mean that. i mean it is a story. move on. >> you're taking it back. ok. >> were negative. .7%. lisa was close to pick up on this. we are seeing a move on the bond market. 130 year in the u.k., sterling hasn't appreciated -- it was briefly on cable, then snapped back. >> it is complex. i will go with what i heard from others on the fixed rate mortgage. the floating rate mortgage. that is the key social issue here. >> a huge problem. >> i want to point out that he enjoys traffic. >> is he moving? i do know that. >> traffic. >> i don't think he is moving to new york. >> is not the worst thing. i will try to figure it out.

we're taking a mcdonald's. john, i'm looking at where we are. can i just say something? the fix is a 33.43. we saw equity deterioration beginning to catch up. there was a song and dance. we've been talked about it for three days. >> we have been down since the show started. just .1% on the nasdaq. we are down .5%. >> bankers are going to blink. that is the theory. >> other really going to blink? are we going to get a change of policy and what is a look like? intervention kill you so much for so little. the boj stepping in. there will be something sustainable, lisa. the need of a decent picture about how the fundamental policy shift is going to come close. that remains to be seen. >> put it another way, there is the distinction between blinking and having stability. right now, the lack of stability is giving people real pause about risk assets. he saw that from the bank of

america. they previously went to investment grade credit. they no longer went to that conviction because of rate volatility. it is difficult to go into force with any conviction. if you don't have conviction at about four faith and credit. >> if you're just tuning in, 53 months ago, the gilt market operation carried out a temporary font. it was limited in nature. they will go from today until the middle of next week. >> two weeks after that, you will hear from the bank of england. there will be eight right decision. they keep talking about a scheduled meeting in early november. a scheduled meeting. i wonder, but they have to have a meeting before that. >> the best thing i've heard all day is qc. quantitative confusion. this is all very confusing. the bank of england is trying to come out and throw the lists trust -- liz trust administration -- liz truss administration out. they want to give independence,

you want to do it need to do, but the bank of england is coming out with a confusing statement. how does this give stability? >> who will buy and sell bonds. maybe we will move to sell bonds at a high rate, and may be in november. i am with you. is all over the place. the biggest story is beyond the u.k.. you need to think about why the boj had to step in. why the federal reserve is doing what it is doing. we are still talking about doing more. they're doing it to get inflation lower. we get that. the problem is worldwide, it is just bubbling to the surface in a much more profound light over the last couple weeks. yields are lower. the 10 years 392. guy johnson from london will join us shortly to break this down. this is bloomberg.

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>> the fed is finally getting its monetary policy titan. >> the market clearly understands was happening. >> we are getting closer to a lot of things. >> inflation is here to stay, and higher rates are to stay. >> higher rates on the bear market. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. >> here comes the central bank intervention. life from new york city, good

morning. this is bloomberg surveillance. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures are down .3%. the long bond in the u.k. is down 53 basis points. on the u.k. tenure. >> let's go back 30 years. you talk about a 30 year bond. this was back to 19 32 with a fracture in the united kingdom, but it is global as well. i love what cameron >> published moments ago on bloomberg. lee says this was necessary, but probably not sufficient. that is out of the textbooks that fits the moment. >> the bank of england has a market with long bonds on a limited manner for limited time. it begs the question what the next policy shift should be. obviously, big rake -- rate hikes. does that federal government blink? >> the tennis ball over the government, and we will see what liz truss does.

you are way more familiar with this than any of us are. this is the independence of a central bank, and now for a government that affected what many call reaganomics. >> bonds are surging. sterling is not. you picked up on this quickly. you had the initial pop, and we now snapped back lower. >> a lack of conviction in the bank of england. they will follow through on tighter policy to counteract looser fiscal policy. this really raises an issue. if you and up with a 100 basis point rate hike by the bank of england, you are pushing and pulling at the same time. they are lowering rates while still height king -- hiking rates in the basin. they are tying themselves into knots. what happens when the market pricing is inconvenient? do you squelch it? that is the new policy. >> policy using conflict a mess to clean the u.k.. it is in conflict globally around the world with the federal reserve and the bank of the ecb and the doj. in a big way.

>> that is why you have pressure points that are coming out with unpredictable and volatile ways. they are hitting the 4% level for the first time, going back, the idea is trying to close a currency and having to sell treasuries in order to do that. this is a confusing and very volatile market. >> sterling is down, but it's out 106.2 seven. guy johnson will be joining us shortly. now now here is the rapid market. we are down .4% on the s&p. were off the lows of the session, we've snapped lower on the nasdaq. yields are turning around a monster way the u.k.. also in the u.s.. briefly, 4% grade were down with yields lower at a couple of basis points. zero dollars still 95.66. >> we haven't talked about nord stream 1 and the potential sabotage we heard about

yesterday. we are looking at that eventually, so with all of that, we have a room with flames, we have a bank of england sipping on its tease -- ts tom pointed out, perhaps today is the fire. the fed speaker continues to come out and give conversation about where they are thinking, and perhaps how they view the overseas turmoil. the st. louis fed and fed chair jay powell, fed chair jay bowman, and richard thomas barking, there are so many things. the chicago fed president. who is next? the parade of people coming out. what can they say at a time when they have to fight inflation and their policy?

they have to fight inflation and their policy? they are exacerbating turmoil. wall street executives say that this will occur with bank of america citigroup, j.p. morgan and morgan stanley. what is the best? how do you involve people in a market that it's doing its own thing when they say the market will do what it dies, and then it comes out the other side and they are trying to engage in are trying to engage in some sort of policy that relies on market pricing #that relies on inflationary inputs. like the value of a currency. at 1 p.m., there was one messy option after another. is there no field? -- is there enough yield? >> to get people involved, is there enough conviction. >> there is a ton of stuff switch as contributed to the nervousness of the issue. thank you. guy johnson in the city of london. what are we expecting? he joins us right now. he is usually on tv and radio

later. let's start here. in a moment where we expected the bank having lent to step up with rate hikes, they are buying bonds. make sense of it for us. >> other than sourcing out pension funds, this is a real struggle to see what is axley being achieved here. as you've been pointing out, the pound is down. we have a cable rate at 10591. if you look at 2, 3, 5 years swaps. they are barely budging. so, the impact on the mortgage market is not changing here. the pension funds which carry long duration debt, those are the ones that will benefit, but even there, we are only back to where we were at the beginning of yesterday. yes. we are getting a monster move, but it comes on the other side of asymmetrical move we've seen. that says it all. look at what is happening here. the two-year is here. you can see it is basically the reverse from yesterday. it is incredible to watch. the currency is down. this is -- let sort through the

mechanics briefly, if we can. this is an fpc decision, not an nbc decision. it is a recommendation. it is financial stability that they are doing, effectively, trying to deal with here. is not a monetary decision which comes later. we are not talking about that in terms of rate hikes. they are trying to stabilize the market with very little effect. they are crating reserves, and they're doing this to create reserves. it is trying to be different from qe, but there is a certain nuance we are struggling to see. >> in the headline, with reserves, it is a complete mystery to me. critically, we just showed this on radio. there is a spike down going back to 105 point 87. back to 104. it would be unimaginable. i just framed out the conditions. thank you to the great michael rosenberg for that. the u.k. is moving positively,

and then swings negative five deviations. that is a 10 deviation move. that is absolutely original and financial history. what is the next step for the prime minister? >> the next step for the prime minister and chancellor is a really difficult one. we take the advice to recalibrate. with further announcements, we will get announcements about tweaking things that are possible. i don't know what they are, but there may be tweaks that we make here. there may be a situation a little more stable. a cost cuts. i don't know. but there is definitely a necessity for that. it is basically as you say, a tennis ball to the other side of the corporate expecting your court. but we are still finding ourselves in a situation where the market is once more. the market wants rate hikes.

we have monetary decisions, but not a policy decision. that's what this is. a holding act. this is nothing more than a holding action. rates are going higher. that is the message loud and clear from the market. the bank of england is still on the hook for that. when it can't remain to be seen, can they wait for november? >> that is the question break >> what is the reaction to the imf statement yesterday. >> they have a mixed relationship in terms of the forecast and statement. i think we've obviously had bailouts in the long distant past, so that is that. there was a very long. where the imf was issuing the statements. they were way off base. to the credibility, it went down. i think it was at random. we had issues we were welcomed to resolve here.

there were comments about this difficult way, but it is out of hand, but clearly, the market message is the one that everyone is listening to. i think the imf is just duplicating the message coming through from the market. something needs to change, and this doesn't fit. how are you going to fix this? the bank of treasury have a huge challenge. >> this is why guy and i can't host a show together. someone need to be diplomatic. it's good to see. as always, guy johnson out of london. the ball is in their corporate framed it perfectly. guy said the same thing. time is going to go out to mid-october. in between there, the pressure is going to start building between the bank of england again. on november 3, the pressure will build with the government as well. lower by .5 basis points on the u.k. 30. >> you heard me saying this cliche. it's a litmus paper, and i am sorry. sterling is deep market online,

and i am stunned to see the deterioration from the last tenants. this bodes ill for the government. as i try to get to this. >> i remember nine years ago when the imf talked about this. there was a former chancellor, and austerity. it was too much to back off from austerity. this backed off. >> that is really important. this is a really important observation. you killed it there. the answer is professional or -- professor bloom charted this and it was adamant of getting back to 2% in the classical bottle on the dudley with others. it was just naive as all get out. adam pozen with the most fiery tweet of his distinguished career. with the bank of england. i don't know if you would bring that up, but i am sorry. adam pozen is absolutely on fire. >> his line.

anyone know what the urgent systemic risk was? i don't. he called it bizarre. i called it utterly bizarre. for the imf to weigh in on this, and not weigh in on what the federal reserve is up to, in the united states. coming up, sarah maddock of new thing. we are looking at this. this is bloomberg. >> keeping you up-to-date with news from around the world, with first word. i'm lisa mateo. what is expected to be one of the costliest storms in u.s. history is taking aim at florida's southwest coast. earlier today, hurricane ian was upgraded to a dangerous category four storm with maximum winds of 140 miles per hour. it is now projected to come shortly to -- come ashore late today. it threatens to bring deadly storm surges into tampa bay. more than 2 million for iranians have been told to evacuate. one estimate calls for damages in economic losses in the area to exceed $45 million.

in russia, the kremlin has declared victory in a series of u.n. condemned referendums in the ukraine. voters in four regions occupied by russian troops have voted to become part of russia. moscow ordered the vote after his forces suffered the worst defeat to the u.k. military since the storm. the ceo of deutsche bank is predicting a downturn in europe. it will continue to whipsaw and financial markets. they spoke to bloomberg tv. >> the volatility will continue. if you look at the inflation numbers, if you look at the interest rates going up, i can't see it with volatility going away for the next 12 months. >> saving says inflation could be placed under control. there is a good chance of recovering after the new year. global news, 20 for our state come on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts more than 120 countries.

i'm lisa mateo. this is bloomberg.

>> at the core, i do believe there is no certainty in any way or no way it is inevitable that we are going to enter. >> national economic council director of the economic club of washington. i know you all have thoughts on that. we can talk about that. from new york, this is bloomberg. we are down a little more than 1%. completely whipsawed. down hard again. we're coming back lower after a gilt market operation announcement from the bank of england to come in and by long

and by long bonds over a limited. of time to address what they call disorderly -- dysfunction and all of the above. the 30 year is moving quickly. sterling briefly stronger. cables are now negative. it's 10573. >> 104 would be unthinkable. i wanted to say this. we have to bring what we've been doing for decades. world-class conversations. we will be joined at the 9:00 hour, and moments ago, formerly with the bank of england, it will join us. formerly with the bank of england, it will join us. especially in the next hour. we get very lucky here with katrina douglas. she was previously scheduled to talk about things. i am as dumb as wood. jon ferro, save me. with katrina dudley and franklin mutual, on the nuances of the gilt market, i just -- john, i

am clueless. >> we can start here. it is fantastic to have you with us. franklin mutual advisors. walk us through the unique character, didi profile of the gilt market. and the need of the bank of england. what they can respond to. >> i'm not sure they actually need to respond to anything here. they are trying to stabilize the market, but i grew up in an environment where we were told that markets were efficient. i understand it is only temporary, but i'm not sure that the boe is doing the right thing. people are now talking about whether or not this pushes us off another rate decision. let's go back and think about what happened last week when the boe made their rate decision. there wasn't even consensus within the governors. you had five of them for 50. but you actually had three for 75. and then one person at 25. even within the bank of england, there is not a lot of consensus, and i'm curious about whether or not the lack of consensus also

is part of the issue. why the statement is temporary. it is really not a lot of support. >> you said you don't know if this is necessary. we heard from a host of policymakers that they do not see disorderly markets. all agility, yes. it disorderly, no. what is the distinction when you look around the world, and understand that disorderly policymakers need to step in versus illogical responses to policy. >> volatility is caused by movements in price. the price goes up, the price goes down, and the price is always responding. >> we've had a lot of news. we've had a lot of news. it is causing the volatility. when we have disorderly markets, you are talking about buyer strikes in particular. no one is coming in. i don't think you've heard any of that out of the english market spread i think what you are seeing is people are going in and acting rationally.

when people act rationally, i don't think you need to have the central bank come in and intervene. i fear is that through this intervention, the term is kind of quantitative conundrum because we don't really know what they're trying to do. >> no. we have a surveillance correction. it is not quantitative conundrum. john help me. >> quantitative confusion. >> there it is. the chancellor will meet today with collective wall street. i was john templeton was there with the franklin funds, but there were many. what should wall street listen to from a chancellor beleaguered? >> what you're looking for his long-term intentions. that's what we want. >> a week, a month? >> longer-term. that's not were talking about. we like to understand what is going to happen over the course of the next year. that is where the fed dumps. these plots have been

instrumental in giving stability. you don't necessarily need to agree with what the fed is doing, but if you understand the direction of travel, with the investors, you can position yourself, and you can do the right thing. knowing where were heading, i think that's what people are looking for. i think you can distinguish that from the boe, but were not quite sure where they are going. >> we were joined in hour ago, and he tweeted out, the solution to the problem creates another problem. cliff stepped into the bond market. 1.7%. do you think by addressing this problem? >> you are looking at weakness in the gilt market. first of all, people are thinking that the rate decision in the boe may actually meet. they have a delay. given what they're talking about, the second thing is that as we were talking about this, you need to understand the

importance of controlling inflation in the u.k.. a lot of the u.k. debt is inflation related. that is very different from any other market run the world. the boe really needs to keep that at a hawkish eye on inflation. controlling inflation is not just in order to generate price stability. it is actually to also control the debt cause. >> well said. thank you. katrina dudley from franklin mutual. advisors with sterling against the u.s. dollar. 1.7% at 1.05. yield at the long end on the 30 year down by 50 basis points. 48 on a u.k. 30 year. >> critically, the 10-year inflation comes back. i want to talk about this in the next break. we have internals. but i want to make clear that we are trading to new lows for sterling, except for that brief spike to 103.

technically, 103 is a fiction. we are at new lows for sterling. after what appears to be a vote by the supreme court on somewhat failed intervention. the u.s. real yield comes back to 1.60%. the idea that that could break higher to the real yield is stunning. >> this is the weekly range. 103.50. at the high-end, somewhere in between, with 10560. there is a lack of conviction. it will follow through. the market perceives they need to follow through in order to control inflation. >> there is no confidence about anything right now. anything. not anything whatsoever. >> john, we need to have coverage. >> i don't want to get philosophical. >> what are you doing there? >> is the real yield. >> i needed to.

jonathan: fair to say this one is a bit messy in the last couple of hours. futures down .6% on the s&p 500. nasdaq 100, down 1%. the first time i've ever been called understated. lisa: do you actually think it is a bit messy? jonathan: fantastically messy.

the 10 year has gone from 4% this morning down to .394. the big turnaround is taking place in the u.k.. compare what is happening in the gilt markets to what has happening in sterling. the bank of england has announced a limited intervention, they will come in and by long bonds. down 53 basis points on the back of it on the u.k. 30-year. 4.45. that gives you an idea of the scale of the moves. only briefly did it pop. cable, 1.0560. that is more sterling weakness. this bank of england, when it comes to rate policy, may have to respond. tom: this is not discrete to the united kingdom. we can see on the bloomberg terminal, it goes down to the u.s. and worldwide.

jonathan: somebody wrote in on the bloomberg, there are no good or bad market days, it is just how you are positioned. that is from a corporate bond trader. the people that have been whipsawed by this, yesterday, if you are short, yields were higher, and then being slammed the other way. this is a messy market. tom: you really wonder what we will see from banks, the reports that we will see. they and we have never seen this. jonathan: they like volatility down there, and then they come out and earnings season if they didn't perform and say it was the wrong kind of volatility. lisa: we will find out with bank earnings, see if we get a more recent disruption. can i talk about a specific company for a minute?

we were talking earlier about apple, but i want to tie it to the global story, international pain, what will the fed's response will be, corporate response in the u.s.? shares were down 4% after reports came out they would ratchet backplanes to increase production of the new iphone. how much of this has to do with the international story? europe and china account for 43% of iphone sales. how much of the lack of demand that surprisingly sprung up comes from the pain we are seeing accelerate in a dramatic faction -- fashion? we are also seeing that happen in semiconductors. the demand for chips is coming down. down 3.4% in premarket trading. much of this is a story of bringing forward supplies because people got somebody smartphones and tablets during the pandemic, and how much of

the world is simply not thinking about new devices? tom: with all the economic gyrations, real turmoil in china as well. david blanchflower will be joining us later. mohamed el-erian will join us in the 9:00 hour. right now, joining us is alan ruskin, chief international strategist at deutsche bank. what i love about you, you can write a research note, and then six hours later, you can say you are wrong. they did not read your note. where would we be know if the bank of england acted this morning? alan: probably in a better place. i am pretty critical about the actions that we have just seen. most obviously, this is negative

for sterling. to the extent that the bank of england is adding more liquidity into the system, they are lowering bought -- nominal rates, lifting up price expectations, which means we'll rates are getting a double whammy, and the pound is under additional pressure, what's pushed -- which puts them under additional pressure. maybe they want to see a situation where you see yields coming down in general, but if anything, it places more pressure on them on the front end of the curve. jonathan: november 3 is the next scheduled meeting. how big is that hike going to be? alan: when i last looked, 150 basis points were effectively priced in. the market is really pushing them into a corner to do something huge. effectively the pound will go down further. it remains to be seen how much

will be needed on the day itself. there is a lot of water that will flow under this bridge before then. i would suggest at least 100 basis points will be needed at that point. jonathan: can they do anything about what is happening with pound sterling? the forces worldwide right now are powerful, fed hiking cycle, dollar dominance on the back of it. can i do anything to fight this? alan: great point. it's a question of how much they should fight this. one of the problems that u.k. has, its balance of payments is in seriously negative condition as far as the pound is concerned. the deficit is one of the largest out there. when i last looked, last 12 months, they were the worst among 45 countries. the financing needs are huge.

the issue is what is the appropriate policy mix to stem the tide as it were? i think the bank of england has been backed into a corner by unorthodox fiscal policy, as well. lisa: how much of this is a dollar store and not really a pound story, not really a euro, yen story? alan: one could focus on euro-sterling as the metric that tells you how much of this is a sterling story. by that account, this does not count as any sort of crisis. sterling on a trade-weighted basis, it is not all that wea k, so don't respond, in a sense. i have some sympathy for that. the dollar is the dominant story behind what is going on here. lisa: when does a strong dollar, in and of itself, create havoc

for the rest of the world that we bounce back to the u.s.? i don't want to say global recession, but something that looks like that, because of the strong dollar? alan: so far, the disruptions have been quite limited, what we have seen globally, feedback loops to u.s. risk appetite metrics. some people would say markets are a little bit broken because the japanese are having to intervene. you could say that the yen story there, boj divergent story that is dominant. the u.k. balance of payment story is unique. so far, we should not cry wolf too loudly. that is not warranted. jonathan: who is next to blank? the ecb is talking about another 75 basis point hike. they spoke to maria tadeo this morning.

good friend of ours. who is next to blank? alan: i think everyone is seen as tightening substantially in terms of the g10 world, this year at least. the blinking will probably start in 2023 when the u.s. fed cycle essentially comes to an end. at that time you presume the global economy will be in worse shape, most economies will be that much more in a serious downturn. at that point, there will be a challenge where growth is weak, and inflation is so much higher than is desired. at that point, policy will get into a much more tangled, confused state. tom: alan, thank you. jonathan: great to catch up with you as always.

tk, you say it so often. obe. tom: overcome by events, margaret thatcher's favorite phrase. there will be massive obe's here. i will go back to what i heard at jackson hole. the beautiful veranda outside of the bar that jon and i stumbled on. we were over listening three fed presidents. the bar conversation was no different than the serious visible conversation today. they are making it up as they go after this massive pandemic event and stimulus. jonathan: we sat alongside them,

what are you going to do, hike 75? looking at us, who are these guys? lisa: overcome by events, i think that has a lot of credence. i just want to say this. so far, we have had some pretty extreme events, and it has not been considered disorderly. we heard we have not really seen a buyer strike. at what point does it become that level? we are still not seeing it, even with all the volatility in rates markets. jonathan: chairman powell talked about the pain, not domestic but international. tom: you as 10 year real yield intraday, we are almost out to new benchmark inflation-adjusted yield highs. that is stunning. jonathan: nasdaq futures off the back of that down 1.1%. on the s&p, down .6%.

six days of losses on the s&p coming into today, the longest losing streak since february 2020. down 6.5% and we are taking out more weight from the s&p 500 this morning. this is bloomberg. ♪ lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. hurricane ian is picking up strength as it roars toward southwestern florida. earlier today it was upgraded to a category four storm on a five-step scale. winds of increase to 155 miles per hour, just below a category five. ian is expected to bring heavy rain and potentially debbie storm surge when it makes landfall today. in the u.k., the british retail consortium says shot price inflation accelerated to 5.7% in september. the group says retailers are

battling the weak pound, rising energy bills, commodity prices, and a tight labor market. senior house democrats have police their bill to restrict stock trading and ownership by members of congress. the president and vice president, supreme court justices, and other high-ranking officials would be covered in the measure. the legislation would require them to divest current holdings or put them in a blind trust. biogen says that their medicine slows the effects of all dimers/ apple is backing up plans to increase production of its new iphone this year. the company had expected a surge in demand but that has not happened. apple him to produce 90 million handsets in the second half of the year, roughly the same level as last year.

global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg.

>> watching the pound today will be crucial. potentially with the pound will do in the next week could determine the future of this government. the long end of the u.k. bond market has been essentially trading like a default in the u.k. that is causing immense losses. jonathan: maybe the chancellor not looking at the polls but at pound sterling this morning. down .6% on the s&p. nasdaq 100, down 1%.

the dollar still stronger. the main event is right here in the u.k., the bank of england coming out and announcing a guilt purchase operation, buying a long and of the yield curve in the u.k. bond market. yields lower by 59 basis points on the 30-year. 4.39. sterling is weaker. 1.0571 on cable. people writing on twitter. it is not q. week, it is just a short-term operation to address an immediate risk u.k. financial vulnerability. reassured. tom: this is a bond intervention, not an fx intervention. that needs to be said as well. you have to comment on this.

the real yield in the u.s. adjust to what we see in the united kingdom, popping right back. 1.61%. jonathan: the nasdaq down 1%. everyone in the stock market competing with that. you see this massive move to the front end of the yield curve. lisa and i were talking about this in the commercial break. the damage in the bond market is further out. that is the consensus view. hide in the front end, which means that apple has to put up big numbers, and other tech firms. based on reporting, apple is seeing demand faltering, so you have a double whammy here. the bond market affecting the valuation in stocks. on top of that, and irving's -- earnings story as an overlay. tom: the bank of england acted

amid concerns, a wednesday cash, would trigger guilt crash. i have never seen that headlight in my life. jonathan: i think guy went through it well. this came from the financial stability side of the bank, not monetary policy. on the monetary policy side they still have a lot of work to do. the next scheduled meeting still a month away. we have to get through october before the next scheduled meeting with the bank of england. tom: let's go to javier blas. great calculations by the itv network in the united kingdom, when you get currency devaluation or appreciation, a leader of petrol -- liter of petrol becomes more expensive. explain the price of hydrocarbons and how it affects

the little guy filling up in the united kingdom. javier: almost every commodity in the world is priced in u.s. dollars, even tea, a quintessential british drink. the pound is depreciating very fast against the dollar. everything that we buy is priced in dollars. everything is getting more expensive. crude oil, gasoline, a bag tea. tom: fold in nord stream, gas bubbles floating out of the sea. fold in your view that oil will reverse and will go up to higher prices again. is that a consensus belief? javier: it is not a consensus belief. physical oil traders believe the market is relatively healthy, demand is still there. buddy economies, particularly

here in europe, are slowing down quite a lot. my main concern about the oil and gas market, this morning, coming into the office, it was the first day that it was a bit cold. winter, father is arriving, and we will see high demand for the next four months. to say that we are out of the energy crisis, that the worst is behind us, is way too early. we don't know how the winter will be. lisa: have we already priced in the idea that we will not be seeing russian gas transported through nord stream 1 again, certainly not run this winter? javier: that is more or less priced and after yesterday's events. they are not going to come back anytime soon even if russia wanted to send the gas to europe.

the pipelines are effectively destroyed for the foreseeable future. we may lose supply from russia via ukraine, there is a pipeline still working, but the biggest concern is what is next. we are effectively at war with vladimir putin. it is an economic war. what if something else happens? what if russia tax infrastructure in the north sea? there are thousands of miles of overhead electric grids. we saw what happened last year with gasoline supplies in the u.s. after the cyberattack on colonial pipeline. when is the potential for cyberattack this winter? that is something that everyone is extreme concerned with right now. what if russia launches a cyberattack against the energy infrastructure in europe? jonathan: thank you.

the risks are building. javier blas of bloomberg opinion. 86.50 wti. equity markets are down .6% on the s&p. nasdaq, 1.4%. reports that demand for the iphone are faltering. the big moves in the bond market , through 4% on the 10-year in america, now at 3.92. monster moves in a u.k. gilt market of the bank of a central market operation. the 30-year down 60 basis points, 4.39. tom: this is from philip in bloomberg, in london, the bank of england's decision to announce immediate purchases was prompted by fears that collateral calls, as soon as wednesday afternoon, would

trigger a further crash in gilts. that is a wild sentence from bloomberg. jonathan: a suggestion that they feel some real stress in the financial system. lisa: surprising we have not seen more of that. i will editorialize there. these are the main instruments used for reserves for the safe assets which could cost selling. at what point do we see these tortured financial stability measures at the same time of tightening monetary policy? jonathan: a little bit in the weeds but we have talked about this, front and yields are dropping, so the curve steepen's, but it is being driven by the front end. that happens when bad things are happening.

>> everybody wants to get inflation down, the labor market is still strong, so the pain has not materialized.

>> the bank of england has failed to meet where prices should be in the u.k. >> you have to take the fed at its face value. >> the fed will continue raising rates. >> this is bloomberg surveillance. tom: good morning, everyone. 30 years ago, 11 days away from a crisis for the united kingdom. it's a crisis again this morning. and george soros is not involved. can the events of this morning break the bank of england? jonathan: the bank of england responding by buying bonds on the long and. according to a person familiar with the matter, phil aldrich of bloomberg reporting, they did this today out of concern that we could see a guilt crash off the back of cash calls. they were responded to financial

stability risk. that is a big distinction that guy johnson made earlier as well. tom: goes back to the green book of the imf. for all of you on radio and television, i cannot convey the advantage of having jonathan ferro with us with his knowledge of what is happening in the gilt market, what it means for america. let's try to summarize before others speak later on this morning. your thoughts of your nation falling apart? jonathan: not sure about the country but the market has been falling apart the last few weeks. that is a smaller piece of a much bigger puzzle. the fed is a huge feature in that. global bond yields have been searching. deutsche bank earlier this week said, if the trigger was that budget last week of what has played out in the u.k., the

causes elsewhere. tom: the answer is it is global. lisa, you've been following this. the thermometer of this is maybe away from full faith in the market. have spreads moved over the last three days? lisa: they have. you are starting to hear about foreign investors basically saying, this pain that you are seeing in the rest of the world, u.k., japan, is a leading investor to sell u.s. assets, including top-rated credit. how much does this become a rebound effect into the u.s., even if the fed is looking at a more stabilized and stronger consumer? this is what people are wondering. when is that breakpoint going to happen? tom: two quick observations. euro-swiss goes to new strong's

this morning. sterling, 1.07 for a cup of groundwater, as ted lasso would say. fragile. jonathan: the move that stands up for me today is the front end of the treasury curve. the two-year done by nine or 10 basis points. the curve today is bolstered. the consensus is dollar cash, hide in the front end. that is happening against the federal reserve who a just they will keep on hiking. bigger picture, away from the drama in the u.k., the front end of the curve gets my attention. tom: look for that on friday as well worldwide. real yield gyrating all morning loan. we got so much to talk about, blanchflower joining us later.

right now, saira malik joins us, chief investment officer at nuveen. do you ignore this within conventional, institutional money, how do you bring in the tumult of the last few days? saira: as long as the dollar and yields move up, we can brace for more pain. a few things on the horizon that may give us some stability here, earnings, and some cracks that we are seeing in inflation, technicals. we seem to be breaking through the june lows, 3500 on the s&p 500. but earnings will start to decline a bit. generally they don't crack until bmi gets into contractionary territory. i think investors will get a sigh of relief. inflation remains hot but we are seeing some moderation in rent, a big piece of core inflation.

so you may start to see a plateau of inflation, which could be a positive for investors. short-term stabilization would be good thing for the markets. jonathan: nominal growth has been phenomenal because inflation has been so high, how can you push back against earnings in that environment? you can if you focus on margins and cost. what are margins looking like going into your end? saira: they are a problem because they are at peak levels. on the with pricing power can extend margins. also the dollar is ahead with earnings, and some of the signs of demand destruction will hit earnings. when is the timing of that? probably sometime early 2023. i don't think we can hang onto the positive earnings through the third quarter. but given where the market is right now, where valuations are, it may help to stabilize and all

right this quarter. lisa: when does market momentum overcome some of these fundamental considerations like margins, earnings? how quickly does this bleed out into the economy? saira: when you get into these periods of extreme stress, you see what is happening outside of the u.s., we turn to technicals to see if the market can hold some of their lows, moving averages. until we can technically get to a more stable level, markets will keep declining. higher inflation numbers, fears over what is the next shoe to drop. will it be in the u.k., russia, ukraine? lisa: it sounds like people are hiding under their beds with a lot of cash, waiting for it to pass.

is that what you are doing, are you figure out how to play something? saira: yields are attractive, so that is a headwind for equity, but we are finding areas that are attractive. dividend growth looks cheap compared to some of the other things right now. they can provide some income and protect you against volatility. we like fixed income. high yield is offering strong returns in the high single digits. much higher quality than in the past. look for asset classes that can benefit from higher inflation like credit real estate. tom: let's go to some core competencies. tell me about what musical bonds are doing at nuveen. saira: that is another area of strong fundamentals that has been hit with outflows, a lot of the negative sentiment hitting asset classes.

strong returns formidable bonds. municipalities have healthy coppers right now. it is where you get more bang for your buck. lower risk, lower correlation to other asset classes. jonathan: how many times have you been told that apple iphone demand is faltering? that is the report this morning. saira: it is interesting. we've been waiting a long time for the normalization after the extremely strong demand we saw for their products during covid. to see it finally catching up to apple is not surprising. all of these issues for these company that had a newly strong demand in covid will have to normalize. that will be painful, even for apple. jonathan: saira malik, thank you. the main event today, central bank intervention. the bank of england back in the

market. it is no longer qe, qt. it is now for many of us want to traded confusion, when governor bailey at the epicenter. tom: as we said all morning, it is not just about the bank of england. to me at the epicenter is the trust of government. i never try to understand british politics, but this is the most unusual politics. are they going to do the thing in the house of commons where they scream at each other? jonathan: there will be a budget. did you mean question time? i will get you a date on that. tom: at the hotel that we were in in london, as we held court, we were doing prime minister's questions. jonathan: lisa was the prime minister. tom walked out. lisa: like every day. i think this is a compelling moment.

i love this idea of quantitative confusion, because we are dealing with nodes of contagion, dysfunction. there is a question of whether u.s. stability can persist in the face of dysfunction. jonathan: i saw that report. mr. deese. you wonder who replaces them. lisa: you wonder what the tone is if they are saying everything is fine, supporting the fed, supporting rate hikes, allowing the economy to wilt to combat inflation. this goes back to the credibility of central banks, wondering when they blink. is there a withering of conviction, letting them keep going? tom: conviction wednesday. jonathan: i think there is lack thereof.

coming up shortly, bradley rogoff barclays. looking forward to that conversation. yields plunging in the u.k. as the bank of england starts to buy the long and for a limited period of time. cable all over the place this morning. 1.0583. from new york, this is bloomberg. lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. hurricane ian is rapidly gaining strength as it approaches the western coast of florida. win seven measured at 155 miles per hour. that is just a couple miles below reaching category five strength, the most powerful rating for storms. it will come on shore later today. yesterday, tampa was facing a direct hit. now the hurricane is expected to make landfall in fort myers. the bank of england is taking steps to restore order to the

market. they will buy long dated u.k. government bonds in whatever quantities are needed. the central bank's biggest response yet to prime minister liz truss' historic taxcutting plan. in russia, the kremlin has declared victory in a series of referendums. voters have voted to become a part of russia. moscow ordered the boat after forces suffered their worst defeats to the ukraine military since the start of the war. apple is backing off plan to increase production of its new iphone this year. the company had expected a surge in demand that has not happened. apple will aim to produce 90 million handsets in the second half of the year, roughly the same level as last year. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg.

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>> i am confident that u.k. will come through this. i cannot tell you actually what today's rates moves are, volatility are, but i can also see over time that the pound is coming back. jonathan: making a big call, the deutsche bank ceo. he also talked about a much deeper recession the next 12 months in germany and europe. that is the deutsche bank sheep talking about a deeper recession in europe when the ecb is not forecasting one as a base case. tom: you really wonder how this rebounds over to banks.

forget value and risk and all of this other mumbo-jumbo about taylor risk and all of that. this is unique. you wonder what that does to trading. jonathan: massive moves. down six to two basis points on the 30-year in the u.k. the bank of england announces a gilt market operation. sterling against the u.s. dollar, 1.06. tom: i think we are waiting for the next headline from the truss government. going from guest to guest with adult perspective. we go now to bradley rogoff. he is the head of ficc research. not talking about what barclays is doing as a british bank, whether anyone is jumping in the thames or anything like that.

how do you manage your traders, the research you provide them, how do you manage plus four to negative five standard deviation moves? how do you do that? bradley: it's not easy. i spent a lot of time in the credit markets. talking about inflation, the riskiest parts of the market are high-yield. the market did not exist any time i when we had inflation like this. what been pretty amazing, for all of these crazy standard deviation moves we have had in rates markets, currency markets, you have actually seen credit risk remain fairly benign. we have not had those moves there. for us, it is figure out how correlated are these markets right now. to your point, you need to have some tail risk, some had his own. lisa: what explains this sense

of resilience in the credit markets when the rest of the world is falling apart? bradley: it is surprising to us. our forecasts show that spread should be wider out. we were wider out in june versus where we are now. the answer to that, if you look at data, ltm's, they still held up ok. the consumer in the u.s. has held up. u.s. credit markets especially is where we see the best performance from a spread perspective globally. lisa: some people are saying there will be downgrades, perhaps people are not accounting for how quickly this economic cycle is moving. we are seeing that with expectations for earnings expectations. on the equity front, how much are people mispricing the downgrades and credit? bradley: we don't expect necessarily there will be massive downgrades as we saw when covid hit. that is a very extreme example,

talking about unprecedented times, those were unprecedented times as well. as these companies de-lever, they will get a lot of margin pressure as a result of inflation. there has to be a turnaround. tom: as you speak, i am reading the formal document from the bank of england. totally unfair to you, i want to make that clear. if they are going to come in at 3:00 p.m. this afternoon and do this original mechanism, are they doing it surgically in the secondary market? or are they doing it to everyone? bradley: i don't know exactly the mechanism they will use at this point, but i think it has to be just for the market, as a whole.

you look at what has happened, the reaction we have had. you mentioned the standard deviation moves, how much the u.k. has taken the pain through the fx market or any other market, and then you look since the financial crisis, what success central banks have had coming in, that is a playbook they have to lean on now. lisa: what is the international influence on u.s. credit markets, in terms of their holdings of u.s. credit? according to anecdotes this morning, they are starting to raise capital. bradley: those questions are connected. a lot of the questions i get on the fx move when it comes to credit markets, there is a corporate, they sell a lot of their goods overseas. that will have some impact ultimately on their bottom line when you see an fx move like this, absolutely true. you could argue that spread should be wider, but certainly

not a disaster. i actually think the fear factor right now, when you think about these currency moves, much for and buying there has been of dollar debt. we could talk about treasuries, but if we focus on corporate's, that was where you could get yield. you have shown all of those charts of how many trillions of dollars of negative yielding assets there were, going back to the beginning of the year, that forced everyone into u.s. corporate. one thing we are seeing with this currency move, there are a lot of for holders of u.s. corporate bond that are selling, but they are not making the choice. they have to because of that currency if they are not perfectly hedged. the flow numbers, we could show them every day. i don't think they tell the whole story. those are looking at u.s. mutual funds for the most part. a lot of the selling in outflows will be broad-based.

jonathan: really smart stuff. let's continue the conversation. bramo, super smart stuff. lisa: especially when this is a correlated world with a lot of international flows that are not tracked in traditional ways. how do you parse out interest-rate risk, fx risk from credit risk, from international risk? jonathan: front and in the u.s. treasury curve, about 12 basis points. 4.61%. lisa: this has been the one consensus from everyone. the front end is the place to hide out during uncertainty. the interesting thing is the long end is not playing out. people looking at the potential for inflation to become unworn, more more forced selling. tom: details of the bank's temporary purchases.

we don't need to go into the notes right now. frankly, i don't understand half of it. jonathan: thanks for bringing it up. tom: it firmed up sterling a little bit, brought back the 10 year adjusted yield. where is the government? jonathan: are you asking about pmq's? a lot of people asking why they were not on this week because of party conferences. october 11, i'm told, is when they will return. is that helpful? tom: i'm trying to get through september 30 for the derby. jonathan: october 12.

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jonathan: feels like it is friday, november 22. not even at the end of september. futures are down .1% on the s&p. nasdaq is down half a percent. what a week. what did they say, a week where

decades happen? yields down by five basis points on the 10-year. euro-dollar, .9578. take a look at the 30 year guilt. yields lower by 82 basis points. just pause on that. down 82 basis points on the u.k. 30-year. 4.16. the bank of england announces it is getting involved in the market. if that sounds like a big move to you, it is. the biggest one-day move in history. it takes you back to the lows of monday, tells you about where we have been. a massive surge in gilt yields. the bank of england was concerned about risk in the gilt market, dysfunctional moves that they have to address from a financial stability perspective,

not from a monetary policy perspective, to tackle inflation. jonathan: you talk about what they need to do for people in the u.k., but if it is financial conditions, that is something that all of these institutions take seriously. jonathan: that is why they have responded, but we still have to wait for the budget in the u.k., bank of england rate decision. i joke it feels like november 22. it will be another month and chained before we have another scheduled rate decision. based on what we have seen the last week, people are right to ask, can they wait that long? tom: we have talked to people at the fed, at jackson hole, and the reality is the young turks are spread across the country at the fed. brilliant phd chaps, you don't ever hear about them. one of them that has served the

fed is jonathan pingle, chief economist at ubs. what is it like away from the lights, press conference, what is it like in the trenches of the fed? jonathan p.: thanks for having me on. the phd's will be hard at work. i had an exchange with a former colleague of mine. it is sort of a shame that the most interesting point of our career, we are in a financial crisis or pandemic, but these are the times when the institution sort of goes into overdrive. they are doing a lot of work trying to understand what is going on in a highly volatile environment. tom: is there a debate about a fed that is overreaching on a visible given. ? how does that work with 45 phd's going back and forth?

is it a heated debate right now with jerome powell, or is everybody saying we are behind you? jonathan p.: expect there is a heated debate, and you certainly hear that in the chairman's comments. his comments were very frank after the meeting last wednesday. you can go back to 2018, jackson hole speech, where he is talking about stars, the uncertainty of knowing where these targets are for the economy, guideposts for policy sit in real time. i am sure there are real heated debates going on about what to do, how to do it. but they do have a very singular problem in their mind at the moment, inflation is too high. lisa: we were talking with bill dudley this week about the pitfalls of not being honest about a downturn being put into some of those projection from federal reserve economists. this gives the market room to

question their conviction about staying the course even as the economy deteriorates. would you agree? is that being transmitted in markets, the message to the fed? jonathan p.: i kind of agree with that sentiment looking at their gdp forecast in the s&p, but i think the tone, tanner, and the words they are saying, they are willing to risk recession. i think chair powell was unusually and remarkably frank about the recession possibility in his press conference last week. i don't think any of the speakers since then have backed off of that tone. the hard landing risks are rising. chair powell basically admitted as such. we don't know if there will be a recession or even how severe it might be. they are making the case that the risk is worth it to bring inflation down. i think the markets are getting that message. lisa: right now we're hearing

about the crisis in europe escalating as the region prepares for nord stream 1 not coming back online, essentially warfare being expressed through energy to the region. how concerned are you about some kind of market crisis globally but also in the u.s. that causes exclamation of the downturn? jonathan p.: great question. when i think about what the bank of england is doing today, central banks hate dislocation. when i think about disorderly markets, central banks are kind of on the ready. when i think about the spillovers from nord stream, the risks to the u.s., those are real risks. we are insulated a little bit in the sense of exports are not issued share of gdp, but you can see them weighing on sentiment, risk valuations, some of the spillovers as investors are

becoming increasingly concerned not just about u.s. economic outlook, but global. economists are calling for a recession in europe. certainly we think the recession risks in the u.s. are high, as well. tom: where we try to pretend where there is not a global financial crisis. i actually tried to calculate with the 30-year surging how much less house a given person can buy. i was stunned, 25% less house. the ubs update on the state of renting, buying, and multifamily? jonathan p.: we are not particularly optimistic about residential construction. we have had declines in housing starts for some time in our forecast. the decline in house prices that was reported in yesterday's data

is kind of a warning sign. that index is basically a three-month moving average, but we are already seeing prices start to fall. it has to make one worry about the general outlook for housing. outside of some of the big cities, we have seen a meaningful slow down in rent growth. that has not fit through to cpi, but if you're looking at some listings, there has been a meaningful slowing. there seem to be a quite broad slowdown in housing at the moment. lisa: isn't this exactly what the fed wanted, bringing down cpi faster than many people expected? jonathan p.: you would hope. but it takes time for these rents for new leases to feed into the cpi. it could be as long as 6, 12 months. chair powell admitted when he

sent rent inflation could remain elevated for some time. but they are moving retire. 300 basis points in the six or seven months they have done that, no fomc since 1984 has risen by 285 point. there is a question about whether they are giving the real economy time to see any slowdown in inflation that might make them rethink the overall level at which they need to reset policy rates. they are moving so fast, there is not time to evaluate the real economy. given the lack of this inflation data, that's a concern. jonathan: everything is moving quickly. tom asked me at the top of the hour what i was looking at, the front end of the yield curve in

the u.s. the two-your down 18 basis points now. this curve is steepening pretty aggressively. dropping lower and dropping hard. lisa: much is this because people think the fed will pull back? how much of this is this people filing into the one consensus, real yield in short-term bonds. jonathan: to get your thoughts on this, does that scream risk aversion to you? jonathan p.: we periodically have seen moves, policy mistake trades being done, undone. i do think when the dust settles, the fed's message will be there, we have a bunch of speakers coming out today and it will be digested that the fed will not blink. one way or the other, they are determined to bring inflation back to 2%. the volcker policy experience,

with that example behind them, they are pretty determined, and they sound determined. jonathan: jonathan pingle, thank you. equities turnaround, positive by .2% on the s&p. down on the nasdaq by .2%. we were down across the board by 1% about 40 mitts ago. lisa: much of this is not about what the fed does but about the global picture that conditions will be such that will allow them to move away from perhaps raising rates as quickly. perhaps why people are getting more conviction to get into the two-year. jonathan: we are making history in the gilt market, down 86 basis points. tom: i want to make a difference here, there is huge standard deviation moves in currency. less so in bonds.

the 30-year comes back to trend in the middle of august. jonathan: that 10-30 curve in the u.k., inverted for the first time since 2008. i don't know if there an economic signal in there. ridiculous moves on the long end of the curve from the bank of england intervening. absolutely unreal, down 87 basis points on the 30-year. 4.1%, which is where we were last friday. from new york, this is bloomberg. lisa: keeping you up to date with news from around the world, with the first word, i'm lisa mateo. hurricane ian is rapidly gaining strength as it approaches the western coast of florida. wins have been measured at 155 miles per hour. that is just a couple miles below reaching category five strength of the most powerful rating for a storm. ian is on track to come ashore later today. yesterday, tampa was facing a

direct hit, but now the hurricane is expected to hit fort myers. some scientists are calling gas leaks in the nord stream pipeline and unprecedented climate disaster. the pool of bubbling water in the baltic sea is the most visible of the three leaks. experts are trying to figure out how much methane gas has escaped into the atmosphere. the fear is it could be one of the worst releases ever. senior house democrats have released their bill to restrict stock trading and ownership by members of congress. the president and vice president, supreme court justices, and other high-ranking government officials would be covered by the measure. the legislation would require them to divest current holdings or put them in a blind trust. ford hopes his new gas field pickup will help its electric future. the automaker unveiled its massive redesigned f-series super duty truck. ford says it generates more in

annual revenue than southwest airlines, which last year pulled in $16 billion. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm lisa mateo. this is bloomberg.

>> i'm not sure they actually need to respond to anything here. they are trying to stabilize a market. but i grew up in an environment where we were told markets were efficient. i understand it is only temporary but i'm not sure the boe is doing the right thing. tom: one of the high points of this special edition of bloomberg surveillance. intervention, rate rises in the air. of course, the uncertainty nation to nation about monetary policy. katrina dudley was lights out. we just have to say, our team is

blowing up the show today, great job. lisa: we have an amazing team. tom: i said we have to go to the dartmouth bubble to talk to david blanchflower. experience at the bank of england, doubter of a fully employed u.k., united states as well. david blanchflower, he was there at the queens funeral. in 1992 -- i will editorialize -- they did not hide. where is liz truss? david: no idea. we have no where she is, chancellor, tories are hiding, and news agencies are trying to get ministers to come on and talk about the chaos. the fact that they are hiding is a really bad thing. today is the big anniversary.

september 28 was when dennis hughley went to heathrow airport and the markets collapsed. that he had to come back to downing. then the imf intervened, saying you have to reverse these policies. we have seen chaos in the markets. i wrote a series that this was coming, months ago. the problem is the markets will actually prevent amateurs from doing stupid things. they have not prevented it, but now interventions are happening. we are now in chaos. tom: the students at dartmouth are forced to read the appendix of the green book of the imf, the financial stability book. explain for the radio and television audience worldwide what the bank of england does to study financial stability,

including the headline an hour ago, that they are worried about collateral calls on the gilt market. explain that mechanism. david: in a sense, the story that i know, the book was thrown out last week. what we saw was a statement by the governor of the bank of england. sorry, so many phone calls. the statement of the governor of the bank of england, which caused marcus to crash again, the mpc does not set monetary policy. the bank of england does. i cannot answer your question. today what we saw was a monetary intervention that the committee should have done, but the statement says this was not a meeting of the mpc, this was financial policy meeting. i don't understand.

the book says -- i remember going to the mpc and told monetary policy is meant to be boring, it is meant to calm nerves. in some sense, the intervention was about that, trying to calm nerves in the long-term yield market. they have also said -- the bank of england will not do quantitative tightening this week. the answer is, the book says, calm nerves and be stable. same thing for the treasury. but none of that has happened. all of that was probably true a week ago, but today, economics our pandemonium. lisa: if you are on the bank of england committee right now, what would you ought to do -- op t to do?

david: last week -- i would have banged on the governor's door today and said we have to have a monetary policy committee meeting. basically, we have to raise rates by 100 basis points. we have to stabilize the economy. somebody, somehow, has to step in and be the adult in the room. this will cause all kinds of crisis but somebody, somewhere, has to calm nerves. i would be calling a meeting for the mpc. while we have not had one, i have no idea. if i was on the mpc, i would have the suspicion that the statement issued by the governor of the bank of england on monday was written by the treasury. that would have been a major issue to me. what we have been seeing, the chancellor have been meeting

twice a week with the governor. the whole structure that tom talked about is under threat. if you are a mpc member, you want to say i want to talk about this. you can persuade me to vote for a 100 basis point rise. a week is a long time in the economics of pandemonium. lisa: we just have one minute. but your perspective going forward on the potential for some kind of politicization of this bank of england, when if they were to raise by 100 basis points, could really torpedo households, mortgage rates tied to that. david: the big story, over the last two days, we have seen all these mortgage lenders in the u.k. backing off, taking out their products in the market because they cannot price mortgages because of the chaos. if you are in a position, where you as chancellor have ended up closing markets, --

the rising interest rates will kill the housing market. the u.k. was probably already in recession. it has been driven into recession by this utterly incompetent set of moves by the chancellor. i'm not sure anything that they can do. but it is not clear to me. if he resides, what will they do? tom: we didn't have you ought to talk about the bank of england. how are you going to do in florida, are you going to lose all of your fishing spots? david: the hurricane has moved and is heading right toward my house, so that is not good. it does not look good. the islands have been evacuated. this is not good for us. tom: we have heard this from others as well in florida. we hope that you do well. thank you always for the perspective from dartmouth

college. lisa, and absolutely extraordinary day. can you help me sum it up? lisa: the economics of pandemonium. i think that sums it up. the whipsaw that we have seen on the long end of the guilt her, as people take a look at stabilizing moves from the bank of england, how do you get confidence in a market that is supposed to be deep and the credit of a major nation? tom: vicks, 32.75. please join bloomberg through the day on radio and television. mohamed el-erian will join from the university of cambridge in a bit. stay with us. this is bloomberg. ♪ returning to the office, we need our paranormal services to be more versatile. flexible working needs flexible technology. i know a group who can help us. not those new age shamans again. i'm talking world-class business experts. data geeks, strategists, tax advisors, the works.

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>> what on morning, your equity market just about even in your countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is bloomberg, the open with jonathan ferro. ♪ jonathan: live from new york, we begin with central bank intervention. >> it's an extraordinary situation. >> clearly, the bank of england